Elon Musk's X Corp is taking legal action against the office of Julie Inman Grant in the Federal Court, claiming on Thursday that sweeping changes to how the platform was  regulated were made without proper warning.
The company's barrister told the court that X had previously been subjected to a social media services code that was replaced without consultation by a more onerous standard that applies to all electronic services.
"Despite the fact that the commissioner at no time formed the view that code was deficient ... (she) enacted a standard that would overrule the code," Perry Herzfeld SC said.
Ms Inman Grant claims X and other social media platforms were more correctly regulated under the broader standard because they have the capacity to enable messaging and encrypted chat between users.
This functionality makes social media services more susceptible to the sharing of harmful content, the eSafety website says.
But trying to rescind the social media code under that criteria is unreasonable, Mr Herzfeld argued.
"It would be rather perverse for a social media service ... not to enable messaging or chat between end users," he said.
"One would not refer to the X platform as an instant messaging service."
Mr Herzfeld claims the commissioner did not follow the legal requirement of notifying stakeholders before enacting major changes to an online safety standard.
"The commissioner can't be empowered to make a standard without that standard having gone through that process of public consultation," he said.
"The commissioner is seeking to have her cake and eat it too."
However, the commissioner's barrister said the platform had ample time to raise any objections given the standard did not come into force until six months after it was made public.
"That six-month period provided the opportunity ... if they needed, to make representations to the commissioner for why it should be varied," Christopher Tran said.
He urged the court to reject X Corp's argument that the platform could not be regulated as both a social media service and relevant electronic service.
"The Online Safety Act in no way says you can only be one but not the other," Mr Tran said.
"They need to persuade you that they are mutually exclusive categories."
The commissioner argues X is embedded in two aspects of the online industry and is therefore required to be involved with more industry bodies and regulatory frameworks, Mr Tran said.
Lifeline 13 11 14
Kids Helpline 1800 55 1800 (for people aged 5 to 25)
16°C