Electronic Commerce Directive (Miscellaneous Provisions) Regulations 2018

Lord Clement-Jones Excerpts

Tuesday 20th March 2018 Grand Committee

[Baroness Chisholm of Owlpen (Con)]

These regulations, which were laid in both Houses on 30 January, seek to implement two parts of the electronic commerce directive —or e-commerce directive—in relation to various offences. These are the country of origin principle and provisions relating to the liability of intermediary service providers.

To explain further, when new legislation is brought in on a particular policy area and an element of this relates to offences or requirements that could apply to an information society service—for example, intimate images on an online platform—the directive must be implemented to apply these rules. This must be done for the UK to be compliant with EU law. Importantly, the SI does not create new policy. These regulations are a technical measure to ensure that these offences are consistent with the e-commerce directive. The regulations implement the directive in relation to various offences including, for example, the children’s hearings publishing restrictions offence.

The Committee should be aware that my department worked closely with officials in the Scottish Government and the Northern Ireland Assembly in preparing this draft instrument. The Scottish Government are keen to see this SI made law.

I will now look at what the e-commerce directive is and what the SI claims to achieve. The directive seeks to contribute to the proper functioning of the internal market by ensuring the free movement of information society services within the EU. The directive is also relevant to the European Economic Area. This SI implements the e-commerce directive’s country of origin principle in relation to these offences, where relevant. Under the country of origin principle, an information society service should be only under the jurisdiction of the member state in which the service is established, not the European Economic Area country that the service is targeting. The country of origin rules are described in more detail in the Explanatory Memorandum at paragraph 4.2.

Finally, the SI also implements articles 12 to 14 of the directive, where relevant, which limit, in specified circumstances, the liability of intermediary service providers which carry out certain activities essential for the operation of the internet, namely those which act as “mere conduits” and those which “cache” or “host” information. I emphasise that the sole intention and outcome of this statutory instrument is to implement parts of the electronic commerce directive in relation to various offences, where this has not been done before. It will not create or set new policy; instead it is a technical measure to ensure compliance with EU law. I look forward to the Committee’s questions and hope that your Lordships will allow this SI to become UK law.

[Lord Clement-Jones (LD)]

I thank the Minister for her very clear introduction. This is a very interesting regulation—for aficionados. As she spoke in detail about it, that introduces the country of origin principle for discussion. I understand completely what the draft SI is meant to do. I expect that somebody in DDCMS woke up in a cold sweat and suddenly realised that there was quite a backlog of criminal offences in Scotland and Northern Ireland that needed to be brought within the scope of the e-commerce legislation. Such cold sweats can occur, even in the best-run government departments. We should not impede the passing of this SI simply because some of the offences are rather ancient. We are not dealing just with 2015 offences.

Of much more interest for those who are currently debating the European Union (Withdrawal) Bill is the whole question of the future application of the country of origin principle. After all, starting with the e-commerce directive, the EU Commission aimed to create an effective single market, particularly in the field of online retail. It is extremely pertinent to what is going to happen next. The current law is set out in the EU electronic commerce directive 2000, implemented into UK law in 2002. The regime covers almost every commercial website and is not restricted to online buying and selling but covers any service provided for remuneration at a distance using electronic means. On top of that, we have EU-derived distance selling and cookie regulation.

Much e-commerce law is implemented largely through secondary legislation, which will be preserved after Brexit takes place. However, the EU is obliged to revisit the directive every two years, so a divergence between the EU and the UK is possible. Therefore, the question arises as to whether we are going to need some sort of adequacy ruling for country of origin, rather in the way that we will probably have such a ruling for data protection. Indeed, is country of origin going to be available to us in the first place? Does the e-commerce directive fall away post Brexit? As I am sure the Minister is aware, country of origin principles applied to broadcasting will fall away unless there is a special deal which breaks through the normal cultural exceptions put into free trade agreements. So I am a little pessimistic about that.

Then, of course, the wagon rolls on. The consumer protection co-operation regulation was adopted by the Commission in December 2017. A regulation on addressing unjustified geo-blocking was adopted this February. There are two legislative proposals on the supply of digital content, and on online and other distance sales of goods, which the Commission proposed in December 2015 and are currently under negotiation in EU institutions. What are the Government’s intentions in respect of the new EU digital single market developments? Does they intend to stay aligned with e-commerce law in the EU? If so, how? If not, what will the consequences be? I would be extremely interested to hear from the Minister.

[Lord Griffiths of Burry Port (Lab)]

My Lords, the noble Lord, Lord Clement-Jones, must first hear from me. Perhaps that will give the Minister a little time. I am very grateful for the way in which an aficionado made me aware of this welter of material relating to the way that information flows and the activities that benefit from that flow of information across Europe in so many fields.

This SI is relentlessly logical. I cannot understand why the law on such important and serious matters as human trafficking, prostitution, the care of children, threatening comments, intimate images—all those things that are listed here—came on to the statute book in Brussels in 2000 and here in 2002 but it has taken us until 2018 to deal with it. The country of origin thing may be part of the answer, I do not know. But, as the noble Lord, Lord Clement-Jones, said, just this morning we received a visit from commercial broadcasting people who are terribly worried about this country of origin principle and how it will affect their business in the future.

This SI is intended to ensure the smooth functioning of the internal market and to ensure consistency with EU law—all of that—while we are still members of the EU. I share the bemusement of the noble Lord, Lord Clement-Jones, about what might happen afterwards. He talked about adequacy, the future application of country of origin—will that continue?—and possible divergence that may occur as two different regimes pursue ways forward according to their own respective best lights, which may not be the same.

Of course, Brexit is raising a whole host of details of this kind, which make us aware of how silly we were to go down this road in the first place. Perhaps that remark ought not to go on the record—it does not belong to this debate—but I could not forbear from making it. But here we are with something that makes obvious sense but raises questions of concern that lie beyond its scope and its date. We wonder about both the scope and the date and what will happen to us all very soon. But I have no hesitation in supporting this statutory instrument.

[Baroness Chisholm of Owlpen]

I thank the noble Lords, Lord Clement-Jones and Lord Griffiths, for their contributions, particularly the noble Lord, Lord Clement-Jones, who went off on one, I think. He will probably not think that the answer is good enough but, as we know, the UK will be leaving the digital single market but we will continue to work closely with the EU on digital issues as we build on an existing strong relationship in the future economic partnership. We will seek an ambitious agreement with the EU that enables the best possible access to each other’s markets. There is mutual advantage in the continued close relationship between the UK and the EU on digital issues and the advancement of digital transformation across Europe.

[Lord Clement-Jones]

The Minister is entirely correct.

[Baroness Chisholm of Owlpen]

With that, I think I have covered everything that was mentioned. As I said, this SI is important, and I have set out clearly why we need these regulations, which are technical. They will provide legal certainty to UK online services to enable them to trade across the EU with confidence. I therefore commend them to the Committee.