THE most severe punishment a licensed service provider can face under the new social media licensing regulation is suspension, deregistration of its licence, or prosecution, according to the Malaysian Communications and Multimedia Commission (MCMC).

The penalties range from administrative warnings to compliance notices and, ultimately, prosecution.

MCMC said it will assess the nature of the breach, including its severity, impact, and frequency, as well as the compliance record of the service provider, in deciding the appropriate action to be taken against them.

“In such circumstances, MCMC can initiate actions ranging from an administrative warning, issuance of a compliance direction to rectify the breach, imposing a civil penalty, or compounding offences to proportionately deal with the breach,” it said.

“In the most severe and grave nature of breach, MCMC can suspend access to the said service provider’s platform; deregister the ASP (C) licence; or commence prosecution.”

MCMC explains this in an FAQ for its regulatory framework for social media and messaging apps to apply for an annual licence effective August 2.

The regulation takes effect January 1.

The licence is called the Applications Service Provider Class (ASPC) Licence.

The new regulatory framework aligns with the government’s efforts to create a safer online environment for all Malaysians, especially children and those vulnerable to online harm.

MCMC said social media and internet messaging app owners operating without a licence will be fined up to RM500,000 or jailed five years or both.

They will also be liable for a further fine of RM1,000 for every day or part of a day during which the offence continues after conviction.

MCMC said actions against errant operators will be taken under Section 126 of the Communications and Multimedia Act (CMA) 1998.

Social media users need not apply for the licence, which applies only to social media and internet messaging companies with at least eight million Malaysian users.

This means Facebook, Facebook Messenger, Instagram, TikTok, WhatsApp, Telegram, WeChat, X, and YouTube will have to apply for an annual licence, said MCMC.

MCMC noted that licensed service providers can challenge its decisions or directions, as these are subject to all the relevant processes and procedures provided under the CMA 1998.

Under the CMA 1998, there are safeguards to balance the need for regulation, due process, and the protection of freedom of speech and expression. This includes the Appeal Tribunal and thereafter a judicial review.

The licence is valid for one year and must be renewed annually. Service providers are given a five-month grace period from August 1 to apply for and obtain their licence.

Once they obtain the licence, service providers must implement measures to protect user data; ensure child safety, including restricting users under 13; address online harm such as cyberbullying, online scams, and sexual grooming activities; promote advertisement transparency and restrict advertisements promoting scams; safeguard minors from harmful content and misleading advertisements; and manage deepfakes and harmful artificial intelligence-generated content.

Locally incorporated company

Applicants can apply for class or individual licences depending on their criteria. Fees, including approval, application, and processing fees for renewal, can range from RM2,500 (class licence) to RM85,000 (individual licence).

The establishment of a locally incorporated entity is a prequalifying criterion for licensing. However, under the regulation, the communications minister has the discretion to allow a foreign company to be registered as a class licensee . There is also no restriction on foreign shareholding under the class licence.

More information is available in MCMC’s Licensing Guidebook.

MCMC said the licensing requirement aims to foster a trusted and safe online environment, and wants service providers to safeguard users by improving moderation practices, complying with conduct requirements, and adhering to Malaysian laws.

Under the new licensing regime, MCMC said end users can expect a safer online environment, better protection against harmful content, and clearer avenues for addressing complaints and concerns. – August 2, 2024.