The federal government is considering a legally binding "duty of care" for social media platforms such as Facebook and Snapchat, if their users are hurt by bad behaviour or bullied online.
The threat comes after a Senate committee inquiry found social media giants are ignoring complaints by victims, The Daily Telegraph reported on Monday.
Acknowledging a spate of cyber-bullying linked to suicides such as that of 14-year-old Amy "Dolly" Everett, Communications Minister Mitch Fifield says if online platforms don't act against "creeps and cowards" then the government will.
"The thought of any child being bullied sickens us all, which is why the government is coming after them," Senator Fifield said.
"Clearly social media organisations need to lift their game, take more care and be more transparent."
The minister said the government was closely examining the Senate committee's final report and its recommendations.
Facebook is under pressure on another front as it prepares to reveal the identity of around 300,000 Australian users who had their account information shared with the British political consulting agency Cambridge Analytica.