Artificial Intelligence (Regulation) Bill [HL]

Lord Vaizey of Didcot Excerpts

2nd reading
Friday 22nd March 2024 Lords Chamber

[Lord Vaizey of Didcot (Con)]

My Lords, I thought that this would be one of the rare debates where I did not have an interest to declare, but then I heard the noble Lord, Lord Young, talking about AI and education and realised that I am a paid adviser to Common Sense Media, a large US not-for-profit that campaigns for internet safety and has published the first ever ratings of AI applications used in schools. I refer the noble Lord to its excellent work in this area.

It is a pleasure to speak in the debate on this Bill, so ably put forward by the noble Lord, Lord Holmes. It is pretty clear from the reaction to his speech how much he is admired in this House for his work on this issue and so many others to do with media and technology, where he is one of the leading voices in public affairs. Let me say how humiliating it is for me to follow the noble Baronesses, Lady Stowell and Lady Kidron, both of whom are experts in this area and have done so much to advance public policy.

I am a regulator and in favour of regulation. I strongly supported the Online Safety Act, despite the narrow byways and culs-de-sac it ended up in, because I believe that platforms and technology need to be accountable in some way. I do not support people who say that the job is too big to be attempted—we must attempt it. What I always say about the Online Safety Act is that the legislation itself is irrelevant; what is relevant is the number of staff and amount of expertise that Ofcom now has, which will make it one of the world’s leaders in this space.

We talk about AI now because it has come to the forefront of consumers’ minds through applications such as ChatGPT, but large language models and the use of AI have been around for many years. As AI becomes ubiquitous, it is right that we now consider how we could or should regulate it. Indeed, with the approaching elections, not just here in the UK but in the United States and other areas around the world, we will see the abuse of artificial intelligence, and many people will wring their hands about how on earth to cope with the plethora of disinformation that is likely to emerge.

I am often asked at technology events, which I attend assiduously, what the Government’s policy is on artificial intelligence. To a certain extent I have to make it up, but to a certain extent I think that, broadly speaking, I have it right. On the one hand, there is an important focus on safety for artificial intelligence to make it as safe as possible for consumers, which in itself begs the question of whether that is possible; on the other, there is a need to ensure that the UK remains a wonderful place for AI innovation. We are rightly proud that DeepMind, although owned by Google, wishes to stay in the UK. Indeed, in a tweet yesterday the Chancellor himself bigged up Mustafa Suleyman for taking on the role of leading AI at Microsoft. It is true that the UK remains a second-tier nation in AI after China and the US, but it is the leading second-tier nation.

The question now is: what do we mean by regulation? I do not necessarily believe that now is the moment to create an AI safety regulator. I was interested to hear the contribution of the noble and learned Lord, Lord Thomas, who referred to the 19th century. I refer him to the late 20th century and the early 21st century: the internet itself has long been self-regulated, at least in terms of the technology and the global standards that exist, so it is possible for AI to proceed largely on the basis of self-regulation.

The Government’s approach to regulation is the right one. We have, for example, the Digital Regulation Cooperation Forum, which brings together all the regulators that either obviously, such as Ofcom, or indirectly, such as the FCA, have skin the game when it comes to digital. My specific request to the Minister is to bring the House up to date on the work of that forum and how he sees it developing.

I was surprised by the creation of the AI Safety Institute as a stand-alone body with such generous funding. It seems to me that the Government do not need legislation to do an examination of the plethora of bodies that have sprung up over the last 10 or 15 years. Many of them do excellent work, but where their responsibilities begin and end is confusing. They include the Ada Lovelace Institute, the Alan Turing Institute, the AI Safety Institute, Ofcom and DSIT, but how do they all fit together into a clear narrative? That is the essential task that the Government must now undertake.

I will pick up on one remark that the noble Baroness, Lady Stowell, made. While we look at the flashy stuff, if you like, such as disinformation and copyright, she is quite right to say that we have to look at the picks and shovels as AI becomes more prevalent and as the UK seeks to maintain our lead. Boring but absolutely essential things such as power networks for data centres will be important, so they must also be part of the Government’s task.

Digital Markets, Competition and Consumers Bill

Lord Vaizey of Didcot Excerpts

Committee stage
Wednesday 24th January 2024 Grand Committee

[Baroness Kidron (CB)]

My Lords, I have had a number of arguments about “proportionate” in the decade that I have been in this House. In fact, I remember that the very first time I walked into the Chamber the noble Lord, Lord Pannick, was having a serious argument with another noble Lord over a particular word. It went on for about 40 minutes and I remember thinking, “There is no place for me in this House”. Ten years later, I stand to talk about “proportionate”, which has played such a big part in my time here in the Lords.

