Lords Grand Committee
Thursday 15th October 2026
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Speaker 2
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Speaker 2
I'm very grateful to have this opportunity to bring forward a debate on the cooperation between the United Kingdom and the European Union in the application of our respective competition laws. The subject of the agreement that it that we are noting today. Our competition regime is based on rules established while we were members of the European Union. I go back quite a long way on legislation, on competition. So way back in 1998, when I was a member of the Standing Committee on the competition bill, I moved an amendment on the definition of vertical agreements and their relationship to block exemptions.
Nigel Griffiths, then the Labour DTI minister, said I might agree with this amendment but I can't accept it. We are waiting on the European Commission, including a definition that was unacceptable to the Commission would therefore be jumping the gun post-Brexit. We can at least determine our own competition regime, but there are very good reasons, not least in promoting investment in this country, for having a constructive engagement with the European Commission in how our two regimes address common issues. The treaty, agreed in February, is a very welcome mechanism to support that cooperation.
We in this Parliament have completed our scrutiny. The European Parliament on the 16th of September approved it, and we await the European Council approval so it can come into force about a month thereafter. The cooperation that it provides for is not the same as our former membership of the European Competition Network, but it does have a number of positive elements. These include the mutual notification of enforcement activity, which is likely to affect the other's important interests, and the ability to share information.
In the latter respect, it will be important in practice for the companies who consent to the sharing of their information to be clear whether and how their information may form part of the evidence which the other authority will use in their consideration or determination of a case. There is already cooperation between the authorities. The merger case of Safran and Collins, for example, showed evidence of cooperation requiring divestiture of the former's existing North American business as it acquired in North America, those of Collins Aerospace.
The three authorities, in this case , the Department of Justice in America, the Commission and the CMA for us, respectively, used judicial enforcement in the American case. Conditional clearance in the Commission's case and binding undertakings from the CMA. Three different mechanisms. But actually one could see that they were all directed toward the same structural remedy. Of course, differences in relevant markets can lead to differing remedies. In the merger of van de Moortel and de France.
Both the Commission and our CMA identified the risks to competition in what's called frozen laminated dough products, which I think of as frozen croissant. But the European Commission required the sale of two plants in France on the CMA required the sale of the plant in Worcester. Differences in approach were, however, highlighted some three years ago by the Microsoft and Activision merger case. The European Commission looked to enforceable access obligations to support future competition in cloud gaming, but the CMA required the cloud gaming rights to be sold to Ubisoft as a stronger protection.
So we may see divergent views in future, but these cooperation provisions should ensure that each takes the other's interests fully into account, and they should be operating more nearly to a shared evidence base. So why have I initiated this debate? Because the cooperation in the treaty does not extend to the digital markets competition regime. The Digital Markets Act in the European Union and the Digital Markets Competition and Consumers Act in this country, are the relevant pieces of legislation and are not part of the agreement that is being reached between the two countries, between the two jurisdictions.
They are excluded because the treaty base for the DMA Digital Markets Act is an internal market , one not a competition one under article 101 or 102 of the treaty. I should declare an interest following my participation in the Digital Market Competition and Consumers Act debates back in 2023 and four. I thought it important for us not to fire and forget, as they might say, in the armed services, not to fire and forget, but to follow through. On how the new digital markets regime is being implemented.
My colleagues at Lowe Associates, with whom I have registered interest, assisted me, and we convened a number of discussions, including one on the 1st of October last year and one on the 1st of October this year, both in Brussels, about how the two digital competition regimes are working and including representatives from DG comp, from the Commission and the Digital Markets unit of the CMA, and indeed leading companies and challenger businesses as well as experts. This showed, again that there is ongoing cooperation and engagement between two authorities, but it is nonetheless, I think, instructive to compare and contrast.
Both are intended to be ex-ante pro-competitive, i.e. that where companies acquire significant market power, their behaviour in the market should be the subject of scrutiny and be consistent with the principles and, where necessary, specific requirements which would maintain effective competition and maximise consumer benefits. This is needed because, as the Furman Review for our Treasury here concluded, traditional competition remedies were moving too slowly to maintain competition in such fast moving technology sectors. Both regimes, however, have shared objectives.
The way they go about them are different. The DMA for the commission sets largely quantitative criteria for their designation of gatekeeper platforms. They have concluded such reviews on average in two months, with seven companies designated in relation to 23 core platform services. I should note that the the iPad OS scrutiny took eight months on the part of the commission because it did not meet the quantitative threshold and therefore required a quantitative qualitative investigation. Our DMC looks to investigate whether a.
Whether a company has significant market status is essentially a qualitative process and has taken, on average nine months. So two months versus nine months. The DMA has a list of obligations to be applied to a gatekeeper platform. The dmrC has a set of principles from which conduct requirements may be applied. The degree of prescription in the DMA is clear. For example, it has five specific data obligations about processing data against Self-preferencing using data acquired about data portability, access to data for users, and access to competing search engines.
dmrC has only one that the. That significant market status companies should, and I quote not use data unfairly, end quote. We can nonetheless see a positive example of alignment, including in this. In this respect, in that the CMA's choice of conduct requirement for Google search , announced in June this year on data portability is aligned with the obligation. Under the DMA, the CMA was clear that Google could apply in this country by making DMA compliant API available to UK users on the same terms and to the same standard as in the European Union.
Comparisons between the two regimes are limited as yet. The DMA has been in force for nearly four years. It is over three years since the first gatekeepers were designated under the DMA. dmrC has been in force for less than two years, and the first SMS designations were only a year ago. So in this country, we have yet to see how far reaching the use of conduct requirements will be. We have seen that the CMA are using their flexibilities to enter into voluntary agreements, as with AWS on cloud services instead of designation.
Although I should note the commission too are using some flexibilities in their agreement with booking.com, although actually the gatekeeper designation remains in place. We have yet to see whether and in what circumstances the CMA chooses to use Pro-competition interventions in relation to the companies with SMS designation. This is available where the authority has, and I quote, reasonable grounds to consider that a factor or combination of factors relating to a relevant digital activity may be having an adverse effect on competition.
I was led to wonder why is this measure in the act if there is an adverse effect on competition? A market investigation is available under competition law, or why would the CMA not tackle the issue through its wide ranging power to impose a conduct requirement? One reason may be that if a conduct requirement is used and the company is in breach of the requirement, it may claim that the benefits outweigh the detriment from the breach. It's called the countervailing benefits exemption, and the CMA may wish to use pro-competition interventions to avoid such a potential route for the company.
We don't know. We haven't been in this situation yet. The European Commission does not entertain such an exemption from its obligations. We should be cautious about the use of the countervailing benefits exemption, as monopolists always can demonstrate short term benefits to consumers, but at the cost of long term loss, of competitive gains, of innovation and of market entry. As one who took part in the scrutiny of the Bill, I am not clear that the ex-ante pro-competition regime in this country is yet being used in the way we intended.
I expected that an ex ante regime would mean that the conduct requirements would generally be applied to companies by agreement wherever possible, providing a tailored but relatively comprehensive operating model for how that company relates to its users, competitors and customers. Not one that is necessarily imposed because, and only because there is evidence of harm to which a remedy must be applied. But generally, in order to avoid any adverse effect on competition arising, that's the principle of an ex ante approach.
That is not in practice how the companies nor indeed the CMA appear to be thinking. They continue to regard SMS designation as tantamount to a finding of dominance in a market and a and a conduct requirement. They appear to think is needed only where a remedy must be applied, implying, of course, that there is a harm to which that remedy relates. This is only a very partial application of ex ante regulatory principles.
I expected more and more rapid designation of SMS companies. The way I think of it is if it looks like an elephant, it is an elephant. And we might as well agree it's an elephant quite quickly. The investigative process to determine that Google has significant market status in relation to general search services took nine months. It's an admirably thorough piece of work, but it still only told us what we already knew.
And in those nine months, the exceptional growth in access to AI materially altered how Google responded to search. And, of course, the CMA had to extend their study to include the AI overview . And indeed, the use of standalone AI assistance is now materially changing the shape of that market. So indeed, the prospect of a five year forward look as the bill, as the act envisages, is really increasing unrealistic in the commission. The definition of platforms does actually include virtual assistants, and we will have to see if this is a sufficient fit for the development of AI services.
Although the DMA is often characterised as rigid, the pace at which the Commission are able to designate their willingness to interpret obligations and undertakings, and their follow through in enforcement all suggest elements for potential comparison between the two regimes. That said, dmrC should be recognised as a work in progress. The DMA, following its review by the Commission this year and they judged it to be fit for purpose, should be seen as an established regime. Our CMA is guided by reference to their four P's pace, predictability, proportionality and process in its implementation of the Dmcs Ex-ante competition regime.
A new and challenging responsibility. I would suggest that the CMA should look constructively at how the e. The Commission's regime under the DMA achieves more pace and indeed more predictability. But also they should ask and indeed challenge the Commission's approach. Does it pay a price in terms of incentives to investment and growth? Does it deliver the optimum benefits to consumers? The CMA can and should be ready to think without prior assumptions, other than their statutory requirements, about both the designation process and the application of conduct requirements.
And the European Commission, I hope, should be fully aware of the risks that an ex ante regime, unless applied with flexibility, proportionality and clear process, will inhibit investment and innovation by those market leaders who continue to be among the primary sources of future economic growth. Both regimes are building and learning. The issues they are dealing with are of great significance. We have not even begun to assess whether the ex-ante regime is preventing what are called killer acquisitions of new and innovative market entrants.
That is why I regard the benefits of cooperation between our CMA and the European Commission are at least as important in this context as it is in the application of competition law, which is the subject of this agreement and treaty. That is why I call on the government to seek, through the Trade and Cooperation Agreement, to secure further agreements relating to cooperation in the application of rules aimed at maintaining effective competition and consumer benefits in digital markets.
My Lord, thank you once again for this opportunity. I look forward to our short debate. I beg to move that we take note of this treaty.
Nigel Griffiths, then the Labour DTI minister, said I might agree with this amendment but I can't accept it. We are waiting on the European Commission, including a definition that was unacceptable to the Commission would therefore be jumping the gun post-Brexit. We can at least determine our own competition regime, but there are very good reasons, not least in promoting investment in this country, for having a constructive engagement with the European Commission in how our two regimes address common issues. The treaty, agreed in February, is a very welcome mechanism to support that cooperation.
