Vallance review advocates light-touch regulation for emerging technologies

The government has accepted in full the recommendations of a report by its outgoing chief scientific adviser, Patrick Vallance, into the regulation of emerging technologies such as artificial intelligence (AI), but also drones and space technologies.

Pre-eminent among those is to set up what he and his team – he took input from Priya Lakhani, the founder of an artificial intelligence education technology company called Century Tech, and Matt Clifford, chair of Aria, the UK’s Advanced Research and Invention Agency – are calling a “sandbox”. This is billed as a “live testing environment, with a well-defined relaxation of rules, to allow innovators and entrepreneurs to experiment with new products or services under enhanced regulatory supervision without the risk of fines or liability”.

The sandbox, as envisaged, is to be overseen by the Digital Regulation Co-operation Forum which comprises of Ofcom, the ICO, the CMA and the FCA. It is to be a time-limited host to technology that is ready for commercial breakthrough, and which represents either an answer to a big social challenge or an opportunity for the UK to be world-beating.

To begin with, the sandbox will attend to areas where regulatory uncertainty exists, “such as generative AI [and] medical devices based on AI”. The report also suggests it could link closely with the ICO sandbox on personal data applications.

For its part, the ICO issued a statement with respect to the government’s response to the Vallance report: “Given the opportunities that AI offers, we know we have a crucial role to play in helping innovators develop safe and trustworthy new products and services. We’ve published a wealth of guidance in this area, as well as practical support to innovators through our regulatory sandbox.

“But in a fast-moving area like AI, there is always more that can be done, and we welcome the focus this report will bring. We’ll continue prioritising our work in this area – including guidance we’re working on, including on personal data processing relating to AI as a service – and look forward to discussing the recommendations within the report with our DRCF partners and government.”

The digital technologies report was commissioned by the government on the back of the chancellor’s Autumn 2022 Statement. It is part of a more general programme of work into how the UK can better regulate emerging technologies.

In terms of the sandbox recommendation, the government has said it would “engage regulators” to prepare for the launch of said sandbox. More detail is promised in a forthcoming whitepaper on AI.

The report’s second recommendation – “government should announce a clear policy position on the relationship between intellectual property law and generative AI to provide confidence to innovators and investors” – has elicited a move for the Intellectual Property Office to “produce a code of practice by the summer which will provide guidance to support AI firms to access copyrighted work as an input to their models, whilst ensuring there are protections (e.g. labelling) on generated output to support right holders of copyrighted work”.

The third recommendation – “government should facilitate greater industry access to public data, and prioritise wider data sharing and linkage across the public sector, to help deliver the government’s public services transformation programme” – met with mentions of a government “data marketplace” to be set up by 2025 and of the Office for National Statistics’ Integrated Data Service, which will be in public beta by 31 March, it is said.

Recommendations concerning the future of transport, the use of drones and space technology turn around thorny issues implicated by such relatively novel developments as self-driving vehicles, operating standards for drones, and liability limits for satellite operators. With respect to the latter, the government said it intends to propose a “variable limit approach at the end of March, ahead of a formal consultation on this and other liability and insurance matters in June”.

The report’s recommendation on cyber security – “amending the Computer Misuse Act 1990 to include a statutory public interest defence that would provide stronger legal protections for cyber security researchers and professionals, and would have a catalytic effect on innovation in a sector with considerable growth potential” – the government said only that the “Home Office have a consultation live and a programme of work in the pipeline”.