During the passage of the DPA 2018, many of us tried to get “proportionate” into the Bill on the basis that we were trying to give comfort to people who thought data protection was in fact government surveillance of individuals. The Government said—quite rightly, as it turned out—that all regulators have to be

“proportionate, accountable, consistent, transparent, and targeted”

in the way in which they discharge their responsibilities and they pushed us back. The same thing happened on the age-appropriate design code with the ICO, and the same point was made again. As the noble Baroness, Lady Harding, just set out, we tried once more during the passage of the Online Safety Bill. Yet this morning I read this sentence in some draft consultation documents coming out of the Online Safety Act:

“Provisionally, we consider that a measure recommending that users that share CSAM”—


that is, for the uninitiated, child sexual abuse material—

“have their accounts blocked may be proportionate, given the severity of the harm. We need to do more work to develop the detail of any such measure and therefore aim to consult on it”.

This is a way in which “proportionate” has been weaponised in favour of the tech companies in one environment and it is what I am concerned about here.

As the noble Lord said, using “proportionate” introduces a gap in which uncertainty can be created, because some things are beyond question and must be considered, rather than considered on a proportionate basis. I finish by saying that associating the word specifically in relation to conduct requirements or making pro-competitive interventions must create a legal uncertainty if a regulator can pick up that word and put it against something so absolute and illegal and then have to discuss its proportionality.

[Lord Vaizey of Didcot (Con)]

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

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

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

[Lord Holmes of Richmond (Con)]

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

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

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

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

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

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

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

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[Viscount Camrose (Con)]

It is not my intention to bring in merits by the back door, nor is it my intention not to come clean, or to conceal from Members of this Committee any intentions of the Government. All this is about producing the clarity that we need to safely deliver the wide-ranging new powers of the CMA.

[Lord Vaizey of Didcot (Con)]

Can the Minister clarify for the Committee at some point, perhaps by letter, at what point the penny dropped within the department, with officials, that the word “proportionate” was necessary? If the word “proportionate” is removed, does this give the CMA permission to act disproportionately?

[Viscount Camrose (Con)]

I am happy to provide that information in the form of a letter, and I will leave it at that for now.

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[Viscount Camrose (Con)]

As I said, for those cases where A1P1 cannot be engaged, they can be treated in the same way—equally proportionately to other cases under A1P1. In addition, it creates further clarity around the use of these extensive new powers for the firms that will be affected by their use. In addition, it creates another means for this newly powerful independent regulator to be held to account.

[Lord Vaizey of Didcot (Con)]

Forgive me for intervening to make what is more of a rhetorical point.

[A noble Lord]

Surely not.

[Lord Vaizey of Didcot (Con)]

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

[Lord Holmes of Richmond (Con)]

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

Digital Markets, Competition and Consumers Bill

Lord Vaizey of Didcot Excerpts

Committee stage
Monday 22nd January 2024 Grand Committee

[Baroness Harding of Winscombe (Con)]

My Lords, I support Amendments 8, 9, 10, 13, 35, 37, 42, 44, 45, 46, 57 and 58 in the name of the noble Baroness, Lady Jones of Whitchurch, to which I have added my name. I list them all because the very fact that there are so many amendments to make what is actually quite a simple point shows the scale of the inequality of arms between the potential strategic market status firms and the firms that are detrimentally affected by them.

From looking at the detail it is clear that there are opportunities in the Bill for an SMS firm to comment at the outset and throughout an SMS designation investigation, at the drafting of a conduct requirement, in a conduct investigation and in a PCI investigation. Those affected can comment only at the latter public consultation stage. There is a real risk that the CMA will take decisions without the involvement, insight and information of non-SMS firms.

Like other noble Lords, I attended the very helpful briefing with the Minister and the CMA last week. When challenged on this, the CMA representatives told us that they agreed that there was an inequality of arms, that it was really important to do everything possible to balance it, and that they, with the best intent, intended to do that. They also acknowledged some commercial issues, where there may well be information that the SMS firms share that they should not share with commercial counterparties. Essentially, the CMA leadership—I say this without any judgment on them—told us to rely on the “good chap” theory of government and to trust their best intentions. That is really quite dangerous, given the sheer gulf in that inequality of arms.

