Sri Lanka’s Online Safety Act Puts Digital Future and Economic Recovery at Risk

• by Arlen Fitzpatrick
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Tech Giants Sound the Alarm Over Sri Lanka’s New Online Safety Law

When Sri Lanka passed its Online Safety Act in February 2024, the government pitched it as a way to keep the internet safe. But it’s exploded into controversy, with critics now calling it one of the most pressing threats to the country’s fragile economic comeback. Instead of protecting citizens online, the Act may end up severing Sri Lanka’s connections to the very digital world fueling modern economies.

What’s the big deal? The Asian Internet Coalition—an industry group with Facebook, Google, Meta, and Amazon on its roster—put it plainly: the law is ‘unworkable.’ They’re not just annoyed about a few rules. They’re worried about broad, vaguely defined powers that the government now holds. These powers let officials criminalize all kinds of online content, risking heavy punishments for speech that’s ordinary elsewhere. Imagine running a business and not knowing if a standard customer review or campaign could land you in legal hot water the next day. That’s what companies are now weighing.

The warnings aren’t theoretical. Major players, including India’s Jio (which has big money and major partners like Meta and Google), are rethinking their plans to invest in Sri Lankan telecommunication. International firms simply don’t want to risk their brands or billions if regulations feel unpredictable or politically charged. With digital investments already tough to attract, this Act could push tech backers away—and fast.

Economic Recovery Collides with Digital Clampdown

Here’s why the timing hurts even more. After years of economic struggle, Sri Lanka managed a 5.3% economic growth rate in early 2024. Tourism picked up, shops reopened, and some hope returned to the streets. Foreign investors finally started to take tentative steps back in. But with the Online Safety Act kicking in, there’s a real chance that any fresh optimism could be wiped out almost overnight.

The Act doesn’t just put social media at risk. It casts a shadow over every Sri Lankan business that relies on cloud services, cross-border communication, or foreign partners. If tech companies worry about legal blowback, they might pull services from Sri Lanka altogether. That means local startups could lose their software, online stores might face higher costs or slowdowns, and the government would struggle to meet IMF-backed reforms designed to open and modernize the economy.

• Analysts see a direct conflict between the new law and the country’s commitments under its digital economy roadmap.
• The law could become a model for digital censorship, making it harder to attract any future tech investment.
• Even ordinary Sri Lankans face losing easy access to global platforms just as the country’s digital sector was beginning to take off.

Some experts and advocates aren’t mincing words. They say the Act is out of step with international digital rights standards—and risks undermining what little trust exists between Sri Lanka and global business. Censorship, legal uncertainty, and economic isolation are now top of mind, all while the country is still nursing financial wounds from its recent past.

Calls for immediate repeal are growing louder. Supporters of reform argue Sri Lanka should be focusing on economic innovation, not digital crackdowns. If the government doesn’t change course, the hopes of building a modern, connected economy might slip away—just as things were starting to look up.