The Cost of Doing Business: Ofcom's Struggle to Collect Online Safety Fines

### The Enforcement Gap

In the world of fintech and regulatory oversight, the efficacy of a penalty is measured not by the number on the invoice, but by the capital that actually leaves the corporate treasury. For Ofcom, the UK's communications regulator, the gap between the two has become a glaring liability.

As *The Register* first reported, Ofcom officials have admitted that the majority of fines issued under the Online Safety Act (OSA) remain unpaid. While the regulator has imposed penalties totaling more than £7 million ($9.4 million) across 11 service providers, the actual recovery of those funds has proven elusive.

Suzanne Cater, Ofcom's director of enforcement, told the House of Lords Communications and Digital Committee that while one payment arrived recently, "realistically the majority have not been paid." When pressed for specifics, Ofcom refused to disclose exactly how many providers are currently in arrears or provide details regarding the most recent payment.

### Offshore Shields and Asset Evasion

From a markets perspective, the struggle to collect these fees highlights a systemic loophole: the disconnect between regulatory jurisdiction and corporate assets. Ofcom's group director, Oliver Griffiths, noted that enforcement has primarily targeted smaller companies within the pornography industry, including a £1.4 million ($1.88 million) penalty issued to 8579 LLC in February.

However, the regulator is finding that when a company possesses no assets within the UK, the process of debt recovery becomes exponentially more complex. Griffiths explained to peers that some services have complied with the OSA's safety requirements after being fined but have simply failed to pay the penalty. This leaves Ofcom in the position of pursuing debt separately—a process that is often futile if the entity is structured to operate entirely overseas.

While the OSA allows courts to order third parties, such as ISPs, to restrict UK access to a site, these business disruption measures are not a tool for debt collection. Ofcom can only invoke these powers if there is continuing noncompliance with the act; they cannot be used solely to recover an unpaid fine.

### The 'Cost of Business' Calculus

For many platforms, a fine is not a deterrent if it can be ignored or absorbed. The current state of OSA enforcement suggests that some providers are complying just enough to avoid being blocked from the UK market, while treating the unpaid fines as a negligible cost of doing business.

Ofcom is attempting to pivot. Griffiths suggested that as the regulator moves toward fining larger companies, the difficulty of collection should diminish. He described the current situation as "acute" but expressed confidence that targeting bigger firms would make recovery less of an issue.

To increase pressure, Suzanne Cater noted that the regulator is beginning to hold senior managers personally liable in specific circumstances. Furthermore, Ofcom told *The Register* it is collaborating with the UK government to explore strengthening its powers, though it maintains that any changes must preserve fundamental rights, including freedom of expression.

### Impact vs. Activity

Ofcom has defended its record by pointing to its volume of activity. A spokesperson stated that the regulator has been "more active than any other regulator in the world" regarding online safety laws. Cater highlighted six active enforcement programs and 40 formal investigations involving over 100 services, including X, TikTok, and Telegram.

Yet, activity does not always equate to impact. Oliver Griffiths admitted to peers that he felt "underwhelmed" by the OSA's effect on online safety thus far. While he cited commitments from Snap and Meta to address grooming, and from X to accelerate the removal of terrorist and hateful content, the broader results remain contested.

This sentiment is echoed by Dame Rachel de Souza, the Children's Commissioner for England, who told peers that children believe the OSA "has made absolutely no difference." De Souza criticized the legislation for focusing on content moderation rather than addressing the harmful and addictive designs of the platforms themselves.

### The Billion-Dollar Benchmark

During the House of Lords hearing, the conversation shifted to the scale of global litigation. Lord James Knight questioned whether a recent US settlement involving Meta—worth up to $18 billion regarding claims that Facebook and Instagram harmed children—should influence Ofcom's strategy.

Griffiths acknowledged the case, noting that it serves as a demonstration of both the massive sums platforms are willing to pay to settle online safety litigation and the potential for aggressive enforcement to drive actual changes in service delivery. For Ofcom, the lesson is clear: until penalties are tied to assets that cannot be hidden offshore, the "teeth" of the Online Safety Act may remain purely ornamental.