We in this Parliament have completed our scrutiny. The European Parliament on the 16th of September approved it, and we await the European Council approval so it can come into force about a month thereafter. The cooperation that it provides for is not the same as our former membership of the European Competition Network, but it does have a number of positive elements. These include the mutual notification of enforcement activity, which is likely to affect the other's important interests, and the ability to share information.
In the latter respect, it will be important in practice for the companies who consent to the sharing of their information to be clear whether and how their information may form part of the evidence which the other authority will use in their consideration or determination of a case. There is already cooperation between the authorities. The merger case of Safran and Collins, for example, showed evidence of cooperation requiring divestiture of the former's existing North American business as it acquired in North America, those of Collins Aerospace.
The three authorities, in this case , the Department of Justice in America, the Commission and the CMA for us, respectively, used judicial enforcement in the American case. Conditional clearance in the Commission's case and binding undertakings from the CMA. Three different mechanisms. But actually one could see that they were all directed toward the same structural remedy. Of course, differences in relevant markets can lead to differing remedies. In the merger of van de Moortel and de France.
Both the Commission and our CMA identified the risks to competition in what's called frozen laminated dough products, which I think of as frozen croissant. But the European Commission required the sale of two plants in France on the CMA required the sale of the plant in Worcester. Differences in approach were, however, highlighted some three years ago by the Microsoft and Activision merger case. The European Commission looked to enforceable access obligations to support future competition in cloud gaming, but the CMA required the cloud gaming rights to be sold to Ubisoft as a stronger protection.
So we may see divergent views in future, but these cooperation provisions should ensure that each takes the other's interests fully into account, and they should be operating more nearly to a shared evidence base. So why have I initiated this debate? Because the cooperation in the treaty does not extend to the digital markets competition regime. The Digital Markets Act in the European Union and the Digital Markets Competition and Consumers Act in this country, are the relevant pieces of legislation and are not part of the agreement that is being reached between the two countries, between the two jurisdictions.
They are excluded because the treaty base for the DMA Digital Markets Act is an internal market , one not a competition one under article 101 or 102 of the treaty. I should declare an interest following my participation in the Digital Market Competition and Consumers Act debates back in 2023 and four. I thought it important for us not to fire and forget, as they might say, in the armed services, not to fire and forget, but to follow through. On how the new digital markets regime is being implemented.
My colleagues at Lowe Associates, with whom I have registered interest, assisted me, and we convened a number of discussions, including one on the 1st of October last year and one on the 1st of October this year, both in Brussels, about how the two digital competition regimes are working and including representatives from DG comp, from the Commission and the Digital Markets unit of the CMA, and indeed leading companies and challenger businesses as well as experts. This showed, again that there is ongoing cooperation and engagement between two authorities, but it is nonetheless, I think, instructive to compare and contrast.
Both are intended to be ex-ante pro-competitive, i.e. that where companies acquire significant market power, their behaviour in the market should be the subject of scrutiny and be consistent with the principles and, where necessary, specific requirements which would maintain effective competition and maximise consumer benefits. This is needed because, as the Furman Review for our Treasury here concluded, traditional competition remedies were moving too slowly to maintain competition in such fast moving technology sectors. Both regimes, however, have shared objectives.
The way they go about them are different. The DMA for the commission sets largely quantitative criteria for their designation of gatekeeper platforms. They have concluded such reviews on average in two months, with seven companies designated in relation to 23 core platform services. I should note that the the iPad OS scrutiny took eight months on the part of the commission because it did not meet the quantitative threshold and therefore required a quantitative qualitative investigation. Our DMC looks to investigate whether a.
Whether a company has significant market status is essentially a qualitative process and has taken, on average nine months. So two months versus nine months. The DMA has a list of obligations to be applied to a gatekeeper platform. The dmrC has a set of principles from which conduct requirements may be applied. The degree of prescription in the DMA is clear. For example, it has five specific data obligations about processing data against Self-preferencing using data acquired about data portability, access to data for users, and access to competing search engines.
dmrC has only one that the. That significant market status companies should, and I quote not use data unfairly, end quote. We can nonetheless see a positive example of alignment, including in this. In this respect, in that the CMA's choice of conduct requirement for Google search , announced in June this year on data portability is aligned with the obligation. Under the DMA, the CMA was clear that Google could apply in this country by making DMA compliant API available to UK users on the same terms and to the same standard as in the European Union.
Comparisons between the two regimes are limited as yet. The DMA has been in force for nearly four years. It is over three years since the first gatekeepers were designated under the DMA. dmrC has been in force for less than two years, and the first SMS designations were only a year ago. So in this country, we have yet to see how far reaching the use of conduct requirements will be. We have seen that the CMA are using their flexibilities to enter into voluntary agreements, as with AWS on cloud services instead of designation.
Although I should note the commission too are using some flexibilities in their agreement with booking.com, although actually the gatekeeper designation remains in place. We have yet to see whether and in what circumstances the CMA chooses to use Pro-competition interventions in relation to the companies with SMS designation. This is available where the authority has, and I quote, reasonable grounds to consider that a factor or combination of factors relating to a relevant digital activity may be having an adverse effect on competition.
I was led to wonder why is this measure in the act if there is an adverse effect on competition? A market investigation is available under competition law, or why would the CMA not tackle the issue through its wide ranging power to impose a conduct requirement? One reason may be that if a conduct requirement is used and the company is in breach of the requirement, it may claim that the benefits outweigh the detriment from the breach. It's called the countervailing benefits exemption, and the CMA may wish to use pro-competition interventions to avoid such a potential route for the company.
We don't know. We haven't been in this situation yet. The European Commission does not entertain such an exemption from its obligations. We should be cautious about the use of the countervailing benefits exemption, as monopolists always can demonstrate short term benefits to consumers, but at the cost of long term loss, of competitive gains, of innovation and of market entry. As one who took part in the scrutiny of the Bill, I am not clear that the ex-ante pro-competition regime in this country is yet being used in the way we intended.
I expected that an ex ante regime would mean that the conduct requirements would generally be applied to companies by agreement wherever possible, providing a tailored but relatively comprehensive operating model for how that company relates to its users, competitors and customers. Not one that is necessarily imposed because, and only because there is evidence of harm to which a remedy must be applied. But generally, in order to avoid any adverse effect on competition arising, that's the principle of an ex ante approach.
That is not in practice how the companies nor indeed the CMA appear to be thinking. They continue to regard SMS designation as tantamount to a finding of dominance in a market and a and a conduct requirement. They appear to think is needed only where a remedy must be applied, implying, of course, that there is a harm to which that remedy relates. This is only a very partial application of ex ante regulatory principles.
I expected more and more rapid designation of SMS companies. The way I think of it is if it looks like an elephant, it is an elephant. And we might as well agree it's an elephant quite quickly. The investigative process to determine that Google has significant market status in relation to general search services took nine months. It's an admirably thorough piece of work, but it still only told us what we already knew.
And in those nine months, the exceptional growth in access to AI materially altered how Google responded to search. And, of course, the CMA had to extend their study to include the AI overview . And indeed, the use of standalone AI assistance is now materially changing the shape of that market. So indeed, the prospect of a five year forward look as the bill, as the act envisages, is really increasing unrealistic in the commission. The definition of platforms does actually include virtual assistants, and we will have to see if this is a sufficient fit for the development of AI services.
Although the DMA is often characterised as rigid, the pace at which the Commission are able to designate their willingness to interpret obligations and undertakings, and their follow through in enforcement all suggest elements for potential comparison between the two regimes. That said, dmrC should be recognised as a work in progress. The DMA, following its review by the Commission this year and they judged it to be fit for purpose, should be seen as an established regime. Our CMA is guided by reference to their four P's pace, predictability, proportionality and process in its implementation of the Dmcs Ex-ante competition regime.
A new and challenging responsibility. I would suggest that the CMA should look constructively at how the e. The Commission's regime under the DMA achieves more pace and indeed more predictability. But also they should ask and indeed challenge the Commission's approach. Does it pay a price in terms of incentives to investment and growth? Does it deliver the optimum benefits to consumers? The CMA can and should be ready to think without prior assumptions, other than their statutory requirements, about both the designation process and the application of conduct requirements.
And the European Commission, I hope, should be fully aware of the risks that an ex ante regime, unless applied with flexibility, proportionality and clear process, will inhibit investment and innovation by those market leaders who continue to be among the primary sources of future economic growth. Both regimes are building and learning. The issues they are dealing with are of great significance. We have not even begun to assess whether the ex-ante regime is preventing what are called killer acquisitions of new and innovative market entrants.
That is why I regard the benefits of cooperation between our CMA and the European Commission are at least as important in this context as it is in the application of competition law, which is the subject of this agreement and treaty. That is why I call on the government to seek, through the Trade and Cooperation Agreement, to secure further agreements relating to cooperation in the application of rules aimed at maintaining effective competition and consumer benefits in digital markets.
My Lord, thank you once again for this opportunity. I look forward to our short debate. I beg to move that we take note of this treaty.
12:30
12:30
12:30
Speaker 3
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Speaker 3
Pleasure to follow the noble Lord, Lord Lansley. He is expert, experienced and rightly much admired for his distinction. And he's opened this debate showing that expertise and experience and distinction. I should declare a past interest. For eight years, I was one of the chairs, part time chairs of the Competition Appeal Tribunal, and in my profession as a barrister, I take a close interest in collective actions and the availability of competition proceedings in the United Kingdom, which are a very important part of our service economy.
We're referring to what I regard as a practical, sensible and proportionate agreement which has now been reached. It does not surrender any British sovereignty. It does not does not bind the European the United Kingdom to European competition rules. There is a great similarity between our competition rules and the European Union's. But we're not bound by them in law, nor does it diminish the authority of our CMA or of the UK courts, including the Competition Appeal Tribunal.
What it does is recognise a simple reality that modern markets do not stop at national borders. That the evidence of that is most clear in the United Kingdom, in Northern Ireland. I happen to be to have the privilege of being the chair of the Northern Ireland Scrutiny Committee of this House, the Northern Ireland Select Committee, and I have a plea to the Minister in relation to this process and this debate, and it is that we should be assured that every effort will be made to ensure that no further complexities are applied to Northern Ireland businesses as a result of this agreement.
