X loses court battle with Australia over child abuse safety notice

The Federal Court has ruled that X Corp must comply with an Australian child sexual abuse transparency notice sent to the social media giant when it was still called Twitter.

Australia's eSafety Commissioner took the matter to the Federal Court after X Corp challenged a $610,500 fine in September 2023.

The fine stemmed from a violation notice issued by eSafety because X Corp failed to provide information about how the company met basic online safety expectations regarding child sexual exploitation and abuse material and activities on Twitter.

However, X Corp argued that the notice was not applicable because the company did not exist at the time the notice was issued. The notice was provided to Twitter in February 2023 and X Corp was incorporated in March 2023.

In a 30-second hearing in the Federal Court in Melbourne on Friday, Judge Michael Wheelahan dismissed the case and ordered X Corp to pay eSafety's legal costs.

The court published its reasons online.

This case is separate from the trial involving video of a stabbing at a Sydney church.

X Corp argued against an eSafety takedown notice on that video, and the commission withdrew the action in June.

X and eSafety have several ongoing disputes in both the Federal Court and the Administrative Appeals Court.

After Elon Musk acquired Twitter Inc., it became X Corp. merged.

In his decision, Judge Wheelahan says the Online Safety Act is an important piece of Commonwealth legislation in the digital age where children's access to the internet is ubiquitous.

The Online Safety Act notice was delivered to Twitter 21 days before its merger with X and the end of its existence.

This notice required an explanation of how the company had complied with certain applicable core online security expectations from January 2022 to January 2023.

The Commission argued that the report it received lacked answers, was incomplete or inaccurate.

“In some areas, data is unavailable or impacted by other limitations, but Twitter welcomes follow-up and engagement that can help clarify approaches or commitments to security and service in ways that are meaningful to the Commission and users in Australia is,” a senior executive wrote back to the eSafety Commission.

The social media company was asked further questions, but the company responded by asking for an extension and also said that Twitter “no longer exists as a legal entity.”

The Commission granted two extensions.

In another response from X Corp. was referred to the attached “final submissions of X Corp. (legal successor of Twitter, Inc.)”.

But a month later, eSafety issued the violation notice; a detailed fine for various alleged violations of the Online Safety Act totaling $610,500.

In making his decision, Judge Wheelahan assessed the structure of the laws of Delaware – where Twitter was founded – and the laws of Nevada – where X is registered.

He also found that X Corp had violated the reporting deadline of the original notice.

Second, the court noted that the eSafety Violation Notice did not identify a “location” where the violations occurred.

X Corp argued that the notice was invalid, but Judge Wheelahan said the error “must be viewed as the result of a process of statutory construction” and ruled against X Corp on the “place” aspect.