Digital Markets, Competition and Consumers Bill

Baroness Uddin Excerpts

2nd reading
Tuesday 5th December 2023 Lords Chamber

[Baroness Bennett of Manor Castle (GP)]

My Lords, in that spirit of consensus, I declare my former position as editor of the Guardian Weekly. Noble Lords will find an unusual degree of confluence between what you might describe as the two ends of the media spectrum, in that I very much agree with the noble Lord, Lord Black, on the issues of artificial intelligence use and the digital giants’ use of material coming from mainstream and private publishers without declaring or making fair payment for that.

There are so many Bills coming through alongside this one that I am not sure where this next issue belongs, but much of what is described as generative artificial intelligence is actually plagiarism on a giant scale. I declare a meeting last week with UK Music, which is very much pushing for the idea that the source material of anything that is generated through these kinds of technologies needs to be declared, as well as the way in which it has been generated. These are issues that need to be raised.

A number of noble Lords declaring their creative endeavours made me think that I should declare that I have a book forthcoming in April, Change Everything: How We Can Rethink, Repair and Rebuild Society, published by Unbound.

[Baroness Uddin (Non-Afl)]

Hear, hear!

[Baroness Bennett of Manor Castle (GP)]

Thank you. I have an interest in seeing that that is not open to being rehashed, reused or recycled without my consent, yet as far as I am aware we have no capacity to do that. That is something we need to think about in this Bill and more broadly.

It is a pleasure to take part in a debate in which we are seeing an unusual degree of consensus. Noble Lords have had plenty of time to prepare for the passage of the Bill through your Lordships’ House. It is widely acknowledged to be necessary and it is broadly headed in the right direction, so the department needs to be warned that that will probably produce a strong desire to improve it in Committee and on Report. I am reminded of the most recent similar Bill that I can think of, which is what is now the Domestic Abuse Act, which left this House a lot stronger than it arrived after a lot of consensual and constructive cross-party contributions.

As many have said, the Front-Bench contributions have been very informative. I will pick up one point from the Minister: I do not share the enthusiasm for unicorns. Unicorns have often turned out really to be phoenixes that crash and burn but then are not capable of rebirth, at great cost in human and financial suffering. As many noble Lords have said, we have an ecology that has seen many exciting, new and creative independent businesses swallowed up—minnows swallowed up by sharks—and we need to think about how we can create a different kind of ecosystem. It is worth focusing on the fact that the digital world was born into an oligarchic system, where a big four—or perhaps a big five or six —dominate all sectors of our economy, so it is perhaps not surprising that we have arrived at a system with very little diversity in it and a few large players.

My aim is not to repeat what has already been said, so I am going to tick off some points that have been well covered. On the issue of subscriptions to charities, mentioned by the noble and learned Lord, Lord Etherton, among many others, I would note that one of my favourite charities, English Heritage, is among those that were very concerned about this issue. It is clearly something that your Lordships’ House will need to address.

Picking up from the points made by the noble Lord, Lord Black, on the issue of small, independent news providers I think that many noble Lords will have received a briefing from the Public Interest News Foundation—some have referred to it. We desperately need local news, supporting local democracy and local communities, and these are areas where we desperately need action.

I associate myself also with the speech of the noble Baroness, Lady Hayman, not currently in her place. Right to repair is something that I have long been working on and I look forward to seeing what we can do in that area, so I will not repeat any of that.

We could hear the passion of personal experiences in how many noble Lords focused on the difficulty of ending subscriptions. My suggestion to the noble Lord, Lord Vaizey, is that if you do not know the CEO, you need a strong social media following. A grumble on social media is often very effective. I would like to think that, if we did that enough, it might have some impact on encouraging companies to do a better job of allowing people to escape from subscriptions that they no longer wish to have.

However, I shall focus the main part of my speech on an area that I believe no noble Lord has yet covered, by looking at the issue of advertising. We are all of us, both online and through screens in train stations, on roads and in many other places, exposed to thousands of digital advertisements more or less daily. It is really crucial that, to protect consumers from misinformation and harm, advertising needs to be properly and thoroughly regulated. However, we currently have a system that is slow and opaque and is definitively failing. The UK’s Advertising Standards Authority is not an independent regulator; it is self-funded by the advertising industry. Any complaints which the ASA handles are essentially therefore marking its own homework, so we need to look at this regulatory gap as a matter of urgency. We should have a regulator that is independent and transparent and one that can take timely action.

I will focus on the role of the companies that are advertising products in terms of producing waste, pollution and environmental harms, and ignoring human rights. Recent research published by the Financial Times shows that Shell, one of the world’s top polluters, is estimated to have spent £220 million on advertising in 2023, much of that explicitly aimed at younger people. I have to share a case study of one of my favourite examples of this because its sheer uselessness and inaccuracy has to be noted. A couple of years back, going through the Eurostar terminal, I peered around a corner into an entirely unused area of the terminal where there was an advert from Exxon about plans for green energy from algae—something that Exxon has subsequently got out of entirely. At the time, the company was defending itself about this and its spokesperson said that the company had spent more than $350 million trying to develop biofuels from algae, which was more than double what it spent on advertising—greenwashing, anybody?

