• by Colin Kirkland , September 3, 2024

On Monday, Brazil’s Supreme Court upheld Justice Alexandre de Moraes’ order to ban X in the country after the social-media platform refused to name a legal representative by last Thursday night, effectively costing the app its largest Latin American user base and subsequent ad dollars. 

The decision to officially ban the app in Brazil was unanimous among the five justices, who found that X was repeatedly spreading misinformation and harmful content that is in violation of the country’s internet laws. 

In April, Justice Moraes began investigating Musk for obstruction of justice after he publicly declared that would not comply with a court order to suppress the accounts of seven commentators who Moraes believed to be spreading false reports and hate speech with regard to the current government and the outcome of Brazil’s presidential election in 2022. 

In response to the request to block the anti-government accounts, X claimed the request was made in secret, was illegal and did not align with the platform’s “free speech” moderation approach.

Last week, X officially shut down its Brazilian office and removed its employees there to avoid arrest of local staff members by the government. 

Since failing to appoint a legal representative in Brazil, Musk has called Moraes a “dictator,” posting that the judge is “destroying” free speech “for political purposes.”

“Unfortunately, the illicit conduct was repeated in the current investigation, making it clear that X Brasil failed to comply with several court orders, as well as the willful intention of exempting itself from responsibility for complying with the court orders issued, with the disappearance of its legal representatives in Brazil for the purposes of subpoena and, subsequently, with the aforementioned message about the possible closure of the Brazilian company,” Moraes stated in the most recent court ruling.

Justice Flávio Dino -- also on the panel -- noted that X “seems to believe it’s above the law,” adding that “the size of a bank account does not give rise to outlandish immunity,” according to an English translation by The New York Times.

On Monday, Brazilian President Luiz Inácio Lula accused Musk of spreading a “far-right ideology” through his ownership and use of X. 

The seven X accounts identified in the Brazilian Supreme Court’s request are all linked to former Brazilian President Jair Bolsonaro, who has been banned from running for office for eight years for undermining Brazilian democracy by claiming the 2022 election was rigged, which resulted in attacks on Brazil’s Congress, presidential palace and Supreme Court that have been compared to the January 6 insurrection in the U.S. 

Musk was a public supporter of Bolsonaro and even arranged multiple business deals during his presidency, including for the allocation of internet services via Musk’s satellite communications company Starlink in Brazil.

Last week, Moraes ordered a freezing of Starlink’s finances in Brazil, ultimately preventing the business from conducting financial transactions in the country. Musk claimed that this too was illegal and has pledged to provide free internet access to its 250,000 Brazilian customers while X accounts remain blocked. 

However, under the court ruling, any X users using Starlink or a virtual private network (VPN) to access the social-media platform could face a fine of up to 50,000 reais, or about 9,000 dollars.

Overall, the ban of X in Brazil has cut off around 20 million users, immediately reducing X’s monetizable daily active user count from 250 million to 230 million.

Paired with the 5 million users the company reported losing in Europe this year, X’s total user base is down at least 10% in 2024. 

The significant user drop will directly impact X’s ad revenue -- which is reportedly down around 83% compared to what it had been before Musk took over the app in late 2022.

While some major advertisers have resumed a percentage of their ad spend on X since a widespread advertiser exodus occurred earlier this year in response to antisemitic posts, the platform may be facing another round of advertiser cuts.

This week, the World Bank ceased all paid advertising to X after a CBS News investigation found promoted advertisements from the organization appearing under a racist post from an account that prolifically posts pro-Nazi and white nationalist content.

“The World Bank Group had already reduced its paid marketing on X while working with the platform to implement the strongest safety protocols X offers for our content,” a spokesperson for the World Bank told CBS News on Friday, adding, “This latest incident is entirely unacceptable, and we are immediately ceasing all paid marketing on X.”