Digital Markets, Competition and Consumers Bill
Public Bill Committee, 13 June 2023.
Philip Hollobone (Conservative, Kettering)
We are now sitting in public and the proceedings are being broadcast. I have a few preliminary announcements that Mr Speaker has asked me to draw to your attention. Hansard colleagues will be grateful if Members could email their speaking notes to hansardnotes@parliament.uk. Please switch electronic devices to silent.
Today, we will first consider the programme motion on the amendment paper. We will then consider a motion to enable the reporting of written evidence for publication and a motion to allow us to deliberate in private about our questions before the oral evidence session. In view of the time available, I hope that we can take those matters formally, without debate.
Philip Hollobone (Conservative, Kettering)
The Committee will therefore proceed to line-by-line consideration of the Bill on Tuesday 20 June at 9.25 am.
Philip Hollobone (Conservative, Kettering)
Copies of written evidence that the Committee receives will be made available in the Committee Room and circulated to Members by email.
Examination of Witnesses
Philip Hollobone (Conservative, Kettering)
Before we start hearing from the witnesses, do any Members wish to make declarations of interest in connection with the Bill? No.
We will move straight on then to hear oral evidence from the Competition and Markets Authority. This morning, we are privileged to have a trio of stellar CMA executives: Sarah Cardell, the chief executive; George Lusty, the senior director for consumer protection; and Will Hayter from the digital markets unit.
Before calling the first Member to ask a question, I remind all Members that questions should be limited to matters within the scope of the Bill, and that we must stick to the timings in the programme motion that the Committee has agreed. For this session, we have until 9.55 am. Could I ask our three witnesses, starting with the chief executive, to introduce themselves for the record?
Seema Malhotra (Labour/Co-operative, Feltham and Heston)
Thank you very much for coming today to give evidence. We very much appreciate your time. The CMA has supported this legislation, and there has been quite a lot of talk about how it provides a different approach to how the EU has taken forward legislation in this area. Do you think we have got the balance right, and why do you think a more flexible approach is helpful? You may have an example that you might want to use from your experience of a shadow digital markets unit.Q
Seema Malhotra (Labour/Co-operative, Feltham and Heston)
We have quite a lot to get through, so let me just ask a follow-up question. There has been some criticism that the approach of regulating firms with strategic market status would be a discouragement to business investment and confidence in the UK technology sector. What would your view be?Q
Seema Malhotra (Labour/Co-operative, Feltham and Heston)
Q The Government have not taken forward the recommendations from the CMA on tackling consumer detriment in the secondary ticketing market. Do you think that that was a mistake and that that should be in the Bill? Finally, huge new powers are going to the CMA. Do you think that the accountability mechanisms have the right balance? That will be a concern for Parliament. Mr Lusty and Mr Hayter might want to come in.
Paul Scully (Conservative, Sutton and Cheam)
Q How will the enforcement powers accelerate your enforcement action in particular? Remediation needs to come quickly in digital markets, especially with the appeals process, which has been a topic of conversation. Why do you believe that judicial review is sufficient to give proportionatality for people to push back and for keeping the speed up?
Paul Scully (Conservative, Sutton and Cheam)
So you believe this is the right balance between being robust enough for those with strategic market status and being speedy enough for remediation for challenger tech.Q
Alex Davies-Jones (Labour, Pontypridd)
Good morning. We have talked a lot this morning about accountability to Parliament. That was highlighted quite heavily on Second Reading by Members from across the House. One of the other things that we have already discussed is the need for the CMA’s strategic priorities to be directed and advised by Parliament. Could you expand on your thoughts on that point? Also, where do you see the priorities for the Digital Markets Bill? That is not intended to be a loaded question.Q
Kevin Hollinrake (Conservative, Thirsk and Malton)
Q First, thank you for the work that you do. You are obviously an independent body and you make difficult decisions. You receive more scrutiny than we have ever seen before, with the CMA’s higher profile, and at times that must put you under quite a lot of strain. I appreciate the work that you do. You make the decisions as you see fit, of course, but those often come with criticisms, so thank you.
My question is about innovation. If you speak to some of those who are likely to be designated SMS—strategic market status—businesses, many of them might say, “Well, this will inhibit innovation from our businesses.” I think part of that is about the power to look ahead at where this may take us. What do you say to that? If one of those platforms was opening a new type of supermarket, for example, it might be claimed that this would limit innovation. How would you respond to that?
Kevin Hollinrake (Conservative, Thirsk and Malton)
Q Would you therefore say that those kinds of worries are ill-founded and that that is not something that would prohibit an SMS organisation from innovating?
Philip Hollobone (Conservative, Kettering)
We now come to a quick-fire round. We have six minutes left and four Members seeking to ask questions, so we want quick questions and quick answers.
Neil Coyle (Labour, Bermondsey and Old Southwark)
Do you have the resources to take on the new powersQ ?
Neil Coyle (Labour, Bermondsey and Old Southwark)
Q Do you have an in-house legal team, or will you be taking on additional lawyers, given that it has taken legal action against some companies even to get to this point?
