Online Safety Bill May Pose Risk To Startups, Suggests Regulator Boss

The head of the Digital Regulation Cooperation Forum (DRCF), designed to oversee the streamlining of online regulatory matters, has waded into the debate about the government’s controversial ‘Online Safety Bill.’

The DRCF was formed in July 2020 by three UK regulatory bodies, namely the Competition and Markets Authority (CMA), the Information Commissioner’s Office (ICO) and the Office of Communications (Ofcom).

But now Gill Whitehead, the first head of the DRCF, has spoken with the Financial Times about the risks associated with the Government’s Online Safety Bill for the small business community.

Startup risk

The government last month amended the Online Safety Bill (OSB) after pushback and demands for changes by MPs and peers, as part of its pre-legislative scrunity.

The OSB passed its second reading in parliament last week, and it contains a number of measures to address a range of online harms, including child abuse and bullying.

It also contains a legal duty for firms such as Facebook, Twitter and Google, obliging them to take initiatives and measures to remove illegal content, and to report it to authorities.

Tech executives face jail sentences for failing to adhere to the new regime.

Ofcom could also levy unprecedented fines of up to £18m or 10 percent of global turnover

But Gill Whitehead is concerned that the OSB threatens to weigh down small businesses with new costs associated with content moderation, as well as potential hefty fines for breaching rules.

Whitehead’s stance is important, as the DRCF will have an important role in coordinating how the controversial bill is implemented.

She told the FT that emerging start-ups may struggle with complying with the upcoming law, stifling their ability to take on established tech groups.

“The online safety bill could have an inherent tension with competition because there’s a cost to complying with the bill that might be prohibitive for smaller firms,” she told the Financial Times.

“Unless we work through those things ahead of time, then we leave those tensions on the table and that slows things down for business,” Whitehead added. “By working together, we can help accelerate.”

New regulatory framework

Under the UK’s new regulatory framework, Ofcom will have the authority to audit algorithms that control users’ experience online, the FT reported..

Ofcom said it would require £44mn next year, as well as 300 extra staff, to fulfil its duties set out in the online safety bill, something Whitehead said presented a “hiring challenge” because of talent shortages across the tech sector.

The DRCF published a paper on Thursday, the FT reported, setting out possibilities for regulating algorithms with accredited third-party auditors, similar to financial institutions.

“There are no clear standards [for algorithms], so there’s no industry consensus of what good looks like,” she reportedly said.