Elon Musk’s Twitter, now rebranded as X, has gone down for a second time in court trying to avoid a $610,500 penalty imposed by Australia’s eSafety Commission for failing to properly respond to requests for information on how it tackles child sexual abuse material on the social media site
X Corp initially failed to report on how it was addressing the issue by the March 2023 deadline. eSafety Commissioner Julie Inman Grant, subsequently found X (formerly Twitter) guilty of serious non-compliance to a transparency notice and issued infringement notice for A$610,500.
After several months of back-and-forth between Twitter, as it was then known, and its local lawyers, and the eSafety Commission, seeking clarification, the regulator launched Federal Court legal action against X Corp, alleging failure to comply appropriately to requests to explain how the social media site was dealing with child sexual exploitation and abuse material, and failed to respond or failed to respond truthfully and accurately.
Finally Musk, a billionaire fond of using his platform to imply others are involved in pedophilia, and X Corp were able to rouse themselves and find the energy to engage lawyers and try and get off the off the fine through a technicality.
It didn’t work.
X Corp tried to argue that, when Musk changed Twitter to X a month after the compliance notice was issued by the regulator, that was the end of the matter. The old company was gone, there was no obligation to respond for what happened previously.
The transparency notice eSafety gave Twitter, Inc. in February 2023. Twitter, Inc. merged into X Corp. in March 2023.
But that didn’t wash with Federal Court Justice Michael Wheelahan in October 2024. The full ruling is here, but in modern parlance, His Honour went ‘yeah, nah’ to X Corp’s submissions.
Yet X Corp was willing to fight on, appealing to the full bench of the Federal Court in March, engaging one of Australia’s finest legal minds to argue that the old demand was invalid, and the eSafety Commissioner should have issued a new one to Musk’s new entity before they could take it seriously.
Justice Bernard Murphy handed down the full court’s judgment on Thursday, dismissing X Corp’s appeal as having “no substantive merit” and ordering X Corp to pay the eSafety Commissioner’s costs, which are likely to far exceed the original fine, putting aside the legal expenses on its own side.
“We have concluded that there is no appealable error affecting the factual findings of the primary judge,” His Honour wrote.
eSafety Commissioner Julie Inman Grant said the judgment confirms the obligations to comply with Australian regulations still apply, regardless of a foreign company’s merger with another foreign company.
“In early 2023, 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,” she said.
“eSafety will continue enforcing the Online Safety Act and holding all tech companies to account without fear or favour, ensuring they comply with the laws of Australia,” Ms Inman Grant said.
“Without meaningful transparency, we cannot hold technology companies accountable.”
eSafety’s civil penalty proceedings against X Corp. in relation to its alleged non-compliance with the transparency notice, are ongoing.
The X social media platform, which Musk paid $44 billion for, was merged with xAI, his artificial intelligence company earlier this year.
X’s generative AI chatbot, Grok, last month declared itself “MechaHilter” amid pro-Nazi comments and antisemitism. The comments were subsequently deleted. X CEO Linda Yaccarino also resigned after two years of running the business.
Startup Daily didn’t bother asking X for comment because we couldn’t see the point of getting another poo emoji.
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