As announced recently, the Malaysian government aims to make social media and instant messaging platforms accountable for online harms by introducing a new regulatory framework which requires licensing. According to the Malaysian Communications and Multimedia Commission (MCMC), the objective of the framework is to create a safer online environment for all Malaysians especially children and those vulnerable to online harm.
Why is the MCMC introducing Licensing for social media and internet messaging platforms?
According to the FAQ released by the MCMC, recent trends have shown a surge in online harm especially those affecting children. In addition, online gambling-related suspicious transactions reports (STRs) have nearly doubled between 2019 and 2022. It was reported that the value of related STRs has increased dramatically to more than RM26 billion which represents a 273% increase.
Cyberbullying is also seen as a growing concern as 28% of Malaysian children have been a victim of online violence or cyberbuylling based on a 2019 report by UNICEF. The regulator has also received 9,483 reports of cyberbullying from January 2022 until July 2024.
Online scams and fraud cases have also doubled from 17,668 cases in 2019 to 34,495 cases in 2023 according to Bukit Aman’s CCID. The police department reported a staggering RM1.4 billion in losses from January to July 2024 due to scams.
What does it mean for Malaysia?
The MCMC said the licensing requirement aims to foster a trusted and safe online environment for everyone which is achieved through proactive measures implemented by Service Providers to safeguard users by improving moderation practices, complying with conduct requirements, and adhering to Malaysian laws.
End users can expect a safer online environment, better protection against harmful content and clearer avenues for addressing complaints and concerns. It iterated that users of these platforms will not be affected by the regulatory framework as only the service providers are required to obtain the licence from the MCMC.
Which social media platforms require a licence?
The new licencing requirement is only applicable to social media and internet messaging platforms with at least 8 million registered users in Malaysia. This includes but is not limited to Facebook, Facebook Messenger, Instagram, TikTok, WhatsApp, Telegram, WeChat, X, and YouTube.
The licensing is only for the applicable platforms or service providers and does not affect the end user as well as content creators on the respective platforms. The new framework will be enforced from 1st January 2025.
Licence conditions for social media and Internet messaging platforms
Between today and 1st January 2025, the MCMC will be developing a comprehensive outcome-based guidelines detailing the conduct requirements and duties that the service providers most proactively observe while operating in Malaysia.
The applicable platforms are required to provide the following:
- policies and measures for the protection of user data
- child safety measures including age assurances to restrict users under the age of 13 from accessing the platforms operated by the Service Providers
- policies and measures to address online harm including cyberbullying, online scams, and sexual grooming activities
- content moderation policies and measures in place
- transparency in advertising and restriction of advertisement promoting scams
- measures to safeguard minors from harmful content and misleading advertisements
- measures to simplify complaint procedures for users and response time
- measures to manage deepfakes and harmful Artificial Intelligence (AI) generated content
- regular reporting measures on Service Providers’ compliance with Malaysian laws and the conduct requirements
What happens to applicable social media platforms if they don’t have a licence?
According to the MCMC, action under Section 126 of the CMA 1998 will be taken against any applicable service providers that continue to operate without a licence from 1st January 2025. If convicted, the service provider can be fined up to RM500,000, or face imprisonment up to 5 years, or both. The platforms can be liable for a further fine of RM1,000 for every day during which the offence is continued after conviction.
Actions MCMC could take against licensed platforms that fail to comply with licence conditions
It is stated that the MCMC will assess the nature of the breach including its severity, impact and frequency, as well as the compliance record of the service provider before deciding the appropriate action to be taken against them.
MCMC may initiate actions ranging from an administrative warning, issuance of compliance direction to rectify the breach, impose civil penalty or compound offences to proportionately deal with the breach.
In the most extreme and severe case, the MCMC may suspend access to the platform, deregister their ASP (C) licence or commence prosecution.
Platforms can still challenge MCMC’s directions
If a social media or instant messaging platform doesn’t agree with MCMC’s decisions or directions, they are able to challenge the decision. According to the MCMC, their directions are subject to all relevant processes and procedures provided under the CMA 1998. Under the Act, there are strong safeguards to balance the need for regulation, due process and the protection of freedom of speed and expression.
While Section 51 of the CMA 1998 allows the regulator to issue direction to any person to ensure compliance with licence conditions, the issuance of such direction cannot be done arbitrarily and must adhere to due process. The person will be granted the opportunity to be heard before a direction is issued.
Any service provider that is aggrieved or whose interest is adversely affected by the decision or direction of MCMC, can bring the case up with the Appeal Tribunal established under the CMA 1998 and go through a judicial review.
The MCMC said there have been a number of licensees under the CMA 1998 that have submitted appeals to the Appeal Tribunal on various issues since 2020.
MCMC says its framework has been benchmarked against global best practices
Malaysia isn’t alone in regulating social media and digital platforms. The MCMC said the framework has been benchmarked against and aligns with global best practices and developments seen in Singapore, Indonesia, India, Australia, the United Kingdom, Ireland, Germany, and the European Union (EU) which provides regulatory oversight for online services including social media and internet messaging.
The MCMC said despite the diverse approaches to regulating online services across jurisdictions, there are key similarities in their implementation. It added that there is a consensus on prohibiting illegal and harmful content online and ensuring online services have clear duties to protect users.
Other areas addressed in the benchmarked jurisdictions include protection of user data, child safety measures, combatting online harassment and bullying, ethical use of user data for advertising, and user empowerment and control.
