Digital Markets, Competition and Consumers Bill

Lord Mott Excerpts

Committee stage
Monday 5th February 2024 Grand Committee

[Lord Lucas (Con)]

My Lords, we now move on to subscription contracts. I would very much like to understand the reason for Clause 252(2)(c). The Government seem to contemplate that, if a consumer enters into a contract providing for the recurring supply of goods, is liable to pay for each supply and has no right to bring the contract to an end, the consumer deserves no protection under this Bill. What are these contracts? I am delighted to say that I have failed to enter into such a contract in my life. I did not know that such a contract, where there is no right for the consumer to cancel under these circumstances, existed or was common. What is Clause 252(2)(c) aimed at in terms of practice out in the real world? Given these contracts, whatever they are, why does the consumer not deserve protection from them? I beg to move.

[Lord Mott (Con)]

My Lords, it is a pleasure to take part in this fifth day of Committee. I will speak to Amendments 148A and 148B, which pertain to an exclusion to the subscriptions chapter. Subscription contracts are becoming increasingly popular in our society. I support the Government’s ambition to ensure that consumers are given strengthened protections in these contracts. However, I wish to ensure that we target the right kinds of contracts and businesses with the new subscription requirements.

Schedule 20 has an exclusion for foodstuffs delivered by an unincorporated trader; to my reading, this appears to target certain micro-businesses. To qualify for this exclusion, a trader must deliver foodstuffs on its own behalf and must not be a body corporate. I support the need for a narrow, targeted exclusion for micro-businesses providing local goods and services, but I worry that the requirement not to be a body corporate will unfairly impact on incorporated micro-businesses that have similar characteristics to unincorporated ones.

For example, businesses such as a farm shop or corner shop providing local food subscriptions, or a vineyard providing locally produced wine on subscription, will be caught by the subscriptions chapter if they are incorporated, but not if they are unincorporated. To me, this appears to be an unfair technicality impacting these businesses; many small micro-businesses may fall through the cracks of the exclusion. That is why Amendments 148A and 148B in my name would change the requirement for a business not to be a body corporate to a requirement for a business to be a micro-business, as defined by Section 33 of the Small Business, Enterprise and Employment Act 2015.

These amendments would ensure that micro-businesses delivering foodstuffs locally benefit from the exclusion even if they are incorporated. They would retain all the other requirements so that the exclusion rightly remains targeted on only the smallest businesses. I hope that the Government understand the need for tweaks to this exclusion and are therefore minded to support these amendments.

[Lord Clement-Jones (LD)]

My Lords, I will speak to Amendments 150 and 151 and Amendments 153 to 167. This is a rather voluminous set of amendments, but they are all designed to try to bring the pre-contract information requirement for subscription contracts back to some of the language of the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013. The theme for these provisions is: if it ain’t broke, why fix it?

These amendments seek to maintain the flexibility for traders currently provided by those regulations by taking account of the limited time and space available for providing pre-contract information for certain formats and connected devices, and by recognising that certain key pre-contract information may be apparent from the context. The new clauses—Clauses 254 and 255—together with Schedule 21 are designed to replace the pre-contract information requirements for subscription contracts set out in the regulations. The clauses establish two sets of pre-contract information: a long set of full pre-contract information that must be given or made available to consumers before they sign a contract and a shorter set of key pre-contract information that must be given to the consumer all together, separately to any other information. The latter set must be displayed in such a way that it does not require the consumer to take any steps, such as clicking a link, and it must be displayed prior to the consumer entering into the contract.

But the Bill does not provide for the limited time and space allowances established by Regulation 13(4) of the CCR, which are necessary for certain formats and connected devices. In addition, the Bill does not reflect the flexibility provided by the CCR in terms of recognising key pre-contract information that is apparent from the context. This one-size-fits-all approach is not appropriate, given the many different types of subscription contract and consumer journey that the Bill is intended to cover, and given the varying screen sizes that consumers may use to enter into a contract, particularly on mobile devices.

These amendments are designed to amend Clauses 254 and 255 and Schedule 21 to provide more flexibility for the presentation of pre-contract information. They would import a standard of reasonableness to a trader’s assessment of whether information is apparent from the context. They would distinguish between the timing of pre-contract information and full pre-contract information, in line with the current approach of the CCR. They would enable traders to choose the most appropriate techniques to bring the pre-contract information to the attention of the consumer. They would add a new clause to reflect the limited time and space allowances provided by Regulation 13(4) of the CCR—this is necessary for certain screen formats and connected devices. They would enable traders to choose how best to present pre-contract information in a clear and comprehensible manner, on the basis that providing information all at once will not always be the most effective or transparent approach. They would simplify information about cancellation and avoid duplication. They would remove the pro-rated monthly price from the key information about a subscription, as this may confuse consumers, and they would make clear that certain information should be presented only if applicable.

In summary, it is not clear why we are going so much further than the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations, which, in the view of many, have worked quite well. Of course, we will deal with the difference in the cooling-off requirements—also covered by the CCR—when we debate the amendments of the noble Lord, Lord Black, in a few groups’ time. In the meantime, I very much hope that the Government will adopt a rather more flexible approach than they seem to have in the Bill as it stands.