Digital Markets, Competition and Consumers Bill

Margaret Greenwood Excerpts

Report stage
Monday 20th November 2023 Commons Chamber

Labour has long called for measures to protect consumers, enhance innovation and promote competition in digital markets, in order to unlock growth and level the playing field for smaller businesses. That could not be more important in the midst of a Conservative cost of living crisis.

[Margaret Greenwood (Wirral West) (Lab)]

People often find it difficult to get out of internet provider contracts. They may spend hours on the phone, or communicating via a bot, and when they do get through to someone, that person tries to talk them out of what they are trying to do. It seems to me that it would be very straightforward to require providers to have on their websites a simple and prominent “cancel my contract” button, easily visible to anyone who is logged in. That, surely, would save people acres of time and a huge amount of frustration.

[Alex Davies-Jones]

My hon. Friend has made an important point about an issue faced by all our constituents who are struggling to get out of contracts that do not give value for money, and subscription traps, which we will discuss later this evening. These are issues that should have been dealt with in the Bill, and could have been had it been afforded parliamentary priority. Sadly, many opportunities have been missed and will need to be returned to, and we will be urging the Government to do that in due course.

The Conservatives have needlessly delayed the introduction of the Bill. Their focus on infighting and general chaos has prevented them from presenting suitable legislation. The Bill was first promised in Parliament more than a year ago, and since then, owing to Tory delay, we have fallen behind our European neighbours in this vital policy area. Failure to act against gatekeepers to access points in the digital economy—from web browsers to search engines, and from mobile operating systems to app stores and broadband contracts—is having a huge impact on business growth and consumer prices. Let us be clear: a failure to regulate and level the playing field is having a huge impact on consumers, who ultimately pay the price.

This is a complicated Bill, which has rightly received substantial coverage in the media since it was first published. It is only appropriate for me to begin my consideration of the first group of amendments by raising particular concerns about the Government amendments relating to the countervailing benefits exemption—notably, amendments 13 and 14. As we all know, the countervailing benefits exemption allows the Competition and Markets Authority to close an investigation of a breach of a conduct requirement if a big tech firm can demonstrate that its anti-competitive conduct produces benefits that outweigh the harm. These amendments change the test for the exemption from indispensability—a recognised competition law standard that ensures that a big tech firm cannot proceed with anti-competitive conduct without good reason—to an untested, potentially ambiguous standard. There is a danger that this new, untested standard could allow big tech firms to evade compliance and continue with conduct that harms UK businesses and consumers. They might also inundate the CMA with an excessive number of claims of consumer benefit, diverting its limited resources away from other essential tasks.

The Minister must be realistic. It is highly unlikely that anti-competitive conduct on the part of regulated firms will ever have a consumer benefit. The amendment creates an unnecessary loophole that Labour colleagues and I find very concerning. I would also be grateful if the Minister could clarify whether these amendments create a new legal standard that could allow regulated companies to evade compliance. There is also the question of how the amendments will protect the CMA from being inundated with claims of countervailing benefits from regulated companies. Labour is concerned by these amendments, and I therefore urge Members across the House to support amendments 187 and 188, tabled in my name, which seek to undo the Government’s mismanagement.

I will turn now to the changes in the appeals mechanism. The Minister knows about, and will have heard, the concerns of colleagues on the Conservative side—on all sides, actually—about the changes in the appeals process, as outlined in Government amendment 51 to 56. We have all heard the passionate calls from businesses that have risked their reputations and market share by sticking their heads above the parapet to warn of the risks of watering down the appeals process. It is testament to their hard work that we are at this point today.

As colleagues will be aware, the Government amendments would change the appeals process and standard for penalty decisions to full merits only. As we know, penalties such as fines are the most significant deterrent to prevent short message service firms from breaking the conduct requirements established by the CMA. Although timing—a key concern when considering the impact of full merits on other parts of the Bill—is not of paramount importance when it comes to fines, it is foreseeable that full merits appeals could allow SMS firms to reduce significantly the size of penalties, thus reducing their incentive to comply.

The Minister will come to learn that collegiate, sensible agreement has been a common theme as the Bill has progressed, particularly in line-by-line scrutiny in Committee. Indeed, we broadly welcome the Government’s decision to maintain the judicial review standard for appeals on regulatory decisions. Labour feels that will ensure that the Competition and Markets Authority has the tools to act and is not bogged down in complex, lengthy and costly legal wrangling, which would render the new regime completely ineffective.

However, the Minister must clarify how the amendments will not impede the CMA’s ability to keep pace with rapidly moving digital markets. The regulator must retain the flexibility to construct remedies that target the harms to UK businesses and consumers stemming from big tech’s dominant position in digital markets. Looking back on the contributions of the Minister’s predecessor in Committee, we were all assured with a level of certainty that there would be no changes to weaken the appeals process, so it is a frustrating reality to see yet another U-turn from this Government—sadly, we have all become more than used to their slapdash way of governing and making law.

As we know, introducing full merits appeals for all regulatory decisions would have allowed complex, lengthy and costly legal wrangling, which would render the new regime ineffective. It must therefore be clarified that the Government’s amendment allows full merits appeals only for the level of the fine and for the decision to issue a fine. It must not permit a review of the CMA’s decision to create a conduct requirement or implement pro-competitive intervention, or of the CMA’s decision on whether a conduct requirement has been breached and how to remedy that breach. I would therefore be grateful if the Minister clarified exactly whether that will be the case.

