A growing number of UK companies are moving away from VPNs and adopting proxy services instead, while regulatory pressures and changing business needs reshape the digital tools used for online operations.
Regulatory Drivers Behind the Shift
The trigger for this apparent trend has been the UK’s Online Safety Act, which came into force on 25 July 2025. The law requires platforms hosting user-generated content to carry out risk assessments, enforce strict age verification, and prevent users from bypassing restrictions. Ofcom, the regulator tasked with enforcement, has flagged VPNs as a potential loophole in these measures. This has left businesses increasingly wary about relying on them, even though the government has said there are no immediate plans to ban VPN services outright.
VPN usage in the UK has nevertheless surged in the wake of the Act. For example, figures show Proton VPN sign-ups rose by 1,800 per cent and Nord Security registrations climbed by 1,000 per cent in the days following the new rules, while VPN apps dominated the UK App Store rankings. However, what once looked like a straightforward privacy tool has now become a focal point for regulators. Companies that rely on VPNs for tasks such as market research, competitive analysis, or data collection are finding themselves exposed to new risks of compliance problems and potential scrutiny.
Proxy Demand Surge
This uncertainty has pushed many businesses to explore alternatives. Proxies, which route traffic through an intermediary server without encrypting it in the same way as a VPN, have emerged as a preferred option for a growing range of enterprises. Data from Decodo, a global proxy provider, shows UK proxy users have increased by 65 per cent since the Act was introduced, with proxy traffic rising by 88 per cent.
Industry leaders suggest this is not just a temporary workaround but a reflection of a more deliberate strategy. “Companies around the globe are getting smarter about how they operate in highly competitive landscapes. Instead of just picking the most popular tools, they’re choosing what actually works best for them,” said Vytautas Savickas, CEO at Decodo.
Examples of Proxy Providers
Several proxy companies now leading the market for UK businesses. For example, Oxylabs and Bright Data are recognised for their scale, offering millions of residential, datacentre, mobile and ISP IP addresses worldwide, including large UK pools. Decodo, formerly Smartproxy, has become popular for its balance of affordability and ease of use, while Webshare provides reliable service and even a free tier for smaller tasks. SOAX specialises in city-level targeting across the UK, making it useful for location-sensitive operations, while IPRoyal and Rampage Proxies are seen as accessible entry-level choices. Together, these firms illustrate how far the proxy market has developed, offering tools that range from budget options to enterprise-grade services.
How Much Do Proxies Cost?
Obviously, pricing for proxies varies depending on type, usage volume and provider. Just as an example, however, at the lower end, services like Rampage Proxies start around $1 per gigabyte for residential proxies, while SOAX charges about $3.60 per gigabyte on smaller plans, dropping to closer to $2.50 for high-volume commitments. Enterprise providers such as Oxylabs and Bright Data are typically in the $3–$4 per gigabyte range. In practical terms, this means a small business might spend £100–£300 per month, with medium-sized operations budgeting £300–£1,000, and large enterprises paying upwards of £1,200. By contrast, business VPNs usually charge per user, between $7 and $18 a month, which is cost-effective for secure team access but less suited to the high-volume, region-specific tasks where proxies are increasingly used.
Technical and Strategic Benefits
One reason proxies are becoming more attractive is the greater level of control they provide. VPNs typically encrypt traffic and route it through a single tunnel, which is valuable for privacy but less useful for certain business functions. Proxies, on the other hand, allow more granular routing and customisable access. This means organisations can target data collection by location, test region-specific websites, or monitor competitors without triggering the same kinds of red flags that VPN use often does.
For example, in eCommerce, proxies are being used for price tracking and ad verification, ensuring that online campaigns appear correctly in different regions. In finance and fintech, they help detect fraudulent activity by simulating access from multiple jurisdictions. In digital marketing, SEO teams rely on proxies to monitor search results from specific countries.
As Gabriele Verbickaitė, Product Marketing Manager at Decodo, explained: “More organisations in the UK are investing time in understanding the tools that power secure and efficient online operations. Most companies test out different solutions, providers, and do their research on proxies and VPNs, and they’re also making more informed, strategic choices.”
