Digital Markets, Competition and Consumers Bill

Debate between Bob Stewart and Damian Collins

2nd reading
Wednesday 17th May 2023 Commons Chamber

[Damian Collins (Folkestone and Hythe) (Con)]

I rise, as other Members have done, in support of the Bill. It is a very important piece of legislation that has been long discussed and much looked forward to. It is now safely on the Floor of the House and we wish it a safe passage as it goes through Parliament. The debate we are having is not dissimilar to debates being held in Parliaments around the world. In the United States Congress, there are very lively debates about what it calls anti-trust legislation in the tech sector. The European Union, as has been discussed, has already created its Digital Markets Act. In Australia, there has been a lot of concern about competition within digital markets and a lot of work to improve it.

I agree with other Members who have spoken so far that competition is often the best guarantee of higher standards for the consumer, lower prices and a more vibrant market economy. The reason we are concerned with regards to digital markets is that, in many of those strategic markets, there is evidence of a lack of competition—a lack of choice—that is restricting routes to business and will increase prices for customers. In his opening speech, the Minister rightly pointed to the market impact studies that the Competition and Markets Authority has done, looking at app stores and the mobile advertising market, which show a consumer detriment of over £6 billion. Those are just two market studies that the CMA has done and it is not surprising that that should be the case.

The app store market is important because most people, including most people in this Chamber, have a smart device that runs on one of two operating systems. There are two app stores, and most of what happens on those devices—not exclusively, but most of it—is not interoperable. There have already been investigations showing inconsistent pricing in the commission taken by those operating systems from app developers who sell through their devices. In a market such as that, it is not surprising that there might be constraints or evidence of overcharging, because there is simply nowhere else to go—there is no choice. When the ad tech market is dominated by two companies, Google and Meta, it is not surprising that there may be higher pricing in that market; there is certainly a great lack of transparency. Even some of the world’s biggest advertisers, such as Procter & Gamble, have raised concerns about this issue, but none of the advertisers themselves has enough market power within that market to challenge those incumbents.

[Bob Stewart (Beckenham) (Con)]

Does my hon. Friend agree that we should fully support what my right hon. Friend the Member for Wokingham (John Redwood) has suggested as a model for competition? Competition itself does require to be amended.

[Damian Collins]

I thank my right hon. Friend for his question, and my right hon. Friend the Member for Wokingham (John Redwood) made an excellent opening speech from the Back Benches. My concern is that in digital markets we have an imperfect market. We are at a point in time where the strategic nature of digital markets has developed to such an extent that people cannot not use these systems to reach their customers. For a business looking to sell online, yes, the world is its customer base, but it is using a relatively small number of tools to try to reach those customers, and those tools are controlled by a relatively small number of people. App-based businesses are selling through one of two operating systems. Someone buying ads is doing so largely from one of two companies that dominate the global market. If people are looking for cloud storage, they are probably buying it from Amazon or Google.

Booksellers are a good example. Many book publishers will say that, when they come to their contract renewal with a company such as Amazon, they can be offered very unfavourable terms, but such is the volume of their business that they put through that one retailer that, while in theory they could go elsewhere, in practice they cannot. No shareholder would understand why a business would just walk away from that particular market. In such situations, it is right that the regulator should have the power to say, “Are companies abusing their strategic market status? Is that leading to higher prices for consumers? Is that leading to unfair competition?”

Companies have been quick already to threaten denial of access to the market to people who challenge their status. The Australians have already created their news media bargaining code for the news industry, where the big Facebook-owned and Google-owned platforms have to pay compensation to the media industry for the distribution of its articles for free across their networks. That is now negotiated—there is a negotiation mechanism to make sure it happens. In response, Facebook threatened to withdraw news from the market. During a series of bushfires in Australia, Facebook cancelled all news distribution on its platforms. Such was the popular reaction, it withdrew and has now done these deals, but they would not have been done without the requirement for final agreement and independent arbitration. A book retailer cannot not do a deal with Amazon.

In terms of big app developers, there was a company called Vine. Many Members may be old enough to remember that app. Vine was a popular short-form video app, largely built on the back of the Facebook operating system and the Facebook Graph API. Facebook decided arbitrarily that Vine was requiring too much Facebook user data, and therefore might be a threat to Facebook itself, so it claimed Vine was in breach of its data policies and just kicked it off the platform. It did that for competitive reasons. In these digital markets, we see companies following an aggressive strategy. Where they see competitors, they look either to acquire them or to deny them access to the market and close them down. This is not unlike the debate that was had more than a century ago, particularly in America around the railways.

There was the big test case that President Theodore Roosevelt had against JP Morgan over his railway monopoly. We can imagine lobbyists for Morgan saying, “We may have a monopoly in the rail market, but the price is quite cheap. People do not spend very long on the trains, and you can always walk or use a horse and cart. It doesn’t really matter that we have this monopoly, because people can choose to travel in other ways.” Of course, Morgan’s railway monopoly gave him massive powers of self-preferencing when it came to moving coal and steel around and denying others access to the market. It gave him massive market power and the monopoly was broken up for that reason.

