The Labour Party has called for a state regulator to fix the “distorted” and dystopian digital market dominated by social media and tech giants which it says are at risk of subverting democracy and causing serious social harm.

In a speech in London today, Labour’s deputy leader Tom Watson - who is also shadow secretary of state for digital culture, media and sport - will set out his party’s proposals for a new statutory regulator with powers to prevent market abuse and break up “monopolistic” technology companies which have a stranglehold over the content viewed by billions online.

Labour’s strategy to tackle the dominance of the tech giants also includes a Digital Bill of Rights and a legal Duty of Care to give more powers and protections to internet users, with a focus on safeguarding children from harmful content.

The proposals also include plans for a set of ‘digital democracy guarantees’ to protect democratic processes such as voting and key instructions from online attempts at subversion.

Watson will tell an audience as Whitechapel Art Gallery to reflect that he once looked forward to a “user-led tech utopia”.

“I was among those that saw the Internet as a great democratising force in our politics,” he will say. “It offered new forms of self-organising, entrepreneurship and localism fostered by decentralised communications, but a decade on, we find ourselves in digital dystopia.”

As a result, he will say that “Labour would establish a legal duty to remove illegal content with the supervision of regular judicial review and a transparent process, including fast-track appeals” adding that “the right to legitimate speech should be balanced against the need for legal protection”.

Labour’s intervention in the debate over regulation of tech companies comes as the government prepares to set out plans for a crackdown on online harms in a white paper due at the end of the month.

Jeremy Wright, the secretary of state for digital, culture, media and sport, this week signalled the government’s willingness to use legislation to force tech and social media companies such as Facebook, Instagram, Twitter and YouTube to take action on harmful content.

Watson will use his speech to warn that the internet has become a “haven for hate speech and extremism” as well as breeding ground for fake news and politically-driven advertising, which is undermining trust in democracy and compromising elections.

The rapid growth in artificial intelligence (AI) has also led to systems controlled by algorithms with no human oversight making decisions that affect what information is consumed online. He will also outline the case for labelling of automated bots and social media accounts which act as “agents of disinformation”.

Watson is expected to say: “Our task is to steer the power of technology back towards the public interest. Technology responds to the desires of its users, the structure of its market, and to the limits of the law. These things can all be changed. We can’t afford a laissez-faire approach to digital regulation any longer.”

He will set out how a Digital Bill of Rights will allow for greater control for consumers over how their personal data is collected and monetised, as well reducing the obstacles to moving personal data between platforms.

He will also say: “Users should know when and how their data is subject to automated decisions, so people should have a voice in whether algorithms serve as invisible editors, for example, curating what news we see.”

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