The government knows that the digital sector is one of the UK’s most important sectors. It contributed £151 billion to the economy in 2019 and employs more than 2 million people. With this in mind, the UK government is consulting on its Plan for Digital Regulation, which sets out a “new, ground-breaking approach to the way tech is governed in the UK”. The Plan explains how the government wishes to drive a proportionate and agile regulatory approach, removing unnecessary burdens and offering clarity and confidence to businesses and consumers. The government also wants to encourage innovation and to use tech as an engine for growth so as to create thriving markets that cement the UK’s position as the tech capital of Europe. A tricky tightrope to walk, to say the least.
This Plan starts the conversation as to how the UK will promote innovation yet protect consumers and society. In doing so, it builds on the government’s Ten Tech Priorities, particularly the ambition to keep the UK safe and secure online, to fuel a new era of start-ups and scale-ups, and to lead the global conversation on tech.
The Plan has three key objectives:
Actively promote innovation: digital technologies and their applications drive innovation across every part of the UK economy. The government will seek to remove unnecessary regulation. Where it judges that intervention is necessary, it will first consider non-regulatory measures such as technical standards to reduce burdens. Where regulation is needed, it will be outcomes-focused, backed by evidence and consider the impact on innovation.
Achieve forward-looking and coherent outcomes: the fast-moving, cross-cutting nature of digital technologies means that previously distinct regulatory regimes will become increasingly interconnected - for example in digital content, competition law and data protection are colliding. As the landscape develops apace, policymakers expect to ensure that new regulation minimises contradictions, undue burdens, and overlaps/gaps with existing frameworks. Regulatory interventions will address underlying drivers of harm rather than symptoms, and new regulation will be designed with a clear understanding of the links to the wider regulatory regime and its goals. Regulators intend to take a collaborative approach through engagement with businesses and other regulators, as well as facilitating tests of new business models, products and approaches.
Exploit opportunities and address challenges in the international arena: digital technologies present global solutions and problems in a way rarely seen in other sectors. The UK’s international commitments and domestic regulation heavily influence and shape each other. Therefore, the government says that policymakers will keep in mind international obligations, potential future agreements, and the impact of regulations and standards developed overseas. This includes consideration of how digital technical standards can support domestic rulemaking as a complement or alternative to regulation, and how they can facilitate international interoperability.
The government mentions its work on Online Harms and the CMA’s Digital Markets Unit, and significantly, talks of a new approach for regulating data protection, saying that it wants a regime that supports a world-leading digital economy and society whilst underpinned by the trustworthy use of data. It aims to publish a plan for a pro-growth data regime that builds on its priorities and underpins trust in the responsible use of data, as well as a consultation on the establishment of a new pro-competition regime that will drive innovation and growth across digital markets. The government may not have much leeway to diverge from GDPR in the light of the EU’s recent data adequacy decision which demands that UK privacy laws remain consistent those of Europe. And last, but by no means least, we can expect a consultation on online advertising regulation later this year.
Balancing the promotion of innovative growth versus protection of users and society is a tricky tightrope to walk, and there are economic headwinds ahead. A helping hand from the Treasury in respect of innovation and IP related grants, tax credits, lower corporation tax, and investor tax reliefs would no doubt help to ensure that the tightrope is at least pointing in the right direction, but the Treasury is, I fear, walking its own tightrope.
The consultation on the Digital Plan ends on 28 September 2021.
Digital businesses are operating in many cases without appropriate guardrails - the existing rules and norms which have guided business activity were in many cases not designed for modern technologies and business models