Because, believe me, if you look at our last committee report, you will see how complex some businesses are dealing, how complexity affects the way businesses deal with competition. In the United Kingdom where Northern Ireland is involved. Of course, it's a truism, isn't it, that businesses that operate in the United Kingdom increasingly trade and invest and compete across the whole European continent. So we're dealing with major mergers, some referred to by Lord Lansley, cartels, abuses of market power and anti-competitive practices.
And the importance of those at root is that they frequently affect consumers and small and big businesses on both sides of the channel. So when you find that regulators are investigating precisely the same conduct in various countries, it must be in the public interest that they should be able to communicate, communicate effectively, coordinate where appropriate, and avoid unnecessary duplication. And that is especially so where there is the possibility of a remedy that can be achieved without resort to the complexities that arise under the conflict of laws.
As we lawyers call it, the agreement we're considering here creates a framework for that cooperation. It enables the relevant authorities to notify one another of investigations that may affect their interests, to coordinate the enforcement activity where it's appropriate, and to exchange information subject to robust safeguards of confidentiality and due process. In the context of digital markets, competition and that regime, I believe that that should be the subject of a separate agreement, because there are very complex, different issues that need to be considered there.
But that agreement could take its cues from this agreement. For example, I take some interest professionally in what are called standard essential patents S, e s and S. P is a patent that protects technology that's required to implement an industry wide technical standard. Now, that sentence refers actually to a huge raft of industry, telecoms, consumer electronics, connected vehicles. That's vehicles connected to the internet. Like most of the vehicles we drive today and the Internet of Things.
And those who have standard essential patents have to commit themselves to what is called a Frand commitment, a fair and reasonable and non-discriminatory agreement that ensures that they have the advantage of their patents. But the consumers do not have to pay through the nose. The practical result is that, for example, in a car that's connected to the internet, there's a one off fee paid when the car is built of something like £2,025. That guarantees that you can use your cruise control and everything else you have for for life in that car.
It's very important and we need to think about that. But the alternative to this agreement would be less efficient enforcement, greater regulatory uncertainty, increased costs for businesses and for taxpayers alike. Parallel investigations conducted in isolation risk, inconsistent outcomes, unnecessary expense and avoidable delays. And the delays in this country are short compared with most other countries we're talking about. Cartels do not respect national boundaries. Fraud is neither patriotic nor passive. Dominant firms operate internationally.
Digital markets are global in character, and regulators therefore require mechanisms for cooperation if they are to remain effective. Some may fear that any agreement with the European Union inevitably represents a step backwards from Brexit. Although I'm not an enthusiast of Brexit, indeed the exact opposite. I do not share the view that I. That has just been. That. I've just stated that it represents a step backwards from Brexit. Indeed, as Brexit was claimed to be the United Kingdom's ability to govern itself.
This agreement is part of giving the United Kingdom the ability to govern itself. It's an exercise of that very sovereignty, sovereignty that we all cherish, whether we are pro or anti. Brexit, a sovereign nation is entirely free to enter into cooperative agreements that advance its national interests. So one of the things we have from this agreement is we retain independence, but we are not isolated. It means we can choose our partnerships in a manner that benefits our citizens and our economy.
Importantly, the agreement preserves the autonomy of all parties. Decisions remain in the hands of the United Kingdom authorities, applying UK law and EU authorities applying EU law. There is no supranational decision making involved and there is no obligation to reach the same conclusions if we don't want to. It simply gives us the opportunity to work better. Joined up thinking, joined up working cooperation on what is sometimes an extraordinarily complex subject, both factually, technically and indeed legally as well.
So, my Lords, in a world where economic activity is increasingly interconnected. Effective regulation requires dialogue, coordination and mutual respect between trusted partners. This agreement, in my view, achieves just that. I'm genuinely grateful.
We're referring to what I regard as a practical, sensible and proportionate agreement which has now been reached. It does not surrender any British sovereignty. It does not does not bind the European the United Kingdom to European competition rules. There is a great similarity between our competition rules and the European Union's. But we're not bound by them in law, nor does it diminish the authority of our CMA or of the UK courts, including the Competition Appeal Tribunal.
What it does is recognise a simple reality that modern markets do not stop at national borders. That the evidence of that is most clear in the United Kingdom, in Northern Ireland. I happen to be to have the privilege of being the chair of the Northern Ireland Scrutiny Committee of this House, the Northern Ireland Select Committee, and I have a plea to the Minister in relation to this process and this debate, and it is that we should be assured that every effort will be made to ensure that no further complexities are applied to Northern Ireland businesses as a result of this agreement.
Because, believe me, if you look at our last committee report, you will see how complex some businesses are dealing, how complexity affects the way businesses deal with competition. In the United Kingdom where Northern Ireland is involved. Of course, it's a truism, isn't it, that businesses that operate in the United Kingdom increasingly trade and invest and compete across the whole European continent. So we're dealing with major mergers, some referred to by Lord Lansley, cartels, abuses of market power and anti-competitive practices.
And the importance of those at root is that they frequently affect consumers and small and big businesses on both sides of the channel. So when you find that regulators are investigating precisely the same conduct in various countries, it must be in the public interest that they should be able to communicate, communicate effectively, coordinate where appropriate, and avoid unnecessary duplication. And that is especially so where there is the possibility of a remedy that can be achieved without resort to the complexities that arise under the conflict of laws.
As we lawyers call it, the agreement we're considering here creates a framework for that cooperation. It enables the relevant authorities to notify one another of investigations that may affect their interests, to coordinate the enforcement activity where it's appropriate, and to exchange information subject to robust safeguards of confidentiality and due process. In the context of digital markets, competition and that regime, I believe that that should be the subject of a separate agreement, because there are very complex, different issues that need to be considered there.
But that agreement could take its cues from this agreement. For example, I take some interest professionally in what are called standard essential patents S, e s and S. P is a patent that protects technology that's required to implement an industry wide technical standard. Now, that sentence refers actually to a huge raft of industry, telecoms, consumer electronics, connected vehicles. That's vehicles connected to the internet. Like most of the vehicles we drive today and the Internet of Things.
And those who have standard essential patents have to commit themselves to what is called a Frand commitment, a fair and reasonable and non-discriminatory agreement that ensures that they have the advantage of their patents. But the consumers do not have to pay through the nose. The practical result is that, for example, in a car that's connected to the internet, there's a one off fee paid when the car is built of something like £2,025. That guarantees that you can use your cruise control and everything else you have for for life in that car.
It's very important and we need to think about that. But the alternative to this agreement would be less efficient enforcement, greater regulatory uncertainty, increased costs for businesses and for taxpayers alike. Parallel investigations conducted in isolation risk, inconsistent outcomes, unnecessary expense and avoidable delays. And the delays in this country are short compared with most other countries we're talking about. Cartels do not respect national boundaries. Fraud is neither patriotic nor passive. Dominant firms operate internationally.
Digital markets are global in character, and regulators therefore require mechanisms for cooperation if they are to remain effective. Some may fear that any agreement with the European Union inevitably represents a step backwards from Brexit. Although I'm not an enthusiast of Brexit, indeed the exact opposite. I do not share the view that I. That has just been. That. I've just stated that it represents a step backwards from Brexit. Indeed, as Brexit was claimed to be the United Kingdom's ability to govern itself.
This agreement is part of giving the United Kingdom the ability to govern itself. It's an exercise of that very sovereignty, sovereignty that we all cherish, whether we are pro or anti. Brexit, a sovereign nation is entirely free to enter into cooperative agreements that advance its national interests. So one of the things we have from this agreement is we retain independence, but we are not isolated. It means we can choose our partnerships in a manner that benefits our citizens and our economy.
Importantly, the agreement preserves the autonomy of all parties. Decisions remain in the hands of the United Kingdom authorities, applying UK law and EU authorities applying EU law. There is no supranational decision making involved and there is no obligation to reach the same conclusions if we don't want to. It simply gives us the opportunity to work better. Joined up thinking, joined up working cooperation on what is sometimes an extraordinarily complex subject, both factually, technically and indeed legally as well.
So, my Lords, in a world where economic activity is increasingly interconnected. Effective regulation requires dialogue, coordination and mutual respect between trusted partners. This agreement, in my view, achieves just that. I'm genuinely grateful.
12:56
Speaker 4
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Speaker 4
To both the Lord, both noble lords, for their technical knowledge and introducing this debate, because I freely admit that this is an area, much as I believe very strongly in effective competition law, that I'm not an expert in. But the first thing, of course, when one reads the report from the European Committee is all they've done is read the report themselves and given us no guidance at all. Whereas the two noble Lords have given us a very clear presentation of what we're about.
It's voluntary. It's non-controversial in those practical purposes because it's not enforceable, but it's based on a genuine goodwill and a goodwill and a partnership to try and make our relationships work. And the context we have at the moment, of course, is Brexit or no Brexit. The EU remains our biggest trading partner and the basis on which we trade that is of mutual importance for us to get access and for them not to discriminate against us and vice versa.
So whether you're for or against Brexit, we need to have rules for trading across the entire market. And this is a practical step based on a voluntary agreement that has already been in place. I did try to look around and find how many examples under the existing situation there were of this kind of cooperation. There are a few. One with a motor trade, one for pharmaceuticals and reference, of course, to digital, which I'll come back to, but not very many.
Which suggests that we are still working fairly well with our European partners and the main trading companies understand the rules and probably apply them. But you need to have rules, enforceability, where there are breaches or threats of of breaches. I was slightly taken aback about the need in the light of this, for companies to be prepared for dawn raids and how they should react to them. I wish there had been 1 or 2, I think, in this context.
I mean, they obviously apply more widely. So I think one has said that there's just a few points that I would wish to to raise. And maybe I think if the minister's replying, if she can give any examples of where this has already worked and how it might work more effectively, it would certainly, from my point of view, be be helpful. But I think the noble Lord, Lord Lansley, quite rightly said, part of the reason for this is for investment purposes.
And again, our investment opportunities are in a very dynamic state at the moment time. Our relationship with the United States is extremely fraught in many ways, a sort of business to business company to company, market to market level. It's still working, and hopefully we'll continue to work, but it is being interfered with at the top and by major players in a very disruptive way, which has implications for the UK's own ability to attract investment or to fail to attract investment.