Neil Coyle (Labour, Bermondsey and Old Southwark)
And—
Philip Hollobone (Conservative, Kettering)
We will have to move on, I am afraid.
Vicky Ford (Conservative, Chelmsford)
I want to ask what success is and what it looks like. Is success giving my consumers greater choice and lower prices, and my businesses ensuring that the UK is an attractive place to Q invest compared with other markets? If that is the definition of success, how do you measure it both domestically, compared with what has happened in the past, and internationally, compared with other markets?
Vicky Ford (Conservative, Chelmsford)
Q Really quickly—will you be watching our market compared with what is happening in other markets?
Jerome Mayhew (Conservative, Broadland)
You say that open, competitive markets are good for growth. I totally agree, but we are one market among a global series of markets. Building on what Vicky Ford just said, where do you see this regulatory innovation sitting? You have referenced the EU and what it is doing, and there are other things going on in the US. Will this draw investment into the UK in this sector, or will it make people say, “Hmm, I’m not sureQ ”?
Dean Russell (Conservative, Watford)
When I go back to my constituency in Watford tonight and speak to people on the street, what can I tell them will make a difference to their lives, in the simplest termsQ ?
Dean Russell (Conservative, Watford)
Q Will they see that happen, or will they need to be involved in the process to report where there are issues?
Philip Hollobone (Conservative, Kettering)
I thank our three stellar witnesses very much indeed for their time this morning. We wish you continued success at the CMA.
Philip Hollobone (Conservative, Kettering)
I welcome Rocio Concha, director of policy and advocacy and chief economist at Which?, and Matthew Upton, acting executive director of policy and advocacy at Citizens Advice. Thank you for coming this morning. Would you be kind enough to introduce yourselves to the Committee for the record?
Seema Malhotra (Labour/Co-operative, Feltham and Heston)
Q Thank you for coming to give us evidence today. I have a couple of questions. First, will you outline how you see the Bill delivering consumer benefits, and how you will seek to measure that impact? Secondly, the Government announced with much fanfare that the Bill would tackle the practice of fake reviews, but they are not mentioned in the legislation; they are instead left to a delegated power. Do you think that more action is needed on fake reviews, and how concerned are you that the Bill will not deliver on the changes needed?
Seema Malhotra (Labour/Co-operative, Feltham and Heston)
Q Thank you very much. This question may be more for Mr Upton. The Bill goes some way towards tackling the problem of subscription traps, but it does not go as far as what Citizens Advice has called for, or indeed the Labour party’s policy of making subscription renewals opt in rather than opt out. Why do you think that the legislation needs further safeguards? Why, in the light of your experience, is that important for protecting consumers from harm?
Kevin Hollinrake (Conservative, Thirsk and Malton)
Q Rocio, on your point about including fake reviews on the face of the Bill, our intention is to legislate in this area. I do not know whether you have seen the evidence from Trustpilot, which was submitted as written evidence. It rightly points to the fact that most of the discussion around fake reviews thus far has been about products rather than services. Does not that illustrate that we need to consult properly about that to ensure that we get the legislation right? Isn’t there a risk that we could get it wrong by rushing to stick this on the face of the Bill?
Kevin Hollinrake (Conservative, Thirsk and Malton)
Q Even though there might be some things we have not thought about at this point in time. That would be a good example in terms of Trustpilot’s evidence.
Kevin Hollinrake (Conservative, Thirsk and Malton)
Q Sure, okay. Mr Upton, on subscription traps, do you not feel that the powers that the Bill affords the CMA on civil penalties will address some of the concerns you highlight of people trying to get around the rules, for example? Would that not be something it could act on when it sees gratuitous behaviour such as what you describe?
Richard Thomson (Scottish National Party, Gordon)
The EU has a right to redress for consumers, and there is a schedule in the Bill that would allow the Secretary of State to introduce that again in future through secondary legislation. Do either of you have any sort of sense of the extent to which UK consumers might be at risk of being at detriment compared with their EU counterparts while that secondary legislation is not in placeQ ?
Richard Thomson (Scottish National Party, Gordon)
Q On fake reviews, the challenge that came up at Second Reading was about how we might define, judge and act on them. How do you think it is best to tackle the problem of fake reviews? Have you any suggestions while we are engaged in this consultation?
Richard Thomson (Scottish National Party, Gordon)
How could we legislate create the framework by which the problem of fake reviews could be best addressed?
Dean Russell (Conservative, Watford)
Q You are both at the coalface for consumers in terms of the challenges around all the issues addressed by the Bill. Can you briefly share some real-life examples of why the Bill is so important and what difference it will make to consumers?
Philip Hollobone (Conservative, Kettering)
We have 12 minutes left, and five Members are seeking to ask questions, so we need to increase the pace.
Neil Coyle (Labour, Bermondsey and Old Southwark)
Q Electrical Safety First and the British Toy & Hobby Association have described Amazon and other online platforms as a bit of a wild west when it comes to product safety for consumers. I appreciate that you both support the Bill as a step forward, but what is missing for consumers when it comes to product safety? Is it a new sheriff for the wild west?
