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Brazil Supreme Court justice orders investigation of Elon Musk over fake news and obstruction

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Brazil Supreme Court justice orders investigation of Elon Musk over fake news and obstruction
News

News

Brazil Supreme Court justice orders investigation of Elon Musk over fake news and obstruction

2024-04-09 00:57 Last Updated At:01:00

RIO DE JANEIRO (AP) — A crusading Brazilian Supreme Court justice has included Elon Musk as a target in an ongoing investigation over the dissemination of fake news, and has opened a separate investigation into the U.S. business executive for alleged obstruction.

In his decision, Justice Alexandre de Moraes noted that Musk on Saturday began waging a public “disinformation campaign” regarding the top court's actions, and that Musk continued the following day — most notably with comments that his social media company X would cease to comply with the court's orders to block certain accounts.

Musk, the CEO of Tesla and SpaceX who took over Twitter in late 2022, accused de Moraes of suppressing free speech and violating Brazil’s constitution, and noted on X that users could seek to bypass any shutdown of the social media platform by using VPNs, or virtual private networks.

Musk will be investigated for alleged intentional criminal instrumentalization of X as part of an investigation into a network of people known as digital militias who allegedly spread defamatory fake news and threats against Supreme Court justices, according to the text of the decision. The new investigation will look into whether Musk engaged in obstruction, criminal organization and incitement.

“The flagrant conduct of obstruction of Brazilian justice, incitement of crime, the public threat of disobedience of court orders and future lack of cooperation from the platform are facts that disrespect the sovereignty of Brazil,” de Moraes wrote Sunday.

X's press office did not reply to a request for comment from The Associated Press, and Musk hadn't publicly commented as of Monday morning, apart from brief posts on X.

Brazil’s political right has long characterized de Moraes as overstepping his bounds to clamp down on free speech and engage in political persecution. In the digital militias investigation, lawmakers from former President Jair Bolsonaro’s circle have been imprisoned and his supporters’ homes raided. Bolsonaro himself became a target of the investigation in 2021.

The justice in March 2022 ordered the shutdown of messaging app Telegram nationwide on the grounds that the platform repeatedly ignored requests from Brazilian authorities, including a police request to block profiles and provide information linked to blogger Allan dos Santos, an ally of Bolsonaro’s accused of spreading falsehoods. Dos Santos' account is one of those blocked on X in Brazil. Less than 48 hours after issuing his order in 2022, de Moraes said Telegram had complied and permitted it to resume oeprations.

De Moraes' defenders have said his decisions, although extraordinary, are legally sound and necessary to purge social media of fake news as well as extinguish threats to Brazilian democracy — notoriously underscored by the Jan. 8, 2023, uprising in Brazil's capital that resembled the Jan. 6, 2021 insurrection in the U.S. Capitol.

On Saturday, Musk — a self-declared free speech absolutist — said on X that the platform would lift all restrictions on blocked accounts and predicted that the move was likely to dry up revenue in Brazil and force the company to shutter its local office.

“But principles matter more than profit,” he wrote.

Brazil is an important market for social media companies. About 40 million Brazilians, or about 18% of the population, access X at least once per month, according to the market research group Emarketer.

Musk later instructed users in Brazil to download a VPN to retain access if X was shut down and wrote that X would publish all of de Moraes' demands, claiming they violate Brazilian law.

“These are the most draconian demands of any country on Earth!” he later wrote.

Brazil’s constitution was drafted after the 1964-1985 military dictatorship and contains a long list of aspirational goals and prohibitions against specific crimes such as racism and, more recently, homophobia. But freedom of speech is not absolute.

Musk had not published de Moraes' demands as of Monday morning and prominent blocked accounts remained so, indicating X had yet to act based on Musk's previous pledges.

Moraes' decision warned against doing so, saying each blocked account that X eventually reactivates will entail a fine of 100,000 reais ($20,000) per day, and that those responsible will be held legally to account for disobeying a court order.

