- Tech CEOs’ Concerns: UK Regulations Nearing “Tipping Point”
- Regulation and Frustration: Implications of UK’s Online Safety Bill and Digital Markets Act
- Challenges in Regulating Tech: The Balancing Act and Experts’ Perspectives
It was difficult to maintain a poker face when the CEO of a large U.S. technology company I was speaking with stated that there was a definitive tipping point at which the company would leave the United Kingdom.
The faces of the other people in the room, many of whom worked there, mirrored my astonishment.
Neither had they heard this before, one of them told me afterward.
I cannot reveal who it was, but it is a brand that you would likely recognize.
I’ve been in this profession long enough to identify a belligerent tech ego when I encounter one. From Big Tech, there is frequently large-scale discourse. However, this felt distinct.
It echoed a sentiment I’ve been hearing increasingly frequently from this lucrative and prominent U.S.-based sector recently.
“Pivot point”
Many of these businesses are increasingly frustrated.
Their “tipping point” is UK regulation, which is rapidly approaching.
The passage of the Online Safety Bill is anticipated in the autumn. Aimed at protecting minors, it stipulates stringent rules for policing social media content, along with severe financial penalties and jail time for tech executives who fail to comply.
A proposal that encrypted messages, including those sent via WhatsApp, can be read and handed over to law enforcement by the platforms they were sent on if they pose a national security or child protection risk has proven to be particularly controversial.
The children’s charity NSPCC has described encrypted messaging apps as the “front line” where images of child abuse are shared, but it is also viewed as an indispensable security tool for activists, journalists, and legislators.
Currently, messaging applications offering this encryption, such as WhatsApp, Proton, and Signal, cannot view the contents of these messages themselves.
WhatsApp and Signal both threatened to leave the UK market in response to this demand.
The Digital Markets Act is also proceeding through the legislative process. It is proposed that the UK’s competition watchdog selects significant companies such as Amazon and Microsoft, assigns them rules to abide by, and establishes penalties for noncompliance.
Multiple companies have informed me that they believe this grants an unprecedented level of authority to a single body.
Microsoft reacted angrily when the Competition and Markets Authority (CMA) blocked its acquisition of video game industry titan Activision Blizzard.
The European Union is a more attractive location to start a business than the United Kingdom, raged CEO Brad Smith. Since then, the CMA has resumed negotiations with Microsoft.
This is particularly damning because the EU is also introducing similar regulations, but the EU market is much larger and therefore more valuable.
Apple has threatened to remove Facetime and iMessage from the United Kingdom if proposed amendments to the Investigatory Powers Act, which would require tech companies to obtain Home Office approval before releasing new security features globally, are passed.
The United Kingdom cannot and should not be held hostage by American tech titans. However, their services are utilized by millions of individuals. And there is no UK-based alternative to these services, for better or worse.
Rishi Sunak, the self-proclaimed pro-technology prime minister, serves in this context. He wants to bring the lucrative US-based artificial intelligence business to the UK. A few of them, including Palantir, OpenAI, and Anthropic, have agreed to establish headquarters in London.
But in Silicon Valley, California, some claim that benevolence is waning.
Michael Malone, a veteran of the technology industry, explains, “There is growing irritation in the United States regarding the United Kingdom and the European Union’s efforts to rein in Big Tech. This is viewed as less about ethical behavior and more about jealousy and stifling foreign competition.”
British entrepreneur and DeepMind co-founder Mustafa Suleyman will found InflectionAI in California.
It is difficult to walk this line. Big Tech’s past actions have not exactly been exemplary, and many people believe regulation and accountability are long overdue.
Also, “pro-innovation” should not be confused with “pro-Big Tech,” warns Professor Neil Lawrence, a Cambridge University academic who has previously served as a CMA advisor.
“Pro-innovation regulation is about ensuring that small businesses and start-ups can participate in emerging digital markets,” he explained.
Other experts are concerned that the rule-makers do not comprehend the swiftly advancing technology they are attempting to harness.
Dame Diane Coyle, an economist, remarked, “There are a few government employees with profound [technical] knowledge, but not nearly enough.”
“Therefore, [all of this] legislation has been moving through Congress in a manner that appears to technical experts, such as some of my colleagues, to be ill-informed, thereby jeopardizing some of the services that people in this country highly value.”
If UK legislators do not comprehend the technology, specialists are willing to provide guidance.
However, many of them feel ignored.
Surrey University cyber-security expert Prof. Alan Woodward served at GCHQ, the UK’s intelligence, security, and cyber organisation.
So many of us have signed letters, given formal testimony to committees, and offered direct advice – either the government does not comprehend or does not wish to listen,” he stated.
The combination of ignorance and arrogance is hazardous.
The Department for Science, Innovation, and Technology stated that it had “worked hand-in-hand with industry and experts from around the globe to develop changes to the technology sector,” including during the development of the Online Safety Bill and the Digital Markets Bill.