Neil Coyle (Labour, Bermondsey and Old Southwark)
Q So this is a missed opportunity. There is nothing within clauses 67 to 82 on the investigatory powers that would allow for sufficient tackling of unsafe products, including toys reaching children.
Neil Coyle (Labour, Bermondsey and Old Southwark)
That is disappointing.
Jerome Mayhew (Conservative, Broadland)
Q Mr Upton, I want to come back to you about subscription traps. You are saying that the requirement in the Bill that subscription cancellation should be a timely process is not sufficiently detailed. I declare an interest: in a former life, I used to help write European regulations. Is it not an absolutely basic tenet of writing regulations that you design outcomes— you do not list processes unless you absolutely have to, because things change? Given that point, are the Government, or the drafters of this Bill, not correct to focus on the outcome required and leave the process alone?
Jerome Mayhew (Conservative, Broadland)
Q Is the intervention not actually the exact opposite of what you are suggesting, in that, if you have a stricter requirement within the regulations, people find ways to get round that strict interpretation, but if you have an outcomes-focused statement as is currently in the Bill, the onus is on the companies to demonstrate compliance, and the CMA, with the fining power of 10% of global turnover, has the stick with which to enforce it?
Alex Davies-Jones (Labour, Pontypridd)
Q You mentioned schedule 18 already and some of the missed opportunities that you see there. Some things that have been highlighted are drip pricing and misleading green advertising. Can I push you a bit further on the missed opportunities in schedule 18?
Alex Davies-Jones (Labour, Pontypridd)
Yes. What you would like to be in there.
Vicky Ford (Conservative, Chelmsford)
Q When the CMA was answering Dean Russell’s question about how consumers will feel the benefits, one of the things it pointed to was its greater powers to fine companies that are misbehaving. Do you not think that the threat of fines on companies will have a trickle-down benefit to the consumers, and that it will mean that companies will think harder about not acting in ways that are to the detriment of consumers?
Anna Firth (Conservative, Southend West)
You have given us a simple, practical way to end subscription traps through the opt-out. Do you have any other simple, practical amendments in the locker that would help better protect my consumers in Southend-on-Sea?
Philip Hollobone (Conservative, Kettering)
I thank our witnesses very much indeed for your precious time this morning; we appreciate it.
Rushanara Ali (Labour, Bethnal Green and Bow)
Good afternoon, everyone. I need to call the Government Whip to move a motion to amend the Programme Order agreed this morning. The purpose of the motion is to enable us to hear from the witnesses who were unable to give evidence earlier today.
Rushanara Ali (Labour, Bethnal Green and Bow)
Good afternoon, everyone. Could each of the witnesses introduce themselves, please? One witness is in the room and two are joining us virtually.
Rushanara Ali (Labour, Bethnal Green and Bow)
Thank you all very much for joining us. I call shadow Minister Alex Davies-Jones to kick off with questions.
Alex Davies-Jones (Labour, Pontypridd)
Good afternoon professors and thank you for joining us today. We have had a lot of chatter about whether the Bill will help or hinder the growth of innovation in the UK’s digital market. What are your opinions about that and do you feel that the Bill goes far enough?Q30
Alex Davies-Jones (Labour, Pontypridd)
Q Professor Fletcher?
Kevin Hollinrake (Conservative, Thirsk and Malton)
Q Thank you very much for your answers. Amazon has recently said the complete opposite of what you are saying. It has said that the Bill will stop it from innovating. It has started these new stores where you can go and shop and there are no staff—people just go in, take the stuff off the shelf and walk out. Amazon says that this Bill would have stopped it from taking forward that kind of innovation. What particular areas in the Bill is Amazon referring to? Do you recognise those as valid concerns?
Kevin Hollinrake (Conservative, Thirsk and Malton)
Q There is a forward-looking provision, is there not, for the CMA to look five years into the future and decide whether a company will have entrenched market power then? Is that what Amazon is referring to? Is that their concern, and would that be valid?
Kevin Hollinrake (Conservative, Thirsk and Malton)
Q How would they game the system, Professor Marsden? What do you mean by that?
Kevin Hollinrake (Conservative, Thirsk and Malton)
Q Professor Furman, I saw your hand up. Do you have any comments?
Rushanara Ali (Labour, Bethnal Green and Bow)
I call shadow Minister Seema Malhotra.
Seema Malhotra (Labour/Co-operative, Feltham and Heston)
Thank you very much for coming today. I want to pick up on the argument that the legislation will enhance innovation. In your excellent report, which underpins much of our work, you mention hearing from businesses that were finding it hard to innovate.Q
Some conversations that we have had have been more explicit about the increased costs of innovation, and the difficulties when there is no interoperability or access, and increased costs being passed on to customers. Is that consistent with your experience, and what are the likely economic benefits to businesses and consumers of this legislation? I will take Professor Fletcher first, and then we will come back to Professor Furman and Professor Marsden.
Seema Malhotra (Labour/Co-operative, Feltham and Heston)
Q Professor Furman, I would be interested to know whether you think the Bill strikes the right balance. Does it give the CMA too much power? Does it put the right amount of power in the new digital markets regime?
