Google will stop carrying advertisements for binary options trading after criticism from Australian authorities.
The tech giant said it would ban the advertisements from June, while also restricting other risky online schemes — including contracts for difference, spot forex and cryptocurrencies — following complaints made by the Australian Competition and Consumer Commission (ACCC) earlier this month.
Binary options is a highly speculative form of trading, which experts and regulators have likened to gambling. And many unlicensed operations, often found online, are just out-and-out scams.
Australian authorities have seen a nine-fold increase in binary option scams in the last four years, with losses estimated to be in the hundreds of millions of dollars.
Why stop now?
Google’s decision came days after Background Briefing aired criticism of the tech giant by regulators who said it had ignored requests to stop showing advertisements for binary options.
The announcement was made in a blog post from Google’s director of sustainable ads, Scott Spencer, who said the company was cracking down on advertisements in “unregulated or speculative financial products”.
ACCC deputy chair Delia Rickard had told Background Briefing the advertisements were hurting Google’s reputation.
“I would like Google to follow the request of regulators,” she said.
“ASIC [Australian Securities and Investments Commission], the US financial services regulator, the Canadian ones have all asked Google to stop showing results for binary options.
“Unfortunately it does appear they’re still showing them.”
Google is not the first internet giant to take a stance against binary options advertisements.
In June last year, Apple updated its developer guidance, banning any apps that facilitated binary options trading.
Six months later, Facebook followed suit, banning binary options advertisements outright.
Greg Yanco, head of Market Supervision at ASIC, welcomed Google’s latest move.
“It will go a long way to making sure consumers are not exposed to risky products and unlicensed activity,” he said.
“Binary options are risky products that promise high returns quickly.
“However, the reality is quite different — up to 90 per cent of consumers lose their entire investment.”
What about the apps?
It is unclear whether Google will also remove binary options apps from its Google Play store.
A spokeswoman did not respond to questions.
ASIC previously asked Google to remove unlicensed binary options apps last year, which it did at the time.
But as of last week more than 200 apps were still available for download.
Google said it took down more than 3.2 billion advertisements that violated its advertising policies — more than 100 per second.
“We’re constantly updating our policies as we see new threats emerge,” Mr Spencer said in the post.