The government plans to force social media platforms and search engines to reduce fraudulent advertisements. The duty will be included in an updated version of the Online Safety Bill.
This draft follows criticism of a previous draft that covered harmful user-generated posts but not harmful advertisements and promotions.
As well as announcing the amendment to the Online Safety Bill, the government also announced a consultation on the rules for the online advertising industry.
The government claims that existing regulations have not kept up with “rapid technological developments” in the industry, resulting in “increased consumer harm”. It could result in a new online advertising regulator with the ability to block and ban advertisers who repeatedly break the rules.
The changes will require companies “to put in place proportionate systems and processes to prevent (or minimise in the case of search engines) the publication and hosting of fraudulent advertising on their service” and to be able to remove the ads when they are made aware of them.
Online Safety regulator Ofcom will decide whether the systems and processes are proportionate.
According to the Treasury Committee’s report, the government has failed to address an alarming rise in fraud across the country.
The MPs suggested that online companies, including Meta and Google, should pay compensation to people duped by scams advertised through their platforms.
Instead of paying compensation, however, the MPs noted the companies were receiving public funds to advertise warnings about these scams.
The Financial Conduct Authority paid more than £1.1m to companies including Google, Twitter, TikTok and Meta to run anti-scam adverts between 2019 and 2021.
Google has since offered the regulator $3m (£2.2m) in free advertising credits, which the MPs said should be copied by the other platforms.
Martin Lewis, the founder of Money Saving Expert, previously settled a lawsuit against Facebook for running fraudulent ads featuring his name and image.
He said he was thankful that the government “listened to me and the huge numbers of other campaigners… who’ve been desperate to ensure scam adverts are covered by the Online Safety Bill”.
“Now we and others need to analyse all elements of this new part of the bill and work with government and parliament to close down the hiding places or gaps scammers can exploit,” he added.
The UK is the largest market in Europe for advertising and the fourth largest in the world by advertising spend – with the total industry turnover in 2019 reaching an estimated £40 billion.
MPs said it has been easy for fraudsters to place rogue adverts online because the tech companies have not been legally required to verify advertisers’ backgrounds.
Along with the announcement, Culture Secretary Nadine Dorries said: “We want to protect people from online scams and have heard the calls to strengthen our new internet safety laws.
“These changes to the upcoming Online Safety bill will help stop fraudsters conning people out of their hard-earned cash using fake online adverts.
“As technology revolutionises more and more of our lives, the law must keep up,” added Ms Dorries.
“Today, we are also announcing a review of the wider rules around online advertising to make sure industry practices are accountable, transparent and ethical – so people can trust what they see advertised and know fact from fiction.”
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