Digital Markets, Competition and Consumers Bill

(Limited Text - Ministerial Extracts only)

Report stage
Monday 20th November 2023 Commons Chamber

4.43 pm

[The Parliamentary Under-Secretary of State for Science, Innovation and Technology (Saqib Bhatti)]

I beg to move, That the clause be read a Second time.

[Madam Deputy Speaker (Dame Rosie Winterton)]

With this it will be convenient to discuss:

Government new clause 6.

New clause 23—Digital Markets Unit and CMA: annual statement to House of Commons—

“(1) The Secretary of State must, once a year, make a written statement to the House of Commons giving the Secretary of State’s assessment of the conduct and operation of—

(a) the Digital Markets Unit, and

(b) the CMA as a whole.

(2) The first statement must be made by 1 February 2024.

(3) A further statement must be made by 1 February each subsequent year.”

This new clause would require the Secretary of State to make a written statement about the conduct and operation of the DMU and CMA.

New clause 27—Appointment of senior director of the DMU—

“The senior director of the Digital Markets Unit must be appointed by the Secretary of State.”

This new clause provides that the senior director of the DMU must be appointed by the Secretary of State.

New clause 28—Duty of the CMA: Citizens interest provisions—

“(1) The Enterprise and Regulatory Reform Act 2013 is amended as follows.

(2) After section 25(3) insert—

“(3A) When carrying out its functions in relation to the regulation of competition in digital markets under Part 1 of the Digital Markets, Competition and Consumers Act 2024, the CMA must seek to promote competition, both within and outside the United Kingdom, for the benefit of consumers and citizens.””

This new clause would give the CMA a duty to further the interests of citizens – as well as consumers – when carrying out its digital markets functions under Part 1 of the Bill.

Amendment 176, in clause 2, page 2, leave out lines 20 and 21 and insert—

“(b) distinctive digital characteristics giving rise to competition law concerns such that the undertaking has a position of strategic significance (see section 6).”

This amendment is linked to Amendment 182.

Amendment 206, page 2, line 25, after “Chapter” insert “, taking account of analysis undertaken by the CMA on similar issues that have been the subject of public consultation.”

This amendment aims to ensure that the CMA are able to draw on previous analysis on issues relevant to the regulatory regime.

Amendment 177, page 2, line 25, at end insert—

“(5) The CMA must publish terms of reference setting out a summary of the evidence base for making a finding of substantial and entrenched market power or of a position of strategic significance.

(6) The terms of reference must include a detailed statement of the competition law concerns arising from these characteristics and the relationship between the designated digital activity and other activities.

(7) Activities with no reasonable prospect of adverse competitive effects linked to digital activity must be referred to as unrelated activities and the terms of reference must expressly state that unrelated activities are not covered by the designation.”

This amendment would require the CMA to publish terms of reference summarising the evidence base for a finding of substantial and entrenched market power or a finding of strategic significance.

Amendment 178, in clause 3, page 2, line 28, after “service” insert “predominantly”

This amendment clarifies that the provision of a service predominantly by means of the internet would be a digital activity.

Amendment 179, page 2, line 34, leave out subsection (2)

This amendment is linked to Amendment 178.

Amendment 180, in clause 5, page 3, line 28, at end insert—

“(c) are not assuaged by evidence of competition arising beyond the activities of the undertaking, and

(d) demonstrate that the perceived market power will be improved compared with the scenario in which the designation does not occur.”

This amendment makes additions to the definition of substantial and entrenched market power.

Amendment 181, in clause 6, page 3, line 31, leave out “one or more of” and insert “both”

This amendment is linked to Amendment 182.

Amendment 182, page 3, line 33, leave out paragraphs (a) to (d) and insert—

“(a) significant network effects are present;

(b) the undertaking’s position in respect of the digital activity would allow it to extend its market power.”

This amendment changes the definition of the term “position of strategic significance”.

Amendment 183, in clause 7, page 4, line 17 at end insert “arising from the designated activities”

This amendment limits the turnover condition in relation to UK turnover to turnover arising from designated activities.

Amendment 184, page 4, line 19, at end insert “to account for inflation on the CPI measure”

This amendment ensures that the sums used to determine whether the turnover condition has been met can only be amended to account for inflation on the CPI measure.

Amendment 194, in clause 11, page 6, line 36, at end insert—

“(c) give a copy of the statement to those undertakings that have not been designated as having SMS that are most directly affected.”

This amendment ensures that challenger firms are able to access information about the regulatory framework on an equal basis to designated firms.

Amendment 195, in clause 12, page 7, line 9, at end insert—

“(5) As soon as reasonably practicable after giving a notice under subsection (2), the CMA must give a copy of the notice to those undertakings that have not been designated as having SMS that are most directly affected.”

See the explanatory statement to Amendment 194.

Amendment 196, in clause 14, page 7, line 36, at end insert—

“(5A) As soon as reasonably practicable after giving an SMS decision notice, the CMA must give a copy of the notice to those undertakings that have not been designated as having SMS that are most directly affected.”

See the explanatory statement to Amendment 194.

Government amendments 2 and 3.

Amendment 197, in clause 15, page 8, line 41, at end insert—

“(6) As soon as reasonably practicable after giving a revised SMS decision notice, the CMA must give a copy of the revised notice to those undertakings that have not been designated as having SMS that are most directly affected.”

See the explanatory statement to Amendment 194.

Government amendments 4 to 7.

Amendment 193, in clause 19, page 11, line 15, at end insert—

“(9A) A conduct requirement must be imposed within 3 months of an undertaking being designated as having SMS under section 2.”

This amendment ensures that a time frame of three months is imposed for the CMA to enforce conduct requirements on designated SMS firms.

Government amendment 8.

Amendment 190, in clause 20, page 12, line 9, after “to”, insert “harm competition in the relevant digital activity or the other activity,”

This amendment would ensure that the CMA can tackle anti-competitive conduct in a non-designated activity, provided that the anti-competitive conduct is related to a designated activity.

Amendment 191, page 12, line 11, after “activity”, insert “, provided that the conduct is related to the relevant digital activity”

See the explanatory statement to Amendment 190.

Government amendments 9 and 10.

Amendment 192, in clause 25, page 14, line 7, at end insert—

“(e) whether to take action in accordance with Chapter 4 (Pro-competitive interventions) in respect of the extent to which it is complying with each conduct requirement to which it is subject and the effectiveness of each conduct requirement to which it is subject.”

This amendment would ensure that the CMA considers the efficacy of existing Conduct Requirements when considering whether to make Pro-Competitive Interventions.

Government amendments 11 and 12.

Amendment 198, in clause 26, page 15, line 3, at end insert—

“(7) As soon as reasonably practicable after giving a conduct investigation notice, the CMA must give a copy of the conduct investigation notice to those undertakings that have not been designated as having SMS that are most directly affected.”

See the explanatory statement to Amendment 194.

Amendment 187, in clause 27, page 15, line 8, at end insert—

“(2) The CMA may have regard to any significant benefits to users or potential users that the CMA considers have resulted, or may be expected to result, from a factor or combination of factors resulting from a breach of a conduct requirement.”

This amendment would ensure that the CMA considers any significant benefits to users resulting from the breach of a Conduct Requirement when it is considering representations from designated undertakings as part of a Conduct Investigation.

Amendment 199, in clause 28, page 15, line 20, at end insert—

“(5) As soon as reasonably practicable after giving a notice under subsection (2), the CMA must give a copy of the notice to those undertakings that have not been designated as having SMS that are most directly affected.”

See the explanatory statement to Amendment 194.

Amendment 188, page 15, line 21, leave out Clause 29.

This Amendment is consequential to Amendment 187.

Government amendment 13.

Amendment 186, in clause 29, page 15, line 31, leave out subsection (c) and insert—

“(c) the conduct is necessary for the realisation of those benefits based on the best available evidence reasonably obtainable, and”

This amendment would change the circumstances in which the countervailing benefits exemption would apply.

Government amendment 14.

Amendment 209, page 15, line 37, at end insert—

“(4) The CMA may only consider that the countervailing benefits exemption applies if it has reached such a consideration within six months of the day on which the conduct investigation notice is given to the undertaking.

(5) In subsection (2), a “benefit” means any benefit of a type set out in regulations made by the Secretary of State in accordance with the procedure under subsections (6) to (9).

(6) The Secretary of State must, within six months of this section coming into force, lay before Parliament draft regulations setting out the types of benefit that apply for purposes of subsection (2).

(7) A Minister of the Crown must make a motion in each House of Parliament to approve the draft regulations within 14 days of the date on which they were laid.

(8) Subject to subsection (9), if the draft regulations are approved by both Houses of Parliament, the Secretary of State must make them in the form of the draft which has been approved.

(9) If any amendments to the draft regulations are agreed to by both Houses of Parliament, the Secretary of State must make the regulations in the form of the draft as so amended.”

This amendment would introduce a 6 month time limit on the duration of investigations into countervailing benefits claims, and specifies that the Secretary of State shall introduce further legislation for Parliamentary debate providing an exhaustive list of the types of countervailing benefits SMS firms are able to claim.

Amendment 200, in clause 30, page 16, line 13, at end insert—

“(4A) As soon as reasonably practicable after giving the notice, the CMA must give a copy of the notice to those undertakings that have not been designated as having SMS that are most directly affected.”

See the explanatory statement to Amendment 194.

Government amendments 15 and 16.

Amendment 201, in clause 31, page 17, line 3, at end insert—

“(7A) As soon as reasonably practicable after making an enforcement order (including a revised version of an order), the CMA must give a copy of the order to those undertakings that have not been designated as having SMS that are most directly affected.”

See the explanatory statement to Amendment 194.

Amendment 202, in clause 32, page 17, line 35, at end insert—

“(6A) As soon as reasonably practicable after giving a notice under subsection (5), the CMA must give a copy of the notice to those undertakings that have not been designated as having SMS that are most directly affected.”

See the explanatory statement to Amendment 194.

Amendment 203, in clause 34, page 18, line 36, at end insert—

“(4A) As soon as reasonably practicable after revoking an enforcement order, the CMA must give a copy of the notice to those undertakings that have not been designated as having SMS that are most directly affected.”

See the explanatory statement to Amendment 194.

Government amendments 17 and 18.

Amendment 189, in clause 38, page 21, line 7, leave out “breached an enforcement order, other than an interim enforcement order” and insert “breached a conduct requirement”

This amendment would allow the CMA to initiate the Final Offer Mechanism after a Conduct Requirement of the type permitted by clause 20(2)(a) has first been breached, provided that the other conditions in clause 38 are met.

Government amendments 19 to 30.

Amendment 204, in clause 47, page 26, line 8, at end insert—

“(4A) As soon as reasonably practicable after giving a PCI investigation notice or a revised version of the PCI investigation notice, the CMA must give a copy of the notice to those undertakings that have not been designated as having SMS that are most directly affected.”

See the explanatory statement to Amendment 194.

