Briefing

Regulating the Digital Sphere After Brexit

Ten years after Brexit, the European Union and the United Kingdom have adopted new legislation governing digital life and the digital economy. Data protection, the digital economy, online safety, and artificial intelligence are all areas in which Brussels and London are developing broadly similar regulatory tools. This British alignment with the European approach reveals a shared community of interests between the two trading partners and confirms their rapprochement.

On both sides of the Channel, the digital sector represents a major economic and social challenge. A source of geopolitical tension with the United States, British and European regulatory choices are broadly aligned. While London champions a pro-innovation narrative and Brussels asserts one of rights protection, the legal rules ultimately adopted point in a common direction. The European Union has chosen to establish substantive and procedural rules defined a priori, grounded in several legislative interventions covering the protection of personal data, online safety, the digital economy, and artificial intelligence. The Westminster legislature has intervened in the same domains, with similar objectives and a broadly comparable methodology. In the area of personal data protection, the United Kingdom has maintained the European framework with minor adaptations. British online safety regulation is fully aligned with the European approach, with a wide scope of obligations and rules defined a priori. It remains more limited with respect to consumer protection and more far-reaching on the protection of minors and age verification. The country's intervention in the digital economy pursues the same objectives as the European Union, but unlike Brussels, London has chosen to define rules a posteriori in a targeted manner for each regulated company, following a market investigation. While this approach may appear more precise and effective, it also requires more time before obligations can be imposed — obligations that may ultimately mirror those of the European Union. Artificial intelligence is the area where the United Kingdom and the European Union diverge most. The United Kingdom has chosen not to regulate the technology through ad hoc legislation, while the European Union has adopted a comprehensive framework. This difference in approach could narrow as the European Union retreats from full implementation of its text and the British government announces its intention to regulate companies deploying the most powerful artificial intelligence models.

Beyond the rhetoric, the shared challenges facing the European Union and the United Kingdom in the digital domain have led to the adoption of a broadly similar approach in the areas of data protection, online safety, and the digital economy — and possibly, in the near future, in the field of artificial intelligence as well.

01 | The Shared Challenges of the European Union and the United Kingdom

In a sharp break with the Conservative Party line, British Prime Minister Keir Starmer announced in January 2026 his desire for alignment with the European Union's internal market[1], against a backdrop of shifting international relations. President Donald Trump launched a direct attack targeting both new British and European digital sector legislation[2]. He accused London and Brussels of appropriating the revenues of American digital companies through their regulatory practices. Yet at the time of its withdrawal from the European Union, the United Kingdom had harboured ambitions of becoming Europe's new Singapore. The country was to constitute itself as an economic zone broadly open to trade, with freedom of commerce as its competitive advantage on world markets. In 2016, the United Kingdom exported approximately 40% of its goods and services within the European Union[3]. That remains true ten years later. As an indispensable market for British digital companies, the United Kingdom oscillates between its desire to offer an attractive regulatory framework for innovation and competitiveness and normative alignment with the European Union. Faced with the emergence of a continental, preventive, and horizontal model for regulating the digital economy, the United Kingdom deploys an approach more targeted than the European one and theoretically more favourable to innovation. These regulatory differences create non-tariff barriers to entry into European digital markets.

The British digital economy faces challenges similar to those of the European Union. The sector represents a significant share of national economic output. In 2023, the digital sector accounted for approximately 5.2% of the value added produced within the European Union[4] and approximately 6.5% of the value added produced in the United Kingdom[5]. It also gives rise to major difficulties: economic concentration of markets, online violations of individuals' rights, and threats to democratic life. In response, the European Union and the United Kingdom have in recent years developed a new legislative arsenal, with the latter following the lead of the former. The new legal rules revolve around the key issues of digital economy regulation: the security of information systems, the protection of online data, competition between digital market companies, consumer protection online, the protection of democracy online, and the promotion of business competitiveness and innovation. Since the end of the application of European Union law in the United Kingdom, successive governments — first Conservative, then Labour — have broadly supported this regulatory movement. While the Conservative Party's political line was one of gradual divergence from European norms, the Labour Party, in power since July 2024, was elected on a programme firmly committed to rapprochement with the European Union. This intention culminated in May 2025 in the first UK-EU summit since Brexit, with a "reset" agenda[6].

