Digital Markets, Competition and Consumers Bill

Baroness Jones of Whitchurch Excerpts

Report stage
Monday 11th March 2024 Lords Chamber

[Lord Clement-Jones (LD)]

My Lords, it is a pleasure to follow that piece of logic. I do not need to speak for very long in support of the many important amendments that have been spoken to in this group. The Minister, in Committee and in his welcome letters and meetings, has attempted to rebut the need for them—but I am afraid that, in all cases, their proponents have been rather more persuasive in wishing to see the CMA unambiguously able to exercise its powers.

In a different context, the Communications and Digital Committee, chaired by the noble Baroness, Lady Stowell of Beeston, in its report on large language models, said that there was a considerable “risk of regulatory capture”. Mindful of that, we need to make sure that the CMA has those powers.

I turn to the amendment proposed by the noble Lord, Lord Faulks, and his argument about the dangers of introducing proportionality, also spoken to by the noble Lord, Lord Wolfson. On these Benches, we fully support having that provision in the Bill, as in the noble Lord’s Amendment 13. Human rights for big tech is not really a slogan that I am prepared to campaign on.

The noble Baroness, Lady Jones, will no doubt introduce her Amendments 43, 46, 51 and 52 on appeal mechanisms for penalties, which differ from all the other decisions of the CMA. We very much support her in those amendments, and we have signed them. I also support the noble Baroness’s Amendment 59. The Minister took the trouble to write, explaining why the Government did not consider including a duty to citizens, but sometimes such clarification, as in this case, makes us only more enthusiastic for change. I am afraid that citing overlap and the creation and operation of the DRCF is not enough; nor is citing the risk of regulatory overreach, given its inclusion 20 years ago in the Communications Act. We agree with the conclusions of the original task force.

We also support the noble Lord, Lord Lansley, on the importance of placing time limits on the Secretary of State in approving the CMA guidance under the digital markets provisions of the Bill, in Amendment 56. Although I believe that the noble Baroness, Lady Stowell of Beeston, will not be pressing it to a vote, we very much support her in her relentless campaign for improved parliamentary scrutiny. This has been identified by so many parliamentary committees, not least by the Industry and Regulators Committee on which I sit. It seems extraordinary that we are still waiting to implement the kind of solution that she is putting forward, and I hope very much that the House will take forward her suggestion.

We also very much support in principle the amendment proposed by the noble and learned Lord, Lord Etherton, on collective proceedings. He may not press the amendment to a Division today, but this is a vital change that we should make to ensure that rights in this area can be properly exercised and enforced. If the noble Lord, Lord Faulks, seeks the opinion of the House on his Amendment 13, the noble Baroness, Lady Jones, on her Amendment 43, and the noble Lord, Lord Lansley, on his Amendment 56, we will support them.

[Baroness Jones of Whitchurch (Lab)]

My Lords, I thank all noble Lords who have contributed this afternoon to what is a very important group of amendments. I add my thanks to the Ministers and officials for their time in the run-up to this debate in trying to resolve the many issues that we have tabled today.

I thank the Minister for tabling Amendment 1 and for listening to our concerns about the Secretary of State’s power to amend the conditions that would determine whether a tech company has a position of strategic significance. I am glad that the Minister has listened to our concerns, and we are happy to say that we accept the new proposals.

Our Amendments 43, 44, 46, 51, and 52 would reinstate judicial review principles as the means by which penalty decisions are heard, rather than being determined on the merits. I thank all noble Lords who have spoken this afternoon, and indeed those who have added their names to these amendments, for their support. As we debated in Committee and again today, these amendments are among the several we are debating in which the original balance between big tech companies and challenger firms was distorted by late government amendments on Report in the Commons. The Minister has already admitted that the changes came about as a result of lobbying by the big tech companies to No. 10. They clearly would not have done this unless they were expecting to benefit from those changes.

The debate around the appeals mechanism goes to the heart of those concerns. We know that penalties such as fines are the most significant deterrent in preventing SMS companies breaking the conduct requirements established by the CMA. There is a real concern that a merits appeals process would allow the SMS firms to deliberately delay implementation of the fines and open up the judgment of the CMA right back to square one. This is why the CMA has itself argued that it prefers the judicial review process, which is widely used elsewhere and avoids protracted litigation. We agree with the CMA and believe that appeals through judicial review will deliver swifter and more effective outcomes. We want to close down the opportunities for unnecessary litigation from huge corporate lawyers with time on their side and deep pockets to fund their activities.

