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This is the same government demanding a back door into encryption of messaging devices.

If the UK govt operated in the private sector, they would have been fired several times over

Nah, they would just pay a fine and keep on doing business. At least in the US.

It's the same in EU. Google and Facebook got fined a couple of times and they just don't care.

The phrase you’re looking for is “slap on the wrist”.

A fine is a fee you pay for wrongdoing that makes you think twice next time.