techUK statement on an amendment to introduce expanded senior management liability provisions in the Online Safety Bill

15 Jan 2023 09:46 PM

techUK and our members have worked closely with the Government and MPs on the Online Safety Bill. This is a much-needed piece of legislation which will create a regulatory framework to enable tech companies and the regulator, Ofcom, to work effectively to protect children online.

According to the Government’s own estimates more than 25,000 companies will be in scope of this new legislation. A key test of the Bill’s success will be whether it can enable these 25,000 in scope companies and the regulator to make quick and effective decisions.

The Online Safety Bill can meet this test if it is clear about what it is asking companies to do; if it enhances existing company systems and processes and if it avoids an over- expansion of scope.

Parliamentarians have proposed amendments to introduce expansive and wide-ranging senior management liability provisions to the Online Safety Bill.

As drafted, the proposed amendment (New Clause 2) creates problems for the regime which technology firms of all sizes believe will not advance the Bill’s objective to deliver an effective regime to protect children online but will damage the UK digital economy.

The Bill as drafted does have ‘teeth’ that will ensure compliance. In its unamended form, the Online Safety Bill contains senior management liability for non-compliance with Ofcom information requests and fines amounting to 10 percent of a company’s global turnover.

These sanctions are significant and create powerful incentives for compliance.

The extension of senior management liability as proposed in New Clause 2, we understand, would create liability for general non-compliance without any specific escalation process.  

Such an extension would create significant legal jeopardy for firms that will be difficult to manage. This we believe will have negative effects on how the regime will operate as well as on the wider UK digital economy.

The risks we envisage would include changing the UK’s risk profile for investors and new businesses as senior managers face the prospect of criminal prosecution even when using their best endeavours to comply with the Online Safety Bill.

The proposed changes will create unecessary disincentives for senior management to be based in the UK, undermining the UK’s potential as a regional or global tech hub, an area where the UK has done well to attract significant volumes of investment as well as senior leaders and decision makers.

Further, such a widely drafted approach to senior management liability risks upsetting the balance achieved in the Online Safety Bill between protecting children online and upholding freedom of expression. This may push some companies towards a model of general monitoring and over-removal of content due to fears over liability.

techUK is working with MPs, the Government and our members to ensure that amendments to the Online Safety Bill help the Bill meet its objectives to create a safer internet while also supporting a vibrant digital economy.