Amendment 205, in clause 50, page 27, line 28, at end insert—

“(6A) As soon as reasonably practicable after making a pro-competition order, the CMA must give a copy of the order to those undertakings that have not been designated as having SMS that are most directly affected.”

See the explanatory statement to Amendment 194.

Government amendments 31 to 56.

Amendment 185, in clause 102, page 61, line 10, leave out subsections (6) and (7) and insert—

“(6) In determining an application under this section—

(a) for any application made within a period of three years beginning on the day on which this Act is passed, the Tribunal must determine the application on the merits by reference to the grounds set out in the application;

(b) for any application made thereafter, the Tribunal must apply the same principles as would be applied—

(i) in the case of proceedings in England and Wales and Northern Ireland, by the High Court in determining proceedings on judicial review; and

(ii) in the case of proceedings in Scotland, by the Court of Session on an application to the supervisory jurisdiction of the court.

(7) The Tribunal may—

(a) for any application made within a period of three years beginning on the day on which this Act is passed, confirm or set aside the decision which is the subject of the application, or any part of it, and may—

(i) remit the matter to the CMA,

(ii) take other such steps as the CMA could itself have given or taken, or

(iii) make any other decision which the CMA could itself have made;

(b) for any application made thereafter—

(i) dismiss the application or quash the whole or part of the decision to which it relates. and

(ii) where it quashes the whole or part of that decision, refer the matter back to the CMA with a direction to reconsider and make a new decision in accordance with a ruling of the Tribunal.”

This amendment changes for a three-year period the mechanism by which the Tribunal would determine applications for review.

Government amendments 57 to 67, 83 and 84, 106, 108, 111, 148 and 149.

[Saqib Bhatti]

I am honoured to have been appointed as the Minister with responsibility for tech and the digital economy, and as one of the Ministers with responsibility for the Digital Markets, Competition and Consumers Bill. When I was appointed last Tuesday, many helpful colleagues came up to me to say, “You have been thrown in at the deep end,” but it is a blessing to have responsibility for taking this legislation through the House.

In that vein, I thank my hon. Friend the Member for Sutton and Cheam (Paul Scully) for his tireless work to get the Bill to this stage.

I am aware of the importance of this legislation and the sentiment across the House to deliver the Bill quickly. The benefits of the digital market measures in part 1 of the Bill are clear to see. They will bring about a more dynamic digital economy, which prioritises innovation, growth and the delivery of better outcomes for consumers and small businesses. The rise of digital technologies has been transformative, delivering huge value to consumers and businesses. However, a small number of firms exert immense control across strategically critical services online because the unique characteristics of digital markets, such as network effects and data consolidation, make them prone to tip in favour of a few firms. The new digital markets regime will remove obstacles to competition and drive growth in digital markets, by proactively driving more dynamic markets and by preventing harmful practices such as making it difficult to switch between operating systems.

I turn now to the Government amendments. When the Under-Secretary of State for Business and Trade, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) first stood in the House, he stated that the legislation would unleash the full opportunities of digital markets for the UK. That intention has not changed, and our amendments fully support that. The Government’s amendments to part 1 will provide greater clarity to parties interacting with the regime, enhance the accountability of the regulator and make sure that the legislation is drafted effectively and meets its aims. I will address each of those themes in order.

This new regime is novel. To maximise certainty, it is critical that its parameters—the scopes of the regulator’s functions and the rights and obligations set out in the legislation—are clear. Therefore, the Government have tabled a series of amendments to further clarify how the digital markets regime will work in practice. The amendments relate to how legally binding commitments provided by firms within the scope of the regime will work in practice, the Digital Market Unit’s ability to amend certain decision notices, and how in certain circumstances the DMU may use its investigatory and enforcement powers after a firm is no longer designated.

Two important sets of clarifying amendments are worth covering in more detail. The first relates to conduct requirements. Consumer benefit is a central focus of the digital markets regime. The DMU must consider consumer benefit when shaping the design of its interventions. To reinforce that central focus, we are clarifying how the DMU will consider consumer benefits when imposing and enforcing conduct requirements. Amendment 7 requires the DMU to explain the consumer benefits that it expects to result from a conduct requirement, ensuring transparent, well-evidenced decisions. Amendments 13 and 14 simplify the wording of the countervailing benefits exemption, while critically maintaining the same high threshold.

[Sir Jeremy Wright (Kenilworth and Southam) (Con)]

I draw the House’s attention to my entry in the Register of Members’ Financial Interests. Let me take the opportunity to congratulate my hon. Friend the Member for Meriden (Saqib Bhatti) on his appointment. Does he recognise that it is important to be clear—and for the CMA and the DMU to be clear—that there could be a conflict between the interests of current consumers and those of future consumers? Therefore, it is important that the interests of both are balanced in what the CMA and the DMU eventually decide to do.

[Saqib Bhatti]

My right hon. Friend makes an important point. As I make progress, I hope he will be reassured that the regime will take both those things into account.

Together, amendments 13 and 14 will make sure that consumers get the best outcomes. Amendment 14 makes an important clarification on the role of third parties in the final offer mechanism process. New clause 5 and related amendments will clarify when and how third parties may make collective submissions in relation to the final offer mechanism. That is vital, as collective bargaining can help to address power imbalances during negotiations. We expect that third parties, especially smaller organisations, may seek to work together when negotiating payment terms and conditions.

My second theme is the accountability of the regulator. The discretion afforded to the CMA and its accountability to Government and Parliament have formed a large part of the debate—quite rightly—during the passage of the Bill. I will take time to address that.

The digital markets regime is flexible in its design, with the CMA requiring a level of discretion to deliver effective outcomes. While that is common for ex ante regulation, that does not negate the importance of taking steps to maximise the predictability and proportionality of the regulator’s actions. For that reason, the Government are introducing an explicit requirement for the CMA to impose conduct requirements and pro-competition interventions only where it considers that it is proportionate to do so.

That will make it clear to firms in scope of the regime that they will not be subject to undue regulatory burdens. Firms will be able to challenge disproportionate obligations, and the Competition Appeal Tribunal will, in its consideration of any appeals, apply the principle of proportionality in a reasonable way, as it always does. To complement that, and to ensure consistent senior oversight and accountability of the regime, amendments 57 to 60 require enforcement decisions, including the imposition of penalties, to be reserved to the CMA board or its committee.

[Damian Collins (Folkestone and Hythe) (Con)]

I welcome my hon. Friend to his position, and congratulate him on his role. The Government amendments relate to the proportionality test for conduct requirements. Why did the Government feel that there was a need for those additional tests? Was there a concern that the CMA would use the power disproportionately, and if so, what might such a use have been?

[Saqib Bhatti]

I thank my hon. Friend for his contribution to the House on these matters, and for that question. The aim of the amendments is to provide clarity and give certainty—clarity that we will always ensure that the consumer is at the heart of what we do, and certainty because that is what business always needs. I will happily give further clarity in my closing remarks. To ensure robust oversight of the DMU’s implementation of the regime, we are also requiring that the Secretary of State approve the publication of guidance relating to part 1 of the Bill.

[Rebecca Long Bailey (Salford and Eccles) (Lab)]

On the issue of clarity, the Minister knows that the final offer mechanism should be an issue of last resort, and before that there should be a mechanism by which negotiations can take place. Can he assure the House that there will be a mechanism to ensure that big tech firms do not drag out negotiations unnecessarily, because it is not clear so far?

[Saqib Bhatti]

The whole mechanism is designed to ensure that smaller firms have a say in this. That is why the final offer mechanism is there. I hope that that that gives the hon. Member some reassurance.

Finally, the regime has the potential for significant financial penalties to be imposed, so we have tabled amendments to allow any party subject to a penalty to appeal decisions about the penalty on the merits, rather than on judicial review principles. An appeal on the merits allows the Competition Appeal Tribunal to consider whether it was right to impose the penalty, and to consider the penalty amount. Where appropriate, it also allows the Competition Appeal Tribunal to decide a different penalty amount.

[John Penrose (Weston-super-Mare) (Con)]

I join the queue of people congratulating the Minister on his new role, which is well deserved. I think that I am right in saying that any appeal against a fine from another economic regulator, such as Ofwat or Ofgem, is made to the CMA on the basis of the JR standard, yet we seem to be creating a different, and arguably more complicated, special deal for large tech platforms. Can he explain the Government’s thinking behind that?

[Saqib Bhatti]

I do not think that there is, as my hon. Friend puts it, a special deal; it is about taking a balanced approach to ensure that firms with penalty decisions that have less direct impact on third parties have the opportunity to challenge them, and take a view on them according to the regime.

[John Penrose]

The Minister is being very generous. I just want to understand why the approach differs from that taken in identical appeals by other companies against other economic regulators.

[Saqib Bhatti]

Given the huge size of the fines, it is only right that that approach is put in place to ensure the penalties are applied appropriately, but it does not apply to decisions that are not made by the CMA.

The regime has the potential for significant financial penalties to be imposed, so we are introducing amendments to allow any party subject to a penalty to appeal decisions about that penalty “on the merits”. An appeal “on the merits” allows the Competition Appeal Tribunal to consider whether it was right to impose the penalty and to consider the penalty amount. Where appropriate, it allows the Competition Appeal Tribunal to decide a different penalty amount. The DMU’s other decisions, including the decision as to whether a breach of the regime occurred, would remain subject to an appeal on judicial review principles.

[Sir Jacob Rees-Mogg (North East Somerset) (Con)]

I join in congratulating my hon. Friend on his appointment and on this very wise amendment. It is fundamental to the rule of law that people who are fined large amounts of money have some proper form of appeal; we must not put too much trust in unaccountable and unelected regulators.

[Saqib Bhatti]

My right hon. Friend is always a thoughtful contributor to debates in this House. We believe that the amendments ensure consumer benefit is at the heart of what we are doing and any appeals will be carried out appropriately. Adopting these amendments would bring the digital markets regime into closer alignment with existing CMA mergers and markets regimes, where penalty decisions can be appealed on the merits. As in those regimes, all other decisions are appealable on judicial review principles.

[Sir Jeremy Wright]

I thank my hon. Friend for giving way again. He will appreciate that we are all trying to get clarity, so we understand what the proposals really mean. In relation to the appeal standard that he describes, for cases that are not specifically related to fines, he mentioned the proportionality addition earlier in his remarks. When it comes to an appeal, are we right to understand that the question of proportionality applies when the CMA originally makes its decision to require an intervention and does not apply to the JR standard that is used to determine an appeal?

It is important to be specific about that, because there are those who would argue that proportionality should be a part of the appeal process. I think the Government amendments say that proportionality applies at an earlier stage and that when it comes to considering whether the CMA has behaved in a proportionate way in making its decisions, the assessment will be made by the Competition Appeal Tribunal on JR principles. Am I right about that?

[Saqib Bhatti]

I agree that that is exactly what we are saying. I am happy to provide further clarity in my closing remarks.

