He said the "extremely open-ended" bill raises serious questions on how the implementing authorities such as the police, Malaysian Communications and Multimedia Commission and the Attorney-General's Chambers will decide what amounts to true or false news.
Governments in several countries, emboldened by US President Donald Trump's fulminations against "fake news", are considering such legislation.
Two weeks ago, in a written reply in Dewan Rakyat, the communications and multimedia ministry said a total of 91 cases involving the dissemination and publication of fake news on social media were recorded past year.
Opposition lawmaker Ong Kian Ming described the bill as an "attack on the press and an attempt to instill fear" as elections loom.
"It is timed for the elections and to silence discussions on 1MDB", he said.
Malaysia is ranked 144th out of 180 countries in Reporters Without Borders' World Press Freedom Index.
Paulson called the bill "sheer overkill and an exaggeration of the problem of "fake news" and called for the bill to be discarded "in its entirety".
"Any person who, by any means, knowingly creates, offers, publishes, prints, distributes, circulates or disseminates any fake news or publication containing fake news commits an offence and shall, on conviction, be liable to a fine not exceeding RM500,000 or to imprisonment for a term not exceeding 10 years or to both, and in the case of a continuing offence, to a further fine not exceeding RM3,000 for every day during which the offence continues after conviction", the Bill read.
It received a first reading in Parliament on Monday, raising concerns it could stifle political debate ahead of the general election, which is expected to take place by the end of August, although there is no official date as yet.
Journalists group Gerakan Media Merdeka (Geramm) said the government should not be the sole judge of what constitutes fake news.
- Malaysia has had enough with fake news.
If convicted, the funder can also be fined up to RM500,000 or sentenced to a jail term of up to 10 years or both. "The proposed bill is aimed at protecting the public from fake news and, at the same time, ensuring that their right to speech and expression under the Federal Constitution is respected", Said said. His administration has responded harshly to media outlets reporting on the story and fired critics within the government.
"(As such) people turn to the internet and social media as alternatives", he said on Facebook.
The bill was tabled by Minister in the Prime Minister's Department Datuk Seri Azalina Othman Said. "The fake news law is a new weapon to cover up corruption".
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