Critics were concerned that the new law could lead to censorship and undermine free speech.
The UK government has watered down a sweeping new law on internet safety after strong criticism from campaigners and lawmakers.
The Online Safety Bill would have forced tech giants to remove online content that is "legal but harmful".
The legislation would have given regulators wide-ranging powers to sanction digital and social media companies, such as Google, Facebook, Twitter, and TikTok.
Like the EU's planned Digital Services Act (DSA), the UK aimed to crack down on online racism, sexual abuse, bullying, fraud, and other harmful material.
But critics had expressed concern that the Online Safety Bill could lead to censorship and undermine free speech.
UK Digital Secretary Michelle Donelan confirmed that the government has now abandoned that "legal but harmful" wording after acknowledging that it could “over-criminalise” online content.
"Tech firms or future governments could [have used] the laws as a license to censor legitimate views," Donelan said.
What does the watered-down Online Safety Bill look like?
Instead of removing all "legal but harmful" content, social media platforms must set out clear terms of service, and stick to them.
Companies will be free to allow adults to post and see offensive or harmful material, as long as the content is not illegal.
But if the platforms fail to meet their pledge to ban racist, homophobic, or other offensive content, they can be fined up to 10% of their annual turnover or £18 million (€20.8 million). Senior company managers could also face criminal action.
The Online Safety Bill also still requires companies to help people avoid seeing content that is legal but may be harmful, such as the glorification of eating disorders, misogyny, and some other forms of abuse. This must be done through warnings, content moderation, or other means, according to the legislation.
Big Tech firms also will have to demonstrate how they enforce user age limits that are designed to keep children from seeing harmful material.
The Online Safety Bill will still criminalise some online activity, including "cyberflashing" (sending unwanted explicit images) and "epilepsy trolling" (sending flashing images that can trigger seizures).
The law also makes it an offence to assist or encourage self-harm, following a campaign by the family of 14-year-old Molly Russell, who ended her life in 2017 after viewing suicide content online.
The UK government hopes the changes will be enough to get the bill through Parliament, despite widespread opposition.
“I will bring a strengthened Online Safety Bill back to Parliament which will allow parents to see and act on the dangers sites pose to young people,” Donelan said in a statement.
"Unregulated social media has damaged our children for too long and it must end".
The Online Safety Bill has been beset by delays and has been awaiting approval for around 18 months. It is set to return to parliament next week.