New Digital Safety Laws Will Penalize Social Media Apps If They Don’t Implement Safeguards Against Illegal Content

New Digital Safety Laws Will Penalize Social Media Apps If They Don’t Implement Safeguards Against Illegal Content

  • 18.03.2025 09:18
  • digitalinformationworld.com
  • Keywords: Illegal Content, Market Growth

New UK digital safety laws will penalize social media apps with hefty fines if they fail to implement safeguards against illegal content like child abuse and fraud. Companies could face up to 10% of global revenue in penalties or service removal. The Online Safety Act requires robust measures to protect users, including enhanced moderation systems and new reporting channels to tackle online dangers.

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Estimated market influence

Social Media Apps

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Analyst rating: N/A

If they don't implement safeguards against illegal content, they will face major fines.

Reddit

Reddit

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Analyst rating: Buy

Mentioned as one of the companies linked to the Online Safety Act.

Google

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Analyst rating: N/A

Could face 10% global revenue fines for non-compliance.

X (Twitter)

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Analyst rating: N/A

Included in the list of companies under the Online Safety Act.

Facebook

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Analyst rating: N/A

Part of the 100k services linked to illegal content moderation.

Tech Giants

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Analyst rating: N/A

Overall, tech giants are being penalized for not prioritizing safety measures.

Context

Analysis of New Digital Safety Laws: Business Insights and Market Implications

Overview

  • New Online Safety Act in the UK: Imposes strict measures on social media apps to prevent illegal content such as child abuse, terrorism, fraud, and explicit material.
  • Scope: Affects over 100k services including major platforms like Reddit, Google, X (Twitter), and Facebook.

Financial Penalties

  • Fines: Companies can face penalties of up to 10% of global revenue, which could amount to millions for tech giants like Google and Meta.
  • Potential Shutdowns: Severe breaches may lead to removal of entire services.

Competitive Dynamics

  • Regulatory Scrutiny: Tech giants are under increased pressure to prioritize safety, potentially altering market dynamics.
  • Market Impact: Smaller platforms may face disproportionately higher costs relative to their size.

Strategic Considerations

  • New Code of Conduct: Includes requirements such as:
    • Default privacy settings for children’s profiles and location sharing.
    • Enhanced tools for women to block harassment.
    • Implementation of hash matching technology to identify illegal content.
  • Fraud and Abuse Prevention: Companies must establish dedicated reporting channels and systems to combat scams, terrorism, and revenge porn.

Market Trends

  • Shift in Priorities: The act emphasizes safety over free speech, signaling a regulatory shift towards user protection.
  • Global vs. Local Compliance: US lawmakers (e.g., JD Vance) criticize the law as a threat to free speech, but the UK remains committed to enforcing it independently.

Long-Term Effects

  • Regulatory Precedent: The act sets a framework that could influence similar regulations globally.
  • User Trust and Behavior: Enhanced safety measures may increase user trust but could also lead to changes in platform usage patterns.

Regulatory Landscape

  • Enforcement: Ofcom will monitor compliance, particularly focusing on child abuse prevention measures.
  • Non-Compliance Risks: Failure to implement safeguards could result in fines or service removals.

This analysis highlights the significant financial and operational risks for tech companies under the new regulations, while also emphasizing the potential long-term implications for user safety and market dynamics.