‘On ‘big tech’ good regulation helps good growth’

Labour is gripped by a leadership debate centred on a perceived tension between stimulating economic growth and tackling inequality. A similar false dichotomy is playing out in its approach to regulating ‘big tech’.

In opposition, Labour criticised the Tory administration for being “left behind by the US and EU, who are moving ahead with real safeguards on the technology.” Now they are in power, progress is painfully slow and the world is watching.

Labour’s longest-serving Prime Minister recently observed of AI: “There is no point in debating whether this technological revolution is a good or bad thing. Just know it is a ‘thing’.” That sentiment neatly captures a broader concern: that the current government sees its role less as shaping the direction of technological change for the good of working people and UK businesses, and more as championing its rapid deployment and managing the consequences after the fact.

READ MORE: ‘For Labour the next phase must be about growth’

This abdication of responsibility has direct relevance to the world of journalism. Tech platforms such as Google are now the main gateway for the public to access trusted news and information produced by publishers. When a new AI product is launched which replaces or reduces the prominence of links to publisher websites, the impact is felt immediately by news providers through dramatic drops in traffic and the commensurate advertising revenues. Google’s fast-paced integration of AI into search increases synthetic information, threatening the quality and provenance of information at a time of global instability when we need trusted sources more than ever before.

The root of this paralysis is an underlying fear within government of being branded as ‘anti-innovation’ by a tech lobby that treats any boundaries as an attack on progress.  Labour thinks ‘big tech’ will stop investing in the UK if it doesn’t get the support it feels obligated to. As a result, on most issues, the government has displayed impressive reluctance to cause any offence to Silicon Valley. Nowhere is this more apparent than its approach to the Competition and Markets Authority, which has suffered funding cuts, sudden changes in senior personnel, and a deafening absence of political support.

This demonstrates a dangerous misunderstanding of how economic dynamism actually works. Labour has made economic growth its number one priority, heavily tied to its Industrial Strategy.  But monopolies suffocate growth. Far from killing innovation, greater competition drives growth by reducing the market power imbalance, boosting innovation and productivity. These are not abstract concepts; unfair pricing and tech duopolies act as a secret tax on British consumers.

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None of us want burdensome regulation, and that is exactly what competition law prevents. In fact, the way Google and others dictate the activities of consumers and businesses is far more burdensome than any regulation a government could introduce. Meaningful competition reform will allow British businesses to emerge from the stifling grip of ‘big tech’ dominance.

There is also a fatalistic attitude prevailing at the top of government, treating the rise of technology platforms like an unstoppable force of nature that we all just have to endure. It represents a sharp U-turn from Rachel Reeves’ own 2017 warning that “new monopolies of platform capitalism like Google, Facebook and Amazon” have “captured and commodified” knowledge, data and social relationships.

A bolder approach is both right and effective. The CMA’s recent world-first Publisher Conduct Requirement is a case in point. By forcing Google to give news organisations and publishers effective tools to control whether their content is used to power AI features like search overviews without losing their traditional search rankings, the regulator demonstrated exactly what happens when you hold a firm line.

Far from leaving the UK market and withdrawing investment, Google immediately announced it will pilot these new controls for publishers in the UK before rolling them out globally, proving that robust, proportionate regulation does not trigger a grand departure but instead sees the UK leading the world.

The answer to ‘big tech’ dominance isn’t to bow to their pressure or stand by and do nothing. Instead, it’s to give the CMA vocal, consistent support to exercise the remit it’s been given by Parliament.

Funding cuts inflicted upon the CMA should be reversed, enabling the regulator to hire more specialist talent. This will bring pace to its work, too, which is crucial in delivering other conduct requirements to ensure fair and reasonable payment for news content – particularly important for smaller local publishers.

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Labour does not face a choice between growth and regulation. Instead, it faces a choice about what kind of growth it wants to deliver. If ministers are serious about real sustainable growth, they must move beyond managing the consequences of technological change and start shaping its direction. They must achieve this by backing the CMA to set firm rules, ensuring that innovation works for the broader digital economy, not just for those who already dominate it.

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