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X Corp fails to toss eSafety’s $610k penalty
The importance of the Online Safety Act was affirmed in a Federal Court decision to toss out X Corp’s objection to a $610,000 penalty issued by the eSafety Commissioner.
Naomi Neilson
Justice Michael Wheelahan dismissed proceedings brought by X Corp, owner of the “X” social media platform, that claimed it should not have to pay a $610,000 penalty issued by the eSafety Commissioner because it was meant for the now defunct Twitter Inc.
“X Corp has therefore failed to show that it was not required to respond to the reporting notice,” Justice Wheelahan said.
“It also necessarily follows that X Corp has not shown, on this ground, that the infringement officer did not have reasonable grounds to believe that X Corp has contravened section 57 of the Online Safety Act, which was the other main issue.”
In opening his judgment, Justice Wheelahan said that where access to content, including by children, is ubiquitous, the Online Safety Act “is an important piece of Commonwealth legislation”.
“As the long title to the act suggests, its objects are to improve and promote online safety for Australians,” Justice Wheelahan said.
“In furtherance of those objections, the act confers extensive functions and powers upon the commissioner that includes the collection of information by coercive means the civil enforcement of the act.”
In February 2023, the eSafety Commissioner gave notice to Twitter Inc under the Online Safety Act that required it to prepare a report about the extent to which it complied with basic online safety expectations from January 2022 to January 2023.
Although the report was provided by the deadline, the commissioner said it did not provide all the information required and claimed various responses were “absent, incomplete or inaccurate”.
Last March, Twitter Inc merged into X Corp and ceased to exist.
When X Corp failed to provide further information, the commissioner issued an infringement notice made up of $16,500 itemised penalties – which came to the sum of $610,500 – over its failure to respond to the notices between 29 March and 5 May 2023.
X Corp told the Federal Court that because Twitter Inc ceased to exist, it lacked the capacity to comply with the notice and X Corp was not obliged to prepare any report in its place.
Its alternative submission was whether it was subject to obligation to respond to the reporting notice as governed by the law in Nevada.
X Corp submitted it did not take on Twitter Inc’s legal obligation.
On this point, Justice Wheelahan said from the perspective of Nevada’s law, “X Corp’s new status entailed being subject to all the liabilities, including the regulatory obligations, to which Twitter Inc have been subject immediately before it merged into X Corp”.
Naomi Neilson
Naomi Neilson is a senior journalist with a focus on court reporting for Lawyers Weekly.
You can email Naomi at:
