The genesis and long-term success of a highly engaging platform begins with the best intentions: to connect all the players within its ecosystem with disruptive technology that forges a new and better path to goods and services, shared content and connectivity. Due to your pioneering innovation, ingenuity and sheer drive to deliver on your vision, the platform era is now entrenched in our day-to-day lives – and for many, our business livelihoods. Four of the top five most valuable businesses in the world today are platform companies.1 

When you were building your dream and imagining all the good you could do for society with it, you never proactively contemplated how your platform and ecosystem might be exploited by the criminal element. Platforms are brimming with limitless potential that continues accelerating as they grow and leverage new technologies such as 5G and Artificial Intelligence (AI). That unlimited potential is unfortunately also available to the bad actors behind some of the worst crimes plaguing society today: fraud, identity theft, money laundering, drug trafficking, online child sexual exploitation, human trafficking, corruption and even terrorism.

Without ever intending to, some platforms have essentially opened a portal for criminal enterprises to expand their reach into vulnerable populations, easily monetize illicit activities and evade detection – in many cases creating an end-to-end platform that can be used to facilitate crimes against the most vulnerable in our society. How can organizations strike a balance between the opportunities of the platform era and their expanding obligations as corporate citizens?

The Power of Your Platform for Criminal Enterprises

The features and functionality that make platform experiences so engaging and powerful are equally as empowering for bad actors. Platforms create connectedness with and between customers, extend branding, build revenue and accelerate global commerce. Both legitimate and illicit organizations have discovered the power of today’s platforms and are leveraging them to grow global audiences, better monetize their businesses and increase their wealth. Accelerated transaction speeds, greater anonymity and the lack of physical and geographical restrictions of today’s borderless marketplace are the ideal fuel for nefarious criminal activity to flourish.

The Impacts of the Platform Era on Human Crime and Global Security

Child Exploitation:
  • The U.S. accounted for 30% of the global total of child sexual abuse material (CSAM) URLs at the end of March 2022, meaning the U.S. hosts more child sexual abuse content online than any other country in the world.2
  • Between 2019 and 2020, as we moved into pandemic lockdown and became more reliant on digital channels, there was a 97.5% surge in the number of online enticements, defined as an individual communicating with a child online with the intention of committing a sexual crime.3
Drug Trafficking:
  • 75% of the American deaths due to drug overdose between April 2020 and April 2021 were due to opioids, mostly Fentanyl.4
  • The Drug Enforcement Agency (DEA) identified 76 Fentanyl cases that involved drug traffickers advertising with emojis and code words on ecommerce platforms and social media apps over a two month investigation in 2021.5
  • The DEA confiscated more than 9.5 million bootleg pills in 2021, an increase of nearly 430% since 2019 and roughly 40% of those fake pills contained enough Fentanyl to cause a fatal overdose.6
Human Trafficking and Sex Trafficking:
  • Over 80% of the U.S. Justice Department’s sex trafficking prosecutions in 2020 involved online advertising to solicit buyers for commercial sex.7
  • 59% of online recruitment of identified U.S. victims in active sex trafficking cases in 2020 took place on just one mainstream U.S. social network.8
Sanctions Evasion and Global Security Issues:
  • Whistleblower Aid alleges sanctioned pro-Russian separatist leaders continue using social media platforms to recruit fighters and solicit funds following the Russian invasion of Ukraine.9
  • 126 million Americans, totaling 39% of the U.S. population, were potentially exposed to Russian-linked disinformation posts designed to disrupt the integrity of U.S. election systems and democratic processes.10
  • 32 Russian groups and individuals, including Russian intelligence services, were sanctioned by the Treasury Department in 2021 for a deliberate scheme to influence the 2020 U.S. presidential elections.11
  • Notable global ecommerce retailer settles with the U.S. Office of Foreign Assets Control (OFAC) after conducting retail ecommerce transactions with persons in sanctioned territories (including Crimea, Iran and Syria) and sanctioned country embassies.12

These numbers present just a small snapshot of a prolific problem. The criminal element lurking on everyday platforms often contributes to more cumulative and damaging consequences for our society and global security. The profits from these illicit activities create steady income streams for drug cartels, human traffickers, child abusers, extremist groups, state-sponsored or corrupt regimes and military factions. Well-organized criminal networks leverage ecommerce marketplaces, communication platforms, crowd-sourced media, cryptocurrencies and dark web routes to monetize their crimes, launder the proceeds and hide large amounts of illegal profits with little risk of detection. The lack of more stringent, universal safeguards combined with legal ambiguity around the applicability of certain laws has the potential to fuel a vicious and very lucrative, cycle of criminality across popular social media, ecommerce marketplaces, alternative and peer-to-peer payment platforms and streaming media platforms.

Expectations for Accountability are Escalating as Awareness Grows

The market entry and initial expansion of many of the world’s largest platforms was largely unencumbered by stringent regulatory controls. Legal gray areas and uncertainties contributed to gaps in oversight and loopholes that bad actors stood ready to capitalize on for criminal enterprises.

Recent years have seen a significant shift in global regulatory scrutiny into the platform economy. News stories about OFAC settlements by a leading ecommerce retailers, marketplaces and technology companies abound.

For example, a software company and a digital currency payment processor – both of whom transacted with entities or individuals in sanctioned regions – recently were subject to OFAC action. OFAC enforcement actions for 2021 equaled $20.1 million and 14 of 26 total enforcements involved organizations that were not financial institutions.13  

Ongoing legislative efforts are underway across multiple jurisdictions to hold platform providers more accountable for potential illegal activity occurring within their ecosystems, including the EARN IT Act in the U.S., the UK’s Online Safety Bill and Europe’s Digital Services Act.14 Recent regulatory guidance also signals increased reporting requirements for digital identity information and advocates for the use of location information gathered by apps and websites, automation, machine learning and other technology-driven efficiencies.15   

Shareholder and consumer expectations around corporate accountability continue to increase in equal measure. Digital consumers bring universal and uncompromising expectations for well-protected and convenient experiences over every channel and every interaction. They also expect your business to echo their commitments to issues impacting the welfare of society. Customer loyalty has the potential to quickly turn into a liability when a business is connected to bad actors and criminal activities. The opportunity costs stemming from long-standing reputational damage, erosion of shareholder value, fractured supply chains and risky third-party relationships can quickly outstrip the financial costs of the regulatory fines and enforcements that follow a sanctions, AML or anti-bribery and corruption violation.

Balancing Customer Experience, Corporate Values and Reputational Risk with Improved Risk Visibility

Your business relies on building enduring and extendable relationships with customers, third-parties and suppliers utilizing your platform. The exponential proliferation of bad actors exploiting everyday platforms for criminal activity makes it essential to understand the inherent risks those relationships can introduce into your ecosystem at any given point in time. Every touchpoint in the customer journey has the potential to create an unintentional gateway for criminal activity to enter your ecosystem. Each new account creation, login, details change and payment represent a highly susceptible touchpoint that warrants careful attention.

Solid relationships and strong data are the crux of successful platform revenue generation. Most platforms are already leveraging monumental amounts of customer data to drive highly personalized and curated experiences. Likewise, data and intentional customer risk journeys can enable your business to create a stronger line of defense to prevent bad actors from entering your platform ecosystem.

Identity data, digital intelligence, location data and due diligence data, combined with using an intuitive workflow orchestration and automation platform can help drive real time risk decisioning to prevent AML, sanctions and corruption risk across the customer lifecycle— without unnecessary disruption to the customer experience. These automated risk assessment processes can occur in an orchestrated, non-intrusive workflow designed to keep every touchpoint feeling effortless and engaging for your most trusted customers. Conducting a passive, risk-based assessment enables your business to proactively detect risk signals in real time at the point of risk to block bad actors before they impact the security of your ecosystem. Adding these controls provides your business with a streamlined way to leverage actionable risk intelligence and amplify visibility across critical points in the customer journey without disrupting your elegant customer, partner or supplier journey.

