Draconian web rules ‘will kill UK tech firms’ and would be an ‘obstacle’ to new start-ups

Draconian new rules designed to make the internet safer for children could deliver a ‘killer blow’ to British technology start-ups, a lobby group warns today.

The controversial code, drawn up by the Information Commissioner’s Office, applies too broadly and will be a ‘serious obstacle to growth’, the group said.

The Coalition for a Digital Economy, known as Coadec, also warned the code will ‘destroy’ smaller firms.

The group, which represents UK technology start-ups, said the attempt to protect children online could backfire and prompt tech firms to suck up even more data about adults and children alike.

And, in a warning that will alarm many parents, it said the measures could restrict UK children to a sanitised version of the internet ‘largely designed’ by a handful of big companies.

Under the proposed ICO rules, web firms will be forced to introduce strict age checks on their websites – or treat all of their users as if they are children.

The code is so stringent that critics fear adults could end up being forced to demonstrate their age for virtually every website they visit – or have the services that they can access limited as if they were under 18.

They may have to log in every time they visit a commercial news website, browse holidays, read a blog, or access shopping sites.

Companies that do not stick to the new rule will face fines of up to 4 per cent of their global turnover. In the case of Facebook, this would be £1.67bllion. 

Yesterday, in a strongly-worded letter to the Information Commissioner, Coadec’s executive director Dom Hallas warned that ‘most start-ups’ would end up putting age gates in front of their websites.

He said the majority of firms cannot afford to launch standalone children’s versions of their sites, and are unwilling to treat all their users as if they are children because their business models depend on being able to collect user data.

Treating all users as if they are children would ‘render most business models irreparably damaged,’ Mr Hallas said.

Only the biggest tech companies could afford to run parallel versions of their websites for children, so under-18s would effectively have their version of the web designed by a handful of companies.

‘It will close off access to a huge number of start-up services to those under the age of 18,’ the Coadec chief said.

In a warning that is likely to alarm many privacy campaigners, he added that the ‘default’ age-gating will ‘mean a vast increase in data collection from all kinds of providers of online services – who would be required to seek age verification from all their users.’

The warning comes amid growing controversy over the proposed ICO rules, which could come into force as early as the autumn.

Yesterday former culture secretary John Whittingdale warned that they will have a ‘chilling effect’ on smaller UK tech companies and that it was ‘mad for the ICO to proceed with this’ at this stage.

An ICO spokesman said: ‘We are aware of industry concerns. We’ll be considering all the responses we’ve had as well as engaging further.’