Freedom of Expression (Communications and Digital Committee Report)

Viscount Colville of Culross Excerpts

Thursday 27th October 2022 Lords Chamber

[Viscount Colville of Culross (CB)]

My Lords, I declare an interest as a freelance TV producer. I had the honour of serving on the Communications Committee when this report was published. I too thank the noble Lord, Lord Gilbert, for his very able chairing of this inquiry.

The noble Lord, Lord Gilbert, suggested that the Government should amend the Online Safety Bill clauses on content that is legal but harmful to adults. I agree with the fears that these clauses will have an extremely deleterious effect on free speech. It is not just that the definition for this material is so vague, but that the Bill gives such dangerous powers to the Secretary of State to specify what is harmful by regulations. I support the recommendation in this report, which were then taken further by the Joint Committee on the Bill, to set up a parliamentary committee that will have the power to interrogate these changes further. I understand that the last Government were minded to drop these clauses. I would be grateful if the Minister would share with your Lordships’ House the new Government’s thinking on this issue.

I want to concentrate my speech on the later recommendations in the report. Recommendations 33 and 34 call for the Digital Markets Unit to be given statutory powers. It has been established for over a year and a half but still has not been given these. This could not be a more urgent issue. The big tech companies are still shockingly dominant. Your Lordships have heard this week of the falls in their share prices, but they still have enormous power in the markets.

In the tech ad market, this power is supreme. The CMA’s report into online platforms and digital marketing space found that Google and Facebook, as it was then called, make up 80% of digital advertising spend. It declared that the market is “no longer … contestable”. Such dominance is an obvious threat to innovative start-ups. Even if they manage to get a share of the advertising revenue, they face the ever-present threat of being bought up before they have grown to scale by the big players, whose dominance is therefore enhanced.

The problem is that the CMA’s monopoly rules concentrate on consumer price benefit. Obviously, when so many of the services offered by the platforms are free, that does not apply. Instead, different metrics must be introduced which take into account how the platforms use data, consumers’ privacy and freedom of expression.

The Government’s response to the committee’s recommendation is to acknowledge that competition is central to unlocking the full potential of the digital economy. They promise to deliver reforms that will bring more vibrant markets, innovation and increase productivity. Who in this House does not agree with that?

I echo the noble Baroness, Lady Stowell, who asked why the Government have been so slow to enact these pledges. The Queen’s Speech dangled before your Lordships the hope of a draft digital markets and competition Bill, which promised to give the DMU statutory powers so that it can tackle tech companies’ abuse of their dominant positions. As the Government delay on this matter, regular businesses and consumers are losing out. The CMA suggests that they are losing £2.4 billion annually from the overpricing of the big platforms on ad sales alone.

Instead, the Government have used valuable legislative time to bring forward a media Bill which, although containing useful elements, promises to privatise Channel 4, which is driven by blind ideology rather than any business case. Can the Minister give the House an indication of when the digital markets Bill will come before it? I hope he will give us an assurance that goes beyond “when parliamentary time allows”.

I should also like to draw your Lordships’ attention to recommendation 42 of the report, which calls for a mandatory bargaining code to be set up to ensure fair negotiations between platforms and news publishers. Since 2010, over 265 regional newspapers in the UK have closed. Those that remain have seen their circulations collapse and this lost revenue is not being replaced by digital subscriptions. The industry faces an existential threat.

The big hope is that it can be resurrected digitally, as 38% of visits to news publishers’ websites came from links on Google or Facebook. However, at the moment the platforms get the content free or at very little cost, even though news content is one of the biggest drivers of traffic. The tech companies have made contracts with some newspaper publishers to pay for their content, but many say that the power imbalance is so great in the platforms’ favour that they are not being paid the true cost for using the content.

A bargaining code has already been introduced in Australia. It is not perfect because it is not sufficiently inclusive of regional players, and some people are worried about a mandatory contract for news content being imposed on the platforms. However, Rod Sims, the ex-head of Australia’s competition commission, told me that this has not happened and he had not been forced to use his powers. The threat of the imposition of a contract has changed the dynamic in the market enough to bring the platforms to agree an equitable price with news publishers for use of their content.

The report needs to see more of its recommendations taken up by the Government. There is still important work to be done if this country is to become a digital world leader. I urge the Minister to do all he can to ensure that there is legislation which allows freedom of expression and for a competitive digital market to allow a plurality of platforms in which those voices can be heard.