Digital Markets, Competition and Consumers Bill

Debate between Lord Stevenson of Balmacara and Viscount Camrose

Committee stage
Wednesday 24th January 2024 Grand Committee

[Viscount Camrose (Con)]

I thank the noble Lord, Lord Clement-Jones, and my noble friend Lord Lansley for bringing these important amendments. It is enormously valuable and important to kick the tyres of Clause 20 and understand or assure ourselves that it works.

Amendment 18A, tabled by the noble Lord, Lord Clement-Jones, would create a new permitted type of conduct requirement, allowing the CMA to require an SMS firm to provide users with a way to pay for products and services that would provide consumer protection. I thank him for the amendment; it highlights the vital issue of ensuring that consumers are protected when using online marketplaces.

We feel that conduct requirements are already able to require that SMS firms have effective processes for handling complaints by and disputes with users or potential users. This will allow the CMA to intervene when competition issues arise in this area. My noble friend Lord Offord will be talking to the consumer provisions in Part 4 in a later sitting, and I will not tread on his toes here. However, those provisions put it beyond doubt that, where platforms promote or facilitate consumer transactions, they must act with professional diligence, in addition to more specific duties such as refraining from misleading omissions or actions or aggressive practices.

We recognise that public understanding of the requirements of professional diligence could be clearer, and we recently consulted on how price transparency and product information for consumers can be improved. The Government’s response to that consultation was published this morning, and, in the light of this, we will be undertaking further work with stakeholders to ensure that platforms’ obligations to consumers are more widely and easily understood. I would of course welcome the noble Lord’s input during that process.

Amendment 31, tabled by my noble friend Lord Lansley proposes to add a new permitted type of conduct requirement to deal with the issue of SMS firms attempting to stop third parties raising possible non-compliance with the CMA. I thank my noble friend for tabling this amendment and highlighting the importance of this issue, on which I have also received representation from affected firms.

Alongside information gathered through its own monitoring, the CMA will rely on information from third parties that will have direct knowledge of market conditions. It is therefore crucial that third parties have the confidence to speak to the regulator. I can provide assurances that the CMA will have strong powers to tackle discriminatory or unfair behaviour seeking to frustrate the regime or interfere with enforcement, where it occurs within the scope of a designated activity. Both conduct requirements and PCIs will be available to combat such behaviour, supported by the usual robust enforcement powers and penalties. I draw my noble friend’s attention specifically to Clause 20(3)(a), which, in addition to the conduct requirement

“on fair and reasonable terms”

in Clause 20(2)(a), can be used where relevant.

The CMA will also be able to intervene outside the designated activity, but not in an unconstrained way: it can use conduct requirements to prevent leveraging, or a PCI to address an adverse effect on competition in a designated activity.

Input from third parties will be crucial in ensuring the success of this regime. However, some stakeholders may have concerns about sharing information or experiences for fear of retaliation. The CMA has well- established processes for handling information and maintaining the anonymity of those providing evidence, whether informally or as part of an investigation. Recognising the importance of engagement, the CMA has also announced plans to expand this approach; for example, by establishing representative panels—one for consumers and civil society, and one for businesses and investors. This will facilitate input from third parties, which in turn will support the design and implementation of interventions.

I therefore hope that the noble Lord will feel able to withdraw his amendment.

[Lord Stevenson of Balmacara (Lab)]

The Minister mentioned in his address—I was grateful to him for doing so—that there was a recent announcement from the department about sneaky hidden fees or drip prices that are unavoidable, and the press report that I am reading says that they will be banned. Does not this bear directly on points made during this debate, and in particular on Clause 20? Does this mean that the Minister will bring forward amendments at a later stage?

[Viscount Camrose (Con)]

My preference would be to consider so doing once the Committee has had a chance to debate later sections of the Bill which go directly to consumers.

[Lord Stevenson of Balmacara (Lab)]

So it is not ruled out at this stage.

[Viscount Camrose (Con)]

I am ruling nothing out at this stage.

[Lord Stevenson of Balmacara (Lab)]

The Minister is very generous.

Online Safety (List of Overseas Regulators) Regulations 2024

Debate between Lord Stevenson of Balmacara and Viscount Camrose

Tuesday 16th January 2024 Grand Committee

[Lord Stevenson of Balmacara (Lab)]

My Lords, I join the noble Lord, Lord Clement-Jones, in welcoming this SI, and I thank the Minister for his kind comments about the work that went into the Bill. I share with him our pleasure that it is now in force and up and running; this instrument is proof positive that it is indeed so. Like the noble Lord, Lord Clement-Jones, I have many questions about what is happening, but certainly no objections to what is proposed.

