Elon Musk’s Starlink faces legal jeopardy in Brazil after X ban

Brazil’s ban of social media platform X has led to greater scrutiny on another part of Elon Musk’s business empire: Starlink.

From Amazonian tribes and farming frontiers, to the armed forces and offshore oil industry, the satellite internet service has connected remote corners of the continent-sized territory to the worldwide web since launching there in 2022.

Access for Starlink’s 225,000 users in Latin America’s largest nation was thrown into doubt after it was recently dragged into the dispute surrounding the supreme court’s shutdown of X.

The episode reveals Starlink’s legal vulnerabilities in the country and has raised concerns among hundreds of thousands of people and businesses in Brazil — often in isolated areas — for whom it has become a vital tool.

“If Starlink is blocked, there will be chaos in communications at the farm level, from issuing invoices to [remotely] controlling machines,” said Odacil Ranzi, a crop grower in the rural interior of Bahia state.

When X was briefly reinstated in Brazil on Wednesday, the social media platform blamed an “inadvertent” technical update and said it would continue to abide by the nationwide ban.

But authorities accused it of seeking to deliberately disobey the ruling by supreme justice Alexandre de Moraes from the end of last month.

The judge had clashed with Musk over X’s refusal to obey court orders to take down accounts suspected of spreading misinformation, before blocking the social network after it failed to appoint a local legal representative.

Moraes also ruled Starlink formed part of the same “economic group” because of their ultimate common shareholder, so could be held jointly responsible for X’s court fines.

A subsidiary of rocket builder SpaceX, which is controlled by Musk, Starlink is a distinct company to Musk’s social media group.

Starlink initially refused to implement the X blackout unless authorities reversed what it called an “illegal” freeze of its bank accounts, imposed to guarantee the payment of X’s penalties.

After a warning by Anatel, Brazil’s communications regulator, that Starlink could eventually lose its licence to operate if found to be in breach of court rulings, the company abided by the X prohibition.

Last week, Starlink’s assets were unfrozen, but only after R$11mn ($2mn) was taken from its accounts. On Thursday, the court imposed a new daily fine of R$5mn on X if the social media network continued to be available in Brazil, with Starlink also held responsible.

While Anatel itself has questioned the practical viability of blocking the service, the dispute has led to worries about Starlink’s position in the country.

Although it represents only 0.5 per cent of Brazil’s broadband market, Starlink has rapidly become the leader in satellite internet. Today it controls almost half of the segment, ahead of competitors including HughesNet, Viasat and Telebras.

With a fleet of low-orbit satellites whose signals reach distant places not served by regular cable and fibre-optic internet providers, telecoms experts said Starlink was cheaper and easier to install than rival products.

“This combination of better quality and lower cost means that other traditional offers, while in theory competing with Starlink, are in practice not even comparable to it,” said Thiago Ayub, chief technology officer at Sage Networks, an IT services company.

Alongside retail and business subscribers, Starlink has also made inroads into Brazil’s public sector, according to government procurement and transparency sites. The company is understood to have a minimal operational presence in Brazil, with a registered office at a company in São Paulo that provides administrative functions.

SpaceX did not respond to requests for comment. A law firm representing Starlink in Brazil said it was not authorised to comment.

The service has come under fire from other authorities in Brazil. Public officials say its devices have become an essential communications tool for environmental criminals conducting unauthorised gold prospecting in the Amazon forest.

On a recent mission by special forces to destroy an illegal mining base this year in the Yanomami indigenous reserve, accompanied by the Financial Times, operatives discovered a Starlink antenna, one of dozens seized this year.

“Sometimes you see the miners running away with the equipment on their back,” said one of the security agents. “Every camp has one.”

Connection to the outside world allows the miners to receive advance warning of helicopter sorties by law enforcement agencies in areas such as the Yanomami lands, an expanse of dense jungle the size of Portugal.

The FT interviewed half a dozen Brazilian officials in recent months who said Starlink was frequently uncooperative with requests for assistance to identify the location and users of its kits in indigenous or other protected areas. An obstacle was data protection laws prohibiting the release of confidential customer information, several of the people said.

André Porreca, a prosecutor in Manaus, the capital of Amazonas state, said Starlink’s internet services used in illicit actions were often contracted by people acting on behalf of criminals.

“The problem itself is not internet access,” Carlos Baigorri, head of Anatel, said in a July interview. “The problem is the illegal activity.” Defenders of Starlink point out that mobile phones and computers are also used by criminals.

However, the company appears to have changed tack lately. In a case concerning illegal mining in the Yanomami territory, a confidential supreme court ruling recently ordered the company to hand over geolocation and user data, as first reported by newspaper Valor Economico. A person familiar with the situation said the demand was being complied with.

With concerns of market concentration, the government of President Luiz Inácio Lula da Silva — whom Musk called a “lapdog” of the supreme court justice who banned X — is keen for new entrants.

The communications minister recently met a representative from tech giant Amazon to discuss its rival service, which is expected to be available in Brazil from 2026. Anatel last week authorised challenger E-Space to operate in the country.

“Having a second or third supplier would greatly minimise this concern about the total unavailability of the service with no other alternative,” said Ayub.

Perhaps alive to the competition, Starlink is now advertising a time-limited offer for households in Brazil: R$1,000 for hardware, down from R$2,400, with “unlimited” high-speed internet for R$184 per month before taxes.

Additional reporting by Beatriz Langella in São Paulo