Digital Markets, Competition and Consumers Bill

Debate between Saqib Bhatti and Robert Buckland

Report stage
Monday 20th November 2023 Commons Chamber

[Sir Robert Buckland]

I warmly welcome my hon. Friend to his place, as this is my first chance to do so. Are we now to understand that, with regard to the judicial review standard, proportionality will, in effect, be built in, and that we are going beyond the principles of plain, vanilla JR into the more widely understood term? Am I right?

[Saqib Bhatti]

I suggest that I write to my right hon. and learned Friend, and to all right hon. and hon. Members who have raised the important question of proportionality, to clarify the position. We want this legislation to have clarity for consumers and certainty for businesses because, as my right hon. Friend the Member for North East Somerset (Sir Jacob Rees-Mogg) said, this is an ever-changing market, so it is essential that we have clarity and certainty.

[Sir Robert Buckland]

The point about proportionality extends into clause 29, where the Government have now removed the indispensability test, leaving bare proportionality. My amendment asks for a necessity test. What assessment has my hon. Friend made of the removal of “indispensability”? Does he still think that the threshold for countervailing benefit will be sufficiently high to ensure that the CMA does not disapply or discontinue investigations inappropriately?

[Saqib Bhatti]

That is an important point, and I appreciate my right hon. and learned Friend giving me the opportunity to clarify it. I want to be unequivocal that, from my perspective, the threshold is still high and we have provided clarify. If he requires even further clarity, I am happy to write to him to be completely clear.

--- Later in debate ---

[Sir Robert Buckland]

Perhaps the Minister will forgive me for juxtaposing his reluctance to make things clear in primary legislation when discussing this clause and what the Government seek to do in part 4 on subscriptions. It seems to me very odd to conduct a subscription regulation mechanism by using primary legislation. There is a conflict in the logic being applied here, and I am sorry that I have to point that out to him.

[Saqib Bhatti]

I am sure that the Under-Secretary of State for Business and Trade, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) will appreciate the pass that I am just about to give him; I am sure that he will address that issue in his speech.

I reiterate my gratitude to the Opposition for their co-operative behaviour, which I have been informed about by my predecessor, and to right hon. and hon. Members across the House for the challenge that they have put forward today. I am grateful to Members across the House for their contributions, and I hope that they continue to work with the Government. We will continue to work with Members as the Bill progresses through Parliament to ensure that it drives innovation, grows the economy and delivers better outcomes for consumers. That is what the Government care about. We want a highly competitive market that innovates and nurtures the technology companies of tomorrow to ensure that the digital online world serves consumers. For that reason, I respectfully ask Members not to press their amendments.

Question put and agreed to.

New clause 5 accordingly read a Second time, and added to the Bill.

New Clause 6

Protected disclosures

“In the Public Interest Disclosure (Prescribed Persons) Order 2014 (S.I. 2014/2418), in the table in the Schedule, in the entry for the Competition and Markets Authority, in the right hand column, after ‘Kingdom’ insert ‘, including matters relating to Part 1 of the Digital Markets, Competition and Consumers Act 2024 (digital markets)’.”—(Saqib Bhatti.)

This new clause (which would be inserted into Chapter 8 of Part 1 of the Bill) confirms that matters relating to Part 1 of the Bill (digital markets) are covered by the entry for the Competition and Markets Authority in the Public Interest Disclosure (Prescribed Persons) Order 2014.

Brought up, read the First and Second time, and added to the Bill.

Clause 15

Notice requirements: decisions to designate

Amendments made: 2, in clause 15, page 8, line 34, leave out from “that” to the end of line 35 and insert

“the undertaking or digital activity, as the case may be, remain substantially the same”.

This amendment clarifies how the CMA may revise its view of an undertaking or digital activity by issuing a revised SMS decision notice.

Amendment 3, in clause 15, page 8, line 37, leave out from “not” to the end of line 38 and insert

“affect—

‘(a) the day on which the designation period in relation to that designation begins, or

(b) anything done under this Part in relation to that undertaking.”—(Saqib Bhatti.)

This amendment confirms that giving a revised SMS decision notice does not affect anything done under this Part in relation to a designated undertaking.