And the question we have to ask is, to what extent are we prepared to compromise our own independence in order to attract investment on terms which are unfavourable or less favourable than we would like, which, in my view, reinforces the need for us to reset our relationship with the EU because they are more trusted partners. Whatever might worry about delay and bureaucracy. We understand each other much better and we're on the same page.
And it it may not be quite relevant to this debate, but it does concern me, particularly in the digital context that we're talking about 3 or 4 individuals whose personal wealth is the same as a medium sized country. There, a point I saw two days ago was individually, any one of them could end world hunger with their own resources. That doesn't appear to be what motivates them or mobilises them. And that's what worries me, is what they do want to do with their wealth in many ways, is to use it powerfully to interfere in markets, or to pressure markets or to blackmail markets.
And we need to have a robust but flexible competition arrangement that enables us to operate within those markets, to attract investment within those markets, but to protect our own interests. And it will not be surprised, be surprising for noble Lords, for me to say this is a step in the right direction in terms of reset. But in many ways, of course, and I take the point that Lord Carlile made. But had we not left the EU, we wouldn't have needed this possibly given us a bit of space we didn't have.
I think the bigger picture, if we ever get back to the single market, which I certainly would hope the customs union. Ultimately full membership of the European Union is the extent to which some of the space that we have enabled to create during Brexit justifies us not re-entering a very close relationship with the EU in terms of how do the the compromises and the benefits, and indeed, to what extent can we negotiate a relationship which takes some account of those changes? Because, my Lords, my own dealings with the EU in a whole variety of different circumstances when we were members, was that the UK were actually innovators to the benefit of the EU.
And it's one of the reasons why they miss us right now, because we were prepared to sort of not quite go along with the centralist conventional wisdom and challenge it. It was one of the reasons why many of the smaller countries, the Benelux, the Scandinavian countries, were so fraught when we left because they saw us as championing that against what they saw as a as a French, German, possibly Italian sort of dominance. And that balance has gone. But that aside, it seems to me that if you're in business in the UK and 40 plus percent of your export market is across the channel, you have to conform in any case to the rules and regulations that apply to be part of that market.
What you want is to ensure that the rules are mutually enforced and fairly enforced, both here and there, and this agreement seems to be designed to ensure that that is the case as far as competition is concerned. I think one of the problems of the last few years, however, is very, very many small and medium sized businesses will probably regard this agreement as no relevance to them, because they've stopped trading in the EU because of the technical difficulties.
People might have said before Brexit, oh, it was bureaucratic. But actually, if we were in the EU, the bureaucracy was negotiated at a senior level and a company trading within the EU, it was assumed that you were conforming to the rules and you didn't have to prove it. Now you have to prove it, which if you're a big corporation, you can probably do at some expense. But if you're a small or medium sized business, it's just too much trouble.
It's too costly, so you just don't do it. And I think that's one of the reasons we we have suffered as a result. So I think I would simply want to say to the to the minister, given it's voluntary, given it's unenforceable, first of all, what is the experience of the arrangement we've had up until now taught us about how it will actually work, and any 1 or 2 examples where it has been applied and how it's been applied.
And if I can perhaps just come back to the digital space because I I'm a member of the International Relations and Defence Committee, and we're in the middle of a an inquiry into multilateralism in the changing world. And we're having a sub inquiry into the role of AI in multilateralism and are taking. Well, and the point that Lord Lashley made was things are moving at terrifying pace, and it's very difficult to know how any rules or regulations are going to work because they're ahead of the game.
And on two counts, one, the technology that's being developed, I mean, obviously you have the extreme instance of taking over the world and killing us all, but you also have the people creating these things do not know necessarily what they're creating or who will use it, good or bad. I mean, so an awful lot of companies are already using AI, and it may be using it in ways that are hugely beneficial. Indeed.
I think it was suggested in the previous quarterly growth figures that one of the reasons they were slightly higher than expected was the productivity bonuses from the application of AI, but at the same time, they could be used for anti-competitive reasons or extreme competitive advantage. And it's therefore one of the reasons why I agree with with Lord Carlile, we almost certainly need a separate agreement in the digital space, but it is a case, in my view, with we have a real problem.
I mean, in the sense that 98% of AI innovation is being driven by the United States, a very small bit significant, a small bit by China. And actually the UK is third, although that was pointed out being equivalent to being the third Gallagher brother in practical terms, because it's but it is innovative and it is well targeted. And it does give us some advantage in a small way, but it doesn't give us any leverage in the market of what's happening elsewhere.
So I do believe it's really important that we have a separate agreement. I just want to worry how we can possibly get it in place fast enough. And having got it in place, how it can work in a way that takes account of the pace of development, which is implied. So actually, funnily enough, the strength of this agreement is its weakness. That is its strength. Namely, it's flexible, it's unenforceable, but it's based on a genuine understanding of each other's aspirations and a genuine requirement to work together to ensure that all the parties know that there is an effective competition space, and that there are parties who work together to ensure that it's enforced.
And I just repeat, if the minister can give some practical examples, I think that would enlighten us. I did try to find 1 or 2, and I was slightly disappointed. All I was told is that there's an agreement and I've got every different aspect of what this agreement was, but not actually how specifically it might be applied, or even actual examples or theoretical examples, so that we can better understand in practical terms, from a business point of view, what this will mean, either what, what it what it might threaten them with, hopefully not too much and what it might provide them as an opportunity.
So if the minister can answer those questions, I'd much appreciate it.
It's voluntary. It's non-controversial in those practical purposes because it's not enforceable, but it's based on a genuine goodwill and a goodwill and a partnership to try and make our relationships work. And the context we have at the moment, of course, is Brexit or no Brexit. The EU remains our biggest trading partner and the basis on which we trade that is of mutual importance for us to get access and for them not to discriminate against us and vice versa.
So whether you're for or against Brexit, we need to have rules for trading across the entire market. And this is a practical step based on a voluntary agreement that has already been in place. I did try to look around and find how many examples under the existing situation there were of this kind of cooperation. There are a few. One with a motor trade, one for pharmaceuticals and reference, of course, to digital, which I'll come back to, but not very many.
Which suggests that we are still working fairly well with our European partners and the main trading companies understand the rules and probably apply them. But you need to have rules, enforceability, where there are breaches or threats of of breaches. I was slightly taken aback about the need in the light of this, for companies to be prepared for dawn raids and how they should react to them. I wish there had been 1 or 2, I think, in this context.
I mean, they obviously apply more widely. So I think one has said that there's just a few points that I would wish to to raise. And maybe I think if the minister's replying, if she can give any examples of where this has already worked and how it might work more effectively, it would certainly, from my point of view, be be helpful. But I think the noble Lord, Lord Lansley, quite rightly said, part of the reason for this is for investment purposes.
And again, our investment opportunities are in a very dynamic state at the moment time. Our relationship with the United States is extremely fraught in many ways, a sort of business to business company to company, market to market level. It's still working, and hopefully we'll continue to work, but it is being interfered with at the top and by major players in a very disruptive way, which has implications for the UK's own ability to attract investment or to fail to attract investment.
And the question we have to ask is, to what extent are we prepared to compromise our own independence in order to attract investment on terms which are unfavourable or less favourable than we would like, which, in my view, reinforces the need for us to reset our relationship with the EU because they are more trusted partners. Whatever might worry about delay and bureaucracy. We understand each other much better and we're on the same page.
And it it may not be quite relevant to this debate, but it does concern me, particularly in the digital context that we're talking about 3 or 4 individuals whose personal wealth is the same as a medium sized country. There, a point I saw two days ago was individually, any one of them could end world hunger with their own resources. That doesn't appear to be what motivates them or mobilises them. And that's what worries me, is what they do want to do with their wealth in many ways, is to use it powerfully to interfere in markets, or to pressure markets or to blackmail markets.
And we need to have a robust but flexible competition arrangement that enables us to operate within those markets, to attract investment within those markets, but to protect our own interests. And it will not be surprised, be surprising for noble Lords, for me to say this is a step in the right direction in terms of reset. But in many ways, of course, and I take the point that Lord Carlile made. But had we not left the EU, we wouldn't have needed this possibly given us a bit of space we didn't have.
I think the bigger picture, if we ever get back to the single market, which I certainly would hope the customs union. Ultimately full membership of the European Union is the extent to which some of the space that we have enabled to create during Brexit justifies us not re-entering a very close relationship with the EU in terms of how do the the compromises and the benefits, and indeed, to what extent can we negotiate a relationship which takes some account of those changes? Because, my Lords, my own dealings with the EU in a whole variety of different circumstances when we were members, was that the UK were actually innovators to the benefit of the EU.
And it's one of the reasons why they miss us right now, because we were prepared to sort of not quite go along with the centralist conventional wisdom and challenge it. It was one of the reasons why many of the smaller countries, the Benelux, the Scandinavian countries, were so fraught when we left because they saw us as championing that against what they saw as a as a French, German, possibly Italian sort of dominance. And that balance has gone. But that aside, it seems to me that if you're in business in the UK and 40 plus percent of your export market is across the channel, you have to conform in any case to the rules and regulations that apply to be part of that market.
What you want is to ensure that the rules are mutually enforced and fairly enforced, both here and there, and this agreement seems to be designed to ensure that that is the case as far as competition is concerned. I think one of the problems of the last few years, however, is very, very many small and medium sized businesses will probably regard this agreement as no relevance to them, because they've stopped trading in the EU because of the technical difficulties.
People might have said before Brexit, oh, it was bureaucratic. But actually, if we were in the EU, the bureaucracy was negotiated at a senior level and a company trading within the EU, it was assumed that you were conforming to the rules and you didn't have to prove it. Now you have to prove it, which if you're a big corporation, you can probably do at some expense. But if you're a small or medium sized business, it's just too much trouble.
It's too costly, so you just don't do it. And I think that's one of the reasons we we have suffered as a result. So I think I would simply want to say to the to the minister, given it's voluntary, given it's unenforceable, first of all, what is the experience of the arrangement we've had up until now taught us about how it will actually work, and any 1 or 2 examples where it has been applied and how it's been applied.
