X responsible for Twitter’s compliance, regulator argues
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The news: Lawyers for the eSafety Commissioner have argued before a Melbourne court that when Twitter became X Corp in March 2023, it “swallowed the assets and liabilities” of its predecessor.
The context: X Corp’s lawsuit against the online safety regulator over a transparency notice issued to Twitter regarding child sexual abuse material hinges on a key “tipping point”, Federal Court of Australia Judge Michael Wheelahan has said.
The crux of the matter is whether Australian online safety laws, enforced by the eSafety Commissioner, permit the surviving entity of a merger to be viewed as the company served with a compliance notice before the merger took place. eSafety is pursuing separate civil penalty proceedings against X for alleged non-compliance with the same 2023 notice.
For Elon Musk’s X, the argument is straightforward: the transparency notice does not apply to the social media platform because X didn’t exist when the notice was issued.
The case adds to an already contentious litigious relationship between X and eSafety, with several disputes ongoing before both the Federal Court and the Administrative Appeals Tribunal.
Earlier this year, eSafety’s Federal Court case against X for alleged non-compliance with a takedown notice linked to video content of a stabbing in Sydney’s west saw Musk hurl online insults at eSafety Commissioner Julie Inman Grant. The matter was scrapped in the Federal Court, with a related dispute now unfolding in the Administrative Appeals Tribunal.
eSafety issued the notice to X when it was branded as Twitter, in February 2023, raising questions about measures it has in place to deal with child sexual abuse. Twitter rebranded as X in July 2023.
Other tech platforms — namely Google, TikTok, Twitch and Discord — were also issued with notices at the time.
What they said: Barrister Brett Walker SC, representing X before Wheelahan, said there is “no suggestion” in online safety measures that “in the case of a merger between a notice and the time to report, the surviving entity is to be regarded for all purposes as the entity to which the notice was given".
If anything, Walker argues, eSafety should have issued a new notice to X for its non-compliance, rather than relying on one issued to Twitter.
Barrister Stephen Lloyd SC has argued the exact opposite on behalf of eSafety.
Conversely, Barrister Stephen Lloyd SC argued on behalf of eSafety that Australian law should treat the consequences of a merger similarly to a company changing its name. He asserted that national law recognises X Corp as inheriting Twitter’s responsibilities.
“There’s nothing in the Online Safety Act that says the duty cannot fall onto the new corporate entity,” Lloyd said.
Wheelahan has reserved his decision in the case.
The sources: Federal Court of Australia, eSafety Commissioner
