Digital Markets, Competition and Consumers Bill

Debate between Baroness Kidron and Lord Black of Brentwood

Report stage
Monday 11th March 2024 Lords Chamber

[Lord Black of Brentwood (Con)]

My Lords, I declare my interest as deputy chair of the Telegraph Media Group and my other interests as set out in the register. I will focus briefly on three crucial amendments in this group—on proportionality, the appeals standard, and the Secretary of State’s powers—echoing points that have already been made strongly in this debate.

I fully support Amendments 13 and 35 in the name of the noble Lord, Lord Faulks. The amendment made to the Bill in the Commons replacing “appropriate” with “proportionate” will significantly expand the scope for SMS firms to appeal the CMA’s decision to create conduct requirements and initiate pro-competitive interventions.

As we have already heard, the Government have sought to argue that, even absent the “proportionality” wording, in most cases the SMS firms will be able to argue that their ECHR rights will be engaged, therefore allowing them to appeal on the basis of proportionality. The question arises: why then introduce the “proportionality” standard for intervention at all, particularly when the CMA has never had the scope to act disproportionately at law?

In this context, it is clear that the main potential impact of the Bill as it now stands is that a court may believe that Parliament was seeking to create a new, heightened standard of judicial review. As the Government have rightly chosen to retain judicial review as the standard of appeals for regulatory decisions in Part 1, they should ensure that this decision is not undermined by giving big tech the scope to launch expensive, lengthy legal cases. All experience suggests that that is exactly what would happen by it arguing that the Government have sought to create a new, expansive iteration of JR. I fear that, if the amendments from the noble Lord, Lord Faulks, are not adopted, we may find in a few years’ time that we introduced full merits reviews by the back door, totally undermining the purpose of this Act.

Amendments 43, 44, 46, 51 and 52 in the name of the noble Baroness, Lady Jones, are also concerned with ensuring that we do not allow full merits appeals to undermine the CMA’s ability to regulate fast-moving digital markets. Even though full merits are confined to penalty decisions, financial penalties are, after all, as we have heard, the ultimate incentive to comply with the CMA’s requirements. We know that the Government want this to be a collaborative regime but, without there being a real prospect of meaningful financial penalties, an SMS firm will have little reason to engage with the CMA. Therefore, there seems little logic in making it easier for SMS firms to delay and frustrate the imposition of penalties.

There is also a danger that full merits appeals of penalty decisions will bleed back into regulatory decisions. The giant tech platforms will undoubtedly seek to argue that a finding of a breach of a conduct requirement, and the CMA’s consideration that an undertaking has failed to comply with a conduct requirement when issuing a penalty, are both fundamentally concerned with the same decision: “the imposition” of a penalty, with the common factor being a finding that a conduct requirement has been breached. The cleanest way to deal with this is to reinstate the merits appeals for all digital markets decisions. That is why, if the noble Baroness, Lady Jones, presses her amendments, I will support them.

Finally, I strongly support Amendment 56 in the name of my noble friend Lord Lansley, which would ensure that the Secretary of State must approve CMA guidance within a 40-day deadline. This would allow the Government to retain oversight of the pro-competition regime’s operations, while also ensuring that the operationalisation of the regime is not unduly delayed. It will also be important in ensuring that updates to the guidance are made promptly; such updates are bound to be necessary to iron out unforeseen snags or to react to rapidly developing digital markets. Absent a deadline for approval, there is a possibility that the regulation of big tech firms will grind to a halt mid-stream. That would be a disaster for a sector in which new technologies and business models are developed almost daily. I strongly support my noble friend and will back him if he presses his amendment to a vote.

With the deadline to comply with the Digital Markets Act in Europe passing only last week, big tech’s machinations in the EU have provided us with a window into our future if we do not make this legislation watertight. As one noble Lord said in Committee—I think it was the noble Lord, Lord Tyrie—we do not need a crystal ball when we can read the book. We have the book, and we do not like what we see in it. We must ensure that firms with an incredibly valuable monopoly to defend and limitless legal budgets with which to do so are not able to evade compliance in our own pro-competition regime.

