The Online Safety Act is kicking in and the reality of having an internet governed by Ofcom is starting to materialise; no matter what the Act’s advocates say, this reality isn’t pretty. Regulations like the Online Safety Act make Britain a bad place to do business and to be online, with two recent stories illustrating exactly how.
The first is the news that Sam Altman’s OpenAI, the organisation behind ChatGPT, will not launch its new text-to-video AI tool, Sora, in the UK. Britain, according to OpenAI, is no longer a good place to operate AI technology, thanks to the Online Safety Act, which has given Ofcom huge powers to regulate online communications, including the use of generative chatbots, in which OpenAI specialise.
This puts Britain in the same sorry position as the European Union, whose strict AI regulations have had the double effect of suffocating any domestic European AI industry and deterring global innovators in AI from offering their products in Europe. This is more embarrassing as, only recently, Britain could boast that it had a more permissive regulatory regime for AI and this is why Google’s AI tool, Gemini, was available in the UK but not in the EU. Thanks to the Online Safety Act, we have lost this competitive advantage. We have chosen to leave the EU, then introduce regulations which keep us stuck in the Brussels quagmire.
The second case is smaller but could be repeated thousands of times over in the future. The manager of the London Fixed Gear and Single Speed forum announced that he would shut the forum because of the Online Safety Act. As the manager of an online forum with around 70,000 members, the new law means he is personally liable for the posts on the site, and the costs of complying with the new laws mean maintaining such a forum is simply not worth the time and risk.
The manager, known as Velocio on the site, wrote:
I can’t afford what is likely tens of thousand to go through all the legal hoops here over a prolonged period of time … this is not a venture that can afford compliance costs… what remains is a disproportionately high personal liability for me, and one that could easily be weaponised by disgruntled people who are banned for their egregious behaviour (in the years running fora I’ve been signed up to porn sites, stalked IRL and online, subject to death threats, had fake copyright takedown notices, an attempt to delete the domain name with ICANN… all from those whom I’ve moderated to protect community members)… I do not see an alternative to shuttering it.
Is he being risk averse? Perhaps. We do not know how consistently this law will be enforced, after all. However, the expansive nature of this law is clear, and Velocio will hardly be the only person running an online message board in his free time to think that it isn’t worth the hassle anymore. The message to tech companies and forum managers is the same: don’t bother doing business in Britain. It’s just too difficult.
Before this law was enacted, the Government was warned that these kinds of outcomes were possible. Think tanks, tech industry associations and free speech campaigners all warned that this would cause a chilling effect, stifling the online economy, eroding freedom of speech online, and deterring investment in Britain. The Government – then Conservative, but with full support of Labour in opposition – laughed these concerns out of the room. How wrong they were.
Government ministers even suggested that the new laws would be good for the economy because it would encourage a boom in the online safety-tech sector. That is, a sector entirely dependent on enforcing government regulations. Former minister Paul Scully boasted in 2023 that ‘The UK safety tech sector is meeting this challenge. It is one of the fastest growing tech sectors in the UK, with revenues increasing 20% in the last year alone to £456m, and it now employs over 3,300 staff across the UK.’
No wonder Britain’s productivity remains flat when government ministers boast about the revenues of a rent-seeking sector delivering the state’s objectives, instead of finding ways to increase genuine innovation and productivity in the private sector.
While it would be better if the Online Safety Act were never introduced, it was supported by the vast majority of parliamentarians. The Act’s advocates also claimed that the law commands some 80% public support, according to YouGov data. It was inevitable that some kind of regulation was on its way, and it was understandable that Parliament decided to listen to the concerns of many parents who feared for their children’s wellbeing in the social media age.
But the Online Safety Act being implemented today was neither inevitable nor desirable. Parliament has given a green light to Ofcom to prosecute speech across the whole internet. Ofcom has announced a litany of 40 new requirements for all online platforms to follow, proudly saying that ‘this is just the beginning’ and they should expect more rules in the years to come. Indeed, in its letter to AI companies, Ofcom says that it will demand named executives be accountable for online harms and raises the threat of hefty fines to those who do not comply. If only the state embraced accountability in the same way.
Following the summer’s riots, the Government seeks new ways of strengthening this law to suppress speech online. This is regulatory decadence at its worst. Ofcom is becoming one of the most powerful regulators in the country, and one of the strongest signs to stay away from the British economy. Until these regulators are brought to heel and these laws repealed, British prosperity will continue to suffer.
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