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Australia intends to bring in a law this year which will make it compulsory for internet companies to proactively stop hosting scam ads or face fines, Reuters reported citing, the Australian Competition and Consumer Commission, or ACCC.
The consumer regulator and the treasury department are in discussions with internet, banking and telecommunications companies about developing a compulsory anti-scam code that legally requires the companies to take reasonable actions to protect people on their platforms, including providing an effective complaint service, the report added.
In Australia, cryptocurrency scam ads showing the face of mining billionaire Andrew Forrest have resulted in Australian people getting scammed for millions of dollars, the report added citing Forrest.
Forrest is suing Meta (META), which owns Facebook, over the ads in California alleging that he was unable to force Meta to take action locally, according to the report.
As of now, specific anti-scam rules in Australia apply only to telecom companies. The amount of money Australians have lost to scams have increased three-fold to about A$2.7B ($1.8B) from 2020 to 2023, on par with what is being seen worldwide, after the pandemic thrust more people to go online.
The ACCC now wants new rules which holds all participating industries accountable. Placing a legal liability on internet platforms could lead to disagreements between the country and the industry, which has usually leaned on U.S. laws that largely do not hold them accountable, according to the report.
“We are hoping to see them being rolled out in the course of this period to the end of this year,” said ACCC Chair Gina Cass-Gottlieb to the news agency about the compulsory anti-scam codes that would apply to each industry.
Cass-Gottlieb added that the agency thinks the country needs clear and specific enforceable legal obligations.
The company could have to pay fines of A$50M, three times the benefit received by wrongdoing or 30% of turnover at the time the event occurred, for failing to adhere to the rules, the report noted citing the treasury department.
Australia has already seen a tussle with Meta. Last month, Meta noted that it will consider blocking all news content from Facebook in Australia if the government forces it to pay licensing fees to media outlets to display links, in line with the decision it took in Canada that implemented a similar law.
Separately, the ACCC is suing Meta alleging the company’s failure to halt cryptocurrency scam ads being published on its platform which had faces of prominent Australians, including Forrest.
The U.S. tech giant is defending the lawsuit the ACCC filed in March 2022 and it is still at a pre-trial stage. Cass-Gottlieb noted that a mandatory rule would reduce the requirement for “backward-looking” and time-consuming court enforcement which involves probe, resolution of a lawsuit and appeals, the report added.
Meta had said in a filing in January that it wanted a voluntary rule, and that a planned mandatory code could lead to companies prioritizing compliance over innovation.