The Bytesize Briefing with Atticus Partners - April

Welcome to the Atticus Partners Technology newsletter: the Bytesize Briefing!??

Each month, we cover the politics and policy from across the UK and European technology sectors.??

In this edition, we explore the passing of the landmark Artificial Intelligence Act, how Big Tech is protecting again election disinformation online, the potential for Chinese-owned digital companies to move to Ireland, tech announcements in the Spring Budget and what Labour is planning for the sector, if it comes into power.?

For more information about Atticus’ work in the technology sector, or questions about the support you require, please get in touch via [email protected].??

1. European Parliament passes landmark Artificial Intelligence Act

In March, European Union lawmakers approved the world’s first major set of regulations for the artificial intelligence sector, the Artificial Intelligence Act. The main objective of the legislation is two-fold: protecting fundamental rights from high-risk AI, whilst also enabling AI innovation in the EU. The Act will take a risk-based approach, with higher risk AI systems facing greater scrutiny.??

Although celebrated at its passing, with the European Parliament’s Civil Liberties co-rapporteur Brando Benifei saying the Act “is a starting point for a new model of governance built around technology”, the legislation has also faced intense criticism. This includes by Drago? Tudorache, an MEP who acted as a co-rapporteur for the legislation, who warned it may soon become “obsolete” as new technology develops.??

Industry stakeholders have been similarly critical. Max von Thun, Director of the competition policy organisation the Open Markets Institute, commented how the risk posed by AI is intrinsically linked to the dominance of the companies developing and rolling out new technologies, highlighting how it is impossible to deal with risk without managing dominance.?

2. Battle against digital disinformation

Brussels has shared guidelines on how major platforms – including Meta, X, Snapchat and TikTok – are expected to manage online disinformation ahead of the European Parliament elections in June.??

The guidelines will require social media platforms and search engines to scrutinise the risks of online disinformation and work closely with cyber security agencies across the bloc. Although the guidelines are fairly broad, they will be strictly enforced under the EU’s new Digital Service’s Act –? with digital platforms facing fines of up to 6% of global turnover for non-compliance.??

It appears that Big Tech is taking the warning seriously. TikTok is establishing an EU-specific monitoring feature on the app to ensure that the information being shared on the platform is “trusted and authoritative”, while Meta announced it will be activating an Elections Operation Center to identify and mitigate threats around the election. ?

3. Ireland attempts to woo Chinese giants

While the US Senate considers legislation to force the sale of TikTok or face suspension of the social media site in the United States, Ireland is taking the opposite approach. Temu, Shein and other Chinese companies are looking to headquarter their operations for Europe, the Middle East and North Africa in Dublin, taking advantage of low corporation tax and other financial incentives.??

Analysts of Western-Chinese relations have advised against the move, with Dan Baer, senior vice president at the Carnegie Endowment for International Peace, stating that Ireland welcoming Chinese companies “could poison the present situation”. China hawks may want to begin watching Ireland’s tech space more closely…?

4. Spring Budget proves a mixed bag for the tech sector

The Chancellor delivered his annual Spring Budget in an effort to help move the tide of electoral opinion, with the headline announcement being a 2% cut to National Insurance, following on from a similar move in the prior Autumn Statement.?

The tech sector received a touch of good news from the Budget, with the Alan Turing Institute, the UK’s national institute for data science and artificial intelligence, having their funding doubled to support research in healthcare, the environment and national security.??

Support for small and midsize enterprises (SMEs) was also announced, with ￡7.4 million given to an upskill?pilot fund which will help SMEs develop AI skills. This investment will work alongside the SME Digital Adoption Taskforce, which aims to explore effective methods of assisting SMEs to?integrate?digital technology to enhance their productivity. Jeremy Hunt took a moment during the Budget to tout tech companies, and the Government’s role in enticing them to the UK, saying the country is on track to be the “next Silicon Valley”.?

5. Labour details their future plans on tech

Peter Kyle has spelled out what Labour’s plans would be for tech if they were to win the next election. Speaking at a recent industry event, the Shadow Secretary for Science, Innovation and Technology announced plans to release an AI strategy in the coming months that aims to make AI "work for everyone”, claiming he wanted to entice the “next 10 DeepMinds to start up and scale up here within the UK.” Later in the month, reports emerged that Labour are considering plans to address AI deepfakes, with a focus on AI generated nude images.??

Commitments were also made to establish a “regulatory innovation office” to give the Government “strategic steers” on their industrial policy. The aim of this would be to prevent innovation from being stifled, with the regulatory office also setting targets for regulatory approval times, which would be compared internationally.?

Look ahead...

The Lords will complete their assessment of the Artificial Intelligence (Regulation) Bill in the coming weeks before the legislation progresses to the Commons. The Bill seeks to create an ‘AI Authority’ with a set of guiding principles for these new technologies, including proposals relating to machine learning, foundation models, and regulatory sandboxes.?

While important topics, the Bill is expected to pass through the Commons Stages relatively slowly as it originated in the House of Lords.??

The Digital Markets, Competition and Consumers Bill will also move to the Commons for its ping pong stages before Royal Assent. Following the consideration of Peers' amendments, the Bill will become law and significantly change the landscape of UK competition law and digital markets.?

To find out more about how Atticus helps tech companies to navigate the changing regulatory and legislative landscape, get in touch with our team at [email protected] to learn more about what we can do for you.?