Ofcom has proposed new measures requiring platforms like YouTube and Instagram to tackle fraudulent advertisements. If enacted, companies could face fines of up to £18 million or 10% of global turnover for non-compliance, significantly impacting how tech firms manage advertising content.
Ofcom has released draft proposals aimed at regulating big tech companies like YouTube, Instagram, and TikTok to address the growing prevalence of fraudulent advertisements. These measures are part of the broader Online Safety Act (OSA) and target misleading content that tricks viewers into purchasing products or services.
The regulator reports that over half of UK adults have encountered potentially scam advertisements, with more than a third experiencing them regularly.
If these draft measures are passed into law, platforms that do not comply could face substantial fines, potentially amounting to £18 million or 10% of their global revenue, depending on which is greater. This could significantly impact how these companies approach the advertisement of products on their platforms.
Ofcom's online safety director, Oliver Griffiths, emphasized that tech firms must take serious action to combat fraudulent ads and protect users from scammers.
The proposals require platforms to ban users who post scam content and prevent them from creating new accounts. The focus is also on removing misleading ads quickly, along with enforcing stricter regulations on impersonating legitimate businesses. Griffiths urged platforms to begin improvements for user safety right away, rather than waiting for the regulations to come into effect.
Platforms categorized under the OSA and classified as Category 1, 2A, and 2B will face heightened accountability and transparency requirements, forcing them to implement systems that effectively prevent and manage fraudulent advertisements.
The call for action by Ofcom comes amid increasing reports of deceptive advertisements, including misleading ads for products like portable air conditioning units on social media and fake AI-generated images used to mislead viewers. This indicates a growing trend of false advertising that has become commonplace online.
However, the enforcements rely on regulations that have not yet been fully implemented, raising concerns about Ofcom's current capabilities to tackle the issue effectively.
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Ofcom has proposed new measures requiring platforms like YouTube and Instagram to tackle fraudulent advertisements. If enacted, companies could face fines of up to £18 million or 10% of global turnover for non-compliance, significantly impacting how tech firms manage advertising content.