Australia plans to introduce a law by the end of the year requiring internet companies to proactively prevent hosting scams or face hefty fines, according to the top consumer regulator on Friday, potentially setting up another showdown 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. This code would legally require them to take reasonable steps to protect users, including offering an effective complaint service.
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In Australia, cryptocurrency scam advertisements featuring mining billionaire Andrew Forrest have led to significant financial losses for Australians. Forrest is suing Facebook owner Meta in California, claiming he was unable to force Meta to take action domestically.
Currently, only telecommunications providers face specific anti-scam regulation in Australia. However, the amount lost to scams tripled to A$2.7 billion ($1.8 billion) from 2020 to 2023, prompting the ACCC to push for new laws making all participating industries accountable. This could create new conflicts with an industry that typically relies on U.S. laws, which largely exempt them from responsibility.
Already, a law designed by the ACCC forcing internet companies to pay media companies licensing fees for links to content has resulted in Meta saying it may 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 applying to each industry. “We do need, we think, very clear and specific enforceable legal obligations.”
Failure to comply with the codes would subject companies to fines of A$50 million, three times the benefit gained by wrongdoing, or 30% of turnover at the time it took place, according to the treasury department.
The ACCC is separately suing Meta for allegedly failing to stop the publication of advertisements for cryptocurrency scams featuring prominent Australians, including Forrest. Meta is defending the case, which was filed in March 2022 and is still at a pre-trial stage.
Cass-Gottlieb said a mandatory code would reduce the need for “backward-looking” and time-consuming court enforcement. Meta declined to comment on the anti-scam code’s timing but stated in a submission in January that it preferred a voluntary code, warning that a mandatory code might result in companies prioritizing compliance over innovation.
