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You can't outrun the law forever

In Brazil, Elon Musk finally has a case worth fighting — but he has to do it in the courts

Casey Newton

Starlink, the satellite broadband company led by Elon Musk, said on Tuesday that it would comply with a court order and block access to X in Brazil. It marked yet another surprising twist in a wild saga that has been simmering all year but boiled over this weekend when a Brazilian judge single-handedly moved to ban X in the country.

Today let’s talk about how a personality clash between two powerful men led to tens of millions of Brazilians being prevented from accessing X — and how the move could be used to justify further restrictions on internet freedom around the world.  

In April, I wrote about how Musk had decided to risk a ban of X in Brazil over a court’s order that the platform ban a number of accounts belonging to right-wing users. Musk decided to restore the accounts in defiance of a powerful Supreme Court justice named Alexandre de Moraes, who subsequently opened an inquiry into the billionaire.

Musk, who has said he bought Twitter to turn the platform into a bulwark of free speech, positioned the move as a defense of liberty against an extremist government. Moraes, for his part, called Musk an “outlaw” whose X would “allow the massive spread of disinformation, hate speech and attacks on the democratic rule of law, violating the free choice of the electorate, by keeping voters away from real and accurate information.”

After Musk’s April outburst, X quickly reversed course, and said it would comply with the judge’s order. But the accounts that Moraes sought to terminate remained active, and last month X said he threatened to arrest a local employee for the platform’s failure to comply with his order. (The court wouldn’t comment, but threatening platform employees with jail time is an increasingly common and typically quite effective means of allowing government agents to moderate content as they see fit.) 

Typically, threatening an employee with jail is all it takes to get a company to reverse course. Musk, on the other hand, said X would close its offices in Brazil.

On Friday, Moraes met that dramatic escalation with one of his own. Here are Jack Nicas and Kate Conger in the New York Times:

In a highly unusual move, Justice Moraes also said that any person in Brazil who tried to still use X via common privacy software called a virtual private network, or VPN, could be fined nearly $9,000 a day.

Justice Moraes also froze the finances of a second Musk business in Brazil, SpaceX's Starlink satellite-internet service, to try to collect $3 million in fines he has levied against X. Starlink — which has recently exploded in popularity in Brazil, with more than 250,000 customers — said that it planned to fight the order and would make its service free in Brazil if necessary.

Moreover, while he quickly reversed course, Moraes initially ordered Apple and Google to block X at the level of the app store in Brazil, as well as blocking VPN apps that let users circumvent geographic barriers to app usage.

While moves like these are common in authoritarian countries such as Russia or China, they are extraordinary to see in democracies, which typically place a higher value on free expression.

In any case, the fallout from Moraes’ ban was swift. Countless fan and meme pages went silent. Bluesky added 2 million users, and Threads saw some lift as well. (They are currently the No. 1 and 2 apps respectively in the Brazilian App Store, per Similarweb.) 

And depending on how long the ban lasts, it will likely degrade even further the value of X, which a new analysis over the weekend found had lost an estimated $24 billion in value since Musk acquired Twitter in 2022.

What makes the story of Brazil and X such an unusual tech policy story is the way it has been driven almost entirely by two people. 

On one side is Musk, who has often claimed the mantle of free speech warrior in public while capitulating to government requests in private. One analysis last year found that under Musk, X had given into 83 percent of requests from authoritarian governments to remove content. And he appears more willing to accede to the requests of right-wing governments, such as India’s.

In 2021, it seemed possible that India would be the first democracy to ban Twitter, after the company fought court orders to remove political dissent — including from left-wing opponents to the government of Narendra Modi. But relations have warmed between Musk and the Modi government since he stopped fighting those battles.

“The rules in India for what can appear on social media are quite strict, and we can’t go beyond the laws of a country,” Musk told the BBC last year. “If we have a choice of either our people go to prison or we comply with the laws, we will comply with the laws.” At another point in the interview, Musk said: “If people of a given country are against a certain type of speech, they should talk to their elected representatives and pass a law to prevent it.”

Brazil once again gave Musk the choice of sending an employee to prison or complying with its laws. This time, he chose not to comply.

Musk’s defiance likely would have sparked a backlash in most countries where X operates. But he has found a particularly pugnacious opponent in Moraes, a hugely powerful and controversial figure within Brazilian politics who came to prominence during the tenure of former president Jair Bolsonaro. Bolsonaro, a Trump-like figure who threatened to undermine Brazil’s democracy, lost the 2022 election and left office after a violent riot at the capitol by his supporters last year.

Both during and since Bolsonaro’s presidency, Moraes has used the unusual powers of his office to order people arrested over their social media posts, account bans on the platforms where they posted, and even temporarily removing a governor from office. At X, he has sought the removal of at least 140 accounts, the Times reported, and often delivers his orders in sealed documents that do not specify any rationale for his decision.

Moraes is not the first government agent to make overbroad legal requests of a tech platform. Google, Meta, and other companies receive thousands of requests like these every year, and disclose them in aggregate in annual transparency reports. The reason they publish those reports is to serve as a check on governments that seek to abuse their power by seeking information from platforms for surveillance and other potentially problematic uses.

Crucially, Google and Meta also fight against overbroad requests in court. Sometimes, they win. The result is a kind of dance between platforms and governments that leaves everyone at least somewhat disappointed but is also the reason that so many people around the world can speak freely online.

I don’t post on X any more myself, and I will not lament its passing when it disappears. But whatever role the 140 X accounts in question in Brazil may have played in threatening Brazil’s democracy, they cannot have threatened it more than silencing the 20 million or so Brazilians who have been using it regularly. Particularly when Brazil’s move will be seen by autocracies as justification to enact ever more onerous speech restrictions of their own.

Like Pavel Durov before him, Musk appears to have thought he could escape the reach of regulators indefinitely. This weekend, he began to learn the same lesson Durov has: you can’t outrun the legal system forever. Had Musk fought for his users in court earlier, he might have avoided a ban. Instead, as he has before in so many other things, Musk chose to do it the hard way.

Casey Newton writes Platformer, a daily guide to understanding social networks and their relationships with the world. This piece was originally published on Platformer.

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OK, so when was the longest shutdown in US history?

The US government officially shut down at 12:01 a.m. on Wednesday after senators failed to agree on a last-minute funding bill. Though initially shrugging off the threat of a shutdown during yesterday’s session, stocks were mildly in the red on Wednesday as investors reacted to what is now the 11th shutdown in the government’s history.

Until this latest shutdown, there had been 20 government funding gaps experienced since 1976 — though not all ended in a full shutdown, with full closure averted in half of those cases.

Indeed, prior to the 1980s, funding gaps didn’t typically have major effects on government operations, with agencies continuing to operate on the basis that the funding would come eventually. However, a more stringent interpretation of the rules led to a stricter appropriations process from the early 1980s onward, with many subsequent funding gaps resulting in a shutdown of affected agencies (unless the gaps were quickly fixed or occurred over a weekend).

Obviously, the duration of the latest shutdown is still unclear, but it will continue until Congress passes a funding bill — most likely via a “continuing resolution,” which has ended every shutdown since 1990. Data analyzed by USAFacts suggest that it might not be a one- or two-day affair, as funding gaps have lengthened in recent years.

Government shutdown patterns
Sherwood News

Indeed, the last shutdown, which began in December 2018, ended up becoming the longest in history, at a whopping 34 days. By the time the government reopened in January 2019, about $3 billion (in 2019 dollars) had been wiped from the GDP in Q4, per data from the Congressional Budget Office, with approximately $18 billion in “federal discretionary spending” delayed over the roughly five-week stretch.

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GM climbs following upgrade, report that Trump administration seeks stake in its lithium mine partner

Shares of General Motors rose more than 2% in premarket trading Wednesday following an upgrade of the stock by UBS from neutral to buy. The firm also hiked its price target for GM by 45% to $81.

Also likely elevating GM was a Reuters report that the Trump administration is exploring taking a 10% stake in Lithium Americas, the automaker’s partner in a yet to open Thacker Pass lithium mine. Shares of Lithium Americas surged 68% in the premarket.

GM, which invested $625 million into the lithium mine last year, holds a 38% stake in the joint venture. The mine is expected to become the Western Hemispheres primary lithium source in 2028, when it’s slated to open, producing enough of the metal to make 800,000 electric vehicle batteries.

Prior to its plans for Lithium Americas, the Trump administration last month said it would take a 10% stake in Intel. In July, it announced a 15% stake in rare earths miner MP Materials.

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