Combating Disinformation: Freedom of Expression

Debate between Lord Fox and Viscount Camrose

Tuesday 13th February 2024 Lords Chamber

[Viscount Camrose (Con)]

Indeed. It is worth reminding the House that close to 2 billion people will go to the polls over this calendar year. A great many of those elections in which they participate will come under attack from malign foreign influences. Therefore, we have implemented the Defending Democracy Taskforce, chaired by the Security Minister, which set up a new unit last year specifically dedicated to safeguarding our coming election, whenever it may be. It continues to engage with various committees of Parliament and with the Electoral Commission. We will look carefully at any proposals on deepfake provisions in the DPDI Bill. Deepfakes are already illegal today if they violate either the foreign interference offence or the false communications offence.

[Lord Fox (LD)]

My Lords, my noble friend Lord Strasburger asked about the parliamentary scrutiny of the unit. Does the Minister understand that, if there were to be proper scrutiny of the unit, some of the words that he uses to try to placate your Lordships’ House would have deeper resonance? Can he tell us why the ISC is not scrutinising the unit?

[Viscount Camrose (Con)]

NSOIT is indeed scrutinised by Ministers; it sits within DSIT and then Ministers, as we see, come before this House to explain matters. As a national security team, I dare say that we would have some concerns about a standing report to Parliament about its activities, but I can continue to reassure the House on its role.

Digital Markets, Competition and Consumers Bill

Debate between Lord Fox and Viscount Camrose

Committee stage
Wednesday 24th January 2024 Grand Committee

[Lord Fox (LD)]

The Minister has already introduced a difference between the two. There is a difference between “there is no other reasonable or practicable way” and “indispensable”. They are not the same—they are not synonymous. If I have to prove that something is not practicable, that is not the same as indispensable. The Minister has absolutely proved the point.

[Viscount Camrose (Con)]

Again, in my opinion, the two sentences are indistinguishable in their meaning.

--- Later in debate ---

[Viscount Camrose (Con)]

As many noble Lords in the debate have alluded to, we have to be clear that this is a fast-moving field, and we have to at least allow for the possibility that new technologies can provide new consumer benefits and that it is okay to argue that a new and emerging technology that was not part of the original consideration can be considered as part of the defence against a finding of breach. The fact that the intended meaning is intended to be clearer in the current drafting is aiming to provide greater certainty to all businesses while ensuring that consumers continue to get the best outcomes.

Amendment 41, from the noble Lord, Lord Clement-Jones, would change the current drafting of the countervailing benefits exemption in several ways that together are intended to ensure that the CMA is provided as soon as possible with information relating to an SMS firm’s intention to rely on the exemption. We agree with noble Lords who have spoken today that it is important that the exemption cannot be used to avoid or delay enforcement action. The conduct investigation will operate in parallel to the assessment of whether the exemption applies, meaning that the investigation deadline of six months is not affected by the exemption process. The regime has been designed to encourage an open dialogue between the CMA and SMS firms, helping to avoid delays, unintended consequences and surprises on all sides. Therefore, in many cases, if a firm intends to rely on the exemption, we anticipate that this will be clear to all parties from early on in the process.

[Lord Fox (LD)]

I appreciate what the Minister said. By “early on in the process” does he mean after the process has been instigated, or before? A lot of this information is needed in order to understand whether there needs to be a process in the first place. There is a chicken and an egg here, in that some of this information is up front before we get to actions and enforcement.

[Viscount Camrose (Con)]

Indeed. It is an important point. Right from the beginning of potential conduct requirement design or PCI design, it would be consulting very widely with all stakeholders, including SMS firms and tech challengers. As part of that consultation, consumer benefits would be expected to be stated, in what is designed to be a participative process on all sides. As I was saying, the CMA is required to consider consumer benefits early on, when setting conduct requirements. The SMS firms will therefore outline the consumer benefits associated with their conduct at that stage, long before a conduct investigation.

Finally, adding further evidential requirements risks overburdening the regulator with more documentation than necessary, and therefore potentially delaying any enforcement action. For the reasons I have set out, I hope the amendment will not be pressed.

I come now to the discussion on the powers of the CMA to enforce obligations where they have been breached by SMS firms. Amendment 43, from the noble Lord, Lord Clement-Jones, would provide the CMA with a power to impose an enforcement order requiring an SMS firm to offer fair and reasonable payment and non-payment terms to third parties for goods or services. I can confirm that, under Clause 19, the CMA already has the power to require a firm to offer fair and reasonable terms through conduct requirements, and, where these are breached, the CMA has power under Clause 31 to make an enforcement order obliging the firm to stop the breach. As such, this amendment would not give the CMA any additional powers and could risk a narrower reading of its powers by raising the question of why other types of orders are not mentioned.

