Australia is preparing to implement pioneering anti-scam legislation aimed at tech giants this year.

Quick Read

• Australia is set to implement legislation that requires internet companies to block scams.
• Severe penalties for failing to comply could amount to $50 million or higher.
• The ACCC and the treasury are seeking input from multiple industries to develop a code to combat scams.
• Advertisements for cryptocurrency scams that use Andrew Forrest’s name have led to substantial financial losses.
• Meta is facing a lawsuit for not effectively controlling misleading ads.
• The recent legislation seeks to make technology giants responsible, which might lead to clashes with United States laws.

Australia’s New Anti-Fraud Legislation

By the end of the year, Australia intends to implement a pioneering law that will require internet companies to actively prevent the hosting of scams or risk substantial fines. The Australian Competition and Consumer Commission (ACCC), alongside the treasury department, is presently engaging with internet, banking, and telecommunications companies to develop a compulsory and enforceable anti-scam code.

The Importance of This Legislation

This action follows significant financial losses for Australians due to cryptocurrency scam advertisements featuring high-profile individuals such as mining tycoon Andrew Forrest. Forrest has initiated legal proceedings against Facebook’s parent company, Meta, in California, after failing to compel the company to take action within Australia. Government statistics show that Australians’ losses from scams have surged from $900 million in 2020 to $2.7 billion in 2023, reflecting a global trend worsened by the increased online activity driven by the pandemic.

Consultation with Industry and Code Creation

The ACCC and the Treasury seek to create an anti-scam code mandating internet platforms to take reasonable measures to safeguard users. This encompasses providing efficient complaint services. At present, only telecommunications providers in Australia are subject to specific anti-scam regulations.

Possible Disputes with Major Technology Companies

The enactment of this law might provoke another clash between Australia and major tech companies. Historically, internet platforms have depended on U.S. legislation that mostly absolves them from accountability. The ACCC has previously required internet firms to pay media organizations licensing fees for content links, causing Meta to contemplate blocking media content on Facebook in Australia. The new anti-scam legislation could exacerbate these tensions by imposing legal liability on these platforms.

Expected Implementation Timeline

“We anticipate the implementation of these measures throughout this period and by the end of the year,” stated ACCC chair Gina Cass-Gottlieb. The ACCC maintains that clear and enforceable legal requirements are essential. Non-compliance with these new regulations could lead to penalties of up to $50 million, triple the profit obtained from the misconduct, or 30 percent of the revenue at the time the violation took place.

Ongoing Legal Proceedings and Potential Consequences

The ACCC is taking legal action against Meta for not preventing the display of deceptive advertisements that include well-known Australians. Meta has been defending itself since March 2022, and the case remains in the pre-trial phase. Cass-Gottlieb contends that a compulsory code would lessen the reliance on “retroactive” and lengthy court procedures for enforcement.

Meta has chosen not to provide comments regarding the timing of the anti-scam code. However, the company has previously expressed a preference for a voluntary code, arguing that a mandatory code could result in a focus on compliance rather than innovation.

Summary

Australia is poised to implement a groundbreaking anti-scam legislation by year’s end, aimed at holding internet companies responsible for preventing scams. Both the ACCC and the treasury are engaging with different industries to develop a regulatory anti-scam code. This initiative is intended to combat the increasing financial losses due to scams in Australia but might result in additional disputes with major tech companies such as Meta.

What is the main goal of Australia’s new anti-scam legislation?

The main goal is to require internet firms to take preventive measures against hosting scams and to offer efficient complaint services, thereby safeguarding users.

What are the potential fines for businesses that do not comply?

Companies could be subject to penalties amounting to $50 million, triple the advantage obtained from the misconduct, or 30 percent of their revenue at the point of the violation.

Why might there be a possible conflict with U.S. laws?

U.S. regulations generally shield internet platforms from liability for content created by users, whereas Australia’s recent legislation seeks to make these platforms legally responsible.

What has driven this recent legislative proposal?

The rising financial losses resulting from scams during the pandemic, which led to Australians losing $2.7 billion between 2020 and 2023, spurred this legislative action.

Who is in charge of developing the anti-scam code?

The mandatory anti-scam code is being developed under the leadership of the Australian Competition and Consumer Commission (ACCC) and the treasury department.

Q: Which types of scams have been most common in Australia?

Cryptocurrency scam ads featuring high-profile individuals such as Andrew Forrest have been especially common, resulting in considerable financial losses for Australians.

How could this new legislation affect technological innovation?

Certain technology firms, such as Meta, contend that enforcing a compulsory anti-fraud code might compel them to emphasize adherence at the expense of innovation.

Q: When is the law anticipated to take effect?

The ACCC aims to implement the new anti-scam codes by the end of this year.