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Brazil Judge Demands Big Tech Compliance with Local Laws to Continue Operations

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Brazilian Supreme Court judge Alexandre de Moraes stated on Wednesday that tech firms must comply with local laws to remain operational in the country, highlighting the government’s firm stance on regulating online platforms. While he did not name any specific companies, his remarks followed a recent announcement by Meta to scale back its U.S. fact-checking program and reduce restrictions on discussions about sensitive issues like immigration and gender identity.

Moraes, speaking at an event marking the second anniversary of the 2021 riots in Brazil, emphasized that the court would not allow companies to profit from hate speech. “In Brazil, (the companies) will only continue to operate if they respect Brazilian legislation, regardless of the rant of Big Tech managers,” he asserted.

This statement comes after Brazil’s Supreme Court had temporarily suspended the social media platform X (formerly Twitter) for over a month last year for failing to comply with court orders, including those related to moderating hate speech. Judge Moraes issued the initial suspension order, which was later unanimously upheld by a five-member panel. In response, X’s owner, Elon Musk, denounced the action as censorship but ultimately complied by blocking certain accounts to resume operations in Brazil.

In a separate development, Brazilian prosecutors have ordered Meta to clarify whether its changes to the fact-checking program in the U.S. will also apply in Brazil. Meta, which did not comment on the matter through its Brazil office, was given a 30-day deadline to respond. This order is part of an ongoing investigation into how social media platforms address misinformation and online violence in Brazil.

 

Elon Musk’s X Set to Resume Operations in Brazil After Final Fine Payment

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Elon Musk’s social media platform X is set to be restored in Brazil after it fulfills one last condition: the payment of an additional fine. Brazil’s top justice, Alexandre de Moraes, issued a ruling on Friday requiring the platform to pay 10 million reals (approximately $2 million) for two more days of non-compliance with previous court orders. Rachel de Oliveira, X’s legal representative in Brazil, is also liable for a separate fine of 300,000 reals.

The legal battle between X and the Brazilian government dates back to April, when de Moraes, a justice of the Supremo Tribunal Federal (STF), launched an investigation into Musk and X for allegedly obstructing justice. Musk had previously vowed to defy court orders to remove specific accounts, which he described as “censorship.” This defiance culminated in the platform being suspended at the end of August, a ruling upheld by a judicial panel on September 2.

Earlier this month, X informed Brazil’s supreme court that it was now compliant with its orders. Despite this, the additional fine was imposed for X’s delayed adherence. The ongoing conflict escalated after Musk criticized de Moraes publicly, calling him a “criminal” and urging the U.S. to cease foreign aid to Brazil.

In mid-August, Musk also closed X’s offices in Brazil, leaving the company without a legally required representative. Following this, the STF issued an ultimatum, threatening a nationwide ban on X and further fines if the platform did not comply with orders to remove certain accounts accused of harming federal agents.

The case became even more complex when the STF froze the business assets of Musk’s companies, including X and Starlink, as the court viewed them as interconnected entities. Musk responded by threatening reciprocal legal action against the Brazilian government unless his company’s assets were returned.

Justice de Moraes has been a strong advocate for federal regulation to combat hate speech and misinformation online, leading to pushback from tech companies and far-right officials, including former President Jair Bolsonaro and his supporters. Musk, who has criticized Brazil’s current President Luiz Inacio Lula da Silva, has maintained a long-standing relationship with Bolsonaro, who previously authorized SpaceX to operate in Brazil.

Though Musk portrays himself as a defender of free speech, his leadership at X has drawn criticism. Under his management, X has complied with government takedown requests in countries like Turkey and India, with compliance rates increasing significantly in 2023 compared to the previous year.

X now faces increased competition in Brazil, with Meta’s Threads and Bluesky gaining users during its suspension. Starlink, Musk’s satellite internet business, also faces competition from French-American firm eSpace, which was recently authorized to provide services in Brazil.

Lukas Darien, a law professor at Facex University Center in Brazil, commented on the implications of the case, noting that it sets a precedent for large technology companies. “This case demonstrates that laws will be enforced in Brazil, regardless of the size or influence of the business,” Darien said.

On Thursday, X Global Government Affairs released a statement affirming its commitment to free speech, stating: “X is committed to protecting free speech within the boundaries of the law… We believe that the people of Brazil having access to X is essential for a thriving democracy.”

 

OPEC+ Focuses on Compliance as Output Hike Postponed Amid Market Uncertainty

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The OPEC+ alliance is tightening its focus on ensuring compliance with oil production cuts as it advances with a strategy involving both formal and voluntary output reductions. Two OPEC+ delegates, speaking anonymously due to the sensitive nature of the discussions, revealed that the coalition is particularly concerned about some members’ failure to adhere to their production quotas. Countries like Iraq and Kazakhstan, along with Russia, have been producing more than their agreed levels, challenging the credibility of OPEC+ efforts to stabilize the market.

Earlier in the month, the group delayed an anticipated return of 2.2 million barrels per day (bpd) to the market, initially scheduled for October, pushing the phase-out of voluntary cuts to December instead. OPEC+ members are operating under a complex structure of cuts: the group is set to produce 39.725 million bpd next year under its official policy, while eight key members, including Saudi Arabia, are voluntarily reducing output by an additional 1.7 million bpd until 2025.

Undercompliance within OPEC+ has been a recurring issue, undermining the alliance’s credibility as it tries to manage the global oil supply amidst geopolitical tensions in the Middle East, economic recovery uncertainties in China, and market volatility triggered by stock sell-offs. Oil prices, which have been relatively low throughout the year, fell again on Thursday following reports that Saudi Arabia may be willing to abandon its unofficial target of $100 per barrel to increase output after December.

Brent crude futures for November were trading at $71.44 per barrel on Thursday, down slightly from the previous session, while Nymex WTI futures remained stable at $67.75 per barrel. Carole Nakhle, CEO of Crystol Energy, suggested that Saudi Arabia’s potential pivot on price could be a warning to non-compliant OPEC+ members, noting that Riyadh has shouldered much of the burden of production cuts. She emphasized that while higher prices benefit Saudi Arabia, there has never been a fixed target price for the group.

OPEC+ ministers, including Saudi Arabia’s Prince Abdulaziz bin Salman, have reiterated that their primary goal is to reduce global oil stocks rather than aim for a specific price point. Nonetheless, some member countries rely on oil revenues to meet budgetary obligations. For instance, the International Monetary Fund estimates that Saudi Arabia needs oil prices to average $96.20 per barrel to balance its fiscal budget, a key factor as the kingdom invests heavily in its Vision 2030 economic diversification program.

Despite these pressures, Saudi Arabia has not shifted its OPEC+ strategy and continues to avoid targeting an explicit oil price, according to one OPEC+ source. Riyadh’s focus remains on long-term revenue generation through projects like Neom, a futuristic megacity designed to lessen the country’s dependence on hydrocarbons.

The history of Saudi Arabia using its production capacity as leverage within OPEC+ is not new. In 2020, a price war between Riyadh and Moscow led to a market glut during the early stages of the Covid-19 pandemic, briefly driving WTI oil prices into negative territory. OPEC+ currently relies on monthly production data from independent sources to monitor member compliance, with the Joint Ministerial Monitoring Committee, which oversees conformity, scheduled to meet next on October 2.