The helpful Explanatory Memorandum explains that the context for this instrument is

“the global nature of service providers”

and how they operate. In that sense, I recognise that there are some gaps as regards the areas from where difficulties and troubles might come. For instance, Poland and parts of the eastern European bloc are thought to be centres from which emanate quite a lot of damage and a certain amount of material that is almost certainly illegal, yet I see no reference to any organisation—maybe there is none—that might be able to help Ofcom explore what is happening there. I am also concerned about Canada, because it hosts the biggest—I think—pornography company in the world. Again, I would have thought it would be helpful to Ofcom to be able to contact a collaborative organisation in Canada to work with, but I do not see one in the list.

That leads me on to another, related point. There is, and has been for some time, a network of likeminded organisations with which Ofcom has worked well in the past. There is a list of them on its website. Not all of them are in the Government’s proposals before us, and I wonder whether that in any way reflects a clash of views by the Government. Perhaps the Minster will comment on why we do not see Korea or South Africa, for instance. I would have thought that at least those with which Ofcom has a good working relationship at the moment should have been close to appointment. Perhaps there is some sort of competition there or element that I am not aware of. Any light that could be shed on that would be helpful.

Paragraph 7.5 of the Explanatory Memorandum attached to the SI very helpfully specifies that these regulations have certain minimum standards by which they are judged—a point picked up by the noble Lord, Lord Clement-Jones. I felt they were very appropriate to the ones that the Minister mentioned, including the bespoke regulatory framework itself,

“whether its autonomy is protected in law; and whether the … jurisdiction that empowers them, upholds international human rights”.

These are all good things, and I am pleased to see them mentioned in the Explanatory Memorandum and referenced in his speech.

That raises the question: what happens if any of these organisations depart from these standards? Will another procedure or SI be required to remove them from the list, or would they just cease to be part of the group with which Ofcom discusses things? It would be helpful to have on the record some idea of what the procedure would be if that were required.

My last two points are relatively small. There is a hint that more regulators will be considered and brought forward. That is good; I think we are all in favour of more places, since, as has been said, this is a global issue. What is the timing of that, roughly? Perhaps we could have some speculative ideas about it.

Finally, as the noble Lord, Lord Clement-Jones, pointed out, this is the first of many SIs coming forward for consideration by the House. In Committee on the Bill, we discussed at length how Parliament could be involved. This SI is probably not a very good example of that, but in the codes of practice considerable work will be required by Parliament to make sure that the affirmative resolutions are properly researched and discussed.

The proposal we made, which was accepted by the noble Viscount’s colleague, the noble Lord, Lord Parkinson, was the Parkinson rule: that the statutory instruments would, in fact, be offered to the standing committees. I do not think that would have been necessary for this instrument; I just wonder whether that is still in progress and whether it is the Government’s intention to honour the idea announced at the Dispatch Box that the legwork for many of the substantial SIs that will come forward could be done with advantage by the committees, which would inform the debates required in both Houses before these instruments can be approved. I look forward to hearing from the noble Viscount whether that is likely to happen.

[Viscount Camrose (Con)]

As ever, I thank noble Lords for their valuable contributions to this debate. Needless to say, it is vital that we recognise the global nature of regulated service providers under the Online Safety Act. This SI will ensure that Ofcom can co-operate and share online safety information with specified overseas regulators where appropriate.

As set out, we will review on an ongoing basis whether it is desirable and appropriate to add further overseas regulators to the list. That is an ongoing activity. I anticipate that, as more and more jurisdictions enter the online safety regulation business, we will see an acceleration of the rate at which they can join on the lines we have set out.

I will now respond to some of the specific questions raised in the debate. The noble Lord, Lord Clement-Jones, asked about the types of information that Ofcom might share using this mechanism. The Government anticipate Ofcom being able to share information and co-operate with other regulators, which will lead to international regulatory co-operation, which is likely to reduce the regulatory burden on Ofcom, as well as international counterparts—for example, in relation to duties that are quite similar between regulators, such as duties to deal with illegal content. I anticipate that being a particular focus of their co-operative activities.

Positive benefits may also result from Ofcom supporting overseas regulators in carrying out their online safety regulatory functions and co-operating with relevant criminal investigations or proceedings. That co-operation might address a source of harm for UK users—for example, preventing malign actors disseminating suicide and self-harm content on regulated services.

Regarding the scale of the exchange, Ofcom itself would have discretion as to the scale of the information sharing that takes place through these provisions. However, it is likely to be beneficial to both Ofcom and its regulatory counterparts to engage in information exchange of this nature.

