Brazil orders suspension of X amid ongoing legal disputes

Today, August 30, 2024, the Supreme Federal Court of Brazil (STF) issued an order for the immediate suspension of X, formerly known as Twitter, across the country. This decision follows a series of non-compliance incidents with court orders related to criminal investigations involving the platform. The move marks a significant escalation in Brazil's efforts to enforce its legal mandates on social media companies operating within its jurisdiction, particularly after X's repeated refusal to comply with specific directives issued by the court.

The decision primarily targets X Brasil Internet Ltda., the Brazilian subsidiary of X, along with its international affiliates, Twitter International Unlimited Company, T.I. Brazil Holdings LLC, and other entities under the broader control of Elon Musk, the major shareholder and CEO of X. The court has also included Musk as an individual subject to investigation due to his public defiance of Brazilian judicial orders and his stated intent to close the subsidiary to avoid compliance.

When did the ban become official?

The decision to suspend X in Brazil was made official today, August 30, 2024. This decision comes in the wake of Musk's announcement on August 17, 2024, that he would dissolve X Brasil Internet Ltda., the company's local subsidiary, to avoid complying with Brazilian judicial mandates. The court saw this move as an attempt to evade Brazilian jurisdiction and thwart the ongoing investigation.

In response to Musk's statement and the continued lack of cooperation from X, the court extended the ban to include all entities connected to X in Brazil, encompassing Twitter International Unlimited Company, T.I. Brazil Holdings LLC, and Starlink Brazil Holding Ltda., among others.

Where did the legal issues arise?

The legal challenges primarily arose from X's alleged failure to comply with Brazil's "Marco Civil da Internet," the legal framework that governs internet use in the country. The law, enacted in 2014, requires companies operating in Brazil to adhere to local laws, including removing illegal content and providing user data upon judicial request. The legislation holds internet service providers accountable for damages caused by third-party content if they do not take action in response to a court order.

In addition, the Brazilian Civil Code mandates that any foreign company operating in Brazil must maintain a legal representative in the country who can respond to legal actions. X's failure to provide such cooperation, despite multiple attempts by the court to communicate with its representatives, was seen as a direct violation of Brazilian law.

Why was X banned in Brazil?

The ban was imposed due to X's persistent non-compliance with judicial orders and perceived threats to public order and safety. According to the STF, X's platform was being used to facilitate unlawful activities, including the incitement of violence and the spread of false information intended to destabilize democratic institutions. The court emphasized that no private entity, including X, is above the law.

Musk’s announcement on August 17, 2024, that he intended to close the Brazilian subsidiary rather than comply with court orders, was viewed as a deliberate act of defiance against the Brazilian judiciary. The STF responded by expanding its enforcement measures and ultimately ordering the suspension of X in Brazil.

How did the Brazilian judiciary respond?

The STF adopted a series of escalating actions to compel compliance. Initially, the court imposed daily fines on X Brasil Internet Ltda. for failing to adhere to its orders. When these measures proved ineffective, the court expanded its penalties to include asset freezes and the suspension of financial transactions for all entities linked to X in Brazil.

What are the implications of the ban?

The suspension of X has profound implications for both the company and its users in Brazil. For X, the ban represents a significant disruption in one of the world’s largest social media markets. The financial penalties and asset freezes could impact its global operations and profitability, while the loss of access to millions of Brazilian users could reduce its market reach and influence.

For Brazilian users, the ban means restricted access to a major social media platform, potentially affecting personal communication, business operations, and social interaction. The decision also sets a precedent for how global tech companies must navigate local laws and the potential consequences of failing to comply with national regulations.

How is the ban applied?

The ban is enforced through a combination of technical and administrative measures coordinated by the Brazilian authorities. Firstly, the Brazilian telecommunications agency (ANATEL) and the Central Bank of Brazil have been instructed to implement the suspension order. ANATEL is responsible for coordinating with internet service providers (ISPs) and telecommunications companies to block access to the X platform at the network level. This includes preventing access to X's domains and IP addresses from within Brazil, effectively making the platform inaccessible to users in the country.

To complement the network-level block, the Central Bank of Brazil is involved in freezing all financial assets associated with X's entities in Brazil. This includes bank accounts, shares, and other financial instruments. The Central Bank has been instructed to ensure that any financial transactions related to X are halted, preventing any movement of funds or assets that could undermine the enforcement of the ban.

Additionally, Brazilian law enforcement agencies have been tasked with monitoring compliance among internet service providers. ISPs that fail to block access to X could face substantial fines or legal penalties. The Ministry of Justice and Public Security is also coordinating with the judiciary to monitor and enforce the ban's application across different regions of Brazil.

