Elon Musk says he'll match the law when it comes to free speech. Here's what you need to know about the EU's new content regulations.

• Elon Musk said his version of Twitter will protect free speech but also abide by the law.
• However, Twitter operates in the EU, which has imposed new rules on content moderation.

Elon Musk, Twitter's new owner, has explained that his vision for protecting "free speech" on the platform also entails abiding by the law.

In a tweet on Wednesday, the billionaire wrote: "By 'free speech,' I simply mean that which matches the law. I am against censorship that goes far beyond the law."

"If people want less free speech, they will ask government to pass laws to that effect," he added. "Therefore, going beyond the law is contrary to the will of the people."

A self-described "free speech absolutist," Musk has pledged to turn Twitter into a "digital town square where matters vital to the future of humanity are debated." In the lead-up to his acquisition of the platform, the Tesla and SpaceX CEO also indicated that he would likely be changing the way Twitter moderates content and handles account bans.

While Musk didn't specify in his tweet if he was referring to American or international law, his ambitions for the platform could run up against newly imposed European regulations on online content moderation — a potentially costly prospect for his new company.

On Saturday, the European Union passed the Digital Services Act, a package of legislation aimed at tackling the spread of misinformation and illegal content on the internet. Big Tech companies looking to operate within EU countries will have to abide by the rules or risks fines and a potential ban.

A 'Musk-ified' Twitter clash with the EU's new content regulations

The Digital Services Act mandates that very large online platforms (VLOPs) — such as Twitter, Facebook, and Instagram — must operate on the basis that what is illegal offline must be illegal online, in accordance with the EU's laws.

For instance, the Act requires that major social media platforms to flag hate speech, eliminate any kind of terrorist propaganda, and put in place frameworks to quickly take down illicit content.

In addition, per the Act, the platforms must possess a "crisis response mechanism" to combat disinformation. The Act's text specifically cites the example of Russia's invasion of Ukraine and how online information amid the conflict has been manipulated.

Special provisions to prevent advertising from targeting minors must also be put in place, per the Act.

Platforms like Twitter will also have to carry out annual risk analyses to monitor how their platforms may be adding to the spread of divisive material, which includes content that has "adverse effects on fundamental rights," threatens "democratic processes and public security," or exacerbates "gender-based violence."

Failing to follow EU laws could hurt Twitter's earnings

Penalties for violating the Act could hurt Twitter and, by extension, Musk. For one, the company could face sanctions in Europe that would take away around 6% of the company's revenue, or result in a total ban on the company operating in Europe, said Thierry Breton, the EU's internal market commissioner.

There are some country-specific laws that Twitter will have to be mindful of as well. For instance, Germany has regulations that require firms like Twitter to remove hate speech within 24 hours or be fined up to 50 million euros ($56 million).

Meanwhile, the UK — which is no longer part of the EU bloc — is also looking to pass an online safety bill, which could result in Twitter having to moderate not only illegal but also harmful content if it wishes to operate in the country.

"If [Musk's] approach will be 'just stop moderating [Twitter],' he will likely find himself in a lot of legal trouble in the EU," Jan Penfrat, senior policy adviser at digital rights group EDRi, told ABC News.

"An 'Elonised' version of Twitter would probably not meet the DSA requirements of articles 26-27," said Mathias Vermeulen, public policy director at the digital rights agency AWO, per TechCrunch.

"This can lead to fines (which Musk doesn't care about), but it could lead to Twitter being banned in the EU in case of repeated violations," Vermeulen added, per the outlet. "That's when it really gets interesting: Would he change his ideal vision of Twitter to preserve the EU market? Or is he prepared to drop it because he didn't buy this as a business opportunity but to 'protect free speech in the US?'"

The EU's leaders have also warned Musk to comply with their rules.

"We welcome everyone. We are open but on our conditions. At least we know what to tell him: 'Elon, there are rules. You are welcome but these are our rules. It's not your rules which will apply here,'" Breton told The Financial Times.