Twitter's faced this law before, and they had strong filters to block Nazi content in Germany. (It was part of how we knew damn well they had the tools to block or remove hate speech... because they did it in countries where it was illegal.)
It looks like Elon's changes have included removing the anti-Nazi filters from Germany or their moderation team can no longer keep up with reports.
Or both. Both is also likely.
Anyway. The lawsuit is over activity for the last four months, so this isn't "some bits & pieces kept slipping through for the last many years, and we're finally annoyed enough to do something about it."
Germany’s Federal Office of Justice today announced(Opens in a new window) it had started “fine proceedings” against Twitter for possibly violating the country’s Network Enforcement Act. The law essentially requires social media companies to act within 24 hours to remove “clearly illegal” content after it’s been reported, and within seven days to remove other less-obvious illegal postings.
24 hours is... not a lot of time, since that includes weekends and the reports may be coming in well outside of US business hours.
But. In the past, Twitter managed them. Of course, operating on a skeleton-crew staff, they may not have 24/7 moderation coverage anymore. And Elon doesn't want content removed because someone thinks it's offensive.
My guess: Germany gets its ruling and Twitter refuses to pay up. They've been skipping a lot of payments recently.
And then he starts screaming when every advertiser with an office in Germany pulls their ads under threats from the German government. Oh, and German ISPs will then block Twitter entirely. (Which was the threat that got them to create the anti-Nazi filter in the first place - Twitter wasn't concerned about fines, but they didn't want to be blocked in a substantial portion of the EU.)