Critical to accountability is, of course, transparency. The Government are committed to transparency and bringing forward amendments that will require the CMA to set out its reasons for imposing or varying a conduct requirement. That will improve transparency around CMA decision making and increase consistency with other powers in the Bill where similar justification is required. It also reinforces the CMA’s existing responsibility to consider likely impacts on consumers when deciding whether and how to intervene.

The third theme is to ensure the legislation is drafted effectively. Therefore, we have tabled further technical amendments to ensure that the Bill’s text meets the Government’s original intended aim. They relate to the scope of conduct requirements, specifically the application of the materiality threshold contained in clause 20(3)(c), the maximum penalty limits imposed on individuals, the mergers reporting duty and the service of notices on undertakings overseas in certain circumstances.

It is worth noting that there are a small number of cross-cutting amendments contained in parts 5 and 6 of the Bill that will also impact the digital markets regime. I want to ensure that there is plenty of time for hon. Members to debate the Bill at this important stage in its passage. I appreciate a collaborative approach from across the House. I am sure that there will be many different views on some of the amendments, but I look forward to a constructive and collaborative discussion.

--- Later in debate ---

[Sarah Olney (Richmond Park) (LD)]

The Liberal Democrats welcome many aspects of this Bill. We are pleased that the Government are finally acting on the Competition and Markets Authority’s recommendations in bringing forward measures to prevent the tech giants from putting our digital sector in a stranglehold. We want to see a thriving British tech sector in which start-ups can innovate, create good jobs and launch innovative products that will benefit consumers. A strong competition framework that pushes back on the tech giants’ dominance is essential for that.

For too long a small number of big tech firms have been allowed to dominate the market, while smaller, dynamic start-up companies are too often driven out of the market or swallowed up by the tech giants. New rules designed by the CMA will ensure that these large companies will have to refrain from some of their unfair practices, and they give the regulator a power to ensure that the market is open to smaller challenger companies. The Liberal Democrats are pleased to see changes to the competition framework, which will allow the CMA to investigate the takeover of small but promising start-ups that do not meet the usual merger control thresholds. This change is particularly important for sectors such as artificial intelligence and virtual reality while they are in their infancy. The benefits of these changes will filter down to the end users, the consumers, in the form of more choice over products and services, better prices and more innovative start-ups coming to the fore.

While we are glad that most of the CMA’s recommendations are in this Bill, we have concerns about certain aspects, such as the forward-looking designation of SMS firms and the definition of countervailing benefits that SMS firms are able to claim. The countervailing benefits exemption allows the CMA to close an investigation into a conduct breach if an SMS firm can demonstrate that its anti-competitive practices produce benefits for users that outweigh the harms. There is some concern that big tech may seek to exploit this exemption to evade compliance with conduct requirements and continue with unfair, anti-competitive practices. It could also create scope for tech firms to inundate the CMA with an excessive number of claims of countervailing benefits, diverting the CMA’s limited resources away from essential tasks. Amendment 209, tabled in my name, seeks to strengthen the Bill and to curtail the power of large tech firms to evade compliance by tightening the definition in the Bill of what kind of benefits are valid.

The Liberal Democrats also have concerns about several of the Government amendments, particularly those relating to the appeals standard, as they risk watering down some of the CMA’s most powerful tools. There is now a real danger that powerful incumbents will use their vast resources to bog down and delay the process, leaving smaller competitors at a disadvantage. These amendments show that the Government are taking the side of these established firms at the expense of smaller, growing firms, and at the expense of economic growth and innovation as a whole.

The Liberal Democrats are keen to ensure that big tech is prevented from putting the British tech sector in a stranglehold. We hope that the Government will be robust on the defensive measures in the Bill. It is important that they reject any attempt to water down or weaken this Bill with loopholes, and that they ensure there is no ambiguity that could be exploited. Although competition is crucial for Britain’s tech sector, we hope the Government also move to tackle some of the fundamental issues holding it back, such as the skills gap, the shortage of skilled workers and weak investment.

[Saqib Bhatti]

With the leave of the House, I would like to address some of the points that have been made today.

I am grateful to Members across the House for their contributions to this debate and, of course, throughout the development of this legislation. I am similarly grateful for the cross-party support commanded by the digital markets measures. Members will find that I agree with points raised on both sides of the House, and I am confident that this Bill addresses those points.

I thank the hon. Member for Pontypridd (Alex Davies-Jones) for kindly welcoming me to the Treasury Bench, for her amendments and for her commitment to getting this legislation right. She asked about the countervailing benefits exemption, and I reassure her that the wording change maintains the same high threshold. SMS firms must still prove that there is no other reasonable, practical way to achieve the same benefits for consumers with less anti-competitive effect. This makes sure consumers get the best outcomes, whether through the benefits provided or through more competitive markets.

The hon. Lady also asked about appeals, and it is important that decisions made by the CMA can be properly and appropriately reviewed to ensure that they are fair, rigorous and evidence-based. We have considered strong and differing views about appeals from a range of stakeholders, and judicial review principles are the appropriate standard for the majority of decisions under the regime, as we have maintained with the additional clarification on the DMU’s requirement to act proportionately. We have, however, aligned the appeal of penalty decisions with appeals under the Enterprise Act 2002, so that parties can challenge these decisions on their merits to ensure that the value of a penalty is suitable. Penalty decisions have less direct impact on third parties, and the amendment will provide additional reassurance without affecting the regime’s effectiveness.

The significant changes we are making will provide more clarity and assurance to firms on the need for the DMU to act proportionately. They also bring the regime in line with the relevant CMA precedent. Parties will have greater scope to challenge whether the interventions imposed on them are proportionate or could have been achieved in a less burdensome way. When financial penalties are imposed, parties will have access to a full merits review to provide reassurance that the value of the fine is appropriate.

The hon. Lady also asked about the implementation of guidance, and I can assure her that we are working at pace to ensure the regime is operational as soon as possible after Royal Assent. Guidance must be in place for the regime to go live, and the Government will be working with the CMA to ensure timely implementation. The Secretary of State will, of course, review all guidance for all future iterations.

The hon. Lady also talked about amendments 187 and 188, which seek to replace the countervailing benefits exemption with a power for the CMA to consider benefits to users before finding a breach of a conduct requirement. The exemption will ensure that there is a rigorous process to secure the best outcomes for consumers, and removing it would jeopardise clear regulatory expectations and predictable outcomes. In turn, this would make it more likely that consumers lose out on the innovations developed by SMS firms, such as privacy or security benefits. Government amendments 13 and 14 clarify the exemption while, crucially, maintaining the same high threshold and clear process.

The hon. Lady also mentioned amendments 194 and 196, and the Government agree that it is important that the DMU’s regulatory decisions are transparent and that the right information is available to the public. We understand that these amendments would require the DMU to send decision notices to third parties that it assesses to be most affected by those decisions. However, under the current drafting, the DMU is already required to publish the summaries of key decisions. Requiring the DMU to identify appropriate third parties and send them notices would introduce a significant burden on the DMU, to limited benefit, and I argue that it would undermine the flexibility and quick pace that we expect from the DMU. We believe the current drafting strikes the right balance, providing transparency and public accountability on DMU decisions.

--- Later in debate ---

[Sir Robert Buckland]

I warmly welcome my hon. Friend to his place, as this is my first chance to do so. Are we now to understand that, with regard to the judicial review standard, proportionality will, in effect, be built in, and that we are going beyond the principles of plain, vanilla JR into the more widely understood term? Am I right?

[Saqib Bhatti]

I suggest that I write to my right hon. and learned Friend, and to all right hon. and hon. Members who have raised the important question of proportionality, to clarify the position. We want this legislation to have clarity for consumers and certainty for businesses because, as my right hon. Friend the Member for North East Somerset (Sir Jacob Rees-Mogg) said, this is an ever-changing market, so it is essential that we have clarity and certainty.

[Sir Robert Buckland]

The point about proportionality extends into clause 29, where the Government have now removed the indispensability test, leaving bare proportionality. My amendment asks for a necessity test. What assessment has my hon. Friend made of the removal of “indispensability”? Does he still think that the threshold for countervailing benefit will be sufficiently high to ensure that the CMA does not disapply or discontinue investigations inappropriately?

[Saqib Bhatti]

That is an important point, and I appreciate my right hon. and learned Friend giving me the opportunity to clarify it. I want to be unequivocal that, from my perspective, the threshold is still high and we have provided clarify. If he requires even further clarity, I am happy to write to him to be completely clear.

[Damian Collins]

I am grateful for what my hon. Friend has said so far about the application of the proportionality test, but if he is to follow up with Members in writing with some clarity, can he set out what he believes the grounds for challenge would be on the basis of proportionality? The interventions that the CMA may make and the rulings it may give are at the end of quite a lengthy process of market analysis, demonstration of abuse of market power and breach of conduct requirements. If those are challenged routinely and at a late stage, on the basis that there are grounds to say that it is disproportionate, it could have the unintended consequence of delaying systems in a way that they should not be delayed.

[Saqib Bhatti]

If I heard my hon. Friend correctly, he wanted a letter on that. This legislation is designed to make sure that it is not for big companies to litigate heavily to stifle the smaller challengers from coming out and becoming the big companies and employers of tomorrow. Let me write to him to clarify the point further.

My right hon. and learned Friend the Member for South Swindon has spoken about accountability in my numerous conversations with him over the past few days, and again today. I take his point. He will know that I want independent, versatile, flexible and adaptable regulators. That is only right for an ever-changing digital market that is always innovating and changing the way it operates. We do not know the unicorns of tomorrow or the benefits that we can get from consumers. The Competition and Markets Authority and the DMU have a responsibility to be accountable, to maintain that flexibility and to have adaptability to new technology and new entrants in the market. As I am sure he knows and respects, that is why independent regulators are a central part of our internationally recognised business environment. We should not forget that point.

I take the points about overreach by regulators, but they are a core part of what international partners and investors look at when it comes to the competition regime, because they know that will be innovative and will encourage further innovation in technology. The CMA is operationally independent from Government, and Government will not intervene in its regulatory decisions. The DMU will have discretion in how it designs its interventions under the regime. That discretion is matched with robust accountability, from initial decision making to appeals.

There is a range of checks and balances throughout the regime that provide assurance. I hope that reassures my right hon. Friend. There are opportunities for Government, Parliament and stakeholders to hold the CMA to account, but I welcome his challenges and interventions on this point, because it is important. I am sure that this will be looked at again in the other place. Government should always be sensitive to those challenges. The digital markets regime will be overseen by CMA’s board, which is accountable to Parliament for all key decisions. Key decisions will be taken by a committee, of which at least half its members will offer an independent perspective. I am sure that he will welcome that because, as new technologies and innovations emerge in the market, we will need new expertise.

[Damian Collins]

My right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland) made the important point that the growth and expansion of regulation in digital markets is necessary but substantial. The ability of this place to keep track of how the regulators use their powers is increasingly important. That may be beyond the work of any departmental Select Committee, but instead requires something like the Public Accounts Committee, as he suggested—a separate committee whose job is to focus on and scrutinise such work. That was recommended by the House of Lords Communications and Digital Committee, and also by the Joint Committee on the Online Safety Bill. I do not expect the Minister to give us an answer right now, but if he could reflect on that need and give some guidance to the House, that would be welcome.

