Online Safety Bill: UK tech superpower dreams could be crushed by over-regulation
New rules in the European Union’s Digital Services Act (DSA) are set to come into force tomorrow, while the UK’s Online Safety Bill (OSB) remains mired in parliamentary proceedings, reigniting the regulation debate among tech companies and industry experts.
The OSB, which aims to enhance online safety and security for users within the UK, is still navigating its way through parliament, and is currently in its final reading in the House of Lords.
It was first introduced in parliament in March 2022; the DSA was approved just a month later.
Under the DSA, major players like Meta, Apple and Google must now adhere to regulations that restrict certain user-targeting practices and improve the transparency of internal data.
Lengthy delays to the OSB and its controversial rules, especially surrounding end-to-end encrypted messages, have riled up tech companies. Discontent is still simmering.
Andy Yen, chief executive of Proton, an end-to-end encrypted email service, told City PM he is “deeply concerned” about the current state of the OSB.
“Frankly, lawmakers seem unwilling or unable to understand the concerns that almost the entire technology industry, as well as numerous other groups, have about the threats to end-to-end encryption, and by extension the threats to privacy and business in the UK,” he said.
Under the new laws, authorities could force communication providers like Proton and WhatsApp to scan online messages sent in the UK in order to detect criminal activity.
Yen warned that his company may have to “take a long hard look at its future in the UK”, as it refuses to compromise on users’ privacy.
Will Cathcart, head of WhatsApp at Meta has also previously chimed in: “No one, including WhatsApp, should have the power to read your personal messages.”
“People want their messages to remain private and secure. WhatsApp will not weaken the security we provide,” he added.
A government spokesperson said: “We are unambiguously pro-innovation and pro-privacy, however we have made clear that companies should only implement end-to-end encryption if they can simultaneously prevent abhorrent child sexual abuse on their platforms.
“The Online Safety Bill does not give Ofcom or the government any powers to monitor users’ private messages. As a last resort, and only when stringent privacy safeguards have been met, the Online Safety Bill will enable Ofcom to direct companies to either use, or make best efforts to develop or source, technology to identify and remove illegal child sexual abuse content.”
Cumbersome regulation?
While both the EU and UK online acts put the onus on digital platforms to curb harmful content, the OSB is more “prescribed” when it comes to protecting minors, according to Ben Dunham, a digital media and technology lawyer at Osborne Clarke.
Some industry experts have suggested that the significantly more detailed and cumbersome regulation in the UK could undermine the country’s ambitions to become a tech superpower.
Ed Ratcliffe, head of public affairs at TechUK, took this view, telling City PM that while his organisation supports the legislation’s objectives, a number of last-minute additions to the bill have yet to undergo in-depth review.
He said a combination of “vague obligations” and the potential for severe sanctions could deter investment and innovation while placing a “significant burden” on small businesses trying to grow.
The UK “cannot ignore” online safety issues in its quest to become a tech superpower, said Antony O’Loughlin, director head of litigation and general counsel at Setfords.
But he argues the OSB must strike a balance between this and the “commercial viability” of the UK’s tech sector under the new regulations.
Out of sight, out of mind
It’s not just about the stringent rules either. During the long wait for the bill to be approved, tech companies may simply be forgetting about it, Jo McLean, managing associate at City-based law firm Addleshaw Goddard pointed out.
McLean said the delay is impacting how companies prioritise which regime to base their governance structures and processes on.
“The tech giants have had since last October when the DSA was finalised to plan and prepare for implementation,” explained McLean, but “while the OSB remains up in the air it is not the priority”.
However McLean added that, in the long run, the delay is unlikely to “significantly hinder” the UK’s tech superpower dream.