Changed government should not impact counter fraud elements of Online Safety Bill – Ofcom

The election of Liz Truss as Tory party leader and prime minister early last week (5 September 2022) should not impact on the Online Safety Bill’s counter fraud measures, an Ofcom spokesperson has said.

Speaking at last week’s Fraud Charter roundtable (6 September 2022) – hosted by Insurance Times and sponsored by Carpenters Group – Dan Mount, principal for online safety policy at Ofcom’s broadcast and online content group, told counter fraud experts that “there is broad cross party consensus on the need to introduce more accountability to the operation of online services and to take proportionate steps to mitigate harm”.

Ofcom – officially The Office of Communications – is the government-approved regulatory and competition authority for the broadcasting, telecommunications and postal industries in the UK.

The regulator will have responsibility for implementing new regulations that arise from the signing into law of the Online Safety Bill, which will introduce rules for websites and apps such as social media, search engines and messaging platforms.

Under the bill, these companies will have new duties to protect UK users by assessing and responding to risks of harm and taking steps to address them.

Earlier this year (9 March 2022), legislators amended the bill to include protections against fraudulent advertising, unlicensed financial promotions and fraudsters impersonating legitimate businesses.

These requirements would require social media platforms, for example, to put systems in place to prevent or minimise spoof ads online and remove them where possible.

The bill is currently in the report stage in the House of Commons, which provides opportunities for Members of Parliament to scrutinise the text of a bill and suggest further amendments prior to its third reading.

New government review

Last week (7 September 2022), new UK prime minister Liz Truss confirmed in a parliamentary debate that her government would proceed with the passage of the Online Safety Bill.

Responding to a question, Truss said: “We will be proceeding with the Online Safety Bill.

“There are some issues we need to deal with – what I want to make sure is that we protect the under-18s from harm and that we also make sure free speech is allowed, so there may be some tweaks required, but… we need to protect people’s safety online.”

Debate in the Tory party has raged over the bill’s impact on free speech, with some on the right of the party suggesting that restrictions on “legal but harmful” speech contained within the current drafting of the bill could curtail freedom of expression.

Over the summer, international trade secretary Kemi Badenoch said the bill was “legislating for hurt feelings” by limiting the scope of what could be said online if someone deemed it offensive.

Counter fraud measures

Mount confirmed that while “there are various debates around certain elements of the bill, particularly the legal but harmful content” he didn’t believe this would “affect the illegal content and fraud side of things”.

However, Mount – who is leading the development of Ofcom’s regulatory approach to addressing online fraud and scams – did note that the regulator was conscious that it should act proportionately in its regulation of online spaces so as not to over-incentivise online platforms to remove content.

He explained: “There is balance needed because platforms are in a position where they could face 10% of turnover fines for failing to remove content and there’s a risk that they will be over-incentivised to take down lots more content, including potentially legitimate content.

“That would obviously not be a good outcome because we don’t want to result in the constriction of legitimate expression and business activity.”

Mount added that a single item of fraudulent content on a platform would not trigger a fine because the regulator is aiming to oversee the systemic implementation of “protective systems and processes that an online service has in place” rather than enforce fines for small amounts of content proscribed by the bill.

He explained: “There are limits to human moderation and content moderation systems – platforms can never be 100% effective. We want them to be as effective as they could reasonably be expected to be.”

Implementation schedule

Ofcom currently hopes to have its illegal content codes and company risk assessment guidance for the bill’s requirements in place by early 2023, following the signing of the bill into law via Royal Assent.

This schedule would include the regulator publishing draft guidance, which would then be consulted on to allow Ofcom to fine-tune its regulations before a final statement that would mean codes governing illegal content would come into force.

These codes would cover user generated content on all services, including fraud on all online services within scope.

However, Mount explained that the fraudulent advertising duty would take “slightly longer” to implement because the bill was only applicable to certain services that would require further legislation to clarify.

Because of this, Mount predicted that codes on the regulation of fraudulent advertising would come into force “towards mid-2025”, following consultation on the subject sometime during 2024.

These schedule predictions were “indicative milestones” intended to provide the counter fraud sector with a “general picture”, clarified Mount.