UK's digital regulators focus on algorithms

The Digital Regulation Cooperation Forum (DRCF) has today published two papers on algorithms, along with a call for comments inviting anyone involved in or having a view on the use of algorithms to share their views until 8 June 2022.

The DRCF was established in 2020 to ensure greater cooperation between the Competition and Markets Authority, the Information Commissioner's Office, the Office of Communications and the Financial Conduct Authority in digital regulation.

The first of the papers looks at the current and potential benefits and harms of algorithms, and explores possible roles for UK regulators and the DRCF in particular. The key takeaways are not especially surprising - among them that algorithms may offer benefits, but harms can occur both intentionally and inadvertently; algorithmic processing lacks visibility and transparency; and there are limitations to the DRCF members' current understanding of the risks. The DRCF proposes ways in which its members could collaborate to bring about greater impact than would be achieved through individual regulatory action, including supporting the development of algorithmic assessment practices, helping organisations communicate more information to consumers (e.g. via transparency guidelines and algorithmic registers) and engaging with researchers to better understand issues with "human-in-the-loop" oversight (e.g. automation bias). 

The second paper seeks input on algorithmic auditing. While algorithmic auditing is not yet conducted extensively, the DRCF expects an audit ecosystem to evolve in the near future and recognises the important role regulators have in helping to shape that evolution. It notes a number of issues in respect of the current audit landscape, including the lack of specific rules and standards, the ability for auditors to enter the market without any assurance of quality, inconsistencies in what audits focus on and reluctance on the part of companies to cooperate with audits. Possible solutions identified include providing guidance on when audits are appropriate, establishing best practice principles and developing audit standards. The DRCF considered that these and other steps could help develop a third-party auditing market to complement regulatory activity, and noted that regulators would play a role in ensuring action is taken where audits identify issues.

The DRCF plans to undertake further activity in the field of algorithmic processing in the next financial year. The call for inputs is open until 8 June 2022. The DRCF has also today published its 2022-2023 workplan and its 2021-2022 annual report.