Digital Markets, Competition and Consumers Bill

Baroness Jones of Whitchurch Excerpts

Committee stage
Monday 22nd January 2024 Grand Committee

Moved by

[Baroness Jones of Whitchurch]

1: Clause 2, 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.”
Member’s explanatory statement
This amendment aims to ensure that the CMA are able to draw on previous analysis on issues relevant to the regulatory regime.

[Baroness Jones of Whitchurch (Lab)]

My Lords, we have also added our names to Amendment 7. At the outset, I should say that we are in broad agreement with all the amendments in this group.

Before I explain the detail of our amendment, and without wishing to rerun the Second Reading debate, I would just like to say that we believe that the essence of the Bill is important and necessary. Our concerns, where we have them, are about some of the details in the Bill and we will give them proper challenge and scrutiny. However, it is not in the interests of consumers or businesses for the Bill to be unduly delayed and we hope to get it on the statute book in an improved form and in a timely manner.

Part 1 of necessity gives the CMA considerable new powers. We support the model that is being proposed, with priority being given to identifying the big tech players that have strategic market status. However, it is important that those new powers are carried out with clarity and with transparency and a number of our amendments in this and other groups address this issue. Our Amendment 1 is a simple but important amendment. It would enable the CMA to draw on its analysis and consultations that have taken place before the passing of the Bill.

Those of us who attended the briefings with the CMA last week will have heard the amount of detailed preparation that it has carried out in anticipation of the Bill being passed. We believe that it is important that it can draw on this wealth of knowledge without starting from scratch and having to do it all again. This will strengthen its effectiveness going forward, as it can reflect on the lessons learned and the outcomes of the various consultations that have already been undertaken.

When this issue came up in the Commons, the Minister, Paul Scully, said:

“I strongly support the point that the CMA should not have to repeat work that it has already done. It is for the DMU to decide what is and is not relevant analysis to its investigations, and it should be able to draw on insight from previous analysis or consultations when carrying out an SMS investigation where it is appropriate and lawful to do so. I am happy to confirm that the Bill does not prevent the DMU from doing that”.—[Official Report, Commons, Digital Markets, Competition and Consumers Bill Committee, 20/6/23; col. 116.]


However, this is our concern. The Bill as it currently stands is silent on the issue. It does not make it clear either way and, specifically, it does not make it clear that this retrospection is within the powers of the CMA. We want to put this clarity in the Bill to avoid the potential for any legal challenges about the way the CMA is going about its investigation. Noble Lords will be familiar with this argument, as it will be a running theme during our scrutiny of the Bill. We want the rules to be watertight and we want to close any legal loopholes from those who stand to lose if the CMA rules against them. Therefore, we believe that this amendment is important in shoring up the CMA’s powers to act and I beg to move.

[Lord Clement-Jones (LD)]

My Lords, at the opening of this Committee stage, I want to repeat, rather in the same way as the noble Baroness, Lady, Jones, what I said on Second Reading: we broadly welcome this Bill. In fact, since the Furman report was set up five years ago, we have been rather impatient for competition law in the digital space to be reformed and for the DMU to be created.

At the outset, I also want to thank a number of organisations—largely because I cannot reference them every time I quote them—for their help in preparing for the digital markets aspects of the Bill: the Coalition for App Fairness, the Public Interest News Foundation, Which?, Preiskel & Co, Foxglove, the Open Markets Institute and the News Media Association. They have all inputted helpfully into the consideration of the Bill.

The ability to impose conduct requirements and pro-competition interventions on undertakings designated as having strategic market status is just about the most powerful feature of the Bill. One of the Bill’s main strengths is its flexible approach, whereby once a platform is designated as having SMS, the CMA is able to tailor regulatory measures to its individual business model in the form of conduct requirements and pro-competition interventions, including through remedies not exhaustively defined in the Bill.

However, a forward-looking assessment of strategic market status makes the process vulnerable to being gamed by dominant platforms. The current five-year period does not account for dynamic digital markets that will not have evidence of the position in the market in five years’ time. It enables challengers to rebut the enforcer’s claim that they enjoy substantial and entrenched market power, even where their dominance has yet to be meaningfully threatened. Clause 5 of the Bill needs to be amended so that substantial and entrenched market power is based on past data rather than a forward-looking assessment. There should also be greater rights to consultation of businesses that are not of SMS under the Bill. As the noble Baroness, Lady Jones, said, this will be discussed later, under another group of amendments.

