Why all the fuss about Habbo Hotel?

“It’s not Syria” screamed one complainant on my Twitter feed… It set me thinking about the news priorities which led us to spend so much of Channel 4 News on the past two nights devoted to the goings on in and around Habbo Hotel, the social gaming and online community for teenagers.

Well, let’s deal with scale. The Finnish company that owns Habbo boasts that it is the biggest site of its kind in the world. Big it is – a quarter of a billion people have accessed the site globally. The turnover last year was over £30m. The site has its own currency and hosts discussion forums.

Let’s deal then with what it is. It’s an online fantasy world aimed at young teens but frequented by all ages including the very young and the much older. It has the feel of a real hotel where you get provided with a basic room with a bed and a table. But as in life, you want your room to be special, so you can buy gift cards with Habbo Hotel credits on the terrestrial high street to purchase things to improve your room. As of yesterday those retail outlets here ceased as WHSmith, Tesco, and GAME decided close their involvements in the aftermath of our revelations about what else was going on in Habbo Hotel.

Within the hotel a virtual social life unfolds. You can assume any identity in the form of an avatar and make virtual relationships with other avatars. Who they are in real life remains a mystery, and that can remain the case even after you’ve been approached and asked by person or persons unknown to to leave the Hotel and to make more direct contact with them on a one-to-one  basis, on another platform – Facebook perhaps, MSN or Skype, and ultimately potentially to meet in real life.

But into this world stomp people who, in short, want sexual gratification out of this virtual fantasy world; they are people who want people to go on a webcam and undress and more. Some may be older teens, others alarmingly older and more malicious of intent than that.

Does it matter? In my view it goes to the very heart of the tension between the liberation and freedoms that the internet has wrought and the risks that it has inaugurated particularly for the very young.

I have spoken often of late of the dawning of the golden age of journalism – and I believe we are on its very doorstep right now. But at the same time, what the Habbo Hotel furore reveals is the genuine potential for the internet to facilitate on an industrial scale theft of the innocence of childhood.

Read more: Habbo and online gaming – how do I protect my child?

In my office yesterday I heard a father bemoan the loss of time with his child – lost to the computer games to which his five-year-old son is already addicted. We are bound to ask what long-term effect gaming addiction; exposure to sexual advances; and pedophile seductions will have on our children.

When I was six years old, I was the victim of sexual assault by a member of the domestic staff at the school where my father taught. I was saved from what could have developed into a potentially much more severe sexual attack by someone who had seen what was going on and reported it in time for a teacher to rush to the assailant’s room and rescue me. That experience is with me to this day. How will the virtual version of what happened to me affect future generations of 9,10, and 11-year-olds?

As a generality most of us don’t want the internet regulated – it’s probably too late to achieve it anyway. What makes the Habbo case so dramatic and important are the ways in which it has come to light and how these revelations have affected its activities. As I write, an initial response of the company running the site has been to “mute” the site – conversations among visitors to the Hotel are suspended, whilst the company carries out its own inquiries.

So far “regulation”, by some third official force, has proved absent. The unravelling of Habbo’s hotel life has come about not from the actions of any regulator, but through media digging, and market response. Habbo’s two biggest investors, controlling a third of the holding company’s capital, have already bailed out, taking their their multimillion pound investments with them.

Can we trust the market, or indeed the media, always to respond quite so coherently? Given the tenderness of those at risk, can we in turn risk leaving redress for corporate cyber misbehavior to the market?

You’ve guessed it – Habbo may not be Syria, but it does represent a seminal moment in our relationship with cyberspace, and, I would argue therefore worthy of the very considerable time and effort we have devoted to the story.

Follow @jonsnowC4 on Twitter.