Ten years after Brexit, the United Kingdom is choosing to gradually rebuild its relationship with the European Union. This rapprochement, sustained by regulatory alignment, demonstrates a community of interests that did not disappear with the state's withdrawal. Personal data, the digital economy, online safety, and artificial intelligence are all regulatory domains that illuminate both the manifestations and the limits of this alignment.

02 | Personal Data Online: Between Innovation and Protection

The United Kingdom initially maintained the European Union's framework for personal data protection. Personal data encompasses all the traces a person leaves on the internet that enable them to be identified[7]. Entering into force in 2018, the European Union's General Data Protection Regulation (GDPR)[8] established the first substantial regulatory framework for governing the use of personal data in the digital economy. The text is a compromise. The EU sought a harmonised legal framework at European level to prevent differences in legislation between Member States from hindering the development of the digital economy, which is now founded on the mass processing of data. A degree of liberalisation in the sharing of personal data is at work, but the text remains centred on the protection of the right to privacy. However, access to individuals' personal data also creates new dangers for citizens' security and for the free determination of their choices.

In 2018, the Cambridge Analytica scandal broke: a British company was accused of having illegally collected the personal data of 87 million Facebook users and of having provided profiling services to Donald Trump's campaign as well as to pro-Brexit parties ahead of the referendum held on the matter in the United Kingdom[9]. While the actual effects of this activity on the outcomes of these two democratic events remain disputed, the importance of protecting British citizens' online data was brought into sharp relief, revealing the need to further safeguard citizens' right to online privacy. Under the GDPR, any person who collects or processes personal data on the territory of the European Union must comply with a number of obligations designed to safeguard the rights of the citizens whose data they use. These obligations apply to companies processing personal data when they operate within the internal market and when exporting outside the internal market. The GDPR supplements the European "e-privacy" Directive of 2002, which also governs the processing of personal data in the electronic communications sector[10]. After its withdrawal from the European Union on 31 December 2020[11], the United Kingdom retained in force the applicable European Union secondary law that had been adopted prior to its withdrawal. As such, the two European legislative instruments on online privacy protection were transposed into British law.

In 2021, Prime Minister Boris Johnson's government announced its intention to amend the legislative framework. The aim was notably to "unleash the power of data" within the Conservative government's "Golden Age of Technology" strategy. With the Data Protection and Digital Information Bill introduced in 2023, the government sought to substantially loosen the rules on the protection of personal data online and to facilitate the processing of data by businesses. Abandoned after the 2024 general election, the Labour majority put forward a new version of the reform: the Data (Use and Access) Bill 2024-25. Adopted in June 2025, the reform does not replace the GDPR but amends it. The text represents a more modest reform of the existing framework. This more cautious positioning preserves the renewal of the European Commission's adequacy decision while easing some of the GDPR's constraints. This decision recognises the equivalence between the level of personal data protection online in the United Kingdom and within the European Union. The former Member State had benefited from it since 2021[12]. The transfer of personal data between the two territories is therefore not subject to the additional rules applicable to third countries. A key issue in the digital economy, the loss of this benefit would substantially hamper trade between the United Kingdom and the EU in this area. While the Commission's adequacy decision was due to expire in June 2025, the European Commission decided to extend the first decision until the adoption of the British reform. A second adequacy decision was ultimately granted in December 2025[13], following examination of the British reform. The new legal framework seeks to foster innovation and provides for a reduction in the obligations imposed on companies with respect to the processing of personal data. It remains to be seen whether such reductions will effectively benefit British companies, or whether the importance of trade with the European Union will push them to maintain all of their compliance procedures on the basis of the GDPR.