So we might not have got the right wording in this long list of amendments, but this is a really important principle. I have deep respect for all the officials in the CMA, as my noble friend Lord Tyrie has just said, but this is a very hard balancing act that we will be asking them to undertake. Having played this game on the other side, I say that we should have no illusions: all companies spend a lot of time trying to influence the regulator that regulates them. If we do not ensure that there is an equality of arms in that process, we will be setting the CMA up to fail.

[Lord Vaizey of Didcot (Con)]

My Lords, I support these amendments as well. This is a terrifying prospect; I hate taking part in Bill Committees, because it is so hard to navigate where the amendments are, but I feel more courage following my noble friend Lord Tyrie, with his practical suggestions, and my noble friend Lady Harding, with her overview and common-sense approach to these amendments. In effect, she said exactly what I want to say. Trying to amend different clauses to get the effect we want is a slightly artificial process. As we know, these amendments in Committee are, in effect, devices to get across the fundamental point.

Some kind words were used about potential SMS companies and the platforms, but we all know that what we are debating is an attempt to bring about equality in the arms race when it comes to levelling the playing field as far as competition is concerned. When my noble friend Lady Harding spoke to earlier amendments, she talked about companies being afraid to put their names to concerns. That really shone a spotlight on the situation that currently prevails, which is, in effect, a duopoly of two platforms that can decide whether start-ups and apps live or die—or, indeed, how much profit they potentially make.

I support the principle of these amendments. How one gets from A to B is potentially a very difficult route, but I hope that the Minister will say in his reply that he understands the mood of the Committee. Can we find a way to extricate ourselves from the current process whereby, understandably, the SMS company is presented with the case against it and goes off to answer it? To a certain extent, it is kept within a relatively closed circle, in a very legalistic way, when the accused is in the dock. Can one broaden that out to allow the challenger companies that may have prompted the investigation to know exactly what the CMA thinks are substantial points that it wants to take forward, which could potentially be points that they wish to take action on? That might also encourage other challenger companies that may not be aware of the investigation or, indeed, the details of the investigation to come through with their own material evidence.

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[Lord Vaizey of Didcot (Con)]

I am interested in my noble friend’s point about the idea that allowing challenger firms to put in evidence to the CMA would overwhelm it with too much information that it could not cope with. Two points spring to mind. First, when you bring a case against an SMS the workload is unbelievable anyway—it is enormous—and these cases go on for years, so it strikes me that additional information from challenger firms would not unduly add to the CMA’s burden. Secondly, if my noble friend will forgive me, it seems a relatively casual phrase. I do not know whether there has been any analysis of the kind of information the CMA would expect to receive, but surely information that it received from challenger firms would simply allow it to present a much more robust case, rather than it being overwhelmed by paperwork.

[Lord Clement-Jones (LD)]

My Lords, so that the Minister does not have to stand up a second time, I will just add the other side of the coin to the question from the noble Lord, Lord Vaizey. The Minister seems very concerned about the workload within an SMS, but they are an SMS for a reason.

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[Baroness Stowell of Beeston (Con)]

My Lords, as this is the first time I have spoken in Committee, I declare that I chair the Communications and Digital Select Committee—but I am speaking in a personal capacity. This is quite an eclectic group of topics; it makes me wonder what will be in the group labelled “miscellaneous”.

I will talk about the leveraging principle, but before doing so, I acknowledge what has already been said about parliamentary accountability and the fact that I have an amendment in a later group. To pick up a point that the noble Viscount, Lord Colville, just made about his amendment to Clause 20, if we were to have a new Select Committee, there is no reason why, in the course of its business, it would not look at regulations being brought forward. I would expect there to be that sort of role for a Select Committee, but it would not replace the role of the Secretary of State in this context. We will come back to that when we get to the specific amendment.

The amendment on copyright is very interesting to me, not least because the Communications and Digital Committee is currently carrying out an inquiry on large language models. We are in the final stages of that inquiry and will publish our report very soon. We will have, I hope, some interesting things to say about copyright at that time.

I turn to my point on the leveraging principle; in particular, I will pick up on Amendments 26 and 27 in the name of the noble Baroness, Lady Jones. When the Communications and Digital Committee carried out our scrutiny of the Bill and held hearings in the summer, we looked at the leveraging principle and concluded that what was in the Bill was adequate; we did not propose any further changes being necessary. Noble Lords may remember that, at Second Reading, I raised concerns about how the Government had diluted various bits of the Bill that we, as a committee, had said, “Do not do that”. As I understand it, they have not diluted the leveraging principle. However, I am a great believer in judging people by their actions rather than by what they say. Over the last few weeks, I have been very interested in the various representations that have been made to me and others from the different challenger firms and industry bodies in this area. I see and am sympathetic to their concerns on this topic.

