Starlink emerges as fresh battleground between Musk, Brazil

By Ricardo Brito and Luciana Magalhaes

BRASILIA/SAO PAULO (Reuters) -Tensions between Brazil and Elon Musk's business empire ratcheted up further as the country's telecoms regulator threatened to sanction his satellite broadband company Starlink hours after its top court stood behind a controversial decision to ban social network X from the country.

Brazil's President Luiz Inacio Lula da Silva also backed the top court's Judge Alexandre de Moraes' decision to suspend X. The judge found that X allowed postings of hate messages and falsehoods about the country's electronic voting system that undermined Brazil’s democracy.

"The Brazilian judiciary may have given an important signal that the world is not obliged to put up with Musk's far-right ideology just because he is rich," Lula said in an interview with CNN Brasil released on Monday.

Reacting to the judge's earlier move to freeze Starlink's accounts for possible use to pay fines owed by X, Musk said in an X posting that he would seek a reciprocal seizure of Brazilian assets, but did not say how.

Starlink on Monday again found itself in Brazilian authorities' crosshairs by refusing to obey Moraes' order for all internet providers to block domestic access to X.

A senior official at telecommunications regulator Anatel said sanctions against Starlink for noncompliance could include the revocation of its license to operate in Brazil.

Anatel commissioner Artur Coimbra told Reuters that the regulator is inspecting all Brazilian telecom operators to make sure they have shut down Musk's messaging platform.

Starlink is the only company that has told Anatel it will not comply with the judge's ruling, Coimbra said.

Starlink did not immediately respond to a request for comment on Monday.

It previously told Anatel it was refusing to remove X from its service until the freeze on its Brazilian bank accounts was lifted, the telecom regulator confirmed to Reuters earlier on Monday.

Moraes last week froze Starlink's accounts after X did not pay fines imposed for failing to obey judicial orders.

SIXTH-BIGGEST MARKET

Earlier on Monday, a Supreme Court panel voted unanimously to uphold the suspension of X in the country for defying a court order.

Moraes last week ruled that X should be suspended in Brazil because it did not name a local legal representative as required by law and ignored a deadline for compliance.

Justices Flavio Dino, Cristiano Zanin, Carmen Lucia and Luiz Fux sided with Justice Alexandre de Moraes. Three of the justices on the panel said the suspension could be reversed if the platform complied with previous rulings.

X did not immediately respond to a request for comment on the panel's decision.

X was taken down for most Brazilians in the early hours of Saturday following Moraes' decision although some people continued to access it through VPNs and other means. Moraes has also threatened to levy a fine of 50,000 reais ($8,902.66) a day on those using VPNs to access the social network, although it remains unclear how enforceable that threat is.

Brazil is X's sixth-biggest market globally with about 21.5 million users as of April, according to Statista.

Moraes and Musk, who owns a controlling share in Starlink, have been locked in a months-long feud after the social media platform challenged orders to block accounts accused by investigators of spreading misinformation and hate.

While Moraes' defenders see him as a crusader in the defense of democracy, critics accuse him of using heavy-handed methods on politicians and businessmen.

Musk has argued that Moraes sought to censor users and closed the X office in Brazil in August without appointing a new representative, triggering the suspension.

On Monday, Musk replied, "Exactly," to a post that described the suspension as an attack on freedom of expression and Brazilians' rights.

Chief Justice Luis Roberto Barroso, who was not on the review panel, said that removing legal representatives to avoid complying with court decisions "is a behavior that would not be acceptable anywhere in the world."

X remained inaccessible for most users in Brazil.

($1 = 5.6163 reais)

(Reporting by Luciana Magalhaes and Luana Maria Benedito in Sao Paulo, and Ricardo Brito in Brasilia; additional reporting by Andre Romani in Sao Paulo; Editing by Aurora Ellis and Christian Plumb)