And if I can perhaps just come back to the digital space because I I'm a member of the International Relations and Defence Committee, and we're in the middle of a an inquiry into multilateralism in the changing world. And we're having a sub inquiry into the role of AI in multilateralism and are taking. Well, and the point that Lord Lashley made was things are moving at terrifying pace, and it's very difficult to know how any rules or regulations are going to work because they're ahead of the game.
And on two counts, one, the technology that's being developed, I mean, obviously you have the extreme instance of taking over the world and killing us all, but you also have the people creating these things do not know necessarily what they're creating or who will use it, good or bad. I mean, so an awful lot of companies are already using AI, and it may be using it in ways that are hugely beneficial. Indeed.
I think it was suggested in the previous quarterly growth figures that one of the reasons they were slightly higher than expected was the productivity bonuses from the application of AI, but at the same time, they could be used for anti-competitive reasons or extreme competitive advantage. And it's therefore one of the reasons why I agree with with Lord Carlile, we almost certainly need a separate agreement in the digital space, but it is a case, in my view, with we have a real problem.
I mean, in the sense that 98% of AI innovation is being driven by the United States, a very small bit significant, a small bit by China. And actually the UK is third, although that was pointed out being equivalent to being the third Gallagher brother in practical terms, because it's but it is innovative and it is well targeted. And it does give us some advantage in a small way, but it doesn't give us any leverage in the market of what's happening elsewhere.
So I do believe it's really important that we have a separate agreement. I just want to worry how we can possibly get it in place fast enough. And having got it in place, how it can work in a way that takes account of the pace of development, which is implied. So actually, funnily enough, the strength of this agreement is its weakness. That is its strength. Namely, it's flexible, it's unenforceable, but it's based on a genuine understanding of each other's aspirations and a genuine requirement to work together to ensure that all the parties know that there is an effective competition space, and that there are parties who work together to ensure that it's enforced.
And I just repeat, if the minister can give some practical examples, I think that would enlighten us. I did try to find 1 or 2, and I was slightly disappointed. All I was told is that there's an agreement and I've got every different aspect of what this agreement was, but not actually how specifically it might be applied, or even actual examples or theoretical examples, so that we can better understand in practical terms, from a business point of view, what this will mean, either what, what it what it might threaten them with, hopefully not too much and what it might provide them as an opportunity.
So if the minister can answer those questions, I'd much appreciate it.
12:58
Speaker 2
-
Speaker 2
My Lords. we are all very grateful to my noble friend, Lord Lansley, not only for securing this debate, but also for delivering what I found to be one of the most impressive speeches I've heard on this subject, displaying a wide knowledge not only of the background , but also the way ahead, which is really what this debate should be all about. And I'm very grateful to my noble friend , Lord Carlile of Berriew for introducing me to standard, essential patents.
Wow. I think we were all blown away by his expertise in this area. We've always regarded him as an eminent lawyer, but I hadn't quite appreciated the extent to which he'd moved on a much wider stage. So let me make clear that we , on these benches , support effective international cooperation in the enforcement of competition law. And I agree with Lord Bruce of Bennachie that we need to hear from the government with some clear examples of why, indeed, this whole this new agreement is going to operate in practice where anti-competitive behaviour affects consumers and businesses across borders.
Competition authorities must be able to work together. Effective competition is essential if we are to have confidence in our economy, and it also encourages investment and innovation. And I pause here to reflect on the words of Lord Bruce of Benwick. We in this country are proud to have some of the most brilliant scientists in the world. We have won more Nobel Prizes than the rest of Europe put together.
And of course, when I. A few years ago, when I was involved as cabinet Minister for science, we launched World Wide Web, which had been thought up by the most brilliant young 18 year old Cambridge undergraduate operating in CERN, the Large Hadron Collider. And we thought I'd say to Lord Bruce, we thought at the time that things were moving so fast they were almost out of control with the development of the internet.
I was the first minister to receive a mobile phone, and I could hardly carry it because it was heavy. Things do move on, but it's very important to have effective competition because that that is essential to the sort of confidence we can have about the future. And it encourages investment and innovation. It also gives consumers greater choice and ensures that businesses succeed because they offer better products and services.
This agreement makes a number of practical changes intended to achieve just that. In particular, where the UK and EU competition authorities are pursuing the same or related enforcement activities, they will now have a formal framework which they can through which they can coordinate those activities. And I would be grateful if the noble Baroness, the Minister, could clarify exactly how the government expects this to operate in practice.
And let's look back to some of the suggestions that have been made during this debate. One objective should surely be to reduce unnecessary duplication, yet greater cooperation between regulators could, in some circumstances, also make it easier for parallel investigations to take place. A business operating both in the United Kingdom and the European Union could still face two investigations, two sets of information requests and potentially different remedies.
So could the minister therefore say what safeguards there are to ensure that this agreement genuinely reduces duplication and regulatory burdens, rather than simply facilitating parallel enforcement by different authorities? Now, article three states that a competition authority should notify the authorities of the other party where enforcement activity is likely to affect the other important interests. I quote, yet, as I understand it, important interests is not defined in the agreement. That leaves an obvious question for businesses and their legal advisers.
What factors will the CMA or European authorities take into account when deciding that an important interest has been engaged? Does the government intend, either independently or jointly with the European Union, to publish criteria or guidance explaining exactly how that test will operate? Much of the UK competition policy, of course, sits outside this agreement, but this debate takes place against a much wider question about the direction of competition policy in this country.
Competition policy has to protect consumers and tackle genuine anti-competitive behaviour, but it must also recognise that Britain is competing internationally for capital entrepreneurs and innovative businesses. Now , the government themselves have instructed the CMA to give greater consideration to growth and investment. The CMA's report last year, as my noble friend pointed out, outlined the four P's pace, predictability, proportionality and process and says that its objective is to create a regulatory environment which attracts investment and gives businesses confidence.
This is so important in the area that we're discussing. Technology is expanding fast. I acknowledge that the noble Lord is quite right. It's moving at pace. Now the CMA now exercises significant powers over some of the world's largest and most innovative companies. The Digital Markets Competition and Consumers Act 2024 gave it an extensive new regulatory regime .
Alongside its existing merger and competition powers. So the government, I believe, do need to be able to demonstrate that the cumulative effect of these powers is supporting, rather than deterring, investment in the United Kingdom. What assessment has the government made of the impact of the MCPs act and the CMA's digital market regime on investment, innovation and business confidence in the UK? Similarly, have ministers reviewed whether the CMA's existing merger control powers are appropriately calibrated to the government's stated objective, which I hope we all share, of making Britain one of the best places in the world in which to invest.
Last year, the CMA acknowledged, and I quote, UK law gives us an unusually broad jurisdiction by international standards. This can create uncertainty over whether we will review a particular deal or not. End of quote. We saw only last week the government intervene in the BT talk talk transaction on public interest grounds under the Enterprise Act 2002, citing the continuity of telecommunications services. There may well be exceptional circumstances in which such intervention is justified, but the act also allows governments to specify new public interest considerations.
We should therefore be very careful that the public interest does not gradually become a cover for the political interest. The CMA itself has previously worn to re. Politicisation of merger control could well undermine business confidence. So what assessment has the government made of the risk that expanding ministerial intervention powers could create uncertainty, raise the regulatory risk attached to investing in the UK and ultimately deter investment? Finally, the government did announce a competition reform bill in the King's Speech in May.
We were told that it would make competition investigations faster and more predictable, reduce unnecessary burdens on businesses and strengthen accountability. Well, we're now in October, and that bill has still not been introduced. So finally, could the noble Baroness, the minister, tell the committee exactly when the competition Reform Bill will be laid before Parliament and whether the government remains committed to the reforms that were announced in the King's Speech.
We have raised a whole range of questions, and we all now look forward to the Minister's response here. Good. All right.
Wow. I think we were all blown away by his expertise in this area. We've always regarded him as an eminent lawyer, but I hadn't quite appreciated the extent to which he'd moved on a much wider stage. So let me make clear that we , on these benches , support effective international cooperation in the enforcement of competition law. And I agree with Lord Bruce of Bennachie that we need to hear from the government with some clear examples of why, indeed, this whole this new agreement is going to operate in practice where anti-competitive behaviour affects consumers and businesses across borders.
Competition authorities must be able to work together. Effective competition is essential if we are to have confidence in our economy, and it also encourages investment and innovation. And I pause here to reflect on the words of Lord Bruce of Benwick. We in this country are proud to have some of the most brilliant scientists in the world. We have won more Nobel Prizes than the rest of Europe put together.
And of course, when I. A few years ago, when I was involved as cabinet Minister for science, we launched World Wide Web, which had been thought up by the most brilliant young 18 year old Cambridge undergraduate operating in CERN, the Large Hadron Collider. And we thought I'd say to Lord Bruce, we thought at the time that things were moving so fast they were almost out of control with the development of the internet.
I was the first minister to receive a mobile phone, and I could hardly carry it because it was heavy. Things do move on, but it's very important to have effective competition because that that is essential to the sort of confidence we can have about the future. And it encourages investment and innovation. It also gives consumers greater choice and ensures that businesses succeed because they offer better products and services.
This agreement makes a number of practical changes intended to achieve just that. In particular, where the UK and EU competition authorities are pursuing the same or related enforcement activities, they will now have a formal framework which they can through which they can coordinate those activities. And I would be grateful if the noble Baroness, the Minister, could clarify exactly how the government expects this to operate in practice.
And let's look back to some of the suggestions that have been made during this debate. One objective should surely be to reduce unnecessary duplication, yet greater cooperation between regulators could, in some circumstances, also make it easier for parallel investigations to take place. A business operating both in the United Kingdom and the European Union could still face two investigations, two sets of information requests and potentially different remedies.
So could the minister therefore say what safeguards there are to ensure that this agreement genuinely reduces duplication and regulatory burdens, rather than simply facilitating parallel enforcement by different authorities? Now, article three states that a competition authority should notify the authorities of the other party where enforcement activity is likely to affect the other important interests. I quote, yet, as I understand it, important interests is not defined in the agreement. That leaves an obvious question for businesses and their legal advisers.