Only today, I was interested to read the Bloomberg daily newsletter on tech matters, which refers to the recent case in the US in which Apple has been forced to make some changes to its 30% fee policy. It has already started introducing things that make that almost meaningless to those who might benefit from it. The newsletter explains what people have to do to use a different payment system from Apple’s and avoid the 30% fee. It says:

“In order for developers to include a website link in their apps to an outside payment system, they’ll first need to submit a request form to Apple. If approved, the link can only be displayed once within the app. It must look like a text URL—meaning it can’t be a candy-colored button that says ‘Use PayPal’—and the text itself must match one of seven templates”.


It continues:

“When clicked, the link will surface a warning from Apple about the risks of transacting with third-party websites, with ‘continue’ or ‘cancel’ buttons. The website has to open in the device browser, rather than from a pop-up within the app, where, depending on the type of service, a user can sign in or register for a new account”;


in other words, you will not bother by the time you have got through all that.

That was a long-winded way to say that I am minded to support what the noble Baroness, Lady Jones, is seeking to do with the leveraging principle here. A safeguard is necessary, but, as I said at the beginning, I am speaking in my own personal capacity.

[Lord Vaizey of Didcot (Con)]

My Lords, I will slip in here quickly, since I have Amendment 25 in this group. I follow my noble friend Lady Stowell in supporting tightening up the leveraging principle as much as possible. We would have a lot more fun in this Committee if we stopped referring to the leveraging principle and started referring to the whack-a-mole principle, which is the same thing. From now on, that is what I will do.

As my noble friend said, it is absolutely critical to the success of the pro-competition regime. We all know how it works and may have used it in our own commercial lives. After years of litigation, you concede a point to the competition authority and reduce the headline prices you are charging for the app to appear on your platform, and then you slip in a new way of charging, as was so ably set out by my noble friend Lady Stowell. You find a different way to charge in order to generate exactly the same revenue.

I tabled Amendment 25 simply to strengthen the anti-whack-a-mole conduct requirement so that designated undertakings cannot shift their anti-competitive behaviour to non-designated activities, even if their ability to do so is directly linked to their strategic market status in a designated activity. Without this change, there is a danger in the current drafting of the CMA having to constantly designate new activities and play catch-up with the SMSs—or it may not be able to combat anti-competitive behaviour in any way at all.

The key point here is that Clause 20 allows the CMA to intervene only when an SMS firm’s conduct

“is likely to materially increase the undertaking’s market power”.

It is too narrow, and it gives these SMS firms broad opportunities to avoid compliance. For example, if Apple News was not designated, as things currently stand, Apple could impose unfair terms on news publishers via contracts, circumventing the terms where it holds the market power, where the action has been taken which would be in the App Store. To appear in Apple News, you would go one step behind, in terms of the contracts with the news publishers, and therefore avoid any remedy.

My amendment seeks simply to close potential loopholes. As I said, my noble friend Lady Stowell has ably set out what the whack-a-mole principle is all about: generating exactly the same revenues but being very creative in how you do so as you play this game with the competition regulator.

[Lord Black of Brentwood (Con)]

My Lords, I support Amendment 25; but for the glitch that others have experienced, I would have put my name to it. I shall also speak to Amendments 26 and 27. As this is the first time I have spoken in Committee, I must declare my interest as deputy chairman of the Telegraph Media Group and note my other interests.

In short order, the noble Lord, Lord Clement-Jones, got it right: in many ways, these anti-leveraging provisions, the whack-a-mole provisions, go to the heart of the Bill, because if we do not get this right then it will fail. As my noble friend Lord Vaizey said, at the moment Clause 20 is far too narrow and will give the SMS firms remarkable opportunities to avoid any form of compliance. In fact, it runs a coach and horses through the Bill, which is why we need to rectify it. The example of Apple that he gave could be replicated across all sorts of SMS platforms, which is why we absolutely need to close the loophole. My noble friend’s amendment is probably the cleanest and easiest way to do that, but I would also support Amendments 26 and 27, tabled by the noble Baroness, Lady Jones, which would effectively address the same concerns. I look forward to hearing from the Minister on these points, which are crucial to the future of the Bill.

[Lord Vaizey of Didcot (Con)]

On a point of order, I am incredibly embarrassed that I fail to declare my interests each time I speak because I am so nervous in this Committee. I declare my interests, particularly as a presenter of Times Radio, which links me to News UK, and as an adviser to a mobile games company, Pixel United.