“Including Elon Musk in the digital militias investigation is one thing. Blocking X is another. With this, Moraes is making a nod, saying that he didn't remain inert amid provocations from Elon Musk,” Carlos Affonso, director of Rio de Janeiro-based think tank Institute for Technology and Society, said by phone. “It is a warning shot so that lines aren't crossed.”

Bolsonaro — who bestowed Musk with a prestigious medal when he visited Brazil — was among those encouraging Musk to follow through with his promises to publish documents, saying they would reveal how the top electoral court was pressured to interfere in the 2022 election that he lost. Bolsonaro has often made such claims, without any evidence.

“Our freedom today is largely in his hands,” Bolsonaro said about Musk in a live broadcast on social media Sunday night. “The action he’s taking, what he’s been saying and he hasn’t been intimidated and has said that he’s going to put forward this idea of fighting for freedom for our country. That’s good.”

The lower house lawmaker who is rapporteur of a bill that aims to establish rules for social media platforms said on X that the episode underscored the urgency of bringing the proposal to a vote. It was approved by the Senate in 2020. Brazil's attorney general on Saturday night had already voiced his support for regulation.

"We cannot live in a society in which billionaires domiciled abroad have control of social networks and put themselves in a position to violate the rule of law, failing to comply with court orders and threatening our authorities. Social peace is non-negotiable,” Jorge Messias wrote on X.

Sá Pessoa reported from Sao Paulo. AP videojournalist Tatiana Pollastri contributed.

FILE - Elon Musk appears at an event in London, on Nov. 2, 2023. A crusading Brazilian Supreme Court justice included Musk as a target in an ongoing investigation over the dissemination of fake news and opened a separate investigation late Sunday, April 7, 2024, into the executive for alleged obstruction. (AP Photo/Kirsty Wigglesworth, Pool, File)

FILE - Elon Musk appears at an event in London, on Nov. 2, 2023. A crusading Brazilian Supreme Court justice included Musk as a target in an ongoing investigation over the dissemination of fake news and opened a separate investigation late Sunday, April 7, 2024, into the executive for alleged obstruction. (AP Photo/Kirsty Wigglesworth, Pool, File)

FILE - President of the Superior Electoral Court, Judge Alexandre de Moraes, speaks during the inauguration of the Center for Combating Disinformation and Defense of Democracy in Brasilia, Brazil, March 12, 2024. The Brazilian Supreme Court justice has included Elon Musk as a target in an ongoing investigation into digital militas, according to a copy of Moraes’ decision issued late Sunday, April 7. (AP Photo/Eraldo Peres, File)

FILE - President of the Superior Electoral Court, Judge Alexandre de Moraes, speaks during the inauguration of the Center for Combating Disinformation and Defense of Democracy in Brasilia, Brazil, March 12, 2024. The Brazilian Supreme Court justice has included Elon Musk as a target in an ongoing investigation into digital militas, according to a copy of Moraes’ decision issued late Sunday, April 7. (AP Photo/Eraldo Peres, File)

HONG KONG (AP) — Asian stocks fell Wednesday with most of the markets in the region closed for a holiday. Meanwhile, U.S. stocks closed out their worst month since September.

Oil prices were lower and U.S. futures were mixed.

Tokyo’s Nikkei 225 index lost 0.4%, down to 38,271.77 after the country’s factory activity experienced a milder shrink in April, as the manufacturing purchasing managers’ index from au Jibun Bank rose to 49.6 in April from 48.2 in March. A PMI reading under 50 represents a contraction, and a reading of 50 indicates no change.

The yen continues to struggle. On Wednesday, the U.S. dollar rose to 157.88 Japanese yen from 157.74 yen.

Australia’s S&P/ASX 200 dipped 1.1% to 7,581.90. Other markets in the region were closed due to the Labor Day holiday.

