Work on digital regulation in the UK continues apace. The Digital Regulation Cooperation Forum (DRCF) is an initiative that brings together the four regulators who are most involved in digital matters – the Competition and Markets Authority (CMA), Ofcom, the Information Commissioner’s Office (ICO) and, since 1 April, the Financial Conduct Authority (FCA).
That’s a lot of anachronyms to digest, but don’t stop reading: the DRCF is important! It shows that the UK regulators are working constructively together on the complex issues that straddle their remits. This is ground-breaking and, without it, attempts to improve digital markets may fail. At a moment where regulatory initiatives are mushrooming in the digital space, the DRCF shows the way.
Having published its workplan in March, the DRCF published a further document yesterday in response to the UK Government’s request for advice on what steps are needed to help the four regulators to co-operate more successfully. The DRCF sets out two main recommendations (discussed further below):
- making information sharing between the regulators easier; and
- embedding coherence and cooperation in the statutory framework for digital services.
1. Information sharing
The DRCF wants it to be easier for the regulators to share information between them, and this seems very sensible.
We need the regulators to work effectively together and they can’t do that unless they are working from the same set of facts. All four of them have robust procedures for handling sensitive information and an obvious need to see information relevant to digital regulation. I can therefore see no benefit in placing any restrictions whatsoever on the sharing of information between them provided it is reasonably related to their duties. There is no benefit to the UK consumer if (e.g.) the CMA loses half a day each time they want to share relevant information with ICO because their lawyers need to jump through the confusing hoops of Part 9 of the Enterprise Act (which deals with information disclosure).
A more efficient process for sharing information ought to reduce inefficiencies, and therefore save taxpayer money, without any material detriment to the firms under investigation because much of the information would be shared eventually under Part 9 anyway. And the lawyers can spend more of their time on the detail of the Digital Markets Unit’s codes of conduct, which is what we’d want them to focus on.
By the way, I also take the view that information sharing needs to be made much easier internationally in order to help the leading authorities to deal coherently with these global markets. But that’s a debate for another day.
2. Embedding coherence
The DRCF highlights the need to encourage the regulators to consider the wider regulatory ecosystem rather than just their own narrow duties. Again, this seems very sensible.
It would be a bad outcome for consumers if (e.g.) the CMA’s investigation into Google’s Privacy Sandbox ended up with a remedy that was great in competition terms but awful in privacy terms. It is therefore clear to us that the CMA needs legal cover for taking account of privacy considerations (which aren’t currently explicitly within the CMA’s remit) in its decisions.
As part of its recommendation, the DRCF raises the possibility of a formal duty for the regulators to consult each other. While I can see the thinking behind it, I would be slightly disappointed to see additional processes being added. This would add a material amount of time to investigations. Far better would be to allow each regulator to take account of other regulators’ views, give them a general duty to co-operate, and trust that they are grown up enough to take account of what they each say. This would avoid the need for formal submissions to each other that will take too long and obscure their candid views because they fear disclosure to the parties under investigation.
Overall, this latest document from the DRCF is very sensible and let’s hope the UK Government acts on it. I would favour measures that allow the regulators to work together productively rather than measures that add additional legal hurdles to their investigations or possible grounds of appeal.
[Image source: privacy365.eu]
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