Seema Malhotra (Labour/Co-operative, Feltham and Heston)
Q Thanks for those responses. Professor Marsden, how much we will need some global leadership to ensure this legislation has the impact it needs to have? Some of these issues and the companies’ operations do not stop at borders. To what extent are there tools in the legislation and more widely for the CMA to operate with sister regulators abroad?
Seema Malhotra (Labour/Co-operative, Feltham and Heston)
Professor Fletcher and Professor Furman, do you want to add anything?
Paul Scully (Conservative, Sutton and Cheam)
Q Thank you for coming before us. You are right: you cannot have a monopoly of monopolies commission. That would be wrong, but if we can have more regulatory certainty across the globe, that is good. There are three areas that I can see the different interests pushing on. There is the appeals system, whether it is judicial review or a full merits review, the final offer mechanism and the countervailing benefits exemption. On appeals, do you think judicial review is sufficient, proportionate and fast enough? That is what we are trying to do here—is it fair and fast to get that remediation? It would be interesting to hear your comments.
Paul Scully (Conservative, Sutton and Cheam)
Professor Marsden or Professor Furman, do you have any views on that? Professor Marsden, your screen has frozen. Professor Furman?
Paul Scully (Conservative, Sutton and Cheam)
Okay. Thank you.
Dean Russell (Conservative, Watford)
Professor Fletcher, imagine I am a growing business: I am successful, I have an online presence, I am doing lots of great stuff and I am a challenger to the global big businesses. What does the Bill mean to me? What difference will it make?Q
Dean Russell (Conservative, Watford)
Thank you. I notice that we have lost one of our witnesses, so I will go to Professor Marsden—I mean Professor Furman. My apologies; I forget my own name sometimes!
Dean Russell (Conservative, Watford)
Q Excellent. If I may follow up and spin that question on its head, Professor Marsden—hopefully I have the right person. I was asking before about what difference the Bill will make to a small business or growing business, but what will it mean for big businesses—the global giants—especially those that work in the online space? What will it make them better at doing? What will it stop them doing that might be harmful to competition at the moment?
Rushanara Ali (Labour, Bethnal Green and Bow)
Thank you, professor. I have a follow-up from the Minister.
Paul Scully (Conservative, Sutton and Cheam)
No, that is fine.
Rushanara Ali (Labour, Bethnal Green and Bow)
Okay. In that case, I will bring in Jerome Mayhew.
Jerome Mayhew (Conservative, Broadland)
I understand the evidence that you have given about the need under clause 194 to have a JR approach to the appeal process. What that does, however, is underline the power that the CMA has. Professor Furman, you mentioned earlier in evidence that it really matters who the leader of the CMA is. The area that I want you to comment on is whether you think that, under this process, there is sufficient political accountability for the decisions of the CMA. Such organisations are big, with the potential to have a huge impact on the economy of this country. Inevitably, they are deeply politically sensitive—or it is foreseeable that they will be—so are we not in danger of passing the buck too much to an arm’s length organisation like the CMA? Perhaps we should recognise that the decisions are inevitably political and that we therefore need a greater sense of political accountability. Professor Furman, could you start off on thatQ ?
Jerome Mayhew (Conservative, Broadland)
Q Professor Fletcher, you are nodding. Would you like to expand on that?
Rushanara Ali (Labour, Bethnal Green and Bow)
Thank you. We have time for one more question, so I call Andy Carter.
Andy Carter (Conservative, Warrington South)
Q Professor Fletcher, picking up on something that you mentioned earlier, I want to look at innovation and investment. You said that we are leading the world in the some of the work that we are doing. Can you quantify how that work will benefit UK plc? I am conscious that that is a big question, but has any work been done on our approach and the benefits to our economy that we might see?
Rushanara Ali (Labour, Bethnal Green and Bow)
Thank you very much. That brings the allotted time for this witness panel to an end. On behalf of the Committee, I thank you all very much for giving us your time.
Rushanara Ali (Labour, Bethnal Green and Bow)
We will now hear from our next panel of witnesses. We have Noyona Chundur, chief executive of the Consumer Council; Peter Eisenegger, board member, National Consumer Federation; and, via Zoom, Tracey Reilly, head of policy and markets, Consumer Scotland. May I ask you to introduce yourselves for the record?
Rushanara Ali (Labour, Bethnal Green and Bow)
Thank you. I invite shadow Minister Seema Malhotra to start the questions.
Seema Malhotra (Labour/Co-operative, Feltham and Heston)
Q Thank you for coming to give evidence. Perhaps I could start with you, Ms Chundur, and then others may wish to come in. Do you think that this Bill will adequately address consumer detriment in digital markets? Are there areas where the legislation could go further?
Vicky Ford (Conservative, Chelmsford)
Slow down!
Seema Malhotra (Labour/Co-operative, Feltham and Heston)
You are going through them quite well, but could you go you through them slightly more slowly, because colleagues will want to write them down?