Innovative Proxy Types
It should also be noted here that the technology itself has matured rapidly. For example, modern proxy services are no longer niche or unstable tools but come bundled with enterprise-grade security features and user-friendly platforms. Companies can now choose from residential proxies, which mimic the IP addresses of home users, also mobile proxies, which use cellular networks, ISP proxies, which combine stability with speed, and datacentre proxies, which are optimised for scale and performance.
This variety gives firms options that align with their specific objectives. Residential and mobile proxies, for example, are harder to detect and block, making them useful for ad verification or web scraping. ISP and datacentre proxies, by contrast, are better suited to tasks requiring speed and high volumes of data. Vaidotas Juknys, Head of Commerce at Decodo, said: “UK businesses are quickly adopting proxy services, moving beyond simple VPNs to more advanced setups that offer greater control over their online activity. It’s no longer just about staying private – performance and reliability are now just as important.”
Security Trade-Offs
However, despite their appeal, proxies are not without risks. The key difference is that proxies do not encrypt traffic in the same way that VPNs do, leaving data potentially more exposed to interception or monitoring. For businesses dealing with sensitive information, this can create vulnerabilities if additional protections are not in place.
Free or poorly managed proxies pose even greater concerns. Studies have shown that many free proxy services are either unstable or actively malicious. Research published last year (University of Maryland and the Max Planck Institute for Informatics) found that only around 34.5 per cent of free proxies tested were active, with many exposing users to adware, credential theft, or malware. For this reason, security experts warn that firms should treat proxies as part of a broader, layered security strategy rather than a like-for-like replacement for VPNs.
At the same time, critics note that the rapid adoption of proxies could create its own regulatory flashpoints. Just as VPNs are being scrutinised for their role in bypassing restrictions, widespread proxy use may eventually attract similar attention. Privacy campaigners argue that this arms race between regulation and circumvention tools risks undermining trust in digital services altogether.
Some Key Challenges and Criticisms
The transition also raises some practical challenges. For example, businesses must ensure that the proxy providers they use have robust security and compliance standards. Unlike VPNs, which are relatively standardised, the proxy market is fragmented, with varying levels of reliability and transparency among providers. Companies that depend heavily on proxies for data-driven decision-making could find themselves exposed if those services are blocked, blacklisted, or compromised.
Another criticism is that while proxies offer technical advantages, they do not necessarily solve the deeper issues driving regulation in the first place. The Online Safety Act was designed to protect children and reduce harmful content online, yet businesses adopting proxies to sidestep VPN concerns may only be shifting the problem rather than addressing it.
These concerns highlight the complexity of the issue. On one side, businesses need practical tools to compete globally, collect data, and operate efficiently. On the other, regulators are pushing for tighter oversight of digital access, with VPNs and now proxies caught in the middle of the debate.
What Does This Mean For Your Business?
The evidence suggests that the move from VPNs to proxies is more than just a passing reaction to regulation. For UK businesses, proxies appear to offer some real operational advantages, from accurate regional targeting to resilience against restrictions that can disrupt data-driven work. Sectors such as eCommerce, finance and digital marketing are already embedding these services into their daily operations, treating them not as optional extras but as essential infrastructure. For many firms, the ability to monitor competitors, verify advertising, or track prices across multiple markets has become too important to risk on tools that may fall under heavier regulatory pressure.
However, the shift also carries unavoidable trade-offs. For example, proxies may deliver speed and flexibility, but they do not provide the same encryption and privacy protections as VPNs, which creates a different risk profile. This is forcing companies to rethink their wider security strategies and balance operational performance with robust safeguards. For regulators, the trend signals another layer of complexity, as proxy use could undermine some of the very protections that the Online Safety Act was intended to enforce.
What this means for UK businesses is that digital infrastructure decisions are no longer simply about cost or convenience. For proxy providers, the surge in demand represents an opportunity to cement their place in the enterprise market, but it also brings responsibility to deliver reliable, transparent and secure services. For policymakers, the growth of proxies underscores the difficulty of regulating technologies that adapt faster than legislation.
The result is a more finely balanced environment, where businesses gain new capabilities but also face new scrutiny. Proxies may now be the tool of choice for many UK firms, but their adoption highlights wider questions about how companies, regulators and consumers can navigate the shifting ground of online access and digital control.
