The attack, which occurred late last year, showed a dozen teens bullying a 17 year-old girl with a mental disability.
The group tried to force her to perform sexual acts, before urinating on her and setting her hair on fire.
"The government has never tolerated bullying in schools and this zero-tolerance approach extends to the online world," said Jacinta Allan, education minister in Southern Victoria.
Allan said that all students have the right to learn in a safe and supportive learning environment.
"This includes making students' experience of the virtual world of learning as safe and productive as possible," she added.
UK children's charity the NSPCC is also taking up the online fight against bullying, setting up shop in the virtual world of Habbo Hotel for three months.
The NSPCC hopes to reach out directly to children and push its message of anti-bullying through a series of activities and events.
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