Seema Malhotra (Labour/Co-operative, Feltham and Heston)
Q Sorry: your list of eight things was quite useful, so would you be able to go through those—as you were before, but just a bit slower?
Vicky Ford (Conservative, Chelmsford)
I wrote down the first one.
Seema Malhotra (Labour/Co-operative, Feltham and Heston)
Could you start the list again?
Seema Malhotra (Labour/Co-operative, Feltham and Heston)
Q Thank you—that was very helpful. On subscription traps, you will have evidence for recommending opt-in rather than opt-out. Could you talk us through the impact of the opt-out?
Seema Malhotra (Labour/Co-operative, Feltham and Heston)
Q Mr Eisenegger, are there any gaps that you would argue for, and what is your view on fake reviews and whether they are being sufficiently addressed in the legislation?
Seema Malhotra (Labour/Co-operative, Feltham and Heston)
Q In the interests of time, I will move on to Ms Reilly. What is your view of how this will affect/benefit consumers in Scotland? Are there any other specific issues that we should consider in relation to Scotland?
Kevin Hollinrake (Conservative, Thirsk and Malton)
Q Noyona, you mentioned that you felt that the CMA should not be the only enforcement body that oversees the legislation. Who else do you think has the experience and expertise to perform some of those significant obligations?
Neil Coyle (Labour, Bermondsey and Old Southwark)
The Bill aims to protect consumers and challenge unfair competition online, but one significant disadvantage for British companies and consumers is counterfeit goods sold on platforms such as Amazon. For example, the British company that holds a licence to make Peppa Pig toys has the trademark and the patent, and meets the standards, including safety standards, but counterfeit goods, particularly those imported from other countries such as China, are dangerous and do not meet safety conditions. Will the Bill help end that situation for consumers and companies here? Is it an opportunity to do so or, if not, is it amendable to achieve that?Q
Neil Coyle (Labour, Bermondsey and Old Southwark)
Q Would the Bill allow for a company here to say that? Amazon’s excuse is that that is for the producer in China, for example, to do that, rather than for Amazon. Does the Bill address that gap or not?
Neil Coyle (Labour, Bermondsey and Old Southwark)
Q Thank you for your work. Perhaps the Government will pick up on some of that. Noyona, I think you were going to come in.
Vicky Ford (Conservative, Chelmsford)
Q Could you give us examples of where the industry has set standards in the digital space that have helped to address particular holes? You have given us a list of standards for online reviews and alternative dispute resolution, but can you give us a way to explain to our constituents why these industry-led standards help to underline good behaviour in this market, and why it is important that they are set in an international sphere for these players?
Vicky Ford (Conservative, Chelmsford)
Are they industry-led?
Vicky Ford (Conservative, Chelmsford)
Q I think you said that you sometimes see the standardisation process in the digital world being used by larger players to put barriers in the way of smaller players getting involved.
Vicky Ford (Conservative, Chelmsford)
Q Can you give an example where you have seen that?
Seema Malhotra (Labour/Co-operative, Feltham and Heston)
Q I want to come back to some areas that we have picked up on in previous evidence sessions. Schedule 18 to the Bill sets out a list of commercial practices that are to be considered unfair, but a number of arguably unfair commercial practices are not included. Examples might be drip pricing or misleading green advertising, which is an increasing consumer concern. Do you consider those omissions to be something that needs more attention during the passage of the Bill so we do not miss this opportunity?
Seema Malhotra (Labour/Co-operative, Feltham and Heston)
I think Ms Reilly wants to come in as well.
Seema Malhotra (Labour/Co-operative, Feltham and Heston)
In relation to support for consumer organisations, how do you think the CMA and the Government can better support consumer organisations that are supporting consumers on the frontline?Q
Vicky Ford (Conservative, Chelmsford)
Q I want to come back to schedule 18 and ensure that I absolutely understood what Tracey said. This morning, I think Which? said that they thought fake reviews should now be put in schedule 18. I have had constituents who have suffered from fake reviews for services they have given, and the fake review has been very damaging to their business. We all know about fake reviews on books, which can be very damaging. Are you saying, Tracey, that we need to ensure we get the wording of how it goes into schedule 18 right—have the consultation and get the wording right—but let the Government introduce it through Henry VIII powers later, rather risk delaying the Bill by trying and maybe not getting the exact wording right now?
Vicky Ford (Conservative, Chelmsford)
Q So “get it clear” is what you are saying to us.
Jerome Mayhew (Conservative, Broadland)
Q Ms Chundur, you gave a very interesting stat earlier: £1.6 billion per year is spent on subscriptions that people do not want. One of your eight areas of concern is an opt-in clause for the subscription trap issue. You are in good company, because Citizens Advice came up with the same recommendation in this morning’s evidence session. However, we will hear later today from the News Media Association, which expressed exactly the opposite view in its written evidence: that the current wording of clause 252(1), which is essentially that you should be able to unsubscribe with one click without any unreasonable additional steps to go through,
“may hinder the provision of improved subscription offers that are in the best interest of the consumer”.
