X, formerly known as Twitter, lost a legal case in Australia where it attempted to avoid a $400,000 fine by arguing that Twitter no longer existed as a company. The dispute began over a year ago when Australia’s eSafety Commission asked the company to provide information about how it handled child sexual exploitation on the platform. X’s incomplete response, which left several questions unanswered, resulted in a fine of more than $415,000 for non-compliance.
In an effort to avoid the fine, X claimed that Twitter Inc. had ceased to exist as of March 2023, following its acquisition and rebranding by Elon Musk. According to X’s legal argument, since Twitter Inc. no longer existed as a separate entity, X Corp, which replaced it, should not be held responsible for complying with the eSafety Commission’s requests. The company argued that X Corp was distinct from Twitter Inc. and thus not subject to the same obligations.
X Corp Loses Australian Legal Battle, Fined $415,000 for Non-Compliance in Child Safety Investigation
This legal strategy has been a recurring theme for X, with CEO Linda Yaccarino also claiming that X is a “brand new company” in various public settings, including a Senate hearing on child safety earlier this year. The argument was used as a defense mechanism to avoid scrutiny and regulatory demands tied to Twitter’s previous operations.
However, Australian federal Judge Michael Wheelahan rejected X’s claim, stating that the argument lacked logical coherence and was not sufficiently explained. The court ruled that X Corp could not escape its regulatory responsibilities by simply claiming that Twitter no longer existed as a separate legal entity. This decision upheld the fine and held X accountable for non-compliance with the eSafety Commission’s request.
Following the ruling, eSafety Commissioner Inman Grant welcomed the decision, emphasizing the potential consequences had X’s argument succeeded. Grant warned that if the court had accepted X’s stance, it could have set a dangerous precedent, allowing companies to avoid regulatory obligations in Australia by merging or rebranding under new names.
