Digital Markets, Competition and Consumers Bill

Debate between Lord Bassam of Brighton and Lord Offord of Garvel

Report stage
Wednesday 13th March 2024 Lords Chamber

[Lord Bassam of Brighton (Lab)]

My Lords, we are very grateful—we are always very grateful, actually—to the noble Lord, Lord Clement-Jones, for tabling this amendment, which raises a valid concern around the suitability of the current provisions in Section 58 of the Enterprise Act.

We take the view that the world has changed significantly since that legislation was put on the statute book. It was changed as a result of the passage of the National Security and Investment Act, but not in a way that addressed the points that have been properly raised by the noble Lord. Some aspects of this debate featured during the passage of the Online Safety Bill, and I strongly suspect we will revisit this on other occasions in the future, as the noble Lord, Lord Lansley, has invited us to with the Media Bill.

The noble Lord, Lord Clement-Jones, described this as a “brazen attempt” on his part. Well, I hope the Government will be open-minded about looking at whether and how the public interest notice regime could be revised in the future, to take account of different types of media provider. However, because I know that noble Lords would like to progress on to another interesting group on a similar topic, I will hand the Floor to the Minister.

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Scotland Office (Lord Offord of Garvel) (Con)]

I thank the noble Lord, Lord Clement-Jones, for Amendment 64. It would expand the list of media merger public interest considerations to include:

“The need for free expression of opinion and plurality of ownership of media enterprises in user-to-user and search services”.


I previously addressed this issue in Committee, when I referred to the Government’s ongoing consideration of Ofcom’s recommendations. As suggested by the noble Lord, ensuring that our regime is updated to reflect current market conditions remains important.

My noble friend Lady Stowell of Beeston has been engaging extensively with government on changes to the wider media merger regime, and I understand that discussions have been constructive. My noble friend Lord Parkinson of Whitley Bay, who is in his place, is the Lords Minister responsible for media mergers. To avoid repetition, I will not speak to the detail of these discussions now but will leave it to my noble friend, who will return to the substance of this in the next debate. I hope the noble Lord will be able to withdraw his amendment and allow us to discuss this further when the next group is debated.

Digital Markets, Competition and Consumers Bill

Debate between Lord Bassam of Brighton and Lord Offord of Garvel

Committee stage
Monday 5th February 2024 Grand Committee

[Lord Bassam of Brighton (Lab)]

My Lords, I was initially going to say that this is a disparate group of amendments but, as I have heard the arguments adduced, I have realised that it has more coherence to it.

The Committee should pass a vote of thanks to the noble Baroness, Lady Morgan, for tabling her amendment. This is an incredibly sensitive issue and one that in spirit we completely support—why wouldn’t you? If I were in the noble Baroness’s position, having dealt with cases of the sort that she has, I, too, would probably be mounting a campaign on this. We should be grateful to the Mental Health Foundation for the support that it has given. It cannot be right that usually harmless algorithms are used for another purpose like this and it would be helpful if we could get some clarity to the law.

This issue raises highly sensitive issues about online purchases. It is hard to envisage that any commercial undertaking, whether online or trading on our high streets, would deliberately market a product knowing that it was likely to be used for acts of self-harm and far worse. I will listen carefully to what the Minister has to say on this. If there is something that can usefully be done in legislation and there is an opportunity to do it here, we should take that opportunity.

I turn to the amendment tabled by the noble Lord, Lord Lucas, which initially I thought put the cart before the horse, but I do not think so any more. It is a neat amendment that is usefully placed. The noble Lord is looking at how the effectiveness of trading standards is measured and looking at their resource and support.

About 20 or 30 years ago, I was a trading standards national officer. I was not a trading standards officer, but I used to lobby government for resources on behalf of trading standards, which always used to say they did not have enough resource. The answer from the Government at the time was pretty much the same as I am expecting the answer to be this afternoon: that the Government are resourcing trading standards well and that they do a very good job. However, there is a good case for reviewing their effectiveness, particularly in the light of the other amendments in this group.

