Australia is planning to introduce a new law by the end of the year that will require internet companies to take proactive measures to stop hosting scams or face significant fines, as stated by the top consumer regulator on Friday. This move could potentially lead to a conflict with major tech companies. The Australian Competition and Consumer Commission (ACCC) and the treasury department are in talks with internet, banking, and telecommunications firms to create a mandatory anti-scam code. This code would legally compel these companies to take reasonable steps to protect users and provide an effective complaint service.
In Australia, cryptocurrency scam ads using the image of mining billionaire Andrew Forrest have caused Australians to lose millions of dollars. Forrest is suing Facebook owner Meta in California after claiming he was unable to get Meta to take action domestically against the ads. Currently, only telecommunications providers are subject to specific anti-scam regulations in Australia. However, the amount lost to scams by Australians has tripled to A$2.7 billion ($1.8 billion) from 2020 to 2023, in line with global trends due to increased online activity during the pandemic.
In response, the ACCC is advocating for new laws that would hold all participating industries accountable. Placing legal liability on internet platforms may lead to a new clash between Australia and an industry that has traditionally relied on U.S. laws exempting them from responsibility. Earlier, a law introduced by the ACCC to require internet companies to pay media companies licensing fees for content links resulted in Meta threatening to block media content on Facebook in Australia.
Additionally, Apple may have avoided a significant fine from the EU. Gina Cass-Gottlieb, Chair of the ACCC, stated by phone that they are expecting the mandatory anti-scam codes to be implemented by the end of the year. She emphasized the need for clear and specific enforceable legal obligations. Failure to comply with the codes could result in fines of A$50 million, three times the benefit gained through wrongdoing, or 30% of the turnover at the time it occurred, as per the treasury department.
The ACCC is also separately suing Meta for its failure to prevent the publication of cryptocurrency scam ads featuring well-known Australians. Meta is defending the case, claiming that a mandatory code would reduce the need for time-consuming court enforcement, investigation, and resolution of a lawsuit, as well as appeals. Meta declined to comment on the timing of the anti-scam code, stating in a submission in January that they prefer a voluntary code and that a mandatory one might lead to companies prioritizing compliance over innovation.