On the question from the noble Lord, Lord Stevenson, on why certain regulators have not been added, we will of course work closely with Ofcom and other stakeholders. He raised a number of interesting examples that would have been quite tempting to add to the list of criteria applied by us, which we, along with Ofcom, produced for the time being but on an ongoing basis. The intention is to review that to add other regulators that can add value in this way.

--- Later in debate ---

[Lord Stevenson of Balmacara (Lab)]

Can I press the Minister on the point I made at the end? Will the generic approach to SIs in future be that they are offered to the standing and Select Committees of the two Houses before they are brought forward for consideration?

[Viscount Camrose (Con)]

I will commit to going away and thinking about that one, because I feel that is a broader question about parliamentary oversight of regulation in general—if I have understood right.

[Lord Stevenson of Balmacara (Lab)]

It certainly can be taken that way, but actually it was a rather narrow question. His colleague, the noble Lord, Lord Parkinson, gave a statement at the Dispatch Box that the Government would use their maximum efforts to ensure that the two Select Committees—the DSIT Select Committee in the Commons and the Communications and Digital Committee in the Lords—would have the chance to look at draft SIs before they came forward. It is certainly more work, and we do not want that, but it would make it much easier for the Houses to be able to respond positively and accurately as they go forward.

[Viscount Camrose (Con)]

I apologise to the noble Lord; I misunderstood. I very much see the value of this and will strain my sinews to deliver just that. Meanwhile, I commend these regulations to the Committee.

Design Right, Artist’s Resale Right and Copyright (Amendment) Regulations 2023

Debate between Lord Stevenson of Balmacara and Viscount Camrose

Monday 20th November 2023 Grand Committee

[Viscount Camrose (Con)]

My Lords, I very much thank the three noble Lords for their valuable and interesting contributions to this debate. As I said in opening, IP matters. The IP system exists to encourage innovation and the sharing of information, creativity and knowledge. It provides individuals and businesses with the confidence to invest their time, money and energy into developing something new. That is why the Government remain committed to a world-leading IP framework. We hope these regulations will ensure that the IP system continues to support innovation across the economy and will make some targeted changes to the benefit of our IP framework.

I shall respond to some of the important questions raised in the debate. The noble Earl, Lord Clancarty, asked about ARR. I thank him for his kind words and support for the changes to ARR in relation to the change of currency. He mentioned the benefits to smaller artists of the ARR regime and the noble Lord, Lord Clement-Jones, expressed similar support. Under that change, artists who continue to receive ARR payments will see an estimated average increase of around 7%, with the highest-value artworks obviously experiencing the largest increase. In addition, when UK inflation is taken into consideration, the minimum threshold resale price for ARR eligibility will actually be lower in real terms than when it was set in 2006.

The noble Earl and the noble Lord, Lord Clement-Jones, asked about government policy for ARR in free trade agreements and why ARR is not included in some negotiations; the noble Lord, Lord Stevenson, also touched on that matter. It is current government policy to support ARR globally via international fora as well as via UK free trade agreements. For example, in our recent free trade agreements with Australia and New Zealand we negotiated provisions to provide ARR on a reciprocal basis—that is, the UK will provide ARR royalties to Australian artists and vice versa.

Noble Lords asked about provisions in FTAs that are still being negotiated, specifically with India and Canada. They will forgive me if I cannot comment at this point on negotiations that have not yet concluded. Needless to say, I am happy to set out more information as it emerges on where we are with these or other free trade agreements.

I turn to the issue of exhaustion. I note the views of the noble Earl, Lord Clancarty, on the UK’s existing UK-plus exhaustion regime and on making the UK-plus regime permanent. As I think everybody in the Room agrees, this is an important matter. As the noble Earl is aware, the Government have consulted widely on it and continue to consider what the UK’s eventual IP exhaustion regime should be. Work to consider the decision on the UK’s future exhaustion regime is ongoing. We intend our future regime to strike the right balance between consumer choice and fair market pricing, protecting creators and promoting competition. The Government are aware that businesses would like certainty about future arrangements that will be affected by this decision. We will let stakeholders know the outcome of the policy decision in due course.

[Lord Stevenson of Balmacara (Lab)]

I think we all asked for a bit more detail than the Minister’s “in due course”. Could he be a bit more specific?

[Viscount Camrose (Con)]

Indeed. DSIT has been making representations to precisely that effect across government and that process is in train. I cannot provide a date for when it is going to be complete.