[Saqib Bhatti]

My hon. Friend makes an important point that is a matter for wider discussions on accountability. I am happy to have that discussion with him in future. As things currently stand, there are sufficient balances and checks in place, but I am always open to having further discussions with him.

[Grahame Morris]

Could the Minister give some clarification on my point about fair reimbursement to the journalists and publishing houses that produce original content? As the new Minister, is he prepared to meet the National Union of Journalists to hear its concerns directly?

[Saqib Bhatti]

If the hon. Member will be ever so patient, I will address that point, because it is important.

My right hon. and learned Friend the Member for South Swindon talked about the DMU’s ex-ante powers, which I want to address because it is an important measure. We proposed to give the DMU ex-ante powers to impose obligations on designated firms because of the characteristics of digital markets, which make them particularly fast-moving and likely to tip in favour of new, powerful winners. We do not think that approach is appropriate for firms in other markets that do not exhibit the same qualities. Even if a firm meets the turnover conditions and carries out a digital activity, the DMU will still need to find evidence that the firm has substantial and entrenched market power, as well as a position of strategic significance in the activity, to designate the firm. The DMU will prioritise the areas where there will be greatest benefits for markets and consumers, and will reflect the CMA’s strategic steer provided by the Government, which is designed to reflect the policy as intended.

[Sir Jacob Rees-Mogg]

I think that everyone wishes to achieve the same objective, so I do not quite understand why His Majesty’s Government do not accept the amendment of my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland), which will make that clear beyond doubt, will safeguard it and will tidy up the legislation.

[Saqib Bhatti]

I will address my right hon. Friend’s point. We have listened to the concerns and discussed them in great detail, but I believe the Government’s amendments strike the right balance between prioritising the benefit to the consumer while helping the digital market to remain flexible and innovative, allowing for the future tech of tomorrow to be a big challenger.

One of the great strengths of the Bill lies in the speed and flexibility of the toolkit to better equip the regulator to tackle fast-moving and dynamic digital markets. The amendments will maintain an effective, agile and robust process, and will not undermine the Digital Markets Unit’s ability to intervene in a timely and impactful way. They will ensure that the DMU’s approach is proportionate and beneficial to consumers. I hope that we have reached a good position with the Members I have spoken about, but I want to turn to the points raised by my hon. Friend the Member for Folkestone and Hythe (Damian Collins), who was ever so eloquent about the challenge that the legislation is looking to overcome and the balance that it seeks. I was greatly appreciative of his support and the challenge he has put down.

In respect of the hon. Member for Easington (Grahame Morris), the final offer mechanism, which strengthens the hand of smaller businesses when they challenge those bigger businesses, is designed with the challenges he has put forward in mind. I hope that he appreciates that we recognise the traditional business model of news media, particularly print media, which has been substantially disrupted by the growth of digital. The regime is designed to help rebalance the relationship between major platforms and those who rely on them, including news publishers. That could include creating an obligation to offer fair and reasonable payment terms for the use or acquisition of digital, including news, content. I will absolutely take up the offer to meet the NUJ and hear its concerns. I hope that this measure goes a long way towards appeasing those concerns by rebalancing the market and ensuring that firms that have strategic market significance know that they must present a much fairer deal for regional print media.

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[Sir Robert Buckland]

Perhaps the Minister will forgive me for juxtaposing his reluctance to make things clear in primary legislation when discussing this clause and what the Government seek to do in part 4 on subscriptions. It seems to me very odd to conduct a subscription regulation mechanism by using primary legislation. There is a conflict in the logic being applied here, and I am sorry that I have to point that out to him.

[Saqib Bhatti]

I am sure that the Under-Secretary of State for Business and Trade, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) will appreciate the pass that I am just about to give him; I am sure that he will address that issue in his speech.

I reiterate my gratitude to the Opposition for their co-operative behaviour, which I have been informed about by my predecessor, and to right hon. and hon. Members across the House for the challenge that they have put forward today. I am grateful to Members across the House for their contributions, and I hope that they continue to work with the Government. We will continue to work with Members as the Bill progresses through Parliament to ensure that it drives innovation, grows the economy and delivers better outcomes for consumers. That is what the Government care about. We want a highly competitive market that innovates and nurtures the technology companies of tomorrow to ensure that the digital online world serves consumers. For that reason, I respectfully ask Members not to press their amendments.

Question put and agreed to.

New clause 5 accordingly read a Second time, and added to the Bill.

New Clause 6

Protected disclosures

“In the Public Interest Disclosure (Prescribed Persons) Order 2014 (S.I. 2014/2418), in the table in the Schedule, in the entry for the Competition and Markets Authority, in the right hand column, after ‘Kingdom’ insert ‘, including matters relating to Part 1 of the Digital Markets, Competition and Consumers Act 2024 (digital markets)’.”—(Saqib Bhatti.)

This new clause (which would be inserted into Chapter 8 of Part 1 of the Bill) confirms that matters relating to Part 1 of the Bill (digital markets) are covered by the entry for the Competition and Markets Authority in the Public Interest Disclosure (Prescribed Persons) Order 2014.

Brought up, read the First and Second time, and added to the Bill.

Clause 15

Notice requirements: decisions to designate

Amendments made: 2, in clause 15, page 8, line 34, leave out from “that” to the end of line 35 and insert

“the undertaking or digital activity, as the case may be, remain substantially the same”.

This amendment clarifies how the CMA may revise its view of an undertaking or digital activity by issuing a revised SMS decision notice.

Amendment 3, in clause 15, page 8, line 37, leave out from “not” to the end of line 38 and insert

“affect—

‘(a) the day on which the designation period in relation to that designation begins, or

(b) anything done under this Part in relation to that undertaking.”—(Saqib Bhatti.)

This amendment confirms that giving a revised SMS decision notice does not affect anything done under this Part in relation to a designated undertaking.

Clause 17

Existing obligations

Amendments made: 4, in clause 17, page 9, line 23, at end insert—

“(2A) In Chapters 6 (investigatory powers and compliance reports) and 7 (enforcement and appeals), references to a ‘designated undertaking’ are to be read as including an undertaking to which an existing obligation applies by virtue of provision made in reliance on subsection (1).”

This amendment provides that references in Chapters 6 and 7 to a designated undertaking include an undertaking to which an obligation applies by virtue of provision made in reliance on clause 17(1).

Amendment 5, in clause 17, page 9, line 37, at end insert—

“(ba) commitment (see sections 36 and 55);”.—(Saqib Bhatti.)

This amendment provides for the CMA to be able to apply an existing commitment, with or without modifications, in respect of certain new designations or to make transitional, transitory or saving provision in respect of a commitment when it would otherwise cease to have effect.

Clause 19

Power to impose conduct requirements

Amendments made: 6, in clause 19, page 10, line 30, leave out from “requirement” to the end of line 35 and insert

“or a combination of conduct requirements on a designated undertaking if it considers that it would be proportionate to do so for the purposes of one or more of the following objectives—

(a) the fair dealing objective,

(b) the open choices objective, and

(c) the trust and transparency objective,

having regard to what the conduct requirement or combination of conduct requirements is intended to achieve.”

This amendment provides that the CMA may only impose a conduct requirement or combination of requirements if it considers that it would be proportionate to do so, having regard to what the requirement or combination is intended to achieve.

Amendment 7, in clause 19, page 11, line 15, at end insert—

“(9A) Before imposing a conduct requirement or a combination of conduct requirements on a designated undertaking, the CMA must have regard in particular to the benefits for consumers that the CMA considers would likely result (directly or indirectly) from the conduct requirement or combination of conduct requirements.”—(Saqib Bhatti.)

This amendment provides that the CMA must consider the likely benefits for consumers when imposing a conduct requirement or combination of conduct requirements.

Clause 20

Permitted types of conduct requirement

Amendment made: 8, in clause 20, page 12, line 9, leave out from “to” to “in” on line 10 and insert

“materially increase the undertaking’s market power, or materially strengthen its position of strategic significance,”.—(Saqib Bhatti.)

This amendment clarifies that a conduct requirement is permitted if it is for the purpose of preventing an undertaking from carrying on activities other than the relevant digital activity in a way that is likely to materially strengthen its position of strategic significance in relation to the relevant digital activity.

Clause 21

Content of notice imposing a conduct requirement

Amendments made: 9, in clause 21, page 12, line 28, after “requirement” insert

“or, as the case may be, each conduct requirement as varied,”.

This amendment clarifies how the notice requirements in clause 21 apply in relation to the variation of a conduct requirement.

Amendment 10, in clause 21, page 12, line 31, leave out paragraphs (b) and (c) and insert—

“(b) the CMA’s reasons for imposing the conduct requirement, including—

(i) the objective for the purposes of which the CMA considers it is proportionate to impose the conduct requirement (see section 19),

(ii) the benefits that the CMA considers would likely result from the conduct requirement (see section 19(9A)), and

(iii) the permitted type of requirement to which the CMA considers the conduct requirement belongs (see section 20);”.—(Saqib Bhatti.)

This amendment requires the CMA to give reasons for imposing conduct requirements on a designated undertaking. Sub-paragraph (ii) is consequential on Amendment 7.

Clause 26

Power to begin a conduct investigation

Amendments made: 11, in clause 26, page 14, line 11, leave out “a designated” and insert “an”.

This amendment, together with Amendments 12, 16, 29, 37, 38, 40, 42, 43 and 65, ensures that enforcement action can be taken in respect of an undertaking that has ceased to be a designated undertaking in relation to its conduct while it was a designated undertaking.

Amendment 12, in clause 26, page 14, line 18, leave out “designated”.—(Saqib Bhatti.)

See the explanatory statement for Amendment 11.

Clause 27

Consideration of representations

Amendment proposed: 187, in clause 27, page 15, line 8, at end insert—

“(2) The CMA may have regard to any significant benefits to users or potential users that the CMA considers have resulted, or may be expected to result, from a factor or combination of factors resulting from a breach of a conduct requirement.”—(Alex Davies-Jones.)

This amendment would ensure that the CMA considers any significant benefits to users resulting from the breach of a Conduct Requirement when it is considering representations from designated undertakings as part of a Conduct Investigation.

Question put, That the amendment be made.

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18:35

Division 5

Ayes: 196

Noes: 275

Clause 29

--- Later in debate ---

18:49

Division 6

Ayes: 197

Noes: 278

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

I beg to move, That the clause be read a Second time.

[Mr Deputy Speaker (Sir Roger Gale)]

With this it will be convenient to discuss the following:

Government new clause 8—Use of damages-based agreements in opt-out collective proceedings.

Government new clause 9—Mergers of energy network enterprises.

Government new clause 10—Power to make a reference after previously deciding not to do so.

Government new clause 11—Taking action in relation to regulated markets.

Government new clause 12—Meaning of “working day” in Parts 3 and 4 of EA 2002.

