SYDNEY: An Australian Federal Court on Thursday upheld a regulatory penalty against X Corp following its admission that it breached online safety laws by failing to supply required information regarding its child protection systems. The ruling concludes a protracted legal battle that has lasted close to three years.
The dispute originated in October 2023, when Australia’s online safety authority, the eSafety Commissioner, imposed a fine of A$610,500 (approximately US$437,000) on the company.
The penalty was issued after the platform provided what regulators deemed an insufficient response to a formal request seeking details of its measures to prevent child exploitation online.
On Thursday, proceedings before the Federal Court confirmed that X Corp had admitted contravening the Online Safety Act. Christopher Tran, representing the eSafety Commissioner, told the court that the company had failed to comply for a period of around 38 days, acknowledging “ongoing noncompliance”.
“The respondent admits that it contravened the Act,” he stated during the hearing, noting that the breach related to delays in providing mandatory regulatory information.
According to Reuters, the court further noted that X Corp had initially challenged the penalty, arguing procedural issues linked to its rebranding after its acquisition by Elon Musk in 2022. However, the regulator later pursued separate enforcement action to recover the fine.
Judge Michael Wheelahan ultimately not only upheld the penalty but increased it to A$650,000, while also ordering the company to pay an additional A$100,000 towards the regulator’s legal expenses.
The legal resolution formally closes the dispute, which began after the eSafety Commissioner issued a set of 25 questions regarding the platform’s child protection and anti-exploitation frameworks. Authorities argued that failure to respond in a timely manner hindered regulatory oversight.
X’s legal representative, Perry Herzfeld, told the court that the matter largely concerned “historic issues relating to the timeliness of provision of information”. He added that the events occurred during a “period of change and transition” within the organisation.
While the regulator confirmed that no direct harm had been identified as a result of the delay, it emphasised that failure to provide information on request obstructs its ability to perform its statutory duties effectively.
