Digital Markets, Competition and Consumers Bill

Baroness Ritchie of Downpatrick Excerpts

2nd reading
Tuesday 5th December 2023 Lords Chamber

[Baroness Ritchie of Downpatrick (Lab)]

My Lords, it is a pleasure to follow the noble Lord, Lord Holmes of Richmond. I welcome the Bill, but there are some improvements that the Government could bring forward to provide better protection against the big tech giants. I feel that many of today’s arguments have coalesced around several points. The Bill deals with various aspects, and there are concerns that it does not contain any explicit environmental content. Reference has already been made to that. It makes no progress in plugging the gap in environmental reporting of food and drink products, it does nothing to extend repair as a consumer right, as the noble Baroness, Lady Bennett, indicated, and there are issues around gift aid. All that needs to be addressed.

However, I want to concentrate this evening on the need for the Government to strengthen the legislation through government-based amendments introduced at Committee or Report to enable better and more effective regulation for big technology companies. Undoubtedly the Bill can launch a ground-breaking framework to regulate a remarkably unbalanced digital marketplace in the UK. It is a market in which tech giants such as Alphabet and Meta hold near-complete control over every aspect of nearly every online transaction. While digital technology has given journalists new opportunities to engage with the communities that they cover, the dominant tech firms have positioned themselves as central intermediaries, through which most news content must pass to reach citizens. This allows them to capture data about the use of the content by consumers, sell advertising based on that use, and capture value created by news and information firms. They hoard a lion’s share of advertising revenue, nearly 80% of the digital advertising market, as well as valuable user data generated for them by news providers, while the providers struggle to keep their lights on. I have seen examples of that in Northern Ireland.

With that system in place, the news publishers that have to interact with the giants lose out, especially those that are locally owned and operated. When they suffer, their audiences—citizens right across the UK—lose out as well. The independent news sector online is made up of several hundred publishers. Millions of residents in hard-to-reach local communities, such as those in distinct rural communities in Northern Ireland, rely on them for fact-checked and trustworthy information about all facets of their lives. It is a sector that has been given many reasons to feel as if it was abandoned by the UK’s policymakers. With appropriate policy measures, it also stands to gain the most out of our action. Using proper interventions, we can allow it to continue enriching the lives and democratic participation of the UK’s communities at every level.

In 2022, the Public Interest News Foundation estimated the UK independent news sector’s total revenue at £20 million to £40 million. In the same year, take note that Google and Meta generated an estimated £16.1 billion in UK advertising revenue. We should contemplate that contrast in resources. According to Press Gazette, the overall digital advertising market in the UK grew this year, but none of the fresh spoils will go to the publishers working diligently to inform the public. Undoubtedly, this system must be remedied; with certain amendments and considerations, this Bill can sit among a much-needed set of holistic interventions. It can help to introduce sustainability to the news industry, and in particular help the independent online news sector to survive and flourish. In many instances, it is providing local news content to local communities.

The Bill should allow the CMA to use the final offer mechanism more flexibly and earlier in the regulatory process; reduce the potential to politicise regulation by limiting the vast oversight powers given to the Secretary of State over the Digital Markets Unit; allow for countervailing benefits to users to be considered at the many consultation and investigation stages of regulation instead of being used as a “get out of jail free” card by tech giants; promote a competitive and pluralistic UK press by instructing the CMA to consider citizens’ rights as it regulates the digital marketplace; ensure that as many actors as possible can trade with SMS firms on fair and reasonable terms by mandating transparency with the regulator and, when appropriate, the market; and ensure that the expanded merits-based appeal to penalties imposed on SMS firms does not undermine appropriate regulatory decisions made after due process at earlier stages in the new framework.

I hope that the Minister will reflect on those suggested proposals for amendments in this sector and consider bringing them forward in Committee or, failing that, on Report. Such amendments would enable and bring about an improvement to the Bill, put certain checks in place in respect of the big tech companies and provide for their better regulation, which is urgently required. I urge the Minister today to reflect on those proposals and provide answers and some direction about the next steps from the Government.