Technology & Digital round-up: October 2026

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Here’s your top 3:

Government steps up action on AI risks and opportunities

The UK’s AI Minister called for cybersecurity to be discussed in every boardroom in a speech on protecting Britain from increasingly powerful AI. He confirmed that the AI Security Institute is now evaluating the latest generation of advanced AI models, following work with leading developers and the US government.

And in his  much anticipated Budget, the Chancellor set out over £700 million in investment and a series of measures to: strengthen security, resilience and sovereign capability; unlock the opportunities of AI; and deliver the infrastructure needed for AI. Key announcements include:

• A new AI Cyber Security Centre of Excellence in Manchester
• A new National Exposure and Real-Time Vulnerability (NERV) Centre at the National Cyber Security Centre, which will deploy AI tools to identify cyber vulnerabilities across critical infrastructure and the wider economy.
• A national Cyber Shield to develop agentic cyber defence capabilities.
• A new National Agentic Security Unit to develop new capabilities to detect, investigate and respond to cases of rogue agentic systems.
• Building on the Law Commission’s product liability consultation (more below), the government will consult in 2027 on tackling insecure technology at source and consider where liability for cyber breaches should sit.
• A new AI Biosecurity Lab to harness AI to protect against emerging biological threats.
• A new Data Centre Covenant – setting tests for approving new strategic data centres and the contribution they must make to the UK, matched by a stronger offer of government support on energy connectivity for those projects contributing the most to the UK’s objectives.

The government is considering stronger protections through the Cyber Security and Resilience Bill and wider regime, including loss-of-control risks and the identification, reporting and review of serious AI incidents and near misses.

The Cyber Security and Resilience Bill is nearing the end of the legislative process. Third reading in the House of Lords took place on 2 November, and the Bill now returns to the Commons. At report stage, peers rejected a proposal on reporting incidents involving frontier AI models. With the government considering stronger AI protections, we will monitor the Bill’s progress.

In the coming months, the government’s AI Taskforce will focus on AI’s impact on national security, economic growth, public services and the workforce. A National Cyber Action Plan is also expected.

Data regulator calls for evidence on agentic AI

The ICO is seeking views from developers, deployers and other stakeholders on how data protection law applies to the capabilities and risks specific to agentic AI.

The regulator recognises the technology’s potential to significantly improve operational efficiency. It wants to clarify regulatory requirements and help organisations develop and deploy agentic AI responsibly.

The consultation closes on 20 November 2026 and focuses on the following data protection challenges arising from organisations’ use or development of agentic AI tools:

• Data security
• Transparency across complex supply chains
• Allocating and evidencing accountability
• Automated decision-making and appropriate safeguards
• Fairness and purpose limitation
• Lawful processing

The ICO wants to understand how organisations are addressing these challenges and is seeking evidence on best practice approaches. The responses will inform its forthcoming statutory code of practice on AI and automated decision-making. It will also publish a separate report on agentic AI in the adtech ecosystem later this year.

This consultation is part of the ICO’s wider work on AI, including recently securing data protection improvements from ten of the world’s largest AI foundation model developers.

Reforming product liability law for the digital age

The Law Commission is consulting until 14 January 2027 on proposals to update product liability law for the digital age. A final report with recommendations for law reform is expected in late 2027.

The current product liability regime under the Consumer Protection Act 1987 is almost 40 years old. Its focus on physical products raises questions about its application to digital technologies and modern supply chains. There are also doubts about whether the regime has fully achieved its original aims of providing a clear and straightforward route to compensation. Key proposals include:

• A broader definition of “product” to include software, AI systems, and the design components and features of social media and other online platforms
• An expanded definition of “supply”, with products treated as supplied irrespective of how they’re delivered
• New categories of potentially liable persons to reflect the increasing complexity of modern supply chains
• A clearer and more structured framework for determining what constitutes a “defect”
• A rebuttable presumption of defect and a risk-sharing mechanism in cases involving exceptional evidential difficulties
• A new framework for the compensation of psychiatric harm
• Compensation for destruction and corruption of data
• Resetting the long-stop period following a substantial modification to a product and extending it to 25 years in cases of latent harm

