Wednesday 6 February 2019 / 12:01 AM Tom Watson

Radical action is needed to fix the distorted digital market – Tom Watson

In a major speech today, 6th Feb 2019, Tom Watson, Labour’s Deputy Leader and Shadow Secretary of State for Digital, Culture, Media and Sport, will lay out Labour’s view of how the digital market is broken with monopolistic power wielded by a few companies causing serious social harm and subverting democracy.

The speech will take place at Whitechapel Art Gallery in the heart of London’s ‘Tech City’ at an event hosted by the centre-left think tank Progressive Centre UK titled: ‘What can be done to harness the power of digital to enhance not endanger our democracy?’

Tom will outline how Labour proposes to rebalance the distorted digital market by:

  • Establishing a new statutory regulator with powers to prevent market abuse and break up monopolies
  • Introducing a Digital Bill of Rights and a legal Duty of Care to give more powers and protections back to consumers, particularly children
  • Introducing Digital Democracy Guarantees – new rules to protect our democracy from subversion online

The speech, which builds on Jeremy Corbyn’s Alternative MacTaggart Lecture at the Edinburgh TV festival last August, will lay out Labour’s view on the radical measures necessary to remedy the broken digital market ahead of the Government’s release of the online harms white paper due at the end of the month.

Tom will say that he recently found out that he was the first person to use the phrase ‘social media’ in the House of Commons, in 2008. Back then he “looked forward to a user-led tech utopia. I was among those that saw the Internet as a great democratising force in our politics. It offered new forms of self-organising, entrepreneurship, and localism fostered by decentralised communications. But a decade on, we find ourselves in digital dystopia.”

Social media is causing and exacerbating mental health problems in children and young people. The online world has become a haven for hate speech and extremism. Fake news online is undermining trust in democracy and even compromising elections. Algorithms with no human oversight are making significant decisions that affect life chances and what information you see online. Online retailers are undercutting high streets and failing to pay their fair share of taxes.

Tom will say that at the root of many of these problems is a market distorted by data monopolies and will say that if the Government’s Online Harms White Paper is to be effective, it must take action to tackle the fundamental problems in the digital market. He will say “Our task is to steer the power of technology back towards the public interest. Technology responds to the desires of its users, the structure of its market, and to the limits of the law. These things can all be changed. We can’t afford a laissez-faire approach to digital regulation any longer.”

In the speech, Tom will outline Labour’s proposals to rebalance the digital market, ensure our democratic institutions and processes are protected and rebuild public trust in the digital sphere.

On rebalancing the digital market and empowering consumers Labour proposes:

  • Giving a new regulator, with a statutory underpinning, powers to prevent market abuse and where necessary break up monopolies
  • A broad legal duty of care on companies to protect users, particularly children and young people, from harm, enforced by strict penalties
  • A Digital Bill of Rights to allow citizens to exercise more control over how their data is collected and monetised, and greater rights to move their data across platforms and a right to know what automated decisions their data is subject to

On Digital Democracy Guarantees Labour proposes:

  • Online political advertisers targeting UK citizens should be physically located in our country.
  • Automated accounts on digital platforms should be clearly labelled.
  • Political advertising should be more transparent. Consumers should have the confidence to know which organisation has placed adverts they are seeing and understand the broad demographic targeting criteria
  • A legal duty to find and remove illegal content with the supervision of regular judicial review and a transparent process, including fast-track appeals.

On bolstering a Digital Public Sphere Labour proposes:

  • Online and media awareness across our education system
  • Giving charitable status to some local, investigative and public interest journalism that have been suffering from the digital revolution

On empowering consumers and rebalancing the digital market Tom Watson is expected to say:

“At the centre of this crisis is an imbalance of power:

Data monopolies and a distorted market. Each year, businesses make billions by extracting and monetising personal data from each and every one of us.

And yes, they offer us a service in return. But only worth a fraction of the fortune they gain.

This is Surveillance Capitalism. The power dynamic between platforms and users has long been lopsided.

We need to take more control over how our personal data is collected and monetised through a Data Bill of Rights. Customers should benefit from the value of the data we provide and the inferences made from it.

And in a market that offers little consumer choice, we must reduce the barriers for moving between platforms, meaning greater portability of data across services. Users should know when and how their data is subject to automated decisions, so people should have a voice in whether algorithms serve as invisible editors, for example, curating what news we see.

And we will explore alternatives to companies keeping large databases on the promise they will process it within the law. Too many of those promises have been broken.

Of equal importance is the power dynamic between the companies themselves. Consumers must have meaningful choices in how to find, send and receive information online. One of Government’s central roles is to prevent the abuse of market power, and we could make meaningful interventions, from facilitating competitive entry and product differentiation, to regulating essential services so that public interest comes before private profits.

