From the Government’s industrial strategy to the just-published IPPR Commission on Economic Justice report, “Prosperity and justice: A plan for the new economy”, if you are setting out policy for the economy, then you need to decide what you intend for the digital economy. And in examining that, you unavoidably have to come up with a plan for the data economy, too.
That’s exactly what arises from the IPPR’s two-year deliberation on what exactly is wrong with the UK economy and how it can be fixed. While anybody outside of the political sphere might be tempted to dismiss the views of a think-tank, that would be to ignore their potential to become formal party policy and potentially get enacted.
IPPR policy papers were central to the Blair-Brown New Labour project. While that puts it on the wrong side of the current power balance under Jeremy Corbyn’s leadership of Labour, it is entirely possible that an MP with ambitions to run the Treasury or Department for Business, Energy and Industrial Strategy might adopt what IPPR suggests.
Even if that possibility is set aside, the output of a review conducted by very serious and informed figures merits consideration. Among its ten-point plan, the proposal on “Promoting open markets in the new economy” has specific relevance. So what would any reshaping of the economy in line with this report mean for the data industry?
Just as many European economists, legislators and regulators have previously noted, the report’s authors recognise that, “the most concentrated markets of all are in the digital economy.” This creates challenges to new entrants and innovation, with data understood to be the power base from which this “excessive buying power” has grown.
The problem identified is that the Competition and Markets Authority (CMA) is only focused on issues of consumer welfare, not on industry structures or public interest more broadly. Notably, UK competition authorities only issued fines of £65 million between 2012 and 2014, whereas German authorities imposed £1.4 billion.
As services like search and social media have a zero-price business model, that means there is no consumer perspective from which the CMA can currently act. So the report proposes a reframing of its principles to encompass “market power that damages the public interest”.
Given the “winner-takes-all” effect that a successful, scaled-up digital platform can achieve, data and analytical capabilities are being concentrated into a very few (mostly non-EU) companies. That means new innovations such as AI and other data-driven start-ups could be stifled.
To address this, the report proposes that “the CMA…require platforms to open up their data as a condition of expansion”. That would be a remarkable and powerful extension of current rules and policies, although it is difficult to see the targets of this agreeing to such terms.
While the Information Commissioner’s Office already liaises with other regulators, such as Ofcom, when it comes to how data is being used or misused in specific sectors, the report goes a step further with its proposal for the Office of Digital Platforms (OfDigi). The intention would be to regulate search, social media and services in the same way as utilities.
Notably, OfDigi would overlap with the ICO in its proposed role of “enforcing greater transparency and enforcement over the collection and use of data”, as well as enabling more data portability. It is not clear why the authors believe the ICO is not equipped to carry out its existing task of enforcement and enablement of these GDPR rights. After all, the ICO is already active, including overseeing what the report apparently sees as a new obligation on companies to keep “audit logs” of the data on which they build algorithms - a requirement already in place in GDPR.
By viewing data through the prism of the digital platforms that original and control it, OfDigi may look like it fits into a regulatory gap. The reality seems more likely to be duplication, competition or substitution.
The “almost unprecedented wealth” and minimal transparency of the digital platforms makes them a clear target for policy makers. To this end, IPPR proposes “seeking to make data a common resource, open and available to be used for a wider variety of ends, and shared according to rules set by a common and enforceable governance regime.”
This vision of a “digital commonwealth” is a bold proposal and goes far beyond steps like funding the Open Data Institute or encouraging other public sector bodies follow the example of TfL. Digital utilises would have to open up their gold mines, which seems the most unlikely of all the suggestions in the report ever to become a reality.
Perhaps in recognition of this, the authors look to the public realm to get the ball rolling with a Digital UK public service that ensures all data created by local, regional and national public bodies is made open by statute. A consumer benefit would be a “digital citizen account” in which all of this public service data is aggregated and accessible to its subject.
The report has very noble goals - prosperity and justice for all should be acceptable to all but the most self-regarding, filter bubble-inhabiting Silicon Valley billionaire. From their perspective, however, and that of more populist politicians, the proposals are likely to be labelled as socialist and simply ignored.
Yet suppose just one of these proposals were to be enacted, such as regulating the market share allowable to a single digital platform, for example. The space and opportunity created could prove invigorating, especially to innovative and lively UK data start-ups. In a time when it is impossible to discount any political idea from becoming reality, IPPR may just have found an idea that could gain momentum.