Government new clause 13—ADR fees regulations.

Government new clause 14—Power to require information about competition in connection with motor fuel.

Government new clause 15—Penalties for failure to comply with notices under section (Power to require information about competition in connection with motor fuel.

Government new clause 16—Procedure and appeals.

Government new clause 17—Statement of policy on penalties.

Government new clause 18—Offences etc.

Government new clause 19—Penalties under section (Penalties for failure to comply with notices under section (Power to require information about competition in connection with motor fuel)) and offences under section (Offences etc).

Government new clause 20—Information sharing.

Government new clause 21—Expiry of this Chapter.

Government new clause 22—Removal of limit on the tenure of a chair of the Competition Appeal Tribunal.

New clause 1—Meaning of “payment account” and related terms—

“(1) ‘Payment account’ means an account held in the name of one or more consumers through which consumers are able to—

(a) place funds;

(b) withdraw cash; and

(c) execute and receive payment transactions to and from third parties, including over any designated payment system.

(2) ‘Payment account’ also includes the following types of account—

(a) savings accounts;

(b) credit card accounts;

(c) current account mortgages; and

(d) e-money accounts.

(3) ‘Designated payment system’ has the same meaning as within the Financial Services (Banking Reform) Act 2013.

(4) ‘Relevant institution’ means—

(a) any bank which has permission under Part 4A of the Financial Services and Markets Act 2000 to carry out the regulated activity of accepting deposits (within the meaning of section 22 of that Act, taken with Schedule 2 and any order under section 22);

(b) any building society within the meaning of section 119 of the Building Societies Act 1986;

(c) any credit institution within the meaning of the Payment Services Regulations 2017;

(d) any authorised payment institution within the meaning of the Payment Service Regulations 2017; and

(e) any small payment institution within the meaning of the Payment Services Regulations 2017.

(5) ‘Discriminate’ means that a relevant institution acts in a way which, were that relevant institution a public authority, would constitute a breach of its obligations under section 6(1) of the Human Rights Act 1998, in so far as those obligations relate to—

(a) Article 8 of the European Convention on Human Rights;

(b) Article 9 of the European Convention on Human Rights;

(c) Article 10 of the European Convention on Human Rights;

(d) Article 11 of the European Convention of Human Rights; and

(e) any of the Articles listed in paragraphs (a) to (d) when read with Article 14 of the European Convention on Human Rights.”

This new clause defines relevant terms for the purposes of NC2.

New clause 2—Rights of consumers in relation to payment accounts—

“(1) A relevant institution must not discriminate against a consumer when deciding—

(a) whether to offer a consumer a payment account;

(b) whether to alter, or vary in any way, the terms of an existing payment account in use by a consumer; or

(c) whether to terminate or otherwise restrict a consumer’s access to their payment account.

(2) A relevant institution, within 30 days of deciding to alter, vary, terminate, or otherwise restrict a consumer’s access to their payment account, or deciding not to offer a consumer a payment account, must provide the consumer with a written statement of reasons explaining their decision.

(3) A written statement of reasons under subsection (2) must clearly specify—

(a) the basis upon which such a decision was taken, including reference to any terms and conditions within the consumer’s contract upon which the relevant institution relies, or reference to any legal obligations placed upon the relevant institution;

(b) all evidence taken into account by the relevant institution in reaching its decision; and

(c) any other matters that had bearing on the relevant institution’s decision.”

This new clause would place a duty on banks, building societies and similar institutions not to discriminate against consumers when offering retail banking services.

New clause 3—Rights of redress—

“Where a relevant institution has acted in breach of its obligations under section [Rights of consumers in relation to payment accounts] (1), the consumer shall have a right to damages in respect of any—

(a) financial loss;

(b) emotional distress; and

(c) physical inconvenience and discomfort.”

This new clause would give consumers a right to redress if discriminated against under NC2.

New clause 4—Enforcement of rights of redress—

“(1) A consumer with a right to damages by virtue of section [Rights of redress](1) may bring a claim in civil proceedings to enforce that right.

(2) The Limitation Act 1980 applies to a claim under this section in England and Wales as if it were an action founded on simple contract.

(3) The Limitation (Northern Ireland) Order 1989 (S.I. 1989/1339 (N.I. 11)) applies to a claim under this section in Northern Ireland as if it were an action founded on simple contract.”

This new clause makes provision for the enforcement of redress under NC3.

New clause 24—Review of Competition Appeal Tribunal—

“(1) The Secretary of State must, as soon the Secretary of State considers reasonable practicable after this Act has been passed, commission a review of all processes involving the Competition Appeal Tribunal.

(2) The Secretary of State must ensure that the review is conducted independently of the Digital Markets Unit and the CMA.

(3) The Secretary of State must lay a report of the review before Parliament.”

This new clause would require the Secretary of State to commission an independent review of the Competition Appeals Tribunal processes.

New clause 25—Duty to treat consumer interests as paramount—

“(1) In applying the provisions of this Act, the CMA and the Courts have an overriding duty to treat consumer interests as paramount.

(2) The duty set out in subsection (1) includes a duty to—

(a) address consumer detriment, including the protection of vulnerable consumers;

(b) expedite investigations that give rise to consumer detriment; and

(c) narrow points of challenge in appeals to CMA decisions that engage consumer detriment.”

This new clause would impose a duty on the CMA and the Courts to treat consumer issues as paramount.

New clause 26—Proceedings before the Tribunal: claim for damages—

“(1) The Competition Act 1998 is amended as follows.

(2) In section 47A, after subsection (2)(b) insert—

“(c) Part 4 of the Digital Markets Act 2023””

This new clause would allow claims for damages in respect of infringements of the provisions of Part 4 of this Bill.

New clause 29—Contract renewal: option to opt in—

“(1) Before a trader enters into a subscription contract with a consumer where section 247(2) applies, the trader must ask the consumer whether they wish to opt-in to an arrangement under which the contract renews automatically at one or more of the following times—

(a) after a period of six months and every six months thereafter, or

(b) if the period between the consumer being charged for the first and second time is longer than six months, each time payment is due.

(2) If the consumer does not opt-in to such an arrangement, the trader must provide a date by which the consumer must notify the trader of the consumer’s intention to renew the contract, which must be no earlier than 28 days before the renewal date.

(3) If the consumer has not—

(a) opted into an arrangement under subsection (1), or

(b) given notification of the consumer’s intention to renew by the date specified under subsection (2),

the contract will lapse on the renewal date.”

This new clause would allow the consumer to opt-out of their subscription auto-renewing every six months, or if the period between payments is longer than six months, before every payment. If the consumer does not opt-in to auto-renewal, they would be required to notify the trader manually about renewing.

New clause 30—Contract renewal: variable rate contracts—

“(1) Before a trader enters into a subscription contract with a consumer where section 247(3) applies, the trader must ask the consumer whether they wish to opt into an arrangement under which the contract renews automatically on the date the consumer becomes liable for the first charge or the first higher charge.

(2) If the consumer does not opt into an arrangement under subsection (1), the trader must provide a date by which the consumer must notify the trader of the consumer’s intention to renew the contract, which must be no earlier than five days before the renewal date.

(3) The trader must also ask the consumer whether they wish to opt into an arrangement under which the contract renews automatically—

(a) after a period of either six months from the first charge or higher charge and every six months thereafter, or

(b) if the period between the consumer being charged for the first and second time is longer than six months, each time payment is due.

(4) If the consumer does not opt into an arrangement under subsection (3), the trader must provide a date by which the consumer must notify the trader of the consumer’s intention to renew the contract, which must be no earlier than 28 days before the renewal date.

(5) If the consumer has not—

(a) opted into an arrangement under subsection (1) or subsection (3), or

(b) given notification of the consumer’s intention to renew by the date specified under (as the case may be) subsection (2) or subsection (4),

the contract will lapse on the next renewal date.”

This new clause would introduce an option for the consumer to opt-out of their subscription auto-renewing after their free or discounted trial. Otherwise, they would have to notify the trader manually about the subscription continuing. It also introduces an option for the consumer to opt-out of their subscription auto-renewing.

New clause 31—Regulatory burdens arising from competition and consumer regulation—

“(1) The CMA must, at least once a year, publish a report setting out its assessment of the economic cost of regulatory burdens that have been created and removed over the previous year through the exercise by public bodies of—

(a) competition and consumer powers; and

(b) the following activities, as far as they relate to competition and consumer matters—

(i) the imposition of conduct requirements;

(ii) dispute resolution and public enforcement activities;

(iii) the monitoring of undertakings, and

(iv) the issuing of regulatory orders.

(2) The Secretary of State must ensure that public bodies provide the CMA with information the CMA considers is necessary for completion of the report.

(3) The Secretary of State must ensure that the net economic cost of regulatory burdens set out in the report is zero or less in every year.

(4) In this section a “regulatory burden” means a burden as defined in section 1(3) of the Legislative and Regulatory Reform Act 2006.”

This new clause places on Ministers a permanent duty to ensure that the net economic cost of burdens from competition and consumer regulation is zero or less each year.

Government amendment 69.

Amendment 207, in clause 141, page 89, line 13, at end insert—

“(c) the collective interests of consumers include avoiding any detriment that might be incurred by consumers if the United Kingdom does not reach a level of net zero carbon emissions by 2030.”

This amendment would mean that part of the test of whether a commercial practice had committed an infringement would be whether the commercial practice had failed to protect consumers from any detrimental effects arising from a failure to achieve net zero by 2030.

Government amendments 70 to 79, 81, 82 and 85.

Amendment 226, in clause 224, page 150, line 27, at end insert—

“(4A) Where a commercial practice has been found to be unfair under paragraph 32 of Schedule 18 of this Act, any body listed as a public designated enforcer in section 144(1) of this Act may require the removal of the relevant online marketing from the internet.”

This amendment allows enforcement bodies to remove the marketing of fake or counterfeit products from the internet.

Amendment 208, page 150, line 29, at end insert—

“(6) An established means used to encourage control of unfair commercial practices must include the following measures—

(a) investigation and determination on a timely basis—

(i) in accordance with a pre-determined process which has been published on the internet,

(ii) by people who are independent of any organisation undertaking commercial practices, and

(iii) with the outcome of any decision published.

(b) the appointment of a board to oversee the investigation and determination process, with the majority of the members of the board independent of any organisation undertaking commercial practices;

(c) provision for the suspension of a commercial practice during an investigation and prior to a determination being made;

(d) provision for guidance to be issued, by the CMA, the relevant weights and measures authority or, if the established means is an organisation, the established means itself, about the lawfulness of a commercial practice;

(e) publication of statistical and other information about the operation of, and compliance with, the established means to enable the CMA or weights and measures authority in question to assess on an annual basis the continuing appropriateness of using the established means.”

This amendment sets out conditions, including in relation to independence and transparency, for the means by which the control of unfair commercial practices will be encouraged.

Government amendments 86 to 93.

Amendment 210, in clause 251, page 166, line 24, leave out “six” and insert “twelve”.