03 | A European and British Movement to Regulate the Digital Sector

On 21 February 2025, the White House published the memorandum "Defending American Companies and Innovators From Overseas Extortion and Unfair Fines and Penalties" addressed to the Secretary of the Treasury and the Secretary of Commerce. The objective of the memorandum is to defend American digital companies against the "appropriation" of their revenues by foreign states through discriminatory regulation of digital services via discriminatory practices. While the imposition of taxes on digital services and the introduction of "costly" regulation are among the targets, the President of the United States also instructs the Secretaries of State to investigate all acts, policies, or practices of Member States of the European Union or of the United Kingdom that would have the effect of requiring or encouraging American companies to conduct their activities in a manner that infringes upon freedom of expression and political engagement. Following the speech of United States Vice-President J. D. Vance at the Munich Conference on 14 February 2025, the House Judiciary Committee opened an investigation into the European Union's digital regulation on the same grounds. On 23 February 2025, the United States thereby marked its opposition to the legislation put in place to regulate digital companies in the United Kingdom and by the European Union in order to govern the power of large digital firms and online life. Guilty of anti-competitive behaviour, large digital companies also carry numerous ills: online hate, harassment, the dissemination of violence, the manipulation of opinion, and disinformation. They are few in number, most often foreign, and hold virtually all market shares in digital economy sectors[14]. On both sides of the Channel, states wish to regulate online spaces to make them safer and to reintroduce effective competition in digital markets. Confronted with the limits of competition policy, the European Union adopted the Digital Markets Act (DMA)[15] in 2022. In the same movement, the United Kingdom adopted the Digital Markets, Competition and Consumers Act (DMCC) in 2024. Likewise, since common law was no longer sufficient to regulate digital services, the European Union instituted the Digital Services Act (DSA)[16] in 2022. The United Kingdom also responded with the Online Safety Act in 2023.

04 | The Alignment of Digital Economic Regulation

The United Kingdom and the European Union wish to deconcentrate digital markets. This is not only a matter of digital sovereignty for states but also of competitiveness for British and European companies. The control exercised by a handful of private actors over the dissemination of innovations in digital markets, their pricing, and the terms and conditions of commercial relations subordinates companies on the old continent to their decisions. Competition in digital markets is particularly weak given the concentration of market shares among a small number of companies. European competition policy is insufficient to address this situation. Competition policy aims to ensure that companies compete on the market for market share. This pressure is supposed to make them more competitive, more innovative, and to generate beneficial effects for consumers. To deter companies from colluding to carve up markets, or a dominant company from abusing its position to eliminate competitors' possibilities, the European Union sanctions anti-competitive conduct and controls mergers. However, the exercise of these sanctioning powers requires a lengthy process ill-suited to digital markets, and the sanctions are not effective against companies with immense cash reserves.

The European competitive offensive began in 2004 with a first decision against Microsoft and has continued to the present day. Between 2004 and 2025, the European Commission adopted around twenty decisions imposing sanctions for competition infringements against the GAFAM companies, with the pace of adoption accelerating from the 2010s onwards. Despite these sanctions, the market power of the handful of companies that concentrate the majority of digital market shares continues to grow. By way of illustration, between 2010 and 2019, the market capitalisation of the GAFAM companies increased dramatically: the market capitalisation of Facebook — the lowest of the five companies — was, for example, three times higher than that of Exxon, Nike, or Coca-Cola. The European Union therefore chose to regulate large digital companies in order to compel them to adopt certain practices and to allow for the deconcentration of digital markets.