On Tuesday, the S&P 500 tumbled 1.6% to cement its first losing month in the last six, and ended at 5,035.69. Its momentum slammed into reverse in April — falling as much as 5.5% at one point — after setting a record at the end of March.

The Dow Jones Industrial Average dropped 1.5% to 37,815.92, and the Nasdaq composite lost 2% to 15,657.82.

Stocks began sinking as soon as trading began, after a report showed U.S. workers won bigger gains in wages and benefits than expected during the first three months of the year. While that’s good news for workers and the latest signal of a solid job market, it feeds into worries that upward pressure remains on inflation.

It followed a string of reports this year that have shown inflation remains stubbornly high. That’s caused traders to largely give up on hopes that the Federal Reserve will deliver multiple cuts to interest rates this year. And that in turn has sent Treasury yields jumping in the bond market, which has cranked up the pressure on stocks.

Tuesday’s losses for stocks accelerated at the end of the day as traders made their final moves before closing the books on April, and ahead of an announcement by the Federal Reserve on interest rates scheduled for Wednesday afternoon.

No one expects the Federal Reserve to change its main interest rate at this meeting. But traders are anxious about what Fed Chair Jerome Powell may say about the rest of the year.

GE Healthcare Technologies tumbled 14.3% after it reported weaker results and revenue for the latest quarter than analysts expected. F5 dropped 9.2% despite reporting a better profit than expected.

McDonald’s slipped 0.2% after its profit for the latest quarter came up just shy of analysts’ expectations. It was hurt by weakening sales trends at its franchised stores overseas, in part by boycotts from Muslim-majority markets over the company’s perceived support of Israel.

Helping to keep the market’s losses in check was 3M, which rose 4.7% after reporting stronger results and revenue than forecast. Eli Lilly climbed 6% after turning in a better profit than expected on strong sales of its Mounjaro and Zepbound drugs for diabetes and obesity. It also raised its forecasts for revenue and profit for the full year.

Stocks of cannabis companies also soared after The Associated Press reported the U.S. Drug Enforcement Administration will move to reclassify marijuana as a less-dangerous drug in a historic shift. Cannabis producer Tilray Brands jumped 39.5%.

The earnings reporting season has largely been better than expected so far. Not only have the tech companies that dominate Wall Street done well, so have companies across a range of industries.

In the bond market, the yield on the 10-year Treasury rose to 4.69% Wednesday from 4.61%.

Benchmark U.S. crude fell 75 cents to $81.18 a barrel. Brent crude, the international standard, lost 65 cents to $85.68 a barrel.

In currency trading, the euro cost $1.0655, down from $1.0663.

FILE - A person walks in front of an electronic stock board showing Japan's Nikkei 225 index at a securities firm in Tokyo, on April 22, 2024. Asian stocks fell Wednesday, May 1, 2024 with most of the markets in the region closed for a holiday. Meanwhile, U.S. stocks closed out their worst month since September. (AP Photo/Eugene Hoshiko, File)

FILE - A person walks in front of an electronic stock board showing Japan's Nikkei 225 index at a securities firm in Tokyo, on April 22, 2024. Asian stocks fell Wednesday, May 1, 2024 with most of the markets in the region closed for a holiday. Meanwhile, U.S. stocks closed out their worst month since September. (AP Photo/Eugene Hoshiko, File)

FILE- A person looks at an electronic stock board showing Japan's stock prices at a securities firm in Tokyo, on April 30, 2024. Asian stocks fell Wednesday, May 1, 2024 with most of the markets in the region closed for a holiday. Meanwhile, U.S. stocks closed out their worst month since September. (AP Photo/Eugene Hoshiko, File)

FILE- A person looks at an electronic stock board showing Japan's stock prices at a securities firm in Tokyo, on April 30, 2024. Asian stocks fell Wednesday, May 1, 2024 with most of the markets in the region closed for a holiday. Meanwhile, U.S. stocks closed out their worst month since September. (AP Photo/Eugene Hoshiko, File)

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