Regulating in a Digital World (Communications Committee Report)

Lord Stevenson of Balmacara Excerpts

Wednesday 12th June 2019 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, I declare that I was once very briefly a member of the Communications Committee, I think before the noble Lord, Lord Inglewood, took the Chair, although there was a point where he did appear in the Chair. I am not quite sure why that was, but it sticks in my memory. I therefore speak personally of the skills and expertise that have often gathered around that group.

We all owe a debt to the noble Lord, Lord Gilbert, for introducing this report. To say that it is a powerful and useful report is to repeat what a lot of people have said. However, the test is whether the members of the committee rally round and support it, and we have had a brilliant demonstration of that today. It is clearly a well-functioning and powerful group, but it has picked a topic of considerable importance and brought forward something which has made the whole House think again. The excellent speeches and the good debate we have had tonight are only part of the process. The report itself is a very good read. It may be abstract, but it certainly hits home.

The Government’s response was unusually prompt, but DCMS has a good record on this—certainly better than a lot of other departments. However, I felt, like others, that it was a bit defensive. It claims that the committee’s recommendations are closely aligned with what the Government are doing, although, as we have heard, the committee feels that it goes much further. It argues that the issues are covered in the online harms White Paper, but if they were not, they would be picked up by Centre for Data Ethics and Innovation—talk about having it both ways. We will see how that goes. Is it true that the centre is not yet established as a statutory body? If so, will the Minister explain how it will provide independent expert advice on the measures needed if it remains an NDPB within his department?

I shall argue tonight that if, as the Government say in their response, it is clear that they must lead the way in tackling these challenges and there really is firm commitment to do what is needed, they need to be prepared to take on vested interests so that they can shift expectations of behaviour, agree new standards and update our laws, which is what they say they want to do.

Several members of the committee, perhaps reflecting their own contexts, have expressed concern about the Government’s commitment here, but I put it to the Minister that the Government should use this excellent report as a spur to further action. I suggest that the best way forward, as the noble Lord, Lord McNally, said, is to publish a draft Bill and allow it to be subject to pre-legislative scrutiny. That way, we can see what is happening, get the transparency we need and pick up the comments and expertise required.

We have a White Paper, which in common parlance means that a Bill is in prospect or might be in preparation—perhaps the Minister will confirm where we are on that. The Government and the committee certainly agree that the centrepiece of the new approach should be, as the Government propose, tripartite. It is a significant and welcome decision of the Government to legislate to establish a new statutory duty of care to make companies take more responsibility for the safety of their users online and tackle the harm caused by content or activity on their services, combined with legislation to ensure compliance with this duty by establishing an independent regulator with powers to implement, oversee and enforce any regulatory framework. Most importantly, the third leg of the stool is to create a new form of regulatory intervention which will help companies to thrive, while ensuring the safety of users promoting innovation, guaranteeing freedom of expression and establishing other norms that underpin our democratic society—the democracy element is very important.

The reason that is so interesting is that it is a tripartite and interlocking approach. Like the committee, I broadly agree with what the Government are trying to do in ensuring that digital technology and the internet work for everyone—citizens, businesses and society as a whole. But there is far too little in the response to the committee to back up the Government’s assertion that the new system will answer the committee’s concerns that new technology will be deployed ethically as well as safely and securely, or that consumers will have the powers they need to ensure that their rights and views are not ignored, as they are at present, which is why the committee’s report is so important.

We all owe the committee a debt of gratitude for its work in setting out so comprehensively the challenges that the new regulatory environment will face, and the comments made by speakers today have been most useful in fleshing out the issues. How could it be otherwise, given that the skills, knowledge and experience represented on the committee are so incredibly useful?

I join several previous speakers in suggesting more action from the Government. I shall mention three of the committee’s recommendations which seem to me to have real merit, but which the Government seem to have downplayed. Like my noble friend Lady McIntosh—who is wearing three hats today—I felt that the Government’s response did not quite convince the neutral witness that they have the momentum, as I think she put it, to see this job through to the end. As I said, there is a test, which is the publication of a draft Bill.

First, on the smarter regulation proposal—the centrepiece of the speech of the noble Lord, Lord Gilbert, and the first point raised by him—the committee said that we need not more but different regulation for the internet. I agree with that. In paragraph 240, it comes up with a very interesting idea which fleshes out that concept. As the noble Lord said, the Government should establish another body with additional powers to ensure that digital regulation, wherever it happens, is kept up to date and in step. It has called it the digital authority and has listed the powers that it might have, aimed at co-ordinating regulation and regulators in the digital world.