Amendment 107, also from the noble Lord, Lord Clement-Jones, would allow the CMA to apply to the High Court where a firm was breaching, or attempting to breach, an obligation or one of the conduct requirement objectives set out in Clause 19(5). The objectives in Clause 19(5) are not intended to be binding on SMS firms. Their purpose is to guide the design of conduct requirements by the CMA. It would therefore not be appropriate for the CMA to find a firm in breach of these objectives.

However, I agree with the noble Lord, and others who have spoken today, that it is important that the regulator can respond quickly before irreversible harm results from SMS-firm conduct. Where urgent action is needed in relation to a suspected breach of conduct requirements, the CMA will have the power under Clause 32 to make an interim enforcement order before irreversible harm occurs. For PCIs, the CMA will be able to issue directions setting out specific steps that a firm must take to become compliant with a pro-competition order. Failures to comply with orders under either conduct requirements or PCIs can be enforced through robust penalties. There is also the possibility of affected persons applying to court to enforce relevant requirements, and to apply for injunctions under Clause 101.

Digital Markets, Competition and Consumers Bill

Debate between Lord Fox and Viscount Camrose

2nd reading
Tuesday 5th December 2023 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Science, Innovation and Technology (Viscount Camrose) (Con)]

My Lords, I thank all today’s speakers for their eloquent, clear and powerful contributions to what has been a fascinating debate of the very highest quality. In particular, a number of speakers referred back to the Online Safety Act debates and variants of the warm glow. I am delighted to participate in any such approach to the Bill, as is my noble friend Lord Offord. I welcome very much the support shown across the House for this legislation, with the caveats gone into by many speakers. As my noble friend said in his opening speech, this is an important Bill which will drive innovation, grow the economy and deliver better outcomes for consumers. The debate we have engaged in is demonstrative of noble Lords’ desire to ensure that digital markets are competitive and work well, and that consumers are protected from the potential harms posed by anti-competitive and unscrupulous practices.

I will respond to the questions raised, cutting across a number of issues and speakers as I go. First, my noble friend Lady Stowell and the noble Lords, Lord Bassam and Lord Clement-Jones, asked, quite rightly, whether we are watering down the Bill. Let me categorically say that that is absolutely not the intention. The amendments at Commons Report brought further clarity, and they will ensure that the DMU’s interventions are proportionate and drive the best possible outcome for consumers. I look forward to discussing this further during the Bill’s passage.

I turn to the appeals standard in the digital markets regime, which was raised by noble Lords across the House, including my noble friends Lord Vaizey, Lord Kamall, Lady Stowell, Lady Harding, Lord Black and Lord Lansley, the noble Lords, Lord Bassam and Lord Clement-Jones, and the noble Baronesses, Lady Kidron, Lady Ritchie and Lady Jones. We have considered strong and differing views about appeals from a range of stakeholders. Judicial review remains the appropriate standard for the majority of decisions in the regime, and we have maintained that for appeals of regulatory decisions, with additional clarification on the need for the Digital Markets Unit to act proportionately. Firms would already have been able to challenge decisions to impose interventions on the basis that there were disproportionate interferences with their rights under the European Convention on Human Rights. This amendment allows that challenge to happen under usual JR principles. Moving appeals on penalties to full merits brings the regime into line with the Enterprise Act 2002. It will mean that, once a breach has been found, a firm could argue that the imposition of a penalty was not appropriate, the level of it was not suitable, or the date by which it should be paid needs to be changed.

I turn to the countervailing benefits exemption, which was raised by a number of noble Lords, including my noble friends Lady Harding, Lord Vaizey, Lord Lansley, Lord Kamall, Lord Black, Lady Stowell, the noble Lords, Lord Bassam, Lord Clement-Jones and Lord Fox, the noble Viscount, Lord Colville, and the noble Baronesses, Lady Ritchie and Lady Kidron—I see the point about themes. I reassure all noble Lords that this is a further safeguard in the legislation to ensure that consumer benefits which might have been unknown when conduct requirements were first introduced can be recognised. The noble Lord, Lord Bassam, asked for an example of how this could work in practice. If an SMS firm bans an application on its platform, it might breach a conduct requirement not to apply discriminatory terms. The firm could claim that the ban was to protect user security and privacy. Thanks to the exemption’s high bar, the DMU would close its investigation only if the SMS firm provided sufficient evidence, such as an independent report from security experts. Firms will not be able to use the exemption to delay enforcement. Assessment of whether the exemption applies will take place during the enforcement investigation, which has a deadline of six months.