I will come back to Amendment 111 in a moment, but Amendments 112 to 120 relate very neatly to the scope and jurisdiction of weights and measures—ie, trading standards. They would significantly broaden the responsibilities of trading standards officers, who presumably would take on investigatory and enforcement responsibilities on a shared basis with the CMA. We have sympathy with these amendments because there is a strong case for local enforcement. I understand that people living in a locality might want to go to their local authority trading standards officers for advice, support and encouragement in seeking enforcement against rogue online traders. If we embark on this route there will need to be protocols in place so that duplication does not occur and so that there is good advice and information from officers locally working in tandem with CMA officials, and of course there would be a question of resource and support for local trading standards officers. Ministers and the Government may think that this is a valuable route, but the relationship between central and local enforcement needs to be explored. These amendments valuably focus light on that, because people in any community anywhere in the country will want to know how they can access their rights as consumers dealing as much online as in the high street and offline. We have a lot of sympathy for the amendments in the name of my noble friend Lady Crawley, the noble Earl, Lord Lindsay, and the noble Baroness, Lady Bakewell.

I will go back to Amendment 111. As the noble Lord, Lord Clement-Jones, argued, it is really about the detail of the enforcement of penalties and their range and scope. In general terms, we support the notion that penalties should take account of the profitability of the company which is in breach of enforcement orders—breaking the law. Again, it will be interesting to hear the Minister set out the Government’s policy in this field and explain to us how it is going to work. I look forward to the Minister’s response.

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Scotland Office (Lord Offord of Garvel) (Con)]

My Lords, I am extremely grateful to noble Lords for their amendments in this group and for their valuable contributions on these important issues. I will start by discussing Amendment 110. moved by my noble friend Lady Morgan, whose continued leadership on this very serious and hugely important topic is commendable. Amendment 110 would make the marketing of products intended to be used to take one’s own life a specified prohibition, which would therefore be enforceable under Part 3. Like everyone who spoke, I—and the Government—recognise the tragic consequences of suicide and how so many lives and families have been devastated by it. The Government do not underestimate the gravity of this issue, and that is reflected by the measures already in place around suicide prevention and, indeed, the steps we have taken to clamp down on the advertising and supply of pro-suicide materials.

First, we have strong, well-defined laws in relation to complicity in another person’s suicide, such as the Suicide Act 1961. Building on that, where content on the internet reaches the threshold for a criminal offence under the Suicide Act 1961, the Online Safety Act will place new duties on all in-scope user-to-user services proactively to tackle it.

Under the Online Safety Act, search services have targeted duties that focus on minimising the presentation of illegal search results to users, and protecting children from such search content. These duties will play a key role in reducing traffic directed to websites with content that encourages or assists suicide, reducing the likelihood of users encountering this content. The Act also places duties on providers to protect children from harmful content that encourages, promotes or provides instructions for suicide but that does not meet the criminal threshold. Separately, the independent Advertising Standards Authority bans adverts that may cause harm or serious or widespread offence, including adverts containing references to suicide.

These approaches are supported by the Government’s suicide prevention strategy for England. As part of that, the Department of Health and Social Care leads a cross-government and cross-sector group established to rapidly identify and proactively tackle emerging methods of suicide. Through this group’s close working, there are currently over 30 live actions and interventions to reduce public access to, and limit awareness of, emerging methods, with further commitments made in the strategy. These include seeking to tackle at source the suppliers of harmful substances for the purposes of suicide, and the development of a new national process that both captures intelligence and subsequently issues alerts to relevant parts of the health, care, education and justice systems on any emerging methods or risks to be aware of.

Amendment 110 is set against this background. Its laudable intent does not fit with the purpose of Clause 149 and, by extension, Part 3. This amendment would use Part 3, which is merely an enforcement vehicle for existing duties, prohibitions or restrictions, to define and impose on traders a substantive legal prohibition. Once again, I am extremely grateful for my noble friend’s amendment. I applaud her passionate sponsorship of this vital issue and would be delighted to meet, as requested. However, at this moment, I hope she feels reassured enough by existing measures to withdraw the amendment.

I am grateful to my noble friend Lord Lucas for Amendment 110A. The Government fully agree with him that, as with any statute, Part 3 needs to be kept under review to ensure that it achieves its intended real-world impacts. However, it is important to note that the court-based consumer enforcement regime under Chapter 3 of Part 3 is not new. In general, it updates and simplifies the current court-based enforcement regime in Part 8 of the Enterprise Act 2002. There are therefore existing mechanisms for reviewing the effectiveness of consumer enforcement, which we believe to be sufficient.