This amendment would provide for traders to have to issue reminder notices to consumers about ongoing subscription contracts only every twelve months, rather than every six.

Amendment 211, page 166, line 36, leave out subsection (5) and insert—

“(5) The Secretary of State may, by regulations, make reasonable provision for the content and timing of reminder notices.”

This amendment, together with Amendments 212 and 213, would remove the detailed provision about the content and timing of reminder notices from the face of the Bill and instead give the Secretary of State the power to make such provision by regulation.

Government amendment 94.

Amendment 212, page 167, line 1, leave out Clause 252.

See explanatory statement to Amendment 211.

Government amendments 95 to 98.

Amendment 214, in clause 253, page 168, line 7, leave out “in a single communication” and insert

“in a manner that is straightforward, timely and does not impose unreasonable cost on a consumer”.

This amendment, together with Amendments 215 to 218, would remove from the Bill the existing detailed provisions for ending a subscription contract, intending that they should be covered by provision made in secondary legislation under the provisions of clause 270(1)(c), and instead set principles for how a contract may be ended.

Amendment 215, page 168, line 10, leave out subsection (2).

See explanatory statement to Amendment 214.

Amendment 216, page 168, line 15, leave out subsection (4).

See explanatory statement to Amendment 214.

Amendment 217, page 168, line 23, leave out subsection (6).

See explanatory statement to Amendment 214.

Amendment 218, in clause 254, page 168, line 37, leave out subsections (3) to (5).

See explanatory statement to Amendment 214.

Government amendments 99 and 100.

Amendment 219, page 170, line 25, leave out clause 257.

This amendment, together with Amendments 220 to 222, would remove the provision for a mandatory cooling-off period for a subscription contract.

Amendment 220, page 171, line 19, leave out clause 258.

See explanatory statement to Amendment 219.

Amendment 221, page 172, line 18, leave out clause 259.

See explanatory statement to Amendment 219.

Government amendments 101 to 103.

Amendment 222, in clause 272, page 180, line 25, leave out subsection (5).

See explanatory statement to Amendment 219.

Government amendments 104, 105, 107, 109, 110, 112 to 147 and 150 to 152.

Amendment 223, in clause 317, page 221, line 35 leave out “subsection (2)” and insert “subsections (2) and (2B)”.

This amendment and Amendment 224 would provide for an implementation period of two years before the provision in the Bill relating to subscription contracts comes into force.

Government amendments 153 and 154.

Amendment 224, page 222, line 6, at end insert—

“(2B) Chapter 2 of Part 4 comes into force two years after the day on which this Act is passed.”

See explanatory statement to Amendment 223.

Government new schedule 1—Mergers of energy network enterprises.

Government amendments 155 to 163.

Amendment 225, in schedule 18, page 343, line 42, at end insert—

“32 At any stage of a purchase process, presenting a price for a product which omits obligatory charges or fees (or an estimate thereof) which are payable by the majority of consumers, which are not revealed to the consumer until later in the purchase process.”

This amendment adds the practice of “drip-pricing”, a pricing technique in which traders advertise only part of a product’s price and reveal other obligatory charges later as the customer goes through the buying process, to the list of unfair commercial practices.

Amendment 227, page 343, line 42, at end insert—

“32 Marketing online products that are either—

(a) counterfeit; or

(b) dangerous.”

This amendment would add marketing counterfeit and dangerous online products to the list of banned practices.

Government amendments 164 to 170.

Amendment 228, in schedule 19, page 350, line 30, at end insert—

“Non-commercial society lotteries

13 (1) A contract under which a lottery ticket or tickets are purchased for one or more non-commercial society lotteries.

(2) In sub-paragraph (1), “non-commercial society” has the meaning given by section 19 of the Gambling Act 2005, and “lottery ticket” has the meaning given by section 253 of that Act.”

This amendment seeks to exclude lottery tickets purchased for non-commercial society lotteries from the scope of the provisions on subscription contracts.

Government amendment 171.

Amendment 213, in schedule 20, page 354, line 19, leave out paragraphs 28 to 38.

See explanatory statement to Amendment 211.

Government amendments 172 to 175.

[Kevin Hollinrake]

May I first echo the remarks about the excellent address by the Under-Secretary of State for Science, Innovation and Technology, my hon. Friend the Member for Meriden (Saqib Bhatti)? I welcome him to his place—he did a fine job on his first outing in such a complex debate.

I, too, am delighted to bring the Digital Markets, Competition and Consumers Bill to the House on Report. May I express my gratitude to colleagues across the House for their contributions to Second Reading and Committee stages, and for their continued engagement throughout its passage? I thank in particular the hon. Members for Pontypridd (Alex Davies-Jones) and for Feltham and Heston (Seema Malhotra) for their constructive engagement and commitment to seeing the Bill delivered quickly so that its benefits can be realised. I also thank my hon. Friend the Member for Weston-super-Mare (John Penrose) for his excellent engagement—over the weekend in particular—and my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland) for his many important and relevant amendments.

The reforms to the competition and consumer regimes contained in parts 2 to 5 of the Bill will grow the economy and deliver better outcomes for consumers and bona fide businesses. Consumers will have more choice and protection, and pay lower prices. Businesses will operate on a fairer and more level playing field. The reforms will do that by enhancing the wider competition regime, strengthening the enforcement of consumer protection law, and putting in place new consumer rights and more transparency.

It is a simple fact that the way in which we buy products and services today very often involves a digital process. The opportunities that follow are vast—more accessibility, flexibility and choice for consumers—but there is also a greater risk of consumer harm, including, for example, consumers being trapped in a subscription contract that they no longer want or purchasing goods that may not be up to scratch because they unknowingly relied on a fake review. We must ensure that consumers and their cash are protected.

Swifter interventions to tackle bad business practices against consumers are expected to deliver a consumer benefit of £9.7 billion over 10 years, as UK consumers benefit from new rights, stronger law enforcement and more competition through merger control. Importantly, the reforms will also grow the economy by boosting competition, better placing the UK to succeed in export markets. It will allow the Competition and Markets Authority to more effectively deter, prevent, and, where necessary, enforce against monopolistic behaviours. That will ensure that the free market can operate effectively.

The Government amendments to parts 2 to 5 of the Bill will provide greater clarity, ensure coherence with related legislation, and make sure the Bill’s measures meet their intended aims. Almost all the amendments are technical in nature. I will address them across four categories: competition, consumer enforcement, consumer rights and cross-cutting provisions.

First, the competition measures in the Bill will give the CMA new powers to enable it to tackle anti-competitive activity swiftly and effectively, meaning that it can focus its work on the areas of greatest potential harm. The competition environment is complex and ever evolving. We must respond carefully but decisively to changes in the judicial and legislative landscape to provide certainty and to avoid any unintended detrimental consequences of wider developments.

New clause 8 amends the Competition Act 1998 so that the absolute bar on damages-based agreements being relied on in opt-out collective actions will not apply to third-party litigation funding agreements, which are the main source of funding for that type of action. That responds to a recent Supreme Court judgment, and effectively restores the previously held understanding of the status of litigation funding agreements under the 1998 Act. Accordingly, it will have retrospective effect.

In response to a recent Competition Appeal Tribunal judgment, we are specifying the circumstances in which a market investigation reference may be made in relation to an area that has already been the subject of a market study but was not referred for further investigation at that time. We are also bringing forward a series of amendments to ensure alignment between this Bill and the Energy Act 2023, which introduced the energy network merger regime, and to make minor corrections to provisions relating to that regime. Separately, we are repealing paragraph 8 of schedule 3 to the 1998 Act to remove a redundant reference to the treaty establishing the European Coal and Steel Community. To ensure that the implementation trials for market remedies introduced by the Bill are as effective as possible, we are introducing new powers for the Secretary of State to extend the scope of implementation trials in the markets regime to include regulatory conditions.

I will now address the new direct consumer enforcement model. That model will enable the CMA to act faster and take on more consumer cases on behalf of the public, resulting in a further estimated direct benefit to consumers of tens, or potentially hundreds, of millions of pounds. The Government have tabled a series of technical amendments to increase certainty in respect of the CMA’s operational duties. They include aligning the definition of “business” in part 3 of the Bill with that in part 4 of chapter 1 to ensure that any breaches of unfair trading prohibitions can be enforced through the regime; and making provision about information-sharing between public authorities so that enforcers can obtain the information that they need to take enforcement action under part 3 of the Bill.

On appeals, we are adding a requirement for the CMA to include information about applicable appeal rights in a final breach-of-directions enforcement notice, as well as empowering the appeal court to send issues back to the CMA for decision on certain notices. We are also empowering the Secretary of State to update through regulations the specified maximum amounts for fixed and daily penalties imposable by a court or the CMA when a business breaches a formal information request.

Moving on to consumer rights—I am sure this will interest many Members across the House—the purpose of the Bill is simple: to empower consumers to get the deal that is right for them, and to increase their confidence in the products they buy and the services they use. The new rights on subscription traps will give consumers more control over their spending. Such traps have been the subject of some debate during the passage of the Bill, and the Government are introducing amendments to remove unintended consequences.

[Edward Timpson (Eddisbury) (Con)]

I welcome the introduction of consumer rights on subscriptions, which have become a real minefield for many people of all ages. Why do the Government feel it necessary to have this provision in the Bill and in primary legislation, when if it was in secondary legislation it could have more flexibility with changing circumstances?

[Kevin Hollinrake]

We think it is a sufficiently important issue and something we consulted on previously. We have a good idea of the kind of measures we would like to put in place, and we are adding more flexibility—my hon. Friend will have seen some of the Government amendments that have been tabled in response to concerns raised by Members of the House, including my right hon. and learned Friend the Member for South Swindon. We want that flexibility, yet we want to move on quickly with this important reform. There is about £1.6 billion of potential benefit to consumers through this Bill.

[Jim Shannon (Strangford) (DUP)]

I commend the Minister who is putting forward ideas that I, and perhaps my party, feel we can subscribe to and support. I always ask this question, because I think it is important that the general public have an access point if they have a question on something to do with consumer rights. Do the Government intend to ensure that there is some methodology—a phone call, an email address or contact person—who the public can contact if they have a question?

[Kevin Hollinrake]

Our position is that we do not intervene in the practices of businesses unless there is a necessity to do so. We leave those channels open for decisions by businesses in the services that they offer to consumers, rather than dictating to them how they should communicate with their consumers. It is absolutely right that those channels are open and freely available. One important thing we are doing in the Bill is making it much easier to terminate a contract. A person should be able to end a contract as easily as they enter into it, and that is an important part of the Bill.

The Government are bringing forward a series of amendments that remove the requirement for businesses that offer subscription contracts to send a reminder notice ahead of the first renewal notice in instances where there is no free trial. For businesses that offer those contract types, the amendments will see their regulatory burden decrease as they will be required to send only two reminder notices per year instead of three. That also ensures that consumers do not receive too many notices at the start of their contract. The requirement to send a reminder notice before a free or low-cost trial rolls over to a full contract will remain in place.

