18 February 2022

The Government’s latest proposals risk crippling the UK’s internet economy

By Camilla de Coverly Veale

Earlier this week the Financial Times published a deeply concerning report suggesting businesses could soon be forced to monitor their services for ‘legal but harmful’ content.

Leaving aside the insanity of asking platforms to police something that law enforcement would have no right to, it’s another example of the Government treating the Online Safety Bill as though it were an isolated attempt to rein in a handful of large social media platforms. This is emphatically not the case. Indeed, by the Government’s own estimates the new regime will affect 24,000 businesses, the overwhelming majority of which are small and micro platforms.

The report suggests the Government is considering a hasty rewriting of intermediary liability protections, the rules which mean platforms aren’t held responsible for third-party and user content they did not create. These protections have provided a clear, viable framework within which online innovation has flourished. From eCommerce to food delivery, restaurant reviews and beauty booking apps, liability protections have helped develop the thriving internet economy. Changing the intermediary liability framework is like removing a crucial piece in Jenga – and be in no doubt, it risks bringing down the entire tower.

Why do these protections matter? To take an everyday example – review sites. Being able to easily and quickly share, often anonymously, experiences of hotels, restaurants, used car dealerships, paintballing centres, countryside hikes and even crappy employers has made navigating life better for everyone. But enabling a builder, hotel or a business to sue RatedPeople, TripAdvisor or Glassdoor for a review they found objectionable? That’s a business killer.

Of course, for tech giants, liability changes are painful but might be a blow worth suffering. If you listen to podcasts you’ll have been bombarded with adverts from Facebook about how they are open to reform of ‘Section 230’ – the equivalent of liability protections in the United States. Of course they are – they have a cash pile to rival a medium-sized Gulf state, half of the Magic Circle law firms on retainer and a certain (newly promoted) former Deputy Prime Minister repeating the same three lines about how they will ‘do better next time’.

The Davids to Facebook’s Goliath don’t have that option. These smaller and more innovative firms couldn’t shoulder the disproportionate compliance costs and profound legal risk just to operate in the UK, meaning that startups with better business practises than Facebook couldn’t compete fairly with Big Blue.

It’s no coincidence that while in the US Facebook have encouraged liability changes, their smaller rivals have created a group to push back against them. It now appears that the Biden administration has listened to their concerns – our own Government would do well to follow suit.

Today Coadec has released a report exploring these issues in further detail, you can access it here


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Camilla de Coverly Veale is Policy Director at The Coalition for a Digital Economy (Coadec).

Columns are the author's own opinion and do not necessarily reflect the views of CapX.