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House of Lords Hansard
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Digital Competition
05 November 2019
Volume 800

Question

Asked by

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To ask Her Majesty’s Government what assessment they have made of the recommendations of the report of the Digital Competition Expert Panel, Unlocking Digital Competition, published on 13 March.

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My Lords, the Government welcome wholeheartedly the Digital Competition Expert Panel’s report. We have accepted the panel’s bold set of pro-competition recommendations to open up digital markets, including a new digital markets unit to protect consumers and competition, and to encourage innovation. We are carefully considering the panel’s thoughtful report and look forward to providing a response in due course.

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My Lords, it is clear that big tech platforms are gaining enormous market power, particularly in data and digital advertising. Is it not now vital that we recognise the importance of giving the Competition and Markets Authority the new powers that it needs to treat datasets as an asset over which there must be competition, and certain UK technology companies as strategically important when it comes to takeovers? Why have this Government not already set up the digital markets unit urgently, as Furman recommended, to do the necessary assessments?

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Until we decide where we are going to base the digital markets unit, we need to look at its functions in the round. The report of the noble Lord, Lord Tyrie, as well as the digital markets panel, will feed into the process that we are looking at. The noble Lord is quite right to raise datasets as a concern. The ownership of such things is a formidable barrier to entry, so loosening an incumbent’s grip on data and forcing companies to hand over personal data to competitors, at the request of a consumer, would indeed boost competition and consumer choice.

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I welcome the noble Baroness to her first Question Time and congratulate her on her smooth answers so far. The report to which she refers points out the advantages of a digital markets unit. But it also points out the difficulties in the overlap of responsibilities between it, the CMA and Ofcom, as well as the possibility of links across to the Information Commissioner’s Office. This is a sort of spaghetti of different titles and groups. Has she any answer to how that will pan out?

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I cannot answer on the results of our discussion at this stage because they are ongoing. There are a number of options for how the digital markets unit could be taken forward, including whether it should be in an existing institution, such as Ofcom or the CMA, or located separately. We believe, however, that form and location should follow function. The follow-up work by Professor Furman, the noble Lord, Lord Tyrie, and the Government will address these issues.

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My Lords, my main concern is that, rather than being given new powers without the proper scrutiny that we all like to see, the competition authorities should exercise the powers that they already have to stop takeovers by the digital giants of plucky and talented digital innovators, working across borders where necessary—for example, in the case of the recent Fitbit move. When I was at Tesco—I declare an interest—we could barely buy a single supermarket without an investigation. Does my noble friend agree that we should now use competition law to encourage scale-up, not the takeover of our vital digital businesses?

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I understand my noble friend’s concern. We should indeed be encouraging our emerging digital businesses to grow independently. But as the noble Lord, Lord Tyrie, observed in his report, the CMA has an analogue system of competition and consumer law in a digital age. The digital panel recognised that its powers needed to be adapted to cope with the complex mergers in this sector, and we welcome the CMA’s review of its merger assessment guidelines for these digital markets.

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My Lords, the report is right to highlight the importance of allowing consumers to move and control their data as key to stopping these data monopolies locking data in. But the report also points out how slow current competition practices are; we see evidence of this slowness in the response. When will the Government sort out the mess that the noble Lord, Lord Stevenson, set out over who is to be responsible for making these important things happen?

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In the normal course of events, the Government would have promised a White Paper in January and that would still be our aim. All these institutions are working together to provide an answer to those questions.

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My Lords, when are the Government planning to follow up on the Green Paper published last April, Modernising Consumer Markets?

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The Government are committed to ensuring that markets work for all consumers. Since the Green Paper, we have consulted on enabling consumers to simply and securely share their data with third parties. We have confirmed our commitment to giving regulators the tools they need to address the harm caused by the loyalty penalty and worked with the UK Regulators Network to ensure that better support is available to vulnerable consumers, including piloting projects on data sharing and setting minimum standards for their treatment across sectors. Work has also been undertaken to follow up on the Green Paper. As I said, we would, in the normal course of events, expect to bring forward proposals for consumer reform early next year.

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My Lords, has the Minister seen the reports that people who used to work for Conservative Prime Ministers and the Conservative Party have set up false sites on Facebook and other social media, under false names, and attacked the Labour Party? When will that kind of manipulation, falsehood and lying by Conservatives be stopped and outlawed?

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I do not recognise those reports; I have not read them myself. However, the Government are committed to increasing transparency in digital campaigning to maintain a fair and proportionate democratic process. To this end, the Government announced, on 5 May this year, that they will implement an imprints regime for digital election material. The defending democracy programme, which we have already set up in the Cabinet Office, also works across government departments to strengthen the integrity of our electoral system.

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My Lords, if the Government are so committed to transparency, why have they not released the report of the Intelligence and Security Committee looking at the potential influence of Russian interference in our electoral system?

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The noble Lord is straying slightly away from the original Question, but the Prime Minister is considering the report and will report in due course.