The provisions of Clause 5, as it is currently worded, risk causing problems for the CMA in practice. Part of the problem is the need for evidence to support a decision by the CMA of a market position over the entire five-year period. The five-year period requires current evidence of the position in the market in five years’ time. In dynamic digital markets such as these, no such evidence is likely to exist today. The CMA needs evidence to underpin its administrative findings. Where no such evidence exists, it cannot designate an SMS firm.

The CMA will have evidence that exists up to the date of the decision—evidence of the current entrenched position, market shares, barriers to entry, intellectual property rights and so on. In that respect, we support the noble Baroness, Lady Jones, with her Amendment 1, because it should of course include earlier investigations by the CMA. All that evidence exists today in 2024, but what the position will be in 2028 will need to be found and it has to be credible evidence to support a CMA decision under Clause 5. Particularly in fast-moving technology markets, the prediction of future trends is not a simple matter, so lack of sufficient evidence of the entrenched nature of a player at year 5 or over the entire period would prevent a rational decision-maker from being able to make a decision that the player will have SMS over the five-year period, as demanded by the Bill. Every designation and subsequent requirement or investigation imposed on the designated undertaking risks being subject to challenge on the basis of insufficient evidence.

As the Open Markets Institute says,

“the inevitably speculative nature of a forward-looking assessment makes the process vulnerable to being gamed by dominant platforms. For example, such firms may use the emergence—and even hypothetical emergence—of potential challengers to rebut the enforcer’s claim that they enjoy substantial and entrenched market power, even where their dominance has yet to be meaningfully threatened by those challengers”.

It gives the example of the rise of TikTok, which Meta has used in arguments to push back against anti-trust scrutiny:

“Yet while experiencing rapid growth in terms of user numbers, TikTok has so far failed to seriously challenge the economic dominance of Meta in online advertising (the basis of Meta’s market power), generating less”


than

“a tenth of the latter’s global revenues. Dominant platforms will also use emerging technologies—such as generative AI—to claim that their dominance is transitory, claims that will be difficult for the CMA to rebut given future uncertainty”.


Our Amendments 3, 4, 5 and 6—here I thank the noble Lord, Lord Vaux, for his support for them, and sympathise with him because I gather that his presence here today has been delayed by Storm Isha—suggest that the number of years should be removed and the provision clarified so that the assessment is made based on current evidence and facts. If the market position changes, the CMA has the power to revoke such designation in any event, on application from the SMS business, as provided for by Clause 16.

That is the argument for Amendments 3, 4, 5 and 6 in Clause 5. I look forward to hearing what the noble Viscount, Lord Colville, has to say on Amendment 7, which we very much support as well.

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[Viscount Camrose (Con)]

I take note of my noble friend’s point. There may be many areas on which all of us in this Committee end up disagreeing, but one that I doubt we will disagree on is the need for absolute clarity in all these measures. I am very happy to commit to taking that away and seeing whether there is an appropriate form of words that can deliver the clarity that noble Lords are seeking.

[Baroness Jones of Whitchurch (Lab)]

My Lords, I thank all noble Lords who have spoken. I very much echo the thanks expressed by the noble Baroness, Lady Harding, to all the companies and business that have given evidence and come forward to speak to us. It is true that, for a number of them, they have taken risks to do that. It is a sad fact of life now that their very survival could be at stake if some of their concerns become public. That is why we are here today, I suppose. That is where the market has left us and there is a need to address that.

To pick up on the points made by the noble Lord, Lord Clement-Jones, and the noble Baroness, Lady Harding, about the CMA’s assessment, I think that we have had a useful discussion with the Minister around all that. I certainly want to look at Hansard and at the reassurances that the Minister has tried to give on this. I very much take the point, incidentally—as mentioned by the noble Viscount, Lord Colville, in moving his amendment—that SMS status does not mean that they have done anything wrong, so I do not want to get too hung up about giving that status in the first instance. What is important is how we follow that up and look at their behaviour going forward. As the noble Lord, Lord Clement-Jones, spelled out, there is a danger that, if we are not careful, those who are given that category will game the system. That is what we are all anxious about.

