Digital Economy Bill

Baroness Buscombe Excerpts

Committee: 4th sitting (Hansard - continued): House of Lords
Wednesday 8th February 2017 Lords Chamber

[Baroness Buscombe (Con)]

My Lords, I thank all noble Lords who have taken part in this important debate. It is good to have this debate.

This group of amendments seeks to make extensive changes to the broadcast media public interest considerations that may be relied upon to intervene in certain media merger situations and the fit and proper test that Ofcom has a duty to apply to all those who hold a broadcasting licence in the UK.

Before I get into the detail, the debate has included views from across the House about the parties to the Fox/Sky merger. There is a proposed merger currently in train, which it is very likely the Secretary of State will need to consider under her existing powers. As the Secretary of State noted in her written statement of 10 January, any decision will be a quasi-judicial one. It is important that she is able to act independently and that the process is scrupulously fair and impartial. As a result, neither I nor any Minister can comment on the merits of this specific case. I will have to restrict my comments to the substance of the amendments themselves.

I have noted carefully the views of noble Lords, and of the noble Lord, Lord Puttnam, in particular. I have a transcript here of some of the debate of the then Communications Bill, in 2003. Of course, the noble Baroness, Lady O’Neill, remembered the key issue about citizen and consumer. Indeed, Lord Puttnam and I met outside this Chamber to try to come to terms with our approach to this issue—I was part of Her Majesty’s Opposition in those days. A lot was achieved. Of course, it was a government amendment on Third Reading which created the plurality and public interest test. It was my noble friend Lord Lansley, who is unfortunately unable to be in his place tonight, who sat on the draft legislative committee on that Bill, and who retains that interest.

Drawing all the contributions together brings us to a single question: do the Government believe they have the necessary powers to allow them to deal with complex media mergers and a concentration of ownership that would be damaging to media plurality?

In our view, the tests introduced in 2003 are wide-ranging and provide the Secretary of State for Culture, Media and Sport, who is responsible for media mergers, with a wide discretion to intervene. For example, in cases where there are concerns about media plurality, or where a bidder does not have a genuine commitment to the UK’s well-established rules on content standards and cross-promotion, which are overseen by Ofcom, the Secretary of State can consider those concerns as part of her deliberations as to whether to intervene in the proposed merger.

Turning to the amendments themselves, given the discretion to intervene based on the existing media public interest considerations, we do not believe it is necessary to add the additional requirements set out in Amendment 229ZA and would argue that these are matters that can already be considered under the existing tests. In addition, the matters set out are considered by Ofcom on an ongoing basis in its regulatory role.

There are three existing broadcast media public interest considerations that the Secretary of State can take into account in deciding whether or not to intervene in a merger. The first is the need for a sufficient plurality of persons with control of media enterprises—I stress, plurality of persons. The second is the need for a wide range of broadcasting which is both high quality and appeals to a wide variety of interests. In other words, the focus must be on content and plurality of content. The third is the need for persons carrying on media enterprises to have a genuine commitment to broadcasting standards. Together, these powers give the Secretary of State discretion to consider a wide range of matters in deciding whether the specified public interests may be relevant, and whether or not to intervene in a particular merger.

Amendment 229ZA, which inserts new Section 58(2D) into the Enterprise Act, would allow the Secretary of State to intervene in a media merger based on the need for those holding broadcasting licences to be a fit and proper person, as noble Lords have said today. The issue of who is a fit and proper person to hold a broadcasting licence is a regulatory matter for Ofcom. Ofcom is under an ongoing duty to remain satisfied that those holding broadcasting licences are fit and proper to do so, under Section 3 of the Broadcast Act 1990 and Section 3 of the Broadcast Act 1996. Ofcom’s assessment of these matters will consider the conduct of those who have material influence or control over broadcast licensees and will consider a wide range of factors in assessing who is fit and proper, including the matters set out in the amendment.

The amendment also proposes a new Section 58(2E), which is aimed at allowing intervention on the basis that the governance of broadcast media enterprises providing news needs to include sufficient safeguards for editorial freedom in the provision of full and accurate news services. I entirely accept—and the Government entirely agree with noble Lords on this—that the issue of governance is crucial, although we discussed in earlier debates today that the issue of accurate news is becoming a very difficult one and will exercise all our minds in the coming months. It is a long-established condition of broadcast licences in the UK that news is reported with due accuracy and impartiality, as set out in Ofcom’s broadcasting code. Ofcom, as the regulator, governs compliance with this requirement of the code.