There are very few new ideas in public policy, but I wonder whether this is one. There is the germ of a very good idea here, and I hope that the Government will take seriously the case for creating a body with powers to instruct other regulators to address specific problems or areas in the digital space. In cases where that is impossible because the problems are not within the remit of any one regulator, the digital authority should be well placed to advise the Government and Parliament of new or strengthened legal powers which are needed. The suggestion of combining this with a standing Joint Committee of Parliament is a very good one; that seems to square that circle very well.

Turning to the principles underlying regulation, the committee makes a very good point, which is that there should be a much more explicit set of principles underwriting the way in which any regulation applying to the internet should work. This may answer some of the points made by my noble friend Lord Maxton and others about the need for universal appeal for this, because if the principles are well constructed, they will be beyond any particular national boundary; they will be strong enough to go across them.

The 10 principles which the committee says should guide the development of the regulation have already been discussed by both the noble Baronesses, Lady Harding and Lady Kidron, but they bear repeating: parity, accountability, transparency, openness, privacy, ethical design, recognition of childhood, respect for human rights and equality, education and awareness raising and democratic accountability. This is a very powerful group of principles, which, if they are taken properly and put into words which apply to those who have to operate in this space, will bite. The Government say that the six principles they have specified in their White Paper, are,

“closely aligned with those set out in this report”.

As the noble Baroness, Lady Harding, said, they are not exactly similar, and there are three important gaps. There is no mention of accountability: the processes that need to be in place to ensure individuals and organisations are held to account for their policies and actions. Nor is there mention of transparency: how we will see into the businesses and organisations operating in the digital world so that they are open to scrutiny—this very strongly picks up the point about algorithms. The other gaps are democratic accountability, which was picked up by the noble Lord, Lord McNally, and proportionality and evidence-based approaches. There may be ways in which these words appear in the Government’s list, but the fact that they have been drawn out in the committee report is important, and we should not lose that.

Market concentration was raised by a number of speakers. The report makes two important points that the Government have not picked up on well. The first is on the way in which the internet operates specifically against the public interest, with large companies becoming data monopolies, mainly through mergers and acquisitions. The committee recommends that, in their review of competition law in the context of digital markets, the Government consider implementing a public interest test for data-driven mergers and acquisitions, so that the CMA can intervene, as it currently does in cases relevant to media plurality or national security. I agree with this. Secondly, the internet is characterised by a concentration of market power in a small number of companies that operate online platforms and values brands, platforms and other issues that are not well recognised within the physical world. The Committee make the point that these aspects of digital markets challenge traditional competition law and it suggests that Government broaden the consumer welfare standard to ensure that it takes adequate account of long-term innovation and strengthens the power of the CMA to bring the process of imposing interim measures up to date and make it more effective. I think this is something that the noble Lord, Lord Tyrie, has already proposed, so the Government may be able to respond to.

Other speakers have picked up that the government response here is rather weak:

“We continue to consider policy options across the range of measures proposed”.


But the independent Digital Competition Expert Panel led by Professor Jason Furman published its recommendations for government on 13 March 2019, so there has clearly been plenty of time to pick this up and bring forward proposals. There needs to be legislative change here, so why not put this in a draft Bill since we already have the proposals?

I do not think anybody has picked up on the elephant in the room: the e-commerce directive. I think that is partly because it is complicated and made more difficult by Brexit. The point made by the committee is important: online communication platforms are utilities, in the sense that users feel they cannot do without them. As the report points out, the providers of these services have a safe harbour at the moment under the e-commerce directive. What are the Government going to do about that? I ask the Minister to pick up this point in particular. If we are staying in the single market, this would have to be done conjointly with the EU, and there are measures afoot to try to do something here. If we leave, we will have some flexibility. Can the Government share its thinking on this issue?

Finally, on my list of actions for the Government: content moderation. Again, this has not been picked up very strongly, but perhaps we have just become so used to it that we are unable to think again about this. One of the greatest frustrations of the internet is that the powers to remove content that is either illegal or causes harm are so ineffective—in paragraph 224 the Committee adjures for this. One problem is that major platforms have failed to invest in their moderation systems, leaving human moderators overstretched and inadequately trained. AI is also not proving effective. There is little clarity about the expected standard of behaviour, and little recourse for a user to seek to reverse a moderator’s decision. I worry that relying on a new duty of care is not enough. What we also need is a much stronger consumer right, backed by a regulator who has the power to require action when users have genuine concerns. Will these new powers be considered?