First, public designated enforcers already review and report on the enforcement interventions they undertake. For example, since 2019, the Association of Chief Trading Standards Officers has produced annual impacts and outcomes reports that show the impact of local authority trading standards services in England and Wales. Both the Chartered Trading Standards Institute and the Society of Chief Officers of Trading Standards in Scotland conduct workforce surveys and publish reports that cover issues such as staffing and enforcement actions. Regulators such as the CMA, the Financial Conduct Authority and Ofcom provide transparent statements about their enforcement work and publish annual reports that evaluate their past year’s performance. These regulators are accountable to Parliament and subject to scrutiny by parliamentary Select Committees.

This ongoing reporting is complemented by dialogue with government about enforcement priorities and capability. For example, the CMA, which has a central co-ordination role in the network of public designated enforcers, already has a statutory role to provide advice to government on matters relating to its functions, including consumer enforcement. The Government may therefore request the CMA to provide information or advice on any gaps in enforcers’ powers or capabilities. The Government have committed to respond publicly to such advice within 90 days, clearly indicating the steps we will take in response.

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[Lord Offord of Garvel (Con)]

I thank the noble Lord for his intervention. As I said on my noble friend Lady Morgan’s Amendment 110, we are dealing with a serious issue. I took great pains to run through the various layers of protection currently on the statute book and outlined why the Government believe that this is covered elsewhere and is not within the scope of the Bill. I have also said that I will meet my noble friend and look at this in more detail to see whether we need to look further at the Long Title, to which the noble Lord referred.

[Lord Bassam of Brighton (Lab)]

Is the noble Lord saying that it is not outside the scope of the Bill?

[Lord Offord of Garvel (Con)]

We are saying that there is extensive protection built up around this sensitive issue and that there should not be further legislation made within the scope of the Bill, but that, if we need to look at it further, we can do so before Report.

Every local authority always wants more money. It is a feature of UK public life and it is up to local authorities to decide how to spend their money appropriately. As we all know, some are better run than others. Funding is not ring-fenced and it is up to local authorities to make sure that standards are maintained in their area.

Amendments 111 and 122, tabled by the noble Lord, Lord Clement-Jones, pertain to profits from infringements and the calculation of penalties. They would ensure that profits made from engaging in an infringing commercial practice can be expressly reflected in the calculation of a monetary penalty imposed through an enforcement order made by the court or a final infringement notice given by the CMA. I thank the noble Lord for his amendments and I absolutely agree with the intent behind them. In fact, work is under way to produce a comprehensive set of regulations, which could be made under Clause 203, to set out the amounts that are to be treated as comprising a person’s turnover when calculating the maximum penalty that can be levied.

Our intention is that any profits accruing from the relevant infringement will be captured by this methodology, but we consider that this maximum penalty calculation will be a technical exercise that needs to be supported by robust and detailed methodology, which is therefore better suited to secondary legislation. I hope that the noble Lord is sufficiently reassured that this important issue will be addressed.

[Lord Offord of Garvel (Con)]

Yes, that is exactly what I am saying. In order to get a profit, one has to start with turnover. A detailed mechanism is required to look at how these P&Ls work and, rather than being in the Bill, this needs to be examined as a technical exercise. There needs to be a methodology put together for it; we will therefore do that in secondary legislation.

Amendments 112 to 120 relate to online content take-down powers and were tabled by my noble friend Lord Lindsay but presented by the noble Lord, Lord Clement-Jones. These amendments would give trading standards departments in Great Britain the power to apply to a court for online interface orders and interim online interface orders to modify, restrict or take down illegal content displayed online.

We welcome the spirit of my noble friend’s amendments. Indeed, the Government have published their consultation response on proposals to empower additional enforcers, besides the CMA, to apply to a court for online interface orders. We have committed to give this additional power to public designated enforcers. These enforcers include, but go beyond, trading standards departments—for example, sector regulators such as Ofcom, which already have consumer enforcement powers under Part 3 of the Bill. We would be pleased to discuss with noble Lords how best to enact these important changes to ensure that the use of this power is governed by adequate procedures.