1. The Digital Markets Act (EU)

The Digital Markets Act (DMA) entered into force in Europe in 2023. It provides the European Commission with tools complementary to those of competition law. The DMA allows the European Commission to designate these companies as "gatekeepers" of digital markets. The gatekeepers since 2024 are Alphabet[17], Apple, Meta, Amazon, Microsoft, and ByteDance. Their services are omnipresent in the daily lives of businesses and citizens: Google Chrome, iOS, Instagram, WhatsApp, Windows, and TikTok, among others. The DMA sets out a series of obligations and prohibitions applicable to these companies with regard to the use of and access to data collected through their digital services, the distribution of their digital services, and the interoperability of their services. Gatekeepers must, for example, allow the installation of "software applications" within an operating system. In practice, this means that Apple, for example, must permit the installation of applications such as a browser, a messaging application, or an online app store within the iOS operating system through which iPhones operate today. The aim is to give application development companies the opportunity to compete with the company in the market for native applications by prohibiting the closure of Apple's ecosystem. Gatekeepers must also ensure the interoperability of online messaging services. In time, Meta will be required to offer users of WhatsApp and Telegram — a competing messaging service — the ability to exchange messages between one another from their respective applications. The objective is to limit the network effect created by these services. The more users an application has, the more its use becomes unavoidable. Users must therefore be able to avoid being locked into any one messaging network.

2. Digital Markets, Competition and Consumers Act (UK)

Following in the footsteps of the DMA, the British Digital Markets, Competition and Consumers Act (DMCC) has the same general objective: to regulate competition in digital markets[18]. The text entrusts this mission to the British competition authority: the Competition and Markets Authority (CMA). Like the European Commission, the CMA can designate certain digital economy companies as having "strategic market status". Companies so designated on account of their market power will be subject to specific obligations. Unlike the European DMA, the British text does not set out predefined obligations or prohibitions as such, but instead grants the competition authority the ability to define these obligations on a case-by-case basis for each designated company. These new rules will likely be similar to those provided for by the European Union, given that market structures are broadly the same. While the DMA has been fully applicable since 2024 on the European side, the British authority must shape its rules so that they can meet the text's objectives. The CMA designated Google and Apple for various digital services in October 2025[19]. However, after announcing the introduction of certain behavioural obligations relating to the app stores of both companies, the CMA ultimately abandoned the imposition of such measures, preferring to rely on commitments from the two companies. They committed in particular to treating competing applications fairly and transparently within their app stores. Apple committed not to arbitrarily refuse a developer the ability to distribute their application on the Apple Store in a manner that would protect the company's native applications. The CMA also submitted for public consultation proposed behavioural obligations directed at Google in February 2026 to allow online content producers to control the manner in which Google uses that content for the operation of its artificial intelligence. An investigation is under way into the possibility of designating Microsoft. In the event of non-compliance with the new rules, both the European Commission and the CMA can impose fines of up to 10% of the company's annual global turnover. Alphabet's global turnover in 2025 was $402.8 billion. Ten percent of that figure converted into euros represents just under €35 billion. That is slightly more than 1% of French or British GDP in 2025. These amounts are comparable to those under competition law, and the fines actually applied are most often considerably lower. The European Commission has already sanctioned certain designated companies. Apple was fined €500 million and Meta €200 million in April 2025.

The European Union chose a less flexible and targeted approach than the United Kingdom to complement its competition policy, but the spirit of the texts is the same. The Commission applies behavioural obligations defined by the European regulation, while the CMA may define tailored behavioural obligations depending on the results of its market investigation. While both methods aim at the same outcomes, it will be possible in due course to assess which of the two proves most effective. On both sides of the Channel, states want competition authorities to structurally open markets and constrain the behaviour of multinationals. These shared objectives are supported by a bilateral cooperation agreement in the field of competition, concluded in April 2026. If the discourse of simplification has affected European digital legislation, British competition policy is the target of a pro-innovation and pro-industry political narrative that pushes it towards a degree of liberalisation, notably in the area of merger control. This is evidenced by the appointment of Doug Gurr as head of the CMA in January 2025. The new president of the authority was indeed president of Amazon UK from 2016 to 2020. It remains to be seen whether differences in the positions of the individuals heading regulatory authorities will produce a change in policy in this domain.

A joint offensive on the digital economy, both London and Brussels have also intervened on the safety of users online. Citizens, children, and consumers are the targets of attacks that states are seeking to curb.