The noble Lords, Lord Fox and Lord Bassam, and my noble friends Lord Vaizey, Lady Harding and Lord Kamall asked about the change to the indispensability wording. The change of the language is to clarify the exemption; it maintains the same high threshold and makes sure that consumers get the best outcomes possible, whether through the benefits provided or through more competitive markets.

I thank the noble Lord, Lord Tyrie, for his detailed analysis of the work of the CMA and his continued support for the legislation. He raised the matter of proper scrutiny of the CMA. I very much agree with him on the importance of this and look forward to continuing that conversation.

The noble Viscount, Lord Colville, the noble Lord, Lord Clement-Jones, and my noble friends Lady Stowell and Lord Kamall sought reassurance that requiring the Secretary of State to approve guidance would not cause delays. The Government are committed to ensuring that approval is given in good time, in order for the regime to be in place as soon as possible. Introducing a statutory timeline for this process would limit the Government’s ability to work collaboratively with the CMA.

My noble friend Lord Holmes and the noble Lord, Lord Vaux, raised the importance of the independence of the regulator, and the noble Baroness, Lady Kidron, spoke about the risk of regulatory capture. I agree that this is an absolutely vital issue. The noble Lord, Lord Bassam, and my noble friend Lord Holmes asked about the resourcing and tools of the DMU. I reassure them that the Government have full confidence in the DMU’s resourcing. There are currently around 70 people working in DMU roles, and we expect the DMU to be around 200 people in steady state.

A number of noble Lords, including my noble friend Lord Black, the noble Viscount, Lord Colville, the noble Lord, Lord Clement-Jones, and the noble Baronesses, Lady Kidron, Lady Bennett, Lady Jones and Lady Ritchie, raised the importance of support for the press sector, with which I agree. The digital markets regime aims to address the far-reaching power of the biggest tech firms and help rebalance the relationship between those platforms and other businesses, including publishers. This will make an important contribution to the sustainability of the press, which is so important in all aspects of our lives.

The noble Viscount, Lord Colville, the noble Lord, Lord Fox, my noble friend Lord Black and the noble Baroness, Lady Ritchie, asked about the final offer mechanism and how this will work. The final offer mechanism is a backstop measure to help resolve sustained breaches of conduct requirements relating exclusively to fair and reasonable payment terms, where other DMU tools are unlikely to resolve the breach in a reasonable timeframe. Unlike the Australian and Canadian models, the final offer mechanism is not a standalone tool to force negotiations. It forms just one part of the DMU’s holistic toolkit for promoting competition in digital markets. The DMU will be able to impose conduct requirements on the firm from day one of its designation, including requirements to ensure fair and reasonable terms. However, we recognise that some stakeholders may be concerned about SMS firms frustrating the process. Here, the CMA can seek to accelerate the stages before the final offer mechanism, making use of urgent deadlines on enforcement orders and significant financial penalties, where appropriate.

The noble Lord, Lord Knight, and the noble Baronesses, Lady Bennett, Lady Jones and Lady Uddin, asked if the regulator will have sufficient power to deal with imbalances in access to data. The answer is yes. These are exactly the kinds of issues that the DMU will be able to address.

The noble Viscount, Lord Colville, and the noble Baroness, Lady Uddin, asked how the digital markets regime will address the rise of artificial intelligence. The regime has been designed to be tech-neutral, future-proof and flexible enough to adapt to changing digital markets.

I now turn to questions raised today on the competition part of the Bill. I note the interest from my noble friend Lord Sandhurst in the recent Supreme Court judgment on the status of litigation funding agreements—LFAs—and its potential impact on the ability to bring collective actions on behalf of consumers across the legal system. The Government have urgently addressed the potential implications of the judgment on claims under competition law, and we feel this has provided some much-needed certainty to funders and claimants. I also note the interest from my noble friend and others across the House in extending this to all parts of the civil legal system. While I am advised that this Bill is not the appropriate vehicle to deliver this aim, I can assure noble Lords that the Ministry of Justice is actively considering options for a wider response.

I now turn to the consumer part of the Bill. Several noble Lords, including my noble friend Lord Black, the noble Lords, Lord Vaux, Lord Clement-Jones and Lord Bassam, and the noble Baroness, Lady Jones, posed questions about the approach taken in the Bill on subscription traps. The measures being taken forward are the ones which are necessary and proportionate to ensure that consumers are treated fairly and understand what they are signing up to, while balancing further costs and regulatory burdens on businesses.

