Digital Markets, Competition and Consumers Bill

Baroness Fookes Excerpts

Committee stage
Wednesday 24th January 2024 Grand Committee

[Lord Faulks (Non-Afl)]

My Lords, I begin by apologising for not taking part at Second Reading. I have read the excellent debate, including the helpful introduction by the Minister. I also had the privilege of sitting through the first day in Committee, during which I learned a great deal. I refer to my interests in the register. I am not a competition lawyer, but I have experience of judicial review and of the operation of the Human Rights Act. I was chair of the Independent Review of Administrative Law, which reported a couple of years ago and resulted in the Judicial Review and Courts Act.

My amendment, which has the support of the noble Baroness, Lady Stowell, and the noble Lord, Lord Black of Brentwood, concerns the use of the word “proportionate” in Clause 19. I also have a similar amendment in this group, Amendment 53, which concerns Clause 46.

Despite some heavy lobbying of the Government by big tech, the right to appeal against an intervention by the CMA will engage the judicial review test, rather than a merits test, except as to penalty. Later amendments will carefully probe this latter aspect and I look forward to hearing the debate.

The original adjective in Clause 19 was “appropriate”. The word “proportionate” replaced it at a relatively late stage in the Bill’s progress through the Commons. Why? In one view, it is an innocuous change. Indeed, one would expect an intervention by the Digital Markets Unit to be proportionate. The word also has a respectable legal pedigree. For example, you can defend yourself against attack, provided that your response is proportionate to the attack. Whether that response is proportionate will be a question of fact, often for a jury to decide.

But judicial review is primarily concerned not with the facts of a decision but with the process by which the decision is made. Classically, the courts got involved only if a decision was so unreasonable that no reasonable public body could have reached it. The scope of judicial review has expanded somewhat to include challenges based on, for example, irrationality or the failure to take into account relevant considerations. There are other grounds, but all are effectively concerned with the process rather than with factual findings, although I readily concede that there are occasions when these distinctions can be somewhat opaque.

Since the enactment of the Human Rights Act, the concept of proportionality has entered the law in relation to judicial review, but only in limited circumstances. The most recent edition of De Smith’s Judicial Review, generally regarded as the leading textbook in this area, says at 6-090:

“Domestic courts are required to review the proportionality of decisions and enactments in two main categories of case: cases involving prima facie infringements of Convention rights and cases involving EU law”.


Some think that proportionality should be the test in all cases of judicial review, but that is not currently the law.

I cannot see why an appeal in the context of this Bill would obviously involve a convention right, although those rights have a habit of getting in everywhere. If convention rights are engaged, proportionality comes into the analysis anyway. Choosing to put “proportionate” into the legislation might lead a court to conclude that Parliament had deliberately used the word to widen the scope of a judicial review challenge, even when no convention right is engaged. For my part, that is a risk that I do not think should be taken. Your Lordships’ House is well aware of the risk of expensive, time-consuming litigation that may result from these interventions, which it may be perfectly sensible to bring about.

A proportionality test is far closer to an appeal on the facts than one based on conventional judicial review principles. Whether an intervention is proportionate or not gives the court greater scope for looking at those facts. I would therefore much prefer to revert to the original word, “appropriate”, which does not carry the same heavy legal charge and does not risk expanding the grounds of appeal. I look forward to hearing the Minister’s response and explanation behind the change in wording. I beg to move.

[The Deputy Chairman of Committees (Baroness Fookes) (Con)]

I add at this point that, if Amendment 16 were to be agreed, I could not call Amendment 17 by reason of pre-emption.

[Baroness Stowell of Beeston (Con)]

My Lords, I am hugely grateful to my noble friend Lord Faulks, if I can still call him that—in real life, he is my friend, even if he now sits on another Bench—both for tabling his amendments and for the incredibly comprehensive and thoughtful way in which he has introduced this group. To have the noble Lord’s expertise on this topic is incredibly valuable. I have signed his Amendments 16 and 53 but have also tabled my own in this group: Amendments 17 and 54. I am grateful to the noble Lords who have signed mine.

By way of some background to add to what the noble Lord has said, as I mentioned on the first day in Committee, and indeed at Second Reading, the Communications and Digital Select Committee held hearings on the Digital Markets, Competition and Consumers Bill during the summer of last year. We took evidence from the large tech firms as well as a range of challenger firms. We focused on Parts 1 and 2 of the Bill, which is what we are discussing at this time.

As my noble friend the Minister acknowledged when he spoke at Second Reading, we as a committee found that the Bill as it stood at that time—as introduced to Parliament—struck a careful balance. We felt that, overall, it was proportionate and would deliver on the outcomes that we were seeking to achieve and all felt were necessary for this legislation—namely, a level playing field for the various different businesses that now seek to operate in digital markets. We were careful to acknowledge that striking that balance was hard to achieve; it was not an easy thing. We commended the Government for that. We were also clear, however, that any further changes, particularly to some contentious areas, such as the appeals process, could cause significant problems.

As the noble Lord, Lord Faulks, said, we will come on to the question of appeals in a later group. The insertion of the word “proportionate” in the Bill, in the context of the conduct requirements that the CMA may impose, or the specific pro-competition interventions, has the potential to create a question and introduce a loophole that could be exploited during the appeals process. This is making people nervous—it is certainly making me nervous.

The noble Lord’s amendment would change the Bill back to its original wording. I have signed the amendment based on the way he, as a legal expert, has explained it, which seems to me to be the best way forward. However, my Amendments 17 and 54 try to make it clear to any tribunal hearing down the line that, by including the word “proportionate”, Parliament has not intended to create any new, novel or different opportunity for anybody to interpret what the CMA should always be doing, which is being proportionate in the way in which it goes about its duties. My amendments are, if you like, a safeguard, but I think what the noble Lord, Lord Faulks, has proposed is clearer and neater. Like him, I look forward to the Minister’s reply. This is an area which is causing quite a lot of concern and on which we need a clear response from the Government.