SYDNEY – Australia is set to introduce legislation by the end of the year aimed at compelling internet companies to proactively prevent scams, with the possibility of significant fines for non-compliance, according to the country’s top consumer regulator on Friday. This move may ignite another confrontation between Australia and major technology firms.
The Australian Competition and Consumer Commission (ACCC), in collaboration with the treasury department, is currently consulting with internet, banking, and telecommunications companies to develop a mandatory, enforceable anti-scam code. This code will legally require companies to take reasonable measures to protect users, including offering an effective complaint resolution service.
In Australia, advertisements for cryptocurrency scams featuring mining billionaire Andrew Forrest have led to substantial financial losses for Australians. Forrest is pursuing legal action against Meta Platforms Inc. (META.O), the owner of Facebook, in California, after claiming he was unable to compel Meta to act against the ads domestically.
At present, only telecommunications providers in Australia are subject to specific anti-scam regulations. However, from 2020 to 2023, the amount of money lost to scams by Australians tripled to AUD 2.7 billion (USD 1.8 billion), mirroring global trends as more people turned to online activities during the pandemic.
The ACCC has advocated for new laws to hold all participating industries accountable. Imposing legal liability on internet platforms may create fresh friction between Australia and an industry that has traditionally relied on U.S. laws, which largely exempt them from such responsibilities.
Previously, a law developed by the ACCC mandated that internet companies pay media outlets licensing fees for linking to their content. This resulted in 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,” said ACCC Chair Gina Cass-Gottlieb, referring to the proposed mandatory anti-scam codes. “We do need, we think, very clear and specific enforceable legal obligations.”
Non-compliance with the codes could result in fines of AUD 50 million, three times the benefit obtained from the wrongdoing, or 30% of the company’s turnover at the time of the violation, according to the treasury department.
The ACCC is also suing Meta for allegedly failing to prevent the publication of advertisements for cryptocurrency scams featuring prominent Australians, including Forrest. Meta is currently defending this case, which the ACCC filed in March 2022 and is still in the pre-trial stage.
Cass-Gottlieb indicated that a mandatory code would diminish the need for “backward-looking” and time-consuming court enforcement that involves extensive investigation, preparation, and resolution of lawsuits, as well as potential appeals.
Meta declined to comment on the timing of the anti-scam code but, in a submission in January, advocated for a voluntary code. The company argued that a mandatory code might lead to companies prioritizing compliance over innovation.