A number of noble Lords—I hope noble Lords will forgive me if I do not read out the full list, because there are far too many of them and it might test everyone’s patience—raised concerns about potential unintended consequences for charities in relation to the new subscription rules, in particular their ability to claim gift aid. Donations to charities where nothing is received in return are not subject to the subscription rules. Generally, charities will only be in scope if they provide auto-renewing contracts to consumers for products and services in return for payment. This is consistent with other consumer protection laws. I reassure the House that it is not the Bill’s intention to undermine access to gift aid; we are examining this issue closely and will provide a further update in Committee.

Many noble Lords, including the noble Lords, Lord Bassam and Lord Fox, raised other consumer harms such as drip pricing and fake reviews. The Government have recently consulted on proposals to address these and other practices, and our upcoming consultation response will set out next steps. The noble Baroness, Lady Bennett, also mentioned misleading green claims. This is indeed an important issue, which we hope is already covered by existing regulations.

I agree with the noble Baroness, Lady Hayman, and my noble friend Lord Holmes that the right to repair is important. The right-to-repair regulations which came into force on 1 July 2021 address some of the issues she raised. My noble friend Lord Offord, as the responsible Minister, would be happy to meet her to discuss this further.

My noble friend Lord Holmes raised concerns about Henry VIII powers. Where the powers to amend primary legislation would permit major changes to the legislation concerned, they are subject to the draft affirmative procedure.

I hope that in wrapping up I have responded to at least most of the points raised by noble Lords today. I note that there were other issues raised which I have not addressed, such as alternative dispute resolution and secondary ticketing. I look forward to discussing those items and others during the Bill’s passage. Let me once again thank all noble Lords for their contributions and engagement, not just today but in the lead-up to it. My noble friend Lord Offord and I look forward to further and more detailed debates on these matters and many more besides in Committee.

[Lord Fox (LD)]

Before the Minister sits down, I should say that I mentioned the central role that standards and the setting of future standards have. The Minister need not answer the question now, but could he write to me about the strategy, in a sense, and the involvement that the DMU might have, or should have, in future standards-setting for the technology?

[Viscount Camrose (Con)]

I apologise to the noble Lord for not addressing that. Absolutely I will write.

Artificial Intelligence: Regulation

Debate between Lord Fox and Viscount Camrose

Tuesday 24th October 2023 Lords Chamber

[Lord Fox (LD)]

I thank your Lordships’ House. I will follow on from the point made by the noble Lord, Lord Holmes. Huge commercial benefits are possible from AI. We have talked about the dangers, but there are benefits as well. However, as the Made Smarter Review made clear, the management skills to implement the digital opportunities of today are insufficient, so they are quite clearly not going to be there to implement the benefits of the future. In conjunction with his colleagues in the business department, what is the Minister doing to make sure that we have the skills to be able to take advantage of this technology?

[Viscount Camrose (Con)]

Yes, I thank the noble Lord for his point, which is a really important one. There is no defined curriculum of skills for AI anywhere, and there is such a very large range of different types of skills from data science, analytics and computer science, among others, to do that. I do not believe that anyone has produced what might look like a core curriculum of those things. We are, on the other hand, investing very serious funds into education at all levels, from school age to college age and advanced studies as well. I very much take the point, and driving global acceptance and adoption of AI is absolutely key to realising its value.

Semiconductors Manufacturing

Debate between Lord Fox and Viscount Camrose

Monday 18th September 2023 Lords Chamber

[Lord Fox]

To ask His Majesty’s Government what progress they have made towards engagement with the semiconductors manufacturing sector concerning funding to support future manufacturing in the United Kingdom, as set out in the Semiconductor Strategy, published on 19 May.

[The Parliamentary Under-Secretary of State, Department for Science, Innovation and Technology (Viscount Camrose) (Con)]

The national semiconductor strategy sets out the Government’s plan to build on the UK’s strengths to grow our sector, increase our resilience and protect our security. We will also announce plans by the autumn to further support the competitiveness of the semiconductor manufacturing sector, which is critical to the UK tech ecosystem and our national security. We have engaged, and continue to engage extensively, with industry. The Government’s new semiconductor advisory panel met last week to inform our approach.

[Lord Fox (LD)]

I thank the Minister for his Answer. I think the concern lies around the rhetoric that has surrounded the May announcement, which very much focused on research and design while coupling that to resilience. As the Minister knows, good design companies and good research get bought and leave the country, and they do not necessarily contribute to resilience, whereas manufacturing does. As the Minister said, we in this country are home to some very innovative, lower-cost, niche manufacturers, but for those investors to have the confidence to further those companies, a strategy needs to be set out. Can the Minister assure your Lordships’ House that his department is putting maximum pressure on the Chancellor so that, when his Autumn Statement comes out, a proper manufacturing strategy for semiconductors in this country will be forthcoming?

