Digital Markets, Competition and Consumers Bill

Lord Holmes of Richmond Excerpts

Committee stage
Wednesday 24th January 2024 Grand Committee

[Lord Vaizey of Didcot (Con)]

I wonder if I can just slip in before Members on the Front Bench speak, particularly those who have signed the amendment. I refer again to my register of interests.

I support the principle that lies behind these amendments and want to reinforce the point that I made at Second Reading and that I sort of made on the first day in Committee. Any stray word in the Bill when enacted will be used by those with the deepest pockets—that is, the platforms—to hold up action against them by the regulator. I read this morning that the CMA has resumed its inquiry into the UK cloud market after an eight-month hiatus based on a legal argument put by Apple about the nature of the investigation.

It seems to me that Clause 19(5) is there to show the parameters on which the CMA can impose an obligation to do with fair dealing and open choices, and so on. It therefore seems that “proportionate”—or indeed perhaps even “appropriate”—is unnecessary because the CMA will be subject to judicial review on common-law principles if it makes an irrational or excessive decision and it may be subject to a legal appeal if people can argue that it has not applied the remedy within the parameters set by paragraphs (a), (b) and (c) of Clause 19(5). I am particularly concerned about whether there is anything in the Bill once enacted that allows either some uncertainty, which can be latched on to, or appeals—people refer to “judicial review plus” or appeals on the full merits, which are far more time-consuming and expensive and which will tie the regulator up in knots.

[Lord Holmes of Richmond (Con)]

My Lords, it is a pleasure to take part in day two of Committee on the DMCC Bill. Again, I declare my interest as an adviser to Boston Limited.

It is a pleasure to follow the introduction from my noble friend Lord Faulks. I think is highly appropriate that we discuss proportionality. I have a number of amendments in my name in this group: Amendments 33, 52 and 220, and then the rather beautifully double Nelsonian, Amendment 222. Essentially, a considerable amount of work needs to be done before we can have proportionality going through the Bill in its current form. My amendments suggest not only addressing that but looking at counter- vailing benefits exemptions and financial penalties.

Agreeing with pretty much everything that has been said, and with the tone and spirit of all the amendments that have been introduced thus far, I will limit my remarks to Amendment 222. It suggests that regulations bringing into force Clauses 19, 21, 46 and 86

“may not be made until the Secretary of State has published guidance”

going into the detail of how all this will operate in reality.

Proportionality is obviously a key element, as has already been discussed, this is just as important, as we will come on to in the next group. My Amendment 222 straddles the groups a bit, under the vagaries of grouping amendments, but it is nevertheless all the better for it.

I look forward to hearing my noble friend the Minister’s response on proportionality, countervailing benefits exemptions and financial penalties, and on the need for clear, detailed guidance to come from the Secretary of State before any moves are made in any and all of these areas.

[Lord Black of Brentwood (Con)]

My Lords, I am afraid I am going to play the role of Little Sir Echo here. I hope that the unanimity expressed so far will send a strong message to my noble friend the Minister. I support Amendment 16 in the name of the noble Lord, Lord Faulks, to which I have added my name, and Amendments 17, 53 and 54. I note my interests as declared at the start of Committee.

As I made clear in my remarks on Second Reading, we must, throughout the consideration of the Bill, steadfastly avoid importing anything into the CMA and DMU procedures that would allow the platforms to deploy delaying tactics and tie up the regulators in endless legal knots. Long legal wrangling will destroy the very essence of the Bill, and it is not mere speculation to suggest that this might happen. As we have seen elsewhere in the world, and indeed in publishers’ own existing dealings with the platforms, we do not need to gaze into a crystal ball; we can, as the noble Lord, Lord Tyrie, put it the other day, read the book.

In that light, as we have heard consistently this afternoon, I fear that the government amendments made in the other place, requiring the conduct requirements and PCIs to be proportionate rather than appropriate, do just that. They impose significant restrictions on the work of the CMA and, as an extremely helpful briefing—which I think all Members have had—from Which? put it, produce “a legal quagmire” that would allow the unaccountable platforms

“with their vast legal budgets … to push back against each and every decision the regulator takes”.

It is simply counterintuitive to the design of the flexible and participatory framework the legislation portends. As my noble friend Lady Stowell said, it certainly makes me very nervous.

The key point is that introducing the concept of proportionality is, frankly, totally otiose, as the noble Lord, Lord Faulks, put it so well, as proportionality is already tested by judicial review—something the CMA itself has already reiterated. The courts, in this novel area of legislation, will rely on Parliament clearly to state its intentions. Introducing the concept of proportionality not only is unnecessary but in fact muddies the waters and creates confusion that will be mercilessly used by the platforms. It certainly does not produce clarity. The Government really must think again.

--- Later in debate ---

[Lord Vaizey of Didcot (Con)]

I want to get all the heckles out of the way; they have to be recorded in Hansard. I listened to the Minister’s explanation very carefully. He said that there is no single accepted definition of “proportionate”—that there are different definitions depending on case law and the common law. Is that not exactly what the problem is? The minute you put that word in the clause, you have, effectively, said that there are eight, seven or six definitions of proportionate. Guess what the platforms will do with that.

[Lord Holmes of Richmond (Con)]

May I build on that before my noble friend the Minister responds? What precisely was inappropriate about “appropriate”?

[Lord Black of Brentwood (Con)]

My Lords, this is not just to prevent the Minister getting up again; it is relevant to both points that have just been made. A number of noble Lords asked whether this huge volte-face by the Government between the publication of the Bill and the amendments made very late in the other place came about as a result of pressure from the platforms. Could he tell us whether the platforms lobbied for this change and whether he discussed it with them?

--- Later in debate ---

[Lord Holmes of Richmond (Con)]

My Lords, I shall speak briefly to this group of amendments and particularly commend those in the name of the noble Baroness, Lady Jones.

There are key themes that inevitably run through deliberations across groups in Committee, and it seems that, this afternoon, a recurrent theme has understandably been that the Bill is certainly better as was than currently as is. A number of amendments make that point very firmly.

If the Bill does not address at every point necessary the whole question of asymmetry in the nature of the relationship between the parties in all these complex arrangements, there is precious little point in proceeding beyond this point. The whole nature of the relationship and the negotiations therein is framed by the asymmetry of power, of resources and of what can be brought to bear by each party to proceedings. Hence, in this set of amendments, while different approaches are taken, similar ends are sought.

I look forward to hearing the Minister’s response and, as the noble Lord, Lord Clement-Jones, is “not” here, I also look forward very much to him “not” intervening on the Minister.