Welcome to the latest Atticus Partners Technology newsletter: the Bytesize Briefing.
Each month, we cover politics and policy from across the UK and European technology sectors.
In this edition, we cover the recent UK government reshuffle and what it means for the Uk’s tech agenda, ‘colossal’ investment gap for European clean tech, the continued struggle between the EU and the US on tech-related tariffs, new AI regulation in the UK, and growing discontent with the Online Safety Act.
DSIT Reshuffle: New Leadership, New [CD1] Questions for UK Tech
The past two weeks have seen a dramatic reshuffle, significantly changing the composition of the Department for Science, Innovation and Technology (DSIT) and its leadership team. Liz Kendall MP has been appointed as Secretary of State following her move from the Department for Work and Pensions, replacing Peter Kyle MP, now Secretary of State for Business and Trade.
Kendall takes charge of DSIT at a critical time. The department has been central to building a “digital centre of government” - uniting the Government Digital Service, Central Digital and Data Office, and other key units - and has recently taken on responsibility for public sector cyber security. Yet the reshuffle has seen several ministers with direct expertise in technology and digital policy depart. They have been replaced by Kanishka Narayan MP, who has commercial experience across digital transformation and AI, and Ian Murray MP, who has been demoted from his role as Secretary of State for Scotland.
For the UK tech sector, the reshuffle raises two questions: will this new ministerial team have the bandwidth and expertise to maintain momentum on digital transformation? And can they keep tech at the centre of the government’s broader productivity and public service reform agenda? For now, the sector will be watching closely to see how these changes shape the government’s next steps on its digital, data, and technology agenda.
EU clean tech faces ‘colossal’ investment gap
The European Climate Neutrality Observatory has warned that “Europe is facing a trade deficit across key energy transition technologies including solar panels and EV batteries”. The watchdog has subsequently called for a “long-term climate investment strategy”, cautioning that without decisive action the bloc risks “locking in” dependence on imports.
In 2023, EU investment in clean technologies fell €344bn short of the €842bn needed to meet 2030 climate targets, while fossil fuel subsidies rose 19 per cent on 2022 levels. Key sectors such as heat pumps, wind power, and building renovations are seeing investment slow, and competition from cheaper Chinese goods is putting pressure on Europe’s domestic industry.
Brussels is preparing policy interventions, including tougher public procurement rules under the Industrial Decarbonisation Accelerator Act and rapid implementation of the Net Zero Industry Act, which aims for 40 per cent of net zero technologies to be produced in Europe by 2030.
However, with the investment gap widening, policymakers face mounting pressure to protect the EU’s clean tech industry while staying on track for climate goals.
US v EU tech battle over tariffs continues to escalate
“Digital taxes, legislation, rules or regulations are all designed to harm, or discriminate against, American technology” stated US President Donald Trump in August. Considering President’s Trump previous condemnation of the restrictions faced by American-based technology companies, such as Apple, Meta and Microsoft, under the European Union’s Digital Markets Act (DMA) and Digital Services Act (DSA), his comment has been interpreted as a thinly veiled criticism of EU tech policy.
Alongside this critique, President Trump threatened to impose tariffs and export restrictions on countries that challenge US big tech companies through their taxes, legislation and restrictions. With Trump having imposed tariffs on over 15 individual countries and regions in 2025 alone – including a recent 50% tariff on goods from India – these threats put pressure on the EU, due to the bloc having signed a recent trade agreement with the US.
In response, the European Commission has asserted its “sovereign right” to have oversight and impose legislative restrictions on tech companies operating in the EU and further reiterated the neutrality of its operations, with Commission spokesperson Thomas Regnier saying “The DSA and the DMA both apply to all platforms and companies operating in the EU irrespective of their place of establishment”.
It will be worth keeping a watching eye on this battle with national leaders now being drawn into the debate, including French President Emmanual Macron saying that the EU should consider retaliatory measures across the US digital sector.
Growing pressure against Ofcom and the politicisation of the Online Safety Act
The UK’s landmark online safety regime has continued to evolve in recent weeks, with enforcement measures under the Online Safety Act (OSA) drawing both domestic controversy and international pushback.
At the centre of these developments is a new lawsuit filed in the United States by the internet forums 4chan and Kiwi Farms, who are challenging Ofcom’s authority to regulate them under the OSA.
The legal complaint was filed in a Washington DC Federal Court and seeks a legal ban on Ofcom enforcing or attempting to enforce the OSA against them in the US, as well as hoping the court rules that the OSA contradicts the US constitution's free speech protections.
However, Ofcom have pushed back on this, arguing that a service doesn't have to be based in the UK to be subject to the OSA and that platforms now have a duty to protect UK users.
This highlights the growing tension between the UK’s regulatory ambitions and the global nature of online platforms, and the inherent difficulties and enforcement challenges that regulators across the world are facing.
Meanwhile, the OSA continues to be enforced at pace and platforms such as Steam have recently announced the introduction of age verification measures. In addition, last month Wikipedia lost its challenge against OSA verification rules despite it raising concerns that these could threaten the human rights and safety of its volunteer editors.
As usual, these issues and debates around online safety show no signs of abating. Ministers have also piled pressure on smartphone manufacturers to do more to protect children, and the government is increasingly seeking to use online safety as a political dividing line between Nigel Farage and Reform UK.
In addition, in one of her first moves in her new role as Secretary of State for Science, Innovation and Technology, Liz Kendall introduced tougher online safety rules. The government announced that content encouraging or assisting serious self-harm will be treated as a priority offence for all users which has been a long-standing issue for online safety campaigners.
With regulators and government Ministers emboldened and opponents energised, the UK’s online safety debate is arguably entering one of its most contentious phases yet.
Look Ahead...
The UK tech sector came together for the “Building a Smarter State” Conference on the10th September, which explored how innovation is reshaping public services and how government, civil society and industry can deliver on Labour’s Blueprint for Modern Digital Government.
Meanwhile, debate over the UK’s Online Safety Act is expected to continue, fuelled by criticism from figures such as Elon Musk and Nigel Farage, and intensified by the recent arrest of comedy writer Graham Linehan, for comments he posted on social media.
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