I end with three smaller points, but which are still important. Two or three speakers in the debate were concerned about data acquisition and the need for the publication of an annual data transparency statement. I absolutely agree with that. There is something here that we are not picking up. The Government do not do credit to this important recommendation and it is surely not sufficient to rely on the fact that this information should be set out clearly in a privacy notice.

The noble Viscount, Lord Colville of Culross, picked up the issue of addiction and made a very strong case. There are clear worries about how people become addicted to the internet in a way that has not yet been picked up well, although there are now some changes from medical authorities on this. We need to learn from the failure so far to deal with gambling addiction and gaming addiction. What is suggested in the paragraph is not going to solve this crisis, but it is a start. Voluntary efforts by the companies responsible for the problem is not the way forward. Will the Government look at this again?

Finally in this group, I turn to the matter of algorithms, which have already been touched on. How do you discover which algorithms are being used, what they are doing to your data and how is that going to work? We spent a lot of time on this when considering the Data Protection Bill. Had the noble Lord, Lord Clement-Jones, been here for the debate, I suspect that we would still be talking about it, but I am sure that the Minister is well rehearsed in the arguments. I look forward to a positive response. Something needs to be done here, but the Government are ducking the issue and are not doing well.

The Government are fond of saying that their White Paper is world-leading in terms of laying down statutory rules for the internet, but this report and our excellent debate tonight show that a bit of a gap is emerging between the rhetoric and the likely reality. I hope that I am wrong and I hope that the Minister can reassure us. Backing the kids’ code would be a start, but accepting the idea of bringing forward a draft Bill for consideration would be the way forward.

[The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Ashton of Hyde) (Con)]

My Lords, I am grateful to my noble friend Lord Gilbert for introducing the debate and to the entire Communications Committee for its report. I think that it is clear and well thought through. I also thank all other noble Lords who were not on the committee but who have given us their views. This is an interesting area and the thought that has gone into the report is a tribute to noble Lords. However, plenty more needs to be done. As the report notes, the digital world plays an ever-increasing role in all aspects of life. The noble Lord, Lord Maxton, referred to that. As well as benefits and opportunities, this development has brought with it new challenges and risks. The noble Lord, Lord McNally, quoted Tim Berners-Lee in that respect. I think that the committee’s report is closely aligned with, although absolutely not identical to, the Government’s approach. I will explain some of the areas that we are considering and some where we do disagree.

The recently updated digital charter, which was also described as a digital work plan—it is that as well—is our response to the opportunities and challenges arising from new technologies. The committee’s report sets out 10 principles to shape and frame the regulation of the internet which resonate with the six principles that we set out in the charter. I will come back to those principles later. At this point I have to say that I do not agree with some of what the noble Lord, Lord Maxton, said. I believe that it is possible to regulate as long as it is sensible and proportionate. Indeed, Sir Nick Clegg has asked for reasonable regulation, as has been reported today in the newspapers. My Secretary of State has been to discuss this with Facebook and other tech companies in California. Where I do agree with the noble Lord and with my noble friend Lord Inglewood is that co-operation with international bodies is eminently desirable and will be useful. I personally have spoken about this at the G7, the D9, the OECD and the EU Council, and that was just me, let alone the Secretary of State and the Minister for Digital and the Creative Industries. We want to work with our like-minded international partners to determine how we can make the internet a safer place while protecting the fundamental rights and values on which our democracy is based. I can say that other countries are interested in our work in this area. I agree in a way with the noble Lord, Lord Stevenson, that we should not say too often that the work is world-leading; we ought to let other people tell us that.

The principles of the digital charter underpin an ambitious programme of work to ensure that the internet and digital technologies are safe and secure, are developed and used responsibly—with users’ interests at their heart—and deliver the best outcomes for consumers through well-functioning markets.

I will now set out in more detail some of the key areas of work that correspond to the committee’s recommendations. My department and the Home Office recently published the online harms White Paper—which virtually every noble Lord mentioned—setting out our plans to make the UK the safest place in the world to be online. I believe that the suggestions in that White Paper satisfy the committee’s 10 principles.

