Facebook’s Encryption Plans Back Under Attack by U.K. Lawmaker

(Bloomberg) -- The U.K.'s digital minister warned he had “very grave concerns” about Facebook Inc.'s plans to expand end-to-end encryption across all user communications, continuing a longstanding battle by the government against the U.S. company's messaging tools.

Secretary of State for Digital, Culture, Media and Sport Oliver Dowden said both he and Home Secretary Priti Patel are speaking with Facebook “at all levels” about encryption, in a press conference on Wednesday.

“End to end encryption cannot be a way of facilitating child abuse, and so on, and we've shared those grave concerns,” Dowden added. “We haven't ruled out any steps to protect against those abuses.”

Facebook founder Mark Zuckerberg has promised to expand encryption messages beyond WhatsApp to all its apps by default, including Messenger and Instagram, a move which has met resistance from U.S., U.K. and Australian justice officials.

The U.K. government has previously urged social-media platforms such as Facebook and Twitter to tackle terror posts on their sites, and demanded access to encrypted messages. However Dowden added that any legislative means to tackle the issue would not be in the forthcoming Online Safety Bill.

The U.K. is currently reshaping its approach to tech companies following its departure from the European Union, and while attempting to limit the power of big tech, lawmakers are also pushing to relax listing rules to create bigger British startups. Officials are set to change stock exchange rules around blank-check firms as part of wide-ranging reforms to boost the attractiveness of London, while company founders will also be able to keep greater control when they list their businesses in the city.

Dowden said he hopes these reforms will lure British entrepreneurs back from U.S. capital markets, which offer more relaxed rules around share ownership and higher valuations. The U.K. is “looking to see how we can make it easier for tech to list, and in particular the founder question, which has been one of the big challenges,” said Dowden.

Dowden also added that one of the world's biggest tech deals remains under scrutiny. British officials have yet to break their silence over Nvidia Corp's $40 billion takeover of British chip designer Arm Holdings six months after it was announced. Britain's Competition and Markets Authority said in January it would investigate the deal.

“Don't take the fact that we've said nothing on it as being that we are not going to act, or indeed we are going to act,” said Dowden. “It is still very much under consideration.”

Dowden has been canvassing British technology entrepreneurs. He met e-commerce business THG Plc founder Matthew Moulding on Tuesday, and spoke with cybersecurity firm Darktrace Ltd Chief Executive Officer Poppy Gustafsson on Wednesday. As evidence of a changing culture, he cited the so-called unicorn valuation of Starling Bank and Deliveroo's decision to list in London.

“This goes to the heart of one of the biggest challenges clearly that we face in the U.K.,” Dowden acknowledged. “There is always going to be a problem in the U.K. of scale. We are not a China or a U.S.”

On Thursday the minister announced that 2020 was a record year for venture capital funding in the U.K., citing government analysis which showed that $15 billion had gone to tech companies - more than France and Germany combined.