Digital Regulation: driving growth and unlocking innovation · first published 6 July 2021
This document, published in July 2021, is the government's overarching strategy for how it intends to regulate digital technologies across the UK economy. It sets three objectives — promoting competition and innovation, keeping the UK safe and secure online, and promoting a flourishing democratic society — and three principles regulators and policymakers should follow: actively promote innovation, achieve coherent forward-looking outcomes, and address international opportunities. It announces several forthcoming initiatives including a Digital Markets Unit (DMU) to tackle dominance by large tech firms, an Online Safety Bill, a pro-competition regime, and planned legislation on cyber security for connected devices. This is not a procurement policy: it contains no rules about how public contracts are awarded, evaluated or scored, and no obligations are placed directly on businesses supplying to government. Small firms in the digital sector may benefit indirectly from the DMU's pro-competition intent, but there is nothing here that changes what a supplier should do when bidding for a public contract today.
WHO THIS APPLIES TO
THE ENKII VIEW
For SMEs, the most tangible near-term signal is the establishment of the Digital Markets Unit to open up competition against dominant incumbents — if legislated, this could lower barriers for challenger firms in digital markets. The cyber security regulation of connected consumer products (IoT devices) is a concrete regulatory direction that small hardware and software firms should track, as compliance requirements will follow. However, this document is a policy vision and conversation-starter, not an actionable procurement rule — SMEs should monitor the downstream legislation and strategies it promises (AI Strategy, Digital Strategy, Online Safety Bill, Product Security Bill) rather than acting on this document itself.
1. Track the Product Security and Telecommunications Infrastructure Act (which followed this plan) and ensure your connected devices comply with the cyber security requirements it introduced — this is now law.
SMEs building or supplying consumer connected/IoT products — The plan announced the Product Security and Telecommunications Infrastructure Bill as the vehicle for mandatory cyber security standards for consumer IoT devices; that legislation has since been enacted.
2. Check your compliance obligations under the Online Safety Act, which followed this plan — particularly duties to remove illegal content and protect children.
SMEs operating online platforms, apps or services with user-generated content — The plan announced the Online Safety Bill as forthcoming legislation placing a duty of care on online companies; the Act has since passed.
3. Monitor the Digital Markets, Competition and Consumers Act and the CMA's Digital Markets Unit — if you are being squeezed out by a large platform, the DMU now has powers to designate firms with Strategic Market Status and impose conduct requirements.
SMEs in digital markets competing against dominant platform incumbents — The plan established the DMU 'to drive competition between digital firms and open up opportunities for innovative start-ups to compete with incumbents.'
4. Stay current with ICO (Information Commissioner's Office) guidance on data protection and algorithmic processing — the DRCF's work programme specifically includes 'algorithmic processing' as a priority focus area.
All SMEs handling customer data or using automated decision-making — The plan confirmed the DRCF would focus on 'algorithmic processing' and 'service design' as strategic projects, signalling increased regulatory attention in these areas.
5. Engage directly with DCMS consultations and DRCF calls for evidence as they are published — this plan explicitly states the government wants industry expertise to design pro-innovation regulation.
Digital SMEs interested in shaping future regulation — The plan states: 'We will explore how to ensure new regulations are designed with systematic input from external experts and tech leaders' and invites views from 'business, civil society, academia and beyond.'
Every rule below quotes the official document verbatim.
The digital sector contributed £151bn in output and accounted for 1.6 million jobs in 2019, contextualising the scale of the sector this plan addresses. (UK digital sector, contextual statistic, 2019 data)
“The digital sector contributed £151bn in output and accounted for 1.6 million jobs in 2019.”
A Digital Markets Unit (DMU) was established in shadow form in April 2021 to provide proactive oversight and swift action on competition issues in digital markets. (Digital markets, all firms operating in UK digital economy)
“A Digital Markets Unit, established in shadow form in April 2021, will be equipped for proactive oversight and swift action on competition issues, helping prevent future bad outcomes before they occur.”
The government planned to consult on the pro-competition regime for digital markets in summer 2021 and put it on a statutory footing as soon as parliamentary time allowed. (Digital markets, UK-wide)
“We will consult on the regime in summer 2021 and put it on a statutory footing as soon as parliamentary time allows.”
The proposed Online Safety Bill places a duty of care on online companies hosting user-generated content or allowing people to talk online to remove illegal content and protect children. (Online platforms, social media, websites, apps hosting user-generated content — UK-wide)
“The proposed Online Safety Bill will enshrine in law a duty of care on online companies to keep their users safe.”
The government planned to legislate on cyber security for connected (smart) consumer devices via the Product Security and Telecommunications Infrastructure Bill. (Manufacturers and suppliers of consumer connected/IoT products, UK-wide)
“The 'Product Security and Telecommunications Infrastructure Bill', referenced in the May 2021 Queen's Speech, will act as the legislative vehicle.”
39% of businesses and 26% of charities reported cyber security breaches or attacks in the 12 months prior to publication, with one in five losing money, data or other assets as a result. (All UK businesses and charities, contextual statistic)
“39% of businesses and 26% of charities report having cyber security breaches or attacks in the last 12 months, as a result of which one in five lost money, data or other assets.”
The government's three principles for designing digital regulation are: actively promote innovation; achieve forward-looking and coherent outcomes; and exploit opportunities and address challenges in the international arena. (All government digital policymakers and regulators, UK-wide)
“Actively promote innovation... Achieve forward-looking and coherent outcomes... Exploit opportunities and address challenges in the international arena.”
The Digital Regulation Cooperation Forum (DRCF) — comprising the CMA, FCA, ICO and Ofcom — was established as a voluntary forum to deliver a joined-up approach to digital regulation. (UK digital sector regulators and the businesses they oversee)
“We will work closely with the key regulators who make up the recently-formed Digital Regulation Cooperation Forum, a voluntary forum comprising the CMA, FCA, ICO and Ofcom — to support their work to deliver a joined up approach to digital regulation.”
The government stated its intention to use non-regulatory tools such as technical standards as a first consideration before introducing regulation, in order to minimise burdens on business. (All digital businesses, UK-wide)
“Where we judge intervention is strictly necessary, we will first consider non-regulatory measures like technical standards to reduce burdens.”
Views on the Plan were invited by 28 September 2021, via email to digitalregulationplan@dcms.gov.uk. (Any business or individual wishing to respond; consultation now closed)
“We welcome responses by 28 September 2021. You can send your views on this to: digitalregulationplan@dcms.gov.uk.”
This briefing is enkii's interpretation of the official document — the official text always governs.
Source document © Crown copyright, reused under the Open Government Licence v3.0 via the GOV.UK Content API. enkii tracks every Procurement Policy Note and briefs changes the day they land — see all briefings.