Consumer Rights Bill

Lord Haskel Excerpts

Monday 20th October 2014 Grand Committee

Moved by

[Lord Haskel]

40A: Clause 40, page 25, line 31, at end insert—
“( ) Subsection (1)(c) does not apply where modifications are made to digital content if such modifications—
(a) benefit consumers;(b) remedy issues or risks; or(c) improve functionality of the digital content;provided that the fact that necessary changes may be made is disclosed in the terms and conditions.”

[Lord Haskel (Lab)]

My Lords, as my noble friend said, Clause 36 deals with digital content and the consumer’s right for it to be as described. This is important because people may not be able to properly check digital content before buying a complete program. Neither can you check whether it matches a trial version. It has to do what it says on the label.

As my noble friend said, digital content does not remain static. It evolves over time and during use. To give consumers the benefit of these improvements and the advantages of new developments as they come along, digital content providers supply updates, as the Minister explained. However, in addition to updates, upgrades are needed to make sure that the digital content works on the latest operating system and hardware.

The Explanatory Notes say that the Bill goes partly towards recognising this, in that it allows for updates that enhance features or add new features. However, the Bill is not clear. It insists that the digital content continues to match the original product. It has to remain as initially described for the duration of any contract. People in the industry, including my noble friend Lord Sugar, who has many years of experience in the software industry, consider that this could hold back progress in upgrades because the obligation of having to match the original product description could make some new features difficult or impossible to install.

This amendment therefore suggests a more practical approach while still maintaining the rights of the consumer. The amendment allows digital content to be modified if it is of general benefit to the consumer or if it improves the functionality of the software, regardless of whether the digital content continues to meet the original description. To make this absolutely clear, the original terms and conditions must disclose the fact that necessary changes may be made.

The Minister said that she was determined to provide clarity. This is what the amendment does, and achieves it by adding an exemption to Clause 40 so that subsection (1)(c) does not apply where modifications are made to digital content if such modifications are of benefit to the consumers, if they remedy issues, eliminate risk or generally improve the functionality of the digital content—provided that the fact that necessary changes may be made is disclosed clearly in the terms and conditions of the original contract. For example, the amendment will make it perfectly clear that if a consumer purchases Microsoft Office 365 they are not buying a static product and need not purchase a new version each time Microsoft issues an update or improvement. The programme will be refreshed and its features updated automatically as the consumer continues to use the software and had been informed of this at the time of the purchase.

The amendment will provide the clarity that the Government seek, less room for dispute, and continuing benefits for the consumer. I beg to move.

[Lord Knight of Weymouth]

My Lords, I have considerable sympathy with my noble friends’ amendment. However, I should like to return to the issue of the iPad of my noble friend Lady King, which she described as “stuffed”, following the iOS upgrade. I am sure that Apple would argue that the modifications embedded in the upgrade are of benefit to consumers, remedy issues or security risks, and improve the functionality of the iPad. Whatever the reason—it may be an old iPad that cannot handle the iOS, or it may be user or Apple error; I do not know the circumstance of her iPad being “stuffed”—the point that I am trying to make, certainly when others upgrade their iPads with the new iOS, is that if they have an old version of the device they would be struggling. We know that plenty of software upgrades depend, to some extent, on whether your hardware can cope with all the extra features that Apple in particular include. I wonder whether my noble friend’s amendment can deal with such a scenario in which benefit may apply to most but not necessarily all consumers. The amendment may be better than what is in the Bill, and it may be that I am just pointing out the complexities of this area, but I should be interested in his and any other responses to that point.

--- Later in debate ---

I am concerned that the perverse effect of the amendment would be to allow traders the opportunity to change digital content post sale through an update and not provide consumers with a remedy if the result of the update is that the consumer no longer has the digital content that was described when they bought it—I think back to the iPad of the noble Baroness, Lady King. I therefore hope that the noble Lord understands these concerns and feels prepared to withdraw the amendment.

[Lord Haskel]

I am sorry I was not here to hear about my noble friend’s problems with her iPad. I was in a Select Committee meeting. As far as my noble friend’s comments are concerned, this is an industry that is moving all the time. If too many constraints are put on it, it will stop moving at the speed that it is meant to go. We have to ensure that consumers’ rights are not limited, but that the industry can make progress. I feel that the amendment that my noble friend Lord Sugar and I have put down meets that balance.

In her response the Minister spoke about the two options. Those options are always there, but we also have to ensure that, although the consumer has these options for their rights, the industry can make progress, otherwise we will all end up with obsolete software—rather like my noble friend.

I thank the Minister for her response, and my noble friend Lord Knight. This is a very complicated technical matter. We will have to look at the Minister’s response. The amendment is based on my noble friend Lord Sugar’s many years of experience in the industry—I am too old to be in the show. We will certainly consider the Minister’s response and the other contributions and perhaps return to the matter on Report. In the mean time, I beg leave to withdraw the amendment.

Amendment 40A withdrawn.