- Australia will introduce a law by the end of the year mandating internet companies to proactively prevent online scams, with substantial fines for non-compliance.
- To enhance consumer protection and address the scam-related losses during the pandemic, the proposed legal liability may create tensions between Australia and the tech industry.
OUR TAKE
By imposing hefty fines, the government is forcing tech giants to finally prioritise user safety. The responsibility for ensuring user safety should be shared by all participants, not just the government. Australia’s new enforcement will regulate these companies’ heightened awareness of their content, thereby collectively building a safer Internet.
–Ashley Wang, BTW reporter
What happened
Australia plans to introduce a law by the end of the year mandating internet companies to proactively prevent online scams, otherwise, substantial fines will be implemented, according to the Australian Competition and Consumer Commission (ACCC). This move, aimed at enhancing consumer protection, could lead to a significant confrontation with major tech companies.
The ACCC and the treasury department are in discussions with internet, banking, and telecommunications firms to develop a mandatory, enforceable anti-scam code. This code will require companies to take reasonable steps to protect users, including offering effective complaint services. The urgency for such legislation is underscored by the sharp rise in scam-related losses, which have tripled to $1.8 billion from 2020 to 2023, driven by increased online activity during the pandemic.
Currently, only telecommunications providers in Australia are subject to specific anti-scam regulations. However, the ACCC is pushing for broader laws to hold all relevant industries accountable.
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Why it’s important
Failure to comply with the new anti-scam codes could result in fines of $33.8 million, three times the benefit gained from wrongdoing, or 30% of the company’s turnover during the infraction. ACCC Chair Gina Cass-Gottlieb emphasised the need for “clear and specific enforceable legal obligations” to reduce reliance on lengthy court processes.
The ACCC now is also suing Meta for failing to stop similar advertisements featuring prominent Australians. While Meta declined to comment on the timing of the code, it has expressed a preference for a voluntary code, arguing that mandatory compliance could stifle innovation.
This proposed legal liability for internet platforms could create new tensions between Australia and the tech industry, which typically relies on US laws that largely exempt them from responsibility. By imposing hefty fines, the government is forcing tech giants to finally prioritise user safety. This legislation, driven by a staggering rise in scam-related losses, is essential.