Illegal and unacceptable content and activity are widespread online, and UK users are concerned about what they see and experience on the internet. The balance that needs to be struck—this conundrum, if you like—was outlined by my noble friend Lady Harding. We agree with the committee that a duty of care is an effective response to tackle this problem. We intend to establish in law a new duty of care on companies towards their users, overseen by an independent regulator, on which we are consulting. As a result of that, as the right reverend Prelate said, tech companies will have to have responsibility. It will leave them in no doubt that internet companies have a responsibility in scope. We believe that this can lead towards a new, global approach to online safety that supports our values, as I said, but also promotes a free, open and secure internet. Speaking of democratic values, I also look forward to the ideas of the House of Lords special inquiry committee on democracy and digital technologies—chaired by the noble Lord, Lord Puttnam —which the noble Lord, Lord McNally, mentioned. I can confirm that, as always, DCMS will give it its utmost co-operation.

As the report identifies, organisations increasingly collect and use individuals’ personal data online. The noble Lord, Lord Vaux, gave us helpful detail on that. New technologies must be deployed ethically, as well as safely and securely. The Government take both the protection of personal data and the right to privacy extremely seriously. The GDPR and the Data Protection Act provide increased regulatory powers for the Information Commissioner’s Office, which strengthen our data protection laws to make them fit for the digital age.

However, the increased use of personal data with artificial intelligence is giving rise to complex, fast-moving and far-reaching ethical and economic issues that cannot be addressed by data protection legislation alone. In answer to the questions from the noble Lord, Lord Vaux, relating to Google in particular, I will look at those details again. It is fair to say that people can contact the Information Commissioner’s Office if they are worried about the use of their personal data by tech companies that may or may not be in compliance with the GDPR.

The Government have also set up the Centre for Data Ethics and Innovation to provide independent, impartial and expert advice on the ethical and innovative deployment of data, algorithms and artificial intelligence. In answer to the noble Lord, Lord Stevenson, this has not yet been set up on a statutory basis—as I think he well knows—but it will be. It is a question of legislative time, but it is our intention and plan to do that. In the meantime, as he knows, the Chancellor has made money available for it to act. It will work closely with regulators, including the ICO, to ensure that the law, regulation and guidance keep pace with developments in data-driven and AI-based technologies. The issue of the forward-looking aspects of the digital authority will partly be addressed by the Centre for Data Ethics and Innovation, but I will come back to the digital authority in a minute.

As set out in the online harms White Paper, creating a safe user environment online requires online services and products to be designed and built with user safety as a priority. We will work with industry and civil society to develop a safety by design framework.

The noble Lord, Lord Stevenson, and other noble Lords talked about market concentration, and the report recommends how the Government should approach mergers and acquisitions in this unique online environment. The Government’s Modernising Consumer Markets Green Paper sought views on how well equipped the UK’s competition regime is to manage emerging challenges, including the growth of fast-moving digital markets. We continue to consider the options across the range of measures proposed in the Green Paper, including for digital markets, and are due to report in summer 2019. This will be informed by the work of the independent Digital Competition Expert Panel, led by Professor Jason Furman, which published its recommendations for Government on 13 March. The Prime Minister announced yesterday that Jason Furman has agreed to advise on the next steps on how we can implement his recommendation to create a digital market unit. We are considering his other recommendations, and will respond later this year.

On the digital authority, which was one of the key recommendations of the report, to, among other things, co-ordinate regulators in the digital world, we support the committee’s view that effective regulation of digital technology requires a co-ordinated and coherent approach across the various sector regulators and bodies tasked with overseeing digital businesses. They need clarity and stability, and the Government should lead the way in providing oversight and co-ordination of digital regulation, and ensuring consistency and coherence. We are carefully considering how existing and new regulatory functions, such as that proposed through the online harms White Paper, will fit together to create an effective and coherent landscape that protects citizens and consumers. However, we are also conscious of the calls for speed, which have been made by many noble Lords and stakeholders, not all tonight. On the one hand, we have to carefully consider the implications of new regulation, as the noble Lord, Lord Gordon, told us; on the other hand, there are serious harms that need addressing now.

When I say we are carefully considering it, we are carefully considering it. The noble Lord, Lord Stevenson, is looking as if he is not taking me seriously, but we are.

[Lord Stevenson of Balmacara]

I apologise to the Minister. It was just that he said that he was considering it, and that he is considering it. It did not seem to advance the argument very much.

[Lord Ashton of Hyde]

I was considering it, we are considering it, and we will consider it further. The worry we have is about speed, and setting up a completely new regulator, and co-ordinating the existing regulators, is what we have to worry about. The consultation is still going on, and that is something we can address.