05 | The Alignment of Digital Economic Regulation

The European Union and the United Kingdom seek to make online life safer and to address the negative effects of digital services on society. While the degree of regulation of digital services varies by domain between the two legal orders, British and European legislation adopt a broadly similar approach. Both Brussels and London have chosen to entrust independent authorities with the regulation of digital companies in the areas of illegal content, the online protection of minors and consumers, and online democratic life. European and British legislation are prescriptive. They require online platforms, social networks, and search engines to act at the level of both the design of their services and their operation. If a user is harassed on Facebook, Meta must act promptly. If a child uses Google Chrome, they must not be exposed to pornographic content. An election must not be threatened by waves of disinformation or hatred towards candidates. X must be compelled to act if the service is used for terrorist activities. Amazon must act if an online seller defrauds consumers. Both British and European policymakers have chosen to broadly regulate online life through the Digital Services Act and the Online Safety Act. The response they have chosen is to make digital companies accountable. The European Union and the United Kingdom are now officially cooperating in the implementation of this policy.

1. The Digital Markets Act (EU)

The Digital Markets Act (DMA) entered into force in Europe in 2023. It provides the European Commission with tools complementary to those of competition law. The DMA allows the European Commission to designate these companies as "gatekeepers" of digital markets. The gatekeepers since 2024 are Alphabet, Apple, Meta, Amazon, Microsoft, and ByteDance. Their services are omnipresent in the daily lives of businesses and citizens: Google Chrome, iOS, Instagram, WhatsApp, Windows, and TikTok, among others. The DMA sets out a series of obligations and prohibitions applicable to these companies with regard to the use of and access to data collected through their digital services, the distribution of their digital services, and the interoperability of their services. Gatekeepers must, for example, allow the installation of "software applications" within an operating system. In practice, this means that Apple, for example, must permit the installation of applications such as a browser, a messaging application, or an online app store within the iOS operating system through which iPhones operate today. The aim is to give application development companies the opportunity to compete with the company in the market for native applications by prohibiting the closure of Apple's ecosystem. Gatekeepers must also ensure the interoperability of online messaging services. In time, Meta will be required to offer users of WhatsApp and Telegram — a competing messaging service — the ability to exchange messages between one another from their respective applications. The objective is to limit the network effect created by these services. The more users an application has, the more its use becomes unavoidable. Users must therefore be able to avoid being locked into any one messaging network.

2. The Digital Services Act (EU)

On the European side, the European Digital Services Act entered into application in 2023. It constitutes a digital services regulatory policy launched by the organisation of states. The aim pursued is to allow users' online lives to flourish in a "safe online environment" — or at least a safer one than exists today. The text creates new rules to govern the power of digital companies, structured around several additional tiers. Certain rules apply to all digital companies that enable the sharing or storage of information online. Other rules apply cumulatively on top to hosting providers, online platforms, and very large search engines and online platforms. The logic of asymmetric regulation depending on a company's position or size in the market — as in the DMA — is reproduced. In practice, the European Commission designated, for example, very large search engines or very large online platforms — Alphabet, Amazon, Apple, Meta, Microsoft, X, TikTok, Booking, and Wikipedia, as well as Aylo, WebGroup, and Technius — in 2023. The new rules aim to ensure transparency in the general terms and conditions of use of services and in companies' decisions to restrict access to their services; to create mechanisms for reporting illegal content and for seeking redress against decisions taken by the company; to ensure effective consumer protection; and to broadly ensure the safety of online environments and their freedom from harm to civic processes. For example, the very large digital companies designated on the basis of their large number of users must mitigate the risks their services pose to electoral processes or public safety. The role assigned to large companies in ensuring the safety of online environments goes beyond purely economic or consumer protection issues to encompass the functioning of European democracies. The European Commission plays a central role in implementing this regulation. It acts alongside national regulatory authorities. In France, it is the Autorité de régulation de la communication audiovisuelle et numérique (Arcom) that is responsible for implementing this policy. The European Commission has already launched investigations and sanctioned certain companies. X was fined €120 million in December 2025. Whaleco Technology (Temu) was fined €200 million in May 2026.