I am not sure that the wording achieves what the Minister wants. I think that we are all genuinely clear on the outcomes that we want, as the Minister said, but the current wording does not achieve that. The five-year forward plan is playing into the hands of the wrong people, and we will not come out with the outcomes that we want if we stick with the current wording, so I very much welcome the chance to have further discussion about that.

[Lord Tyrie (Non-Afl)]

Before the noble Baroness leaves that point, I strongly endorse what she says. I make the point that we are here debating a set of powers that we would, in most contexts, otherwise consider extremely draconian, because there has already been abuse and market power has already been exercised in ways that we all consider unacceptable. That is why we need clarity on this point. We do not need to look into the crystal ball—we can read the book.

[Baroness Jones of Whitchurch (Lab)]

I thank the noble Lord very much for that insight. He is absolutely right, of course. We all understand his wealth of experience; it is very helpful to have his support on that issue.

I pick up on the amendment tabled by the noble Viscount, Lord Colville, to which the noble Lord, Lord Clement-Jones, and I have added our names. He rightly raised that the significant powers given to the Secretary of State to vary the conditions would lead to tech companies being considered to have strategic market status. As my noble friend Lord Knight said, the list in Clause 6 is quite generic. In a sense, that should be enough for us. None of the things in Clause 6 is time limited, so it should be enough for the CMA and the DMU to do their work.

There is concern, therefore, about how the Bill is currently worded, as it does not give any constraints to the Secretary of State to change the conditions, apart from the affirmative SI—and we can all rehearse the arguments about what that means for parliamentary accountability. The Minister might say that it is necessary to add new conditions if new anti-competitive practices come to light, but I feel that the current wording—and I think that the noble Viscount feels this, too—allows not just for new anti-competitive practices but for the current conditions to be watered down. That is our real concern. The noble Viscount gave an example about specifying particular forms of market practice, such as online sales and delivery, which would then apply to only one or two companies and not the ones that, as I think we all understand, should be in the frame. I was not absolutely convinced by what the Minister said on this issue. It is a bit of a running theme and, as several noble Lords said, we will come back to the issue of parliamentary scrutiny. Perhaps we can look at that in the round at a future point.

The Minister will be pleased to know that I support the government amendments. They make good sense and give clarification in the Bill, which we always like.

We continue to believe that Amendment 1 is necessary to enable the CMA to proceed with speed once the Bill is on the statute book. Nothing the Minister has said so far has persuaded me that the silence in the Bill on this issue is sufficiently reassuring. I hope that we can find a form of words—if not ours then a different form of words—that will allow the CMA to look backwards, giving it absolute reassurance that it can do so and that it will not have to repeat any of its activities. This is all about tightening up the wording. We will reflect on what the Minister said, and I hope that we can talk about this some more. In the meantime, I beg leave to withdraw the amendment.

Amendment 1 withdrawn.

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Moved by

[Baroness Jones of Whitchurch]

8: Clause 11, page 6, line 36, at end insert “, and
(c) give a copy of the statement to those undertakings that have not been designated as having SMS that are most directly affected.”Member’s explanatory statement
This amendment is one of a series that would ensure that challenger firms are able to access information about the regulatory framework on an equal basis to designated firms.

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[Baroness Jones of Whitchurch (Lab)]

My Lords, in moving Amendment 8, I will also speak to my Amendments 9, 10, 13, 35, 37, 42, 45, 46, 57 and 58. I thank my noble friend Lady Ritchie, the noble Lord, Lord Clement-Jones, and the noble Baroness, Lady Harding, for adding their names. The noble Lords, Lord Clement-Jones and Lord Tyrie, have some other amendments in this group to which I will respond at the end of this debate. However, I can confirm that we support the thrust of the noble Lords’ amendments and look forward to hearing their more detailed arguments in due course.

As I made clear at the outset, our concerns with this Bill are mainly about the detail, in particular the changes made by the Government at the very last minute on Report in the Commons. We support the model that is being proposed, although we share some of the concerns that will come up in this debate and in later ones about the extent of the widespread powers that have been given to the CMA and the DMU in respect of the big tech players, in particular their application to those being given strategic market status. The corollary to the decision to introduce this new approach is that the new power should be set out clearly in statute, which is the point that we have made, and that when it is used the DMU will need to be open and transparent to all those who have a legitimate interest.

