Elon Musk backs in his fight with Brazilian judge after losing millions from his strike

After a three week brawl, it appears that Elon Musk had backed down in its fight with the Brazilian judiciary, after complying with court orders in Brazil to restore access to its 21 million users in the country and end a protracted fight between billionaire CEO Elon Musk and the country's highest courts.

Reports indicate that X began suspending accounts accused of spreading misinformation on September 18, as ordered by Justice Alexandre de Moraes. Alongside the suspensions, X’s legal team announced that a new legal representative will soon be appointed in Brazil, in accordance with local law requiring social media platforms to have such representation.

Lawyers of X informed Brazil's Supreme Court on Friday that the company has finally named a legal representative, a key requirement for reinstating the social media platform in the major market. The Brazilian court has given X an additional 5 days to complete all the paperwork to formalize the representation.

During the three weeks that X went offline in Brazil, Musk repeatedly attacked de Moraes on X, most recently calling him "Brazil's Voldemort", "Brazil's Darth Vader," and a "dictator". He had also launched an X account dedicated to exposing alleged abuses of power by de Moraes.

Despite these accusations, a Brazilian supreme court justice panel upheld Moraes' decision, keeping X suspended and imposing fines.

Musk's feud could have a wider implication for the Billionaire

Brazil's ban on X will have little impact on the business of X, given that Brazil has historically been a small part of X's total business.

The annual revenue from Brazil was $80 million to $100 million in 2021, the last full year before Musk's takeover. That amounts to about 2% of the company's total sales.

While sales from Brazil represent only a very small piece of X's overall business, any revenue is still important for the business, which is still fighting to win back advertisers and pay off significant debt obligations.

Musk's feud with Brazil could also lead to other business issues for the world's richest man. The same judge who banned X also froze the bank accounts in Brazil for Starlink, the satellite internet provider that's part of Musk's rocket company, SpaceX, as a way to pressure Musk.

Temporary service restoration

Last week, X reappeared in Brazil after a software update that it said had been an "inadvertent and temporary service restoration for Brazilian users". This temporary access resulted from a shift to Cloudflare’s servers, allowing users to access the platform unintentionally.

A spokesperson for X’s Global Government Affairs confirmed that the access was accidental:

“X Brazil reiterates that the situation did not arise from any attempt to circumvent the Supreme Court’s suspension order but rather from a technical failure caused by the need to change the network infrastructure used to provide access to the X platform to other South American countries.”

Moraes perceived this as a wilful challenge to his authority, and had levied a R$5 M fine on X on top of the R$18.3 that had already been imposed.

According to Moraes’ ban on X, users in Brazil who access the platform through virtual private networks (VPNs) could face fines of $9,000 daily.