The government must pause for thought before pushing ahead with “online harms” regulations

A common view of the world goes thus – individuals and businesses do whatever they can to pursue their own self-interest, and must be kept in check by governments. As certain companies get bigger and bigger, greater regulations are required.

While not entirely without merit, this dichotomous standpoint is excessively blunt and can result in unintentionally harmful policies. Human behaviour and incentive structures are, alas, not that simple, as famously explained by economist Bruce Yandle's theoretical example of "bootleggers and baptists".

Yandle's primary case concerned puritanical lifestyle restrictions in the US, endorsed by baptists, which inadvertently helped bootleggers by cutting off the legal supply of, for example, alcohol. The point being – parties with seemingly opposite interests end up as unlikely bedfellows, and promote interventions that work against the public interest.

Numerous public policy instances attract the bootleggers-and-baptists comparison, especially when regulations support established businesses. Contrary to the big government versus big business view of the world, large well-resourced companies can often cope with a growing web of regulations better than small competitors, to the extent that they lobby in their favour. Regulatory barriers to entry become their friend.

This is precisely the charge laid this morning by various tech commentators unimpressed with the government's "online harms" white paper. The Department for Culture, Media and Sport (DCMS), along with the Home Office, say the paper presents "tough new measures to ensure the UK is the safest place in the world to be online". It follows widespread and understandable concern surrounding content on social media platforms that can be directly harmful to viewers, or indirectly harmful to democracy and, one could argue, public health.

Notably, Facebook's response to the white paper is uncritical and largely welcoming. The UK lobby group for startup competitors, however, is extremely concerned. "These plans will entrench the tech giants, not punish them," the Coalition for a Digital Economy (Coadec) says. "It will benefit the largest platforms with the resources and legal might to comply – and restrict the ability of British startups to compete fairly. There is a reason that Mark Zuckerberg has called for more regulation. It is in Facebook’s business interest."

Coadec is not some fringe group, it includes and has included several senior figures who have also worked in Downing Street and, indeed, at the DCMS. The government has previously courted such tech expertise in a bid to appear relevant and modern. Before it rushes ahead with this potentially misguided attempt to get tough on social media giants, it should do so again.