In addition, we are creating a new power for the Secretary of State to disapply or modify reminder notice requirements in respect of particular entities or contracts, and amend the timeframes in which a business must send a reminder notice to a consumer. The amendments provide greater flexibility and clarity on when reminder notices should be sent, allowing for adaptability post implementation. A further amendment clarifies that, in the event of a dispute about the cancellation of a contract, the onus is on the consumer to prove that the method in which they sent a notification to cancel their subscription contract was sufficiently clear. That intends to rectify the concern that businesses will be subject to enforcement action if a consumer attempts to cancel their subscription contract through unconventional means, for example through a tweet.

I thank my right hon. Friend the Member for Calder Valley (Craig Whittaker) and the hon. Member for Gordon (Richard Thomson) for their continued engagement on Second Reading and in Committee on the issue of whether society lotteries are captured under the subscription measures. As I said in Committee, it is certainly not our intention to capture those contracts. We are therefore introducing an amendment to clarify that gambling contracts, which are already regulated under gambling laws, are excluded from the scope of the subscription contract measures. I trust that that amendment will offer them, and those in the industry, clarity on the matter.

Let me turn to a series of technical Government amendments in relation to protections for consumer savings schemes. Such schemes involve making deposits to save towards a specified event such as Christmas or back-to-school shopping, and they are a vital means for British families to budget for those big occasions. The Bill is not designed to capture routine advance payments for services. In order to avoid possible uncertainty, we are introducing amendments that will exclude contracts regulated by Ofcom, such as prepaid pay-as-you-go mobile phone contracts, as well as contracts for prepaid passenger transport services, such as prepaid Transport for London Oyster cards, from the list of what constitutes a consumer savings scheme. Finally, we are introducing two amendments to maintain the effect of the Consumer Protection: Unfair Trading Regulations 2008, which the Bill repeals and largely restates. The first relates to the application of disclosure of information provisions in part 9 of the Enterprise Act 2002, and the second relates to the information requirement placed on a trader in certain circumstances. Two technical amendments are also being introduced.

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To conclude, I am pleased that the Bill addresses so many of the issues that our constituents experience, but these matters must continue to be highlighted. I think we have all mentioned some examples. I ask the Minister to engage regionally with Northern Ireland Departments to ensure that the laws around consumer rights apply to Northern Ireland at the same time as they do to the mainland. I look forward to hearing about that in due course, and also about how we can all take advantage equally of the issues that have been raised in the House tonight, so that across this great United Kingdom of Great Britain and Northern Ireland, we can all be equal citizens—equal under the law and equally subject to the law.

[Kevin Hollinrake]

I thank right hon. and hon. Members for their contributions to the debate and for their ongoing engagement.

First, let me speak to the amendments tabled by the hon. Member for Pontypridd (Alex Davies-Jones), who has thoroughly enjoyed our engagements over the weeks that we have been studying the Bill. New clause 29 would impose a requirement on traders to ask their customers whether they want their subscription to renew automatically every six months when they sign up to a subscription contract. If they do not choose this auto-renewal option, the contract would end after six months, unless the customer expressly asked for it to continue. New clause 30 would apply equivalent requirements to contracts that renew automatically after a free or low-cost trial.

The Government agree that consumers must be protected from getting trapped in unwanted subscriptions. However, we do not think the new clauses would deliver this in the right way, and such an approach could end up inconveniencing many consumers. For example, if a consumer had not initially opted into an auto-renewing contract, but later decided that they wanted to keep the subscription, they would have to repeatedly communicate that they wanted to continue their subscription or risk its unintentionally lapsing. That risk could be multiplied across each subscription they held.

The new clauses would also impose undue additional costs on businesses. As my right hon. Friend the Member for North East Somerset (Sir Jacob Rees-Mogg) rightly stated, all regulatory costs end up being borne by consumers, so we must approach regulation with extreme care. The Government’s approach strikes the balance of protecting consumers without compromising the benefits of rolling subscriptions and the convenience they provide.

On amendment 225, the Government recently consulted on tackling the practice of drip pricing, and we will shortly set out the next steps, following an assessment of the responses. It would be premature to amend the Bill in advance of that.

Turning to my hon. Friend the Member for Weston-super-Mare (John Penrose), I agree with the instincts behind his ideas to control the costs of red tape and regulatory burdens in new clause 31, and with many of the points made about this issue in his Government-commissioned report on competition policy and the subsequent 18-month update that he published. I suggest that together, we can do better than what is set out in the new clause. He too knows that, as my right hon. Friend the Member for North East Somerset said, all regulations are ultimately paid for by consumers. It is absolutely right that we look to minimise regulation and that we also recognise that the best form of regulation is competition, which is what we are here to promote.

In his “Power To The People” report, my hon. Friend the Member for Weston-super-Mare recommends a one in, two out solution. It will be interesting to see where we can go with that. Everybody, certainly on the Government Benches, is concerned about regulation and the increasing burden on businesses. However, if we look at some of the regulations that we imposed on business in 2021-22—this is from “Better Regulation: Government’s Annual Report”—significant regulations were put in place covering things such as making our telecommunications more secure against foreign actors, climate-related financial disclosures and making homes more efficient, which I think most people would acknowledge we should do, as well as sanctions against Russian oligarchs and the rest. Those regulations are not necessarily the burdens that many Members might consider them to be.

When we look at regulation, we have to decide what is the right thing to do—the right things to leave, the right things to take out and the right things to amend. We have made a start by updating the better regulation framework, with earlier scrutiny of regulatory proposals by the Regulatory Policy Committee so that its advice can be applied before a legislative solution has been settled on. The updated framework focuses on designing the least burdensome policies, avoiding regulation completely where possible, and minimising costs and administrative burdens where regulation is required. In parallel to our call for evidence and forthcoming consultations, we are seeking to change the culture of regulation in the UK to be more pro-growth and business friendly.

New clause 31 proposes some important further measures. It would create much stronger accountability for any future Government who failed to control red tape costs properly. It would plug an important historical loophole by including economic regulators in the better regulation framework, and it would provide extra independence for the accountancy sector in reporting on changes in regulatory burdens, so that Governments cannot be accused of marking their own homework, as my hon. Friend puts it. However, the new clause is constrained by the scope of the Bill, so it cannot plug all the historical gaps in the better regulation framework, and it makes the CMA a successor to the RPC, when there may be better ways to ensure enhanced independence.

As a result, I would suggest a better alternative approach. Any regime should recognise the economic benefits as well as costs of any changes to regulation. Accounting for them is complex: some are indirect, some are externalities and some take years to manifest or come to fruition. Individual regulators should take responsibility for reporting on their activities, including what they have done to support the growth of the businesses they regulate, as well as what additional burdens they have created or removed, and why. In each case, I agree that we will need to establish targets and metrics to monitor the success of our regulators and of Government Departments in promoting growth.

There are a few legitimate exceptions from the RPC’s scrutiny process, such as urgent or civil emergency measures, but that should not mean whole areas of the economy are exempt from its scrutiny, otherwise we would leave loopholes that mean costs are still not scrutinised and potential benefits are ignored.

Although the RPC is already an independent scrutiny body, I agree that we should find ways to ensure even stronger and more independent measurement and reporting of changes in regulatory benefits and burdens, without assuming that the best or only answer is for the CMA to take over this function, as the new clause proposes. Finally, there must be stronger accountability than at present for any Government who fail to control regulatory burdens properly.

Although we do not think it is right to accept the new clause as it stands, I accept and agree with many of the things it tries to achieve. I therefore invite my hon. Friend to work with officials and me to develop a better, stronger way of achieving his four aims through a mixture of potential Government amendments to the Bill and other measures or statements of Government policy to be released publicly before Royal Assent, where the changes fall outside the Bill’s scope. I hope these proposals are acceptable and that he will not press the new clause.

Amendment 228, which was tabled by the hon. Member for Gordon (Richard Thomson), seeks to exclude lottery tickets purchased from non-commercial society lotteries from the scope of the provisions on subscription contracts. We agree with him on this, which is why we tabled a Government amendment to that effect. I thank him for his contribution.

New clause 24, which was tabled by my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland), would require the Secretary of State to commission a review of the Competition Appeal Tribunal’s processes, independent of the CMA and the DMU. I am grateful for his focus on this important matter and for the legal knowledge he brings to bear.

The Competition Appeal Tribunal Rules 2015, which set out the tribunal’s procedures, require the Secretary of State to carry out a regular review of the rules and to publish their conclusions, which last happened in April 2022. New clause 24 would unnecessarily duplicate this work.

Turning to new clause 25, the CMA’s overarching objective is to promote competition for the benefit of consumers, and this must shape the design of its interventions and how it prioritises its work. A consumer duty would overlap with that objective and is, in our view, unnecessary.

New clause 26 would extend the right to seek damages at the Competition Appeal Tribunal to all infringements of part 4. The Bill already provides for consumer redress in respect of some provisions of part 4. Additionally, the private redress provisions in part 3 include the power for public enforcers to seek enhanced consumer measures, including financial redress for consumers.

Amendment 210 would reduce the frequency with which a trader must send reminder notices. We share the intention of my right hon. and learned Friend the Member for South Swindon to ensure that businesses and consumers are not overburdened by reminder notices. However, we believe that this amendment would negatively impact consumers by increasing the risk that they end up paying longer for unwanted subscriptions. We think that requiring traders to send reminders every six months strikes the right balance.

Amendment 211 would create a new power for the Secretary of State to make reasonable provision relating to the content and timing of reminder notices. Amendments 212 and 213 would then remove existing provisions relating to such matters from clause 252 and schedule 20. As my right hon. and learned Friend recognises, we have tabled an amendment that provides a power to amend these details through regulations, enabling the Government to respond should evidence of consumer behaviour or operational practice indicate that adjustments are necessary.

Amendments 214 to 217 would remove requirements that are designed to ensure traders provide easy and accessible means for consumers to end their subscription contracts. Instead, principles would be set out to guide the arrangements put in place by traders, and relevant provisions would be made in secondary legislation. The Government are committed to ensuring that consumers are not hindered when trying to leave a subscription contract or when trying to stop a subscription renewing—the hon. Member for Strangford (Jim Shannon) also raised that point. That is the objective behind these provisions, and it is vital that they remain in the Bill. It is also critical that consumers have flexibility when ending their contract, rather than businesses dictating the communication channel, such as a phone cancellation only. We appreciate that any communication to end a contract must be sufficiently clear to a business, as is underlined by Government amendment 102. That amendment makes it clear that the onus is on the consumer to prove that their communication was sufficiently clear.

Amendments 219 to 222 would remove the mandatory cooling-off period for subscription contracts. It is important to retain those provisions as they provide essential protections for consumers. The renewal cooling-off period protects consumers who have signed up to trials or longer term contracts. That is particularly important since our consultation showed that many people forget to cancel those subscriptions before they automatically renew. We understand, however, that some businesses are concerned about how the cooling-off period will work in practice, particularly for digital streaming services. This is an important issue to get right, so the Government will publicly consult on the return and refund rules to ensure that they are fair and practical for businesses and consumers. That will include consulting on a waiver of cooling-off rights for some products.