[Baroness Kidron (CB)]

My Lords, I will speak to Amendments 43, 44, 46, 51 and 52, to which I have added my name, and Amendment 59. Before I do, I register my support for Amendments 13 and 35, which were brilliantly set out by my noble friend Lord Faulks and added to by others. I too shall support them if they choose to ask the opinion of the House.

I also support Amendment 56 in the name of the noble Lord, Lord Lansley. I have lived experience of waiting too long for the code to come back from the Secretary of State. Even without being a bad actor, it is in the nature of Secretaries of State to have a burgeoning in-tray, and it is in the nature of codes to be on a subject that politicians have moved on from by the time they arrive. I fully support him, and 40 days seems like a modest ask given the importance of the Bill overall.

I turn to the amendments in the name of the noble Baroness, Lady Jones. I look forward to her setting them out after I have supported them. They would reinstate judicial review as the appeal standard for penalty decisions. I thank the Minister for the generosity of his time; I know he spoke not only to me but to a number of noble Lords. However, the thing I have taken away from discussions with government and during Committee is the persistent drumbeat that asserts that we are giving huge new and untested powers to the CMA. Here, we can fill in as we like: full merits on penalty, countervailing benefits, proportionality, and Secretary of State powers have been introduced simply to give a little balance. I find that unacceptable given the power of the companies and the asymmetry we are trying to address.

The reality is that the powers given to the CMA, while much needed, are dwarfed by the power of the companies they seek to regulate. The resources available to the CMA, while welcome, are dwarfed by the resources available to a single brand of a single SMS. Most of all, the CMA’s experience of regulating digital companies is dwarfed by the experience of digital companies in dodging regulation. I am struggling to understand the imbalance of power that the Government are seeking to address.

I was in Brussels on Wednesday last week and there is a certain regret about the balancing that the EU allowed to the DMA in face of the tech lobby, only to see Apple, TikTok and Meta gleefully heading to the courts and snarling up the possibility of being regulated as intended for many years—or perhaps at all. This issue was raised by the noble Lord, Lord Black. Adding a full merits appeal on penalty will embolden the sector to use the threat of appeal to negotiate their position at earlier points in the process. It will undermine the regulator’s strength in coming to a decision. Very possibly, as other noble Lords have said, it could bleed backwards into areas of compliance and conduct requirements. It is, as the noble Baroness, Lady Harding, said, creating a hole for water to get in. The companies lobbied furiously for full merits on penalties. This is not an administrative point; it goes to the heart of the regime. Full merits give the regulated leverage over the regulator.

The most straightforward way of ensuring that the regulator does not abuse its new, enhanced power, as the Government appear to fear, is to make it accountable to Parliament, as the noble Baroness, Lady Stowell, set out in full, repeatedly and with great eloquence. I am sorry that we will not have an opportunity to make our feelings on that issue felt today, but I strongly support her saying that we should not drop this issue just because it is inconvenient to deal with at this point in the electoral cycle.

Digital Markets, Competition and Consumers Bill

Debate between Baroness Kidron and Lord Black of Brentwood

Committee stage
Monday 29th January 2024 Grand Committee

[Lord Black of Brentwood (Con)]

My Lords, I want to support Amendment 76, to which I have added my name, with some brief remarks because the noble Viscount, Lord Colville, has put the case with great power and eloquence. I also support Amendment 77 in the name of my noble friend Lady Stowell, which is a clever solution to the issue of accountability.

I support Amendment 76 in particular, both because I do not believe the requirement is necessary and because—this is a consistent theme in our Committee debates—it builds into the legislation a completely avoidable delay and poses a very real threat to the rapid enforcement of it. Quite apart from the issues of principle, which are significant, this is also intensely practical. The CMA’s guidance on the Bill, published earlier this month, set out the expected timetable for the consultation phase on the Bill’s implementation, running through to October 2024, which could be a very busy month. It is almost certainly when we will have a general election or be in the midst of one.

