Australia upholds $610,500 fine against Musk's X on child e-safety concerns

An Australian Court has upheld AUD 610,500 fine against Elon Musk's X for failing to address child abuse content amid crackdown on tech companies

An Australian court on Friday rejected an appeal by social media platform X, formerly Twitter, to overturn a fine of AUD 610,500 ($418,100) imposed by the eSafety commissioner. This marks a significant victory in the country’s efforts to regulate global tech companies and hold them accountable for their role in online safety.

Why was X fined by Australian authorities?

The fine was issued under Australia’s Online Safety Act, making X the first social media platform to be penalised under this legislation. The watchdog had imposed the penalty after X, now owned by Elon Musk, failed to adequately respond to queries about how it was handling child sexual abuse material on its platform.
 

 

X’s legal team had petitioned the court to dismiss the fine, but the court ruled on Friday that the company must pay the full amount. It ordered Musk’s company to bear all court costs. This decision brings an end to a legal dispute that arose after the eSafety commissioner found that X had not provided satisfactory responses to questions about its efforts to tackle child abuse content.

X failed to respond to basic safety questions

Australia’s eSafety commissioner Julie Inman Grant issued legal notices to X, then Twitter, in February last year among other companies. The notice, issued under the Online Safety Act, questioned firms on the steps they had takent o tackle child abuse on online platforms.

According to a report by the Guardian, Inman Grant stated that X’s responses during a seven-month back-and-forth exchange with her office were insufficient. Notably, the platform did not provide critical details, such as the number of people on its safety team. Under Australian law, social media platforms are required to demonstrate how they are meeting basic safety standards to protect users from harmful content.

Australia’s crackdown on tech companies

The Australian government has been mounting pressure on global tech companies to improve content moderation. Over the past year, it has pursued legal action against X to compel the removal of a violent video related to a terrorist attack. The government has also announced plans to introduce age restrictions for teenagers using social media, aiming to create a safer online environment for younger users.

Musk clashed with the Australian government, calling its efforts to introduce laws against digital misinformation ‘fascist’. These proposed laws could impose fines of up to 5 per cent of a company’s annual revenue if they fail to address misinformation and disinformation on their platforms.

Will Musk’s X pay the AUD 610,500 fine?

After acquiring the platform in November 2022, Musk introduced major restructuring in company’s workforce, reducing staff by 80 per cent. He later said X no longer has any employees in Australia, raising concerns about whether the company would comply with the court’s decision and pay the fine.

If X fails to pay the fine or provide the requested information, the eSafety commissioner could pursue further legal action, which might result in additional penalties. These could include daily fines of up to AUD 782,000, backdated to February 2023, when the original notice was issued. Speaking at the SXSW (South by Southwest) event in Sydney, Grant noted that if the maximum penalties are imposed, X could face tens of millions of dollars in fines.

X has yet to respond to the court’s ruling or indicate what steps it will take next.
 

X has been entangled in other lawsuits, including one filed by an Australian company, Facilitate, which is seeking more than AUD 1 million for work completed at X offices in London, Dublin, Sydney, and Singapore. The company denied breach of contract, and the case is ongoing.