Online safety and social media regulation are gaining momentum on both sides of the Atlantic – are the tech giants ready? | Dechert LLP

When the UK government first introduced the Online Safety Bill (the “Invoice“) in Parliament, he hailed the bill as creating “the world’s best online safety laws” who “marked an important step in the fight for a new digital era”.1 The bill is currently in committee stage, where it is being considered by MPs who have heard testimony from tech giants including TikTok and Twitter, alongside online safety advocates like the National Prevention Society. cruelty to children and the Center for Countering Digital Hate.

If passed, the bill will create a new regulatory and enforcement framework requiring online content providers.OCP“) to combat illegal and harmful content on their services. It mirrors recently proposed laws in the EU and the US, and has the potential to be a leading legislative model for other countries seeking to improving online security by regulating OCPs.

This OnPoint summarizes the main elements of the UK bill and examines the global trend towards increased regulation of OCPs, and its impact on OCPs providing online services around the world.2

New regulatory obligations

At a minimum, the bill will impose legal duties of care on social media platforms, online forums and search engines that host user-generated content as well as sites offering adult content.OCP“) at:

  • Assess their user base and risks of harm to users from the content of the service (and update their risk profile as the risk profile changes);
  • Take active steps to mitigate the risk of harm to individuals resulting from illegal content and activities, and to services accessed by children, from activities harmful to children (what will constitute harmful activity will be defined in the regulations) ;3
  • Implement systems and processes to enable reporting of specified types of content;
  • Establish adequate complaints procedures for the specified content; and
  • Put systems and processes in place to ensure criminal content is reported to the UK National Crime Agency.4

The bill also requires the Secretary of State to make regulations specifying the threshold conditions by which OCP services will be classified as Category 1, Category 2A or Category 2B. Additional obligations will be imposed on OCPs providing Category 1 services, including an enhanced obligation to perform and record risk assessments, an obligation to protect the online safety of adult users, an obligation to empower users to better control their exposure to harmful content, and duties to protect content of democratic importance and journalistic content.5 The threshold conditions will be set according to the number of OCP users and the functionality of its services.6

The bill also imposes various obligations relating to transparency, reporting, verification of user identities and payment of fees. The administrative burden on OCPs will be substantial and the government estimates it expects OCPs to collectively spend between £50m and £95m in transition costs, followed by around £290m in costs annually thereafter.seven

Investigation, Enforcement and Sanctions

The bill appoints Ofcom, the UK regulator responsible for regulating communications services, including television, radio and post, with responsibility for the enforcement and oversight of the regime. It gives Ofcom new criminal investigation and enforcement powers, including the power to compel OCPs to provide information and witnesses to attend interviews. It also gives Ofcom new powers of entry, inspection and audit.8 It creates criminal offenses relating to refusal to cooperate with Ofcom’s investigative measures and provides for the possibility of joint liability for parent and subsidiary companies in certain cases where Ofcom deems it appropriate.9 It will also allow Ofcom to apply to English courts for “business disruption orders” requiring OCPs to withdraw services or, in extreme cases, block access to non-compliant OCP services.ten

The Bill does not impose criminal liability on OCPs for failing to comply with their legal obligations, but in such cases Ofcom can impose financial penalties of up to £18m or 10% of eligible worldwide revenue of OCP during the most recent complete accounting period. , whichever is greater.11 Where two or more entities are jointly and severally liable for a penalty, the maximum penalty will be the greater of £18 million or 10% of eligible worldwide group turnover.12

Separately, the bill updates some of the existing communications offices in England and Wales, creating three new communications offenses for (i) sending online threats and harassment, (ii) sending false communications with the intent to cause psychological or physical harm, and (iii) send unsolicited sexually-oriented photos and videos. The aim of these new offenses is to strengthen the protection of vulnerable users and reduce online abuse. The offense of sending false communications will require prosecutors to demonstrate that the person sending the message knew at the time of sending that the message was false and was likely to cause significant psychological or physical harm. to his audience.13 The offense cannot therefore be committed by OCPs whose users publish false information on their platform, unless the prosecution can demonstrate that the OCP knew at the time of sending the message that it was false and likely to cause significant moral or physical harm to its spectators.

