Company X lost a legal battle in Australia in which it tried to avoid a $400,000 fine by claiming Twitter no longer exists. The creative legal argument, first spotted by ArsTechnica, comes amid a more than year-long dispute with Australia’s eSafety Commission.
In February last year, the commission asked the company, then known as Twitter, to provide details about its response to child sexual exploitation on its platform. The commission said in a statement last year that Company X did not answer many questions in its responses and left “some fields completely blank.” As a result, the eSafety Commission fined the company more than $415,000 for violations.
It was an attempt to contest this fine that led to the argument that X should not be liable because Twitter “no longer exists.” From court filings:
X Corp submitted that as of March 15, 2023, Twitter Inc will cease to be a person and therefore a provider of social media services. Therefore, because Twitter Inc lacks the ability to comply with the notice and because X Corp is not the same provider as the provider to whom the notice was issued, X Corp has no obligation to prepare the report on behalf of Twitter Inc. A claim was submitted.
This argument is not entirely new to the Elon Musk-owned company. CEO Linda Yaccarino has also repeatedly insisted that Company X is a “brand new company” to avoid scrutiny. She repeated this line multiple times while testifying at a Senate hearing on child safety issues earlier this year.
However, Australian Federal Judge Michael Wheelahan found this argument unpersuasive, saying X’s claims required “a leap of logic not supported by an adequate explanation”. X did not immediately respond to a request for comment.
eSafety Commissioner Inman Grant welcomed the decision in a statement. “If Company X’s argument had been accepted by the court, it could have set a worrying precedent that a foreign company could potentially avoid regulatory obligations in Australia by merging with another foreign company.” Grant said.
