The US Democracy Technology Partnership Act – what does it mean for UK tech companies?

Last week, I was asked to comment for the Robotics Law Journal on the recent US Democracy Technology Partnership Act.  My initial thoughts related to the state of global technology regulation and the need for fairer, more equitable and effective international tech regulation (market abuse, sustainability issues, incentivising global collaborative solutions).  

In this blog, I set out the material impacts this US Democracy Technology Partnership Act could have on UK technology companies if the UK were to join as a member.  

First, it is not clear what the benefits are for the UK and its technology businesses joining this US “democracy” partnership.  Obviously it is early days, but I think the UK Government ought to use this time to carry out full and proper due diligence on the wider tech business opportunities for the UK (which includes selling our technology to our counterpart countries, not just buying from them) not overlooking our current trading and history with China, amongst others.  

Second, UK Government and technology companies will need to have an unbiased comprehensive understanding of the impacts, good and bad, of signing up to this rather restrictive US dominant partnership.  What are the prospects of winning business as a member versus the business the UK had to sacrifice to become a member.  Noting the UK Government has been promoting business with China over the past decade for investment, so to change the UK position to keep in with the US technology partnership would seem extraordinary and potentially harmful to the integrity of UK Sovereignty decision making.  It is not clear currently whether the UK would actually be eligible to become a member in light of its long term business relationships with China.  We shall see.

Third, “greater coordination” for supply chain resilience is required under the Partnership across critical technology areas such as:

1. artificial intelligence and machine learning;
2. 5G telecommunications and other advanced wireless networking technologies;
3. semiconductor chip manufacturing;
4. biotechnology;
5. quantum computing;
6. surveillance technologies, including facial recognition technologies and censorship software; and
7. fibre optic cables.

For me, this means greater restrictions over UK technology companies to win business in international technology deals to which this partnership relates.  The entire leadership proposal for the world’s tech-leading democracies is constituted by the US, in the US, for the US.  Involvement of member countries and companies gives US data and gaps filling they need, but not the other way around.  Focussing entirely on the narrower critical technology areas also demonstrates to me the true commitment behind the Act for selling and staying ahead of emerging technologies, not necessarily reflecting on abuse and harm caused by the lack of regulation under older school technology.

Fourth, the Special Ambassador and Directors comprising the Partnership Leadership are US appointments.  Membership are representatives or experts from key Federal agencies determined by the Special Ambassador.  Therefore, apart from the UK’s membership representative, it is not clear how the interests of UK technology companies are going to be addressed or represented.  There are serious gaps in the proposal as currently drafted.

Fifth, I hope to see the UK government going all out to protect UK business interests and economic growth.  The US partnership as is proposed, is currently flawed.  The US seeks to tie in foreign countries for an unknown time period without producing any obvious benefits for them, their economies and their technology businesses.  

Sixth, it is not clear how the regulatory side will be developed, drafted, enacted, monitored, enforced.  Maybe I have misunderstood this aspect, but I cannot see how US law is going to really have any impact in UK law unless there is some shift politically about how we adopt national legislation.

Seventh, the Act is very clear that financing is forbidden to companies involved in the international investment programs of authoritarian or illiberal governments (Section 6, subsection (8)(B)).  On reading the Act in its entirety, it is clear this section is targeted at those companies already doing business with China.  This is particularly tricky for the UK, as we have been collaborating and contracting with Chinese business intensively over the 6-8 years under the Conservative and Cameron Coalition Governments.  I would love to know what the talks were with the US when consulted about these Act provisions before going into the Bill.  I would also love to know the UK’s government figures are on the impact of us joining the US partnership.  With the investment requirement involved to get a place at the table, impact of business lost with China as a result and pathetic chances of our companies winning contracts with third countries via this route, I would strongly suggest the UK Government thinks again about entering this US partnership as a priority for the UK.  I’m not convinced the US is offering UK business anything with this proposal.  I would advise my clients to stay well clear provided the UK government has enabled pathways to international deals without being at the mercy of the US.  

Eighth, the private sector, as always, is better off being left to crack on with its own business and economic growth affairs with the US and other countries without international meddling such as this.  My wish is to see a truly international and equitable world led regulator for technology, one that has all Sovereign States’ participation and buy-in for the protections and safety of its citizens, whether it is China, Russia and/or the US.  

Finally, for me, modern digital technology is about collaboration and solutions, not division, aggression and superiority that this Bill so very well articulated throughout the US Democracy Partnership Act.