Announcement of X’s exit is reviving discussion on regulation in Brazil’s top court
08/21/2024
The announcement of platform X’s exit from Brazil is expected to bring the Internet Civil Framework back to debate in the Federal Supreme Court, Valor has learned. There was already an expectation among the court’s judges to address the matter this semester, but the situation created by the owner of X, Elon Musk, has reignited the discussion about the need for some form of regulation and accountability for digital platforms regarding content.
Experts consulted by Valor believe that the ruling on the Civil Framework is an opportunity to reaffirm that companies cannot operate in Brazil without legal representation. As of Monday evening, neither the Supreme Court nor the Superior Electoral Court had received formal communication regarding X’s exit from Brazil.
Therefore, for now, there is still no precise movement on what actions the judges will take in light of the potential non-compliance with the decisions of the two courts.
X is expected to end the year with 335.7 million users worldwide, 32.7 million fewer users than in 2022.
The agreements signed by X with the Electoral Court regarding misinformation programs remain in effect. The most recent was signed on August 7 and commits the platforms to adopt swift measures to combat fake news and cooperate with the Court in the Integrated Center for Combating Misinformation and Defending Democracy (CIEDDE).
The law firm Pinheiro Neto, which represents X in Brazil, said that it will not comment on the matter and did not even inform whether it will continue to represent the company legally in Brazil.
While the impacts of X’s departure from Brazil are still unclear, experts emphasize the need for the Supreme Court to define pending issues in the Court, such as the accountability of platforms and the discussion of the constitutionality of Article 19 of the Internet Civil Framework, which states that providers are not responsible for content generated by third parties.
Experts interviewed by Valor assert that it will not be easy for X to disregard Brazilian court orders, but they understand that the company’s withdrawal from the country could complicate compliance with the determinations.
In the case of electoral matters, the main concern regarding non-compliance with a court order will be related to irregular content posted by third parties. Fernando Neisser, a professor of electoral law at Getulio Vargas Foundation (FGV) and a member of the Brazilian Academy of Electoral and Political Law (Abradep), noted that if the content is posted by candidates, the notification of the irregularity will go to the candidate, and if they do not remove it, they will be subject to fines, charges of disobedience, and even the revocation of their registration.
“The biggest problem arises with posts from third parties, from individuals who are not candidates, who make illegal posts, some of which are anonymous. There’s no way to notify them, so the platform has the task of removing it. If it doesn’t remove it, the solution will be to take down the entire platform,” he noted.
In Brazil, if a platform does not follow court orders, it can be taken down by internet service providers. Experts consulted by Valor believe this is possible and has been done in the past, such as in the temporary blocking of YouTube by a first-degree judge’s injunction in 2007 involving model Daniela Cicarelli, or the temporary blocking of WhatsApp that occurred in 2015; however, in both cases, the measures were quickly reversed.
Lucas Maldonado, an attorney specializing in digital law from FGV and a partner at the Maldonado Latini law firm, said removing the platform is not straightforward. According to attorney Alexandre Atheniense, the removal of the platform “would be a disproportionate decision.”
The platform X, owned by billionaire Elon Musk, announced on Saturday that it would cease operations in Brazil. In a post published on its own social media, the company said that the measure is due to a ruling by Justice Alexandre de Moraes. According to X, Mr. Moraes threatened to fine and imprison the head of the company’s office in Brazil, Rachel de Oliveira Villa Nova Conceição, for non-compliance with court orders. However, the company claims that the service will remain available to users in the country. When contacted, the Supreme Court did not comment on the matter.
On Thursday, Justice Alexandre de Moraes decided to increase the daily fine imposed on this social media to R$200,000 from R$50,000 per profile that failed to comply with the order to block seven profiles accused of spreading misinformation. Among them is the profile of Senator Marcos do Val, which is subject to a provisional remedy determined by Justice Moraes in investigations regarding the coup-mongering acts of January 8.
By announcing the closure of its social media X operations, Mr. Musk also reduced a space that was already not significant in advertising investment budgets in Brazil, marketing professionals told Valor.
On Friday, about 40 employees of the subsidiary, including commercial area professionals, were laid off via email and had their access blocked, leaving agencies and advertisers without local contacts.
“The closure of the office in Brazil puts a nail in the coffin of an operation that has lost relevance in recent years and has entered a death spiral since Elon Musk took over the company,” an advertising market executive spoke on condition of anonymity. Other professionals in the sector reported that the budget currently allocated to X in advertising campaigns is quite insignificant.
“The X service remains available to the Brazilian population,” the company said in a post on Saturday.
On Monday, no employees were present at the office that the company occupies on one of the ten floors of rental spaces at WeWork in the Itaim Bibi neighborhood of São Paulo. Valor was informed that only one security professional was answering calls and receiving documents, but he could not be found on-site.
X’s team in Brazil had already been reduced in November 2022, following a cut of at least half of the employees of the then Twitter worldwide. The cut was made shortly after Mr. Musk purchased the platform for $44 billion in October 2022.
The social media founded in 2006 in California and which began operations in Brazil in 2012 sent an email to agencies and advertisers in the country on Saturday, saying that it is “committed to ensuring that its business with X continues uninterrupted.”
X is expected to end the year with 335.7 million users worldwide, 32.7 million fewer users than in 2022, according to data from German consultancy Statista. In Brazil, X had 22.1 million users according to the “Digital Brazil 2024” report from the DataReportal platform. The survey cites data published in X’s own advertising planning tools showing that the potential reach of ads in Brazil decreased by 2.2 million people (an 8.9% drop) between the beginning of 2023 and the beginning of 2024.
*Por Flávia Maia, Daniela Braun — Brasília, São Paulo
Source: Valor International