Tech giants warn of mass exit from UK over online safety act costs

In the UK, tech giants such as Elon Musk's X and Google have raised significant concerns regarding the impending Online Safety Act. This legislation is set to enforce age verification and limit exposure to harmful content on online platforms, but its associated funding mechanism has received backlash from industry leaders. The UK's communications regulator, Ofcom, plans to raise approximately £70 million annually to enforce the new regulations. Higher fees would primarily impact the five largest service providers—Meta, Google, Microsoft, Apple, and TikTok—who would face charges based on 0.02 percent of their global revenue. These tech companies fear that such fees could threaten their business models in the UK. Google highlights that relying on worldwide revenue for charges risks stifling growth in the UK market and might deter new services from entering. Similarly, Musk's X cautions that the fees may prevent global providers from launching regulated services in Britain. Uber also expressed worries regarding the potential withdrawal of companies from the UK market due to these financial obligations. This pushback from Silicon Valley coincides with a climate of increasing regulatory scrutiny under Donald Trump's presidency. Musk, a known critic of the UK’s online safety measures, believes there may be leverage to negotiate changes in the proposed act as part of trade discussions with the U.S. Furthermore, companies face severe penalties of up to 10 percent of their annual revenues if they do not comply with the new laws, which has intensified their resistance. Ofcom defenders assert the necessity of these measures to ensure compliance and maintain a safe online environment, yet tech firms argue this will hinder market attractiveness. The dialogue continues as the UK government appears open to reevaluating certain provisions of the act.