Brazil files a lawsuit against Discord seeking R$500M and requests the establishment of an office in the nation.

      The federal government of Brazil has filed a lawsuit against Discord for R$500 million, approximately $97 million, citing significant deficiencies in the platform's age verification and user safety measures. This development comes just three days after Discord contested an order from the data protection authority that suspended its livestreaming capability, arguing that only a court has the authority to suspend such services. This lawsuit is part of a broader trend of litigation that categorizes platforms as defective products instead of publishers.

      The lawsuit was initiated on Tuesday by the Advocacia-Geral da União, the federal government's legal branch, in a federal court located in Brasília. The decision to pursue legal action was made during a meeting attended by Solicitor General Jorge Messias, President Lula, and other officials.

      The amount sought is not intended as traditional compensation. Rather, it is pursued as collective moral damages and will be directed to Brazil’s Diffuse Rights Defense Fund instead of being awarded to individuals. Additionally, the government is demanding R$500,000 per day for non-compliance and has set a fifteen-day period for Discord to comply if the injunction is granted.

      The government is primarily seeking specific remedies rather than monetary compensation. It is asking Discord to implement real-time blocking of content related to self-harm and extreme violence in livestreams, establish a dedicated protocol for reporting sextortion to authorities, and create an age verification system that does not rely on users entering their birth date.

      Many of the requests are structural rather than purely technical. The AGU wants accounts for users under 16 to be officially linked to a guardian, restrictions on server invitations from new accounts, actions to prevent the recreation of banned servers, a permanent reporting channel in Portuguese, moderation staff scaled to the Brazilian user base, and the establishment of a registered office and legal representative in Brazil.

      This case is primarily based on the Digital Statute of the Child and Adolescent, which came into effect in March. This law prohibits self-declared age as a verification method and mandates the most protective settings by default for any platform that could be accessed by minors, regardless of the company's location.

      The incident that prompted this regulatory action occurred in July when a 13-year-old girl in Mato Grosso do Sul died during a Discord livestream after being pressured by group members; a 17-year-old was also driven to self-harm during the same incident, with evidence suggesting that a seven-year-old was targeted by the same individuals.

      The lawsuit highlights that the incident was not concealed. It was publicly announced in advance and utilized core platform features, yet the government claims Discord failed to detect, interrupt, or report it to Brazilian authorities.

      A finding from a prior investigation by the regulator is particularly troubling. The ANPD determined that, just before the new law took effect in early March, Discord made technical adjustments to its livestreaming feature that rendered it less protective of minors than it had been previously.

      Discord has labeled the lawsuit as "disproportionate" and insists it "does not accurately reflect Discord’s approach to safety and compliance with Brazilian law." The company asserts that it had been negotiating in good faith and had proposed a comprehensive package of technical changes along with a financial investment in online safety within Brazil.

      Messias offers a different perspective, stating that Discord rejected a formal agreement to ensure compliance. Neither party has disclosed the proposed agreement that was turned down, though the AGU indicates it is open to reaching a settlement.

      The timing of the lawsuit has political implications. Lula is campaigning for re-election in October, the first lady publicly advocated for the platform's shutdown this month, and TikTok was penalized regarding children's data just a day before this lawsuit was filed.

      Currently, both administrative and judicial processes are proceeding simultaneously, a situation Discord may find challenging. The AGU has made it clear that its case does not supersede the measures put forth by the ANPD, meaning the suspension of livestreaming is still in effect while a federal judge examines a more extensive list of demands, and the ongoing discussion in Europe regarding age verification is being addressed in Brazil through judicial order.