[Lord Stevenson of Balmacara (Lab)]

Could the Minister perhaps hint at what form it might take? Are we at the White Paper stage of the process or will it just be a statement that the issues are finished?

[Viscount Camrose (Con)]

Perhaps I had better write to all noble Lords present to say exactly what form that will take.

Semiconductors Manufacturing

Debate between Lord Stevenson of Balmacara and Viscount Camrose

Monday 18th September 2023 Lords Chamber

[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.

[Lord Stevenson of Balmacara (Lab)]

My Lords, may I follow up that point and ask a little more about the detail of who runs this strategy? In addition to the independent regulator, the CMA, there are, as I understand it, three government departments directly involved: the Cabinet Office, the Department for Business and Trade, and DSIT, as represented by the Minister. The focus of the third leg of the national strategy engages with export control, hostile takeovers and mergers. Who is in charge of that, and can the Minister explain it?

[Viscount Camrose (Con)]

Indeed I can, and I recognise the importance of the question around clarity between these various arms of government. The ownership of the semiconductor strategy sits squarely with DSIT. There is a range of Acts—to do with export controls and protection of investment from states seen to be hostile to us—that of course come under other departments, but overall ownership must sit, and continues to sit, within DSIT.

Counter Disinformation Unit

Debate between Lord Stevenson of Balmacara and Viscount Camrose

Tuesday 18th July 2023 Lords Chamber

[Viscount Camrose (Con)]

The CDU has not been deployed on any side of the small boats debate.

[Lord Stevenson of Balmacara (Lab)]

I accept the point made that the Counter Disinformation Unit sounds rather suspicious. The unit tracks narratives and trends using publicly available information. We all like a good story, so where can we find these narratives and trends. Are they published? Where is the unit established, and what is its budget and its staffing level?

[Viscount Camrose (Con)]

The unit is established within the Department for Science, Innovation and Technology. Its existence and mission, and indeed the legal basis for its activities, are posted on GOV.UK. Because the great majority of its activities are now directed at overseas state actors hostile to our interests, we do not share in a public forum any operational details pertaining to its activity, simply for fear of giving an advantage to our overseas adversaries. However, I recognise the importance and seriousness of the question. To that end, while I cannot in a public forum provide operational details, if the noble Lord or any other noble Lords would like an operational briefing, I would be happy to arrange that.

Online Safety Bill

Debate between Lord Stevenson of Balmacara and Viscount Camrose

Committee stage
Thursday 25th May 2023 Lords Chamber

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

As ever, I thank all noble Lords who have spoken. I absolutely take, accept and embrace the point that transparency is wholly critical to what we are trying to achieve with the Bill. Indeed, the chandelier of transparency reports should be our shared aim—a greenhouse maybe. I am grateful for everyone’s contributions to the debate. I agree entirely with the views expressed. Transparency is vital in holding companies to account for keeping their users safe online. As has been pointed out, it is also to the benefit of the platforms themselves. Confident as I am that we share the same objectives, I would like to try to reassure noble Lords on a number of issues that have been raised.

Amendments 160A, 160B and 181A in the name of the noble Lord, Lord Knight of Weymouth, seek to require providers to make their transparency reports publicly available, subject to appropriate redactions, and to allow Ofcom to prevent their publication where it deems that the risks posed by drawing attention to illegal content outweigh the benefit to the public of the transparency report. Let me reassure the noble Lord that the framework, we strongly believe, already achieves the aim of those amendments. As set out in Clause 68, Ofcom will specify a range of requirements in relation to transparency reporting in a notice to categories 1, 2A and 2B. This will include the kind of information that is required in the transparency report and the manner in which it should be published. Given the requirement to publish the information, this already achieves the intention of Amendment 160A.

The specific information requested for inclusion within the transparency report will be determined by Ofcom. Therefore, the regulator will be able to ensure that the information requested is appropriate for publication. Ofcom will take into account any risks arising from making the information public before issuing the transparency notice. Ofcom will have separate information-gathering powers, which will enable the regulator to access information that is not suitable to be published in the public domain. This achieves the intention of Amendment 160B. There is also a risk of reducing trust in transparency reporting if there is a mechanism for Ofcom to prevent providers publishing their transparency reports.

Amendment 181A would require Ofcom to issue guidance on what information should be redacted and how this should be done. However, Ofcom is already required to produce guidance about transparency reports, which may include guidance about what information should be redacted and how to do this. It is important to provide the regulator with the flexibility to develop appropriate guidance.

