Introduction

Fraud cases have been steadily proliferating in recent years in Taiwan. [1] Telecom and online fraud cases alone accounted for 18% to 31% of all newly filed cases at district prosecutors’ offices [2], underscoring the alarming growth of online fraud. A common form of online fraud involves placing fraudulent ads on social media platforms—such as Meta Platforms, Inc.’s Facebook and Instagram—to reach a large and unspecified audience.

As part of Taiwan’s efforts to combat fraud in the digital economy, the Fraud Crime Hazard Prevention Act (the “Fraud Prevention Act” or the “Act”), enacted in July 2024, explicitly brings online advertising platform operators under regulatory oversight, with the Ministry of Digital Affairs (MODA) serving as the business competent authority of the operators.

The following sections outline the obligations and responsibilities of online advertising platform operators under the Fraud Prevention Act.

I. Online Advertising Platform Operators Regulated under the Fraud Prevention Act

The Fraud Prevention Act defines “online advertising platform operators” as entities that provide advertisement placement or dissemination services for consideration through online platforms or spaces and serve as the final online platform through which the public accesses such advertisements.

However, based on considerations of enforceability, regulatory capacity, and fraud prevention, the Fraud Prevention Act applies only to online advertising platform operators (i) that provide online advertising services within Taiwan—specifically, those whose advertisements are directly accessible to people in Taiwan via the internet—and (ii) that meet the scale thresholds established by the MODA. [3] In September 2024, the MODA announced for the first time a list of online advertising platform operators that it believes meet such a scale threshold. The list includes Google LLC (Google, YouTube), LY Corporation (LINE), Meta Platforms, Inc. (Facebook, Instagram), and TIKTOK PTE. LTD. (TikTok). [4]

II. Anti-Fraud Obligations of Online Advertising Platform Operators

1. Regarding Online Advertising Platform Operators Themselves: Disclosure Obligations [5] and, for Offshore Operators, Representative Designation Requirements [6]

Online advertising platform operators regulated under the Fraud Prevention Act have an obligation to publicly disclose their own business-related information, including the name of the operator, the name of its representative, and the operator’s address, telephone number, email address, and other relevant details.

If a regulated online advertising platform operator and its representative have neither a place of business nor a residence in Taiwan, and have not established a branch office in Taiwan, they are required under the Fraud Prevention Act to designate a Taiwanese citizen, legal entity, or unincorporated body within Taiwan as their legal representative and report the legal representative’s information to the MODA.

The legal representative designated by the offshore operator serves as the recipient of legal documents and also is responsible for informing and assisting the operator in complying with legal requirements related to fraud prevention.

If a regulated offshore operator fails to designate a legal representation in Taiwan or report its legal representation’s information to the MODA, it may be subject to penalties by the MODA, such as imposing fines or publicly disclosing the operator’s name.

2. Requirements Regarding Advertisements Published or Broadcast on Online Advertising Platforms

Advertiser Identity Verification, Fraud Prevention Plan, and Annual Fraud Prevention Transparency Report [7]

The Fraud Prevention Act imposes the obligation on online advertising platform operators to ensure that no advertisements published or broadcast on their platforms involve fraud.

Under the Act, online advertising platform operators are required to establish advertisement management measures, including: (1) verifying the identities of advertisement publishers and funding providers, (2) developing a fraud prevention plan, and (3) submitting an annual transparency report.

As for identity verification, online advertising platform operators must assess the risk level of each advertisement publisher and funding provider and verify their identities by risk-commensurate methods such as digital signatures, Fast IDentity Online (FIDO) authentication, One-Time Password (OTP), or bank account comparison.

In addition, operators must evaluate and analyze the risk of their online advertising services being used for fraudulent activities and develop a fraud prevention plan that includes advertisement management policies and processes, as well as a fraud prevention, detection, and notification mechanism. To achieve the objectives of detecting, identifying, and preventing fraud as outlined in the plan, operators must establish a comprehensive risk management mechanism, taking into reference samples of suspect advertisements published by the competent authority [8].