It seems highly unlikely that the Secretary of State will be able to approve guidance during the purdah of an election campaign and if, after the election—whoever wins it—we have a new Secretary of State, there will inevitably be a further delay while he or she considers the guidance before approving it. The Bill therefore ought to be amended to remove the requirement for the Secretary of State’s approval, or, at the very least, set a strict timetable for it, such as the draft guidance being automatically approved after 30 days unless it is specifically rejected. That would ensure that there is not unnecessary delay, which could run into many months, before the new regime takes effect—especially if there is, as a number of noble Lords have made clear, intense lobbying of the Secretary of State behind the scenes.

[Baroness Kidron (CB)]

My Lords, I support both amendments in this group. This seems to be fundamentally a question of what happens in private and what happens in public. I was struck by the number of exchanges in the second day in Committee last week in which noble Lords raised the asymmetry of power between the regulator and the companies that may be designated SMS. The right reverend Prelate the Bishop of Manchester said,

“let us get this right so that Davids have a chance amid the Goliaths”.—[Official Report, 24/1/24; col. GC 230.]

Online Safety Bill

Debate between Baroness Kidron and Lord Black of Brentwood

Committee stage
Tuesday 9th May 2023 Lords Chamber

[Lord Black of Brentwood (Con)]

My Lords, this is my first opportunity to speak in Committee on this important Bill, but I have followed it very closely, and the spirit in which constructive debate has been conducted has been genuinely exemplary. In many ways, it mirrors the manner in which the Joint Committee, on which I had the privilege to serve with other noble Lords, was conducted, and its report rightly has influenced our proceedings in so many ways. I declare an interest as deputy chairman of Telegraph Media Group, which is a member of the News Media Association, and a director of the Regulatory Funding Company, and note my other interests as set out in the register.

I will avoid the temptation to ruminate philosophically, as the noble Baroness, Lady Fox, entertained us by doing. I will speak to Amendment 48, in the name of the noble Lord, Lord Stevenson of Balmacara, and the other amendments which impact on the definition of “recognised news publisher”. As the noble Lord said, his amendments are pretty robust in what they seek to achieve, but I am very pleased that he has tabled them, because it is important that we have a debate about how the Bill impacts on freedom of expression—I use that phrase advisedly—and press and media freedom. The noble Lord’s aims are laudable but do not quite deliver what he intends.

I will explain why it is important that Clauses 13 and 14 stand part of the Bill, and without amendments of the sort proposed. The Joint Committee considered this issue in some detail and supported the inclusion of the news publisher content exemption. These clauses are crucial to the whole architecture of the Bill because they protect news publishers from being dragged into an onerous regime of statutory content control. The press—these clauses cover the broadcasters too—have not been subject to any form of statutory regulation since the end of the 17th century. That is what we understand by press freedom: that the state and its institutions do not have a role in controlling or censoring comment. Clauses 13 and 14 protect that position and ensure that the media, which is of course subject to rigorous independent standard codes as well as to criminal and civil law, does not become part of a system of state regulation by the back door because of its websites and digital products.

That is what is at the heart of these clauses. However, it is not a carte blanche exemption without caveats. As the Joint Committee looked at, and as we have heard, to qualify for it, publishers must meet stringent criteria, as set out in Clause 50, which include being subject to standards codes, having legal responsibility for material published, having effective policies to handle complaints, and so on. It is exactly the same tough definition as was set out in the National Security Bill, which noble Lords across the House supported when it was on Report here.

Without such clear definitions, alongside requirements not to take down or restrict access to trusted news sources without notification, opaque algorithms conjured up in Silicon Valley would end up restricting the access of UK citizens to news, with scant meaningful scope for reinstating it given the short shelf life of news. Ultimately, that would have a profound impact on the public’s right to access news, something which the noble Baroness rightly highlighted. That is why the Joint Committee recommended, at paragraph 304 of its report, that the Bill was

“strengthened to include a requirement that news publisher content should not be moderated, restricted or removed unless it is content the publication of which clearly constitutes a criminal offence, or which has been found to be unlawful by order of a court within the appropriate jurisdiction”.

