Elon Musk’s social network X has admitted breaking Australian law by failing to disclose the steps it was taking to combat child sexual exploitation material on its platform, ending a near three-year legal fight by conceding to a $650,000 Federal Court penalty.
In a brief hearing in Melbourne on Thursday, X’s lawyer conceded the contravention of the Online Safety Act. Christopher Tran, appearing for the eSafety Commissioner told the court “the respondent admits that it contravened the Act” and that there was “ongoing noncompliance for some 38 days”.
AP
Justice Michael Wheelahan ordered the company – which Musk acquired for $US44 billion in 2022 and folded into SpaceX earlier this year, ahead of a planned trillion-dollar float – to pay $650,000 in penalties and $100,000 to cover the regulator’s legal costs.
In his ruling, Justice Wheelahan stated that a near-maximum penalty was necessary to act as a genuine deterrent for a corporation of X’s size.
The judge added that the public had “an interest in the commissioner seeking and obtaining a public declaration of contravention, which will contribute to a deterrent effect”, describing reporting requirements as an essential aspect of enforcing Australia’s basic online safety expectations.
The proceedings stem from a transparency notice issued by eSafety in February 2023, when the regulator demanded information from US tech giants about how they were tackling child sexual exploitation and abuse material on their services in Australia.
According to court filings, X failed to respond, or failed to respond truthfully and accurately, to more than two dozen separate questions, covering matters ranging from the detection of child grooming and livestreaming of abuse to response times for user reports and the deployment of safety-focused engineering staff.
After issuing a $610,500 infringement notice in October 2023, the regulator was forced into protracted litigation when X refused to pay and instead launched a judicial review, arguing it could not be held to account for actions taken by Twitter before the platform’s rebrand. Twitter merged with X Corp, a Nevada-incorporated entity, in March 2023.
That argument was rejected by the Federal Court in October 2024 and again by the Full Federal Court in July 2025, with three judges unanimously finding the obligation to respond was a “liability” inherited by X Corp under Nevada law.
X’s barrister Perry Herzfeld on Thursday characterised the case as concerning “historic issues relating to the timeliness of provision of information”, and said the conduct in question had occurred during a “period of change and transition for the company”, according to Reuters.
eSafety commissioner Julie Inman Grant – a frequent target of personal attacks from Musk on his own platform – said the ruling reinforced that overseas tech companies could not sidestep Australian rules.
“Meaningful transparency is critical to holding technology companies to account,” Inman Grant said in a statement. “This is not only a key part of our work as Australia’s online safety regulator, it also provides the Australian public with important information about how these companies are tackling the worst-of-the-worst content on their platforms.”
Musk has previously levelled a slew of public insults at the regulator, labelling her an “unelected bureaucrat” and the “eSafety Commissar”, rhetoric that Inman Grant has said resulted in her receiving death threats.
US House Judiciary Committee Chair Jim Jordan demanded Inman Grant travel to Washington last year to testify before Congress over allegations that her “global takedown” orders threatened Americans’ free speech. She has not done so.
The Federal Court case has been widely watched as a test of the Online Safety Act’s reach over US tech giants.
The timing is awkward for Musk, who earlier this year absorbed X into SpaceX in preparation for what is expected to be a record stock debut. The company is aiming to go public in June on the Nasdaq under the ticker symbol “SPCX”, and Musk controls 85 per cent of voting power in the company.
This Australian defeat also adds to a mounting pile of legal troubles for Musk, whose AI company xAI is concurrently battling multiple lawsuits in the US – including action from the City of Baltimore and a class-action suit from teenagers – alleging that Grok’s “spicy mode” facilitated the mass creation of non-consensual, sexually explicit deepfakes, including images of minors.
X and eSafety have been contacted for further comment.
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David Swan is the technology editor for The Age and The Sydney Morning Herald. He was previously technology editor for The Australian newspaper.Connect via X or email.