X Twitter could be fined $400,000 for ignoring requests from the Australian Electronic Security Commission. The regulator wants to examine the steps Company X is currently taking to counter the alleged distribution of child sexual abuse material.
In order to have the fine set aside, Twitter told Australian Judge Michael Wheelahan that Twitter had “ceased to exist” several weeks after receiving the notice, and therefore, Twitter had to comply with the Internet Safety Act, which Twitter had sent to it. Musk said at the time that he was under no obligation to comply with the requirements. Merged the company into X Corporation
Summarizing the defendant’s argument, the court stated, “Company X was not required to prepare a report on Twitter’s behalf because it was not the same supplier to whom the notice was sent.”
But the judge rejected the bare premise that X was not legally responsible for Twitter and ruled that the fine should be upheld. Company X’s claim failed. This is because, under Nevada law, the merger of Twitter and Company X made Twitter a “constitutional corporation,” and all of Twitter’s legal effects were subsequently transferred to Company X.
Judge Wheelahan said that under the Nevada merger law, “all debts, liabilities, and obligations of the Company may be retained or assigned by the purchaser, as the case may be, and may be enforced to the same extent against the purchaser.” He emphasized that this is specifically stipulated. has assumed or contracted for all such debts, debts, duties and obligations. ”
Since X did not comply with the claim, the company must pay the costs associated with the appeal along with the initial penalty. According to the Australian Government’s review of internet safety laws, X could be liable to pay up to $530,000 for failing to comply with a reporting notice, potentially more than doubling its costs.
“If the court accepts Company X’s argument, it could set a worrying precedent that a foreign company can avoid its regulatory obligations in Australia by merging with another foreign company,” the Australian Electronic Security Commissioner said. Julie Inman Grant commented.
He further noted that technology companies unwilling to be transparent about their efforts to combat child exploitation could find themselves in a similar situation. It seems like sometimes it’s better to take responsibility or at least pay a fine.
Source: Arstechnica