Regulatory coordination remains a must for the tech sector in 2023 and beyond
As digital technologies and services have become ever more ubiquitous to the way we live our lives, regulation of the sector has grown. The 2020’s will be a major moment for this with new rules on competition, data protection, online safety, artificial intelligence and telecommunications being introduced in the UK, but also around the world.
Regulation is enormously important for the UK tech sector, around 96% of tech sector output and 81% of exports is in services, where regulation is vital for the research, development and then deployment of digital services.
As the UK charts its approach to regulating the digital economy, what we are seeing is a third way between the more laissez faire approach of the USA and a comparatively prescriptive approach from the EU. The UK model is seeing legislation from the Government being set as high level objectives, and UK’s regulators being tasked to deliver detailed guidance, generally in the form of codes of conduct or standards for the industry.
This approach aims to strike the right balance between identifying clear outcomes such as boosting competition in digital markets or making the UK the safest place to be online while maintaining flexibility so regulators can be adaptive in their enforcement as well as modifying guidance as new technologies emerge.
To help navigate this new landscape the UK’s regulators established the Digital Regulation Cooperation Forum (DRCF) in 2020 to help coordinate regulation and achieve the aim of flexibility as well as consistent and clear outcomes. techUK hopes to see the Digital Regulation Cooperation Forum (DRCF) becoming a long-lasting part of the UK’s regulatory architecture, which will be able to deliver coherence more effectively for digital services compared to a single tech regulator
However, the body remains novel and techUK and our members have been feeding into it’s workplans in its first three years of operation. As the DRCF plans its 2023-4 work programme, techUK outlines its reflections on the DRCF’s 2022-3 operation below under its three key objectives and provides suggestions for how the organisation could build on these in its third year of operation.
Coherence
- Through projects such as attitudes towards age assurance and end-to-end encryption, the DRCF has begun to clarify regulator’ responsibilities. However, these tension points can be interrogated further in the coming year, which will be vital for educating regulators, informing public debate, and providing an avenue for businesses to input in a secure and anonymous way.
- Joint statements setting out the regulators’ views on areas which can have inherent tensions such as between competition, privacy, and online safety are welcomed, but remain high level. Regulators should continue to explore them and consider how they could be addressed.
- There remains a limited understanding of the DRCF’s operating model. This can lead stakeholders to inadvertently view the organisation as being responsible for setting regulatory guidance separate to the four regulators it works across. The 2023-4 workplan could address this by publishing its operating model, and clarifying where stakeholders can expect to direct input.
Collaboration
- Work on algorithmic transparency and auditing demonstrates the DRCF’s value, and techUK welcomes its recognition that regulatory approaches to algorithmic processing should depend on levels of risk. To support businesses in providing input into work such as this, the DRCF should consider publishing information on existing guidance in areas they are exploring.
- techUK is pleased to see the DRCF’s commitment to supporting innovation and suggests that it explores the possibility of facilitating joint sandboxes as new regulatory regimes emerge. This will help to develop potential best practices and schemes that the regulators could undertake to provide clarity to businesses seeking to innovate in a period of change.
Capability
- The DRCF’s work to build knowledge networks has been widely supported and has helped engagement with techUK and its members. This is something which should be continued and further developed in the coming year.
- Symposiums to explore new technologies such as the Metaverse and Web 3.0 have provided good opportunities to engage with regulators and broader stakeholders. These should continue and involve a range of market participants and innovators.
- The DRCF could better develop its stakeholder outreach efforts given the difficulties businesses have found when trying to engage with it. There should be a focus on smaller businesses and challenger firms.
- Ensuring regulators have expert and specialist staff that have good knowledge and experience of the sectors they are regulating remains a priority. To build regulator capability, we encourage the DRCF to build its knowledge of the capabilities, uses and maturity of new technologies.
Further to the DRCF’s workplan techUK feels little discussion has been given to accountability of the UK’s regulators. Once key legislation such as the Online Safety Bill and Digital Markets, Competition and Consumer Bill have passed the UK’s regulators will gain significantly more power to direct policy that will have widespread impacts on our society and economy.
We see these Bill as providing the right framework for address the issues they are designed to tackle however it will be vital that the Government, Parliament, the industry and the public have the ability to examine decisions and hold regulators account. This may require the Government to take a more active role in communicating policy objectives to regulators via letters and strategic steers as well as new structures in Parliament.
Neil Ross
As Associate Director for Policy Neil leads on techUK's public policy work in the UK. In this role he regularly engages with UK and Devolved Government Ministers, senior civil servants and members of the UK’s Parliaments aiming to make the UK the best place to start, scale and develop a tech business.
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