The Competition and Markets Authority is to assemble a dedicated team to handle the use of algorithms, artificial intelligence and big data in business.
The move is intended to improve the CMA's capability to collect and study data, analyse how companies use data and algorithms, and the implications for consumers and competition.
It also hopes to work with researchers, tech companies, the Information Commissioner's Office and other regulators.
The team will be headed by a chief data and technology insights officer, a role which will be advertised later in November.
Data and algorithms are becoming ever more central to business models and competition issues. For example, using algorithms to achieve price fixing online, said the regulator. It recently launched a campaign to ensure online sellers know how to avoid breaking UK competition law in this area.
The regulator regularly steps into areas where it deems a lack of competition is failing consumers. Earlier this year Amazon, Apple and Microsoft committed to providing cloud storage users with fairer contracts after a crackdown by the CMA.
In an interview with the Financial Times, Andrea Coscelli, chief executive of the CMA, said: "If you look at our [case] portfolio now, in many ways we follow the economy and we follow technology.
"Compared to five years ago we do much more work in digital spaces, both on the consumer protection side and the competition side."
A statement from the CMA said: "We are already doing a lot regarding data in our work – so this is about stepping up our work and bringing it more together under the watch of a central team and a senior leader.
"We will establish a new team of data scientists which will aim to improve how we capture, analyse and draw conclusions from large data sets, how we share them with partners and parties in cases and how we store them for future use. It will also explore new analytical techniques to help develop our understanding of issues in the technology sector.
"Data is playing an ever bigger role in the way markets are working and how the CMA works. We want to ensure we are able to match the increasing levels of expertise in companies." ®