The matters set out in the amendment at proposed new subsection 58(2F) would be dealt with by licence conditions and Ofcom’s broadcasting code, including provisions on fair and effective competition and the cross-promotion code, as well as matters that would be considered as part of the fit and proper person test.

[Lord Stevenson of Balmacara]

I thank the Minister for going through this in so much detail. The issue raised in the first part of the amendment on the fit and proper person test was not whether the powers exist but how they would be triggered. The worry is that they would be triggered post hoc rather than anticipatorily with regard to a merger. Do the Government accept that there is a difficulty here?

[Baroness Buscombe]

The Government do not accept that there is a difficulty in this. The important issue is that the powers remain broad in their application. To the best of my understanding, though, there is no difficulty regarding when they are triggered.

[Lord Puttnam]

What I believe the noble Lord, Lord Stevenson, is saying, and it is very important, is that there is an accidental anomaly in the Bill. As someone who, like the Minister, pored over every word of it, I take some responsibility for this, but it is extraordinary— I even referred to it as bizarre—that the bar that is set for an ongoing licensee is higher than the bar for a bidder. Surely common sense requires that someone bidding has to reach the same standards of honesty and probity that are required of an ongoing licensee. There is an anomaly, and I am trying to help the Government to get rid of it because it should not be there. Obviously there should be a bar, but it should apply to anyone applying for a licence just as it does to anyone who has an ongoing licence that is being looked at.

[Baroness Buscombe]

I am going to wait for a reply on that. I would like to be able to respond tonight, rather than saying that I will write to noble Lords; if the Committee will bear with me, let us just wait and see. I understand what the noble Lord is saying about bidders meeting the same standards as those who already have a licence.

It is a long-established condition of broadcast licences in the UK that news be reported with due accuracy and impartiality, as set out in Ofcom’s broadcasting code. Ofcom, as the regulator, governs compliance with this requirement of the code. The matters set out in the amendment at proposed new subsection 58(2F) would be dealt with by licence conditions and Ofcom’s broadcasting code, including provisions on fair and effective competition and the cross-promotion code, as well as matters that would be considered as part of the fit and proper person test. I have been informed that the fit and proper test can be looked at by Ofcom only once they hold a licence, but we believe that the provisions on genuine commitment to broadcasting standards give the Secretary of State the powers she needs in this regard.

[Lord Puttnam]

I think that we all deserve to be very clear about this: can we be sure that the Secretary of State will apply exactly the same standards to a bidder as she would require of an ongoing licensee?

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[Baroness Buscombe]

There is nothing coming from the Box—I think that I will have to come back to this point.

Ofcom’s role as a regulator is to have ongoing oversight of these matters. The important point, however, is that the Secretary of State’s power to intervene in media mergers provides an additional layer of protection for media plurality in the UK. In the case of Amendment 229ZA, the very fact that these matters are part of the regulatory broadcasting framework with which licence holders must comply means that they can be taken into account by the Secretary of State in deciding whether or not to intervene, particularly in terms of the impact that such matters have on the need for persons holding broadcast licences to have a commitment to broadcasting standards. In addition, any merger must also be judged on competition grounds by the relevant competition authority, and the existing competition law. The Government believe that the existing provisions in the Enterprise Act 2002 already give the Secretary of State wide and proportionate powers in relation to proposed media mergers. While we understand the intent behind this amendment, we do not judge that it is necessary.

Amendment 229ZB would similarly seek to add unlawful acts or corporate governance failures as specific matters that Ofcom could take account of when determining, on an ongoing basis, whether an individual or a corporate body satisfies the fit and proper person test, which will include an assessment of those with material influence or control over such bodies. Ofcom can and does take into account such matters and this amendment is therefore unnecessary. There is also a risk that this amendment may potentially narrow Ofcom’s discretion here, although I acknowledge that that is not the noble Lord’s intention.

