Can we have a more global approach to tech regulation, please?

By Luke Seaman, Head of Technology

For Big Techs, regulation is the new normal. From ‘digital taxes’, to stricter data rules, emerging ‘tech regulators’ and even calls in the US for the likes of Facebook to be broken up, the world’s Big Techs are being bound by more and more rules. In keeping with this trend, this week’s Spring Statement saw the UK Government throw its weight behind yet more oversight for the sector. This time the regulatory spotlight has focussed in on competition and the extent to which the emergence of ‘digital monopolies’ can bring about negative outcomes for the users of those digital marketplaces.

The UK Government’s latest foray into the world of tech regulation follows a six-month review by the Digital Competition Expert Panel, led by Barack Obama’s former Chief Economist, Professor Jason Furman. In their report, Unlocking digital competition, published on Wednesday (13 March 2019), the panel put forward a number of recommendations aimed at creating new approaches towards competition and data policy for digital marketplaces. If fully adopted, the panel’s recommendations would mean that, in the future, UK authorities would have a greater say over how tech giants, such as Google, Facebook, Amazon and Microsoft gain dominance in their sectors, which is typically done by buying up the competition. Since 2005, Facebook has acquired over 66 competitors and future would- be competitors to a tune of over $23 billion. In this instance, Facebook’s ability to see off the competition before it threatens its own market share has helped to entrench the tech giant, affording it undeniable power within the social media space. With Facebook under increasing scrutiny for its treatment of user data, most notable in the recent Cambridge Analytica scandal, many are left wondering whether greater competition in the sector would have prevented such abuses.

For this reason, the ambitions of the panel’s report are welcomed, and the Government should be applauded for their attempts to make the UK regulatory model fit for a digital age. However, the issue with these recommendations and others like them is that they are being developed in National Silos rather than as pan-Global solutions.

Big Techs are by their very nature international organisations with their services not (typically) bound by borders, save the restrictions placed on the likes of Facebook, Instagram and Twitter in China. As a result, our regulatory solutions need to reflect the sector’s internationalism. However, the individual approaches emerging from the likes of France, Germany, Britain and the US suggest this is not the direction of travel.

The Big Techs are themselves concerned by the potential flaws of individual National approaches. Google, who like other tech firms are broadly supportive of the move away from ‘self-regulation’ to more formal oversight, have urged policy makers to converge around ‘common rules of the road’ when it comes to global tech regulation. The request is a logical one and examples from the financial services sector, which following the 2007 financial crash introduced more comprehensive international regulatory coordination, demonstrate it is the most effective way of ensuring robust oversight of a sector. Tech firms, who are now some of the biggest spenders of policy lobbying in Europe and the US, are pushing this message with decisionmakers. However, to gain traction such global coordination will require greater political will.

None of this should downplay the merits of the Chancellor’s announcement this week and the UK’s approach through the Furman review and other initiatives like the digital services tax are a step in the right direction. However, to truly grapple with the issues of tech regulation, the UK should do more to help foster a coordinated global approach.

Get in Touch

Luke Seaman

Account Director

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