With respect to annual transparency reports, online advertising platform operators must conduct statistical analyses on the types and quantities of advertisements removed in accordance with the Act, as well as the number of suspended accounts, and publish this information in an annual transparency report.

Advertisement Information Disclosure [9]

The Fraud Prevention Act obligates online advertising platform operators to disclose certain information about advertisements published or broadcast on their platforms. This includes clearly labeling the content as an advertisement and disclosing the identity of the publisher and funding provider. Furthermore, if the advertisement requires prior review and approval from competent authorities before publication by law, the permit number must also be displayed on the advertisement (e.g., advertising of drugs and medical devices).

In the case of advertisements that feature a personal likeness generated by deepfake or artificial intelligence technology, online advertising platform operators should require their clients to disclose such use when requesting the publication or broadcast of the advertisement. This information must be clearly indicated in the advertisement at the time it is published or broadcast on the platform.

Notwithstanding the above, if advertising space is constrained, simply labeling the content as an advertisement and supplying the additional required information through a hyperlink within the advertisement will be deemed sufficient.

Furthermore, if both the advertisement publisher and the funding provider have been verified through real-name authentication and assessed by online advertising platform operators as low-risk entities, disclosing the identity of either party will meet the disclosure requirement.

It is worth noting that online advertising platform operators remain obligated to disclose the required information outlined above even when advertisements are placed through advertising networks or through other automated delivery mechanisms. [10]. They are also obliged to verify that advertisements delivered in such ways comply with the disclosure requirements.

Mechanism to Respond to Fraudulent Advertisements [11]

If an online advertising platform operator becomes aware or receives a notice from the police (or other investigation authorities with similar functions, collectively the “Judicial Police”) or from the MODA or other competent authorities notifying the operator that advertisements published or broadcast on its platform are suspected of being involved in scams, it must remove, restrict access to, or block such suspected content within 24 hours [12].

In addition, the operator has a legal obligation to suspend the user account of the suspected advertisement’s publisher for a reasonable period and to provide the Judicial Police with the information related to the suspected accounts and advertisements. This information includes, for example, the suspected account, the associated telephone number, and the identity information of the advertisement publisher and funding provider.

It should be noted that if an operator fails to comply with the above-mentioned obligations, it may be held jointly and severally liable with the advertisement publisher and funding provider for compensation for damage suffered by those who mistakenly believe that the advertisements are reliable.

3. Data Retention and Cooperation in Criminal Investigations [13]

Online advertising platform operators are obligated to retain data that can be used to trace users’ activities and individual transactions for a reasonable period, such as the information that has been received from users during the identity verification process.

Online advertising platform operators are also obligated to assist the Judicial Police to trace and investigate criminal offenders. For example, if the Judicial Police request operators to provide information during an investigation of fraudulent activities, operators must provide the requested data within three days upon receiving the notice. Additionally, the operators must retain such data for six months for any subsequent investigative needs and, if the case goes into litigation, retain such data until the end of three months after the relevant court ruling or judgment becomes final and conclusive.

4. Safe Harbor Provision [14]

In order to increase the enforcement efficiency of the mechanisms under the Fraud Prevention Act, the Act grants online advertising platform operators an exemption from confidentiality obligations for their implementation of anti-fraud measures or cooperation with authorities as required by the Act. Furthermore, the Act also exempts the operators from liability for damages in the event their compliance with the Act (such as suspension of a suspicious user’s account) results in damage to a user or a third party.

5. Penalties for Non-Compliance [15]

If an online advertising platform operator fails to comply with its fraud prevention obligations or to establish and implement relevant measures as required by the Fraud Prevention Act, it may be subject to fines ranging from TWD 200,000 (c. USD 6,912) to TWD 10,000,000 (c. USD 345,000), and ordered to rectify its non-compliance within a specific period of time. If the operator fails to rectify the non-compliance by the deadline, it may be subject to further fines until the non-compliance is rectified.