From a legal standpoint, there is always a danger in seeking narrowly to define the parameters of the law. Indeed, I sought to do just that during our debates on this issue back in 2003. I was seeking to limit the scope—the boundaries—of the Government’s intended plurality test; I wanted the law to be narrowly defined and to target specific circumstances in which the plurality and public interest test could apply. The noble Lord, Lord Puttnam, disagreed with me, saying that breadth is very important. Of course, it was he who won the day. So I do think it important to take care when trying to narrowly define what does and does not apply, thus narrowing the scope, as that can constrain the whole approach. It is important to take this into account when considering these amendments overall.

The Government therefore believe that the powers introduced in 2003 are sufficiently wide to deal with complex media merger cases which raise public interest concerns and, for this reason, we ask the noble Lord to withdraw his amendments.

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[Baroness Buscombe]

My Lords, I begin by apologising to the noble Baroness, Lady Finlay of Llandaff, that she is, for the second time running, almost a tail-end Charlie. It was the same on Monday evening and she was extremely gracious in waiting for so long for us to get to her amendment. I welcome her amendment, which highlights an issue that most of us here are acutely aware of when buying goods and services online; namely, the consequence of not ticking a box or, in some cases, unticking a box.

The proposed new clause imposes a fine not exceeding 10% of a seller’s annual gross operating profit if a seller of goods and services on the internet were to retain, share or use the contact information of a buyer without the buyer’s consent to do so. It also makes it a requirement that websites provide a tick-box which is not pre-filled, as a means by which an individual can demonstrate their acceptance of having their contact information processed by the seller.

Although I accept the spirit of the amendment, I do not believe it is necessary, for the following reasons. Clause 77 already places a statutory duty on the Information Commissioner to publish a direct marketing code of practice. Putting the ICO’s direct marketing code of practice on a statutory footing will make it easier for the Information Commissioner to take enforcement action against those organisations in breach of the direct marketing rules under the Data Protection Act and the Privacy and Electronic Communications Regulations. The current direct marketing rules are also clear, stating as follows:

“Organisations will need to be able to demonstrate that consent was knowingly and freely given, clear and specific, and should keep clear records of consent. The ICO recommends that opt-in boxes are used”.


The general data protection regulation—GDPR—which will come into force in May 2018 will introduce tough new measures on consent and will place obligations on data controllers to demonstrate clearly how they obtained consent when processing personal data, such as contact information. Silence or pre-ticked boxes as a form of consent will not be permitted under the GDPR. The GDPR will also allow tougher penalties to be imposed on organisations in breach of the rules: up to 4% of the organisation’s total global annual turnover, or €20 million.

The noble Baroness also suggested that the time limit for retaining personal information should be limited, for example, to a year. The reality is that time is not specified: one should hold on to the information only as long as is necessary to process payment or whatever the application is made for. For these reasons, I hope the noble Baroness will feel able to withdraw her amendment.

[Baroness Finlay of Llandaff]

I thank the Minister for that reply and for welcoming the spirit of the amendment. Just for the record, the reason for specifying a year if someone has opted into the mailing list is that over time their circumstances might change. They might want to withdraw their consent but not be clear about how to do it. I hope the Information Commissioner will consider that. People might also lose cognitive function over time and therefore become much more vulnerable to scams than they were when they opted in. So I hope that a time limit is also introduced. However, on the basis of the Government’s response, I beg leave to withdraw the amendment.

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Moved by

[Baroness Buscombe]

236: Clause 89, page 90, line 12, at end insert—
“( ) section (Prevention or restriction of use of communication devices for drug dealing);”

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Moved by

[Baroness Buscombe]

237A: Clause 89, page 90, line 15, after “except” insert “Chapter 1 so far as that Chapter relates to the disclosure of information to or by a water or sewerage undertaker for an area which is wholly or mainly in Wales,”

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Moved by

[Baroness Buscombe]

239B: Clause 90, page 90, line 24, at end insert—
“( ) Sections (Disclosure of information to water and sewerage undertakers) and (Disclosure of information by water and sewerage undertakers) extend to England and Wales only.”

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Moved by

[Baroness Buscombe]

240: In the Title, line 8, after “functions;” insert “to make provision about internet filters;”