The Council of Small Business Organisations Australia (COSBOA) has warned proposed new online safety laws could leave small businesses facing more red tape, make it harder for them to reach new customers online and leave them struggling to get help when platforms wrongly remove their content or accounts.
In a submission to the Australian Government on the proposed Online Safety Amendment (Digital Duty of Care) Bill 2026, COSBOA has sought an exemption for low-risk small business websites, greater consideration of the impact of changes to social media recommender systems, and more protections for businesses when platforms incorrectly remove content or accounts.
COSBOA supports the intent of the reforms, including a safer online environment, stronger protections for children and greater accountability for major digital platforms, but insists the potential impacts on small business need to be understood and addressed before the reforms are implemented.
COSBOA CEO Skye Cappuccio said small businesses should not face new regulatory burdens or lose opportunities to reach customers as an unintended consequence of the reforms.
“Making the online environment safer is important, but we need to make sure we aren’t solving one problem while inadvertently creating new ones for small businesses operating online,” Ms Cappuccio said.
“That means making sure an ordinary, low-risk business website isn’t suddenly subject to a new compliance regime, understanding what changes to social media recommendations could mean for businesses trying to reach new customers, and making sure businesses have somewhere to turn when platforms get decisions wrong.”
As currently drafted, the Bill does not include a revenue, headcount or user threshold. Online services that remain within scope could be required to undertake and document risk assessments, review them regularly and retain records for six years.
“The local retailer, tradie or professional services business with a straightforward website should not have to navigate a compliance framework that isn’t proportionate to the risk they present,” Ms Cappuccio said.
“The Bill gives the Minister powers to exempt low-risk services, but nothing is yet in place or announced. Small businesses need certainty about whether these laws apply to them.”
The reforms could also affect small businesses that rely on social media to market themselves and find new customers.
The proposed laws provide for ‘user empowerment’ measures that could give people greater control over how content is recommended to them. How those measures will operate in practice is yet to be settled, including their potential impact on the way small businesses are discovered online.
“For a small or emerging business, being recommended to someone who doesn’t already follow you can be the difference between reaching a new customer and never appearing on their radar,” Ms Cappuccio said.
“Giving people greater control over what they see online is a positive objective. But we need to understand what that means for small businesses that rely on these platforms to reach new audiences.
“We don’t want an unintended outcome where it becomes harder for a small or new business to be discovered while established brands with large existing audiences have an advantage.”
Greater responsibility for platforms also makes effective review processes particularly important when small business content, listings or accounts are incorrectly removed.
“For some small businesses, social media is one of their primary channels to customers. If an account or listing is incorrectly removed, the impact on sales can be immediate and catastrophic,” Ms Cappuccio said.
“Small businesses need timely access to human review when a decision is wrong. Greater responsibility for platforms should also mean greater accountability to the businesses that rely on them.”
COSBOA wants the potential impact on small businesses properly assessed before the relevant measures are implemented, alongside plain-language guidance and adequate implementation time for any small businesses that ultimately remain within scope.
“We can make the online environment safer without creating unnecessary red tape or making it harder for small businesses to reach their customers,” Ms Cappuccio said.