Amendment 165 seeks to expand the information within the transparency reporting requirements to cover the scope of the terms of service set out by user-to-user providers. I very much agree with the noble Lord that it is important that Ofcom can request information about the scope of terms of service, as well as about their application. Our view is that the Bill already achieves this. Schedule 8 sets out the high-level matters about which information may be required. This includes information about how platforms are complying with their duties. The Bill will place duties on user-to-user providers to ensure that any required terms of service are clear and accessible. This will require platforms to set out what the terms of service cover—or, in other words, the scope. While I hope that this provides reassurance on the matter, if there are still concerns in spite of what I have said, I am very happy to look at this. Any opportunity to strengthen the Bill through that kind of clarity is worth looking at.

[Lord Stevenson of Balmacara (Lab)]

I welcome the Minister’s comments. I am interrupting just because this is my amendment rather than my noble friend Lord Knight’s. The word “scope” caused us some disquiet on this Bench when we were trying to work out what we meant by it. It has been fleshed out in slightly different ways around the Chamber, to advantage.

I go back to the original intention—I am sorry for the extensive introduction, but it is to make sure that I focus the question correctly—which was to make sure that we are not looking historically at the terms of reference that have been issued, and whether they are working in a transparency mode, but addressing the question of what is missing or is perhaps not addressed properly. Does the Minister agree that that would be taken in by the word “scope”?

[Viscount Camrose (Con)]

I think I probably would agree, but I would welcome a chance to discuss it further.

Finally, Amendment 229 intends to probe how Ofcom will review the effectiveness of transparency requirements in the Bill. It would require Ofcom to produce reports reviewing the effectiveness of transparency reports and would give the Secretary of State powers to implement any recommendations made by the regulator. While I of course agree with the sentiment of this amendment, as I have outlined, the transparency reporting power is designed to ensure that Ofcom can continuously review the effectiveness of transparency reports and make adjustments as necessary. This is why the Bill requires Ofcom to set out in annual transparency notices what each provider should include in its reports and the format and manner in which it should be presented, rather than putting prescriptive or static requirements in the Bill. That means that Ofcom will be able to learn, year on year, what will be most effective.

Under Clause 145, Ofcom is required to produce its own annual transparency report, which must include a summary of conclusions drawn from providers’ transparency reports, along with the regulator’s view on industry best practice and other appropriate information—I hope and think that goes to some of the points raised by the noble Lord, Lord Allan of Hallam.

Online Safety Bill

Debate between Lord Stevenson of Balmacara and Viscount Camrose

Committee stage
Tuesday 16th May 2023 Lords Chamber

[Viscount Camrose (Con)]

I stress again that the period in question is two years not three.

[Lord Stevenson of Balmacara (Lab)]

Is it two to five?

--- Later in debate ---

[Viscount Camrose (Con)]

The answer to the noble Lord’s question is that the super-complaint is not a mechanism for individuals to complain on an individual basis and seek redress.

[Lord Stevenson of Balmacara (Lab)]

This is getting worse and worse. I am tempted to suggest that we stop talking about this and try to, in a smaller group, bottom out what we are doing. I really think that the Committee deserves a better response on super-complaints than it has just heard.

As I understood it—I am sure that the noble Baroness, Lady Kidron, is about to make the same point—super-complaints are specifically designed to take away the pressure on vulnerable and younger persons to have responsibility only for themselves in bringing forward the complaint that needs to be resolved. They are a way of sharing that responsibility and taking away the pressure. Is the Minister now saying that that is a misunderstanding?

[Viscount Camrose (Con)]

I have offered a meeting; I am very happy to host the meeting to bottom out these complaints.

[Viscount Camrose (Con)]

As I said, I am very happy to hold the meeting. We are giving users greater protection through the Bill, and, as agreed, we can discuss individual routes to recourse.

I hope that, on the basis of what I have said and the future meeting, noble Lords have some reassurance that the Bill’s complaint mechanisms will, eventually, be effective and proportionate, and feel able not to press their amendments.

[Lord Stevenson of Balmacara (Lab)]

I am very sorry that I did not realise that the Minister was responding to this group of amendments; I should have welcomed him to his first appearance in Committee. I hope he will come back—although he may have to spend a bit of time in hospital, having received a pass to speak on this issue from his noble friend.

This is a very complicated Bill. The Minister and I have actually talked about that over tea, and he is now learning the hard lessons of what he took as a light badinage before coming to the Chamber today. However, we are in a bit of a mess here. I was genuinely trying to get an amendment that would encourage the department to move forward on this issue, because it is quite clear from the mood around the Committee that something needs to be resolved here. The way the Government are approaching this is by heading towards a brick wall, and I do not think it is the right way forward.