UK: UK Digital Economy Bill

Last Updated: 9 September 2016
Article by Alistair Maughan

The UK government has published its Digital Economy Bill, intended to lead to a new Digital Economy Act. Although this is not the first time that the UK has produced legislation on the Digital Economy, the timing of the latest bill – announced by the Queen in May 2016 but published post-Brexit vote – leads to questions about whether the UK will need more than a piecemeal Act of Parliament if it is to maintain whatever position it currently enjoys in the global digital economy.

Much has changed since the UK's last direct legislation on the digital economy, back in 2010. Technologies that seemed advanced then – such as cloud computing – now comprise mature markets, and have been replaced by Big Data, robotic process automation, the Internet of Things and blockchain/distributed ledger technology as industry favourites. Also, the EU has both announced and pushed forward its Digital Single Market initiative. And, of course, the UK has voted in favour of Brexit.

The UK government clearly believes that the UK sits at the top table in terms of the global digital economy. But how does the country retain its position? And, if and when Brexit happens, how will the UK seek to replicate the advantages of being within the world's largest free trade grouping in terms of the flow of digital goods and services?

Timing-wise, the new Digital Economy Bill (the "Bill") – which was announced in the Queen's speech to Parliament in May 2016 and had its first reading in Parliament in July 2016 – is unfortunate. The two key events in its short life so far straddled both the Brexit referendum decision and the EU's announcement of a slew of digital single market measures, both in June 2016.

In light of both those developments, the Bill risks being seen, at best, as merely a stop-gap series of piecemeal measures and, at worst, as an irrelevance. Not that the Bill's measures are unwelcome, of course – merely that, without a lot more government support and legislative initiative, the Bill is not going to close the gaps that risk opening up when Brexit takes the UK outside the EU digital single market.

Content-wise, the Bill's primary focus is infrastructural – especially targeting Internet and broadband connectivity. It includes a range of measures designed to:

  • implement a new Electronic Communications Code;
  • provide better, more consistent end-user access to broadband across the UK;
  • protect children from pornography and harmful online content;
  • amend Ofcom's regulatory responsibilities;
  • improve the delivery of public services, including a new Data Sharing Code of Practice; and
  • strengthen the Information Commissioner's enforcement powers and protect individuals' rights, including via a Direct Marketing Code of Practice intended to provide better protection against spam email and nuisance calls.


The government plans that Internet service providers (ISPs) will have to comply with any request from a UK citizen to provide broadband services at a speed of at least 10Mbps (the so-called Universal Service Obligation), or pay out compensation.

But the Bill doesn't introduce a legal right to a 10Mbps broadband connection; it's merely the first step in that direction. The target 10Mbps threshold doesn't seem particularly onerous, given that the current average broadband speed is 18.6Mbps and the UK government's definition of superfast broadband is 24Mbps. However, the Universal Service Obligation will be reviewed over time, and the 10Mbps figure will rise as and when Ofcom deems higher speeds appropriate, to ensure that the broadband coverage remains "sufficient for modern life".

The Bill also proposes to amend the Communications Act 2003 to permit Ofcom to require communications providers to pay compensation to end-users in respect of a failure to meet published performance standards.


The Bill contains a new Electronic Communications Code (ECC) that provides rights for communications providers to install and maintain equipment on land. The changes ought to reduce the cost of infrastructure roll-out, incentivise investment and improve connectivity.

The existing ECC (originally set out in Schedule 2 to the Telecommunications Act 1984, as amended) governs the relationship between landowners and electronic communications providers who want access to land so that they can install and maintain equipment on that land. The government has been planning to update the ECC for some time in order to strike the right balance between the interests of landowners and communications providers – and to help satisfy the general public's insatiable desire for faster, more reliable broadband.


The Bill discusses customers switching between suppliers of communication services, how this will work and how much public take-up there might be, given that in some other areas (such as bank account switching), consumer take-up has been muted.