[Baroness Harding of Winscombe (Con)]

My Lords, I shall also discuss the leveraging or whack-a-mole provisions. Perhaps Conservative Peers today are London buses: this is the fourth London bus to make the same point. I too would have added my name to my noble friend Lord Vaizey’s amendment had I been organised enough.

I shall make a couple of points. The noble Lord, Lord Tyrie, said earlier that we are all here on the Bill because harm has already been done. If noble Lords will forgive me, I will tell a little story. In 2012, I went on a customer trip to Mountain View, Google’s headquarters in California, as the chief executive of TalkTalk. We were in the early days of digital advertising and TalkTalk was one of its biggest customers. A whole group of customers went on what people now call a digital safari to visit California and see these tech companies in action.

I will never forget that the sales director left us for a bit for a demo from some engineers from head office in Mountain View, from Google, who demoed a new functionality they were working on to enable you to easily access price comparisons for flights. It was an interesting demo because some of the other big customers of Google search at the time were independent flight search websites, whose chief executives had been flown out by Google to see all the new innovation. The blood drained from their faces as this very well-meaning engineer described and demoed the new functionality and explained how, because Google controlled the page, it would be able to promote its flight search functionality to the top of the page and demote the companies represented in the room. When the sales director returned, it was, shall we say, quite interesting,

I tell that tale because there are many examples of these platforms leveraging the power of their platform to enter adjacent markets. As my noble friend has said, that gets to the core of the Bill and how important it is that the CMA is able to impose conduct requirements without needing to go through the whole SMS designation process all over again.

I know that the tech firms’ counterargument to this is that it is important that they have the freedom to innovate, and that for a number of them this would somehow create “a regulatory requirement to seek permission to innovate”. I want to counter that: we want all companies in this space to have the freedom to innovate, but they should not have the freedom to prioritise their innovation on their monopoly platform over other people’s innovation. That is why we have to get a definition of the leveraging principle, or the whack-a-mole principle, right. As with almost all the amendments we have discussed today, I am not particularly wedded to the specific wording, but I do not think that the Bill as it is currently drafted captures this clearly enough, and Amendments 25, 26, and 27 get us much closer to where we need to be.

I, too, add my voice in support my noble friend Lord Lansley’s amendments. I must apologise for not having studied them properly in advance of today, but my noble friend introduced them so eloquently that it is very clear that we need to put data clearly in the Bill.

Finally, as a member of my noble friend’s Communications and Digital Committee, I, too, listened very carefully to the comments made by the noble Lord, Lord Clement-Jones, about copyright. I feel this is a very big issue. Whether this is the right place to address it, I do not know, but I am sure he is right that we need to address it somehow.

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[Lord Clement-Jones (LD)]

I am sorry to interrupt the Minister but that is very general. We have heard around the Room that people are really concerned. As we go forward, so many areas of intellectual property—the ingestion of copyright material, the issues with synthesisation of performances—are being affected by artificial intelligence. The kind of language the Minister is using sounds far too generic. It needs to be much more focused if we are to be convinced that the CMA really has a role in all of this. He is the Minister for both AI and IP, so he is right at the apex of this issue; maybe he is right on the point of the whole thing. He has the ability in his ministerial role to start trying to resolve some of these issues. We have the IPO coming up with a code of conduct—

[Lord Vaizey of Didcot (Con)]

We have a vote soon.

[Lord Clement-Jones (LD)]

This is a long intervention, I agree. I would just ask the Minister to focus on the fact that this is not just any old fairness of terms but something that should be explicitly stated in the Bill.

Artificial Intelligence: Regulation

Lord Vaizey of Didcot Excerpts

Monday 4th December 2023 Lords Chamber

[Viscount Camrose (Con)]

When the then frontier model task force was set up, we had in senior officialdom a total of three years of PhD-level experience in AI safety. I am pleased to say that that number is now 150. We have probably the greatest concentration of AI safety researchers and scientists of any nation working currently for the United Kingdom Government on this crucial issue of AI safety.

[Lord Vaizey of Didcot (Con)]

My Lords, I congratulate my noble friend the Minister on the recent AI safety summit. It is interesting that the EU is currently debating an AI regulation and tying itself up in knots about whether to regulate large language models or the application of AI. Can the Minister give an indication, first, of which direction the Government are heading, and, secondly, what discussions he has had with our colleagues in Brussels on the future of AI regulation?