The government says digital technologies are key to our future prosperity. But legislation is currently out-dated and unable to properly keep up with advances in the tech sector.
A policy paper called ‘Digital Regulation: Driving Growth and Unlocking Innovation’ has been produced with a forward by the Rt Hon Oliver Dowden, Secretary of State for Digital, Culture, Media and Sport.
Dowden writes: “Digital technologies have transformed our economy, our society and our daily lives. They are now a fundamental part of our everyday existence, providing goods and services that even a decade ago seemed unimaginable. The challenge for government is to keep pace with the dramatic speed of technological change: unlocking the enormous benefits of digital technologies, while minimising the risks they present both now and in the future.”
“Where regulation is needed, we will intervene by taking a coherent, pro-innovation, and international approach. This will ensure we can maximise growth and competition in digital markets, drive UK excellence in innovation, and protect the safety, security, choices and rights of our citizens.”
Regulation is being brought forward to combat what the government calls ‘Online Harms’. Aimed squarely at the big international social media companies, this proposes fines of up to £18m or 10% of annual global revenue, whichever is the higher.
New legislation is designed to build on GDPR rules which came into force in 2018.
The policy paper, from the Department for Digital, Culture, Media and Sport, sets three key objectives:
- To drive growth, we will promote competition and innovation across the digital sector.
- To ensure this growth and innovation does not harm citizens or businesses, we will keep the UK safe and secure online.
- To protect our fundamental rights and freedoms, we will shape a digital economy that promotes a flourishing, democratic society.
The report says that digital technologies are the engine driving the UK’s economic growth. The digital sector contributed £151bn in output and accounted for 1.6 million jobs in 2019. Over 34,000 new tech businesses were created in 2018 alone and the UK attracted more international venture capital investment into technology businesses in 2020 than France and Germany combined.
But security needs to be embedded into innovation and planning. 39% of businesses and 26% of charities report having cyber security breaches or attacks in the last 12 months, as a result of which one in five lost money, data or other assets. As digital technologies become more integral to the wider economy and society, vulnerabilities in one organisation can lead to huge disruption elsewhere.
The government vision is to pursue new digital regulation, underpinned by three key objectives: To actively promote innovation; to achieve forward looking and coherent outcomes and to both exploit opportunities and address challenges in the international arena.
Examples of this include the establishment of a Digital Markets Unit. This will promote a pro-competition approach, driving competition between digital firms and opening up opportunities for innovative start-ups.
Currently, the government believes the market dominance of a few well known tech companies leads to fewer opportunities for challenger firms, less innovation, higher prices and less choice.
Therefore, the near future, could be challenging for the global tech giants, such as Facebook, in the social media arena, and Amazon, in relation to online sales.
The UK’s proposals place the onus on social networks to remove harmful content, and seek to level the playing field between big tech and smaller would-be rivals through data-sharing and increased scrutiny of mergers and acquisitions.
The new rules would also make it mandatory for mergers and acquisitions to be notified to the UK’s Competition and Markets Authority, or CMA.
As such, the Online Harms bill, first announced as long ago as 2018, is set to become a “big priority” for the government who believe legislation sits well with the public who, in general, see a need to protect younger internet users and vulnerable adults.
The proposal would impose a statutory duty of care on services that host user-generated content, such as Facebook to YouTube and gaming services, to remove unlawful material and implement measures for the reporting and removal of content that is harmful, but not necessarily illegal. Communications regulator Ofcom has been tasked with enforcing the law.
A proposed Online Safety Bill will enshrine in law a duty of care on online companies to keep their users safe. It will defend freedom of expression and the invaluable role of a free press, while building trust and confidence and promoting innovation within the digital economy.
Social media, websites, apps and other services which host user-generated content, or allow people to talk to others online, will need to remove and limit the spread of illegal content, such as child sexual abuse, terrorist material and suicide content. They will need to do far more to protect children from being exposed to harmful content or activity such as grooming, bullying, pornography and the encouragement or promotion of self-harm and eating disorders.
The most popular social media sites will need to go further by setting and enforcing clear terms and conditions which explicitly state how they will handle content which is legal but could cause significant physical or psychological harm to adults. The ground-breaking draft Bill was published on 12 May and will undergo pre-legislative scrutiny, and the government will look to legislate as soon as Parliamentary time allows.
A joint parliamentary committee from the Commons and the Lords has been established to scrutinise the forthcoming Online Safety Bill. The Committee is required to report by 10 December 2021 and is seeking input from the public.
Mark Glenister of JPP Law said: “It’s a time of major change for the tech sector. However, legislation will impact the huge corporations most and looks set to make it easier for tech start-ups to compete and grow. That’s got to be good news for business.
If you need support on the law when it comes to your tech-savvy business, please contact JPP Law, by phoning 020 3468 3064, or by email [email protected]