As the noble Lord, Lord Black, and the noble Baroness, Lady Kidron, have said, the worrying news from Europe as to the responses so far from Apple and the other tech companies to their fines for anti-competitive behaviour underlines why it is so important to have robust and legally watertight regulation in place in the UK.

I do not think that the Minister, in Committee or in subsequent discussions, has been able to persuade us that a merits review process will not open the door to lengthy litigation designed to frustrate the whole process. If we remain unpersuaded by his arguments this afternoon, I give notice that I will wish to test the opinion of the House on Amendment 43.

These concerns also apply to Amendments 13 and 35 in the name of the noble Lord, Lord Faulks. In this case, replacing the word “appropriate” with “proportionate” has particular legal implications, which the noble Lord, Lord Faulks, has described extremely eloquently. We know that the CMA already has a duty to act proportionality, so repeating it in the Bill takes on a new legal emphasis that might lead a court to widen the scope of a judicial review challenge. In our view, “appropriate” has a much more common-sense meaning of rationality, whereas “proportionate” is a matter of judgment and is more easily disputed.

The Minister has argued that there is a need for extra clarity to reassure the tech companies on the intent of the clause. The amendment from the noble Lord, Lord Faulks, would require the CMA to act proportionately, as its current duty requires, and also appropriately. This is a win-win, which should provide the clarity that tech companies are seeking. I look forward to hearing the Minister’s further clarification on these issues, but, unless there is any new, compelling justification for the changes, we would support the noble Lord, Lord Faulks, if he chooses to test the opinion of the House.

Throughout our deliberations, the noble Baroness, Lady Stowell, has raised important questions about the need to strengthen parliamentary oversight of the CMA’s activities. Her Amendments 55 and 57 provide an excellent route to addressing these concerns. Like other noble Lords, I am sorry that they have not yet found favour with the Government and I very much hope that she will continue to pursue them.

Meanwhile, Amendment 49 from the noble and learned Lord, Lord Etherton, raises the right of consumers to bring collective proceedings where they have suffered the same harm or loss from a breach of conduct requirements. As he has argued, this is a vital lifeline for individuals or small businesses that cannot afford to finance legal proceedings alone. His amendment would create a means of effective enforcement of existing rights once a breach has occurred. We agree that we ought to find a mechanism to allow these class actions to occur in specific circumstances.

However, we also agree with the amendment of the noble Baroness, Lady Harding, that the courts need to avoid proceedings which conflict with or overlap the CMA’s ongoing investigations. We hope the Minister can provide some reassurance that the Government recognise the importance of these issues and will carry out a review. I hope this will provide sufficient reassurance to the noble Lord, Lord Etherton, that a vote on his amendment is not necessary.

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Moved by

[Baroness Jones of Whitchurch]

24: Clause 29, page 16, line 14, after “is” insert “indispensable and”
Member’s explanatory statement
This amendment, alongside another in my name to Clause 29, would revert the Clause back to the one first introduced in the House of Commons. This would narrow the ability of bigger platforms to claim their anti-competitive behaviour presents countervailing benefits.

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Moved by

[Baroness Jones of Whitchurch]

43: Clause 89, page 55, line 32, leave out “, 114 (appeals)”
Member’s explanatory statement
This amendment, alongside others in my name to Clauses 89 and 103, would revert the relevant Clauses back to the ones first introduced in the House of Commons. This would reinstate judicial review principles as the means by which appeals against penalty decisions are heard, rather than such decisions being determined on the merits.

[Baroness Jones of Whitchurch (Lab)]

My Lords, I listened carefully to the Minister’s response. This amendment to the way that appeals are processed goes to the heart of our concerns about the Bill. It would revert the wording to the much more sensible wording that the Government had initially in the Commons. We feel that, without our amendment, the corporate lawyers will run rings around the CMA and postpone any delays in the implementation of CMA decisions. This is an important amendment and I therefore wish to test the opinion of the House.