Government set to pressure big tech over online scams
Australia plans to introduce a law by the end of the year forcing internet companies to proactively stop hosting scams or face hefty fines, the top consumer regulator said on Friday, potentially setting up another showdown with Big Tech.
The Australian Competition and Consumer Commission (ACCC) and the treasury department are consulting internet, banking and telecommunications firms about creating a mandatory, enforceable anti-scam code which legally requires them take reasonable steps to protect users, including offering an effective complaint service.
In Australia, cryptocurrency scam advertisements featuring the face of mining billionaire Andrew Forrest have led to Australians losing millions of dollars, according to Forrest. He is suing Facebook owner Meta over the advertisements in California after saying he was unable to force Meta to take action domestically.
Currently only telecommunications providers face specific anti-scam regulation in Austrualia, according to the government. But the amount lost by Australians to scams tripled to $2.7 billion (US$1.8 billion) from 2020 to 2023, in line with global trends, as the pandemic sent more people online.
That prompted the ACCC to push for new laws making all participating industries accountable. Putting legal liability on internet platforms may create a new point of conflict between Australia and an industry that has typically leaned on US laws, which largely exempt them from responsibility.
Already, a law designed by the ACCC forcing internet companies to pay media companies licensing fees for links to content has resulted in Meta saying it may block media content on Facebook in Australia.
“We are hoping to see them being rolled out in the course of this period to the end of this year,” ACCC Chair Gina Cass-Gottlieb said by phone, referring to mandatory anti-scam codes applying to each industry.
“We do need, we think, very clear and specific enforceable legal obligations.”
Failure to comply with the codes would subject companies to fines of $50 million, three times the benefit gained by wrongdoing or 30 per cent of turnover at the time it took place, the treasury department has said.
The ACCC is separately suing Meta for what it says is a failure to stop the publication of advertisements for cryptocurrency scams featuring faces of prominent Australians, including Forrest.
Meta is defending the case the ACCC filed in March 2022 and which is still at a pre-trial stage. Cass-Gottlieb said a mandatory code would reduce the need for “backward-looking” and time-consuming court enforcement that involved investigation, preparation and resolution of a lawsuit, plus appeals.
Meta declined to comment on the anti-scam code’s timing. The company said in a submission in January it wanted a voluntary code and the planned mandatory code might result in companies prioritising compliance over innovation.
- Reporting by Byron Kaye; Editing by Jamie Freed, of Reuters.
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