Written by Dominic Weeks, Head of Technology, Madano

As anticipated the Chancellor did not shy away from Brexit in his Spring Statement yesterday. As the black hole pulling on the economy, how could he not? Yet, he reserved time to signal his intent to make major changes to regulation of technology juggernauts that will cause vigorous debate for the rest of the week (something we’re hardly in short supply of right now!).

The release of a digital competition review headed by Harvard University professor and former Presidential adviser Jason Furman, conducted for the Treasury, was the major talking point outside of Hammond’s pointed Brexit-focused comments. Furman and other leading policy experts, including Cambridge public policy professor Diane Coyle, recommended several important things in the report. For brevity, the highlights were:

  • Increased competition scrutiny – tightening rules and forming a new digital markets unit to sit within the Competition and Markets Authority (CMA)
  • Empowering consumers – the aforementioned (which aforementioned unit?) unit to set rules on open, shared standards that would allow consumers to more easily move their data between different providers
  • Scaling the Walled Gardens – a recommended CMA inquiry into the online advertising market and Facebook and Google’s dominance.

The Response

Many, including techUK, have poured cold water on the utopia of interoperability and portable data sets, pointing to huge privacy concerns. Stuart Lauchlan, editor of Diginomica, seems less fearful of the impact and takes a more cynical bent, expecting a lack of follow through from Government. Others have already argued that mechanisms for ensuring competition do exist and they could point to Spotify’s EU antitrust complaint. So the possibilities range from government doing the right thing badly, doing nothing at all or doing something pointless.

Yet wariness and cynicism need to give way to dialogue. Simon Duke wrote in this morning’s Times that time was running out for governments to tackle big tech. Conversely, perhaps time is running out for tech companies of all stripes to have their say on what regulation should look like!

No (Fur)man is an Island

This is one report and grandstanding speech amid a litany of assaults on the Big 5. When you consider the totality and the rising sentiment, it is surprising that so little active discussion has happened in response.

Just look at what has happened in the last five days alone:

  • On competition, Presidential-candidate Elizabeth Warren called for the break up of Facebook and other giants last week. Worryingly, Facebook promptly removed her campaign ads from the platform, although they quickly back tracked!
  • Back in Blighty, Digital Secretary Jeremy Wright met a group of people affected by online harms on Monday and proclaimed that the “era of self-regulation is coming to an end and online platforms will have to do more to keep their users safe” as he drew further attention to the forthcoming DCMS Online Harms White Paper.
  • On Friday, a House of Lords committee released a report calling for a Super Digital Regulator to help tackle online harm.

While people are right to make a clear distinction between reports, white papers and reviews and actual policy changes, it’s a mistake not to see the writing on the wall. Industries that have risen to power unchecked have often had to manage belated scrutiny. That’s a necessary evolution and things will be no different this time. A reckoning will come.

What’s curious, however, is the apparent silence in the face of these critiques. TechUK will no doubt continue to be the focal point of representing the industry, but that of course is a broad church (900 members – from the behemoths targeted by these moves, to the plucky seed round innovators that can benefit from a leveller playing field).

Now is the time for a full and frank debate about how tech companies should be regulated in the UK. For it to be fair, it will need to be a cacophony of voices, not a single whisper in the ear of Whitehall.

Madano advises clients across the technology industry. If you’re interested in learning more please get in touch here.

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