Can you comment on that? I will test the NMA if no one else does regarding what exactly it meant by that, and ask for examples of how it might hinder improved consumer engagement, but if the NMA can substantiate that, would you accept that it has a point?
Jerome Mayhew (Conservative, Broadland)
Q Do you also recognise that there are people like me out there who signed up for a contract, and to be asked every single time, “Do you want to renew it?” when it is a core level of services that I benefit from, year in, year out, would be less constructive for my wellbeing? That is poor English, but you know what I am trying to say.
Andy Carter (Conservative, Warrington South)
Q Tracey, you mentioned in your opening statement that a number of markets operate differently in Scotland. I wonder whether I could ask you to expand on that a little. What particularly were you referring to, and where does the Bill need to be amended to accommodate those markets operating differently?
Andy Carter (Conservative, Warrington South)
Q Do you want to pick up on that from a Northern Ireland perspective?
Andy Carter (Conservative, Warrington South)
Q I have one further question. You touched on nudge techniques. Can you expand on that and on what action you think needs to be taken?
Andy Carter (Conservative, Warrington South)
Q Can you give me an example of where that is happening?
Andy Carter (Conservative, Warrington South)
Q Sorry to pressure you on this, but I want to understand what you mean by a nudge technique. If I go on to a website and then I get an email afterwards, is that a nudge technique? What do you mean?
Andy Carter (Conservative, Warrington South)
That is really helpful. Thank you.
Rushanara Ali (Labour, Bethnal Green and Bow)
I call Dean Russell to ask a brief question.
Dean Russell (Conservative, Watford)
Q I have two, but they are really quick. First, will the consumer be expected to do anything in order to see benefits from the Bill, in your view? Will they benefit from all the wonderful things we have talked about, or will a communications campaign be needed alongside the Bill to tell them what their new rights are so that they can report back and make complaints, as it were?
Dean Russell (Conservative, Watford)
I will leave my second question, because I am conscious of time.
Rushanara Ali (Labour, Bethnal Green and Bow)
Thank you.
That brings us to the end of the time allocated for this witness panel. On behalf of the Committee, thank you all very much for taking the time to give evidence.
Examination of Witness
Rushanara Ali (Labour, Bethnal Green and Bow)
We will now hear oral evidence from Professor Geoffrey Myers, visiting professor in practice at the London School of Economics and Political Science. For the record, Professor, could you introduce yourself?
Alex Davies-Jones (Labour, Pontypridd)
Q This is a question that we have been asking a lot of the witnesses today, but it is important to get your views on the record. Could you please outline whether you think the Bill will help or hinder innovation growth in the UK digital sector? Do you think the Bill goes far enough, or are there any omissions from the Bill that you would like to see included?
Alex Davies-Jones (Labour, Pontypridd)
Q On omissions, do you think the Bill could go further?
Alex Davies-Jones (Labour, Pontypridd)
Q Comparing this Bill with other legislation that we are seeing—in the EU, for example—do you see it as positioning the UK as a world leader, which is the phrase the Government like to use, in this area?
Alex Davies-Jones (Labour, Pontypridd)
Q Finally, the other thing we have heard a lot around this Bill is the length of time it has taken us to get to this place. We had the digital competition expert panel set up in 2018, and the Bill’s impact assessment now suggests that the provisions in the Bill will not be fully operational until 2025 at the earliest. Can our digital economy wait that long?
Kevin Hollinrake (Conservative, Thirsk and Malton)
Q You may have heard my question earlier. Some of the firms that are likely to be designated as SMS might argue that this Bill will prevent them from innovating. Do you see any chance of that? Are there any areas within the Bill that make it likely that innovation will be inhibited?
Kevin Hollinrake (Conservative, Thirsk and Malton)
Q I know you are an expert in ex ante regulation. Obviously the way in which people can appeal any intervention by the CMA or the DMU would be only by JR, rather than on the merits method. Is that the right standard?
Seema Malhotra (Labour/Co-operative, Feltham and Heston)
Q I want to pick up on the answers you gave earlier when my hon. Friend the Member for Pontypridd was talking about the delays in reaching this point and the length of time it will take for the Bill to go through. If there are any further delays, particularly if we reach 2025 before this is operational, what do you see some of the risks being in the meantime?
Seema Malhotra (Labour/Co-operative, Feltham and Heston)
Q Would you be concerned that by the time it comes in, it will need amending again?
Seema Malhotra (Labour/Co-operative, Feltham and Heston)
Q I am interested, because you have such a depth of experience across these areas, in whether there is anything you feel has not been said in the evidence session that you would like to make as a contribution to the Committee’s deliberations.
Rushanara Ali (Labour, Bethnal Green and Bow)
That brings us to the end of this session. On behalf of the Committee, I thank you, Professor, for taking the time to give evidence.
Rushanara Ali (Labour, Bethnal Green and Bow)
We will now hear oral evidence via Zoom from Graham Wynn, assistant director for consumer competition and regulatory affairs at the British Retail Consortium. Graham, will you introduce yourself for the record?
