X Fails To Avoid Child Safety Fine
In Australia, Must Pay $6.2 Billion
Jakarta, CNBC Indonesia – Elon Musk’s social media platform, X (formerly Twitter), must pay a fine of around US$400,000 (Rp6.2 billion) after failing to respond to the Australian Electronic Safety Commission’s 2023 inquiry, which is partly aimed at investigating the actions X is taking to combat alleged child sexual abuse material (CSAM) on its platform.
According to Ars Technica reporting over the weekend, in order to overturn the fine, X tried to convince Australian Judge Michael Wheelahan that X was not obliged to comply with the Online Safety Act notice issued to Twitter because Twitter “ceased to exist” a few weeks after receiving the notice—when Musk merged the app into his company X Corp.
Wheelahan summarized X’s argument by saying that “X Corp was not obliged to prepare any report on behalf of Twitter Inc, because X Corp was not the same person as the provider that received the notice.” However, Wheelahan ruled on Friday, October 4, 2024, that the fine should be upheld, rejecting the “fundamental premise” that X had no legal responsibility to respond to the notice after Twitter ceased to exist.
X’s argument failed because Wheelahan found that under Nevada law, Twitter’s merger with X transformed Twitter into a “constituent entity” that then transferred all of Twitter’s legal consequences to X Corp.
Since X failed on all of its claims, the social media company must bear the costs of an appeal, and X’s costs in fighting the initial fine are likely to only increase.In a press release celebrating the ruling, eSafety Commissioner Julie Inman Grant criticized X’s attempt to use the merger to avoid complying with Australia’s Online Safety Act.
“If X Corp’s argument is accepted by the Court, it could set a worrying precedent that merging a foreign company with another foreign company could allow it to avoid regulatory obligations in Australia,” Inman Grant warned.According to the Australian government’s review of the Online Safety Act, X could face a civil fine of up to around $530,000 for failing to comply with the reporting notice, potentially doubling his costs after fighting the initial fine.
SOURCE : CNBC INDONESIA
