Australian court rejects X Corp.'s appeal in child safety case, orders legal costs

Key Points

• An Australian appeals court has unanimously ruled against X Corp., requiring the company to comply with eSafety Commissioner Julie Inman Grant's demands related to child abuse material on its platform.
• The court ordered X Corp. to pay legal costs associated with the case, reinforcing obligations for foreign companies to adhere to Australian regulations despite mergers.
• The ruling is part of broader efforts by Inman Grant's office, which has initiated legislation to prevent children under 16 from using social media platforms, including X, starting in December.
• X had previously been fined for not adequately addressing child exploitation content, a penalty that it is contesting in a separate court case.

MELBOURNE, Australia (AP) — An Australian appeals court on Thursday ruled against X Corp., rejecting a challenge to a safety watchdog's demands for details on how the Elon Musk -owned company was combating widespread child exploitation material on its platform.

Three federal court judges unanimously rejected X’s appeal against a federal court decision in October last year that the company was obliged to respond to a notice from eSafety Commissioner Julie Inman Grant on child abuse material being shared on X, which is incorporated in Texas.

The judges also ordered X to pay the commissioner’s legal costs. Inman Grant’s office describes itself as the world’s first government agency dedicated to keeping people safe online.

Inman Grant has driven world-first legislation that will ban Australian children younger than 16 from social media platforms including X from December.

The federal court case goes back to early 2023, when Inman Grant asked some of the world’s largest technology companies to report on what they were doing about child abuse material appearing on their platforms.

A reporting notice, issued under Australia’s Online Safety Act, was sent to Twitter Inc., incorporated in Delaware, in February that year.

Twitter merged with X the following month.

X arguments against complying with Inman Grant’s order included that Twitter no longer existed as a legal entity and that X did not carry its predecessor's regulatory obligations in Australia.

Inman Grant, a former Twitter employee, welcomed Thursday’s ruling.

“This judgment confirms the obligations to comply with Australian regulations still apply, regardless of a foreign company’s merger with another foreign company,” she said in a statement.

She said her agency would continue enforcing the Online Safety Act and “holding all tech companies to account without fear or favor, ensuring they comply with the laws of Australia.”

“Without meaningful transparency, we cannot hold technology companies accountable,” she said.

X lawyer Justin Quill said he had not yet read the appeals court judges’ reasons and could not comment on the possibility of a High Court appeal.

The High Court only hears around 10% of appeal applications, so the federal court full-bench decision could be final in X's case.

X’s media office did not immediately respond to an email request for comment on Thursday.

In 2023, Inman Grant’s office fined X 610, 500 Australian dollars ($385,000) for failing to fully explain how it tackled child exploitation content. X’s response was considered incomplete or misleading.

X refused to pay and the penalty is the subject of a separate and ongoing federal court case.