The Digital Regulation Cooperation Forum 2023-2024 workplan sees another busy year ahead for the sector

9 May 2023 10:45 AM

Against a year that will see significant legislative and regulatory change for the UK tech sector, the Digital Regulatory Cooperation Forum (DRCF)’s 2023-24 workplan sets out how it will support businesses to navigate an increasingly complex environment under a newly appointed CEO, Kate Jones.

The DRCF is a joint initiative between the major UK regulators that cover digital services. These include the Financial Conduct Authority (FCA), Information Commissioners Office (ICO), The Office of Communication (Ofcom) and the Competition and Markets Authority (CMA).

Now entering its third year, the DRCF’s workplan will be more important than ever as Ofcom moves towards implementation of the Online Safety Bill, new data protection and competition laws are debated in Parliament, and all UK regulators grapple with the Government’s recently published AI Whitepaper and work around online advertising and cybersecurity.

This is not to mention the rapid technological developments we have seen in the past year from the metaverse, to digital assets and the rise of generative AI which have already raised questions on how these emerging technologies can be developed responsibly in a level playing field.

The 2023-2024 workplan

As well as building its profile and existing programme of work, the DRCF will focus this year on creating its bespoke multi-agency advice service to support businesses’ whose products and services cut across multiple regulatory remits. The DRCF also published an Annual Report, reflecting on its output during 2022-23, alongside its own new dedicated website.

Maintaining its priority themes as coherence, collaboration, and capability, the 2023-24 workplan details its aims and specific pieces of work:

Coherence

• As the UK’s new online safety laws come into place, Ofcom will maintain a close working relationship with the ICO and FCA respectively, when developing guidance to support businesses with implementation. Areas of interaction with the ICO includes supervision of services, proactive technologies, age assurance and with the FCA, interaction with financial promotions legislation.
• The ICO and CMA will build on its ongoing collaboration, updating its existing joint statement on data protection and competition. Areas of focus will include online advertising markets, online choice architecture practices and potential regulatory remedies.  

Collaboration

• The DRCF will support the Government with the delivery of its new framework for the governance of AI by building a shared understanding of its key principles across regulators, while also following and assessing developments in generative AI, and third-party auditors of algorithms. Outputs from this work will help to inform a future potential cross-sector regulatory sandbox for AI, as recommended in Sir Patrick Vallance’s review on pro-innovation regulation for digital technologies. 
• Funded by the Regulators’ Pioneer Fund, the DRCF will pilot a multi-agency advice service to help innovators in digital markets develop services responsibly. The ICO has already launched its own pilot service to support businesses with data protection queries.
• The ICO and FCA will deliver joint research into the benefits and harms posed by digital assets.

Capability

• While building on its horizon scanning work, the DRCF will prioritise exploring digital identity and virtualised environments to understand how their deployment may cut across multiple regulatory remits.
• The DRCF will continue to develop knowledge sharing networks around cross-sector issues such as cybersecurity and resilience, build on its own capabilities and resource, as well as partner with a broad range of stakeholders, including overseas regulatory bodies.
• More practical forms of technical collaboration across regulators will be introduced.

techUK welcomes the DRCF’s workplan for the forthcoming year, particularly its focus on prioritising digital identity as part of its horizon scanning workstream, recognition of the value joint statements and symposiums bring to stakeholders, and more transparency on its knowledge networks. It is also promising to see the DRCF acknowledge where regulatory coordination may be necessary in the future, such as Smart Data.

With significant regulatory and legislative milestones ahead this year for the tech sector, the DRCF’s capability, capacity and agility will be key, and businesses will be interested to further understand:

• The DRCF’s operating model: there remains a limited understanding of the DRCF’s operating model. This can lead stakeholders to inadvertently view the organisation as being responsible for setting regulatory guidance separate to the four regulators it works across. Publishing the DRCF’s operating model and clarifying where stakeholders can expect to direct input could help tackle this, particularly for smaller firms.
• Timelines and details: signposting when stakeholders can expect outputs from the DRCF can help manage expectations and provide regulatory certainty. Further details on how actions from the workplan will be implemented in practice can also help to demystify the DRCF’s operations. For example, information on what “practical technical collaboration” between regulators looks like in practice will allow stakeholders to signal where they would find it most useful.
• Realising the DRCF’s full potential: as the first of its kind globally, the DRCF is a novel and invaluable organisation which could be scaled to meet the demands of an increasingly complex digital economy. In addition to its current responsibilities, a larger and more resourced DRCF could take on more ambitious projects such as facilitating joint sandboxes for areas of regulatory overlap, such as between the ICO and Ofcom for online safety technologies, or between several regulators for Smart Data Schemes (i.e., combining pooled data sets with synthetic data).
• Regulatory accountability: through upcoming legislation related to digital markets, regulators are gaining more power to direct policy that will have widespread impacts on our society and economy. While we support this approach which will provide the necessary frameworks to address the issues they are designed to tackle, it is vital that stakeholders have the ability to examine decisions and hold regulators account. This may require the Government to take a more active role in communicating policy objectives to regulators via letters and strategic steers as well as new structures in Parliament.