[Lord Bassam of Brighton (Lab)]

Is it therefore envisaged that the Government will give extra support to local trading standards officers, so that they will have these take-down powers? That seems to be the implication of what the Minister is saying—that it is not just Ofcom or the CMA but that there will be local enforcement as well, so there will be that combination.

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[Lord Offord of Garvel (Con)]

I thank the noble Lord. There is obviously a little confusion about this, so we will need to set it out, which we will do between Committee and Report, to ensure that we know precisely the order of events here.

[Lord Bassam of Brighton (Lab)]

That is important, because the Minister was talking about the actions in the court while the noble Lord, Lord Clement-Jones, and I were concerned not just with that but with where the enforcement law is going to come from. In the Minister’s letter to us, it would be most helpful if he could set out who will have those enforcement powers and how the mechanisms will work, given the interface between the different enforcing agencies. That would give consumers a degree of comfort.

[Lord Offord of Garvel (Con)]

I am happy to do that. We will look at that in a bit more detail and write accordingly.

We come to some minor technical government amendments, Amendments 121, 123, 124 and 128, which in the main are minor and consequential. They are intended to provide clarity on how the relevant provisions function and on continuity between the current consumer enforcement regime and the reformed regime under Part 3. I hope these government amendments will be supported. I thank noble Lords once again for their amendments and for their considered remarks on this group.

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[Lord Offord of Garvel (Con)]

This says that the Government have the overarching legislative position, but the trading standards departments operate locally, and it is important that central government listens to local government. That consultation listened carefully to the trading standards departments and has come back saying that they believe that removing this prohibition would enable them to gather evidence better and more easily for consumer protection. We follow the local authorities in their requirements.

I turn to the use of investigatory powers across the UK. Amendments 126 and 127, again tabled by my noble friend Lord Lindsay and presented by the noble Lord, Lord Clement-Jones, would permit any trading standards department based anywhere in Great Britain to carry out investigations anywhere in the UK. Current law already allows English and Welsh trading standards departments to use their investigatory powers in parts of England and Wales outside that department’s local area. The same is true for trading standards departments in Scotland, which can already use their investigatory powers anywhere in Scotland.

Extending the powers to investigate across the UK fails to recognise that Scotland has its own legal jurisdiction separate from the single legal jurisdiction of England and Wales. I draw noble Lords’ attention to the fact that consumer protection is a transferred matter in Northern Ireland, where trading standards are a central government function, in contrast to Great Britain’s local authority model. These differences across the UK’s nations provide examples that I hope will persuade the noble Lord not to move Amendments 126 and 127.

[Lord Bassam of Brighton (Lab)]

I want to tempt the noble Lord to give us a bit more explanation on this. If I understood what he said rightly, it is quite in order for trading standards officers to begin an investigation in their local authority areas and, because it is clearly a broader issue and a company they are looking at operates nationally, it is okay for them to go after it elsewhere. But, when an English trading standards authority wishes to pursue someone in Scotland, is the Minister really saying that, because the Scottish law is different and so on, they could not mount an investigation that had to take place partly in Scotland because that is where the company is operating or trading from? That seems a bit of a gap in provision if it is the case and, if it is not, I would have thought that there needs to be some form of understanding and set of protocols between and across the authorities operating on each side of the border. I am thinking particularly of border authorities in Northumbria and Cumbria working with trading standards authorities in the lowlands. This must be an issue there quite regularly.

[Lord Offord of Garvel (Con)]

What we are referring to here is that, within these legal jurisdictions, there are differences, not least of all the way prosecutions are conducted in England and Wales versus Scotland and Northern Ireland. Each of those jurisdictions can operate holistically within these jurisdictions. I will write to clarify, but I am pretty sure that the UK remains a united kingdom and, if there is a requirement for someone in England to speak to someone in Scotland, that can still happen. I will find out exactly how it does.

[Lord Bassam of Brighton (Lab)]

The noble Lord is such a strong unionist that I would be surprised if that were not the case.

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[Lord Offord of Garvel (Con)]

I thank the noble Baroness for that. A distinction has been made as per that wording. As the consultation has come back, there has been a view on the distinction between those two areas, but the whole point of consulting noble Lords between Committee and Report is to allow further investigation, discussion and/or justification of that.

