On September 20, 2024, Taiwan’s Ministry of Digital Affairs, acting under the authority granted by Articles 30 and 31 of the Fraud Prevention Act (commonly referred to as the Anti-Fraud Act), promulgated the "Format for Transparency Reports on Identity Verification Technology and Anti-Fraud Plans for Online Advertising Platforms" (hereinafter referred to as the "Transparency Report Format") and the "Regulations on Disclosure Standards and Procedures for Online Advertising Information" (hereinafter referred to as the "Information Disclosure Regulations"). These regulations delineate specific compliance requirements for online advertising platforms, subsequent to the Ministry’s earlier publication identifying platforms subject to heightened regulatory scrutiny. The following analysis highlights the principal provisions of these regulatory instruments:
Transparency Report Format
The Transparency Report Format, promulgated in accordance with Article 30 of the Anti-Fraud Act, imposes a tripartite obligation on online advertising platforms, requiring them to implement identity verification technology, devise anti-fraud measures, and publish annual transparency reports. This regulatory framework provides detailed guidance on the execution of these compliance obligations.
In relation to identity verification, online advertising platforms must authenticate the identities of advertisers and sponsors. Verification may be conducted either in-person or remotely. For remote verification, advertisers and sponsors are required to submit digital copies of identity documents (such as national identification cards or passports) and utilize secure digital signatures via personal identification certificates, business certificates, or Fast Identity Online (FIDO) technologies, ensuring the encrypted transmission of sensitive data.
The anti-fraud plan must encompass a broad range of risk mitigation measures, including policies governing the management of online advertisements, fraud risk assessment and management, detection and identification of fraudulent content, mechanisms for response and reporting, resource allocation, personnel training, and the documentation of corrective actions. Additionally, the retention of records and evidence pertaining to these measures is mandated as part of the anti-fraud plan's compliance obligations.
Transparency reports, which primarily consist of statistical data, are required to include detailed disclosures such as monthly active user statistics in accordance with international best practices. They must also address the implementation of Articles 32 and 33 of the Anti-Fraud Act, including statistics on the removal of advertisements, categorized by type, and the average processing time for such removals. The transparency reports are intended to offer the public a comprehensive overview of the measures taken by online advertising platforms to fulfill their anti-fraud responsibilities.
Information Disclosure Regulations
The Information Disclosure Regulations, promulgated pursuant to Article 31 of the Anti-Fraud Act, further mandate that online advertisements provide sufficient disclosure of information to users—an essential safeguard against fraudulent activities. Advertisements must clearly indicate their status as commercial content and disclose the identities of advertisers and sponsors, including their names and regions of residence (or, for legal entities, their corporate names and principal places of business). Additionally, the regulations require the disclosure of the advertisement’s license number and any use of personal images generated through artificial intelligence or deepfake technologies.
These regulations also require the disclosure of the identities of both the advertiser and sponsor unless it is determined that their business relationship is not high-risk, or where the advertiser and sponsor are the same entity, in which case only the sponsor’s information is required. Furthermore, these disclosure obligations extend to advertising networks and online advertising exchanges. Online advertising platforms that permit third-party advertisements must comply with the disclosure requirements, and they must verify compliance with these regulations at least four times annually. Records of these verifications must be retained for a minimum of three years to facilitate regulatory inspections.
Conclusion
Since the enactment of the Anti-Fraud Act in July 2024, the Ministry of Digital Affairs has acted swiftly to establish a comprehensive regulatory framework through the introduction of these sub-laws. From the previously promulgated "Thresholds for Significant Online Advertising Platforms" to the newly issued "Transparency Report Format" and "Information Disclosure Regulations," it is clear that the Ministry is adopting a pragmatic and thorough approach to governing the online advertising ecosystem. The requirements for transparency reporting and information disclosure align with global best practices in internet governance, not only promoting informed user engagement but also facilitating the assessment of platforms' compliance efforts by regulatory authorities. However, as jurisdictions worldwide intensify efforts to demystify the digital marketplace, it remains paramount that sufficient lead time be afforded to allow for effective implementation. In conclusion, Taiwan’s proactive stance in combating online fraud is commendable, and continued collaboration between the government, online advertising platforms, and other stakeholders will be crucial in enhancing the effectiveness of these regulatory measures.
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Editor: Doris Lin, Harvey Huang
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