More legal and regulatory developments…

• New rules to end subscription traps are coming into force in January 2027. See our article on recently published government guidance and the practical steps that businesses can take to prepare.
• The Digital Regulation Cooperation Forum (comprising the CMA, FCA, ICO and Ofcom) is requesting stakeholder input by 20 November 2026 on its 2027/28 workplan. It wants to understand where overlapping regulatory regimes may be creating confusion or difficulties, and where joint action could help.
• The European Commission published the first harmonised standard supporting the EU AI Act. Providers of high-risk AI systems that follow the standard will be presumed to meet the quality management system requirements under Article 17 of the Act. Further harmonised standards are expected to follow.
• The FCA published AI in financial services: good practice and areas for improvement, explaining how existing rules and the wider regulatory framework apply to firms’ use of AI. It includes case studies covering the Consumer Duty, governance and accountability, and operational resilience.
• In related news, the Bank of England and FCA published the results of their fourth survey on AI and machine learning in UK financial services. Among other things, while AI agent deployment is widespread, autonomy is limited. The highest-rated areas of perceived risk were data protection and security, third-party and supply chain risk, and generative AI-specific risks.
• We’ve seen a flurry of recent CMA activity: proposals to unlock contactless technology on Apple iPhone; £6 million in fines for misleading sales tactics; and proposals to designate Microsoft with strategic market status in its business software ecosystem.
• See our recent article on closing the AI gender gap and the legal, ethical and practical considerations for businesses.
• According to a report from the Institute for Ethics in AI at the University of Oxford, the UK has the opportunity to become a global leader in licensing copyright material for AI, but the government must act now to establish clear rules.
• The government accepted all the recommendations published by an independent Commission on the future regulatory framework for AI in healthcare.
• The Law Society published a practice note on using AI in legal practice, while the Civil Justice Council published its final report on the use of AI for preparing court documents.

 …and in other news

• AI ‘discovered’ a critical security issue affecting PHP, a widely used web development language, prompting organisations worldwide to take immediate action.
• The National Cyber Security Centre is urging organisations to start preparing to migrate to post-quantum cryptography, as it publishes updated guidance on using TLS (Transport Layer Security) to protect data.
• A joint advisory from the NCSC and its international partners urges organisations to strengthen their cyber resilience and defend against the evolving threat posed by malicious China-linked cyber actors.
• The Financial Stability Board published its final report on sound practices for responsible adoption of AI. The report identifies 12 sound practices to help financial institutions harness the benefits of AI while managing its risks responsibly, in ways that support the resilience of the financial system.
• New Robotics Adoption Hubs across the UK will give businesses practical support to adopt robotics and autonomous tech.
• The Investment Association published updated guidance on the use of virtual elements in shareholder meetings. Instead of going fully virtual, investors are asking companies to incorporate a virtual element into hybrid AGMs. Shareholder reapproval of virtual AGM arrangements should be sought every three years.
• The government announced 10,000 new work placements for young people in the UK’s digital and tech sector.
• As AI transforms the fraud landscape, National Trading Standards launched an AI Scams Watchlist to help consumers protect themselves. NTS expects scams to become even harder to identify and stop as AI-enabled crime becomes increasingly autonomous.
• And finally, it was reported that Italian PM Giorgia Meloni has become the latest public figure to trademark her voice against AI threats. After fake websites, voice cloning is the AI-powered scam technique that consumers are most concerned about, according to the NTS AI Scams Watchlist.

How we can support you

If you have queries about any of the points covered in this edition of the Technology & Digital round-up, or need further advice or assistance, please get in touch with Sally, Andrew, Nick, Paul, Luke, Matthew or one of our Technology & Digital experts.