Data Protection Bill [HL]
Debate between Baroness Neville-Rolfe and Lord Knight of Weymouth(6 years, 6 months ago)
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Lord Knight of Weymouth
Certainly if the amendment were to have any legs in terms of using the number of employees as a parameter then that would have to be defined. However you chose to define the size of an organisation, you would need to explore how to work that out.
Baroness Neville-Rolfe
I chose five employees because it often denotes a small organisation or a small business. I can see that some of the businesses in that category might be fairly large. I would of course have no objection to adding an extra criterion, such as turnover, if there was a mood to write exemptions into the Bill. Other legislation has exemptions for smaller bodies. The overall objectives of the data protection legislation clearly have to be achieved but I am concerned that, in particular, some of the subsidiary provisions, such as fines and fees, which I mentioned, are demanding and worrying for smaller entities.
Lord Knight of Weymouth
I am grateful for the noble Baroness’s comments. Something certainly can be done to think more about turnover than the number of employees, otherwise there would be a big loophole, particularly around marketing and being able to set up a company to harvest data, for which the Act would not apply. It could then sell the data on. It would not need very many people at all to pursue that opportunity.
The other thing these amendments allow us to do is ask the Minister to enlighten us a little on his thinking about how the Information Commissioner’s role will develop. In particular, if it is to pursue the sorts of education activities set out in these amendments, how will it be resourced to do so? I know there are some career-limiting aspects for Ministers who promise resources from the Dispatch Box, but the more he can set out how that might work, the more welcome that would be.
Consumer Rights Bill
Debate between Baroness Neville-Rolfe and Lord Knight of Weymouth
Lord Knight of Weymouth
Before the Minister gets back into her stride, I hope that she will forgive me if I ask her a question. Before the Bell so rudely interrupted her, she was talking about what happens if a consumer is dissatisfied with an app and whether the consumer should have to delete it from a device. Have she and the Government given any consideration as to whether, in that circumstance, the consumer could require the producer of the app to delete any data it had collected about the consumer, as an aspect of the redress for their dissatisfaction?
Baroness Neville-Rolfe
Perhaps I can come back to that when I finish developing the argument. We had the first point and I am now going to move on to the second about the ease of copying digital content. Digital content is much easier to copy than physical goods because of its intangible nature, creating issues for digital rights managers. Under many existing contractual relations, the trader will make a payment to the original rights holder for each individual who downloads that content. However, if a trader has to refund the consumer for faulty digital content that they have rejected, that may lead to problems between traders and rights holders, given that the trader will be unable to prove to the rights holder whether the digital content was deleted.
A further point is that an error in the code of a digital content product will be replicated in each and every copy of that product, unlike most goods where faults may be restricted to only a few products. Therefore, where faulty digital content is released the trader would potentially have to provide a short-term right to reject to all consumers of that digital content. That would currently be addressed by the trader issuing an update at little inconvenience to consumers. Having to provide a refund to all consumers, in contrast, could have huge consequences for the digital content industry, which we want to support, particularly our growing number of start-ups and micro-businesses. The result would be much more conservative and costly offerings from businesses, which would spend more time in product development. The availability of basic games that the developer improves over time, or the cheap apps that are enjoyed by many consumers, could be significantly affected.
A short-term right to reject is only one aspect of the new law for digital content. As I have already explained, the consumer must have adequate protection in the digital field. Therefore, the Bill introduces consumer quality rights for digital content for the first time. Most faulty digital content will be repaired with an update, but where faulty digital content cannot be repaired or replaced—or where the repair or replacement cannot be done within a reasonable time or without significant inconvenience to the consumer—the consumer will be entitled to some money back. We have made clear in Clause 44(2) that this price reduction could be as much as 100%—so a full refund. Our evidence shows that where traders are not able to repair faulty content, some traders provide a full refund.
Lord Knight of Weymouth
I am sorry to interrupt; I fear that I may become an irritating presence at this stage. Many designers of digital products have to make a decision about browser compliance, for example, if it is a web-based product, whether or not they will go back to old versions of Internet Explorer. Would the rights to which the Minister has just referred apply to digital producers in circumstances where they have had to make a judgment, when they launch their product, that it is not going to work on those old legacy browsers, as so few consumers are still using them?
Baroness Neville-Rolfe
That brings me on to the points raised by the noble Lords, Lord Stevenson and Lord Knight. Perhaps I can touch first on the issue of IP rights to address consumers’ difficulty in deleting faulty digital content. There is a role for IP law and there may be remedies available, but we again need to strike a balance. We do not want to disadvantage consumers who are unable to be sure whether they have fully deleted all copies of their digital content. That is why we have not taken this route and do not feel that it would be great for the consumer.
If I understood the point that the noble Lord, Lord Knight, was making, he asked, “Why isn’t free digital content included? When will we use the powers that are provided in the Bill to cover it?”. There is a power if future evidence of significant consumer detriment arises. That seems to me a sensible provision to make. However, we do not have enough evidence of consumer detriment at present, and requiring remedies could impact on the sometimes narrow profit margins for businesses, leading to fewer offerings to consumers altogether.
Baroness Neville-Rolfe
The department always keeps the operation of new regulations under review, and I can certainly follow up with the precise detail on this provision, if that is helpful.
The noble Lord, Lord Knight, also asked whether the consumer could require a trader to delete any data that they may have collected. In a sense, the answer is similar: it would be a significant departure from the current regime, which traders are familiar with, and of course data protection rules need to be complied with at all times.
The noble Lord, Lord Stevenson, I think asserted that consumers have the right to a refund only if the trader did not have the right to supply it. However, as I have just said under my second general point, the consumer can get 100% of their money back under Clause 44(2) if a repair or replacement cannot be made within a reasonable time or without significant inconvenience.
In conclusion, I have heard the argument in favour of giving intangible digital content the same rights as goods, including applying the short-term right to reject. I realise that there are strong views on both sides of this debate and a keenness to get this area right. We are already improving the situation for digital content by providing new rights when consumers buy digital content. There may be some attractions to the idea of providing exactly the same rights for digital content as goods, but the issues are not clear cut and a balance has to be struck with the impact on industry. To exactly align the rights for digital content and goods could have severe consequences—to the detriment of industry, which would have to bear the costs, and consequently, I fear, to consumers, who might suffer from reduced product offerings, reduced innovation and, ultimately, higher prices. I therefore ask the noble Lord to withdraw his amendment.