The Australian Federal Court has upheld a $610,500 fine against X Corp, Elon Musk’s social media company, for failing to adequately respond to a probe into its anti-child abuse measures.
Key Takeaways
- X Corp has been ordered to pay $610,500 for non-compliance with an Australian eSafety Commission probe.
- The court dismissed X Corp’s argument that the name change from Twitter exempted it from regulatory obligations.
- This case reinforces Australia’s recent push for transparency from social media platforms on child exploitation measures.
- Neither Elon Musk or X has not publicly responded to the court decision yet.
Key Background
The latest chapter of the Australian government versus X has resulted in a win for eSafety.
“This Federal Court decision is a great outcome for the online safety of all Australians, particularly for children. None of us can fully tackle the tsunami of online child sexual exploitation if we do not have more transparency from major platforms, including X, about what they are – and are not doing – to combat this scourge,” eSafety Commissioner Julie Inman Grant stated on Friday.
At the heart of the latest battle is the name change and entity structure of X, formerly Twitter.
In February 2023, Australia’s eSafety Commission lodged a transparency notice to Twitter Inc, requesting information about the measures it is taking to address child sexual exploitation material on its platform. By March, the US-based company had merged into X Corp.
The newly-named entity complied with some of what was requested, according to the eSafety Commission, but not enough. The case was lodged with Australia’s Federal Court in Victoria.
“eSafety found that X Corp. did not comply with the Notice by providing responses that were incorrect, significantly incomplete or irrelevant.”
eSafety statement
X subsequently claimed that it should not have to respond to the transparency notice because the request was made to its former name Twitter.
The Federal Court judge ruled that it sees X’s obligations differently.
“X Corp has failed to show that it was not required to respond to the reporting notice,” Justice Michael Wheelahan ruled.
“By virtue of the Foreign Corporations (Application of Laws) Act, X Corp thus became, for the purposes of s 57, the “person” required to comply with the reporting notice to the extent that it was capable of doing so.”
Big Number
$610,500 – The fine X Corp must pay following its non-compliance with the eSafety Commission’s probe.
The eSafety Commission response
Inman Grant says she welcomes the rejection of X’s claim and that a ruling supporting X’s position could set a concerning precedent for social media platforms in Australia.
“Early last year, we asked some of the world’s biggest technology companies, including Twitter, to report on steps they were taking to comply with the Australian government’s basic online safety expectations in relation to child sexual exploitation and abuse material on their platforms,” says Inman Grant.
“Had X Corp’s argument been accepted by the Court it could have set the concerning precedent that a foreign company’s merger with another foreign company might enable it to avoid regulatory obligations in Australia.”
The eSafety Commission has started civil proceedings against X Corp.
Musk has not publicly responded to the ruling as yet. Forbes Australia has reached out to him for comment on the decision.
The last post relating to the dispute by the Tesla and SpaceX founder, worth USD$259 billion according to Forbes data, questioned whether Australia’s eSafety Commission could censor content on X beyond its borders.
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