Public response

The response to the bill was varied. Gill Whitehead, head of the UK Digital Regulation Cooperation Forum, a new group set up to streamline internet regulation, expressed concern that the law could “burden small businesses with new costs” and stifle important innovation .14 Others think it doesn’t go far enough. The End Surveillance Advertising to Kids coalition points out that the bill does not restrict OCP’s powers to collect and use data to target advertisements to children, unless the advertisement in question falls under the definition. of harmful.15 Whichever side of the argument you agree with, there is no denying that the bill will impose additional administrative and financial burdens on the OCP market.

Global outlook

The UK is not alone in legislating to regulate OCPs. In April, the EU approved the text of a new Digital Services Act (“DSA“) which, like the UK bill, aims to increase the liability of online platforms for illegal and harmful content.16 In addition, the EU has approved the text of a new law on digital markets (“AMD“) which will increase competition by requiring companies that provide browsers, social networks and search engines to be designated as “gatekeepers” (in the sense that they have at least 45 million monthly end users and at least 10,000 active business users per year in the EU) to allow users greater flexibility in terms of uninstalling pre-installed apps, interconnectivity between different apps and services, and reducing targeted advertising.17 The DMA and DSA will be enforced by the European Commission and are currently awaiting formal approval by the EU Parliament and Council later this year.18

Further afield, the United States is also making inroads in this area, following criticism that it has historically failed to regulate large platforms operating in its own backyard.19 In February 2022, US Senators introduced the Kids Online Safety Act to Congress, seeking to impose on OCPs an obligation to prevent the promotion of harmful and criminal activities and to limit exposure to harmful behaviors such as suicide, self-harm, eating disorders and substance abuse. . In fact, the US bill goes further than the UK bill, in that it will require OCPs to give parents greater control to opt out of data mining and algorithmic recommendations.20

Final remarks

Some critics of EU and UK lawmakers say the trend is leaning towards protectionism but, as the US introduces its own federal bill, that argument crumbles. Regardless of your perspective, it is clear that OCP regulation in the near future is a legal certainty, and OCPs need to start preparing quickly. The financial costs and the administrative burden will be significant. The UK government intends to raise funds to cover the costs of regulation in the UK from industry in the form of fees.21 Add to this the costs of risk assessments, implementing mitigation measures, transparency reporting and cooperating with regulatory investigations, the financial cost to OCPs will rise sharply as these projects progress. law will come into force. PCOs are already feeling the pinch as investors fret about the potential impact of proposed laws on PCO profitability.

Footnotes

1) Press release “First global online safety laws introduced in parliament», March 17, 2022.

2) Unless otherwise stated, all quoted provisions are taken from the Online Safety Bill, Bill 4, 53/8.

3) Section 53.

4) Explanatory Notes to the Online Safety Bill, Bill 258-EN (“Explanatory Notes”), paragraph 19.

5) Part 3, ss 12 to 16.

6) Annex 10, paragraph 1.

seven) Online Safety Bill Impact Assessment, Full Economic Assessment, page 2, see here.

8) Annex 11.

9) Section 161 and Schedule 14.

ten) Explanatory Notes, paragraph 573.

11) Section 122(4)(1).

12) Section 122(5)(2).

13) Section 151.

14) Financial Times, Online safety bill risks stifling start-ups, says head of UK tech regulatorApril 28, 2022, see here.

15) Coalition End Surveillance Advertising to Kids—written evidence to the House of Lords Communications and Digital Committee inquiry into digital regulation, dated October 2021 (DRG0017), see here.

16) See here.

17) See here.

18) See here.

19) See for example the online article from Brookings “US Regulatory Inaction Opened Doors for EU to Step Up Internet», March 29, 2022.

20) See here.

21) See here.

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