[Viscount Camrose (Con)]

The noble Lord raises, as ever, an interesting point, but to build an advanced silicon fab would, first of all, cost tens of billions of pounds. It would run into not only costs of operation but substantial risks of uncompetitive yields and, as we have seen several times historically, shifts in demand for semiconductors. I remind the House that, although 40% of the value chain of semiconductors is represented by manufacturing, 30% is represented by design. It makes sense that our strategy should build on the country’s strengths, particularly in design.

EU Programmes

Debate between Lord Fox and Viscount Camrose

Thursday 7th September 2023 Lords Chamber

[Viscount Camrose (Con)]

First, as I was obliged to explain to the House at the time, I was unable to comment on ongoing negotiations for fear of prejudicing their outcome. The initial position of the EU was that we had to pay for the entirety of 2023, despite the fact that it was already March by the time this agreement was made, there were no mechanisms in the place for clawback, which I will come to in a moment, and it was all or nothing. I am pleased to say that thanks to the negotiations we have reached a deal that works for both sides.

On the clawback scheme, the preferred outcome is not to require a clawback. In common with every previous Horizon programme, we have gained more from the programme than we have put in, and we have every reason to believe that that will be the case, but there is always a risk that, because we are entering this particular Horizon programme late and many of the bids and activities will already have been allocated to different parties, we will not on this occasion be able to make as much money back for our institutions as we put in. In that instance, the clawback mechanism negotiated by our team mitigates that risk somewhat for any really significant disparity.

[Lord Fox (LD)]

My Lords, without overegging the pudding, the whole point of Horizon is that there is international co-operation. There are issues with visas because we are going from the free movement of people to a visa-based system, so that is fundamental to how this works. However, my question is about Copernicus. We have not heard much today about that, so will the Minister tell your Lordships’ House where we are on that and how the deal reflects on that?

[Viscount Camrose (Con)]

I will come back to the question of visas, and I take the point. I am pleased to say that we are also reassociating with Copernicus. It is such an important programme for the earth observation sector. Geospatial is in my portfolio as a Minister. I am a great believer in the value that it can bring. What particularly pleases and excites me about the association with Copernicus is access to the EU’s very comprehensive dataset that could help to kick-start our work and the work done in the EU. I am extremely positive about that.

Emergency Communications

Debate between Lord Fox and Viscount Camrose

Monday 26th June 2023 Lords Chamber

[Viscount Camrose (Con)]

To my knowledge, there was no COBRA meeting—I imagine because the disaster recovery system kicked in and was able to meet the emergency requirements.

[Lord Fox (LD)]

My Lords, I am sure that specific recommendations will come out of the inquiry, but there should also be systematic ones that apply to other areas of national infrastructure. This is not the only single strand of infrastructure that is put in the hands of one private sector company that keeps people’s services alive. Will the Minister undertake that those systematic lessons are applied across the piece and across government?

[Viscount Camrose (Con)]

I do not want to prejudge the outcome of the inquiries. If they determine that there are systemic issues that need to be addressed, then we will put in place a plan to address them.

Medical Research Charities

Debate between Lord Fox and Viscount Camrose

Wednesday 21st June 2023 Lords Chamber

[Viscount Camrose (Con)]

I thank the noble Lord for that question. The first thing to remind the House is that it was not a decision of the UK Government not to be associated with the Horizon programme. Following the trade and co-operation agreement—of which association to Horizon was a part—that association was withdrawn from the United Kingdom. Beyond that, as I say, I cannot comment on the forces at work behind individual negotiation points, but I recognise the frustration and concern that result from the lengthy period of negotiations.

[Lord Fox (LD)]

My Lords, on 19 June, UKRI and DSIT launched a search for ideas that were “bold and ambitious”—a phrase the Minister used just now—and

“transformative ideas for moonshots across the research and innovation landscape”.

That would apparently be delivered by the Pioneer programme in the event that we do not sign up to Horizon. Can the Minister confirm how much will be invested in those moonshot programmes? Can he also confirm that in the event that we sign up to Horizon, those projects will still be funded?

[Viscount Camrose (Con)]

The funding for the Pioneer programme would end up being the same as the funding that would be made available were we to join the Horizon programme, as is our preference. As to individual elements within the Pioneer programme, I cannot comment on their size right now because the programme continues to be based on huge input, which we greatly welcome, from all aspects of the sector.