UK regulators seek input on algorithmic processing and auditing

A coalition of UK digital regulators is calling for views on algorithmic processing and auditing to help streamline and shape the regulators’ collective work going forward, as well as identify further areas of common interest between the organisations.

The Digital Regulation Cooperation Forum (DRCF) – which consists of the Competition and Markets Authority (CMA), the Financial Conduct Authority (FCA), the Information Commissioner’s Office (ICO) and the Office of Communications (Ofcom) – was formed in July 2020 to strengthen the working relationships between the watchdogs and establish a coordinated regulatory approach to the UK’s digital services and economy.

The call for input follows the publication of two discussion papers from the DRCF’s Algorithmic processing workstream, which looked at the benefits and harms of algorithms and the landscape of algorithmic auditing.

“As part of this workstream, we launched two separate research projects – one looking at the harms and benefits posed by algorithmic processing, including the use of artificial intelligence, and another looking at the merits of algorithmic auditing, as a way of documenting risks and assuring stakeholders that an algorithmic system behaves and is governed as intended,” said the DRCF.

“We are now launching a call for input alongside the publication of these two papers and we welcome and encourage all interested parties to engage with us in helping shape our agenda.”

On the benefits and harms of algorithms, the DRCF identified “six cross-cutting focus areas” for its work going forward: transparency of processing; fairness for those affected; access to information products, services and rights; resilience of infrastructure and systems; individual autonomy for informed decision-making; and healthy competition to promote innovation and better consumer outcomes.

On algorithmic auditing, the DRCF said the stakeholders pointed to a number of issues in the current landscape: “First, they suggested that there is lack of effective governance in the auditing ecosystem, including a lack of clarity around the standards that auditors should be auditing against and around what good auditing and outcomes look like.

“Second, they told us that it was difficult for some auditors, such as academics or civil society bodies, to access algorithmic systems to scrutinise them effectively. Third, they highlighted that there were insufficient avenues for those impacted by algorithmic processing to seek redress, and that it was important for regulators to ensure action is taken to remedy harms that have been surfaced by audits.”

The DRCF is now seeking feedback on the papers, with particular interest in the role that watchdogs, both together and separately, should play in regulating algorithms. The call for input will last until Wednesday 8 June 2022, with a summary of the response to be published shortly after that date.

“The task ahead is significant – but by working together as regulators and in close co-operation with others, we intend for the DRCF to make an important contribution to the UK’s digital landscape to the benefit of people and businesses online,” said Gill Whitehead, chief executive of the DRCF.

“Just one of those areas is algorithms. Whether you’re scrolling on social media, flicking through films or deciding on dinner, algorithms are busy but hidden in the background of our digital lives.

“That’s good news for a lot of us a lot of the time, but there’s also a problematic side to algorithms. They can be manipulated to cause harm or misused because firms plugging them into websites and apps simply don’t understand them well enough. As regulators, we need to make sure the benefits win out.”

Alongside its call for input on algorithms, the DRCF has also published its first annual report on the forum’s collaboration, and set out its workplan for the coming year.

“In 2021 to 2022, we focused on laying the groundwork for effective and joined-up collaboration,” said the report. “Through the DRCF, we created single cross-regulatory teams to share knowledge and develop collective views on complex digital issues. We prioritised the following four digital trends and technologies: algorithmic processing, design frameworks, digital advertising technologies, and end-to-end encryption.”

The report added that horizon scanning is key to understanding the impacts of emerging technologies, as well as helping the coalition to identify and plan for future regulatory challenges. “Doing this collectively helps us to share expertise and quickly accelerate our knowledge-building in new or rapidly developing subject areas,” it said.

The workplan published by the DRCF aims to build on this work, outlining three priority areas going forward: coherence between regimes, collaboration on projects, and capability building across regulators.

It also outlined a number of specific projects it will undertake in 2022 and 2023, which it believes will help tackle a range of significant regulatory challenges.

These include projects to protect children online, promote competition and privacy in online advertising, support improvements in algorithmic transparency, and enable innovation in the industries that the DRCF regulates.

In December 2021, a House of Lords Communications and Digital Committee inquiry into digital regulation found that better processes and cooperation between regulators, industry and experts were needed to deal with rapid technological development, while minimising both risks of harms and unnecessary regulatory burdens that limit the benefits of any advances.

Although it welcomed the launch of the DRCF, the committee noted that this was “a small step” and that more measures – including the extension and formalisation of coordination – were needed to boost the coalition’s long-term effectiveness and accountability.

The Lords committee added that, despite the cooperative work carried out by the DRCF so far, the new forum “lacks robust systems to coordinate objectives and to sort out potential conflicts between different regulators as the workload expands”.

In September 2021, the outgoing UK information commissioner, Elizabeth Denham, told MPs and peers that digital economy regulators needed discrete remits backed up by strong information-sharing powers to both provide clear focus and allow for greater cooperation between their disparate but interlinked regimes.

Denham specifically noted the need for “information-sharing gateways” between regulators involved in the DRCF. “We need to be able to share information, because from a competition aspect, a content regulation aspect or a data protection aspect, we are talking to the same companies, and I think it is important for us to be able to share that information,” she said.

Denham added that these gateways, alongside “equivalent powers” such as the ability to perform compulsory audits, would ensure that technology companies, “some the size of nation states, are not forum shopping, or running one regulator against another”.