Draft Online Safety Act 2023 (Qualifying Worldwide Revenue) Regulations 2025

Feryal Clark Excerpts

Tuesday 2nd September 2025 General Committees

[The Chair]

Before I call the Minister to move the motion, I point out that the regulations before us are fairly narrowly drafted and this is therefore not the place for a more discursive debate on the Online Safety Act 2023.

[The Parliamentary Under-Secretary of State for Science, Innovation and Technology (Feryal Clark)]

I beg to move,

That the Committee has considered the draft Online Safety Act 2023 (Qualifying Worldwide Revenue) Regulations 2025.

It is a pleasure to serve under your chairmanship, Dr Murrison. I will first give a very brief background to why the Government are laying this statutory instrument. As the Online Safety Act sets out, Ofcom may make regulations setting out how the qualifying worldwide revenue of a provider of a regulated service is to be determined, and the corresponding qualifying periods. The Act requires that Ofcom sends a draft to the Secretary of State for Science, Innovation and Technology; the Secretary of State’s role is limited to laying the draft before Parliament. As such, the Secretary of State laid these regulations before Parliament on 26 June.

The draft regulations are a critical component of establishing the fee regime whereby providers of regulated services pay a fee to Ofcom to fund the costs of online safety regulation. They are also an integral part of informing a penalties regime that will act as a suitable deterrent to non-compliance.

The qualifying period for calculating the QWR is defined as the calendar year two years prior to the fee-charging year. For example, for the 2026-27 charging year, the qualifying period will be 1 January to 31 December 2024. Under the Act, non-compliant providers may be subject to penalties of up to £18 million or 10% of their QWR, whichever is higher.

The Government are committed to a fee regime that ensures that the burden of paying for online safety regulation falls not on the taxpayer, but on the providers in scope of the Act—a principle that was discussed in great detail and that received cross-party support during the passage of the legislation through Parliament. In a policy statement that was published on 26 June and was informed by a public consultation, Ofcom recommended to the Secretary of State a qualifying revenue threshold of £250 million, saying that this

“strikes the right balance between proportionality and workability, spreads the fee burden across a range of providers and serves the objective of limiting the impact on SMEs.”

The Secretary of State will consider that advice carefully and set the final threshold in a separate SI later this year.

The Secretary of State will also consider any exemptions to the fee paying, as recommended by Ofcom. Ofcom will then set out its final policy decision and a statement of charging principles, and publish final guidance to providers. It intends to begin invoicing providers for fees in 2026-27.

The Act gives Ofcom, as the independent regulator, the responsibility for drafting these regulations. The Government are committed to establishing a fee regime to ensure that the cost of online safety regulation is borne by the companies that receive revenue from the regulated online services. These regulations are fundamental to allowing Ofcom to do that. If approved today, they will come into force later this year. With that, I commend the draft regulations to the Committee.

--- Later in debate ---

[Feryal Clark]

I thank both Opposition spokespeople, the hon. Member for Harpenden and Berkhamsted and the hon. Member for Runnymede and Weybridge, for their very positive approach and their comments on the SI. I also thank the right hon. Member for South Holland and The Deepings for his contribution. The Government appreciate the wealth of knowledge that the House brings to debates on online safety. Members made a vital contribution to the Online Safety Act during its passage, and they continue to dedicate their time and expertise to ensure that the Act is implemented to its full potential.

Today, many of Ofcom’s powers are in effect and platforms are now legally required to protect children from harmful content. This includes rolling out highly effective age assurance to tackle pornography and content relating to suicide and self-harm, and eating disorders. The instrument will bring us one step closer to a fully implemented online safety regime by ensuring that companies raising revenue from online services cover the costs of regulation, not the taxpayers, and that those companies take responsibility for keeping children safe online. The hon. Member for Newton Abbot asked about similarities with GDPR. I was not around when the legislation went through, so I shall have look into that and get back to him in writing.

I will take no more of the Committee’s time. I hope the Committee agrees with me on the importance of introducing regulation to implement the fee regime.

Question put and agreed to.