Clause 17

Existing obligations

Amendments made: 4, in clause 17, page 9, line 23, at end insert—

“(2A) In Chapters 6 (investigatory powers and compliance reports) and 7 (enforcement and appeals), references to a ‘designated undertaking’ are to be read as including an undertaking to which an existing obligation applies by virtue of provision made in reliance on subsection (1).”

This amendment provides that references in Chapters 6 and 7 to a designated undertaking include an undertaking to which an obligation applies by virtue of provision made in reliance on clause 17(1).

Amendment 5, in clause 17, page 9, line 37, at end insert—

“(ba) commitment (see sections 36 and 55);”.—(Saqib Bhatti.)

This amendment provides for the CMA to be able to apply an existing commitment, with or without modifications, in respect of certain new designations or to make transitional, transitory or saving provision in respect of a commitment when it would otherwise cease to have effect.

Clause 19

Power to impose conduct requirements

Amendments made: 6, in clause 19, page 10, line 30, leave out from “requirement” to the end of line 35 and insert

“or a combination of conduct requirements on a designated undertaking if it considers that it would be proportionate to do so for the purposes of one or more of the following objectives—

(a) the fair dealing objective,

(b) the open choices objective, and

(c) the trust and transparency objective,

having regard to what the conduct requirement or combination of conduct requirements is intended to achieve.”

This amendment provides that the CMA may only impose a conduct requirement or combination of requirements if it considers that it would be proportionate to do so, having regard to what the requirement or combination is intended to achieve.

Amendment 7, in clause 19, page 11, line 15, at end insert—

“(9A) Before imposing a conduct requirement or a combination of conduct requirements on a designated undertaking, the CMA must have regard in particular to the benefits for consumers that the CMA considers would likely result (directly or indirectly) from the conduct requirement or combination of conduct requirements.”—(Saqib Bhatti.)

This amendment provides that the CMA must consider the likely benefits for consumers when imposing a conduct requirement or combination of conduct requirements.

Clause 20

Permitted types of conduct requirement

Amendment made: 8, in clause 20, page 12, line 9, leave out from “to” to “in” on line 10 and insert

“materially increase the undertaking’s market power, or materially strengthen its position of strategic significance,”.—(Saqib Bhatti.)

This amendment clarifies that a conduct requirement is permitted if it is for the purpose of preventing an undertaking from carrying on activities other than the relevant digital activity in a way that is likely to materially strengthen its position of strategic significance in relation to the relevant digital activity.

Clause 21

Content of notice imposing a conduct requirement

Amendments made: 9, in clause 21, page 12, line 28, after “requirement” insert

“or, as the case may be, each conduct requirement as varied,”.

This amendment clarifies how the notice requirements in clause 21 apply in relation to the variation of a conduct requirement.

Amendment 10, in clause 21, page 12, line 31, leave out paragraphs (b) and (c) and insert—

“(b) the CMA’s reasons for imposing the conduct requirement, including—

(i) the objective for the purposes of which the CMA considers it is proportionate to impose the conduct requirement (see section 19),

(ii) the benefits that the CMA considers would likely result from the conduct requirement (see section 19(9A)), and

(iii) the permitted type of requirement to which the CMA considers the conduct requirement belongs (see section 20);”.—(Saqib Bhatti.)

This amendment requires the CMA to give reasons for imposing conduct requirements on a designated undertaking. Sub-paragraph (ii) is consequential on Amendment 7.

Clause 26

Power to begin a conduct investigation

Amendments made: 11, in clause 26, page 14, line 11, leave out “a designated” and insert “an”.

This amendment, together with Amendments 12, 16, 29, 37, 38, 40, 42, 43 and 65, ensures that enforcement action can be taken in respect of an undertaking that has ceased to be a designated undertaking in relation to its conduct while it was a designated undertaking.

Amendment 12, in clause 26, page 14, line 18, leave out “designated”.—(Saqib Bhatti.)

See the explanatory statement for Amendment 11.

Clause 27

Consideration of representations

Amendment proposed: 187, in clause 27, page 15, line 8, at end insert—

“(2) The CMA may have regard to any significant benefits to users or potential users that the CMA considers have resulted, or may be expected to result, from a factor or combination of factors resulting from a breach of a conduct requirement.”—(Alex Davies-Jones.)

This amendment would ensure that the CMA considers any significant benefits to users resulting from the breach of a Conduct Requirement when it is considering representations from designated undertakings as part of a Conduct Investigation.

Question put, That the amendment be made.