3. The Online Safety Act (UK)

The Online Safety Act began to enter into force in the United Kingdom in December 2024[20]. Its ambition is similar to that of the DSA: to make internet use safer. The method differs. The text contains fewer obligations and prohibitions. It creates a duty of care online that all companies providing user-to-user services and search engines must comply with. This duty of care varies according to the type of service, its number of users, and the nature of the risk posed to users. All concerned companies must assess the risks posed by their services with regard to illegal content liable to be disseminated via those services and put in place proactive measures to detect and remove illegal content through reporting and complaints mechanisms. In doing so, they are required to take into account users' freedom of expression and their right to privacy. Companies must also integrate into their services measures to protect children from harmful content — that is, legal content that may be harmful to a child user. All services distributing pornography must implement age verification measures for users. In addition to this general duty of care, the text creates three additional categories of companies targeting social media services, search engines, and messaging applications. The companies concerned are targeted based on their size and the nature of their services. These three categories of companies are subject to additional obligations regarding transparency — notably with respect to the risks posed to children — risk assessment, the protection of journalism and political debate, age verification measures, and the prevention of advertising fraud.

While the DSA has been fully applicable since 2024, the Online Safety Act has been implemented progressively since December 2024 and is expected to be fully applicable by 2027. The obligations to implement the general duty of care and the obligations relating to the protection of minors online are now applicable; the additional regimes provided for the three specific categories of companies are not yet in place. Ofcom, the British authority responsible for communications regulation, is the designated regulator for the implementation of the text. The penalties that the authority may impose amount to 10% of the targeted company's annual global turnover, compared with 6% of global turnover under the DSA.

06 | Significant Divergences on Artificial Intelligence

Artificial intelligence is the area where the United Kingdom and the European Union have a substantially more divergent approach. The European Union adopted the AI Act in 2024[21]. The text provides for a series of obligations to assess and mitigate risks perceived as obstacles to innovation. The European approach applies horizontally to all AI companies regardless of their size, varying according to the degree of risk posed to user safety. The approach appears relatively straightforward, but the text proves to be highly complex in its implementation, and the rules provided may even become obsolete given the evolving nature of the technology[22].

Brussels has begun to backtrack in order to protect innovation in this area. The island state, for its part, initially chose not to regulate the technology as such, advancing its desire to apply existing law to the various use cases, before announcing its intention to regulate the companies deploying the most powerful models. At the time when the British government then in office was formulating its doctrine, London had established itself as one of the world's leading hubs for AI. The government's objective is firmly pro-innovation in this area and the British state launched an industrial innovation policy in the domain, supported notably by strong public demand. That said, the social effects of AI prompted a desire to regulate the technology following the Grok affair. In January 2026, X's AI caused a scandal due to the ability it offered users to undress images of people found online. While the government indicated its desire to act, no concrete measures have yet been taken.[23]

Conclusion

Since the United Kingdom's departure from the European Union, London and Brussels have chosen a broadly similar approach to governing digital life and the digital economy. They impose on digital companies more or less substantive obligations depending on their size and their position in the digital economy.

From an institutional standpoint, this alignment of values and objectives is enabling a rapprochement that is only just beginning. While both London and Brussels have chosen to define more or less precise rules on online safety and the digital economy, the two legal orders have left regulatory authorities substantial room for manoeuvre to adapt these rules in response to technological and economic developments. Faced with broadly similar challenges, London and Brussels have every interest in deepening their cooperation in this area in a context of mounting challenges to global trade.

For European and British companies, while the approaches are broadly similar, the subtle and often complex legislative divergences create legal uncertainty and non-tariff trade barriers that could prove damaging to the sustainability of trade between the two zones. The relative easing of rules on innovation is of limited significance given the commercial interests at stake: the comparative advantage derived from the British legal framework does not appear to offset the costs of compliance for export purposes. The conclusion of free trade agreements between the United Kingdom and third countries cannot compensate for the slowdown in trade growth with the European partner, since the new partnerships will merely replicate those from which the United Kingdom benefited before Brexit.


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