Australia's New Law to Combat Internet Scams Sparks Clash With Big Tech

Australia plans to introduce a law by the year's end requiring internet companies to prevent scams or face hefty fines. The ACCC is consulting with various sectors to create a mandatory anti-scam code. This move follows a surge in online scams during the pandemic and could lead to further clashes with Big Tech.

Australia is set to introduce a new law by the end of the year that will mandate internet companies to proactively prevent hosting scams or face substantial fines, the country's top consumer regulator announced on Friday. This move could lead to another confrontation with Big Tech.

The Australian Competition and Consumer Commission (ACCC) and the Treasury Department are in discussions with internet, banking, and telecommunications firms to formulate a mandatory, enforceable anti-scam code. This code will legally compel these companies to take reasonable steps to protect users, including providing an effective complaint service.

In Australia, cryptocurrency scam advertisements featuring mining billionaire Andrew Forrest have resulted in Australians losing millions of dollars. Forrest is currently suing Facebook owner Meta in California, claiming domestic inaction by the tech giant.

Currently, only telecommunications providers are regulated under specific anti-scam laws in Australia. The ACCC's push for broader legislation comes as scam losses in Australia tripled to A$2.7 billion from 2020 to 2023. Aligning with global trends, these losses increased as the pandemic drove more people online.

The introduction of legal liabilities for internet platforms could create new tensions between Australia and the tech sector, which often relies on U.S. laws that largely exempt them from responsibility. Previously, an ACCC-designed law requiring internet companies to pay media companies for content links led Meta to threaten blocking media content on Facebook in Australia.

Meta was unavailable for comment regarding the timing of the anti-scam code but has previously argued for a voluntary code, suggesting that a mandatory one might stifle innovation in favor of compliance.

(With inputs from agencies.)