[Lord Bassam of Brighton (Lab)]

I want to persist a bit more on that. We are now almost at the end of Committee, and Report is probably two or three weeks away. That is not a lengthy period in which to get the drafting right and for us to have that discussion, so I ask that we get a really early draft of these amendments. The wording is important and that will help my noble friend Lady Jones to form a view about whether it covers what we are after here.

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[Lord Bassam of Brighton (Lab)]

My Lords, I congratulate the noble Lord, Lord Mendoza, for scripting such a simple and clear amendment. We are acting as co-signatories, and it seeks, very simply, to exempt third sector charities from the effective limitations on subscription contracts in the Bill.

I appreciate that there have already been several attempts to find a solution to this conundrum, including amendments in the Commons. I understood that Ministers were not particularly attracted to this solution, which seeks to list charity membership subscriptions which qualify for gift aid as an excluded contract pursuant to Clause 253. We were a bit reassured by the letter that Kevin Hollinrake, the Minister in another place, wrote to the National Trust, setting out the Government’s position. He said that it was not their intention to create uncertainty about how different legislation might apply. His letter, dated 23 November, also said that cross-departmental work was being undertaken to consider whether clarification would be beneficial. Having listened to everybody this evening, it is pretty clear that it would be beneficial.

If this approach does not meet the happiness threshold for Ministers, this debate is the opportunity for the Minister to explain where the Government’s internal departmental thinking has got to and what other solutions might be available. The Minister argued in his letter to the National Trust that Chapter 3 of Part 4 is unlikely to apply because there is no contract to be deemed a subscription contract. Given the net value of gift aid to charities—for the National Trust it is £47 million, English Heritage is £100 million et cetera—we think there needs to be clarity. We cannot leave a degree of uncertainty. It certainly does not appeal to us to do that at this stage, given the law of unintended consequences. We cannot rely on an assurance that it is deemed unlikely that the legislation would have the effect that many of the charities that we have been talking to have said it would. The charities need certainty and clarity as well.

If it is not this amendment, what amendment will be brought forward? As the noble Lord, Lord Clement-Jones, said, carnage could definitely occur on Report if we do not get a ready-made solution. It needs to be put right and put right now.

[Lord Offord of Garvel (Con)]

I am extremely grateful to my noble friend Lord Mendoza for moving this amendment and for his compelling speech. I also thank other noble Lords who spoke so passionately on this issue.

Amendment 149 would exclude charity membership subscription contracts eligible for gift aid from the scope of the Bill’s subscription contracts chapter. Many of us have heard strong representations from stakeholders on this matter and it has been valuable to hear the contributions from noble Lords today. It is clear that a number of charitable organisations have concerns about the interaction between the Bill, the existing gift aid rules and the potential implications for their operating models.

Like everyone who spoke, I fully understand the valuable additional income that gift aid provides to charities; as my noble friend Lord Vaizey put it, we are absolutely on the same page as far as that is concerned. Moreover, I assure your Lordships that it is absolutely not the Government’s intention to undermine this critical income for charities.

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[Lord Bassam of Brighton (Lab)]

Before the Minister replies to that point, what is it about the amendment moved by the noble Lord, Lord Mendoza, that is so objectionable? I heard the Minister say that charities are not usually excluded from the effects of legislation in the way that the amendment suggests, but I do not see why they could not be made exempt for this particular purpose.

[Lord Offord of Garvel (Con)]

I thank both noble Lords for their interventions. To take the latter point first, it is absolutely the case that charities are required to live within the statute book generally and are not given exclusions. To take the point made by the noble Baroness, Lady Young, I accept that there are commercial elements to these donations. That may not be the primary purpose but they are commercial none the less, and there are examples where benefits are given to donors in return for donations.

[Baroness Young of Old Scone (Lab)]

That is the exact opposite of what I was trying to get across, so obviously I was not being very clear. The point is that the vast majority of donors give donations to an organisation for the good work that it carries out, rather than because it is a subscription to a particular service. It is therefore not a transactional relationship. It is not, “I will pay you to get this delivered”; it is, “I will pay you because you do really good stuff and I want you to keep doing it”. It is a non-transactional relationship, while subscription contracts are a very transactional relationship. That is the point I was trying to get across.