How the Online Safety Bill could change liability rules

In February 2022, we published a new paper exploring the critical importance of intermediary liability protections and the likely catastrophic impact of changes to them.

You can read our report in full here.

The upcoming Online Safety Bill threatens to rewrite rules around when digital firms are liable for the actions of individual users.

But these are critical to the internet economy and form the bedrock of the UK’s success as an innovation hub as current intermediary liability 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 enabled the thriving digital economy we all benefit from to develop.

Far from being a minor tweak that will only seriously affect large social media platforms, changing the intermediary liability framework would be like removing a crucial jenga piece – the entire tower of the internet economy will come tumbling down.

But our concern with the unintended effects of the Online Safety Bill don’t stop there.

Taken to its fullest extent, proposals could see almost 300,000 firms, overwhelmingly small or micro-businesses, regulated under this new regime with direct compliance costs of a crippling £2.5 billion a year.

This is a significant departure from where the UK is at present and would make the UK a global outlier in how liability is policed and enforced online.

The framework provided for by the EU eCommerce directive has underpinned the success of new and growing UK digital firms for the last two decades and has offered firms both certainty and flexibility to operate across global markets.

In order to protect the UK’s economic position and support post-pandemic recovery and growth, the draft Online Safety Bill needs significant reworking to bring it in line with historic global norms around online liability, as well as ensure that small firms and growing startups are not adversely burdened.