What factors will the CMA or European authorities take into account when deciding that an important interest has been engaged? Does the government intend, either independently or jointly with the European Union, to publish criteria or guidance explaining exactly how that test will operate? Much of the UK competition policy, of course, sits outside this agreement, but this debate takes place against a much wider question about the direction of competition policy in this country.
Competition policy has to protect consumers and tackle genuine anti-competitive behaviour, but it must also recognise that Britain is competing internationally for capital entrepreneurs and innovative businesses. Now , the government themselves have instructed the CMA to give greater consideration to growth and investment. The CMA's report last year, as my noble friend pointed out, outlined the four P's pace, predictability, proportionality and process and says that its objective is to create a regulatory environment which attracts investment and gives businesses confidence.
This is so important in the area that we're discussing. Technology is expanding fast. I acknowledge that the noble Lord is quite right. It's moving at pace. Now the CMA now exercises significant powers over some of the world's largest and most innovative companies. The Digital Markets Competition and Consumers Act 2024 gave it an extensive new regulatory regime .
Alongside its existing merger and competition powers. So the government, I believe, do need to be able to demonstrate that the cumulative effect of these powers is supporting, rather than deterring, investment in the United Kingdom. What assessment has the government made of the impact of the MCPs act and the CMA's digital market regime on investment, innovation and business confidence in the UK? Similarly, have ministers reviewed whether the CMA's existing merger control powers are appropriately calibrated to the government's stated objective, which I hope we all share, of making Britain one of the best places in the world in which to invest.
Last year, the CMA acknowledged, and I quote, UK law gives us an unusually broad jurisdiction by international standards. This can create uncertainty over whether we will review a particular deal or not. End of quote. We saw only last week the government intervene in the BT talk talk transaction on public interest grounds under the Enterprise Act 2002, citing the continuity of telecommunications services. There may well be exceptional circumstances in which such intervention is justified, but the act also allows governments to specify new public interest considerations.
We should therefore be very careful that the public interest does not gradually become a cover for the political interest. The CMA itself has previously worn to re. Politicisation of merger control could well undermine business confidence. So what assessment has the government made of the risk that expanding ministerial intervention powers could create uncertainty, raise the regulatory risk attached to investing in the UK and ultimately deter investment? Finally, the government did announce a competition reform bill in the King's Speech in May.
We were told that it would make competition investigations faster and more predictable, reduce unnecessary burdens on businesses and strengthen accountability. Well, we're now in October, and that bill has still not been introduced. So finally, could the noble Baroness, the minister, tell the committee exactly when the competition Reform Bill will be laid before Parliament and whether the government remains committed to the reforms that were announced in the King's Speech.
We have raised a whole range of questions, and we all now look forward to the Minister's response here. Good. All right.
13:01
Speaker 5
-
Speaker 5
My Lords, I am very pleased to respond for the government, and I thank the noble Lord Lansley for securing this debate. And to all noble Lords who have contributed today on such an important topic. I was trying to list each of your experiences in this, which are highly extensive, your expertise and knowledge. And then I realized I would use far too many of my potentially 20 minutes.
But I have no two of you. Well, sorry. Beg your pardon for using that word. I've. I've known two noble lords for some years and two other noble lords more recently, and I'm getting to know your expertise even better. So it is very, I feel, very August company in responding, and I'm hoping that I can have covered all of your points. If for any reason at the end of my 20 minutes, particularly, I think with the noble Lord Lord Hunt's extensive list of particular queries, there are.
There are any outstanding. I will, of course, write to noble Lords accordingly, but I'll try and cover as many as I can. The United Kingdom and the European Union are close neighbours and major trading partners. We share an interest in ensuring that markets are open, competitive and fair, and that anti-competitive conduct does not harm consumers or hold back innovative businesses. This is particularly important as our economies continue to adapt to technological change, including the opportunities and challenges presented by digital and AI enabled markets mentioned by, in particular, noble Lord Bruce.
In an increasingly interconnected global economy, conduct and transactions often cross borders and affect several jurisdictions at once. Effective enforcement, therefore, depends not only on strong domestic regimes, but on practical cooperation between competition authorities. That is why the government negotiated the UK EU Competition Cooperation Agreement, signed in Brussels on the 25th of February. As noble Lords are aware this year, the agreement is the first supplementary agreement to the Trade and Cooperation Agreement to have been signed since that agreement entered into force in 2021.
It delivers on the commitment of article 361 of the TCA, which provides for a separate framework for cooperation on competition matters. It is also the UK's first ever international cooperation agreement, marking an important step in the government's ambition to deepen cooperation with international partners on competition on issues of shared interests. The agreement will facilitate enhanced dialogue and and operational cooperation between the Competition and Markets Authority, the European Commission and the National Competition authorities of EU member states.
This is the EU's first so-called umbrella agreement, which extends the cooperation framework to the EU Member States. National competition authorities. In practice, this means competition authorities will be better able to coordinate where they are investigating similar or parallel cases. They will be able to notify one another of relevant enforcement activity, cooperate on investigations into cross-border anti-competitive practices, and will give careful consideration of each other's important interests. This matters because closer cooperation can make enforcement more timely, coherent and effective.
It can help avoid unnecessary duplication for authorities and businesses so clearly outlined by the noble Lord Hunt of Wirral. And ultimately, it can support more effective action to address harms, protect consumers and promote fair and dynamic markets. My Lords, this agreement also supports the government's mission to deliver economic growth. Effective competition in dynamic markets drives investment, innovation, productivity and ultimately, growth. It strengthens the conditions for sustainable economic growth and delivers long term benefits for benefits for businesses and consumers.
The government has set out its priorities and expectations for the Competition and Markets Authority through its strategic steer. This emphasises the importance of considering action taken by competition and consumer protection authorities internationally and, where appropriate, ensuring that parallel regulatory action is timely, coherent and avoids unnecessary duplication. This agreement will be an important tool in supporting those objectives. Noble Lords will rightly expect cooperation of this kind to be accompanied by appropriate safeguards.
The agreement is clear that each authority will continue to apply its own competition law and take its own decisions that reflect its important interests. It creates a framework for cooperation where that is helpful and appropriate, while fully respecting the independence of each authority and its enforcement activities. Any information sharing will remain subject to domestic law. The agreement also contains clear protections governing confidentiality, onward disclosure and the purposes for which information may be used.
These safeguards help ensure that cooperation can take place in a way that provides certainty and reassurance for businesses, while protecting confidential information and respecting the independence of each authority. Noble Lords raised the question of why the agreement does not include digital competition within its within its scope. At this stage, the priority has been to establish and bring into force a practical cooperation agreement that delivers tangible benefits for competition enforcement and consumers. Noble Lords will be aware that the UK's digital markets regime only came into force in January 2025, after negotiations for the UK EU Competition Cooperation Agreement concluded.
It is right that the regime is given time to bed in domestically, and that experience is gained of its operation in practice before it is included in a formal cooperation agreement. Furthermore, it is not unusual for the EU to adopt a phased approach to international cooperation agreements where a first agreement establishes the foundation for cooperation, with more advanced cooperation considered later. As relationships, mature and practical experience is gained. Indeed, this has been the approach taken by the EU with other key partners such as Canada.
The agreement should therefore be seen as a foundation rather than an end point. This is why the agreement includes a review clause, which provides an opportunity for both parties to consider whether cooperation should develop further in future. Since signing the agreement was laid before Parliament on the 15th of April and the UK's United Kingdom's parliamentary scrutiny process concluded on the 10th of June, the European Parliament has since given its consent and the agreement is progressing through the European Union's remaining procedures.
We look forward to the necessary steps being completed so that the agreement can enter into force. The agreement also gives us an opportunity to look ahead. It commits the parties to initiate a joint review within two years of entry into force, and establishes a framework through which cooperation can continue to develop over time. As markets evolve, it is important that authorities are able to maintain a constructive dialogue and share expertise where that supports effective enforcement and better outcomes for consumers and businesses.
Digital markets is naturally one example where the UK and the EU share the objective of promoting competition, supporting innovation and delivering better outcomes for businesses and consumers. On the question of why around the timing with the EU on digital competition, noble lords should be reassured that there is already close working between the UK and the EU in this, both as competition authorities and policy makers. The CMA and the European Commission maintain a close dialogue on on competition matters, including digital markets.
There are also existing opportunities for the UK government and the EU to discuss digital competition established under the Trade and Cooperation Agreement, as well as wider discussions through the G7 or OECD. Just this morning, UK and EU officials met through the Trade Specialised Committee, where they had the opportunity to discuss level playing field issues including competition and digital competition policy. On whether we are again on digital competition domestically, I. The government's position is that the UK is very active in this space.
Since the Digital Markets Competition and Consumers Act came into force, the CMA has made significant progress in implementing the new regime. Over the past year, the CMA has concluded three strategic markets market status investigations designated Google in search, and both Apple and Google in mobile ecosystems, imposing remedies, and launched a further SMS investigation to Microsoft's business software and cloud services. Insert the CMA has already imposed conduct requirements relating to publish controls, fair ranking of search results and data portability.
Notably, the publisher controls remedy is a world first and gives publishers greater control over how their content is used in AI generated summaries in mobile ecosystems. The CMA has secured commitments from Apple and Google relating to app review processes and data use, while also consulting on measures relating to Apple Store steering and access to NFC functionality. Support to support competition and innovation in cloud services. The CMA has secured commitments from Amazon and Microsoft to improve interoperability ability and switching, while continuing to investigate competition concerns in business, software and cloud ware and cloud licensing.
The regime is already proving its worth in terms of both speed to impact and resilience to future developments in this fast moving area. As a number of noble lords have highlighted today, competition challenges increasingly have an international dimension. This agreement does not seek to make our respective regimes identical, nor should it. Rather, it ensures that independent authorities are able to work together more effectively where there is a shared interest in doing so.
So in sum, this agreement represents an important step forward in competition cooperation between the UK and the EU. It provides practical. It provides a practical framework for closer engagement between our competition authorities, supports more effective enforcement in cross-border markets, and establishes a strong foundation on which cooperation can continue to develop in the future. Noble lords have also raised a number of specific issues, and I would like to turn to some of those points.
