Digital Markets, Competition and Consumers Bill

Lord Black of Brentwood Excerpts

Committee stage
Wednesday 24th January 2024 Grand Committee

[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.

[Lord Black of Brentwood (Con)]

My Lords, I am afraid I am going to play the role of Little Sir Echo here. I hope that the unanimity expressed so far will send a strong message to my noble friend the Minister. I support Amendment 16 in the name of the noble Lord, Lord Faulks, to which I have added my name, and Amendments 17, 53 and 54. I note my interests as declared at the start of Committee.

As I made clear in my remarks on Second Reading, we must, throughout the consideration of the Bill, steadfastly avoid importing anything into the CMA and DMU procedures that would allow the platforms to deploy delaying tactics and tie up the regulators in endless legal knots. Long legal wrangling will destroy the very essence of the Bill, and it is not mere speculation to suggest that this might happen. As we have seen elsewhere in the world, and indeed in publishers’ own existing dealings with the platforms, we do not need to gaze into a crystal ball; we can, as the noble Lord, Lord Tyrie, put it the other day, read the book.

In that light, as we have heard consistently this afternoon, I fear that the government amendments made in the other place, requiring the conduct requirements and PCIs to be proportionate rather than appropriate, do just that. They impose significant restrictions on the work of the CMA and, as an extremely helpful briefing—which I think all Members have had—from Which? put it, produce “a legal quagmire” that would allow the unaccountable platforms

“with their vast legal budgets … to push back against each and every decision the regulator takes”.

It is simply counterintuitive to the design of the flexible and participatory framework the legislation portends. As my noble friend Lady Stowell said, it certainly makes me very nervous.

The key point is that introducing the concept of proportionality is, frankly, totally otiose, as the noble Lord, Lord Faulks, put it so well, as proportionality is already tested by judicial review—something the CMA itself has already reiterated. The courts, in this novel area of legislation, will rely on Parliament clearly to state its intentions. Introducing the concept of proportionality not only is unnecessary but in fact muddies the waters and creates confusion that will be mercilessly used by the platforms. It certainly does not produce clarity. The Government really must think again.

[Lord Tyrie (Non-Afl)]

My Lords, I do not know whether I am the sole dissenting voice—I do not think I am—but I want to make one preliminary point. I never thought I would make a point in defence of lawyers, but not all legal challenge or scrutiny will necessarily be wrong as this Bill proceeds or as the CMA takes its decisions. It is extremely important that we bear in mind, as we will come on to later on in the Bill, that we need to have a sense of balance about all this, so that we do not allow quite reasonable discontent with some of the shocking practices we have seen from platforms to lead us to a place that we might subsequently regret and which could lead to injustices or damage to British interests through loss of innovation or inward investment.

I listened very carefully to what the noble Lord, Lord Faulks, said. It seemed to boil down to very few things. Are convention rights engaged? They probably are, or if they are not then they will be. Even if they are not, the courts will find a way of getting them in eventually. If they are, what have the Government added? That is why I think I might be with the amenders here. I think very little, if anything at all, has been added. Was this a piece of window dressing, supplied by the Government to satisfy the intense lobbying that has taken place, particularly of No. 10? It had a whiff of that about it for me when I first saw it—I see one or two nods of assent. If it is, I am particularly wary of this change, which is what leads me to think that the amenders might be right. If it is more than this—if something very substantive has been added—then I think we would all like to hear from the Minister what exactly it is that, as a result of the adding of “proportionality”, will be considered for legal scrutiny when this Bill is on the statute book.

--- Later in debate ---

[Lord Holmes of Richmond (Con)]

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

[Lord Black of Brentwood (Con)]

My Lords, this is not just to prevent the Minister getting up again; it is relevant to both points that have just been made. A number of noble Lords asked whether this huge volte-face by the Government between the publication of the Bill and the amendments made very late in the other place came about as a result of pressure from the platforms. Could he tell us whether the platforms lobbied for this change and whether he discussed it with them?

[Lord Bassam of Brighton (Lab)]

My Lords, if I might help the Minister, this legislation has been knocking around for some time now, so what was it that provided that blinding flash of official or ministerial inspiration to bring this amendment about “proportionate” so late in the day in the other place that it was tabled right at the end of the Commons process? What was it that was so compelling as to make that dramatic change?

--- Later in debate ---

This is a huge group, covering a whole range of things, and I hope I have done justice to my noble friend who was not here.

[Lord Black of Brentwood (Con)]

We are all delighted that he is in fact here. I support Amendment 48 in the name of the noble Baroness, Lady Jones of Whitchurch, to which I have added my name.

The final offer mechanism is a crucial part of the Bill; it is the engine that makes it all work. In an ideal world, of course, it ought never to be deployed because the platforms would see the light of day and enter into sensible agreements with publishers. It should be a last resort only where common sense has failed. But this last resort is—like a deterrent—credible as an incentive to negotiate only if it can be deployed throughout the process of negotiation, not at some far distant point in the future. If it is something so far off that the platforms and publishers believe it will never in reality be reached, publishers will be compelled, out of commercial necessity, to accept suboptimal deals from SMS firms, in some cases—I think in particular of the local and regional press—simply to survive. As the Bill is currently drafted, that is exactly what might happen. The noble Viscount, Lord Colville, talked passionately about that aspect.

SMS firms that have time and money on their side—in the way that hard-pressed publishers do not—could very easily hold out until the very last minute of negotiations before the final offer mechanism is deployed. That ability continually to delay things simply reinforces the market power of the SMS firms and does nothing to redress the balance, which is what the Bill is supposed to be all about.

Such an extended nature of the enforcement process means that it could take years for the FOM to be reached if SMS firms are not acting in good faith—and, let us face it, that will happen. We need a system much closer to the Australian news media bargaining code, whereby strict timelines mean that every step combined—bargaining, mediation and final offer arbitration—would take just over six months. Of course, neither publisher nor platform wishes to end up in FOM unnecessarily. This amendment from the noble Baroness would make the FOM available at an earlier stage only if the CMA judged that its standard enforcement mechanisms would not be effective; for example, if an SMS firm had simply refused to enter negotiations. However, if the CMA judges that its standard enforcement mechanisms under Part 1 would be sufficient to ensure that deals are made swiftly, it could proceed with other remedies. This ensures that the FOM is a last resort but also a credible alternative.

Many publishers, particularly local and regional ones, as I have mentioned, are under the most severe commercial pressure. They simply cannot afford to wait to see the fruits of this Bill. Many more titles will have closed and some publishers may have gone under. In the interests of media plurality and local democracy, we need to get this right. As it stands, the Bill wills the ends but not the means.