Strengthening the Safe Social Media Act

The Safe Social Media Act provides a long awaited and necessary step toward the regulation of these online platforms. The Act’s combination of duties of care, reporting requirements, researcher access and the creation of an empowered regulator are a winning formula to building and maintaining a safer online environment for all Canadians.

But the Act can be made stronger, and better fit to purpose by expanding protections for consumers and for competition. No case makes this clearer than the epidemic of frauds and scams on social media, impacting tens of thousands of Canadians and causing hundreds of millions in losses every year. Seniors are especially vulnerable to online scams, representing 40% of reported losses in 2024. Online fraud is a growing problem for all Canadians, with younger Canadians now the most likely to fall victim to scams.ⁱ

Social media platforms and other online sources accounted for the majority of scam losses in Canada in 2024, and account for nearly 75% of cyber-enabled fraud, over $357 million.ⁱⁱ

Advertisements on social media play a major role in distributing scams; in 2024, Meta’s internal estimations suggested their platforms served up to 15 billion potentially fraudulent advertisements per day. As advertisements are paid content, the incentives to address them outside of regulatory pressure are weakened: reporting found that Meta estimated that potential scam ads constituted up to 10% of its annual ad revenue, and the accounts behind these ads were allowed to accrue dozens of strikes before review, if any action was taken at all.ⁱⁱⁱ Other jurisdictions, like Australia, have enacted comprehensive anti-scam legislation that makes online platforms and other actors responsible for eliminating scams, and to be transparent about how they do it. UK regulators have included scams as harmful content under the Online Safety Act.

To protect all Canadians from the most proliferate online harms of our day, frauds and scams must be included as harmful content. Excluding frauds and scams from the Act leaves vulnerable Canadians like seniors, youth, and newcomers at risk of extortion and financial ruin.

Canada’s regulatory approach must not entrench the positions of firms that resist regulation and stifle innovation at home. To protect competition and the possibility of new products and services entering the Canadian market, obligations must be proportional to the role of the platform without entrenching dominant players, and resources must be available across the market. This includes technologies developed for safety and compliance.

01 Add frauds and scams to the definition of harmful content

As well as offering a model for online safety legislation, the United Kingdom and Australia are also leading the way in combatting scams and fraud. The Office of Communications in the UK has proposed regulations to cover fraud and scams under the Online Safety Act, imposing duties to act against scam accounts, remove fraud advertisements, and verify advertisers.^iv Similarly, Australia’s Scams Prevention Framework regulates social media platforms by imposing a duty to protect users, report their efforts, and creating a compliance regime.^v The Safe Social Media Act has all the necessary components to be an effective anti-scam bill, with some adjustments.

02 Regulate business models that incentivize harmful scam content and the actors behind it

While online platforms are quick to make public statements about cracking down on scam activity, investigations and research have revealed a different picture. Platforms can be slow or unwilling to take down content and crack down on accounts that are significant revenue sources, removing offending content while leaving accounts free to continue operating. In large part, this is because the advertising-based business model that many scammers exploit to target victims means that scammers are consistent sources of revenue. Allowing online platforms to self-regulate and selectively report allows them to hedge their financial gains from scams against the costs of regulatory compliance. Regulators and researchers need the tools to set clear requirements for conduct, verify measures are effective, and act when they are not.^vi

03 Acknowledge the role of AI models and their owners in labelling and safety requirements

AI generated content is increasingly used by scammers to impersonate public figures, and to spread other harmful content. To effectively deal with the proliferation of artificial intelligence tools for generating synthetic content and its effects on social media and discourse, the Act’s labelling obligations must apply to all actors involved. The responsibility for labelling synthetic content should start with the generator of the content, and extend to the distributor, as the European Union has done with its Code of Practice on Transparency of AI-Generated Content.^vii If labelling of synthetic content is uniquely the responsibility of online platforms, it may become a resource-intensive content review requirement that is difficult to meet for all but the biggest firms.

04 Make compliance resources and technologies available across the market

Compliance with the Safe Social Media Act will incur technology and administrative costs on regulated providers, including developing digital safety plans, employing resource persons, creating content retention strategies and even age verification. The largest platforms in the market will have the advantage and initiative when it comes to developing technologies and standards that influence compliance standards. To avoid entrenching the market power of dominant platforms and Canada’s dependence on US tech companies, smaller platforms must be able to grow without being hindered by a compliance regime built for companies that are already massive.