Currently, there is no consistency on how long it takes for consumers to switch from one communications service provider to another. The government wants to amend the Communications Act 2003 to add a power for Ofcom to specify requirements in relation to arrangements for end-users to switch their communications provider. The intention is for Ofcom to be able to help consumers make more informed decisions about which communications provider to use.

It's not yet known how the new procedure will work. However, based on previous switching initiatives introduced by Ofcom, it's likely to be a short process (seven days or less). It's also likely to take the form of provider-led switching, so that consumers can arrange switching via their new provider and avoid the headache of having to contact their existing provider to exit the contract.

It's likely that public take-up will depend largely on how this right to switch is communicated to consumers, and how easy the switching process is in practice.


The UK government plans to increase the maximum jail term for online copyright infringement from two to 10 years – despite overwhelming opposition by respondents to its consultation on the change earlier in 2016.

The Bill also contains elements dealing with intellectual property (IP), including the creation of an "Internet link" for owners of registered design rights to reduce innocent infringements. Owners of registered design rights will be able to mark products with a website address at which the details of the registration would be published.

Currently, in registered design right infringement cases, defendants can plead that they didn't know that a design was registered – even if the product was physically marked "registered". The only circumstances in which they can't claim innocent infringement is where the registered design number is identified on the product.

The Bill introduces a further scenario – i.e., if the wording that identifies a registered design is accompanied by a link to a free website which lists the design number for the product, defendants can equally not claim innocent infringement.

This "webmarking" approach is expected to help reduce accidental IP infringement because, as the practice becomes widely adopted across industries, would-be accidental infringers will know what to check for.


The Bill introduces age-verification measures for adult content, effectively prohibiting pornographic material from being made available on the Internet unless it is made available in a way not normally accessible by under-18s. The Bill includes a definition of pornography and provision for the designation of an age-verification regulator who can impose financial penalties on those in breach.

The Bill is aimed at website and app operators that provide online porn (excluding on-demand services). But it's not clear whether the Bill, as currently drafted, could cover ISPs. ISPs are not referenced expressly, and the explanatory notes to the Bill refer to "commercial providers of pornography", but it's arguable that ISPs could be considered to fall within the definition of "persons who make pornographic material available on the internet on a commercial basis". It would be preferable to have this clarified in the final legislation.

At one stage, it was thought that the Bill might include powers to require ISPs to block porn websites. However, although the regulator may inform ISPs of any sites that don't have the appropriate age -verification measures in place, the Bill doesn't include any powers to require an ISP to block any sites that fail to comply with those measures.

It's not yet clear what the new age-verification measures will look like. What we do know is that they will be specified by a newly created age-verification regulator, and that the process is intended to be "robust". For example, it's unlikely that entering a date of birth or checking a tick-box will be sufficient. Privacy campaigners have raised concerns over any age-verification process which requires proof of identity – for example, the provision of credit card details.

Of course, another concern with any measure is how one can practically enforce age checks on overseas websites and apps. Concerns have been raised that any system will result in a two-tier system, to the disadvantage of UK operators.


The Bill contains a number of provisions to strengthen privacy enforcement actions.

The government intends to give statutory effect to the Information Commissioner's Office (ICO) Direct Marketing Guide. This will impose an obligation on companies that engage in direct marketing to comply with direct marketing rules, the Data Protection Act 1998 and the Privacy and Electronic Communications Regulations 2003. The government feels that this will reduce spam email and nuisance calls.


It's hard not to conclude that the Digital Economy Bill is inward-looking and relatively infrastructure-focussed. The UK government may argue that a solid, reliable Internet backbone is an essential element of a world-leading digital economy. And, while that may be true, the inevitable next step must be to move quickly on to more outward-facing digital policy issues designed to help the UK compete effectively in the global digital economy.

For example, the UK government will need to work out how to stem any loss of competitiveness when Brexit takes the UK outside the EU Digital Single Market and, perhaps more interestingly, what options Brexit presents the UK government to create a welcoming home for digital businesses freed from some of the regulatory constraints that the EU Digital Single Market may involve.

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Alistair Maughan
In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions