Digital Markets, Competition and Consumers Bill

Debate between Viscount Colville of Culross and Lord Black of Brentwood

Report stage
Monday 11th March 2024 Lords Chamber

[Viscount Colville of Culross (CB)]

I have added my name to the Minister’s Amendment 1 with great pleasure, because the Government agree that the power in Clause 6 is one the Secretary of State does not need. I have also added my name to Amendment 56 as it aims to curtail an even greater Secretary of State power. In Committee, I tabled a series of amendments to limit the Secretary of State’s powers over various stages of the Part 1 conduct requirement process. At the time, we were told that these powers were needed to ensure that the regime could respond to the fast evolution and unpredictability of digital markets. I grateful to the Minister for changing his mind on one of these powers in Clause 6 and for tabling the amendment to leave out subsections (2) and (3), which, even with the affirmative procedure, were going to give the Secretary of State unnecessary powers. It is a sensible move, as the criteria for deciding whether a digital activity should be deemed of strategic significance are, as he said, broad and well set out in subsection (1).

My concern was that the powerful tech companies, whose market dominance will be investigated in the Part 1 process, might put pressure on Ministers to amend the four criteria in Clause 6 to dilute the range of company activities under consideration for SMS positions. I am satisfied that this amendment will stop that happening. I hope that the Minister will now listen favourably to other amendments, which will be debated today, to ensure that the conduct requirement process is as swift as possible and that the Secretary of State does not have overmighty powers to intervene in the process.

I am grateful to the noble Lord, Lord Lansley, for tabling Amendment 56, to which I have added my name, to Clause 114. Subsection (4)(a) as it stands gives too much power to the Secretary of State to approve these guidelines. As I said in Committee, it was pointed out that the guidelines are the most important part of the SMS process. They set out the framework for the conduct requirement process and allow implementation of the new powers the Bill gives to the CMA to examine market-dominant activities by big tech companies.

One of the reasons for my fear of the Minister’s powers is that she might be subject to lobbying by tech companies, as the noble Baroness, Lady Stowell, pointed out, either to change the guidelines or to slow down implementation. At the moment, the Secretary of State has the power to delay approval indefinitely, and, looking to the future, when the guidelines need to be updated or revised, she or her successor could do the same thing. I am grateful to the Minister and his officials for meeting me twice to talk about this issue. I appreciate his time and attention, but I am disappointed that he and the Bill team felt unable to do anything to fetter the Secretary of State’s powers with a time limit on delay for approval. The Minister feels that a time limit would make the process brittle, and fears that an election or some big political event could cause the process to time out. I ask noble Lords to bear in mind that the amendment deals with the Secretary of State’s powers of approval of the guidelines only, not the entire procedure for setting up the guidelines. If there were an election, ministerial work would stop. However, once the new Government were in place, the time limit could kick in and start again. The Secretary of State could then approve the guidelines in 40 days or send them back to the CMA with reasons.

In my meeting with the Minister, he kindly offered to publish letters exchanged between the Secretary of State and the CMA as the guidelines were created. This seemed a wonderful offer that would go far towards ensuring transparency in the process and allay fears of backstage lobbying, and go some way towards assuaging Members’ concerns about the process of creating guidelines. Unfortunately, the Minister rescinded that offer. I ask him in the name of the openness and transparency of the Part 1 process to reinstate it.

Such a move would complement the second part of Amendment 56, whereby if the Minister does not approve of the guidelines—which would surely be the only reason for delay—an open statement of reasons as to why the guidelines could not be approved would be published. Surely noble Lords agree that transparency in the guidelines process would go far in calming any fears of it being influenced by the big tech companies.

I want very much to see this Bill on the statue book, but the Secretary of State’s powers in Clause 114 are detrimental to the Part 1 process and need to be looked at again. I hope the Minister will accept Amendment 56. If not, I will support the noble Lord, Lord Lansley, should he decide to test the opinion of the House.

[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.

Online Safety Bill

Debate between Viscount Colville of Culross and Lord Black of Brentwood

Report stage
Wednesday 12th July 2023 Lords Chamber

[Viscount Colville of Culross (CB)]

My Lords, I have been a journalist my whole career and I have great respect for the noble Lords who put their names to Amendments 159 and 160. However, I cannot support another attempt to lever Section 42 of the Crime and Courts Act into the Bill. In Committee I put my name to Amendment 51, which aims to protect journalism in the public interest. It is crucial to support our news outlets, in the interests of democracy and openness. We are in a world where only a few newspapers, such as the New York Times, manage to make a profit from their digital subscribers. I welcome the protection provided by Clause 50; it is much needed.

In the past decade, the declining state of local journalism has meant there is little coverage of magistrates’ courts and council proceedings, the result being that local public servants are no longer held to account. At a national level, newspapers are more and more reluctant to put money into investigations unless they are certain of an outcome, which is rarely the case. Meanwhile, the tech platforms are using newspapers’ contents for free or paying them little money, while disaggregating news content on their websites so the readers do not even know its provenance. I fear that the digital era is putting our legacy media, which has long been a proud centrepiece of our democracy, in great danger. The inclusion of these amendments would mean that all national newspapers and most local media would be excluded from the protections of the clause. The Bill, which is about regulating the digital world, should not be about trying to limit the number of newspapers and news websites covered by the protections of Clause 50; it would threaten democracy at a local and national level.

[Lord Black of Brentwood (Con)]

My Lords, I am very pleased to say a few words, because I do not want to disappoint my good friend the noble Lord, Lord McNally, who has obviously read the text of my speech before I have even delivered it. I declare my interests as deputy chairman of the Telegraph Media Group and a director of the Regulatory Funding Company, and note my other interests as set out in the register.

It will not come as a surprise that I oppose Amendments 159 and 160. I am not going to detain your Lordships for long; there are other more important things to talk about this evening than this seemingly never-ending issue, about which we had a good discussion in Committee. I am sorry that the two noble Lords were indisposed at that time, and I am glad to see they are back on fighting form. I am dispirited that these amendments surfaced in the first place as I do not think they really have anything to do with online safety and the protection of children. This is a Bill about the platforms, not the press. I will not repeat all the points we discussed at earlier stages. Suffice it to say that, in my view, this is not the time and the place to seek to impose what would be statutory controls on the press, for the first time since that great liberal, John Locke, led the charge for press freedom in 1695 when the Licensing Acts were abolished. Let us be clear: despite what the two noble Lords said, that is what these amendments would do, and I will briefly explain why.

These amendments seek to remove the exemption for news publishers from an onerous statutory regime overseen by Ofcom, which is, as the noble Lord, Lord Lipsey, said, a state regulator, unless they are part of an approved regulator. Yet no serious publisher, by which I mean the whole of the national and regional press, as the noble Viscount, Lord Colville, said—including at least 95% of the industry, from the Manchester Evening News to Cosmopolitan magazine—is ever going to join a regulator which is approved by the state. Even that patron saint of press controls, Sir Brian Leveson, conceded that this was a “principled position” for the industry to take. The net effect of these amendments would be, at a stroke, to subject virtually the entire press to state regulation—a momentous act wholly inimical to any definition of press freedom and free speech—and with very little discussion and absolutely no consultation.