Furthermore, the STF has notified technology companies and financial institutions operating within Brazil that any attempts to facilitate access to X or its affiliates could lead to severe legal consequences. The court has also issued orders to remove all applications related to X from digital distribution platforms, such as the Apple App Store and Google Play Store, for Brazilian users. This step is intended to prevent the installation or use of the X app in Brazil, further ensuring that the platform remains inaccessible.

Consequences of using a VPN to access X in Brazil

The decision issued today by the Supreme Federal Court of Brazil (STF) explicitly outlines the consequences for individuals and entities attempting to bypass the court-ordered ban on X (formerly Twitter) using technological means, such as Virtual Private Networks (VPNs). The court has mandated strict penalties for anyone who tries to circumvent the suspension of X's operations through the use of VPNs or other similar tools.

According to the judiciary decision, a daily fine of BRL 50,000 (approximately USD 10,000) will be imposed on any individual or entity that engages in "technological subterfuges" to maintain communications on X. This includes using VPNs to access the platform. The fine applies both to natural persons (individual users) and to legal entities (such as companies or organizations) that facilitate or attempt to facilitate access to X despite the ban.

The court's order is clear: any effort to circumvent the judicial suspension using VPNs or similar technologies will not only incur these financial penalties but may also attract additional civil and criminal sanctions under Brazilian law. The decision underscores that the fines are cumulative, meaning they will accumulate daily until the individual or entity ceases to violate the ban.

The judiciary decision also implies consequences for VPN service providers operating in Brazil or serving Brazilian users. While the decision primarily targets X and its affiliates, it also highlights the responsibility of internet service providers (ISPs) and related technology companies to enforce the suspension order effectively. This could lead to several outcomes for VPN providers:

1. Requirement to Block Access: Brazilian authorities could issue directives requiring VPN providers to block access to X's domains and IP addresses. Failure to comply with such directives could result in significant fines, restrictions on their services in Brazil, or even a complete ban from operating in the country.
2. Legal Sanctions: VPN providers that refuse to cooperate with Brazilian authorities or assist in bypassing the ban could face legal sanctions. These could include penalties such as asset freezes, operational restrictions, or other punitive measures similar to those imposed on X Brasil Internet Ltda. and its affiliates.
3. Obligations for Data Sharing: The judiciary may also compel VPN providers to share user data with law enforcement agencies if they suspect that the service is being used to access X for unlawful purposes. This could lead to legal challenges for VPN providers who operate under privacy-centric business models but are required to comply with local laws in Brazil.

The request to Apple and Google to enforce the ban

The STF has directed both Apple and Google, as operators of the world's largest mobile app distribution platforms (Apple's App Store and Google Play Store), to take specific measures to comply with the court's order. The requests include the following actions:

1. Removal of the X App from App Stores in Brazil: The court has requested that Apple and Google remove the X app from their respective app stores for Brazilian users. This means that users in Brazil will no longer be able to download or update the X app on their smartphones or other devices. The removal is intended to prevent new downloads and to halt the app's functionality through regular updates, which could contain patches or workarounds designed to bypass local restrictions.
2. Blocking Access to X via App Platforms: In addition to removing the app, Apple and Google have been asked to block any attempt to access X through alternative means, such as web browsers embedded within other apps available on their platforms. The court's decision specifies that both companies should take all necessary steps to prevent the use of their services to reach X, even indirectly.
3. Reporting Compliance and Implementation Details: The court has also mandated that Apple and Google provide a formal response detailing the steps they have taken to comply with the order. This includes providing a timeline for the removal of the X app and the implementation of measures to block access through other apps. The companies are expected to comply promptly and provide a compliance report to the STF.

What comes next?

As of today, August 30, 2024, the STF's suspension order remains in effect, with further actions potentially forthcoming if X continues to defy Brazilian law. The case highlights broader challenges related to regulating global digital platforms that operate across multiple jurisdictions, particularly when such platforms fail to respect local legal norms.

Summary of Key Facts:

• Date of Ban: August 30, 2024.
• Entities Involved: X Brasil Internet Ltda., Twitter International Unlimited Company, T.I. Brazil Holdings LLC, Starlink Brazil Holding Ltda., Elon Musk.
• Reason for Ban: Non-compliance with Brazilian court orders, facilitation of criminal activities, defiance of Brazilian law.
• Judicial Measures: Suspension of operations, asset freezes, daily fines totaling BRL 18,350,000.
• Legal Basis: Violations of the "Marco Civil da Internet," the Brazilian Civil Code, and the Constitution.
• Current Status: X is suspended from operating in Brazil, with the order covering all affiliated entities.