I am conscious of time so I will push the Minister to clarify a number of important points. Government amendment 64 gives the Secretary of State the power to approve CMA guidance, which will be critical to regulated firms, particularly on how they should comply with the conduct requirements placed upon them. What is unclear is when and how, and in what timeframe, guidance must be submitted to the Secretary of State. I know that many of us would be grateful for some straightforward clarity from the Minister on that issue.

Lastly, I am keen to highlight Labour amendments 194 to 196, tabled in my name, which aim to improve the consultation rights of challenger firms. Under the current drafting, firms with strategic market status will have far greater consultation rights than those that are detrimentally affected by their anti-competitive behaviour. The amendments would give third parties the ability to provide critical information for the CMA’s consideration, and feedback on its work. That is vital, particularly for challenger companies whose growth may see them captured by the regime at a future point. I hope that the Minister will consider the merits of introducing similar amendments in the other place. He would have widespread support from colleagues across the House if he were to go ahead and do so.

We have heard the concerns of Members across the House about how the changes have been implemented, so I urge the Minister to listen carefully to the debate as it progresses and to do the right thing by working collegiately for the benefit of good legislation.

Research and Development Funding and Horizon Europe

Margaret Greenwood Excerpts

Tuesday 18th April 2023 Westminster Hall

[Margaret Greenwood (Wirral West) (Lab)]

It is a pleasure to serve under your chairmanship this afternoon, Mr Hosie. I congratulate my hon. Friend the Member for Sheffield Central (Paul Blomfield) on securing this really important debate, and on his excellent opening speech.

Horizon Europe is the EU’s key funding programme for research and innovation. Running until 2027, it has a budget of €95.5 billion. Among other things, it aims to address climate change and help to achieve the United Nations sustainable development goals. However, the future is unclear where the UK’s association with Horizon Europe is concerned.

The Government recently stated that negotiations on this matter have taken place. Earlier this month, the Minister for Science, Research and Innovation spoke of a recent visit to Brussels by the Secretary of State for Science, Innovation and Technology, to discuss research collaboration with the EU, including the UK’s expectations around association to Horizon Europe.

I hope the Minister will be able to tell us in his response to the debate what further progress there has been over the past few weeks and what progress he expects in the weeks and months to come. I hope he can also say whether he is hopeful, now there is an agreement in place between the UK and the EU on the way in which the Northern Ireland protocol operates, that that will move things along where the UK’s association to Horizon Europe is concerned. I would be grateful if the Minister could elaborate on that point.

Participation of the UK in Horizon Europe is vital to our universities. Back in July 2020, around 100 organisations signed a statement advocating that the UK participates in Horizon Europe. One of those organisations was Universities UK, the collective voice of 140 universities across the UK, including the University of Liverpool, Liverpool John Moores University, Liverpool Hope University and the University of Chester, Edge Hill University and others that are near to my constituency of Wirral West. These universities are crucial to the local economy and to the many academics who live in my constituency who work in them. The statement by Universities UK said:

“Horizon Europe association should be a core part of the future relationship between the EU and the UK for research, underpinning valuable scientific partnerships that have been built up over many years.”

It went on:

“Clinical trials, particularly on diseases with limited patient populations, are reliant on EU-UK collaboration, while close research partnerships continue to accelerate life-changing medical research. Our ability to respond to the threat of climate change and outbreaks of new diseases like Covid-19 has also been greatly improved by close scientific and clinical partnerships across Europe.

Knowledge and discovery do not stop at borders, and the shared global challenges we face require joint solutions.”

I would like the Minister to reflect on that point. I would also like him to address the fact that his Department recently returned £1.6 billion of funds previously allocated for Horizon Europe association to the Treasury, despite the Government having previously stated that research and development budgets would be protected, and that the money allocated for association to Horizon Europe would be spent on research and development. What has happened, and why was that funding returned to the Treasury?

The Government recently published plans for the Pioneer programme, which they have said will

“protect and support the UK research and innovation sector”

if negotiations on associating with Horizon Europe break down. Pioneer has been described as a back-up plan, and a plan B, so why are the Government concerned that negotiations on an association with Horizon Europe might break down? It is clear that UK scientists and researchers, and those representing them, are still pushing for Horizon Europe association. For instance, Sarah Main, the executive director of the Campaign for Science and Engineering, has said:

“Of course, it is sensible for the Government to prepare alternatives…but let not the alternatives get in the way of the progress on both sides towards the goal of a full and cooperative research relationship between the UK and EU.”

Similarly, Tim Bradshaw, the chief executive of the Russell Group, which represents the UK’s leading research universities, has pointed out that

“it will be a challenge to replicate the full benefits of the world’s largest collaborative research programme, with ready-made routes for talent flow, facilities access and collaboration with multiple countries.”

Tony McBride, the director of policy and public affairs at the Institute of Physics, has acknowledged

“the need for a fallback position”,

but has suggested that the Government’s priority must be to secure association to Horizon Europe, and Dr Owen Jackson, the director of policy at Cancer Research UK, has said:

“UK-based cancer scientists are in a strong position to win funding from Horizon Europe and the EU’s Cancer Mission…but they will be at the margins, rather than at the centre, of these important opportunities if we don’t get association over the line.”

Can the Minister confirm that the Government are listening to voices from the sector, and are continuing to engage with stakeholders on the importance of associating with Horizon? Will he make it clear in the strongest terms that the Government are fully committed to making an association with Horizon Europe? Can he also indicate when he expects the negotiations to come to fruition?

[Several hon. Members rose—]