Australia is thinking differently. Australia aims to punish internet companies (Big Tech) for becoming the platform for online scams.
A report on the state of scams 2023 indicates that 25.5 percent of world citizens or 1 in 4 persons lost money to scams or identity theft in the last 12 months, culminating in financial loss of €974 billion. This means federal governments need to take preventive action to reduce online scams.
In March 2022, Britain (the United Kingdom) said it would force Internet platforms such as Google, Meta Platforms, Twitter and other online platforms to stop paid-for fraudulent advertisements.
Digital scams, including investment fraud and people-trafficking deceptions, are on the rise, INTERPOL said. The increase, the agency says, is due in part to the global embrace of new technologies. In 2023, scammers stole over $1 trillion from victims around the world.
The World Economic Forum’s Global Risks Report 2024 includes adverse outcomes of frontier technologies, cyber insecurity and illicit economic activity as short- and long-term threats to the global economy.
Australia
Australia plans to introduce a new law by the end of the year that will require internet companies to proactively prevent scams or face substantial fines, the Australian Competition and Consumer Commission (ACCC) said. This initiative could lead to another confrontation between the Australian government and Big Tech, Reuters news report said.
The ACCC and the treasury department are consulting with internet, banking, and telecommunications firms to develop a mandatory and enforceable anti-scam code. This code will legally require these companies to take reasonable measures to protect users, including providing an effective complaint service.
Meta’s cryptocurrency scam advertisements
In Australia, cryptocurrency scam advertisements featuring mining billionaire Andrew Forrest have resulted in significant financial losses for Australians. Andrew Forrest is suing Facebook owner Meta in California after unsuccessful attempts to compel Meta to take action domestically.
Australian government notes that currently only telecommunications providers are subject to specific anti-scam regulations. However, from 2020 to 2023, Australians’ losses to scams tripled to A$2.7 billion ($1.8 billion), mirroring global trends driven by increased online activity during the pandemic.
This surge in scam-related losses has prompted the ACCC to advocate for new laws that hold all relevant industries accountable. Imposing legal liability on internet platforms may lead to new conflicts between Australia and an industry that has traditionally relied on U.S. laws, which largely exempt them from responsibility.
Previously, an ACCC-designed law mandating internet companies to pay media companies for linking to their content led Meta to threaten to block media content on Facebook in Australia.
ACCC Chair Gina Cass-Gottlieb said: “We are hoping to see them being rolled out in the course of this period to the end of this year,” referring to the mandatory anti-scam codes. She emphasized the need for very clear and specific enforceable legal obligations.
Non-compliance with the codes would result in fines of A$50 million, three times the benefit gained by the wrongdoing, or 30 percent of the company’s turnover at the time of the infraction, according to the treasury department.
ACCC is suing Meta
The ACCC is suing Meta for failing to prevent the publication of cryptocurrency scam advertisements featuring prominent Australians, including Andrew Forrest. Meta is defending the case, filed in March 2022, which is still in the pre-trial stage. Cass-Gottlieb mentioned that a mandatory code would reduce the need for lengthy court enforcement processes.
Meta declined to comment on the timing of the anti-scam code but indicated in a January submission that it preferred a voluntary code, expressing concern that a mandatory code might lead companies to prioritize compliance over innovation.
Baburajan Kizhakedath