We should be concerned that, if we allow the major tech platforms to control access to the market and people’s ability to trade, that will lead to a constrained market and higher prices. The tech sector is looking to develop more all-encompassing systems, such as the metaverse for Meta, where people will have a VR experience where they can buy and sell and do everything, and we see smart devices now playing an increasingly central part in almost every service that we access. The amount we are charged to access those services and the ability to access that market are extremely important for having competitive markets in the future. That is why I think these elements are important.

In finishing, I will talk a bit about the news industry. We see how these new marketplaces are changing the distribution of traditional products so much that their business model may completely collapse. The collapse of regional journalism is because of the massive disruption of the localised ad market. It has taken advertising out of those products. It is not just transferred online; it is transferred to completely different methods of distribution.

Now, that is market economics. That is changing consumer behaviour and businesses must adapt to that. If a news publisher is being told, “Your product can be distributed for free through our systems,” but you get more ad money in the long run if you do not. The distributor collects the advertising revenue and the data, and the publisher benefits little. If the product is being used to attract users to the platform, but the platform monetises it and the publisher does not, that is an unfair and unbalanced level of competition that could have significant detriment in other areas. If journalism is hollowed out because it cannot access the market fairly for its products and services, journalism will die, and democracy and society will be the loser as a consequence.

We want competition to flourish. We want competition to be the best guarantee of high standards and lower prices, but we must recognise that digital markets involve a series of markets in which companies are not really competing against each other, because they create controlled monopolies or business environments with very limited access to competition. If we allow that to continue unchecked, it will be to the detriment of us all in the long run. That is why I welcome the Bill.

National Insurance Contributions Bill

Debate between Bob Stewart and Damian Collins

Monday 4th November 2013 Commons Chamber

[Damian Collins (Folkestone and Hythe) (Con)]

I will say a few words in support of the Bill. Like all Government Members, I believe that this is an excellent measure that recognises that it is businesses of all sizes that create jobs in this country. People are now finding jobs in growing numbers. By reducing taxes on employment, we will make it more likely that businesses will employ more people. The strength of the recovery in the private sector underlines the growth in the economy as a whole. The Labour party predicted that growth would not come and that jobs would not be created. By reducing the cost of national insurance to employers, the Government are in this Bill taking another excellent step in the right direction.

I agree with the Exchequer Secretary that we should look at the Bill as one of a range of important measures that the Government are introducing to support the business community, and all those measures support each other. My hon. Friend the Member for Skipton and Ripon (Julian Smith) spoke of meeting young people under the age of 30 who had received StartUp loans from the Government to invest in starting their own businesses, which have had a great deal of success. The Bill will help businesses like those to get to the next stage on the path to growth and to go from being a start-up to employing a small number of people. There is an enormous appetite among people in this country to have a go at starting their own business. That is one of the most positive things to come out of the recession. We need policies that work with the grain of people’s entrepreneurial instincts and back them as they back themselves.

[Bob Stewart]

I have listened carefully to this debate. I have never run a small business; I have run a medium-sized business, but it was not my own. Would it not be a tremendous fillip to small businesses if HMRC was slightly more proactive when it saw a business making a clear mistake, and wrote to it saying, “It would be better if you did it this way”?

[Damian Collins]

My hon. Friend makes an important point. The quality of the advice to businesses from all quarters is important. That echoes a point made by my hon. Friend the Member for Skipton and Ripon, who said that we all need to advocate the Government’s policies to ensure that businesses benefit from them.

Olympics and Paralympics (Funding)

Debate between Bob Stewart and Damian Collins

Monday 27th February 2012 Commons Chamber

[Damian Collins]

I am grateful to my hon. Friend and fellow Kent Member. It would be churlish of me not to agree with him. All of us in Kent are extremely proud of the role that my hon. Friend the Member for Faversham and Mid Kent (Hugh Robertson) has played, as Sports Minister, in steering the Olympic games safely through the final development of the facilities and planning. He has been ably supported by an excellent team at LOCOG and the ODA, which have done a terrific job in ensuring that the games will be ready on time, We can all be proud of that as we look forward to their happening.

My hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) referred to how the Olympic games will inspire young people across the country. They are a major sporting event. One of my first sporting memories was probably of Sebastian Coe winning his gold medal in Moscow in 1980. The 1984 Olympics were an inspiration to my generation of school children across the country not only for the great variety of sports on the athletics track but for the hockey, which I mentioned earlier. We know that children will take a great interest in it and find it very exciting. Their memories of the London Olympic games will be a defining moment of their young lives, and might inspire them to take up a new sport or pursue an existing interest in sport. The legacy is difficult to quantify at this stage, but we all have faith that it will be an important part of the games.

[Bob Stewart]

It crosses my mind that the Olympic games will be an inspiration to women worldwide. When the games are broadcast, people across the world will see that it is not possible to take women out of the Olympic games. They will be involved, and women who are not normally allowed to take part in sport in some countries will see that women in London can do so. That will be one of the huge inspirations of our London Olympic games.

