Elon Musk’s X and Starlink face daily fines in Brazil for ban evasion

Elon Musk’s X faces steep daily fines in Brazil for allegedly evading a ban on the service there, according to a statement from the country’s supreme court Thursday.

The fines imposed by Brazil’s supreme court amount to $5 million in Brazilian reals, about $920,000, a day. The court said it would continue to impose “joint liability” on Starlink, the satellite internet service owned and operated by SpaceX, Musk’s aerospace venture.

The suspension of X in Brazil was initially ordered by the country’s chief justice, Alexandre de Moraes, at the end of August, with orders upheld by a panel of justices in early September. The court found that under Musk, X had violated Brazilian law, which requires social media companies to employ a legal representative in the country and to remove hate speech and other content deemed harmful to democratic institutions. The court also found that X failed to suspend accounts allegedly engaged in doxxing federal officers.

X recently moved to servers hosted by Cloudflare and appeared to be using dynamic internet protocol addresses that constantly change, enabling many users in Brazil to access the site. In a previous setup, the company had used static and specific IP addresses in Brazil, which were more easily blocked by internet service providers at the order of regulators.

Musk, who owns X, formerly known as Twitter, has been lashing out at de Moraes for months and continued to do so after the order was issued. He’s characterized de Moraes as a villain, comparing him to Darth Vader and Harry Potter character Voldemort. He has also repeatedly called for de Moraes to be impeached.

Brazil previously withdrew money for fines it levied against X from the accounts of X and Starlink at financial institutions in the country. The new fines will begin as of Sept. 19, with the court calculating a total based on “the number of days of non-compliance” with its earlier orders to suspend X nationwide.

While Musk presents himself as a free speech absolutist, X has acquiesced to requests to remove profiles and posts in countries including India, Turkey and Hungary.

Musk and X may be in the process of complying with Brazil’s takedown orders as well. Correio Braziliense, a Brazilian publication, reported on Wednesday that X has started blocking accounts as per suspension orders issued by the country’s supreme court.

Among the apparently banned accounts were those of some internet influencers who are reportedly being investigated for spreading misinformation and promoting attacks against democratic institutions in Brazil. 

X said it wasn’t intending to restore access for Brazilian users.

“When X was shut down in Brazil, our infrastructure to provide service to Latin America was no longer accessible to our team,” a company spokesperson told CNBC on Wednesday. “To continue providing optimal service to our users, we changed network providers. This change resulted in an inadvertent and temporary service restoration to Brazilian users. While we expect the platform to be inaccessible again in Brazil soon, we continue efforts to work with the Brazilian government to return very soon for the people of Brazil.”

Brazil’s national telecommunication agency, Anatel, has been ordered by de Moraes to prevent access to the platform by blocking Cloudflare as well as Fastly and EdgeUno servers, and others that the court said had been “created to circumvent” a suspension of X in Brazil.

A Cloudflare spokesperson told CNBC in a statement that the company isn’t “enabling or preventing blocking,” adding that “many of Cloudflare’s customers choose to use dedicated IPs, which is not unique in the industry.” 

Before the suspension, X had an estimated 22 million users in Brazil, according to Data Reportal.

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