The Government listened to that concern that the platforms would put themselves in the position of censor on issues of democratic importance, and quite rightly amended the draft Bill to deal with that point. Without it, instead of trusted, curated, regulated news comment, from the BBC to the Guardian to the Manchester Evening News, news would end up being filtered by Google and Facebook. That would be a crushing blow to free speech, to which all noble Lords are absolutely committed.

So, instead of these clauses acting as a bulwark against disinformation by protecting content of democratic importance, they would weaken the position of trusted news providers by introducing too much ambiguity into the system. As we all know, ambiguity brings with it legal challenge and constant controversy. This is especially so given that the exemptions that we are talking about already exist in statute elsewhere, which would cause endless confusion.

I understand the rationale behind many of the amendments, but I fear they would not work in practice. Free speech—and again I use the words advisedly—is a very delicate bloom, which can easily be swept away by badly drafted, uncertain or opaque laws. Its protection needs certainty, which is what the Bill, as it stands, provides. A general catch-all clause would be subject, I fear, to endless argument with the platforms, which are well known for such tactics and for endless legal wrangling.

I noted the remarks of the noble Lord, Lord Stevenson of Balmacara, in his superb speech on the opening day in Committee, when he said that one issue with the Bill is that it

“is very difficult to understand, in part because of its innate complexity and in part because it has been revised so often”. [Official Report, 19/4/23; col. 700.]


He added, in a welcome panegyric to clarity and concision, that given that it is a long and complex Bill, why would we add to it? I agree absolutely with him, but those are arguments for not changing the Bill in the way he proposes. I believe the existing provisions are clear and precise, practical and carefully calibrated. They do not leave room for doubt, and protect media freedom, investigative journalism and the citizen’s right to access authoritative news, which is why I support the Bill as it stands.

[Baroness Kidron (CB)]

My Lords, given the lateness of the hour, I will make just three very brief points. The first is that I find it really fascinating that the amendments in the name of the noble Baroness, Lady Stowell, come from a completely different perspective, but still demand transparency over what is going on. I fully support the formation that she has found, and I think that in many ways they are better than the other ones which came from the other perspective. But what I urge the Minister to hear is that we all seek transparency over what is going on.

Secondly, in many of the amendments—I think I counted about 14 or 15 in the name of the noble Lord, Lord Moylan, and also of the noble Lord, Lord Kamall—there is absolutely nothing I disagree with. My problem with these amendments really goes back to the debate we had on the first day on Amendment 1, in the name of the noble Lord, Lord Stevenson. He set out the purposes of the Bill, and the Minister gave what was considered by most Members of your Lordships’ House to be the groundwork of a very excellent alternative, in the language of government. It appears, as we go on, that many dozens of amendments could be dropped in favour of this purposive clause, which itself could include reference to human rights, children’s rights, the Equality Act, the importance of freedom of expression under the law, and so on. I urge the Minister to consider the feeling of the House: that the things said at the Dispatch Box to be implicit, again and again, the House requires to be explicit. This is one way we could do it, in short form, as the noble Lord, Lord Black, just urged us.

Thirdly, I do have to speak against Amendment 294. I would be happy to take the noble Lord, Lord Moylan, through dozens of studies that show the psychological impact of online harms: systems that groom users to gamble, that reward them for being online at any cost to their health and well-being, that profile them to offer harmful material, and more of the same whether they ask for it or not, and so on. I am also very happy to put some expert voices at his disposal, but I will just say this: the biggest clue as to why this amendment is wrongheaded is the number of behavioural psychologists that are employed by the tech sector. They are there, trying to get at our behaviours and thoughts; they anticipate our move and actually try to predict and create the next move. That is why we have to have psychological harm in the Bill.