Competition restrictions and oversight should be modernised to match the digital market. Today, power is consolidated by large companies merging and acquiring smaller competitors, so future competition reviews should consider whether companies are acquiring data and patents that enable monopolisation.

And the scale of the largest companies is rightly the subject of scrutiny. We should take seriously the calls to break them up if it is in the public interest.”

On a legal duty of care Tom Watson is expected to say:

“New regulation must also put the protection of children at the forefront. That’s why Labour will ensure that companies have a legal duty of care in the services they provide to children.

The Government said yesterday that they want this too, but we need to ensure that the threshold for harm caused is not too high to offer meaningful protection and breaches of the legal duty must be met by robust penalties.

Under GDPR companies can be fined 4% of global turnover, or as much as 20 million Euros, for data breaches. If companies breach health and safety law in this country they are not only fined but forced to pay a victim surcharge to compensate those affected. For the duty of care to be effective we need penalties that seriously affect companies’ bottom lines.

It is fitting that Safer Internet Day falls within Children’s Mental Health Week, because the issues have become inextricably linked. More than half of 3 to 4 year olds use the internet. Almost 80 per cent of 5 to 7 year olds are online, along with almost all children between 8 and 11 years olds. Together, children make up a third of online users, and they are also some of the most vulnerable.

NHS research shows that children with mental health problems are more likely to use social media every day, and will do so for longer periods of time. And time spent online can have tragic consequences.

In 2017, 14 year old Molly Russell took her own life. Last month, her parents said that exposure to harmful content about depression and suicide online, and I quote: “helped to kill her”.

And Molly’s family is not alone. This is the kind of harm online content can contribute to when the right safeguards are not in place, a consequence of an industry that too often chooses to profit from children, rather than protect them.

The Science and Technology Select Committee’s recent report on social media, screen time, and young people’s health called for a comprehensive regulatory framework as a matter of urgency. They found that the current patchwork of initiatives does not offer our children the protection they need,

Leaving children vulnerable to content that is detrimental, and in some cases dangerous, to their wellbeing.

I agree – our children need more than patchwork protection.”

On digital democracy guarantees Tom Watson is expected to say:

“The rise in digital disinformation shows that the technologies underpinning the digital economy are too easily turned against us, sowing division and bringing extremism from the margins to the mainstream.

And here lies the danger to our democracy:

Conspiracy sells better than truth; and hate sells better than compassion.

So, digital platforms are ideally suited to propagandists peddling bigotry and division to the disillusioned.

I know Silicon Valley companies didn’t set out to undermine democracy. But they didn’t stop it, and they continue to profit from it…

This is a matter of national security. Disinformation divides our society, damages our faith in the media, and distorts electoral outcomes.

We need to counter this with a set of Digital Democracy Guarantees Tech companies will need to confirm that all online political advertisers targeting UK citizens are physically located in our country. We have the right to know who is trying to influence our views, and how they are trying to do it.

Agents of disinformation amplify their lies through targeted digital adverts and social media bots. So all automated accounts on digital platforms should be clearly labelled. And political advertising should be more transparent so consumers are confident they know who placed the advert they are seeing, and understand the broad demographic criteria by which they were targeted.

Too many platforms choose ad sales over accuracy, clickbait over credibility. We will work with civil society groups to cultivate public knowledge about disinformation, and we will deliver media literacy across our education system to support the next generation of voters.

And we will protect users from those who use digital media platforms to parade illegal material. Illegal content like hate speech and incitements to violence should be removed for the internet. It is the duty of digital media companies to ensure those removals are rapid.

Labour would establish a legal duty to remove illegal content with the supervision of regular judicial review and a transparent process, including fast-track appeals.

The right to legitimate speech should be balanced against the need for legal protection.”

On strengthening our Digital Public Sphere Tom Watson is expected to say:

“We need a digital public sphere to counter the damage done by disinformation, and to safeguard our democracy.

The digital economy has displaced much of traditional journalism. 136 local and regional papers have closed in just six years. And there are 6,000 fewer full-time positions in the industry than in 2007. And rather than facilitating credible, public service journalism online to fill the gap, platform monopolies have pocketed the profit and let fake news run riot.

We need a digital public sphere to help to fill that vacuum. The public policy response must be rigorous and open minded, considering all solutions for modernising media institutions, including through granting charitable status for traditional news businesses in transition.

It’s true that the marketplace for online news seems broken.

But here is our chance to set that right and design a digital public sphere that will promote informed debate, sustain active citizenship, and protect the values of our democracy.”