October 2024
Series Articles on Taiwan's New Anti-Fraud Laws and Regulations (2) – Which Advertising Platforms Are Regulated Under the Fraud Crime Prevention Act?
October 2024
Aaron Chen, Pei-Ching Ji, Doris Hsu, Chuck Liu
In our previous article, Series Articles on Taiwan's New Anti-Fraud Laws and Regulations (1) – Corporate Cooperation Obligations and Preventive Measures under the Fraud Crime Prevention Act, we discussed how the Fraud Crime Prevention Act (hereinafter referred to as the “Act”) brings online advertising platforms under its regulatory scope. The Act requires "large-scale online advertising platforms" to comply with its provisions and collectively implement fraud prevention measures within the digital economy. The criteria for determining what qualifies as a "large-scale online advertising platform operator" are authorized to be set by the Ministry of Digital Affairs (hereinafter referred to as the “MODA”) under Article 27, Paragraph 2 of the Act. Additionally, the MODA is responsible for publishing a list of businesses that meet these criteria and is required to periodically review and adjust the list as necessary (see Article 27, Paragraph 3 of the Act).
Last month, the MODA announced the Criteria for Determining Large-Scale Online Advertising Platforms. To enhance management efficiency, the MODA referenced the thresholds set for regulated online service providers under the Online Safety Act 2023 of the United Kingdom (hereinafter referred to as the “UK's 2023 Online Safety Act”), adopting a risk-based approach. Specifically, the criteria focus on two factors: the "risk of the platform being used to publish fraudulent advertisements" and the "proportion of domestic users." Additionally, the MODA considered the thresholds established under the Digital Services Act of the European Union for very large online platforms and search engines, as well as the UK's 2023 Online Safety Act for large online services, which base the thresholds on user numbers exceeding 10% of the region's total population. Given that Taiwan's market and population are smaller compared to those of the EU and UK, the calculation of the criteria is based on domestic user numbers exceeding 5% of Taiwan's total population[1].
The MODA simultaneously announced the foreign online advertising platforms that meet the specified criteria[2]. The initial group includes Google, Line, Meta, and TikTok, which operate platforms such as Google, YouTube, LINE, Facebook, Instagram, and TikTok—all of which are primarily social media-based online advertising platforms. These businesses are required to appoint a legal representative by October 31, 2024, and conduct a review of their business activities, operations, or investment behaviors[3]. To facilitate communication in handling fraudulent advertisements, the required submission for the legal representative must include detailed information such as the representative’s name, title, address, office or business location, phone number, and email address. Should an online advertising platform that meets the criteria fail to designate and report a legal representative, and does not rectify the issue within the stipulated period after receiving a notice, it may be fined between NT$500,000 and NT$10 million. In cases of serious violations, the fine may range from NT$2.5 million to NT$100 million, along with an order to rectify the violation within a specified timeframe. (See Article 39 of the Act)
It is important to note that the list of large-scale online advertising platforms will be subject to ongoing adjustments. The competent authority will continue to consider changes in practical fraud risks, shifts in the size of online advertising platforms, and the potential for fraud targets to evolve, conducting timely reviews and updates to the list. Moreover, user statistics for these platforms must rely on objective data. In the future, the competent authority will reference databases, research reports from domestic and international professional organizations, or commission periodic surveys from professional institutions. Therefore, it is recommended that relevant online advertising platform operators, even if not included in the first wave of announced lists, remain attentive to regulatory developments from the MODA.
[1] MODA Order No. 1134000734 on September 16, 2024, https://moda.gov.tw/press/bulletin/14158.
[2] MODA Order No. 11340007344 on September 16, 2024, https://moda.gov.tw/press/bulletin/14160.
[3] MODA Order No. 1134000735 on September 16, 2024, https://moda.gov.tw/press/bulletin/14162.
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The contents of all materials (Content) available on the website belong to and remain with Lee, Tsai & Partners. All rights are reserved by Lee, Tsai & Partners, and the Content may not be reproduced, downloaded, disseminated, published, or transferred in any form or by any means, except with the prior permission of Lee, Tsai & Partners.
The Content is for informational purposes only and is not offered as legal or professional advice on any particular issue or case. The Content may not reflect the most current legal and regulatory developments. Lee, Tsai & Partners and the editors do not guarantee the accuracy of the Content and expressly disclaim any and all liability to any person in respect of the consequences of anything done or permitted to be done or omitted to be done wholly or partly in reliance upon the whole or any part of the Content. The contributing authors' opinions do not represent the position of Lee, Tsai & Partners. If the reader has any suggestions or questions, please do not hesitate to contact Lee, Tsai & Partners.