Seema Malhotra (Labour/Co-operative, Feltham and Heston)
Q Thank you for joining us to give evidence. Will you outline what you see as the main consumer issues in the retail industry that you would want—hope for—the Bill to address? Do you see any gaps?
Seema Malhotra (Labour/Co-operative, Feltham and Heston)
Q I just want to follow up on your point about trading standards and enforcement. Trading standards resources have dropped by 50%, and there is a wild west on our high streets and online, with products coming through porous borders at the moment.
Seema Malhotra (Labour/Co-operative, Feltham and Heston)
Q In your view, should more powers be given to trading standards as well? I was not quite clear on where you saw a role for the CMA and trading standards together.
Kevin Hollinrake (Conservative, Thirsk and Malton)
Q Mr Wynn, you mentioned schedule 18 and not adding to the list without proper evidence. Is it your position then that we should not at this point in time add fake reviews to that list and that we should go through a proper process of consultation before we decide what to do about that?
Neil Coyle (Labour, Bermondsey and Old Southwark)
Q I want to see the wild west tackled. As the Bill is drafted, will the consumer detriment provisions be sufficient to tackle producers or suppliers of products that reach UK consumers via platforms such as Amazon, or do the platforms need tackling for responsibility and enforcement action?
Kevin Hollinrake (Conservative, Thirsk and Malton)
Q On that very point, it is something that we are keen to tackle—and Mr Coyle is right to raise it, as he has done several times today. You have talked about an evidence-based approach to this. You will be aware that we will shortly launch the product safety review, which will tackle some of these issues, including the clarification of online marketplaces’ responsibilities in terms of ensuring the safety of products. Do you think that is the right place to deal with this, rather than the Bill?
Seema Malhotra (Labour/Co-operative, Feltham and Heston)
Q An area that we have not covered is much is alternative dispute resolution. Part 4 of the Bill would make accreditation of ADR providers compulsory unless an exception applies. How effective do you think that provision will in protecting consumers, and do you think it is the right approach?
Rushanara Ali (Labour, Bethnal Green and Bow)
I am afraid that brings us to the end of this witness session. Thank you very much for your evidence.
Rushanara Ali (Labour, Bethnal Green and Bow)
We will hear now from Max von Thun, Europe director of Open Markets. Max, would you introduce yourself for the record?
Alex Davies-Jones (Labour, Pontypridd)
Q How important is it that this legislation is not watered down, as the Government’s approach to the Online Safety Bill has been as that passes through the House?
Alex Davies-Jones (Labour, Pontypridd)
Q On the matter of getting it through as quickly as possible, we spoke to previous witnesses regarding the time that this will take to implement—2025 was mooted. It would be helpful to the Committee if you could outline some specific cases and instances of competition in digital markets that have been threatened up to this point, and any specific cases of detriment to the smaller market actors or to consumers.
Vicky Ford (Conservative, Chelmsford)
Q I did some market research with my 23-year-old son, who is much more of a digital consumer than I am, especially when it comes to online games. I want to ask you about where the dividing line is with in-game purchases. I, being very pro-market, would say that anybody should be able to sell these products once you are in the game, but my son was saying, “But wouldn’t that put off the person who invested all the money in inventing that game in the first place and is getting some of his money back because of my in-game purchase? It’s up to me whether or not I make that purchase.” Where is the line, Max?
Vicky Ford (Conservative, Chelmsford)
Q I get that, but let’s say that an online game is like a shop. If I own the shop, I am not going to let anybody else walk in, put their products on my shelves and sell them, because I am paying the set-up costs and running the shop. If I have invented a game, should I let other people sell their products inside it?
Vicky Ford (Conservative, Chelmsford)
Interesting.
Vicky Ford (Conservative, Chelmsford)
Thank you—and sorry, colleagues, for the family discussions.
Andy Carter (Conservative, Warrington South)
Q Can I ask about the whole area of innovation, particularly for smaller start-up tech firms? What is your feeling towards the Bill with regard to the attitude that they might take to operating in the UK?
Andy Carter (Conservative, Warrington South)
Q You wrote an article in The Times recently about fast-growing British tech firms seeing acquisition by the US giants as a viable exit route. Do you think the Bill might change any of that?
Kevin Hollinrake (Conservative, Thirsk and Malton)
Q Thank you for your evidence. You probably heard my questions from earlier. We are very keen to ensure that innovation continues, not just in terms of the start-ups and scale-ups but with our big tech firms. Do you see anything in the Bill that will inhibit that?
Rushanara Ali (Labour, Bethnal Green and Bow)
Are there any further questions? In that case, on behalf of the Committee, thank you very much for coming to give evidence.
Examination of Witnesses
Rushanara Ali (Labour, Bethnal Green and Bow)
Thank you all very much. We will move on to our next session to hear from John Herriman, chief executive, and David MacKenzie, lead officer, from the Chartered Trading Standards Institute. Could you introduce yourselves for the record?
Seema Malhotra (Labour/Co-operative, Feltham and Heston)
Q Thank you very much for coming to give evidence to the Committee. I know from your briefings that you have welcomed the Bill, but I wonder if you might be able to talk us through where you see gaps. Specifically, where do you think there should be, for the successful implementation and enforcement of the new regimes, a greater role for trading standards officers, and why?