Lord Carlile , In terms of complexity for business in Northern Ireland, our intention is that the Competition and Cooperation Agreement will reduce complexity for businesses operating in Northern Ireland through, for example, less duplication, duplicative requests for information. I have a detailed answer on standard essential patents, but I'd be very happy to write to the noble Lord to save a little time on that. But obviously the noble Lord might expect it's all good news in terms of response to you.
To the noble Lord, to the noble Lord Bruce. Advantages that the noble Lord was interested in. Theoretically, this agreement could have real advantages for business subject to. For example, a merger investigation into both the UK and EU, which could include a reduction in costs and duplicative requests for information, which was also a concern for the noble Lord Hunt of Wirral. Greater predictability in outcomes and coordinated enforcement and further, the noble Lord Bruce asked about how will the UK's digital market be able regime be able to adapt to developments in AI? I've touched a little bit on AI before now, but the UK's tools under the digital markets regime are intended to be flexible to address competition issues as digital and AI markets evolve.
For example, the CMA has published a controlled conduct requirement in Google Search as a world first allowing publishers to opt out of their content being used to power AI features. And the CMA will act in areas which will have the greatest benefits for UK markets and and consumers . On the. Some of the detailed questions from the noble Lord Hunt of Wirral on important interests. This term is not defined in the agreement to give respective competition authorities the flexibility to consider what enforcement activities may affect the important interests of the other party on a case by case basis.
I'm hoping that the majority of the other, more general questions that the noble Lord had were covered in my earlier remarks. Anything not. I have obviously committed to ensuring that the noble Lord and others can receive any further detail on specific questions and issues that came up. And so in conclusion, my Lords, just to repeat.
But I have no two of you. Well, sorry. Beg your pardon for using that word. I've. I've known two noble lords for some years and two other noble lords more recently, and I'm getting to know your expertise even better. So it is very, I feel, very August company in responding, and I'm hoping that I can have covered all of your points. If for any reason at the end of my 20 minutes, particularly, I think with the noble Lord Lord Hunt's extensive list of particular queries, there are.
There are any outstanding. I will, of course, write to noble Lords accordingly, but I'll try and cover as many as I can. The United Kingdom and the European Union are close neighbours and major trading partners. We share an interest in ensuring that markets are open, competitive and fair, and that anti-competitive conduct does not harm consumers or hold back innovative businesses. This is particularly important as our economies continue to adapt to technological change, including the opportunities and challenges presented by digital and AI enabled markets mentioned by, in particular, noble Lord Bruce.
In an increasingly interconnected global economy, conduct and transactions often cross borders and affect several jurisdictions at once. Effective enforcement, therefore, depends not only on strong domestic regimes, but on practical cooperation between competition authorities. That is why the government negotiated the UK EU Competition Cooperation Agreement, signed in Brussels on the 25th of February. As noble Lords are aware this year, the agreement is the first supplementary agreement to the Trade and Cooperation Agreement to have been signed since that agreement entered into force in 2021.
It delivers on the commitment of article 361 of the TCA, which provides for a separate framework for cooperation on competition matters. It is also the UK's first ever international cooperation agreement, marking an important step in the government's ambition to deepen cooperation with international partners on competition on issues of shared interests. The agreement will facilitate enhanced dialogue and and operational cooperation between the Competition and Markets Authority, the European Commission and the National Competition authorities of EU member states.
This is the EU's first so-called umbrella agreement, which extends the cooperation framework to the EU Member States. National competition authorities. In practice, this means competition authorities will be better able to coordinate where they are investigating similar or parallel cases. They will be able to notify one another of relevant enforcement activity, cooperate on investigations into cross-border anti-competitive practices, and will give careful consideration of each other's important interests. This matters because closer cooperation can make enforcement more timely, coherent and effective.
It can help avoid unnecessary duplication for authorities and businesses so clearly outlined by the noble Lord Hunt of Wirral. And ultimately, it can support more effective action to address harms, protect consumers and promote fair and dynamic markets. My Lords, this agreement also supports the government's mission to deliver economic growth. Effective competition in dynamic markets drives investment, innovation, productivity and ultimately, growth. It strengthens the conditions for sustainable economic growth and delivers long term benefits for benefits for businesses and consumers.
The government has set out its priorities and expectations for the Competition and Markets Authority through its strategic steer. This emphasises the importance of considering action taken by competition and consumer protection authorities internationally and, where appropriate, ensuring that parallel regulatory action is timely, coherent and avoids unnecessary duplication. This agreement will be an important tool in supporting those objectives. Noble Lords will rightly expect cooperation of this kind to be accompanied by appropriate safeguards.
The agreement is clear that each authority will continue to apply its own competition law and take its own decisions that reflect its important interests. It creates a framework for cooperation where that is helpful and appropriate, while fully respecting the independence of each authority and its enforcement activities. Any information sharing will remain subject to domestic law. The agreement also contains clear protections governing confidentiality, onward disclosure and the purposes for which information may be used.
These safeguards help ensure that cooperation can take place in a way that provides certainty and reassurance for businesses, while protecting confidential information and respecting the independence of each authority. Noble Lords raised the question of why the agreement does not include digital competition within its within its scope. At this stage, the priority has been to establish and bring into force a practical cooperation agreement that delivers tangible benefits for competition enforcement and consumers. Noble Lords will be aware that the UK's digital markets regime only came into force in January 2025, after negotiations for the UK EU Competition Cooperation Agreement concluded.
It is right that the regime is given time to bed in domestically, and that experience is gained of its operation in practice before it is included in a formal cooperation agreement. Furthermore, it is not unusual for the EU to adopt a phased approach to international cooperation agreements where a first agreement establishes the foundation for cooperation, with more advanced cooperation considered later. As relationships, mature and practical experience is gained. Indeed, this has been the approach taken by the EU with other key partners such as Canada.
The agreement should therefore be seen as a foundation rather than an end point. This is why the agreement includes a review clause, which provides an opportunity for both parties to consider whether cooperation should develop further in future. Since signing the agreement was laid before Parliament on the 15th of April and the UK's United Kingdom's parliamentary scrutiny process concluded on the 10th of June, the European Parliament has since given its consent and the agreement is progressing through the European Union's remaining procedures.
We look forward to the necessary steps being completed so that the agreement can enter into force. The agreement also gives us an opportunity to look ahead. It commits the parties to initiate a joint review within two years of entry into force, and establishes a framework through which cooperation can continue to develop over time. As markets evolve, it is important that authorities are able to maintain a constructive dialogue and share expertise where that supports effective enforcement and better outcomes for consumers and businesses.
Digital markets is naturally one example where the UK and the EU share the objective of promoting competition, supporting innovation and delivering better outcomes for businesses and consumers. On the question of why around the timing with the EU on digital competition, noble lords should be reassured that there is already close working between the UK and the EU in this, both as competition authorities and policy makers. The CMA and the European Commission maintain a close dialogue on on competition matters, including digital markets.
There are also existing opportunities for the UK government and the EU to discuss digital competition established under the Trade and Cooperation Agreement, as well as wider discussions through the G7 or OECD. Just this morning, UK and EU officials met through the Trade Specialised Committee, where they had the opportunity to discuss level playing field issues including competition and digital competition policy. On whether we are again on digital competition domestically, I. The government's position is that the UK is very active in this space.
Since the Digital Markets Competition and Consumers Act came into force, the CMA has made significant progress in implementing the new regime. Over the past year, the CMA has concluded three strategic markets market status investigations designated Google in search, and both Apple and Google in mobile ecosystems, imposing remedies, and launched a further SMS investigation to Microsoft's business software and cloud services. Insert the CMA has already imposed conduct requirements relating to publish controls, fair ranking of search results and data portability.
Notably, the publisher controls remedy is a world first and gives publishers greater control over how their content is used in AI generated summaries in mobile ecosystems. The CMA has secured commitments from Apple and Google relating to app review processes and data use, while also consulting on measures relating to Apple Store steering and access to NFC functionality. Support to support competition and innovation in cloud services. The CMA has secured commitments from Amazon and Microsoft to improve interoperability ability and switching, while continuing to investigate competition concerns in business, software and cloud ware and cloud licensing.
The regime is already proving its worth in terms of both speed to impact and resilience to future developments in this fast moving area. As a number of noble lords have highlighted today, competition challenges increasingly have an international dimension. This agreement does not seek to make our respective regimes identical, nor should it. Rather, it ensures that independent authorities are able to work together more effectively where there is a shared interest in doing so.
So in sum, this agreement represents an important step forward in competition cooperation between the UK and the EU. It provides practical. It provides a practical framework for closer engagement between our competition authorities, supports more effective enforcement in cross-border markets, and establishes a strong foundation on which cooperation can continue to develop in the future. Noble lords have also raised a number of specific issues, and I would like to turn to some of those points.
Lord Carlile , In terms of complexity for business in Northern Ireland, our intention is that the Competition and Cooperation Agreement will reduce complexity for businesses operating in Northern Ireland through, for example, less duplication, duplicative requests for information. I have a detailed answer on standard essential patents, but I'd be very happy to write to the noble Lord to save a little time on that. But obviously the noble Lord might expect it's all good news in terms of response to you.
To the noble Lord, to the noble Lord Bruce. Advantages that the noble Lord was interested in. Theoretically, this agreement could have real advantages for business subject to. For example, a merger investigation into both the UK and EU, which could include a reduction in costs and duplicative requests for information, which was also a concern for the noble Lord Hunt of Wirral. Greater predictability in outcomes and coordinated enforcement and further, the noble Lord Bruce asked about how will the UK's digital market be able regime be able to adapt to developments in AI? I've touched a little bit on AI before now, but the UK's tools under the digital markets regime are intended to be flexible to address competition issues as digital and AI markets evolve.
For example, the CMA has published a controlled conduct requirement in Google Search as a world first allowing publishers to opt out of their content being used to power AI features. And the CMA will act in areas which will have the greatest benefits for UK markets and and consumers . On the. Some of the detailed questions from the noble Lord Hunt of Wirral on important interests. This term is not defined in the agreement to give respective competition authorities the flexibility to consider what enforcement activities may affect the important interests of the other party on a case by case basis.
I'm hoping that the majority of the other, more general questions that the noble Lord had were covered in my earlier remarks. Anything not. I have obviously committed to ensuring that the noble Lord and others can receive any further detail on specific questions and issues that came up. And so in conclusion, my Lords, just to repeat.
