Australia plans to pass a law by the end of the year requiring internet companies to actively stop hosting scams or face huge fines, according to Reuters.
The chief consumer regulator announced the move on Friday, which could lead to a new standoff with Big Tech.
The Australian Competition and Consumer Commission (ACCC) and the Department of Finance are consulting banking and telecoms companies on the creation of a mandatory and enforceable anti-fraud code. It would require companies to take reasonable steps to protect users, including offering an effective complaints service.
In Australia, an advert for a cryptocurrency scam involving mining billionaire Andrew Forrest caused Australians to lose millions of dollars. He is now suing Facebook owner Meta over the adverts in California, saying he was unable to get the company to take action domestically.
Only telecoms providers currently face specific fraud rules in Australia, according to the government. However, the amount lost by Australians to fraud tripled to A$2.7 billion ($1.8 billion) between 2020 and 2023.
The COVID-19 pandemic sent more people online, prompting the ACCC to push for new laws to ensure accountability for all industries involved.
Confrontation with Meta
Imposing legal liability on internet platforms could create a new point of conflict between Australia and an industry that has typically relied on US laws that largely exempt them from liability. A law drafted by the ACCC requiring internet companies to pay licence fees to media companies for links to content has led Meta to say it may block media content on Facebook in Australia. ACCC Chair Gina Cass-Gottlieb stated:
We are hoping to see them being rolled out in the course of this period to the end of this year. We do need, we think, very clear and specific enforceable legal obligations.
Failure to comply with the codes will result in a fine of A$50 million, three times the benefit of the offence or 30 per cent of turnover at the time of the breach, the finance ministry said.
The ACCC is separately suing Meta for what it says is a failure to stop the publication of cryptocurrency fraud adverts featuring prominent Australians including Forrest. Meta, meanwhile, is defending a case brought by the ACCC in March 2022, which is still in pre-trial proceedings.