Reconsidering Corporate Responsibilities in the Platform Era

Platforms are built on trust. It is an essential ingredient for the long-term success of a platform ecosystem. Being associated with a sanctions or compliance violation or getting tied to crimes victimizing vulnerable populations has a ripple effect on brand equity, shareholder value and employee engagement. The recovery trajectory from this type of reputational damage is long, costly and difficult.

Standing against the criminal activity than can potentially take place over social media, ecommerce marketplaces, alternative payments and media platforms starts with a commitment to protect and prioritize the integrity of your customer, supplier and third-party relationships. Proactively adding controls to protect potentially vulnerable touchpoints in your customer journey and increase up-front risk visibility can help prevent bad actors from exploiting your ecosystem for criminal enterprise without undue disruption to the customer journey.

Ready to evaluate your ecosystem? We can help you design a strategy to improve end-to-end platform security, mitigate risk and prioritize seamless and secure customer experiences.

This document is for informational purposes only. LexisNexis® Risk Solutions does not represent nor warrant that this document is complete or error free.

References
1. Top 10 Most Valuable Companies in the World, Netizens Report, June 10. 2022, Top 10 Most Valuable Companies In The World 2022 – The Netizens Report
2. and 14. Williams, Rhiannon, “The US now hosts more child sexual abuse material online than any other country”, MIT Technology Review, April 26, 2022, https://www-technologyreview-com.cdn.ampproject.org/c/s/www.technologyreview.com/2022/04/26/1051282/the-us-now-hosts-more-child-sexual-abuse-material-online-than-any-other-country/amp/
3. Berg, Kim and Withers, Melissa, “The Surge In Online Child Exploitation, Trafficking And Abuse — And What To Do About It”, International Business Times, October 29, 2021, The Surge In Online Child Exploitation, Trafficking And Abuse — And What To Do About It (ibtimes.com)
4. Nenn, Kerry, “Fentanyl on Social Media: The New Deadly Digital Dealer,” narcotics.com, February 22, 2022, https://www.narcotics.com/fentanyl-on-social-media/#:~:text=Around%2075%2C000%20of%20those%20deaths%20were%20
5. Hoffman, Jan, “Fentanyl Tainted Pills Cause Drug Fatalities Among Youth to Soar,” The New York Times, May 19, 2022, Fentanyl Tainted Pills Cause Drug Fatalities Among Youth to Soar – The New York Times (nytimes.com)
6. Zwemer, Hannah, “The Deadly Link Between Social Media and Fentanyl Pills”, Addictioncenter.com, December 28, 2021, The Deadly Link Between Social Media And Fentanyl Pills – Addiction Center
7. “Traffickers abusing online technology, UN crime prevention agency warns”, October 30, 2021, UN News, Traffickers abusing online technology, UN crime prevention agency warns | | UN News
8. Cipriano, Andrea, “Facebook Liable for Human Trafficking Connections: Court Ruling,” The Crime Report, June 28, 2021, Facebook Liable for Human Trafficking Connections: Court Ruling – The Crime Report
9. Zakrzewski, Cat; Dwoskin, Elizabeth and Timberg, Craig, “Pro-Russia rebels are still using Facebook to recruit fighters, spread propaganda,” Washington Post, March 11, 2022, Sanctioned rebels are using Facebook to recruit fighters and spread pro-Russia propaganda, whistleblower complaint claims – The Washington Post
10. Scola, Nancy and Gold, Ashley, “Facebook: Up to 126 million people saw Russian-planted posts,“ Politico, October 31, 2017, Facebook: Up to 126 million people saw Russian-planted posts – POLITICO
11. Williams, Katie Bo Williams, Bertrand, Natasha Bertrand and Marquardt, Alex, “New intel reports indicate fresh efforts by Russia to interfere in 2022 election,” CNN, August 13, 2021, New intel reports indicate fresh efforts by Russia to interfere in 2022 election – CNNPolitics
12. 2020 Enforcement Information | U.S. Department of the Treasury
13. 2021 Enforcement Information | U.S. Department of the Treasury
15. The Anti-Money Laundering Act of 2020 | FinCEN.gov