Penalties For Breaching The UK Online Safety Act

Uploaded on 2025-07-29 in NEWS-Cybersecurity News, FREE TO VIEW, BUSINESS-Services-Law

The UK Office of Communications (Ofcom) has recently published details about how it intends to set the fees and maximum penalties that will apply to the Online Safety Act. The legislation specifies that the costs of Ofcom’s online safety work are to be funded by the technology companies it regulates. This is similar to how Ofcom is funded for its work in the other sectors within its remit, which includes TV & Radio.

While the law came into force with effect from 25th July, Ofcom are still working out the precise details of their regulatory regime, in particular, the likely maximuk level of financial penalties are yet tbe determined, although the process has been outlined.

The Act says that firms’ “qualifying worldwide revenues” (QWR) will be used to focus on the level of fees they will have to pay. When organisations breach online safety rules, they may face financial penalties. The Act provides that QWR is also to be used as the basis for calculating the maximum fines that can be levied.

Ofcom’s Decisions

Ofcom has decided to define QWR as a firm’s global revenue from relevant parts of regulated services, rather than just all revenue that is attributable to the UK, when calculating fees or the maximum penalty for a provider. Ofcom says that it estimates that fees will be equivalent to approximately 0.02%-0.03% of companies’ QWR each year.

There is also a QWR threshold at which companies are required to pay fees be set at £250m per year, but firms whose annual UK revenue is less than £10m are exempt from the fees regime. The threshold will ultimately be for the Secretary of State for Science, Innovation and Technology to decide, and it considers that any threshold figure within a £200 million to £500 million range could be appropriate.

Next Steps

To give the fees regime effect, three statutory instruments are required to be considered by Parliament, two of which have been submitted to Parliament already. In addition, Ofcom has formally submitted its advice to the Secretary of State, who will ultimately decide on the threshold for the payment of fees and make the final statutory instrument.

Now that Ofcom has confirmed its approach, firms should begin actively considering how to calculate QWR. It is clear that Ofcom expects firms to develop a robust approach and to ensure sufficient assurance.

By starting early and embracing a proactive approach, firms can develop a robust methodology to navigate the complexities of the regulation, mitigate risks, and effectively manage their financial obligations.

If you have any questions about this statement, please contact Ofcom on: osfeesregime@ofcom.org.uk.

Image: @Ofcom

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