Australia will introduce a law by the end of the year mandating internet companies to proactively prevent scams or face substantial fines, according to the Australian Competition and Consumer Commission (ACCC). This move may lead to a new confrontation with major technology firms.
The ACCC and the treasury department are consulting with internet, banking, and telecommunications companies to create a mandatory anti-scam code. This code would legally require companies to take reasonable steps to protect users, including offering effective complaint services.
What Prompted the Anti-Scam Initiative?
This initiative comes in response to the significant financial losses Australians have faced due to scams, particularly those involving cryptocurrency advertisements using the likeness of mining billionaire Andrew Forrest.
Currently, only telecommunications providers in Australia are subject to specific anti-scam regulations. However, with the amount lost to scams tripling to A$2.7 billion ($1.8 billion) from 2020 to 2023, the ACCC is pushing for broader accountability. This new legislation aims to hold all participating industries accountable, potentially creating a new point of conflict with internet platforms that typically rely on U.S. laws, which largely exempt them from responsibility.
Previous Conflicts
The ACCC previously designed a law forcing internet companies to pay media companies licensing fees for content links. This resulted in Meta threatening to block media content on Facebook in Australia.
ACCC Chair Gina Cass-Gottlieb stated the goal is to roll out these mandatory anti-scam codes by the end of this year, emphasizing the need for clear and enforceable legal obligations.
Penalties for Non-Compliance
Non-compliance with these codes would subject companies to:
- Fines of A$50 million, three times the benefit gained from wrongdoing, or
- 30% of turnover at the time the offense occurred.
The ACCC is also suing Meta for failing to stop the publication of cryptocurrency scam ads featuring prominent Australians, including Forrest. This lawsuit, filed in March 2022, is still in the pre-trial stage.
Meta, which has declined to comment on the anti-scam code’s timing, argued in a January submission for a voluntary code. The company expressed concerns that a mandatory code might prioritize compliance over innovation.
The urgency of the new law is highlighted by the ACCC’s desire to reduce the need for lengthy court enforcement processes. According to Cass-Gottlieb, a mandatory code would alleviate the burden of investigations, lawsuits, and appeals, streamlining the enforcement of anti-scam measures.
Featured Image courtesy of FRANCIS MASCARENHAS/REUTERS
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