Brazil Supreme Court justice opens inquiry into Elon Musk, escalating dispute over misinformation

Brazil Supreme Court Justice Alexandre de Moraes initiated an investigation of tech magnate Elon Musk on Sunday, the billionaire owner and CTO of social network X (formerly Twitter). The probe concerns possible obstruction of justice by Musk who said, over the weekend, he would defy the court's orders to restrict or suspend some popular accounts on its platform.

Moraes also ordered the inclusion of Musk in a broader inquiry into so-called "digital militias," a term applied to people accused of spreading misinformation online to attack democratic institutions in Brazil.

The orders follow threats of open defiance posted by Musk to his account on X, where he now has 180.2 million listed followers.

A defiant Musk wrote on Saturday in response to earlier court orders: "We are lifting all restrictions. This judge has applied massive fines, threatened to arrest our employees and cut off access to in Brazil. As a result, we will probably lose all revenue in Brazil and have to shut down our office there. But principles matter more than profit."

By Sunday, Musk was further provoking the Brazilian Supreme Court calling for the resignation or impeachment of the justice who decided on the orders, Moraes. Musk also made unsupported claims that the judge had broken the law in Brazil.

On Sunday, the tech billionaire also threatened to publish information from inside X that would paint Moraes as a traitor to his own country.

He wrote, "Coming shortly, will publish everything demanded by [Alexandre de Moraes] and how those requests violate Brazilian law. This judge has brazenly and repeatedly betrayed the constitution and people of Brazil. He should resign or be impeached. Shame [Alexandre de Moraes], shame."

Moraes has long supported regulations to rein in harmful content and misinformation online in Brazil. He has faced pushback from a range of entities including tech companies, far-right officials in the country, and former President Bolsonaro.

With a population of more than 215 million in 2023, Brazil is the second most populous country in the Western Hemisphere after the United States. Musk's vocal opposition to Moraes comes during a municipal election year in the country, with voters scheduled to go to the polls in October.

Like Americans, Brazilian voters are deeply divided over politics. During its most recent transfer of power, the country also experienced destabilizing political violence similar to Jan. 6, 2021.

On Jan. 8. 2023, supporters of Brazil's ousted, far-right former President Jair Bolsonaro decried a "stolen" election, invaded and vandalized government buildings, and called for military intervention to remove the elected President Luiz Inácio Lula da Silva from office.

Currently, Bolsonaro is under investigation, suspected of orchestrating a coup, of fabricating records and other offenses in his home country.

Musk — who is CTO, owner of X, and CEO of automaker Tesla and rocket maker SpaceX — visited Bolsonaro in May 2022 during an election year, reportedly to discuss the use of his space company's satellite internet services at rural schools in the Amazon.

SpaceX first obtained permission to switch on its satellite internet service, named Starlink, in Brazil during Bolsonaro's presidency, and the service is now used pervasively throughout the country.

During their May 2022 meeting, Bolsonaro praised the Tesla exec's plans to take over Twitter as a "breath of hope."

X and other social networks face increasing regulatory pressure worldwide, including in Australia, Brazil, the European Union, India and Turkey.

According to filings, the court will fine Musk and the company 100,000 reais (almost $20,000) daily for each account that X reinstates against Brazil's Supreme Court orders. Those involved will also be held accountable in Brazil for defying the court's orders.

Moraes wrote in his decision that "Social networks are not a lawless land!" He said Musk's statements show that X protects those who promote criminal activities against Brazil's democracy.

"The conduct of "X' constitutes, in theory, not only abuse of economic power, by trying to ILLEGALLY impact public opinion, but also flagrant induction and instigation to maintain various criminal conducts practiced by the digital militias investigated" the judge wrote, according to Correio Brazilense.

Musk-led X has been fined for noncompliance with Australia's e-safety regulations. The European Union is also investigating X under its relatively new Digital Services Act, a set of laws meant to hold tech companies accountable for incitement of terrorism, hate speech, child exploitation, and other harmful content on their platforms.

Free speech advocates fear that such regulations—created to curb online harm or protect users' data and privacy—can be too easily exploited by government officials and used to target or silence perceived enemies, such as activists, academics, and dissidents.

While Musk has characterized himself as a free-speech absolutist, his track record is deeply inconsistent.

When he took over Twitter, Musk cut back on content moderation, trust and safety of employees, relaxed the company's policies, and reinstated accounts that were banned under prior management.

For example, Musk reinstated former President Donald Trump's account after prior management banned it for life in January 2021. (The ban followed the Jan. 6, 2021, insurrection at the U.S. Capitol, where Trump supporters rioted and disrupted lawmakers who were formally counting Electoral College votes.)

Meanwhile, Musk-led Tesla has for years required employees and customers to sign stringent non-disclosure and mandatory arbitration agreements, which limit their free speech by design. At SpaceX, employees said they were fired in retaliation for writing an open letter critical of Musk in 2022.

In February, X removed accounts and posts linked to ongoing farmers' protests in India at the behest of the Indian government.

X did not immediately respond to CNBC's request for comment on Sunday.