Musk v Moraes: The tension between a billionaire and the Brazilian Supreme Court

The court has become the de facto regulator of social media in the country.

Brazilian Supreme Court decisions are once again in the international headlines. The past week has been marked by several developments in the operations of X (formerly Twitter) in Brazil. It all started after Elon Musk posted on his X page that the decisions issued by the Brazilian Supreme Court to block a few X accounts in the country would be against the right to freedom of speech. The controversy becomes even more interesting when one observes the list of accounts requested to be blocked. Potential supporters of Brazil’s former president are allegedly being persecuted by Brazilian authorities, according to Musk.

Crackdown on social media accounts

The decision is linked to an ongoing investigation led by the Brazilian Federal Police against individuals who allegedly advocated for a coup to prevent the results of the last presidential elections in Brazil. Brazilian authorities have been cracking down on social media accounts that supposedly spread fake news. In this last ruling, Brazilian Supreme Court Justice Alexandre de Moraes requested the blocking of 10 X accounts belonging to Brazilian businessmen, former congressmen, journalists, and digital influencers. Coincidence or not, most of them openly support Brazil’s former president.

Musk challenged that decision by saying the platform was lifting all restrictions and that the judge had applied massive fines, threatened to arrest employees and cut off access to X in Brazil. He added that the company would probably lose all revenue in the country by having to shut down the office there.

Furthermore, Musk suggested through another post on his platform that all Brazilian users use a VPN (virtual private network) to access X if it was taken down by the court. He even added that the decision was against the Brazilian legal framework and that the Supreme Court Justice should be removed from his position. Consequently, Moraes opened an investigation against Musk and imposed a daily fine of $20,000 per unlocked profile in case Brazilian judicial measures were not taken.

The legal debate

The Chief Justice of the Brazilian Supreme Court, Roberto Barroso, made a statement supporting Moraes’ decisions. According to Barroso, the Brazilian Supreme Court protects domestic institutions, and any company operating in Brazil is subject to the Brazilian Constitution and the decisions of the country’s authorities. Barroso also highlighted that judicial decisions may be subject to appeals, but not to deliberate non-compliance.

On the other hand, Brazilian legal experts have highlighted the drawbacks of Moraes’s responses to Musk’s posts. The absence of the Brazilian Public Prosecutor’s Office in the investigation opened against Musk, along with the negative exposure of the Brazilian justice system to the international scenario, have been key points of criticism.

Issues involving potential consequences for executives and employees of X in Brazil were also part of the discussion. Criminal law experts pointed out that criminal liability in Brazil applies individually. Therefore, if the company has failed to comply with judicial measures to block accounts in Brazil by an order coming directly from Musk in the US, individuals in Brazil could not be held criminally liable for it.

However, the Brazilian branch would be compelled to bear civil penalties (for instance, payment of the daily fine of $20,000 per unlocked profile). According to a public response from X’s lawyers in Brazil, the company does not have the authority to interfere in the management of the platform, which occurs in the US and Ireland. Several legal experts dismissed the possibility of any potential criminal lawsuit against Musk in Brazil due to procedural challenges.

Support from Argentina

After days of expectations surrounding the potential impacts of non-compliance by X in Brazil, Barroso declared the matter closed last Thursday. The Brazilian Chief Justice stated that any further action required would be pursued through judicial procedure. He added, ‘Sometimes, people make bravado, but they do not follow through on their statements” (in Portuguese, “as vezes as pessoas fazem bravatas, mas não implementam as suas declarações”).

Nonetheless, the matter seems far from closing. On Friday, the President of Argentina, Javier Milei, openly offered support to Musk in dealing with X’s dispute in Brazil. They met for the first time at a Tesla factory in the US. The Argentine government issued a statement indicating that Milei and Musk discussed the importance of technological development for the world and agreed to hold a major event in Argentina to discuss topics related to freedom (of speech).

Musk’s relationship with Argentina has been strengthening. SpaceX, another company owned by Musk, has been granted permission to provide Starlink internet services (also owned by Musk) in Brazil’s neighbor. Meanwhile, during the developments concerning X in Brazil this week, current Brazilian President Luis Inacio Lula da Silva made a statement. Without mentioning the businessman’s name, Lula said there’s a billionaire making rockets to seek habitable locations beyond Earth. But he emphasized that one must learn to live here and use a lot of money to help preserve the environment and improve people’s lives.

Social media regulation

The absence of social media regulation stands out as a pressing issue demanding attention. This challenge mirrors the global struggle with privacy laws. Not only is there a lack of unified regulation, but there is also the difficulty of legal frameworks landing behind technological advancements. The recent disagreement between the Argentine and Brazilian governments may only add further political complexity to this scenario in Latin America. Clearly, the outcome of this judicial battle is worth keeping up with.

Cláudia Massaia has significant experience in corporate compliance with recognition in Chambers Brazil 2022 and Chambers Global 2023. She is currently an LLM student at Fordham University, specializing in both Corporate Compliance and Banking, Corporate, and Finance.