There must be no question that the smaller challenger firms which—for various understandable reasons—may not be fully informed about discussions and negotiations between the DMU and potential SMS firms need to be able to access information about the regulatory framework and potential changes to it on an equal basis as the firms being considered for SMS status. How else will we achieve the balance that we are all aiming for in this Bill? Our amendments in this and other groups address this issue.

When this came up in the Commons, Minister Saqib Bhatti said:

“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”. —[Official Report, Commons, 20/11/23; col. 74.]

We agree with that. With respect, however, the DMU publishing summaries of decisions reached completely misses the point we are trying to make. The DMU must ensure that it has all the information it needs, including all the information held by challenger firms, before it makes decisions about SMS status and related matters. Challenger firms may have a different view of what SMS means to their businesses and consumers and it is unlikely that they will have perfect information about the DMU’s thinking. They will, however, certainly want to be engaged in the issues if they are made aware of them at the right time.

Many of us attended a helpful meeting with the CMA last week, where this issue was raised. It became clear that it already has good relations with a number of the bigger challenger firms. However, given that it is investigating anti-competitive behaviour, it is also clear that there will be many smaller start-up companies that will never be given a chance to get established because of the behaviour of the big players. We have a real concern about how we can make their voices heard too. We run the danger that the DMU will contact only the people it already knows about and will not hear from those who are perhaps most squeezed out of the process being investigated.

Our suggestion is that the DMU should have a statutory duty to send decision notices to third parties that it assesses are likely to be most affected by such a decision. To us, this does not seem to be unduly burdensome to the DMU. One could argue that a failure to know which challenger firms are likely to be affected could be very injurious to consumers and the economy at large. In the Commons, the Minister said he thought there would be “limited benefits” to introducing this requirement. I do not think the Government have made the case on this point and I hope they will think again. I also hope that they and the Minister will listen carefully to the points made in this debate.

In the last few weeks, we have met and received submissions from many challenger firms concerned about the Government’s position on the issue. They support the Bill but worry about the imbalance, as they fear it will have a deleterious effect on the regime. They have all made it clear that they support our amendments. I hope the Minister will be able to agree with our arguments. We think there is a strong case for involving the challenger firms at an earlier stage and giving them far more information. I would like to hear how and when the Government intend to do that. I beg to move.

[Lord Tyrie (Non-Afl)]

I declare a number of general interests with respect to this Bill. I am on the advisory board of BSV, a consumer class action being taken against crypto exchanges; I act as a consultant to DLA Piper; I have also had contact with many companies, several platforms and their advisors and many consumer groups about the Bill. As a former chairman of the CMA, I had a significant hand in constructing large parts of it. It is important that others bear in mind that anything I say on this is from the perspective of having been there for enough time to have taken too many of its ideas to heart. In fact, I have been lobbied in all directions on this Bill and for so long that I am losing count of which direction the lobbies all come from.

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[Viscount Camrose (Con)]

Indeed, and I apologise for getting slightly sidetracked on the issue. I think the outcomes we want are that challenger tech firms should be duly informed about the information they need, whether to rebut claims set out by an SMS or to understand the implications and contribute to the process of determining what interventions the regulator should need to make. In the Bill, we are trying to develop the machinery that balances both sides of that equation most effectively, and I remain concerned that we need to manage the workload requirements of the regulator so that it is optimally focused on delivering the right outcomes based on the right information.

[Baroness Jones of Whitchurch (Lab)]

My Lords, I thank all noble Lords who have spoken. We have had an excellent debate. I very much respect the experience of the noble Lord, Lord Tyrie, on this issue. I agree that there is a challenge for us in building trust in the new regime. It is a leap in the dark and, undoubtedly, we are giving the CMA/DMU considerable new powers, so it must prove its worth and prove that our faith in it is justified. I agree that there is a danger of getting that balance wrong. During the passage of the Bill, we will look at other ways of getting parliamentary and other oversight of its activities, to ensure that we get the balance in check.

I also agree that it is important that we maintain commercial confidentiality. This is an issue about sharing information, which we were just talking about. However much information is shared, we must ensure that those who are sharing it—sometimes it is very much core to their business model—respect it and do not put it in the public domain. All that must underpin our debate.

