Major changes to the new Online Safety Bill will require xocial media sites and search engines to stamp out fraudsters and scammers on their platforms as the government strengthens its pioneering internet safety laws.
The move comes as the government also launches a consultation as part of a wider overhaul of how online advertising is regulated in the UK, including proposals to improve transparency and accountability and tackle harmful, fraudulent and misleading adverts.
Together the measures aim to boost people’s trust and confidence in being online by making sure the UK’s rules and regulations keep pace with rapid advances in technology.
A new legal duty will be added to the Online Safety Bill requiring the largest and most popular social media platforms and search engines to prevent paid-for fraudulent adverts appearing on their services.
The change will improve protections for internet users from the potentially devastating impact of fake ads, including where criminals impersonate celebrities or companies to steal people’s personal data, peddle dodgy financial investments or break into bank accounts.
Separately, the government is launching a consultation on proposals to tighten the rules for the online advertising industry. This would bring more of the major players involved under regulation and create a more transparent, accountable and safer ad market.
Harmful or misleading adverts, such as those promoting negative body images, and adverts for illegal activities such as weapons sales, could be subject to tougher rules and sanctions. Influencers failing to declare they are being paid to promote products on social media could also be subject to stronger penalties.
Fraudulent advertising duty
Under the current draft of the Online Safety Bill, search engines and platforms which host user-generated content, video-sharing or live streaming will have a duty of care to protect users of their services from fraud committed by other users. This includes ‘catfishing’ romance scams and fake stock market tips - posted by people in images, comments or videos.
The government is adding a new duty to the bill which will bring fraudulent paid-for adverts on social media and search engines into scope, whether they are controlled by the platform itself or an advertising intermediary.
These companies will need to put in place proportionate systems and processes to prevent (or minimise in the case of search engines) the publication and/or hosting of fraudulent advertising on their service and remove it when they are made aware of it.
It will mean companies have to clamp down on ads with unlicensed financial promotions, fraudsters impersonating legitimate businesses and ads for fake companies. It includes ‘boosted’ social media posts by users which they pay to have promoted more widely.
The regulator Ofcom will set out further details on what platforms will need to do to fulfil their new duty in codes of practice. This could include making firms scan for scam adverts before they are uploaded to their systems, measures such as checking the identity of those who wish to publish advertisements, and ensuring financial promotions are only made by firms authorised by the Financial Conduct Authority (FCA).
Ofcom will oversee whether companies have adequate measures in place to fulfil the duty, but will not assess individual pieces of content, in keeping with the approach taken in the rest of the bill. It will have the power to hold companies to account by blocking their services in the UK or issuing heavy fines of up to £18 million or ten per cent of annual turnover.
Online Advertising Programme (OAP)
Today the government is launching a public consultation on its Online Advertising Programme (OAP).
The content and placement of online advertisements is currently overseen by the Advertising Standards Authority (ASA) under a system of self-regulation. But rapid technological developments have transformed the scale and complexity of online advertising leading to an increase in consumer harm.
Adverts seeking to defraud such as investment scams and promotions for fraudulent products and services including fake ticketing, which in many cases involves fake celebrity endorsement, have proliferated online.
People are also being targeted through legitimate-looking adverts that contain hidden malware. When clicked on they allow hackers to commit malicious cyber security attacks such as ‘cryptojacking’ - the unauthorised use of people’s devices to mine for cryptocurrency.
Elsewhere there is evidence of online adverts selling items prohibited in UK law, such as prescription medicines and counterfeit fashion, misleading adverts misrepresenting the product or service they offer, and influencers failing to reveal sponsorship arrangements with companies in their posts.
The programme will look at the current regulations and regulators including whether they are properly empowered and funded. It will consider the whole supply chain and whether those within it should do more to combat harmful advertising, including ad-funded platforms such as Meta, Snap, Twitter and Tik Tok and intermediaries such as Google, TheTradeDesk and AppNexus.
Options include strengthening the current self-regulation approach or creating a new statutory regulator with tough enforcement powers including:
- Rule-making powers such as setting mandatory codes of conduct and enforcing them with fines and the ability to block and ban advertisers which repeatedly break the rules.
- Increased scrutiny across the supply chain related to high-risk advertising such as the promotion of products related to alcohol or weight loss. Companies could be required to demonstrate they are taking care to protect users - for example avoiding targeting vulnerable groups.
- Increased scrutiny of advertisers which repeatedly breach codes of conduct and more checks on firms and individuals placing adverts and buying ad space. This could include requiring third-party intermediaries or platforms to make advertisers self declare an interest in placing high-risk advertising such as age restricted ads.
- Information gathering and investigatory powers such as the power to audit and request transparency reports from companies and request data from them.
