On Friday, Brazilian Supreme Court Justice Alexandre de Moraes took a bold step by seizing approximately $3.3 million (€2.9 million) from the bank accounts of two companies owned by tech billionaire Elon Musk—X, his social media platform formerly known as Twitter, and Starlink, a satellite-based internet provider operated by his aerospace company SpaceX.
This legal action is tied to ongoing fines owed by X to the Brazilian government. The court’s decision to seize funds from both X and Starlink has sparked widespread debate among legal experts, especially as Starlink was not directly implicated in the cases that led to X’s fines. Nevertheless, the bank accounts of the two companies have since been unfrozen, though the legal questions surrounding the ruling remain.
Legal Confusion Over the Freezing of Starlink’s Accounts
The move to freeze Starlink’s bank account—intended to cover fines levied against X—has raised significant concerns among legal analysts. While Musk owns both companies, X and Starlink are distinct entities. Starlink, a satellite internet provider, operates under SpaceX, while X is a social media platform with its own legal and operational structure.
Legal experts argue that while Musk is the common owner, it might be inappropriate to penalize Starlink for X’s actions, particularly when the two companies function independently in different sectors. The decision to freeze Starlink’s account to recover fines related to X has been met with opposition, with some experts claiming that the companies should be treated separately under the law.
Brazil’s Supreme Court disclosed in a public statement on Friday that Justice de Moraes had ruled to transfer funds totaling more than 7.2 million Brazilian reais (€1.17 million) from X’s bank account and nearly 11 million Brazilian reais (€1.8 million) from Starlink’s account. This order, issued on Wednesday, was not immediately made public, adding to the opacity of the case. De Moraes’ legal reasoning for targeting Starlink’s account, as well as the full details of the case, are yet to be released to the public.
X’s Legal Struggles in Brazil: A Controversial History
The dispute between X and Brazil’s Supreme Court is not new. X has been under legal pressure in the country for failing to comply with court orders regarding the removal of content deemed illegal by Justice de Moraes. Specifically, X has refused to take down posts that the Supreme Court flagged for promoting misinformation, hate speech, or inciting violence, much of which has been linked to far-right political groups in Brazil.
Justice de Moraes, known for his firm stance on content moderation, has been at the center of these legal battles with X, which have intensified since Elon Musk acquired the platform. In one of his most notable rulings, de Moraes suspended X’s operations in Brazil earlier this year, arguing that the platform’s failure to appoint a legal representative in the country violated Brazilian law. According to local regulations, every company operating in Brazil must have an in-country legal representative to handle legal matters and court orders.
X, on the other hand, has pushed back, stating that appointing a legal representative would allow local authorities to exert undue influence on the company. Musk has criticized de Moraes’ demands, suggesting that the justice is attempting to have someone available for arrest if the company continues to defy court orders. The company views this as a tactic by the Brazilian government to increase leverage over the platform, potentially threatening its operational independence.
Tension Over Starlink’s Role in the Dispute
Perhaps the most contentious part of this case is the involvement of Starlink, which was drawn into the legal battle between X and the Brazilian judiciary. Despite being an entirely separate entity from X, Starlink found itself facing the same financial penalties as X. Legal analysts have been quick to point out that, while both companies are owned by Musk, they should be treated independently from one another in legal proceedings.
While de Moraes’ rulings regarding X have been broadly supported, many have raised concerns about the fairness of targeting Starlink. Critics argue that it sets a dangerous precedent for holding one company responsible for the actions of another, especially when the companies are legally distinct. Some experts warn that this could open the door to future legal complications, where unrelated entities could be penalized for the debts or actions of other companies under shared ownership.
Resolution of the Fine Dispute
On Thursday, the banks holding the accounts of both X and Starlink complied with the Supreme Court’s decision, transferring the specified amounts to cover the fines. According to Brazil’s Supreme Court, after the full amount owed was paid, Justice de Moraes deemed it unnecessary to keep the bank accounts frozen. In response, he ordered the immediate unfreezing of all bank accounts and financial assets belonging to X and Starlink. The swift resolution of this particular financial dispute has not, however, quelled the broader concerns regarding the fairness of Starlink’s involvement.
Musk’s social media platform, X, has not yet publicly responded to the seizure of funds or the unfreezing of the accounts, though sources suggest that the company is reviewing its legal options in Brazil. This ongoing battle highlights the growing tension between global tech platforms and local governments, particularly when it comes to issues of regulation, censorship, and control over user-generated content.
Musk’s Criticism of Justice de Moraes and Brazil’s Judiciary
Elon Musk has not shied away from expressing his disdain for Justice de Moraes and the Brazilian judiciary. The tech billionaire has publicly referred to de Moraes as a dictator and an autocrat, criticizing his rulings as overreaching and harmful to free speech. According to Musk, de Moraes’ rulings, particularly those involving content moderation on X, are an attempt to silence political opposition in Brazil.
This friction stems from X’s refusal to block several high-profile users, many of whom are far-right activists accused of spreading disinformation and undermining Brazilian democracy. De Moraes has consistently targeted these individuals, believing that their posts pose a significant threat to the country’s political stability.
In response, Musk has framed the legal challenges as an attack on free speech, positioning himself and X as defenders of open discourse. This has resonated with a portion of Brazil’s population, particularly supporters of former president Jair Bolsonaro, who view de Moraes’ rulings as politically motivated.
The Impact of X’s Suspension and the Rise of Alternatives
X’s legal battles came to a head on August 31, 2024, when the platform was banned nationwide in Brazil following a ruling from Justice de Moraes. The ban came with an additional daily fine of $9,000 (€8,000) for anyone caught using a virtual private network (VPN) to bypass the suspension. This decision had immediate repercussions for X’s Brazilian user base, many of whom quickly migrated to other social media platforms, including Threads and Bluesky.
At the time of the ban, X had an estimated 22 million users in Brazil, according to the “Digital 2024: Brazil” report. While this figure represents a significant user base, it pales in comparison to other platforms in the country. Instagram, for example, boasts six times the number of users as X, while Facebook and TikTok also have far larger followings. The suspension of X has only further diminished its presence in the Brazilian social media landscape, leaving many to question the platform’s future in the country.
Starlink’s Limited Market Presence in Brazil
While X’s struggles in Brazil have captured headlines, Starlink’s operations in the country have been relatively low-key. Starlink, which began providing satellite internet services in Brazil in January 2022, has captured just 0.5% of the national internet market, according to Brazil’s telecommunications agency, Anatel.
Despite its modest market share, Starlink has been hailed as a potential game-changer for rural and remote areas of Brazil, where traditional internet infrastructure is lacking. By offering satellite-based internet, Starlink could provide access to underserved communities, boosting connectivity and economic development. However, its entanglement in X’s legal disputes may hinder its growth and reputation in the country.
Broader Implications for Big Tech in Brazil
The legal battle between Elon Musk’s companies and Brazil’s Supreme Court reflects broader tensions between global tech companies and national governments. As countries around the world grapple with regulating online platforms, issues of censorship, freedom of speech, and corporate accountability have come to the forefront.
In Brazil, the role of the judiciary in shaping these debates has been particularly prominent, with Justice de Moraes emerging as a central figure. His rulings against X, and now Starlink, highlight the growing power of national courts in regulating multinational corporations and ensuring compliance with local laws.
For Musk and his companies, the outcome of these legal challenges could have far-reaching consequences, not only in Brazil but also in other countries where governments are seeking to exert greater control over tech giants.