It is worth noting that, if noble Lords go back to when the Government first announced the Bill, we were promised protection from greenwashing. That was going to be a central part of the Bill, but in the Minister’s introduction we heard no similar focus on the protection from greenwashing that we are looking for. I would suggest that we can go further than protection for actively misleading issues, and I will look to table amendments on this.

In this climate emergency, as we speak in the middle of the COP 28 talks, we need to acknowledge that advertising is a push factor for the generation of a massive amount of unnecessary carbon emissions. The Green Party is calling for a ban on high-carbon advertising—fossil fuels, flights and SUVs are major examples, but it might also include fast fashion, meat and dairy and the banks that are funding the likes of BP and Shell. I can feel your Lordships wincing at this point, but I would point out that there is no right to advertise. We have a choice to decide what our society looks like and what people are bombarded with. We do not have to say, “It’s open slather and you can do whatever you like”. An obvious area for this is cigarette advertising, on which we have long had tight controls, but I also note that Transport for London now restricts advertising on a range of products including junk food and is close to banning gambling promotion. France and Amsterdam are also looking at working on banning high-carbon adverts. We can choose what the future looks like.

There is so much to do, but I finish on the point of how so many of the Bills that your Lordships’ House is dealing with are interrelated. I do not think anyone has yet referred to the fact that we are speaking in the “fraud capital of the world”—I am quoting UK Finance here—and we really need to cross-reference this with what is happening in financial advertising. It is a huge problem that consumers need so much protection from.

--- Later in debate ---

[Baroness Uddin (Non-Afl)]

My Lords, it is an honour and a privilege to follow such distinguished speakers.

This digital era is regarded as a miracle century of advancement. The Covid lockdown fastened us all to Zoom, which connected us with not just our loved ones but the worlds of work and business. The large monopolies arrived at our e-doors expanding every conceivable service, including health and well-being, education and internet shopping, on a scale beyond any predicted forecast. In zillions of homes around the globe, a device became the best childminder for five minutes of peace. In turn, four and five year-olds became the best tutors for countless reluctant grandparents, who are now just as hooked on sharing every aspect of their thoughts and live events—including my 84 year-old mother. These online interactions raise many aspects of our consumer rights and protections: how do we regulate a global phenomenon that is in every environment that we occupy?

I do not possess the technical prowess or expertise of many other noble Lords, but I welcome the determination of this Bill to ensure scrutiny of the digital economy. My intervention is based on a desire to play my part in safeguarding consumer rights and protections. I suggest that the Government need to be ready for frequent reviews of this fast-evolving spectrum of platforms and businesses.

I acknowledge the immense contribution of the digital market revolution to our economy and simultaneously worry about its capacity to develop advanced weaponry, the power of which is playing out on our screens to devastating impact on human beings on the battlefield. It is imperative to set benchmarks and standards as well as codes of ethics in managing new digital products and services.

I have been enthralled by the potential of digital advancement for the public good, for example in advancing communication. There is no one better than the noble Lord, Lord Holmes, to explain some of its aspects, but the advent of technology-assisted learning has empowered so many people with disabilities—including my son—especially children and the elder generation. Such examples are minutiae among the millions of applications constantly being developed.

Lately, I have immersed myself in a number of workstreams arising from my role as co-chair of the All-Party Parliamentary Group on the Metaverse and Web 3.0. I have actively engaged with stakeholders, including developers leading various aspects of technology development such as cybersecurity, digital currency, AI and workforce development. I will therefore use this Second Reading in particular to raise matters of consumer protection and to highlight the need for widening access and diversity among those leading digital market innovation, as we must take action to remedy the deficit in the education and skills of our workforce.

I express my gratitude to former Minister Paul Scully, who worked tirelessly with a number of us in this arena to reach out to businesses and organisations that are not often on the radar of this Government or any other. He is much respected for his championing of a diverse workforce. I also thank Mr Charley Coleman from the Library for meeting me very late last night.

The Government propose that the Digital Markets, Competition and Consumers Bill will compel dominant digital platforms to trade fairly with the wider industry and consumers. The proposed new regime is to be overseen and enforced by the Competition and Markets Authority’s Digital Markets Unit, which the legislation gives the ability to ensure that people and businesses, regardless of their size, are treated fairly by tech firms. I assume that the result will be lower prices for online services and goods, giving more informed choices and control to consumers, but as it is—the Committee stage will no doubt improve some of the Bill’s shortcomings and strengthen it—this is difficult to comprehend, given that Google, Apple, Meta, Amazon and Microsoft continue to dominate the profit ledgers and dwarf any control over advertisements and content.

It is self-evident that what consumers view and experience is determined by often unknown practitioners, who design the contents and messaging that we are allowed and forced to view. Given these confined parameters of product development and services, how will the regulator determine fairness, prices, quality or equity—never mind social justice and safeguarding consumers? What assessment have the Government made of the number of small, independent entrepreneurs and how they can be assisted to compete with the likes of controlled monopolies such as Google, Meta and Amazon, to maintain fair competition and choice for consumers?

