Australia plans to introduce a law by the end of the year requiring internet companies to proactively prevent hosting scams or face substantial fines, according to the top consumer regulator on Friday. This move may set up another conflict with Big Tech.
The Australian Competition and Consumer Commission (ACCC) and the treasury department are consulting with internet, banking, and telecommunications firms to create a mandatory, enforceable anti-scam code that legally obligates them to take reasonable steps to protect users, including providing an effective complaint service.
In Australia, cryptocurrency scam ads featuring mining billionaire Andrew Forrest have resulted in significant financial losses for Australians. Forrest is suing Facebook owner Meta in California after failing to compel Meta to take domestic action.
This surge prompted the ACCC to push for new laws holding all participating industries accountable.
Imposing legal liability on internet platforms could create a new point of contention between Australia and an industry that typically relies on U.S. laws, which largely exempt them from responsibility. Previously, a law designed by the ACCC requiring internet companies to pay media companies licensing fees for content links led to Meta threatening to 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, referring to mandatory anti-scam codes for each industry. “We do need, we think, very clear and specific enforceable legal obligations.”
Failure to comply with the codes would result in fines of A$50 million, three times the benefit gained from the wrongdoing, or 30% of the company’s turnover at the time, according to the treasury department.
The ACCC is also suing Meta for allegedly failing to stop cryptocurrency scam ads featuring prominent Australians, including Forrest. Meta is contesting the case, which the ACCC filed in March 2022 and is still in the pre-trial stage.
Cass-Gottlieb stated that a mandatory code would reduce the need for “backward-looking” and time-consuming court enforcement.
Meta declined to comment on the timing of the anti-scam code. In a January submission, the company expressed a preference for a voluntary code, arguing that a mandatory code might lead companies to prioritize compliance over innovation.