Seema Malhotra (Labour/Co-operative, Feltham and Heston)
Q Is that a point about greater powers that trading standards officers should also have alongside the CMA’s role, or is it a question of resources?
Seema Malhotra (Labour/Co-operative, Feltham and Heston)
Q What happens in that situation? Do you just not get access to the data and the files?
Seema Malhotra (Labour/Co-operative, Feltham and Heston)
Q Would that be specifically for websites where that may be misleading or scamming consumers?
Seema Malhotra (Labour/Co-operative, Feltham and Heston)
Q Sorry, in the interests of time—we may have to go to a vote shortly—I have just one small question, and then I will hand over to colleagues. You said in your evidence that it is important that more is done, because there is nothing requiring online marketplaces and other collaborative platforms to make buyers aware of who the seller is—whether it is a business or a private seller—and that that has implications for consumer rights. Could you explain a bit more about what you think needs to happen that is not in the Bill?
Kevin Hollinrake (Conservative, Thirsk and Malton)
Q You make some important points that we seek to deal with in creating a fair and level playing field and protecting consumers at the same time. There is the whole point about whether an online marketplace is a distributor, retailer or whatever else. Do you think those questions are best resolved in this legislation or in the product safety review, which we have committed to do and brings in many other things that you have referenced already?
Kevin Hollinrake (Conservative, Thirsk and Malton)
Q And the Online Safety Bill does not deal with that?
Rushanara Ali (Labour, Bethnal Green and Bow)
If there are no other brief questions, I bring this session to a close. I thank the panel on behalf of the Committee. This is perfectly timed as there will be votes shortly and we will be away for quite a long time. Thank you very much. We have spared you having to wait an hour or so.
Rushanara Ali (Labour, Bethnal Green and Bow)
Q Thank you all. Before we suspend the sitting for a vote, it is important to get you to introduce yourselves. We will start and see how much progress we make. Next we have Owen Meredith, the CEO of the News Media Association; Peter Wright, the editor emeritus of DMG Media; and Dan Conway, CEO of the Publishers Association. Will you introduce yourselves for the record?
Alex Davies-Jones (Labour, Pontypridd)
Q Thank you all for being here this afternoon. My question is probably aimed at Owen and Peter. In your view, does the Bill go far enough in enabling journalists and media outlets to be empowered to negotiate fair deals with the tech platforms? Can you spell out why that is not the case at the moment?
Alex Davies-Jones (Labour, Pontypridd)
Q You answered my question, but are you concerned that by that point the tech companies will use this as a delaying mechanism, which will help proliferate disinformation and misinformation online by people who claim to be journalists? Provisions in the Online Safety Bill enable anybody to be a journalist, and will prevent that information or fake news—for want of a better phrase—from being taken down.
Kevin Hollinrake (Conservative, Thirsk and Malton)
Q In your organisation’s written evidence, you took a different view from some of our earlier witnesses, who think we are not going far enough in terms of making it easy for people to exit a subscription only to opt back in. Yours said that actually we should make it slightly more difficult, for example, by taking away the cooling off periods and making the exit subscription slightly different in terms of allowing people to take advantage of other offers, which might confuse the process of unsubscribing. I am interested to hear your views on that.
Kevin Hollinrake (Conservative, Thirsk and Malton)
Q I get that, but if you are in a situation where you are subscribed to just one service and there is not a forest of different emails coming in saying your subscription is ending, the effects of your suggestions would make it more difficult for people to exit contracts.
Kevin Hollinrake (Conservative, Thirsk and Malton)
The cooling off period was—
Kevin Hollinrake (Conservative, Thirsk and Malton)
Q But the removal of the cooling off period would make it more difficult for some people to exit a contract, wouldn’t it?
Dean Russell (Conservative, Watford)
Q We live in an era where we talk about consumers, who might be consuming services or products—but they also might be consuming news. How will the consumers of journalism benefit from or be impacted by the Bill?
Dean Russell (Conservative, Watford)
Q I am the MP for Watford. We have the Watford Observer and My Local News—those smaller regional organisations. Do you see this legislation benefiting them?
Rushanara Ali (Labour, Bethnal Green and Bow)
I will bring in Andy Carter to ask a brief question. I would like us to be able to wrap up soon to avoid detaining our witnesses for up to an hour. If everybody is agreed and there are no further questions other than Andy Carter’s, I will call him to ask his question.
Andy Carter (Conservative, Warrington South)
It is a question to Dan. I am very conscious that you have sat here and not had an opportunity to say anything. Could you give us a broad overview of how the Bill might affect the publishing sector?
Andy Carter (Conservative, Warrington South)
Q Can you write to us at some point and share those terms with us, so we can see the experience some of your members face?
Rushanara Ali (Labour, Bethnal Green and Bow)
Unless there is anything else, I will bring this session to a close. On behalf of the Committee, I am grateful to you all for the rapid responses you have provided. Thank you very much.