• SpaceX satellite internet service Starlink said it will comply with court orders to block social network X in Brazil. Elon Musk owns both businesses.
• Brazil's supreme court ordered a suspension of X because it defied federal regulations concerning content moderation and the appointment of a legal representative in the country.
• Musk has been publicly berating Brazil's administration for months, threatening "reciprocal seizure of government assets," in response to its court orders against his businesses.

Starlink, the satellite internet service owned and operated by SpaceX, said it will block social network X in Brazil to continue operations there without the threat of losing its license. Elon Musk owns both businesses.

Brazil's supreme court blocked X in the country after it openly defied the court's orders and failed to pay fines. X refused requests to suspend accounts posting content that the court alleged harmed democratic institutions in Brazil, which is preparing for municipal elections in October.

The supreme court orders had frozen Starlink's financial assets in the country to ensure X would pay its penalties. The country's top justice, Alexandre de Moraes, viewed Musk's two companies as working in concert.

One takedown request pertained to the account of a senator, Marcos do Val, who is being investigated for possible involvement in plots to stage a coup and to sabotage de Moraes. The social network also refused to appoint a legal representative in the country, a requirement under federal regulations.

De Moraes detractors say he has gone too far in exerting control over speech online and on social networks.

As CNBC has previously reported, Starlink has advertised on X and Musk has encouraged users to access the social network using his satellite internet service.

SpaceX has said it has about 250,000 Starlink customers in Brazil. Its competitors there include Hughesnet, Viasat and Telebras.

The Starlink account on X published the following statement, referring to its decision and de Moraes:

"To our customers in Brazil (who may not be able to read this as a result of X being blocked by @alexandre):

The Starlink team is doing everything possible to keep you connected. Following last week's order from @alexandre that froze Starlink's finances and prevents Starlink from conducting financial transactions in Brazil, we immediately initiated legal proceedings in the Brazilian Supreme Court explaining the gross illegality of this order and asking the Court to unfreeze our assets.

Regardless of the illegal treatment of Starlink in freezing of our assets, we are complying with the order to block access to X in Brazil. We continue to pursue all legal avenues, as are others who agree that @alexandre's recent orders violate the Brazilian constitution.

Before Starlink agreed to comply with the orders to block X, the telecommunications regulator for Brazil, Anatel, had threatened sanctions against the company.

A public clash between Musk and the current administration in Brazil, a major non-NATO ally of the U.S., has been escalating for months.

Musk recently characterized de Moraes as a "criminal," comparing him to movie and book villains such as Darth Vader and Voldemort, and has repeatedly called for his impeachment, insisting de Moraes' orders amount to illegal censorship.

Musk has praised Brazil's far-right former President Jair Bolsonaro and promised retribution against de Moraes and President Luiz Inacio Lula da Silva.

"Unless the Brazilian government returns the illegally seized property of X and SpaceX, we will seek reciprocal seizure of government assets too," Musk wrote over the weekend. "Hope Lula enjoys flying commercial."

In April, Musk wrote "How did @Alexandre de Moraes become the dictator of Brazil? He has Lula on a leash."

In an interview with CNN Brazil after the court's orders were unanimously upheld by a panel of five justices, Lula said he hopes the controversy surrounding the suspension of X in his country would show the world "it isn't obliged to put up with Musk's far-right free-for-all just because he is rich," according to a translation from Portuguese to English reported by The Guardian.

Under Lula, Brazil's environmental authority Ibama seized Starlink terminals used by illegal miners in the Amazon rainforest.