Aaron Chen, Pei-Ching Ji, Doris Hsu, Chuck Liu
In our previous article, Series Articles on Taiwan's New Anti-Fraud Laws and Regulations (1) – Corporate Cooperation Obligations and Preventive Measures under the Fraud Crime Prevention Act, we discussed how the Fraud Crime Prevention Act (hereinafter referred to as the “Act”) brings online advertising platforms under its regulatory scope. The Act requires "large-scale online advertising platforms" to comply with its provisions and collectively implement fraud prevention measures within the digital economy. The criteria for determining what qualifies as a "large-scale online advertising platform operator" are authorized to be set by the Ministry of Digital Affairs (hereinafter referred to as the “MODA”) under Article 27, Paragraph 2 of the Act. Additionally, the MODA is responsible for publishing a list of businesses that meet these criteria and is required to periodically review and adjust the list as necessary (see Article 27, Paragraph 3 of the Act).
Last month, the MODA announced the Criteria for Determining Large-Scale Online Advertising Platforms. To enhance management efficiency, the MODA referenced the thresholds set for regulated online service providers under the Online Safety Act 2023 of the United Kingdom (hereinafter referred to as the “UK's 2023 Online Safety Act”), adopting a risk-based approach. Specifically, the criteria focus on two factors: the "risk of the platform being used to publish fraudulent advertisements" and the "proportion of domestic users." Additionally, the MODA considered the thresholds established under the Digital Services Act of the European Union for very large online platforms and search engines, as well as the UK's 2023 Online Safety Act for large online services, which base the thresholds on user numbers exceeding 10% of the region's total population. Given that Taiwan's market and population are smaller compared to those of the EU and UK, the calculation of the criteria is based on domestic user numbers exceeding 5% of Taiwan's total population[1].
The MODA simultaneously announced the foreign online advertising platforms that meet the specified criteria[2]. The initial group includes Google, Line, Meta, and TikTok, which operate platforms such as Google, YouTube, LINE, Facebook, Instagram, and TikTok—all of which are primarily social media-based online advertising platforms. These businesses are required to appoint a legal representative by October 31, 2024, and conduct a review of their business activities, operations, or investment behaviors[3]. To facilitate communication in handling fraudulent advertisements, the required submission for the legal representative must include detailed information such as the representative’s name, title, address, office or business location, phone number, and email address. Should an online advertising platform that meets the criteria fail to designate and report a legal representative, and does not rectify the issue within the stipulated period after receiving a notice, it may be fined between NT$500,000 and NT$10 million. In cases of serious violations, the fine may range from NT$2.5 million to NT$100 million, along with an order to rectify the violation within a specified timeframe. (See Article 39 of the Act)
It is important to note that the list of large-scale online advertising platforms will be subject to ongoing adjustments. The competent authority will continue to consider changes in practical fraud risks, shifts in the size of online advertising platforms, and the potential for fraud targets to evolve, conducting timely reviews and updates to the list. Moreover, user statistics for these platforms must rely on objective data. In the future, the competent authority will reference databases, research reports from domestic and international professional organizations, or commission periodic surveys from professional institutions. Therefore, it is recommended that relevant online advertising platform operators, even if not included in the first wave of announced lists, remain attentive to regulatory developments from the MODA.
[1] MODA Order No. 1134000734 on September 16, 2024, https://moda.gov.tw/press/bulletin/14158.
[2] MODA Order No. 11340007344 on September 16, 2024, https://moda.gov.tw/press/bulletin/14160.
[3] MODA Order No. 1134000735 on September 16, 2024, https://moda.gov.tw/press/bulletin/14162.
Related Articles
The contents of all materials (Content) available on the website belong to and remain with Lee, Tsai & Partners. All rights are reserved by Lee, Tsai & Partners, and the Content may not be reproduced, downloaded, disseminated, published, or transferred in any form or by any means, except with the prior permission of Lee, Tsai & Partners.
The Content is for informational purposes only and is not offered as legal or professional advice on any particular issue or case. The Content may not reflect the most current legal and regulatory developments. Lee, Tsai & Partners and the editors do not guarantee the accuracy of the Content and expressly disclaim any and all liability to any person in respect of the consequences of anything done or permitted to be done or omitted to be done wholly or partly in reliance upon the whole or any part of the Content. The contributing authors' opinions do not represent the position of Lee, Tsai & Partners. If the reader has any suggestions or questions, please do not hesitate to contact Lee, Tsai & Partners.