Regardless, we know that the appetite and demand for online services and goods has soared. Reportedly, the numbers of adults shopping online have increased from 53% to 87% within a year. This has inevitably resulted in an increased level of concern from individuals and SMEs, many of which have experienced unsafe online interactions and digital trading. This suggests that consumer rights and protection are adversely ineffective.

Equally significant is the content of advertising and news materials on big platforms such as Google and Meta, which are impossible for SMEs to contest. Hence the question of balance is difficult to evaluate unless there is an adequate level of financial resources, capacity of expertise and strong representation of consumer advocates within the regulatory structures. Concerns have been raised by some organisations, including bilingual organisations. The Public Interest News Foundation said:

“shrouding all commercial agreements struck under the shadow of the new regulatory framework in secrecy will leave small, resource-strapped independent publishers at a disadvantage compared with their large, corporate counterparts. This would create yet another competitive imbalance in the legislation that is designed to remedy an anti-competitive market”.

How do the Government intend to ensure that the authority given to the CMA will guarantee consumer protection and transparency in its pursuit of unfair and anti-competitive advantages held by leading monopolised companies, as stated?

Not all the news is terrible; it is good that the UK remains a destination of choice for investors and, as the Minister himself said, we can boast holding Europe’s largest number of unicorns. In addition, more music to my ears is the exponential growth of start-up investing, which demonstrates confidence in the UK economy, with the expectation that it will drive economic growth with an additional £41 billion by 2025.

There has been huge excitement about the potential of AI technology, robotics, the metaverse and Web 3.0, all of which cannot function in a silo and require clarity from the Government and overall strategic planning that incorporates new components of digital markets and technological evolution. As the noble Lord, Lord Fox, reminded us, big techs have already encircled the AI envelopes. I agree with noble Lords that, if we get this right, the UK can indeed lead a holistic approach to a digital platform and economy, no matter who is in Government.

I take this opportunity to say something about the potential economic impact of the metaverse—and I am not referring to the one-man band of Meta and its proposed construction of an online world, including depicting history as it sees fit. Here lies the problem in regulating the market of new products and content; for example, who decides what content is appropriate for public consumption, such as on colonisation, slavery, the Elgin marbles, or within the wide range of services being developed in the metaverse space? If we abide by the current status quo, how will any regulator position itself vis-à-vis the many contentions—history is littered with biased information—when it is clear that alternative smaller platforms do not have the massive resources to create or challenge the current trajectory of opinions and content, which seems to be supported by a handful of individuals who control media outlets and governing institutions? As a collective, they set out a specific narrative on any given subject, even if that account is deemed inaccurate and false from others’ points of view—held by vast numbers of consumers, for instance. Thus, big techs with large pockets and capacity will continue to mark out profits of billions while ignoring the need for more conscious and inclusive content and services. My point is that I fear that few changes may happen as a result of this legislation to address the issue on perceived bias.

The hope on the horizon is the new transition to Web 3.0 and the metaverse, with promises of personal data ownership and control; PWC, Goldman Sachs and others suggest that the economic benefits will yield multiple billions to many economies around the world. In fact, our APPG, which I have co-chaired for the past 18 months, has undertaken some work, led by Professor Fernandes of Durham University, who has examined the economic impact of metaverse-related technology by regions, in line with the Government’s levelling-up agenda, particularly cites the east of England as the powerhouse positioned to support the development and research of the metaverse and Web 3.0 technology.

Here too we need to guard against anticompetitive structures and, while encouraging innovation, there is an urgent need to empower all parts of our regions with emerging prospects of jobs and training in this sector. The APPG on Metaverse and Web 3.0 programmes included several evidence sessions with women leaders in this sector, academics and young people. Many highlighted the disparities in access to high-quality equipment and internet connectivity, which were stark. There are many parts of our country where families and young people simply cannot afford the benefit and advantages which new technology enables.

Data ownership is therefore a promise from emerging Web 3.0 technology; it is my view that it is likely to remain a panacea and a purview of the elite organisations and institutions. The case in point is access to NHS health data. I am not sure what percentage of the public actually access their own personal data, but we know that huge amounts of data are already in circulation, bought and sold between companies and corporate organisations, owned and transferred many times over. What difference will this legislation make to that data ownership?

Choices and informed decision-making, whether about goods, services or sharing data online, must be in the forefront of any legislation which intends to promote innovation while protecting consumers, and there are significant gaps in achieving proper safeguards for our citizens in relation to protecting data within the NHS and the welfare system. Informed consent must be an absolute priority, and in the event of any breaches of consumer trust, every user must have a clear pathway for seeking information, appealing decisions and, in the event of any negligence, reparation should be embedded.

Embedding consumer protection, structured penalties and redress within the digital economic landscape would instil community confidence that consumer rights are indeed the Government’s uppermost priority. The Bill must shift the power balance in favour of our citizens as consumers. Only then can this new frontier of the digital market provide absolute certainty of consumer protection.