Tech firms must "stamp out" scam adverts under UK's Ofcom proposals
Social media platforms and search engines will be held accountable for tackling scam advertising under new laws proposed by UK regulator Ofcom.
Meta Platforms Inc's Facebook and Instagram, TikTok, Alphabet Inc's YouTube, Pinterest and Reddit are among those that are facing the toughest measures.
Firms could face fines of up to £18 million or 10% of global revenue, whichever is greater, once the rules come into effect.
The regulator published a draft fraudulent advertising code that builds on the UK's Online Safety Act that came into force last year.
A consultation to gather feedback will run until October 2, before setting out final decisions in 2027 which will then need to be approved by Parliament before coming into effect.
Ofcom said big tech companies will for the first time be legally required to implement robust steps that address scam advertising.
Firms are already accountable for dealing with illegal content generated by users, including anything fraudulent or that could be harmful to children.
But the new rules directly address paid-for adverts which scammers exploit to sell fraudulent products or services on social media or via search engines.
It is understood that some big platforms allow scammers several warnings before they are banned, whereas Ofcom wants to enforce a "one strike and you're out" approach.
Ofcom said an estimated £200 million is lost to fraudulent adverts in the UK on average each year.
The proposals set out 40 measures for major platforms to adopt to protect their users from falling victim to scammers.
These include banning those who post scam ads and preventing them from making new accounts, intercepting imposters posing as legitimate businesses, and setting up dedicated channels for flagging scam ads.
Platforms will also be expected to rigorously test artificial intelligence tools that can create adverts to reduce the risk of criminals misusing the technology.
Oliver Griffiths, Ofcom's online safety group director, said: "For too long, victims have been exposed to scam ads online with tech giants simply not doing enough to combat the fraudsters using their platforms.
"Today we've set out nearly 40 practical, protective measures for companies to adopt. We expect firms to take robust action to stamp out scam ads and boot out the bad actors behind them to safeguard their users.
"Platforms should not drag their heels – they can start making improvements for their users now. Sites and apps that fail to meet their legal duties, once in force, can expect to face serious consequences."
Rocio Concha, head of policy & advocacy for consumer champion Which?, said: "Tech firms continue to treat scam ads as a profitable income stream, despite the harm they cause to millions of people – so Ofcom's proposals are a significant step towards finally seeing them held accountable for enabling scammers to target victims on a massive scale in the UK.
"However, Ofcom's current timeline leaves consumers unprotected until 2027 at the earliest. This is very problematic at a time when breakneck advances in AI are making scams more sophisticated than ever.
"Ofcom needs to implement these codes as soon as possible."
Ofcom's proposals come on the same day the EU has demanded that Facebook and Instagram owner Meta disable "key addictive features" such as infinite scrolling.
The European Commission said Meta had failed to properly assess the risks its design features pose to the physical and mental health of users, including children.
It said Meta needs to implement design changes such as "disabling key addictive features such as 'autoplay' and 'infinite scroll' by default".
Meta now has the chance to respond and defend itself before the commission issues its final decision, which could result in a fine worth up to 6% of the group's global annual revenue.
Meta said on Friday that early findings do not recognise the steps that the company has already taken and its commitment to protecting teenage users.
By Anna Wise, Press Association Business Reporter
Press Association: Finance
source: PA
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