Amendments 223 and 224 would apply a two-year implementation period to the subscription contract provisions in the Bill. The Government fully understand that clarity is important so that businesses know when the new rules will come into effect and can make the appropriate preparations. That is why we will continue to engage with stakeholders to understand the impact of implementing these new rules.

Let me move on to the hon. Member for Bermondsey and Old Southwark (Neil Coyle)—he and I have been walking these streets for so long. Amendment 227 would ban in all circumstances the marketing of counterfeit and dangerous products online, which are already offences under current consumer protection and product safety law. The Government are committed to strengthening enforcement of these laws through the reforms in part 3 of the Bill, and recently consulted on a number of proposals in the product safety review.

Amendment 226 would confer on public enforcers the power to require removal of such material from the internet. The Government have consulted on this issue, with proposals to extend the power to apply for online interface orders to all public enforcers. The Government will publish their response shortly. Finally, the public safety review includes proposals specifically aimed at tackling the sale of unsafe goods online. We will publish a response in due course.

The amendment tabled by my right hon. Friend the Member for North East Somerset (Sir Jacob Rees-Mogg) seeks to add further anti-discrimination laws related to payment account provisions. The Government have been clear about the importance of protecting lawful free speech. It is unacceptable for banks and payment service providers to discriminate on the basis of lawfully held political views, and others such as pawnbrokers, as he mentioned. Consequently, the Government support the spirit of the amendment, but do not believe that it is necessary, principally because the Government have taken significant action to build on existing protections to resolve this issue since the amendment was tabled.

On 2 October, the Chancellor committed to amend the threshold conditions that financial services firms must meet in order to be authorised and to consult on how to deliver that. It will ensure that banks uphold their current legal duties, including requirements not to discriminate on the basis of political opinion, therefore ensuring freedom of speech. Safeguards will also be put in place to protect consumers. Banks will be required to put in place safeguards to protect consumer rights, including free speech, and regulators will be required to act when they are not complied with. In addition, the Government announced that the legal notice period for payment service contract terminations will increase to 90 days, and payment service providers will be legally required to give consumers clear, tailored explanations detailing why they closed their accounts.

I thank the hon. Member for Washington and Sunderland West (Mrs Hodgson) for all her work on the all-party parliamentary group on ticket abuse. She raised the point about the secondary ticket market. We have taken action in this area; I know she is not content with where we are today, but the CMA has new powers in the Bill to fine businesses up to 10% of turnover, which will include ticket touts. Indeed, it has already taken action against two touts, with confiscation orders of £6.1 million in 2022.

On amendment 207, tabled by the hon. Member for Brighton, Pavilion (Caroline Lucas), enforcers can already take action under the Bill to protect consumers during the transition to net zero. For example, they have powers to tackle misleading green claims. We are already making strong progress towards net zero by 2050. The UK has reduced its emissions further and faster than any other major economy.

On amendment 208, established means have long played an important, cost-effective and proportionate role in tackling and stopping unfair commercial practices. Particularly in the field of misleading advertising, bodies such as the ASA have played a key role in expanding the reach of consumer protection law compliance.

In closing—[Hon. Members: “Hurray!”] I have gone on longer than I would have liked to, but an awful lot of amendments were tabled. In closing, I hope that right hon. and hon. Members will see from the Government’s amendments that we have listened to the concerns raised during the passage of the Bill, and that we are determined that it will deliver better outcomes for consumers and small businesses.

Question put and agreed to.

New clause 7 accordingly read a Second time, and added to the Bill.

New Clause 8

Use of damages-based agreements in opt-out collective proceedings

“(1) In section 47C(9) of CA 1998 (collective proceedings: damages and costs), for paragraph (c) substitute—

‘(c) “damages-based agreement” has the same meaning as in section 58AA of the Courts of Legal Services Act 1990 but as if in subsection (3)(a) of that section, in the words before sub-paragraph (i), for “, litigation services or claims management services” there were substituted “or litigation services”.’

(2) The amendment made by subsection (1) is treated as always having had effect.”—(Kevin Hollinrake.)

This new clause (which would be inserted into Chapter 1 of Part 2 of the Bill) responds to the Supreme Court judgment in R (PACCAR Inc) v Competition Appeal Tribunal [2023] UKSC 28. It provides that a damages-based agreement is only unenforceable in opt-out collective proceedings before the Competition Appeal Tribunal if the agreement is with a provider of advocacy or litigation services.

Brought up, read the First and Second time, and added to the Bill.

New Clause 9

Mergers of energy network enterprises

“Schedule (Mergers of energy network enterprises) makes provision amending Part 3 of EA 2002 and Schedule 16 to the Energy Act 2023 in relation to mergers involving energy network enterprises.”—(Kevin Hollinrake.)

This new clause (which would be inserted into Chapter 2 of Part 2 of the Bill) introduces the Schedule inserted by NS1 which amends Part 3 of the Enterprise Act 2002 to facilitate the investigation of mergers involving energy networks enterprises under sections 68B or 68C of that Act and under section 22 or 33 of that Act by the same CMA Group, and to make other minor amendments to provisions relating to mergers involving energy network enterprises.

Brought up, read the First and Second time, and added to the Bill.

New Clause 10

Power to make a reference after previously deciding not to do so

“(1) Section 131B of EA 2002 (market studies and the making of decisions to refer: time limits) is amended as follows.

(2) In the heading, after ‘time-limits’ insert ‘etc’.

(3) In subsection (7), for ‘This section is’ substitute ‘Subsections (4) to (6) are’.

(4) After subsection (7) insert—

‘(8) Where the CMA—

(a) has published a market study notice, and

(b) has decided not to make a reference under section 131 in relation to the matter specified in the notice,

the CMA may subsequently make a reference under section 131 in relation to the matter (without first publishing a market study notice in relation to the matter) only where subsection (9) applies.

(9) This subsection applies where—

(a) the reference under section 131 is made two years or more after the publication of the market study report in relation to the market study notice, or

(b) there has been a material change in circumstances since the preparation of the report.’”—(Kevin Hollinrake.)

This new clause (which would be inserted into Chapter 3 of Part 2 of the Bill) responds to the decision of the Competition Appeal Tribunal in Apple v CMA [2023] CAT 2. It allows the CMA to make a reference under section 131 of the Enterprise Act 2002, if it has previously made a decision not to do so, in the two cases mentioned in what will be new subsection (9) of section 131B of that Act.

Brought up, read the First and Second time, and added to the Bill.

New Clause 11

Taking action in relation to regulated markets

“(1) In Chapter 4 of Part 4 of EA 2002 (market studies and market investigations: supplementary), section 168 (regulated markets) is amended as follows.

(2) In subsection (3) omit paragraph (j).

(3) In subsection (4)—

(a) in paragraph (g), for ‘the duty of the Director General of Electricity Supply for Northern Ireland under article 6 of that Order’ substitute ‘the objective and duties of the Northern Ireland Authority for Utility Regulation under Article 12 of the Energy (Northern Ireland) Order 2003 (S.I. 2003/419 (N.I. 6))’;

(b) omit paragraph (l);

(c) in paragraph (m), for ‘the duties of the Director General of Gas for Northern Ireland under article 5 of that Order’ substitute ‘the objective and duties of the Northern Ireland Authority for Utility Regulation under Article 14 of the Energy (Northern Ireland) Order 2003’;

(d) in paragraph (r), for ‘Monitor’ substitute ‘NHS England’.

(4) In subsection (5), in paragraph (ia), for ‘Monitor’ substitute ‘NHS England’.”—(Kevin Hollinrake.)

This new clause (which would be inserted into Chapter 3 of Part 2 of the Bill) tidies up section 168 of the Enterprise Act 2002 to remove spent references and to correct references that have become out of date.

Brought up, read the First and Second time, and added to the Bill.

New Clause 12

Meaning of “working day” in Parts 3 and 4 of EA 2002

“(1) Part 3 of EA 2002 (mergers) is amended as follows.

(2) In Chapter 1 (duty to make references)—

(a) in section 25 (extension of time limits)—

(i) in subsection (1), after ‘20’ insert ‘working’;

(ii) in subsection (5), in paragraph (b), after ‘10’ insert ‘working’;

(b) omit section 32 (supplementary provision for the purposes of section 25);

(c) in section 34ZA(3) (time limits for decisions about references) omit the definition of ‘working day’;

(d) in section 34ZB (extension of time limits) omit subsection (9);

(e) in section 34ZC (sections 34ZA and 34ZB: supplementary) omit subsection (9).

(3) In Chapter 2 (public interest cases)—

(a) in section 54 (decision of Secretary of State in public interest cases)—

(i) in subsection (5), after ‘30’ insert ‘working’;

(ii) omit subsection (8);

(b) in section 56 (competition cases where intervention on public interest grounds ceases)—

(i) in subsection (4), in paragraph (b), after ‘20’ insert ‘working’;

(ii) omit subsection (5).

(4) In Chapter 4 (enforcement), in section 73A (time limits for consideration of undertakings) omit subsection (12).

(5) In Chapter 5 (supplementary)—

(a) in section 129(1) (other interpretative provisions), at the appropriate place insert—

‘“working day” means any day other than—

(a) a Saturday or Sunday, or

(b) a day that is a bank holiday in any part of the United Kingdom under the Banking and Financial Dealings Act 1971.’;

(b) in section 130 (index of defined expressions), at the appropriate place insert—

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20:56

Division 7

Ayes: 210

Noes: 280

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21:11

Division 8

Ayes: 209

Noes: 281

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[Kevin Hollinrake]

I beg to move, That the Bill be now read the Third time.

The UK’s continued tech success depends on markets that are fiercely competitive, and where the best companies can flourish and create the innovations that spur growth. With this Bill, we will establish new, more effective tools to address the unique barriers to competition in digital markets, allowing the CMA to proactively drive more dynamic markets and prevent harmful practices, such as making it difficult to switch between operating systems. With this Bill, we will help the UK technology industry to grow, creating room for small businesses with great ideas to flourish. This Bill will deliver tangible benefits to British consumers and British businesses alike.

The Bill was welcomed on both sides of the House on Second Reading. The Select Committee Chairs from this House and the other place, as well as hon. Members from a number of parties, including the hon. Member for Pontypridd (Alex Davies-Jones) and my hon. Friend the Member for Weston-super-Mare (John Penrose), have repeatedly spoken of the Bill’s importance. I thank them for their work and for working with us so constructively. On Report, the Government made a number of amendments to the Bill, reflecting the important discussions between stakeholders and Members of this House. I thank Members from across the House for their contributions during the passage of the Bill.

I will conclude by thanking all my predecessors who have taken the Bill from consultation to this House, my officials, the Clerks, and the Chairs and members of the Public Bill Committee for their line-by-line scrutiny, and for their collaborative and constructive approach.