I agreed with the noble Lord, Lord Clement-Jones, that the proposals from the noble Lord, Lord Tyrie, were a curate’s egg; I was not sure either about the independent case reviewer. I worry that it would be another loophole, or hurdle, that would allow the lawyers a field day. The noble Lord, Lord Tyrie, put it there with the very best intentions, and I am happy that we talk about it, but I am not sure about it. It worries me that we are being too prescriptive by setting it out in so much detail in the Bill, but let us get that right because there will, I hope, be other opportunities to debate this.

I thank the noble Baronesses, Lady Harding and Lady Kidron, and the noble Lord, Lord Vaizey, for their support on my amendments. The noble Baroness, Lady Harding, said it very well: the amendments illustrate the inequality of arms between the SMS and the challenger firm. There will be a wealth of evidence that the CMA needs to consider. That will be a whole lot of major anti-competitive practices, a lot of which it already knows about, but there will also be some of the more minor inconveniences that are put upon some of the challenger firms. We have met with a lot of the stakeholders; sometimes what is so annoying is the irritating, almost vindictive little actions, because you have the temerity to put your hand up and say that you do not agree with the major companies. We must ensure that we capture all of that in the round, and that it is not just the major known knowns that the CMA considers.

The noble Baroness, Lady Kidron, made the point very well: there is a danger that, based on what it knows, the CMA will make assumptions about what it can win, rather than getting under the skin of what is really going on and what is right for the consumer in all this. To get under the skin, the CMA will need a lot of information, so we must ensure that it gets the right information, at the right time, from the right people. The noble Baroness and the noble Lord, Lord Clement-Jones, made the point that, as it is set out at the moment, the incumbents have all the cards. We need transparency of information to rebalance the scales in all this.

I have listened carefully to the Minister’s response. He said that the DMU is required to consult publicly before decisions are implemented, but that is probably too late to influence the outcome. By the time that it is consulting publicly, it has already made its mind up. I am not sure that that is the right point at which that major flow of new information needs to take place. The Minister argued that the burden of sending notices to thousands of parties, et cetera, would outweigh the benefit. That is exactly the information that it needs, and the noble Baroness, Lady Harding, made that point. If we have to bite that bullet, let us bite that bullet. If that is what it takes to rebalance the scales then we need to do that.

I fully admit that we might not have got the wording right to achieve that, but I think the principle is right and I am prepared to dig in on that principle. I hope we can have a further discussion on it. I think we know what we want to do. Nobody wants the SMS companies to flood the CMA with so much information that everybody drowns. We have to get it right so that it gets the right information. I do not think we have the balance right at this time, but let us talk about it some more. In the meantime, I beg leave to withdraw my amendment.

Amendment 8 withdrawn.

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[Baroness Kidron (CB)]

My Lords, I am sorry to break the Conservative bus pattern but I, too, will speak to Amendments 26 and 27, to which I have added my name, and to Amendment 30. Before I do, I was very taken by the amendments spoken to by the noble Lord, Lord Lansley, and I support them. I feel somewhat sheepish that I had not seen the relationship between data and the Bill, having spent most of the past few months with my head in the data Bill. That connection is hugely important, and I am very grateful to the noble Lord for making such a clear case. In supporting Amendments 26 and 27, I recognise the value of Amendment 25, tabled by the noble Lord, Lord Vaizey, and put on record my support for the noble Lord, Lord Holmes, on Amendment 24. So much has been said that we have managed to change the name of the leveraging principle to the whack-a-mole principle and everything that has been said has been said very well.

The only point I want to make on these two amendments, apart from to echo the profound importance that other noble Lords have already spoken of, is that the ingenuity of the sector has always struck me as being equally divided between its incredible creativity in creating new products and things for us to do and services that it can provide, and an equal ingenuity in avoiding regulation of all kinds in all parts of the world. Without having not only the designated activity but the activities the sector controls that are adjacent to the activity, we do not have the core purpose of the Bill. At one point I thought it might help the Minister to see that the argument he made in relation to Clause 6(2) and (3), which was in defence of some flexibility for the Secretary of State, might equally be made on behalf of the regulator in this case.

Turning briefly to Amendment 30 in the name of the noble Lord, Lord Clement-Jones, I first have to make a slightly unusual declaration in that my husband was one of the Hollywood writers who went on strike and won a historic settlement to be a human being in charge of their AI rather than at the behest of the AI. Not only in the creative industries but in academia, I have seen first-hand the impact of scraping information. Not only is the life’s work of an academic taken without permission, but then regurgitating it as an inaccurate mere guess undermines the very purpose of academic distinctions. There is clearly a copyright issue that requires an ability both to opt out and correct, and to share in the upside, as the noble Lord pointed out.

