On July 31, 2025, an Australian appeals court delivered a decisive ruling against X Corp., the social media company owned by Elon Musk, upholding demands from the nation's online safety watchdog for detailed disclosures on how the platform combats widespread child exploitation material. This unanimous decision by three federal court judges marks a significant moment in the ongoing legal tussle between regulators and tech giants over accountability and transparency in the digital age.
The case traces back to early 2023 when Julie Inman Grant, Australia's eSafety Commissioner, initiated a broad inquiry into how some of the world's largest technology companies were addressing the proliferation of child sexual abuse material (CSAM) on their platforms. Under the country's Online Safety Act, her office issued a reporting notice to Twitter Inc. in February 2023, requesting detailed information on measures taken to tackle this grave issue.
However, the corporate landscape shifted rapidly when Twitter merged with X Corp. the following month. X Corp., incorporated in Texas, argued that the reporting obligations did not transfer to it because Twitter ceased to exist as a legal entity, and thus X was not bound by the earlier notice issued to Twitter. This legal stance set the stage for a complex dispute over regulatory jurisdiction and corporate responsibility.
In October 2024, a federal court ruled that X Corp. was indeed obligated to comply with the notice from Inman Grant’s office, regardless of the merger and corporate restructuring. The court's decision emphasized that foreign corporate mergers do not exempt companies from adhering to Australian regulations designed to protect vulnerable users online. X Corp. challenged this decision, but the appeals court's ruling on July 31, 2025, reaffirmed the lower court's judgment in a unanimous verdict, further ordering X to cover the legal costs incurred by the eSafety Commissioner.
Julie Inman Grant’s office, which proudly describes itself as the world's first government agency dedicated exclusively to online safety, welcomed the appeals court ruling. Inman Grant, who previously worked at Twitter, stated, "This judgment confirms the obligations to comply with Australian regulations still apply, regardless of a foreign company’s merger with another foreign company." She underscored her agency's commitment to enforcing the Online Safety Act and holding all technology companies accountable without fear or favor, ensuring they adhere to Australian laws.
"Without meaningful transparency, we cannot hold technology companies accountable," Inman Grant added, highlighting the essential role of openness in combating the spread of harmful content online.
From the tech company's side, X Corp.'s legal representative, Justin Quill, indicated that he had not yet reviewed the detailed reasons behind the appeals court's decision and therefore could not comment on the possibility of appealing to the High Court of Australia. He noted that the High Court accepts only about 10% of appeal applications, suggesting that the federal court's full-bench decision might well be the final word in this matter.
Efforts to reach X Corp.'s media office for comment following the ruling went unanswered, reflecting the company's cautious stance amid mounting regulatory scrutiny.
The dispute extends beyond court rulings. In 2023, Inman Grant’s office imposed a fine of 610,500 Australian dollars (approximately $385,000) on X Corp. for failing to provide a complete and truthful explanation of its efforts to address child exploitation content on its platform. The regulator found X's response incomplete or misleading. X Corp. refused to pay this penalty, and the matter is currently entangled in a separate ongoing federal court case.
This legal saga unfolds against a backdrop of groundbreaking legislative action in Australia. Inman Grant has been instrumental in driving world-first legislation that will prohibit Australian children under the age of 16 from accessing social media platforms, including X, starting December 2025. This move reflects growing concerns about the impact of social media on young users and the urgent need for stronger protections.
The case highlights the challenges regulators face in holding multinational technology companies accountable, especially when corporate mergers and restructuring blur traditional lines of responsibility. Yet, the courts have made clear that such corporate maneuvers cannot be used as shields against compliance with national laws designed to protect vulnerable populations.
Australia’s eSafety Commissioner’s office stands as a global pioneer in online safety regulation, setting a precedent that could influence how other countries approach the regulation of digital platforms. The insistence on transparency and accountability from tech companies like X Corp. sends a strong message that the fight against child exploitation online is a priority that transcends borders and corporate complexities.
As the legal battles continue, the ruling serves as a potent reminder that governments are increasingly willing to enforce stringent oversight over digital platforms, demanding that they take responsibility for the content they host and the safety of their users. Whether X Corp. will seek further appeal or comply fully with Australian regulations remains to be seen, but the judicial direction is unmistakably clear.
In the meantime, Australian children under 16 will face new restrictions on social media usage, reflecting a broader societal reckoning with the risks posed by online environments. The court’s decision thus not only impacts corporate legal obligations but also signals a shift towards more robust protective measures for young internet users.
Ultimately, this case underscores a critical juncture in the evolving relationship between technology companies and regulators worldwide, emphasizing that corporate restructuring will not exempt platforms from their duty to safeguard users and uphold the law.
