SCAM Act

The Safeguarding Consumers from Advertising Misconduct Act (SCAM Act), HR7548, was introduced in the House on February 12, 2026, and referred to the Committee on Energy and Commerce the same day. This bill seeks to hold online platforms accountable for fraudulent or deceptive commercial advertisements by removing broad Section 230 immunity in such cases. The bill text explicitly states that courts have interpreted Section 230 too broadly, leading to online platforms facilitating unlawful activities, and cites significant financial losses from online scams. This legislation does not authorize or appropriate any direct funding. Instead, it creates a new regulatory burden and potential legal liability for online platforms. The mechanism is a change in legal immunity, shifting the responsibility for advertiser verification and content moderation onto the platforms themselves. This will necessitate increased investment in content review, fraud detection, and legal defense for companies operating online advertising businesses. Structural losers under this legislation include major online platforms that rely heavily on advertising revenue and currently benefit from Section 230 immunity. Companies such as Meta Platforms, Inc. ($META), Alphabet Inc. ($GOOGL), Amazon.com, Inc. ($AMZN), Pinterest, Inc. ($PINS), and Snap Inc. ($SNAP) would face increased operational costs and legal exposure. The bill's findings directly reference social media platforms as primary conduits for scams, indicating a direct impact on companies like $META, $PINS, and $SNAP. E-commerce platforms like $AMZN, which host third-party sellers and advertisements, would also be affected. The bill is in its early stages, having only been referred to committee, but the existence of a companion bill (S3774) suggests coordinated legislative effort. Looking at recent market data, $META is currently at $573.02, experiencing a -13.25% change over the last 30 days, despite a +6.83% change in the last 7 days. $GOOGL is at $299.99, with a -0.3% change over 30 days and +9.69% over 7 days. $AMZN is at $212.79, showing a -2.81% change over 30 days and +5.89% over 7 days. $PINS is at $18.25, down -7.59% over 30 days but up +1.33% over 7 days. $SNAP is at $4.71, with a -11.8% change over 30 days and +17.16% over 7 days. While recent 7-day changes are positive for these companies, the 30-day trends show mixed to negative performance, which could be indicative of broader market sentiment or other factors, but the introduction of legislation like the SCAM Act adds a layer of regulatory uncertainty. The next legislative step for HR7548 is consideration by the House Committee on Energy and Commerce. Given its early stage, the bill will need to pass through committee, potentially be amended, and then receive a vote in the House, followed by a similar process in the Senate (or S3774 could advance there), and ultimately presidential assent. This process could take months or even years, but the presence of a companion bill increases its probability of advancing.