Tech companies could face billion-pound fines for not preventing online fraud

Firms could be hit with fines of up to 10 per cent of their global turnover

Tech firms would be required to introduce 'systems and processes' to prevent fraudulent advertisements being posted on their sites. AFP

Social media platforms and search engines risk fines of billions of pounds if they do not clamp down on internet fraud, according to new legislation set to be introduced by the UK government.

According to The Daily Telegraph, technology firms would be required to introduce “systems and processes” to prevent fraudulent advertisements being posted on their sites.

Firms could be fined up to 10 per cent of their global turnover from regulator Ofcom if they do not act.

The companies will also have to give a named director who could face up to two years in prison if Ofcom is not given the information it needs to carry out investigations.

That could include when social media companies do not sufficiently co-operate with Ofcom when the watchdog is investigating crimes including extremism, online child abuse and self-harm.

The plans are expected to be laid out within weeks as part of the UK government’s Duty of Care Bill.

Under the bill, a range of new online crimes will be introduced, including posting messages that “convey a threat of serious harm” or the publishing of misinformation that could cause emotional, psychological or physical harm.

However, the bill is expected to be criticised by MPs and campaigners for not going far enough.

“This suggested approach would result in a perverse situation where tech bosses could continue to put children at risk of grooming, without fear of personal consequences. Bosses could only be criminally liable if they fail to co-operate with the regulator’s questions,” Andy Burrows, NSPCC child safety online policy officer, said.

“MPs and civil society have been clear that the Bill must be strengthened significantly, with tech companies made to appoint a board level director with responsibility for children’s safety, and the threat of criminal sanctions if they repeatedly take product decisions that put children at risk,” he told The Daily Telegraph.