A proposed new law will put Australia among the most stringent countries in terms of age controls for social media that will impact platforms such a Reddit and Facebook.
Australia is planning to make social media companies obtain parental consent for users under the age of 16, with multimillion dollar fines for failing to comply.
Social media companies, which include anonymous forums like Reddit and smartphone dating apps like Bumble, would also be required to take all reasonable steps to determine users' ages and prioritize children's interests when collecting data, the Online Privacy Bill said.
If made law, the Online Privacy Bill would put Australia among the most stringent countries in terms of age controls for social media, and build on the country's efforts to rein in the power of Big Tech.
Facebook reviewing proposed law
"We are ensuring data and privacy will be protected and handled with care," said Attorney-General Michaelia Cash in a statement.
"Our draft legislation means that these companies will be punished heavily if they don't meet that standard," she added.
Assistant Minister for Mental Health and Suicide Prevention David Coleman said "Facebook's own internal research demonstrates the impact social media platforms can have on body image and the mental health of young people".
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Facebook's director of public policy in Australia and New Zealand, Mia Garlick, said the company was reviewing the proposed law and understood "the importance of ensuring Australia's privacy laws evolve at a comparable pace to the rate of innovation and new technology we're experiencing today".
The new law would raise penalties for any breaches of the code, with fines of either 10 percent of the company's domestic annual turnover, three times the financial benefit of the breach or $7.5 million.
The current maximum fine is $1.5 million.
In a previously-commissioned report published on Monday, privacy watchdog the Information Commissioner found that while most social media providers had an age minimum of 13, the limit was enforced by "self-attestation" rather than independent verification.