‘Digital world requires a new approach to regulation’ says House of Lords Communications Select Committee

March 12, 2019

The House of Lords Communication Select Committee has issued its report on Regulating in a Digital World  issuing a call for a new approach to regulation.  The large volume of activity that occurs online which would not normally be tolerated offline such as “fake news” and data harvesting combined with the misuse of personal data, abuse and hateful speech make the case for further regulation compelling. 

This need for regulation goes beyond online harms. The digital world has become dominated by a small number of very large companies operating with an unprecedented knowledge of users and other businesses. Without intervention they are likely to gain more control of technologies which disseminate media content, extract data from the home and individuals or make decisions affecting people’s lives. 

More than a dozen regulators have a remit covering the digital world. However, there is no overall regulator and so regulation is fragmented with overlaps and gaps, and there is no specific content regulator for the internet, so the Committee recommends the development of a comprehensive and holistic strategy for regulation with two main strands:

(a) an agreed set of ten principles that shape and frame all regulation of the internet, and

(b) a new Digital Authority to oversee this regulation with access to the highest level of the Government to facilitate the required change.

Such a structure would mean that digital services could be held accountable to an agreed and enforceable set of principles, as suggested below: 

  • Parity: the same level of protection must be provided online as offline
  • Accountability: processes must be in place to ensure individuals and organisations are held to account for their actions and policies
  • Transparency: powerful businesses and organisations operating in the digital world must be open to scrutiny
  • Openness: the internet must remain open to innovation and competition
  • Privacy: to protect the privacy of individuals
  • Ethical design: services must act in the interests of users and society
  • Recognition of childhood: to protect the most vulnerable users of the internet
  • Respect for human rights and equality: to safeguard the freedoms of expression and information online
  • Education and awareness-raising: to enable people to navigate the digital world safely
  • Democratic accountability, proportionality and evidence-based approach.

Proper enforcement and resources are needed to implement these principles and promote their importance to all parts of the digital world. 

A new framework for regulatory action is needed. The Committee recommends that a new body, the Digital Authority, be established to instruct and coordinate regulators. The Digital Authority would have the remit to continually assess regulation in the digital world and make recommendations on where additional powers are needed to fill gaps. The Digital Authority would also bring together non-statutory organisations with duties in this sector.

Effective and timely policy-making and legislation relies on decision-makers being fully informed. However, the speed at which the digital world is developing poses a serious challenge. The Digital Authority should report to a joint committee of both Houses of Parliament whose remit is to consider all matters related to the digital world.

Principles should guide the development of online services at every stage. The design of online services affects what users see and how they behave. A prominent business model of the internet involves capturing users’ attention to collect their data and advertise to them. The Committee argues that there should be greater transparency when personal information is collected and greater options for users to control which information is taken. There should also be greater transparency around data use, including the use of algorithms.

The largest tech companies can buy start-up companies before they can become competitive. Competition law struggles to keep pace with digital markets and often take place only once irreversible damage is done. The Committee recommends that the consumer welfare test needs to be broadened and a public interest test should be applied to data-driven mergers.

Further, due to market concentration, a small number of companies effectively act as gatekeepers to the internet. Greater use of data portability might help, but this will require more interoperability.

In the EU illegal content is regulated by the operation of the general law and by the e-Commerce Directive, which exempts online platforms from liability unless they have specific knowledge of illegal content. The Directive is no longer adequate for dealing with online harms.

The moderation processes of online platforms which host user-generated content are unacceptably opaque and slow. The report recommends that such services should be subject to a statutory duty of care to be enforced by Ofcom, especially relating to children and the vulnerable. The duty of care should ensure that providers consider safety in designing their services to prevent harm, including appropriate moderation processes to handle complaints about content.

The report says that it is in the industry’s own long-term interest to work constructively with policy-makers. If they fail to do so, they run the risk of further action being taken.

The UK government is due to respond to the report within two months.