Brazil top court blocks Elon Musk's Starlink accounts as possible X ban looms
Corrects paragraph 2 to reflect that Musk is owner, not CEO, of X
Musk given Thursday night deadline to comply or face X ban
Judge Moraes blocks Starlink's accounts over lack of X legal rep
Musk calls Moraes a criminal, denounces actions as censorship
X users divided on Moraes' decisions amid debate over speech
By Ricardo Brito and Luana Maria Benedito
BRASILIA/SAO PAULO, Aug 29 (Reuters) -Brazil's Supreme Court blocked the bank accounts of tycoon Elon Musk's Starlink internet firm on Thursday, while an underlying feud leaves his social media platform X on the brink of being shuttered in the country as a deadline looms.
Starlink is the satellite internet service of rocket technology company SpaceX, all part of Musk's sprawling business empire which also includes electric car giant Tesla. The billionaire is the owner of X and CEOof Tesla TSLA.O.
The internet company confirmed it received an order from the judge that prevents the company from conducting financial transactions in Brazil and said in a post on X that it would respond to the order.
Signed by Supreme Court Judge Alexandre de Moraes, the court's decision to sanction Starlink is a response to the lack of legal representatives in Brazil for X, a Supreme Court source told Reuters.
The decision to freeze Starlink's accounts also stems from a separate dispute over unpaid fines that X was ordered to pay due to its failure to turn over some documents. Local newspaper Folha has reported the fines total at least 20 million reais ($3.6 million), but Reuters was not able to confirm the amount.
The Supreme Court said that the time allowed for Musk's popular social media platform to name its legal representative for Brazil would expire at 8:07 p.m. (2307 GMT) on Thursday.
The announcement added that staff will verify whether X has issued any legal response.
At issue in the intensifying dispute is whether Moraes can order the social media platform to block certain accounts accused of spreading lies and distortions, a request Musk has denounced as censorship.
Most of the accounts ordered blocked are run by backers of far-right former President Jair Bolsonaro, some of which deny he lost his 2022 reelection bid.
Brazilian law requires all internet companies to have a legal representative in the country who can receive judicial orders and otherwise be legally responsible for the business.
Late Wednesday, Moraes signed an order for X to name its legal representative or face suspension in the country.
In a post on X, Musk complained that Moraes "is an outright criminal of the worst kind, masquerading as a judge."
Starlink, in a separate post, accused the judge of secretly issuing the order without due process.
JUDGE V. BILLIONAIRE
The cumulative digital and legal disputes could cause X to lose one of its largest, most coveted markets, at a time when Musk has struggled with advertising revenue for the platform.
Earlier this month, X announced it would close operations and fire its staff in Latin America's largest economy due to what it called "censorship orders" from Moraes, while keeping its service available for Brazilian users.
At the time, X claimed Moraes secretly threatened one of the company's legal representatives in Brazil with arrest if it did not comply with legal orders to take down some content.
In Wednesday's ruling, Moraes stressed that companies that do not respect local laws or the confidentiality of private information could have their activities temporarily suspended.
The Supreme Court posted a screen shot of Wednesday's court decision on its X account, tagging Musk's and X's global government affairs accounts.
Moraes ordered X to block certain accounts earlier this year implicated in investigations of so-called digital militias accused of spreading distortions and hate during Bolsonaro's term in office.
After Musk challenged that decision and said he would reactivate accounts on X that the judge had ordered blocked, Moraes opened an April inquiry into the billionaire.
X representatives eventually reversed course and told the Supreme Court that the social media giant would obey the rulings. In April, however, Moraes asked X to explain why it had not fully complied with his decisions.
In response, X lawyers cited "operational faults" that had allowed users ordered blocked to stay active on the platform.
Many Brazilians took to X on Thursday to make light of the saga, including thousands who posted creative "memes" spotlighting the hard-charging judge and the billionaire.
Some X users criticized the ruling signed by Moraes, arguing he was undermining freedom of speech, while others sided with Moraes, insisting that Musk must comply with Brazilian law.
X, formerly known as Twitter, is widely used in Brazil, and is an important means of communication in particular for politicians to use for announcements or launching attacks.
($1 = 5.6286 reais)
Reporting by Ricardo Brito in Brasilia and Luana Maria Benedito in Sao Paulo; Writing by David Alire Garcia; Editing by Christian Plumb, Matthew Lewis and Deepa Babington
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