Janice R. Andrews
By the end of the year, a new rule that will force internet businesses to take proactive measures to stop frauds from being hosted on their platforms or risk paying hefty fines will be introduced in Australia. The Australian Competition and Consumer Commission (ACCC) announced the pronouncement on Friday, setting up what might turn out to be a significant regulatory confrontation with Big Tech.
The ACCC is working with the Treasury Department and internet, banking, and telecom companies to create an anti-scam code that will be enforced and made required. These businesses will be legally required by this regulation to take reasonable precautions against frauds and to offer a reliable complaint resolution process.
Crisis of Cryptocurrency Scams
Scam ads using cryptocurrencies have become more common in Australia; these ads frequently use the image of well-known people, like mining millionaire Andrew Forrest. Australians have lost millions of dollars to these scams. Due to these ads, Forrest is presently suing Facebook owner Meta in California, stating that he was not able to force Meta to take domestic action.
Only Australian telecommunications carriers are currently governed by certain anti-scam laws. However, the necessity for more comprehensive regulatory measures has been brought to light by the increasing financial losses from scams, which tripled to A$2.7 billion (USD $1.8 billion) between 2020 and 2023. The pandemic has caused more people to spend time online, which is driving worldwide trends that are consistent with the rise in scam-related losses.
Encourage Wider Accountability
The ACCC is pushing for new rules in an effort to make all involved industries responsible for stopping frauds. Australia and the IT sector, which has historically relied on U.S. regulations that mainly shield them from responsibility for user-generated content, might become tense if internet platforms are held legally liable.
In the past, Meta threatened to restrict media content on Facebook in Australia after the ACCC created a rule requiring internet companies to pay media organizations for connections to their content. Gina Cass-Gottlieb, chair of the ACCC, stressed the significance of unambiguous and upholdable legal responsibilities. Regarding the required anti-scam codes, she said, “We are hoping to see them being rolled out in the course of this period to the end of this year.”
Possible Sanctions
According to the Treasury Department, enterprises who violate the new anti-scam laws risk fines of up to A$50 million, three times the benefit received from the crime, or 30% of their revenue during the non-compliance period.
Additionally, Meta is being sued by the ACCC for allegedly failing to stop the publication of ads for cryptocurrency frauds that include well-known Australians, like Forrest. The pre-trial phase of this March 2022-filed case is now ongoing. A required code, according to Cass-Gottlieb, would lessen the need for “backward-looking” and laborious court enforcement.
Meta has previously stated that they would prefer a voluntary code, however they have declined to comment on the date of the anti-scam code. The corporation contended in a January proposal that a required code might cause businesses to put compliance before innovation.
Gazing Forward
Conflict with Big Tech is a real possibility as Australia proceeds with these regulatory changes. As part of its ongoing efforts to shield Australian consumers from online frauds, the ACCC has implemented an obligatory anti-scam code. Internet firms will have to take aggressive steps to protect their users or risk facing serious consequences, including significant financial penalties. The results of this regulation campaign may provide a standard for how other nations handle the expanding problem of online scams.
Final Thoughts
By making internet firms responsible for the scams hosted on their platforms, Australia’s soon-to-be anti-scam law seeks to make the internet a safer place for users. Both authorities and the tech sector will be closely observing how these new restrictions are put into place and enforced as the end-of-year deadline draws near and consultations continue.
