Australia Fines X $465,000 for Failing to Report on Child Safety

Key Takeaways

• X Corp. fined AU$650,000 ($465,000) for violating Australia's Online Safety Act
• The company admitted it failed to answer questions about how it handles child exploitation content
• Both X and Australia's eSafety regulator agreed the fine amount was appropriate

An Australian Federal Court judge has fined X Corp. AU$650,000 ($465,000) for failing to tell the country's online safety regulator how it handles child sexual exploitation material. The Thursday ruling ends a three-year court fight that began when X ignored a mandatory transparency notice.

Justice Michael Wheelahan also ordered X to pay AU$100,000 ($71,000) of the eSafety Commissioner's legal costs within 45 days.

What X Failed to Do

In February 2023, eSafety Commissioner Julie Inman Grant sent transparency notices to several major tech companies, including Twitter. The notices asked companies to report what steps they were taking to comply with Australia's Basic Online Safety Expectations for handling child sexual exploitation and abuse materials.

X had until March 29, 2023 to respond. It didn't provide a complete report.

X's lawyer Perry Herzfeld told the court that the noncompliance didn't continue past May 5, 2023. He described that period as "a time of change and transition for the company." Elon Musk completed his acquisition of Twitter in October 2022 and merged it with X Corp. in March 2023.

The company admitted in court that it violated Australia's Online Safety Act by failing to fully answer the questions in the transparency notice.

Why the Fine Amount

Both X and eSafety agreed the AU$650,000 penalty was appropriate. Christopher Tran, eSafety's lawyer, explained the reasoning.

“It's appropriate because X Corp. is obviously a large company and a large figure is needed to ensure that a contravention is not treated as a cost of doing business.”

— Christopher Tran, eSafety's lawyer

For context: X generated around $3 billion in revenue in 2023, down from $4.4 billion in 2022 according to various reports. A $465,000 fine represents a fraction of a percent of that figure.

The Three-Year Legal Battle

X had argued throughout the case that it wasn't obligated to answer eSafety's questions. The Full Federal Court rejected that argument in July 2024, upholding an October 2024 lower court ruling. X did not immediately respond to requests for comment on the fine.

What the Regulator Says

Inman Grant, who worked at Twitter before becoming Australia's eSafety Commissioner, said transparency from tech companies is essential for accountability.

“This is not only a key part of our work as Australia's online safety regulator, it also provides the Australian public with important information about how these companies are tackling the worst-of-the-worst content on their platforms.”

— Julie Inman Grant, eSafety Commissioner

Australia has taken an increasingly aggressive approach to regulating social media platforms. The country's Online Safety Act gives regulators power to compel companies to disclose how they handle harmful content, and to fine those who don't comply.

Pattern of Platform Friction

This isn't the first time X has clashed with Australian regulators. In 2024, eSafety ordered X to remove posts showing a bishop being stabbed during a Sydney church service. X initially refused, calling it censorship, before eventually complying.

The company has also faced regulatory pressure in Brazil, where it was briefly banned in 2024 for refusing to comply with court orders, and in the European Union under the Digital Services Act.

Frequently Asked Questions

Why was X fined in Australia?

X failed to respond to a mandatory transparency notice from Australia's eSafety Commissioner asking how the platform handles child sexual exploitation content. The company admitted it violated the Online Safety Act.

How much is the X Australia fine?

The Federal Court fined X Corp. AU$650,000 (approximately $465,000 USD). X must also pay AU$100,000 ($71,000) of the regulator's legal costs.

Did X appeal the Australian ruling?

X did fight the case for three years, arguing it wasn't obligated to respond. The Full Federal Court rejected that argument in July 2024, and both parties agreed on the fine amount.

What is Australia's eSafety Commissioner?

The eSafety Commissioner is Australia's online safety regulator. It has power to compel tech companies to report on how they handle harmful content and can issue fines for noncompliance.

Source: mint