[Damian Collins]

My hon. Friend makes a good point. I think of Kent and the inspiration of Kelly Holmes, as one of our great Olympians, to young people right across the county. Many streets throughout the country, including in London, are named after famous Olympians. I believe there is a road in south London named after Tessa Sanderson, after she won the javelin gold medal at the LA Olympics. The great athletes of our country, men and women, will be inspirations to generations to come, as they have been in the past, and an important part of the Olympic movement.

I want to touch on some of the local aspects of the Olympic games. The torch relay comes to Hythe, Sandgate and Folkestone on 18 July, before making its way to Dover for its next overnight stop. That is something the whole community can celebrate and enjoy, giving people a chance to see and touch part of the Olympics. It is also an excellent way of building up the excitement and anticipation of the events.

The school games are an excellent initiative, led by my hon. Friend the Minister for Sport and the Olympics, and schools across the country will actively participate in them. The application rate has been incredibly high. Schools such as the Marsh academy, the Harvey grammar school and St Augustine’s primary school in my constituency will be taking part in the games. It will be an inspiration to students that the staging of the games will involve some of the major Olympic facilities in the Olympic park, such as the aquatics centre and the Olympic track. Indeed, some of the first competitive events involving British athletes using those facilities will be at the school games, rather than the main Olympic games. What a fantastic message that sends out about the great importance we attach to developing school games. [Interruption.] Does my hon. Friend want to intervene?

[Bob Stewart]

I was just shifting position.

[Damian Collins]

Sorry, I misread my hon. Friend’s signals.

Civil Aviation Bill

Debate between Bob Stewart and Damian Collins

Monday 30th January 2012 Commons Chamber

[Damian Collins (Folkestone and Hythe) (Con)]

It is a great pleasure to follow the maiden speech from the hon. Member for Feltham and Heston (Seema Malhotra), who gave such an eloquent, thoughtful and intelligent speech, much of which I could agree with. I shall come on to the substance of her remarks about airports and Heathrow in a moment. I am also grateful for the opportunity to echo her tribute to Alan Keen.

I had the privilege of serving for just over a year on the Culture, Media and Sport Committee with Alan Keen. He was a great colleague on the Committee and continued its work as best he could, right through last summer, including taking part in our questioning of the Murdochs and the phone hacking inquiry. He was, of course, present for the launch of the Committee’s report on football governance, a topic that was a lifelong passion of his. He is sorely missed, not only by hon. Members on both sides of the House, but by members of the Committee.

The hon. Lady demonstrated in her speech that communities that live alongside and around airports are vibrant and have a strong affinity to those airports as a great source of wealth, jobs, income, skills and training for the local economy. Communities that live alongside airports are by no means blighted, but can benefit an awful lot from them. My constituency has a somewhat smaller—in fact, much smaller—airport than Heathrow at Lydd, which works under the name London Ashford airport. It is applying for an extended runway so that it can offer more local and regional services. But the arguments that people in Romney Marsh in my constituency would make about why they support the expansion of that airport are very similar to the hon. Lady’s remarks about Heathrow. The economic benefits of that investment in aviation and having a vibrant airport in the locality are good for the local economy and create jobs, rather than turning people away. That is appreciated by many of the hon. Members who have spoken in this debate so far, whose constituencies either contain an airport or are within the economic hinterland of one.

I welcome the thrust of the Bill, in particular the remit of the Civil Aviation Authority to focus on the consumer experience and passengers as its primary motivation. That will help the regulation and support of airports. I am especially drawn to clause 1 of the Bill, which sets the CAA’s general duty. Subsection 1 provides that it

“must carry out its functions…in a manner which it considers will further the interests of users of air transport services”.

Subsection 2 adds a duty to promote competition. I am sure that people will have amendments and ideas that will be discussed in Committee, but I wonder whether those two points may be combined into one, so that the CAA should consider promoting competition as part of supporting and furthering the interests of air transport services, rather than as a separate point. Many of us would see that those two things can be combined, because competition helps to improve the level of quality and service.

I have in mind especially issues of capacity, which may be at the heart of the concerns that many air transport users face. It was mentioned earlier in the debate that one of the particular issues that air transport passengers might face is the time delays caused by flights being required to stack because they do not have a landing slot. In my constituency in Kent, that is a particular cause of noise and environmental pollution. One of the best ways to clean up the aviation industry and reduce its carbon footprint would be to reduce the amount of time planes spend in the air unnecessarily. Much of that happens simply waiting for a landing slot.

[Bob Stewart]

Stacking causes a lot of noise in my constituency and I just want to endorse what my hon. Friend says. There is increasing stacking over Beckenham and we are getting fed up with it.

[Damian Collins]

My hon. Friend’s constituency is 30 miles or so from mine. I am sure that his constituents and mine share that concern.

Extra runway capacity in the south-east of England is a way to manage aviation much more effectively and reduce planes’ stacking time. Although some might say that increasing aviation capacity might lead to environmental pollution, much better management of planes in the air would significantly reduce it. It is a serious point, and the CAA should think of it when considering the air passenger experience.