Latest tech crackdowns have more bark than bite

The threat of onerous new fines could speed up the process. If content is not policed properly, British regulator Ofcom proposes fining companies £18 million ($32 million) or 10 per cent of global turnover. The EU envisages penalties of up to 6 per cent.

The impact depends on whether fines target an individual business unit, such as Facebook’s WhatsApp, or the entire group. WhatsApp would be liable to pay out very little. Under a worst-case scenario, Facebook could face combined fines of more than $US13 billion ($17.2 billion) on $US83.5 billion of expected sales this year.

This is unlikely. Ofcom’s biggest fine to date has been a £50 million charge to Royal Mail, Briain’s stolid postal service. The bark of watchdogs is worse than their bite.

The second threat – that non-compliant services could be blocked from Britain – would spur a backlash from users. The plan, meanwhile, feebly fails to define legal but harmful content.

Content, privacy and competition are three prongs of regulatory interest in tech. The rolling clampdown has already curbed M&A, increased costs and forced companies to reveal more data.

The intersection between free speech and malignant expression will be as grey as ever in the wake of these latest rules. But the rapid scaling up of enforcement starkly demonstrates how public goodwill towards big tech has collapsed.

Financial Times