Key Points:
- Federal Court Justice Michael Wheelahan fined X Corp. AU$650,000 on Thursday for failing to answer questions about how it fights child exploitation.
- X Corp. must also pay AU$100,000 in legal fees to Australia’s eSafety Commissioner within 45 days.
- The ruling ends a three-year legal battle where X claimed its transition under Elon Musk excused its lack of response.
- The eSafety Commissioner first sent the transparency notice in February 2023, before Twitter merged into X.
An Australian federal judge fined Elon Musk’s social media company, X Corp., AU$ 650,000 ($465,000) on Thursday. The court penalized the company because it refused to tell a government watchdog how it protects children from online sexual abuse. Federal Court Justice Michael Wheelahan handed down the penalty in Sydney. The decision marks a significant victory for the country’s online safety regulators, who want to force global tech giants to comply with local laws.
In addition to the fine, Justice Wheelahan ordered the social media giant to cover some of the watchdog’s legal bills. X must pay AU$100,000 ($71,000) to the eSafety Commissioner, Julie Inman Grant, within 45 days. This decision ends a long legal fight that dragged on for three years. X had previously argued that Australian regulators had no right to demand answers about its internal operations, claiming that its corporate merger shielded it from the original order.
The legal battle began when the Australian eSafety Commissioner sent a formal transparency notice to Twitter on February 22, 2023. At the time, the platform operated under its old name, Twitter Inc., before merging with X Corp. in March 2023. The watchdog demanded that Twitter provide a detailed report by March 29, 2023, explaining the steps it took to prevent the spread of child abuse material. The regulator wanted to see how the company detected, reported, and removed the worst types of illegal content from its platform.
Christopher Tran, the lawyer representing the eSafety Commissioner, stated that X admitted it broke the Online Safety Act. The company failed to provide a report that fully answered the regulator’s questions. Perry Herzfeld, the lawyer representing X, told the court that the problematic conduct did not continue past May 5, 2023. He explained to the judge that the platform underwent a massive period of change and transition during that time. This statement referred to billionaire Elon Musk purchasing the company for $44 billion, firing much of its staff, and dissolving its previous safety boards.
Both the regulatory agency and X accepted the AU$650,000 penalty. Tran argued that the court needed to set a high fine because X is a massive global corporation. He emphasized that the government must ensure large tech businesses do not simply treat legal penalties as an ordinary cost of doing business. If the court set the fine too low, large tech firms would ignore local laws and pay small penalties as a minor expense.
The company fought the watchdog’s demands in multiple courts before admitting its fault. In October 2024, a federal judge ruled that the company must answer the questions. X appealed that decision, but the full Federal Court rejected the appeal in July last year. The judges ruled that the social media platform had to comply with Australian law regardless of its corporate restructuring, showing that corporate name changes do not erase legal responsibilities.
Julie Inman Grant, who formerly worked at Twitter, praised the court’s decision. She stated that holding major technology companies accountable requires real, meaningful transparency. She explained that her office sent notices in early 2023 to several of the world’s largest technology firms, not just Twitter. The watchdog wanted to see how these corporations complied with the Australian Basic Online Safety Expectations. The regulator wanted to provide parents and families with clear data on which platforms actively protect their children.
Inman Grant stated that these transparency notices give the Australian public essential information. People have a right to know how social media platforms tackle the worst types of illegal content. She believes that public pressure and regulatory fines will eventually force tech executives to take child safety seriously. At the time of publication, representatives from X had not responded to requests for comment regarding the court ruling.
