Super-regulator seeks even more views on digital action

Anyone expecting an immediate crackdown on US tech giants by the UK’s digital “super-regulator” could be left feeling a little cheated after the body has launched yet another consultation on what is needed from regulators and where industry should step up.

The Digital Regulation Cooperation Forum, comprising the Information Commissioner’s Office, the Competition & Markets Authority, Ofcom and the Financial Conduct Authority, was set up in July 2020.

Last year it vowed to put video-sharing platforms including TikTok, adtech systems and artificial intelligence among its key priorities. It claims “much work has already been done on algorithms, but there is more to do”, although critics argue there is little evidence of concrete action.

The DRCF insists its workplan for 2022/23 includes projects that will help to tackle some of the UK’s biggest digital challenges.

These include protecting children online, by improving outcomes for children and parents by ensuring the privacy and online safety protections overseen by the ICO and Ofcom work in unison, including the Children’s Code.

It has also pledged to promote competition and privacy in online advertising, by fostering competitive online advertising markets that deliver innovation and economic growth, while respecting consumer and data protection rights, through joint ICO and CMA work.

The CMA has already received an undertaking from Google to let the regulator have the final say in any new system which replaces third-party cookies, following an investigation into the impact of the company’s Privacy Sandbox.

However, the controversy around adtech refuses to die down and the ICO’s investigation, which was reopened in January 2021 following an eight-month pause due to Covid, is by its own admission highly complex.

The DRCF will also support improvements in algorithmic transparency to promote its benefits and mitigate the risks to people and to competition, by exploring ways of improving algorithmic transparency and auditing.

Finally, it has vowed to enabling innovation in the industries it regulates by encouraging responsible innovation and exploring different models for how it coordinates its work with industry to support innovation.

The DRCF insists that “algorithmic processing” is often beneficial, underpinning many of the products and services use din everyday life. From detecting fraudulent activity in financial services to connecting consumers with friends online or translating languages at the click of a button, these systems have become a core part of modern society.

However, it maintains that algorithmic systems, particularly modern machine learning or artificial intelligence approaches, pose significant risks if used without due care. They can introduce or amplify harmful biases that lead to discriminatory decisions or unfair outcomes that reinforce inequalities. They can be used to mislead consumers and distort competition.

The DRCF says regulators need to work together to articulate the nature and severity of these risks and take measures to mitigate them. Only then can algorithmic processing systems be developed in safe, responsible ways that are pro-innovation and pro-consumer.

The four watchdogs have now opened a consultation on further action.

DRCF chief executive Gill Whitehead said: “The task ahead is significant – but by working together as regulators and in close co-operation with others, we intend for the DRCF to make an important contribution to the UK’s digital landscape to the benefit of people and businesses online.

“Just one of those areas is algorithms. Whether you’re scrolling on social media, flicking through films or deciding on dinner, algorithms are busy but hidden in the background of our digital lives.

“That’s good news for a lot of us a lot of the time, but there’s also a problematic side to algorithms. They can be manipulated to cause harm or misused because firms plugging them into websites and apps simply don’t understand them well enough. As regulators, we need to make sure the benefits win out.”

CMA chief data and technology insight officer Stefan Hunt said: “Much work has already been done on algorithms by the CMA, FCA, ICO and Ofcom but there is more to do. We’re asking now, what more is needed, including from us as regulators and also from industry?

“Today marks the chance for anyone involved in or with a view on the use of algorithms to have their say, particularly on how we might move to an effective, proportionate, approach to audit to help ensure they are being used safely.”

The consultation is open until June 8 2022.