You know how little kids sometimes play a game where they claim they’ve changed their name, and you can no longer blame them for what they did under their previous name? You know how that never actually works? Well, about that… Elon seems to be trying a corporate version of that trick in Australia, and it has been just as successful.
It’s no secret that this year, Elon’s ExTwitter has been fighting with Australia over demands to remove content, but there was a separate fight, going back over a year, in which the Australian eSafety Commissioner was disappointed with ExTwitter’s processes for handling child sexual abuse material (CSAM) on the platform.
If you don’t recall, a few weeks after taking over the site, Elon claimed that fighting CSAM was his “priority #1.”
And yet, he fired most of the trust and safety team, appeared to stop using industry-standard tools for finding/deleting known CSAM, and seemed to make the CSAM problem on ExTwitter much, much worse. That’s not even mentioning the time he reinstated an account that had shared an infamously horrid piece of CSAM because the poster was an Elon supporter.
Thus, a while back, the Australian eSafety Commissioner began an investigation into how the company was dealing with CSAM. Elon chose to not take it very seriously at all. From the eSafety Commissioner:
I assessed X Corp.’s response and identified 14 questions (many of which involved multiple sub-questions) where it failed to provide the information required by the Notice. In some instances X Corp. had failed to provide any response to the question, such as by leaving the boxes entirely blank. In other instances, X Corp. provided a response that was otherwise incomplete and/or inaccurate.
On 6 April 2023, my office sent follow-up questions to X Corp. to provide a further opportunity to provide the information required by the Notice. The correspondence stated that my office was seeking this information to assess whether X Corp. had complied with the Notice. 1 Service provider notification to X Corp. esafety.gov.au
On 5 May, X Corp. provided information in response to the follow-up questions. It is evident from many of X Corp.’s subsequent responses that it held information required by the Notice and was capable of providing that information at first instance.
Because of this, Australia fined ExTwitter $400k almost a year ago. After the fine was assessed, Elon fought back and appealed the ruling, continuing his standard “ignore first, fight it out in court later” approach to so many things.
He did so by claiming that the fine was for actions taken by “Twitter” (under his watch) but that “Twitter” no longer existed, because there was a different company called “X” that he now ran. So any demands for “Twitter” must be null and void, as X operated under a totally different set of laws.
Because Elon thinks he’s clever and that everyone else is very, very stupid.
To be clear, it’s a little more complicated here. Part of the argument was that since Twitter was a Delaware-based company, while X is a Nevada-based company, different laws apply under each state. But, the idea that this somehow absolved the company of having to deal with legal issues that began under the previous entity still seems like one of those tricks only a bratty schoolboy would try.
Turns out this didn’t work. I’m not sure what’s Australian for “not fucking impressed,” but I’d say that it applies to this judge.
A central feature of this proceeding is that, on 15 March 2023, Twitter Inc merged into X Corp. Upon that occurring, Twitter Inc ceased to exist. These facts were not in dispute, as they were the subject of a statement of agreed facts that was received into evidence….
[….]
To adopt the language of the Nevada statute, Twitter Inc was a constituent entity that merged into X Corp. It was only upon that occurrence that Twitter Inc ceased to exist, and it was only its separate existence that ceased. X Corp’s “status” is as the surviving entity of a statutory merger, in which Twitter Inc was a constituent entity that merged into X Corp, with all of the legal consequences that ensue….
Then there was a separate argument that ExTwitter had made, basically arguing that under Australia’s Regulatory Powers Act, ExTwitter didn’t have to respond because the notice it received “did not specify the place of the contraventions” because, again, it tried to pretend that “Twitter” and “X” were different companies.
This just comes across as another bit of gamesmanship.
And again, the judge wasn’t impressed, noting that the notice identified both companies:
In the present case, X Corp did not advance any persuasive basis on which to conclude that the failure of the infringement notice to identify the place of the contraventions could have prejudiced it. I have already mentioned that X Corp submitted that the location of the alleged contravention could have indicated which was the correct legal entity to which the notice should have been directed. But on X Corp’s own case, the location of the alleged contraventions had no relevance to this question, which was said to turn on the Online Safety Act itself, or the effects of the merger between Twitter Inc and X Corp, as provided for by Nevada law. And, as the Commissioner submitted, the infringement notice was addressed to X Corp and identified both Twitter Inc and X Corp as the relevant “provider”. It was not otherwise explained how X Corp was prejudiced by the fact that the notice did not identify where the failure to comply with s 57 of the Online Safety Act occurred. No prejudice, or even potential prejudice, is apparent. To the contrary, I accept the Commissioner’s submission that X Corp had everything it needed to know in order to consider the allegations made against it in the infringement notice.
I recognize that sometimes Elon gets away with his “cute” legal arguments. But maybe just following the law is better than trying to tap dance around it with obviously stupid rationales?
