X braces for Brazil shutdown as legal spat between Musk, judge intensifies

BRASILIA/SAO PAULO - Social media giant X said it expected Brazil’s top court to order it to shut down late on Aug 29, as a pitched legal battle played out over compliance with local laws and owner Elon Musk’s insistence the platform is being punished for resisting censorship.

X said it expected Supreme Court Judge Alexandre de Moraes to order the shutdown “soon,” after a court-imposed deadline for the company to identify a legal representative in Brazil passed on Aug 29 evening.

Just before midnight, X was still working normally in the country.

Earlier on Aug 29, the Supreme Court blocked the local bank accounts of billionaire Mr Musk’s Starlink satellite internet firm, while the underlying feud over X put it on the brink of being shuttered in one of its top markets.

The two firms are part of Mr Musk’s sprawling business empire, which also includes rocket company SpaceX and electric car giant Tesla. The billionaire is the owner of X and the CEO of Tesla.

In a series of Aug 29 night comments on X, Mr Musk lashed out at Mr Moraes, labelling the judge an “evil dictator” in a newly pinned post.

He also decried the ruling to block Starlink as illegal, and claimed the action “improperly” punishes other shareholders as well as ordinary Brazilians.

Mr Musk also announced that Starlink-parent SpaceX will provide free internet service to Brazilian users “until this matter is resolved.”

Signed by Mr Moraes, the court’s decision to sanction Starlink is a response to the lack of legal representatives in Brazil for X, a Supreme Court source told Reuters.

The decision to freeze Starlink’s accounts also stems from a separate dispute over unpaid fines that X was ordered to pay due to its failure to turn over some documents.

Local newspaper Folha has reported the fines total at least 20 million reais (S$4.6 million), but Reuters was not able to confirm the amount.

The Supreme Court had set a deadline for X to name its legal representative in Brazil by shortly after 8pm on Aug 29 (7.07am on Aug 30, Singapore time).

Brazilian law requires all internet companies to have a legal representative in the country who can receive judicial orders and otherwise be legally responsible for the business.

At issue in the intensifying dispute is whether Mr Moraes can order the social media platform to block certain accounts accused of spreading lies and distortions, a request Mr Musk has denounced as censorship.

Most of the accounts ordered blocked are run by backers of far-right former President Jair Bolsonaro, some of which deny he lost his 2022 reelection bid.

In a previous post on X, Mr Musk complained that Mr Moraes “is an outright criminal of the worst kind, masquerading as a judge”.

Starlink, in its own post, accused the judge of secretly issuing the order without due process.

Judge vs billionaire

The cumulative digital and legal disputes could cause X to lose one of its largest, most coveted markets, at a time when Mr Musk has struggled with advertising revenue for the platform.

Earlier in August, X announced it would close operations and fire its staff in Latin America’s largest economy due to what it called “censorship orders” from Mr Moraes, while keeping its service available for Brazilian users.

At the time, X claimed Mr Moraes secretly threatened one of the company’s legal representatives in Brazil with arrest if it did not comply with legal orders to take down some content.

In his own swipe at X, Brazil’s President Luiz Inacio Lula da Silva pinned a post on the platform late on Aug 29, listing six other social media accounts along with links to them.

Mr Moraes stressed that companies that do not respect local laws or the confidentiality of private information could have their activities temporarily suspended.

Earlier in 2024, the judge ordered X to block certain accounts implicated in investigations of so-called digital militias accused of spreading distortions and hate during Mr Bolsonaro’s term in office.

After Mr Musk challenged that decision and said he would reactivate accounts on X that the judge had ordered blocked, Mr Moraes opened an April inquiry into the billionaire.

X representatives eventually reversed course and told the Supreme Court it would obey the rulings. In April, however, Mr Moraes asked X to explain why it had not fully complied with his decisions.

In response, X lawyers cited “operational faults” that had allowed users ordered blocked to stay active on the platform.

Many Brazilians took to X on Aug 30 to make light of the saga, including thousands who posted creative “memes” spotlighting the hard-charging judge and the billionaire.

Some X users criticised the ruling signed by Mr Moraes, arguing he was undermining freedom of speech, while others sided with Mr Moraes, insisting that Mr Musk must comply with Brazilian law.

X, formerly known as Twitter, is widely used in Brazil, and is an important means of communication in particular for politicians to use for announcements or launching attacks. REUTERS