The other main issue that several noble Lords have mentioned is about the 10 principles in the report, and the six principles in the charter, which I mentioned before. We have a set of principles that underpin the digital charter, and the online harms White Paper is part of the charter’s programme of work. The committee’s principles of regulation correspond with the White Paper approach. For example, on parity, what is unacceptable offline should be unacceptable online. However, the online harms White Paper does set out our intention to consult widely as we develop our proposals, so we will further consider the proposals as part of this, ahead of finalising new legislation.

The noble Lords, Lord McNally and Lord Stevenson, also mentioned pre-legislative scrutiny. We would like to consult thoroughly—we have had a Green Paper and a White Paper, both of which have had consultations that, we hope, will ensure that we get our proposals right. However, as I said before, there is a need for urgent action—that is increasingly evident—and we will take those factors into account when reaching a decision on whether to engage in pre-legislative scrutiny. We are not against it in principle—in fact, there are many ways in which it would be useful—but, having had two consultations already, we may decide in the long run that speed is more important and that we need to get things done.

As to the momentum to which the noble Lord, Lord Stevenson, referred, a Bill is definitely planned. It needs to be drafted after the consultation—which ends on 1 July—but it will not be easy legislation to frame if we are to capture all the areas that noble Lords have talked about. We have momentum and are keen to do it, as is the Home Office, which wishes to address particular issues such as child exploitation.

The noble Lord, Lord Stevenson, the right reverend Prelate and the noble Baronesses, Lady Harding and Lady Kidron, talked about age-appropriate design. The right reverend Prelate was concerned that we would row back from this. Age-appropriate design, or the kids’ charter—or, as I call it, the Kidron charter—is a part of the wider approach to tackling online harms and will play a key role in delivering robust protections for children online. We discussed it at length on the Bill. The ICO has been consulted formally on the code and will continue to engage with industry. We are aware that the industry has raised concerns—the noble Baroness, Lady Kidron, mentioned some of them—but it is not beyond the wit of such an innovative industry to deal with those technical concerns. It is important that the ICO continues to work with the industry to make sure that the measures are workable and deliver the robust protection that children deserve. The ICO has a reputation as a proportionate regulator and we will stand behind it.

The noble Lord, Lord Gilbert, asked about a classification framework akin to that of the British Board of Film Classification. We have said in the online harms White Paper that companies will be required to take robust action, particularly where there is evidence that children are accessing inappropriate content, and that we expect the codes of practice issued by the regulators to make it clear that companies must ensure that their terms of service state what behaviour and what activity is tolerated on the service, as well as the measures that are in place to prevent children accessing inappropriate content. The regulator will assess how effectively these terms are enforced. The classification framework is an interesting idea. We are consulting on developing our proposals and we will certainly include that.

The noble Lord, Lord Gilbert, also asked for important assurances that the press are outside the scope of the duty of care and how the Government intended to balance journalistic freedom with the regulation of online harms. The Secretary of State has been clear that this is not intended to include journalistic content. We do not interfere with what the press does or does not publish as long as it abides by the law of the land. A free press is an essential part of our democracy, so journalistic or editorial content will not be affected by the regulatory framework we are putting in place.

The noble Viscount, Lord Colville, and the noble Lord, Lord Stevenson, mentioned gaming addiction. I have written to the noble Viscount, who reminded me that a whole six weeks had passed and he wondered what we had done about it. I do not think he has been in government or he would know that that is asking a bit much, especially as the consultation is still going on and does not finish until 1 July. We do not want to duplicate what is regulated by other gambling and gaming regulators. We are clearly looking at that important issue, but it is not within the scope of this White Paper.

The noble Viscount mentioned the GDPR loophole. I will have to look at that. I always thought that data subjects had the ability to ask for decisions made by algorithms to be explained, whether or not it was with a person. I will have to check the legal position and get back to him on that.

As far as the e-commerce directive and liability is concerned, the new regulatory framework will increase the responsibility of online services, but a focus on liability for the presence of illegal content does not incentivise the systematic, proactive responses we are looking to achieve. We think the way we are doing it—with the duty of care—gives them the responsibility to be more proactive, and that the monitoring they have to do is within the scope of the e-commerce directive.

I once again thank the noble Lord and his committee for their report. I think we are aligned on some of the fundamental issues. The contributions this evening have shown that there is a depth of interest in this subject. If we get this right, we have an opportunity to lead the way and work with others globally. We will protect citizens, increase public trust in new technologies and create the best possible basis on which the digital economy and society can thrive.