I suggest that the LLMs and general AI firms have taken the axiom “it’s better to ask forgiveness than permission” to unbelievable new heights. Our role during the passage of this Bill may be to turn that around and say that it is better to ask permission than forgiveness.

[Baroness Jones of Whitchurch (Lab)]

My Lords, we have had a wonderfully eclectic debate. I am sorry if we gave some of the amendments more attention than others, because we have a number of very important issues here. Even in my response I may not be giving some colleagues due deference for their hard work and the good arguments they have put forward.

As noble Lords have commented, Amendments 26, 27 and 34 are in my name. As we have discussed, Amendments 26 and 27 would ensure that the CMA can tackle anti-competitive conduct in non-designated activity, provided that this conduct is related to designated activity. This would ensure, for example, that a designated company facing conduct requirements could not simply shift the resources of its business into another similar business venture, which would have a similar outcome of anti-competitive behaviour.

I am very grateful to the noble Baroness, Lady Stowell, for her support. The example she gave of Apple resonates with all of us and has obviously been in the news. It was one of the behaviours I described as rather vindictive in the last debate. I am not sure how much extra money Apple is going to make from it, but it is a question of rubbing someone’s nose in it because you do not like the decision that has been made. I feel that we need to address this issue.

The noble Lord, Lord Vaizey, in his Amendment 25, made a very similar point about the leveraging principle. We have all signed up to “the whack-a-mole principle”; I think we will call it that from now on. As the noble Baroness, Lady Harding, made clear, this is about addressing the leveraging of SMS markets to enter adjoining markets. She gave the example of travel price comparison. I feel that is a lazy innovation; if you get so big, you stop innovating—you copy the competing firms and taking their best ideas without innovating any more. It is in all our interests to get a grip on this, so that these companies that have great resources and great capacity for innovation innovate in a creative way rather than just copying other people’s ideas.

Amendment 34, which is also in our names, would enable the CMA to keep conduct requirements under review and take account of whether those requirements are having their intended effects or if further steps of pro-competition intervention is necessary. It would provide a clearer link between the measures available to the CMA. As the noble Lord, Lord Clement-Jones, and others have said, it underpins the importance of interoperability in CMA decisions. We believe that the amendments help to clarify and reinforce the powers available to the CMA.

I listened carefully to the noble Lord, Lord Holmes, who, as ever, provided enormous insight into the tech world and the consequences of the legislation. We share his objective of getting the powers of the CMA in the right balance. His amendment challenges the Government to explain why the CMA can only impose a conduct requirement to achieve the fair dealing, open choice or trust and transparency objectives—which seems to be overly restrictive and open to legal challenge. We look forward to hearing the Minister’s explanation of why those restrictions were felt necessary. The noble Lord, Lord Holmes, also raised an important point in his Amendment 24, which we have not given sufficient weight to, about the need for those conduct requirements to deliver proper accessibility in line with previous legislation. We absolutely support him in that quest.

The amendments from the noble Lords, Lord Clement-Jones and Lord Lansley, raise important points about transparency and improved data. They stress the importance of portability and interoperability and put data firmly into the conduct requirements. We support those arguments and look forward to the Minister’s response to what we feel are common-sense proposals.

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[Viscount Camrose (Con)]

There is a much broader set of work looking at issues of copyright, intellectual property and artificial intelligence together—a hugely complex piece of work with many stakeholders pulling in a range of different directions. The goal of this Bill is to address that in so far as it affects competitive markets. We may debate this, but the design of the Bill is such that, in so far as competition is affected by the misuse of intellectual property or intellectual property infringements, the CMA is empowered to intervene to drive greater competition or address issues that limit competition. It is targeted only at addressing competitive issues but, in so far as they affect competitive issues, it is empowered to address IP infringement issues, as set out here.

Existing permitted types of conduct requirements already allow the CMA to set requirements for unfair and unreasonable terms, which can include payment terms. The Government are committed to our world-leading IP regime. Copyright legislation already provides a robust framework for rights holders to enforce against copyright infringement. We will take a balanced approach to the use of AI across the press sector and departments across government are working together closely to consider the impact of AI, ensuring that AI innovators and our world-leading creators can continue to flourish.

