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Major technology companies will be required to pay £70 million annually to support Britain’s groundbreaking internet safety legislation, set to commence in the coming weeks. The UK’s communications regulator, Ofcom, has initiated consultations regarding a levy on worldwide revenue from prominent internet companies to cover the implementation costs of the Online Safety Act.
The proposed fee structure suggests a 0.02 per cent charge on qualifying worldwide revenue, potentially resulting in substantial payments from the sector’s largest players. Ofcom’s documentation indicates approximately 20 companies meeting the revenue threshold will contribute, with the top five providers – likely Meta, Google, Microsoft, Apple and TikTok – accounting for 91 per cent of the qualifying revenue.
These industry giants could each face payments exceeding £10 million to finance the Act’s enforcement. The regulator aims to implement these charges by 2026, following the ongoing consultation period. The comprehensive Online Safety Act, primarily designed to enhance child protection online, will begin its initial phase in January by mandating age verification on adult websites.
The legislation’s scope will expand significantly in March, encompassing social networks and search engines under illegal harms compliance requirements. This new levy adds to existing financial obligations for tech companies operating in Britain, including the current digital services tax, which generates £700 million annually through a 2 per cent charge on UK sales.
Companies generating more than £250 million in qualifying worldwide revenue will fall under the levy’s scope, while those earning less than £10 million within the UK will receive exemption. Though these fees represent a modest proportion of tech giants’ global earnings, they have sparked debate within the industry, with smaller website operators expressing concerns about operational viability under the new regulations.
The implementation of these measures could potentially create diplomatic tensions, particularly with the United States. Notable opposition includes Elon Musk, X’s owner and prominent Trump supporter, who is understood to harbour reservations about the legislation’s requirements.
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