Brazilian Supreme Court Judge Alexandre de Moraes has blocked local bank accounts of Elon Musk’s Starlink firm in an escalating conflict with the billionaire and his social media platform X, Reuters reports.
X has advised Reuters it expects to be shut down in the country “soon” after a deadline to secure and identify a legal representative in Brazil passed on Thursday.
The court’s move against Starlink is a direct response to X’s failure to respond to legal orders in Brazil, including a dispute over unpaid fines and a court order to block certain accounts accused of spreading lies and distortions, an order Musk has refused to obey and described as "censorship".
Is it really about censorship?
In an interesting twist of irony, publicly available information reveals that X has obeyed 83% of government requests for bans and information suppressions since Musk took over, up from just 50% the year before the billionaire took ownership of the platform.
“By ‘free speech', I simply mean that which matches the law. I am against censorship that goes far beyond the law,” Musk wrote on X (Twitter at the time) in April 2022.
“If people want less free speech, they will ask government to pass laws to that effect. Therefore, going beyond the law is contrary to the will of the people.”
That logic doesn’t seem to apply to the platform’s actions in Brazil however, with Musk describing Judge Moraes as an “outright criminal of the worst kind, masquerading as a judge."
The dispute was sparked when the Supreme Court Judge ordered X to remove accounts on its platform who had been implicated in ‘digital militia’ investigations, accused of spreading misinformation and fuelling hatred during the previous election cycle.
Musk refused to obey the orders at first, before representatives of X issued a letter stating they would comply with every ruling.
The follow-through has been less than fulsome, leading Judge Moraes to issue a “please explain” which X attempted to clarify with references to vague “operational faults” that interfered with obeying the ban orders.
X claims Judge Moraes has threatened one of the company’s legal representatives with arrest if it does not comply.
Picking and choosing who 'deserves' free speech
Musk has previously stated publicly that it’s better to comply with small amounts of censorship than be shut down altogether, but consistency has never been his strong suit.
In May last year X censored several accounts in Türkiye “in response to legal process” without expounding on which accounts had been banned or why.
Critics say the bans affected profiles accusing Turkish President Erdoğan and his party of corruption, as well as some pro-Kurdish accounts and those criticising the 2016 coup.
Similar accounts belonging to non-government organisations and public universities deemed unfriendly to state regimes have allegedly been banned in Russia, India, Hungary and Syria.
When criticised for censoring content critical of Indian Prime Minister Narendra Modi, Musk stated that “If we have a choice of either our people going to prison or us complying with the laws, we will comply with the laws.”
It begs the question; what changed in the last 16 months for Musk to backflip on previous compliance policy?
“The day before a critical election in Turkey, Twitter appears to be acquiescing to the demands of the country’s autocratic ruler, Erdogan, and is censoring speech on the platform,” tweeted Democrat Adam Schiff, former chairman of the House Intelligence Committee, in May 2023.
“Given Twitter’s total lack of transparency, it is hard to avoid the conclusion that Musk’s promises of free speech have again fallen away.”
Ruling threatens Brazilian market access
About one-fifth of the Brazilian population or some 40 million people use X at least once a day, representing more than 10% of the platform’s total 368 million users and a sizeable share of its market potential lost, should the platform be shut down in the country.
“We are absolutely not insisting that other countries have the same free speech laws as the United States,” the company wrote in a statement published on its platform in English and Portuguese.
“The fundamental issue at stake here is that Judge de Moraes demands we break Brazil’s own laws. We simply won’t do that.
“In the days to come, we will publish all of Judge de Moraes’ illegal demands and all related court filings in the interest of transparency.”
Falling advertising revenue has been applying increasing pressure to X, down 53% from the same quarter last year to just $114 million.
Losing one of its biggest market shares could be another nail in the coffin for the struggling platform – rumour has it Musk is considering selling off Tesla (NASDAQ:TSLA) stock to prop-up the social media company.
"I would be expecting something between $1 and $2 billion in stock," said Bradford Ferguson, president and chief investment officer of asset manager Halter Ferguson Financial, noting it would cause Tesla's stock to lose between 5-10% of its value.
“It's a massive hole they need to plug," he added.