I turn to Amendments 26, 27 and 25. I thank noble Lords for their thoughtful and considered contributions on these amendments. Amendments 26 and 27 are intended to expand the ability of the CMA to intervene outside the designated digital activity. Amendment 25 also seeks to expand this power specifically in relation to self-preferencing behaviour that takes place outside the designated activity. We agree with noble Lords that it is crucial that the CMA can deal with anti-competitive behaviour outside the designated activity where appropriate. My noble friend Lord Offord and I have had a number of representations giving further examples of this kind of behaviour and we are committed to finding the right means of addressing it.

Our current drafting has sought to balance the need for proportionate intervention with clear regulatory perimeters. The regime is designed to address the issues that result from strategic market status and is therefore designed to address competition issues specifically in activities where competition concerns have already been identified. This recognises that SMS firms are likely to be active in a wide range of activities and will face healthy competition from other firms in many of them.

I assure noble Lords that the power to prevent self-preferencing is already sufficiently broad. It can apply where an SMS firm is using its power in the designated activity inappropriately to treat its own products more favourably, but without a need for those products to be linked to the designated activity. In addition, the existing power outlined in Clause 20(3)(c) to intervene in non-designated activities, which noble Lords are referring to as the whack-a-mole principle, has been carefully calibrated. It is available only where the conduct has a material impact on the strategic market status in respect of the designated activity.

The same conduct in respect of a different activity may not have the same impact on the market. It will not always be anti-competitive and may instead form a part of normal business practice in a more contestable market. The DMU will therefore take a targeted, evidence-based approach when considering intervention. The DMU can intervene via conduct requirements outside the designated activity to prevent leveraging into the designated activity or via PCIs to address an adverse effect on competition in a designated activity. Therefore, the Government’s view is that broadening the CMA’s powers would risk over-intervention, creating uncertainty for businesses and risks to innovation and investment.

[Baroness Jones of Whitchurch (Lab)]

Before the Minister moves on, do I understand from the beginning of that contribution that he is still looking at the wording—in other words, that he not wedded to the wording and is there some scope for either the amendment from the noble Lord, Lord Vaizey, or our amendment, or to work with him to see if we can achieve what we are trying to achieve through this or other means?

[Viscount Camrose (Con)]

Throughout this group, I am convinced that we are trying to achieve the same thing. I remain concerned that we have to design safeguards against regulatory overreach to enter into markets that are currently healthy, but beyond that I am very happy to explore the right form of wording or design that achieves the end that all sides are keen to establish.

Amendment 24 is intended to clarify the meaning of information being accessible. I thank my noble friend Lord Holmes for the amendment, and for the rigour and passion he demonstrated when making his points. I agree that the question of online accessibility is of great importance. All kinds of technology should be for everyone. I can provide assurance that the CMA can already consider the concept of accessibility in the broadest sense, and in a way that includes—but is not limited to—compatibility with assistive technology. I agree that it is crucial that all members of our society have the right to accessible information. The Bill as drafted provides for this and can encompass, for example, a requirement to have terms and conditions that are easily accessible on a website, in easy-to-understand language, and compatible with assistive technology.

Amendments 32 and 22 would remove the power that enables the Secretary of State to update the list of permitted types of conduct requirement and replace it with an additional open-ended type of conduct requirement. I thank noble Lords for their amendments and agree that digital markets are fast-moving and unpredictable. Future innovations are hard to foresee and will likely give rise to a range of new behaviours and ensuing harms. Although the Government have endeavoured to make the list of permitted types of conduct requirements fully comprehensive, it could become out of date in the future. The noble Viscount’s proposal to add an open-ended type of conduct requirement would, we feel, grant too wide a power to the CMA and undermine the safeguards we have set by creating a clear framework for the CMA to operate within.

It is right that both government and Parliament have appropriate oversight and scrutiny over the significant powers being granted to the CMA. Therefore, the delegated power to allow the Secretary of State, subject to parliamentary scrutiny, to update the legislation provides the most appropriate way to future-proof the regime, ensuring that it can intervene effectively and promptly on the right issues. In addition, I note that the Delegated Powers and Regulatory Reform Committee has not queried the need for this power.