Tech giants face £70m charge to police online safety laws

Tech giants will be charged £70m a year to cover the costs of Britain’s new internet laws that go into force in the coming weeks.

Ofcom is consulting on a levy on major internet companies’ worldwide revenue to meet the extra costs of enforcing the Online Safety Act, which it estimates at £70m a year.

It said in consultation documents that it expected around 20 companies that meet a revenue threshold to contribute.

The regulator has suggested a fee of 0.02pc of “qualifying worldwide revenue”, which could mean the biggest tech companies paying tens of millions.

It estimates that the largest five providers – likely to be Meta, Google, Microsoft, Apple and TikTok – would account for around 91pc of the qualifying revenue, thus paying almost all the cost.

That could mean the largest providers paying in excess of £10m each to pay for the Act. Ofcom is consulting on the proposals ahead of plans to introduce them in 2026.

The sweeping Online Safety Act was designed to keep children safe. It will start to be implemented in January when some adult sites will be required to enforce age checks.

A much wider swathe of sites will then be covered from March, when social networks and search engines will be required to start complying with illegal harms duties.

The fees will be the latest payment required for major tech companies operating in Britain, adding to the digital services tax, which is a 2pc tax on UK sales that raised £700m last year.

Ofcom said it expected the new Online Safety levy to be charged to companies that have more than £250m in qualifying worldwide revenue, meaning income related to the services covered by the Act.

Sales from Google’s search engine, for example, might be covered, while that from selling mobile phones would not. Those who make less than £10m in the UK would be exempt.

While the fees are a small charge in comparison to the worldwide revenues of big tech companies, they could be a point of contention arising from the laws.

In December, some providers of smaller websites said they would be forced to shut down due to the costs of complying with the legislation.

Enforcing the Act could also create tensions with Donald Trump’s administration. Elon Musk, who owns X and is an influential supporter of Mr Trump, is believed to oppose the laws.

Matthew Sinclair, of the Computer & Communications Industry Association, which represents the technology industry, said: “The Government has rightly prioritised innovation and tech investment as an opportunity to drive economic growth.

“Regulators and ministers considering new legislation need to support that by doing all they can to minimise the deterrent created by the cumulative burden of compliance red tape, restrictions on improvements in digital services and these kinds of charges.”

Ofcom declined to comment.