13:14
13:15
Speaker 5
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Speaker 5
The Prime Minister has been clear that he will honour the manifesto and is committed. It's simply a matter of parliamentary time, and so I don't have any more detailed information to provide this moment. But I'm aware. I know that it's the Department is pressing to ensure that there is parliamentary time available, and that is going through the usual appropriate channels.
13:16
Speaker 5
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Speaker 5
Thank you to noble Lords, the noble Lord Carlile. I am aware of the issues that he is mentioning, and that, again, is absolutely in both officials minds and ministers minds. And we are on it. If I can say I was going to remark once again about the privilege, really, that I feel, having listened to you all with your Lord Bruce's extensive practical experiences, Lord Hunt as a former minister, I loved the idea of the very first mobile phone, and I look forward to seeing the pictorial evidence at some point, because that would be quite amusing to see how big the mobile phones were in those days and all of that extensive knowledge.
And obviously the noble Lord Carlile, with both his Northern Ireland and his Competition Tribunal, extensive experience as well. On and on. Lord Lansley, the noble Lord Lansley. The fact that you were speaking about these issues in 1998 is humbling. I In 1998 is humbling. I don't I can't put it any higher than that. So I do thank you all. I think today's debate has demonstrated the breadth of our shared interest in ensuring that competition works effectively for businesses and consumers, and this agreement provides a strong for closer cooperation with our European partners while preserving the independence of our respective competition regimes.
It's a positive step in its own right, but it's also part of a wider, constructive UK EU relationship, and the government looks forward to building on that cooperation in the years ahead.
And obviously the noble Lord Carlile, with both his Northern Ireland and his Competition Tribunal, extensive experience as well. On and on. Lord Lansley, the noble Lord Lansley. The fact that you were speaking about these issues in 1998 is humbling. I In 1998 is humbling. I don't I can't put it any higher than that. So I do thank you all. I think today's debate has demonstrated the breadth of our shared interest in ensuring that competition works effectively for businesses and consumers, and this agreement provides a strong for closer cooperation with our European partners while preserving the independence of our respective competition regimes.
It's a positive step in its own right, but it's also part of a wider, constructive UK EU relationship, and the government looks forward to building on that cooperation in the years ahead.
13:17
Speaker 3
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Speaker 3
My Lords has been a only a short debate, but I thought one that's very full of content and indeed interesting and indeed entertaining contributions. I'm most grateful to noble lords who who have taken part and for their support for the discussion of these issues. When we're not contemplating legislation, we very rarely have an opportunity to talk about these issues. And unlike some other legislatures who seem to be revisiting the competition policy constantly and trying to trying to influence the executive, we we had the we had the legislation over to the executive.
And then sometimes, as I said in my speech, we fire and forget. And I think it's really important. The issues behind this subject are so important. It's really vital that we take every opportunity to try and bring them forward in the noble Lord, Lord Carlisle did refer to standard essential patents. He will recall. I think that we did cover a little bit of these issues in the Product Safety Bill. In my conversations with the Intellectual Property Office, since I am hopeful that the government will respond before the end of the year.
They have responded. They have responded, yes, sir. Yesterday. Well, my noble Lord is ahead of me. So that is a very good basis on which I think we can bring these issues back. Frankly, the European Union is in bulk. The Commission has withdrawn their proposals. The European Parliament is challenging that in the European Court. So we they can't make progress. I think we should actually think it's incumbent on us to try and lead the way.
So I hope I hope we shall be able to have a constructive debate, if necessary, outside the formal processes of Parliament, but a constructive debate about how we can take steps forward. You know, the noble friend, the noble Lord, Lord Bruce, I think there is an interesting example. The Saffron and Collins one I referred to is an interesting example of cooperation. And I hope we can see that different jurisdictions doing things in their own terms differently, but with the same objective and as it happens, the same remedy.
And I think that's a good a very good example of the way in which I hope this kind of cooperation will proceed in the in the months and years ahead. Noble lady was, I think, very positive about the possibility of taking forward cooperation by phases. Of course, the the legislative base from the European Union's point of view for this agreement doesn't extend into the Digital Markets Act. So we may need to think about something new under the Trade and Cooperation Agreement rather than simply an extension of this agreement.
But I do hope that we will put that into the into the mix. For when is it the 20th of November. The the many things that I hope will form part of a positive reset in inverted commas. The noble Lord, Lord, Lord Bruce was talking about. My noble friend Lord hunt was talking about investment and innovation and the balance and the Competition Reform Act bill, when it comes, presumably will be directed very much to this point.
The balance between promoting investment and growth and ensuring that we maintain effective competition. Competition. I did say in my in my opening remarks, monopolists have always been able to demonstrate short term benefits to consumers. The problem is that they they kill long term investment in innovation because they kill market entry on the part of others. And market entry is absolutely critical in this. The Furman review was very clear that there had been many, literally very many acquisitions of start up and innovative companies in the digital space, by the by, the leading market players.
We're just not it's not we haven't had an SMS designation here long enough to be able to see how far this new regime, through the notification procedures under the MCC will enable intervention to ensure that market entrants are able to succeed in digital markets. And it is fundamentally an interface between the digital competition regime and the conventional competition regime. Because the notification under the MCC leads directly into merger reference under the Enterprise Act and which standing committee I was honored to serve back in 2002 as well.
But the point is, you know, we do want to this is the competition. Bit of digital competition and conventional competition can't be disentangled. They're all part of the same thing. And it will be really important to see the cooperation under this agreement, hopefully working to help to support the the scrutiny of merger references in the digital age. I think the noble Lord, Lord Bruce was talking about the the, the, the power and wealth of the tech magnates. They are, as it were, the railway barons of the modern age.
Now the noble Lord will recall that. I think we should hope that there is a bit of a kind of sense of Andrew Carnegie about this, who, although you might argue about his desire to maximize profit and the way he went about it, his purpose was to maximize profit so he could deploy that money for the public interest, not least in Dunfermline, if I recall correctly. And I hope and there is a bit of the Carnegie philosophy about some tech leaders, not all, but it is really important that if this is a new golden age of, you know, they're not railway barons or creating Standard Oil or US steel, but they are creating the companies which are dominating our industry today.
And I hope that we do find that we have some of that. But let's remember, the Golden Age led to the antitrust legislation in America in the early part of the 20th century. Here in the 21st century, we have to make sure that our antitrust and pro-competition regime is equally as effective as that was in in preventing the abuse of dominance. So I hope I did move the motion, and I hope.
And then sometimes, as I said in my speech, we fire and forget. And I think it's really important. The issues behind this subject are so important. It's really vital that we take every opportunity to try and bring them forward in the noble Lord, Lord Carlisle did refer to standard essential patents. He will recall. I think that we did cover a little bit of these issues in the Product Safety Bill. In my conversations with the Intellectual Property Office, since I am hopeful that the government will respond before the end of the year.
They have responded. They have responded, yes, sir. Yesterday. Well, my noble Lord is ahead of me. So that is a very good basis on which I think we can bring these issues back. Frankly, the European Union is in bulk. The Commission has withdrawn their proposals. The European Parliament is challenging that in the European Court. So we they can't make progress. I think we should actually think it's incumbent on us to try and lead the way.
So I hope I hope we shall be able to have a constructive debate, if necessary, outside the formal processes of Parliament, but a constructive debate about how we can take steps forward. You know, the noble friend, the noble Lord, Lord Bruce, I think there is an interesting example. The Saffron and Collins one I referred to is an interesting example of cooperation. And I hope we can see that different jurisdictions doing things in their own terms differently, but with the same objective and as it happens, the same remedy.
And I think that's a good a very good example of the way in which I hope this kind of cooperation will proceed in the in the months and years ahead. Noble lady was, I think, very positive about the possibility of taking forward cooperation by phases. Of course, the the legislative base from the European Union's point of view for this agreement doesn't extend into the Digital Markets Act. So we may need to think about something new under the Trade and Cooperation Agreement rather than simply an extension of this agreement.
But I do hope that we will put that into the into the mix. For when is it the 20th of November. The the many things that I hope will form part of a positive reset in inverted commas. The noble Lord, Lord, Lord Bruce was talking about. My noble friend Lord hunt was talking about investment and innovation and the balance and the Competition Reform Act bill, when it comes, presumably will be directed very much to this point.
The balance between promoting investment and growth and ensuring that we maintain effective competition. Competition. I did say in my in my opening remarks, monopolists have always been able to demonstrate short term benefits to consumers. The problem is that they they kill long term investment in innovation because they kill market entry on the part of others. And market entry is absolutely critical in this. The Furman review was very clear that there had been many, literally very many acquisitions of start up and innovative companies in the digital space, by the by, the leading market players.
We're just not it's not we haven't had an SMS designation here long enough to be able to see how far this new regime, through the notification procedures under the MCC will enable intervention to ensure that market entrants are able to succeed in digital markets. And it is fundamentally an interface between the digital competition regime and the conventional competition regime. Because the notification under the MCC leads directly into merger reference under the Enterprise Act and which standing committee I was honored to serve back in 2002 as well.
But the point is, you know, we do want to this is the competition. Bit of digital competition and conventional competition can't be disentangled. They're all part of the same thing. And it will be really important to see the cooperation under this agreement, hopefully working to help to support the the scrutiny of merger references in the digital age. I think the noble Lord, Lord Bruce was talking about the the, the, the power and wealth of the tech magnates. They are, as it were, the railway barons of the modern age.
Now the noble Lord will recall that. I think we should hope that there is a bit of a kind of sense of Andrew Carnegie about this, who, although you might argue about his desire to maximize profit and the way he went about it, his purpose was to maximize profit so he could deploy that money for the public interest, not least in Dunfermline, if I recall correctly. And I hope and there is a bit of the Carnegie philosophy about some tech leaders, not all, but it is really important that if this is a new golden age of, you know, they're not railway barons or creating Standard Oil or US steel, but they are creating the companies which are dominating our industry today.
And I hope that we do find that we have some of that. But let's remember, the Golden Age led to the antitrust legislation in America in the early part of the 20th century. Here in the 21st century, we have to make sure that our antitrust and pro-competition regime is equally as effective as that was in in preventing the abuse of dominance. So I hope I did move the motion, and I hope.
13:24
13:24