Starlink in Brazil's crosshairs as spat over Elon Musk's X escalates

Brazil's telecommunications regulator threatened sanctions against Elon Musk's satellite internet firm Starlink, as a public confrontation with the billionaire escalates over the country's decision to block his social media company X.

Last week, Brazil's supreme court ordered a nationwide suspension of X for not appointing a legal representative by a court-mandated deadline, in line with the country's laws. That ruling was upheld on Monday by a panel of federal supreme court justices.

Anatel, Brazil's telecommunications regulator, has instructed internet providers to block access to X following the court order. Artur Coimbra, a commissioner at Anatel, told Reuters that Starlink is the only company that has told the regulator that it would not comply with the court decision.

In a separate interview with CNN Brasil on Monday, Coimbra said Anatel is looking into the potential non-compliance of Starlink and other network operators. The commissioner said there are a number of sanctions that could be imposed on a company if it does not comply with the court order to block X, including fines and the withdrawal of the license to do business in Brazil.

CNBC has reached out to Anatel for comment.

Musk's fight with Brazil stems back to April, when an X representative said that the company was forced by "court decisions to block certain popular accounts." Shortly after, Musk said that restrictions were removed and urged users to download a virtual private network (VPN) to access X, in the case that the social network gets banned.

The conflict ramped up just as Brazil prepares for municipal elections in October. Under the country's laws, social networks have to employ someone who can receive and consider government takedown notices about political misinformation.

X has no such employee in Brazil, after the company said it was removing all its staff from the country last month amid continuing tensions, triggering the latest legal confrontations.

The targeting of Starlink ramps up the dispute between Musk and Brazil, particularly stoking the billionaire's conflict with Brazilian Supreme Court justice Alexandre de Moraes, who was responsible for the ban on X.

Starlink said last week on X that it received an order from Moraes that "freezes Starlink's finances and prevents the company from conducting financial transactions" in the country.

Last week, X accused Moraes of threatening the social network's legal representative with imprisonment. The company's global government affairs team posted on X that the justice froze all of the representative's bank accounts once she resigned.

Musk has repeatedly attacked Moraes branding him an "evil tyrant" and calling for his imprisonment. He has also characterized Brazil's court ruling as censorship.

Brazil's supreme court was not immediately available for comment when contacted by CNBC.

- CNBC's Lora Kolodny contributed to this reported.