By Ricardo Brito, Luana Maria Benedito and Andre Romani
BRASILIA/SAO PAULO (Reuters) - Social media giant X said on Thursday it expects Brazil's top court to order it to shut down, as a pitched legal battle plays out over compliance with local laws and owner Elon Musk's insistence the platform is being punished for resisting censorship.
X said it expected Supreme Court Judge Alexandre de Moraes to order the shutdown "soon," after a court-imposed deadline for the company to identify a legal representative in Brazil passed on Thursday evening.
Just before midnight, X was still working normally in the country.
Earlier on Thursday, the Supreme Court blocked the local bank accounts of billionaire Musk's Starlink satellite internet firm, while the underlying feud over X put it on the brink of being shuttered in one of its top markets.
The two firms are part of Musk's sprawling business empire which also includes rocket company SpaceX and electric car giant Tesla (NASDAQ:TSLA). The billionaire owns X and 40% of SpaceX, and is the CEO of Tesla.
In a series of Thursday night comments on X, Musk lashed out at Moraes, labeling the judge an "evil dictator" in a newly pinned post. He also decried the ruling to block Starlink as illegal, and claimed the action "improperly" punishes other shareholders as well as ordinary Brazilians.
Musk also announced that Starlink-parent SpaceX will provide free internet service to Brazilian users "until this matter is resolved."
LIES AND CENSORSHIP
Signed by Moraes, the court's decision to sanction Starlink is a response to the lack of legal representatives in Brazil for X, a Supreme Court source told Reuters.
The decision to freeze Starlink's bank accounts also stems from a separate dispute over unpaid fines that X was ordered to pay due to its failure to turn over some documents. Local newspaper Folha has reported the fines total at least 20 million reais ($3.6 million), but Reuters was not able to confirm the amount.
The Supreme Court had set a deadline for X to name its legal representative in Brazil by shortly after 8:00 p.m. (2300 GMT) on Thursday.
Brazilian law requires all internet companies to have a legal representative in the country who can receive judicial orders and otherwise be legally responsible for the business.
At issue in the intensifying dispute is whether Moraes can order X to block certain accounts accused of spreading lies and distortions, a request Musk has denounced as censorship.
Most of the accounts ordered blocked are run by backers of far-right former President Jair Bolsonaro, some of which deny he lost his 2022 reelection bid.
In a previous post, Musk complained that Moraes "is an outright criminal of the worst kind, masquerading as a judge."
Starlink, in its own post, accused the judge of secretly issuing the order without due process.
JUDGE V. BILLIONAIRE
The cumulative digital and legal disputes could cause X to lose one of its largest and most coveted markets, at a time when Musk has struggled with advertising revenue for the platform.
Earlier this month, X announced it would close operations and fire its staff in Latin America's largest economy due to what it called "censorship orders" from Moraes, while keeping its service available for Brazilian users.
At the time, X claimed Moraes secretly threatened one of the company's legal representatives in Brazil with arrest if it did not comply with legal orders to take down some content.
In his own swipe at X, Brazil's President Luiz Inacio Lula da Silva pinned a post on the platform late on Thursday, listing six other social media accounts along with links to them.
Moraes has stressed that companies that do not respect local laws or the confidentiality of private information could have their activities temporarily suspended.
Earlier this year, the judge ordered X to block certain accounts implicated in investigations of so-called digital militias accused of spreading distortions and hate during Bolsonaro's term in office.
After Musk challenged that decision and said he would reactivate accounts on X that the judge had ordered blocked, Moraes opened an April inquiry into Musk's businesses.
X representatives eventually reversed course and told the Supreme Court it would obey the rulings. In April, however, Moraes asked X to explain why it had not fully complied.
In response, X lawyers cited "operational faults" that had allowed users ordered blocked to stay active on the platform.
Amid the high-stakes showdown, many Brazilians took to X to make light of the saga, including thousands who posted creative "memes" spotlighting the hard-charging judge and the controversial billionaire.
Some X users criticized the ruling signed by Moraes, arguing he was undermining freedom of speech, while others sided with Moraes, insisting that Musk must comply with Brazilian law.
X, formerly known as Twitter, is widely used in Brazil, and is an important means of communication in particular for politicians.
($1 = 5.6286 reais)