X Doesn’t Mark the Spot When It Comes to Twitter Fine

Lawyers for Elon Musk’s X Corp have argued that the company should not have to pay a $610,500 fine from Australia’s eSafety Commission, as the fine was imposed on Twitter, which no longer exists.

The company, represented by Sydney barrister Bret Walker SC, presented its case in the Federal Court in Melbourne on Monday, during the first of a two-day hearing on the matter.

The eSafety Commission fined Twitter in October last year, saying the social network had failed to adequately respond to questions about how it tackled harmful content on its platform, including child sexual abuse material.

The fine was the first imposed on a digital platform under Australia’s Online Safety Act and could result in a retroactive daily fine of $780,000 for each day the company fails to respond.

But Mr Walker told Judge Michael Wheelahan the fine was imposed on Twitter, which “ceased to exist” after March 15, 2023, when X Corp merged with Twitter in the US state of Nevada.

“After all the arguments have been considered, this is indeed sufficient for the proposal regarding the possible application of Article 57 to our client, who is X and not Twitter,” he said.

“The parties are engaged in a lively dispute about what should happen after what I call the merger.”

Musk registered X Corp in Nevada in early March 2023, and court documents later revealed that Twitter “had merged with X Corp and no longer existed as a separate entity.”

Twitter, which was acquired by Musk in October 2022, was rebranded as X in July 2023.

The fine from the Australian eSafety Commission came after it issued non-periodic reporting notices to several online companies including Google, TikTok, Twitch and Discord in February last year.

The companies were asked questions about how they meet basic expectations for online safety, including efforts to prevent the spread of child abuse and sexual abuse material on their platforms.

“Twitter has not provided any response to the question, for example by leaving the boxes completely blank,” the eSafety Commission said in a report.

“In other cases, Twitter provided a response that was otherwise incomplete and/or incorrect.”

ESafety Commissioner Julie Inman Grant fined Twitter in October and also issued a formal warning to Google for “failing to adequately answer specific questions”.

Judge Wheelahan adjourned the case until Tuesday, when expert witnesses are expected to appear in court.