Digital Markets, Competition and Consumers Bill

Lord Faulks Excerpts

Committee stage
Wednesday 24th January 2024 Grand Committee

Moved by

[Lord Faulks]

16: Clause 19, page 11, line 3, leave out “proportionate” and insert “appropriate”
Member’s explanatory statement
This amendment would restore the Bill’s original wording in relation to Clause 19.

[Lord Faulks (Non-Afl)]

My Lords, I begin by apologising for not taking part at Second Reading. I have read the excellent debate, including the helpful introduction by the Minister. I also had the privilege of sitting through the first day in Committee, during which I learned a great deal. I refer to my interests in the register. I am not a competition lawyer, but I have experience of judicial review and of the operation of the Human Rights Act. I was chair of the Independent Review of Administrative Law, which reported a couple of years ago and resulted in the Judicial Review and Courts Act.

My amendment, which has the support of the noble Baroness, Lady Stowell, and the noble Lord, Lord Black of Brentwood, concerns the use of the word “proportionate” in Clause 19. I also have a similar amendment in this group, Amendment 53, which concerns Clause 46.

Despite some heavy lobbying of the Government by big tech, the right to appeal against an intervention by the CMA will engage the judicial review test, rather than a merits test, except as to penalty. Later amendments will carefully probe this latter aspect and I look forward to hearing the debate.

The original adjective in Clause 19 was “appropriate”. The word “proportionate” replaced it at a relatively late stage in the Bill’s progress through the Commons. Why? In one view, it is an innocuous change. Indeed, one would expect an intervention by the Digital Markets Unit to be proportionate. The word also has a respectable legal pedigree. For example, you can defend yourself against attack, provided that your response is proportionate to the attack. Whether that response is proportionate will be a question of fact, often for a jury to decide.

But judicial review is primarily concerned not with the facts of a decision but with the process by which the decision is made. Classically, the courts got involved only if a decision was so unreasonable that no reasonable public body could have reached it. The scope of judicial review has expanded somewhat to include challenges based on, for example, irrationality or the failure to take into account relevant considerations. There are other grounds, but all are effectively concerned with the process rather than with factual findings, although I readily concede that there are occasions when these distinctions can be somewhat opaque.

Since the enactment of the Human Rights Act, the concept of proportionality has entered the law in relation to judicial review, but only in limited circumstances. The most recent edition of De Smith’s Judicial Review, generally regarded as the leading textbook in this area, says at 6-090:

“Domestic courts are required to review the proportionality of decisions and enactments in two main categories of case: cases involving prima facie infringements of Convention rights and cases involving EU law”.


Some think that proportionality should be the test in all cases of judicial review, but that is not currently the law.

I cannot see why an appeal in the context of this Bill would obviously involve a convention right, although those rights have a habit of getting in everywhere. If convention rights are engaged, proportionality comes into the analysis anyway. Choosing to put “proportionate” into the legislation might lead a court to conclude that Parliament had deliberately used the word to widen the scope of a judicial review challenge, even when no convention right is engaged. For my part, that is a risk that I do not think should be taken. Your Lordships’ House is well aware of the risk of expensive, time-consuming litigation that may result from these interventions, which it may be perfectly sensible to bring about.

A proportionality test is far closer to an appeal on the facts than one based on conventional judicial review principles. Whether an intervention is proportionate or not gives the court greater scope for looking at those facts. I would therefore much prefer to revert to the original word, “appropriate”, which does not carry the same heavy legal charge and does not risk expanding the grounds of appeal. I look forward to hearing the Minister’s response and explanation behind the change in wording. I beg to move.

[The Deputy Chairman of Committees (Baroness Fookes) (Con)]

I add at this point that, if Amendment 16 were to be agreed, I could not call Amendment 17 by reason of pre-emption.

--- Later in debate ---

[Viscount Camrose (Con)]

I will go on to speak more about this. The intention of the Government in “reinforcing” is to bring clarity, particularly since, as I say, A1P1 is not universally applicable to these cases. It brings clarity, and therefore I hope that the effect will be as much closing the door as anything else.

[Lord Faulks (Non-Afl)]

The Minister has talked about A1P1 and the right to peaceful enjoyment of possessions. That may come into the analysis or it may not, but he has taken the view that it may not. If it does, then it is covered by the normal doctrines of judicial review, which include proportionality. If it does not, and he says it may not, why have proportionality in at all?

[Viscount Camrose (Con)]

I believe that, in most cases, A1P1 rights would be invoked, but there are cases where A1P1 would not necessarily be invoked, rare as those cases are. The intention of the Government is to treat all those cases in the same way. As I say, it is important that we also consider the safeguards around the new powers. Having an explicit requirement for proportionality, rather than just the implicit link to A1P1, sets a framework for the CMA as to how it must design and implement significant remedies. A proportionate approach to regulation supports a pro-innovation regulatory environment and investor confidence. I am also aware, of course, that later we are due to debate concerns noble Lords may have about the accountability of the CMA. Without pre-empting that debate, it is worth pointing out that setting out the requirement for proportionality explicitly will help ensure that the CMA uses its powers responsibly.

--- Later in debate ---

[Lord Faulks (Non-Afl)]

I am very grateful to the Minister and all noble Lords who took part in this debate. I think it has raised a pretty fundamental point which runs through a number of different parts of this Bill. I do not know whether to take it personally, but I have not received any of this lobbying that so many other noble Lords received about this particular adjective and its use. My approach is simply to look at it as a lawyer with some experience of the way litigation actually works, and it seemed to me egregious in what it is doing, or at least at risk of doing.

The Minister did well to stick with his instructions that this was to provide clarity. I am afraid it does not do that. As I indicated when I was talking about self-defence, the whole problem with proportionality is that it is very much a question of fact. I might regard something as proportionate; someone else might regard it as disproportionate. It is far more difficult than the tests of rationality or Wednesbury unreasonableness, the tests that are normally used for judicial review, so it is a much lower bar.

On the question of A1P1, it is not usually the most common of the convention rights relied upon. To the man and woman in the street, the idea that Google or Apple have human rights is perhaps a little counter- intuitive. However, I accept that there are ingenious arguments to the effect that A1P1 may have a role to play, which I acknowledged in my opening remarks. However, the Minister accepted that there would be cases when the European convention is not engaged in the analysis, in which case why have proportionality at all? I am afraid I did not find his answer convincing.

I am most grateful to the noble Lord, Lord Lansley, for referring to the communications he had with the Parliamentary Under-Secretary, who, in the course of the communications, seemed to me to be guilty of a most spectacular own goal and reinforced all the fears which have been expressed around the Committee.

This is not paranoia on our part. We have not received sufficient reassurance for the reason for this change. Of course I concede that we expect regulators to act proportionately, but that is not the same as inserting the particular word “proportionate”, which carries such a heavy charge. If it does not mean anything, do not put it in. If it is put it, it is going to be absolute catnip for the courts and judges. It will give them a chance to examine these decisions in a wholly broader perspective.

Grateful though I am to the Minister, I feel it is almost inevitable that we will return to this on Report. I beg leave to withdraw.

Amendment 16 withdrawn.