Furthermore, in cases of serious violations or persistent non-compliance, the operator may not only face higher fines, but may also be sanctioned with network traffic restrictions, suspension of domain name system (DNS) resolution, or access restrictions.

III. Future Outlook

Although the Fraud Prevention Act was enacted on 2 August 2024, the obligations for online advertising platform operators to verify and disclose the identities of advertisers and their funding providers took effect on 1 January 2025.

In May 2025, the MODA issued its first decision imposing penalties against Meta Platforms, Inc. regarding two advertisements posted on Facebook for which Meta Platforms, Inc. failed to disclose the identities of the advertiser and funding provider, as required by the Fraud Prevention Act. The penalties were imposed per advertisement, resulting in a total fine of TWD 1,000,000 (c. USD 34,000).

Those penalties clearly demonstrate the MODA’s strong determination to implement anti-fraud measures. They also affirm the imposition of penalties on a per-advertisement basis, meaning that in violations involving high-volume advertising, the cumulative fines could be hefty.

It is worth noting that in addition to monetary penalties, the Fraud Prevention Act also grants the government significant powers to regulate online advertising platform operators’ compliance with the Act. Available management and control measures include heavy sanctions such as network traffic restrictions, suspension of DNS resolution, and access restriction, which may be imposed as penalties for severe breaches of anti-fraud obligations.

The detailed regulations for enforcing the Fraud Prevention Act, such as the specific criteria for what constitutes a “severe violation,” as well as the discretionary guidelines for imposing penalties, are still pending issuance by the MODA. Online advertising platform operators should therefore stay vigilant and closely monitor policy developments in this area.

This is a translation of the original article in Chinese, which can be found here.

For more information on laws and regulations related to advertising, please contact Ling-ying Hsu at lhsu@winklerpartners.com.

Written on 24 June 2025 by Ling-ying Hsu, Helen Chen, and Wen-Ling Lin.

Translated on 21 October 2025 by Wen-Ling Lin.

1. See statistical data from the National Police Agency, Ministry of the Interior (April 2024) (https://www.npa.gov.tw/ch/app/data/doc?module=wg057&detailNo=1224599461083222016&type=s).
2. See statistical data from the Ministry of Justice (https://www.rjsd.moj.gov.tw/RJSDWeb/visualize/Visualization.aspx?kind=PC&d=12).
3. See Scale Calculation Standards for the Regulated Online Advertisement Companies.
4. See MODA press release (September 2024), “Announcement of the name list of online advertising platform operators meeting the regulated scale according to the calculation standards.” (https://moda.gov.tw/press/bulletin/14160).
5. See Article 28 of the Fraud Prevention Act and the corresponding explanation of its legislative purpose.
6. See Article 29 of the Fraud Prevention Act and the corresponding explanation of its legislative purpose.
7. See Article 30 of the Fraud Prevention Act and the corresponding explanation of its legislative purpose, as well as the Identity Verification Technologies and the Format of Fraud Prevention Plans and Transparency Reports for Online Advertising Platform Operators.
8. See Yahoo! NEWS (April 2025), “Police Release Report on Q1 Illegal Investment Advertisement Trends – This Group of People Suffers the Most” (https://tinyurl.com/rr82hun).
9. See Article 31 of the Fraud Prevention Act and the corresponding explanation of its legislative purpose, as well as the Regulations Governing the Disclosure of Information and Operational Procedures for Online Advertisements.
10. See Article 4 of the Regulations Governing the Disclosure of Information and Operational Procedures for Online Advertisements and the corresponding explanation of its regulatory purpose.
11. See Articles 32 and 33 of the Fraud Prevention Act and the corresponding explanation of their legislative purposes.
12. See the Notification Period Stated in Subparagraph 1 of Paragraph 1 of Article 32 of the Fraud Prevention Act.
13. See Article 37 of the Fraud Prevention Act.
14. See Article 38 of the Fraud Prevention Act.
15. See Articles 39 and 40 of the Fraud Prevention Act.