Global: Ofcom Proposes Tougher Rules to Hold Big Tech Accountable for Scam Advertising

The UK’s Office of Communications (Ofcom) has unveiled draft regulations aimed at strengthening protections against online scam advertisements, proposing new measures that would make major technology platforms legally responsible for tackling fraudulent advertising on their services.

The proposed framework forms part of the UK’s broader efforts to combat online fraud, which continues to impose significant financial losses on consumers and undermine trust in digital platforms.

According to Ofcom, more than £40 billion is spent annually on digital advertising in the UK, generating substantial revenue for large technology companies. However, the regulator argues that existing safeguards have not kept pace with the growing threat posed by cybercriminals who exploit online advertising platforms to target unsuspecting users.

The regulator said more than half of UK adults have encountered potentially fraudulent online advertisements, with over one-third reporting frequent exposure. Victims of these scams are estimated to lose more than £200 million each year.

The proposed Fraudulent Advertising Code would, for the first time, require major online platforms to implement comprehensive systems for detecting, preventing and removing scam advertisements before they reach users.

Under the draft code, technology companies would be expected to adopt nearly 40 practical measures designed to reduce the spread of fraudulent advertisements and strengthen user protection across their platforms.

Failure to comply with the new obligations could expose companies to regulatory enforcement, including financial penalties of up to £18 million or 10 per cent of global annual revenue, whichever is higher.

Commenting on the proposal, Oliver Griffiths, Ofcom’s Online Safety Group Director, said technology companies must take greater responsibility for preventing fraud on their platforms.

He noted that online users have remained exposed to scam advertisements for too long, adding that platforms should begin improving their fraud prevention measures immediately rather than waiting for the rules to become legally enforceable.

While the proposed code is expected to evolve alongside emerging cyber threats, some industry experts argue that regulatory frameworks must become more proactive to remain effective against increasingly sophisticated fraud schemes.

Jonathan Frost, Director of Global Advisory at BioCatch, said technology platforms already possess extensive data on user behaviour and advertising patterns that could be leveraged to detect and prevent fraudulent activity before consumers are targeted.

He argued that removing scam advertisements only after they have been published is insufficient, stressing that preventing fraudsters from reaching users should be the primary objective.

Frost also warned that the rapidly evolving nature of cyber threats means regulations based on current threat models could quickly become outdated, calling for a more adaptive regulatory approach capable of responding to future fraud risks.

The proposed rules signal a significant shift in the UK’s online safety framework, placing greater responsibility on digital platforms to strengthen fraud prevention, improve consumer protection, and enhance accountability within the online advertising ecosystem.