On 9 March 2019, the House of Lords Select Committee on Communications published its report on “Regulating in a digital World”. It included a number of recommendations to the government, including 10 guiding principles for the development of regulation online, a new public interest test for data driven mergers and a new Digital Authority, to oversee regulation of the digital world.
The Select Committee on Communications is appointed by the House of Lords “to look at a broad range of communication and broadcasting public policy issues and highlight areas of concern to Parliament and the public.” Noting the growing importance of the digital world, the Committee summarised that regulation has simply not kept up with the pace with the role of the internet and digital services in the lives of the public and a new approach to regulation is now required.
The report suggests that online platforms increasingly identify an individual by reference to their harvested data and the Committee is concerned by the risks this creates for users’ data privacy, particularly with the growth of the use of personal data in artificial intelligence. The Committee therefore recommends that it is essential that data is processed in line with the GDPR and kept accurate at all times. The report calls for data processors and controllers to produce annual data processing ‘transparency statements’ detailing which forms of behavioural data they generate or purchase from third parties, how they are stored and for how long and how they are used and transferred. The Committee also asks that the ICO set out rules for the use of algorithms based on the 10 guiding principles set out below.
The Committee makes a number of recommendations which it anticipates will prevent anti-competitive behaviour or abuse of dominance by leading technology companies, including: a new public interest test, based on the accumulation of data, to be implemented by the Government for all data driven mergers and acquisitions; that online service providers be given special obligations to act fairly towards users, other companies and in the interest of society; and that the CMA undertake a market study of the digital advertising market.
The recommendation for a new public interest test comes amidst increased scrutiny of the tools which the CMA has at its disposal for assessing digital mergers. In the week following the publication of the Committee’s report a government expert panel published a paper on “Unlocking digital competition“. In its report the expert panel, led by Professor Jason Furman (an economist and former White House advisor), proposes that the CMA be given the power to deploy a “balance of harms” approach, considering the scale as well as the likelihood of harm in merger cases involving potential harm to competition and innovation.
But not everyone agrees that the CMA needs to overhaul its approach to data mergers in this way. In a letter responding to the Furman report, CMA chief executive Andrea Coscelli expressed reservations about the recommendation for a balance of harms tests, suggesting that there could be difficulties in applying this kind of test in a transparent and robust way.
The Committee report also suggests that online companies which host and curate user uploaded content should be under a duty of care. This would have to be upheld by a regulator with a full set of enforcement powers.
A new Digital Authority
The Committee calls for the establishment of a new body, the Digital Authority, to co-ordinate regulators across sectors, communicate the views of Government, Parliament and the public; assess regulations and recommend changes where necessary.
10 principles to guide regulation online
The Committee recommends ten principles which should guide the development of both the online world and its regulation:
- Ethical design
- Recognition of childhood
- Respect for human rights and equality
- Education and awareness
- Democratic accountability, proportionality and evidence-based approach.
The full report can be read here.