UK ministers retreat from giving new tech regulator statutory backing

UK ministers will not legislate in the next parliamentary session to empower a new technology regulator to police big internet companies such as Facebook and Google, Whitehall officials confirmed on Thursday.

The government had been weighing plans to include a bill in the forthcoming Queen’s Speech that would put the digital markets unit based within the UK competition regulator on a statutory footing, but has backed away from legislating.

On Thursday, the government only gave a vague promise that a full bill would eventually be produced: “The government will introduce legislation to put the Digital Markets Unit on a statutory footing in due course,” it said.

According to people briefed on the matter, the government will announce a draft bill including powers for the new watchdog on May 10, but stop short of including a final bill that could be made into law in the next one-year legislative session, which begins this autumn.

Instead, the unit will not receive statutory underpinning until the following parliamentary session in 2023-24 at the earliest.

The update comes after the Financial Times reported on Monday that the government had shelved plans for the new digital markets unit from the Queen’s Speech despite having already launched it unofficially last year.

Without statutory underpinning, the technology regulator will be unable to set bespoke rules for technology companies or fine them with penalties of up to 10 per cent of turnover for breaching them — both elements of a radical plan to curb the dominance of a small number of powerful technology groups.

The government announced the new regulator two years ago and it was set up in “shadow form” within the CMA last year. It currently has around 60 staff but no powers beyond the watchdog’s existing toolkit.

On Thursday, the Department of Culture Media and Sport set out in more detail the scope of the digital regulator’s new powers, which include the ability to force technology companies to pay for news and better transparency over how they use algorithms and data.

In a response to its own consultation last year, the government said the unit would be given the power to solve pricing disputes between news outlets and platforms.

The unit will also make it easier for customers to switch between Apple iOS and Android phones or between social media accounts, by ensuring data can be transferred more easily.

The digital markets unit would only set rules for a small number of companies with “substantial and entrenched market power in the UK”, the government said. Those companies would also have to report takeovers to the CMA before they complete under new “light touch” merger rules.

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