Digital Markets, Competition and Consumers Act 2024 (Consequential Amendments) Regulations 2025

Considered in Grand Committee

15:45:00

Moved by

That the Grand Committee do consider the Digital Markets, Competition and Consumers Act 2024 (Consequential Amendments) Regulations 2025.

My Lords, this instrument was laid before the House on 18 December 2024 and relates to the Digital Markets, Competition and Consumers Act 2024—the DMCC Act—which received Royal Assent in May 2024. The instrument makes amendments to legislation in consequence of Parts 3 and 4, and Chapter 2 of Part 5, of the Act. Part 3 updates and strengthens enforcement of consumer protection law. Part 4 updates the legislative framework of consumer protections against unfair trading, introduces substantive new consumer rights in relation to subscriptions contracts and consumer savings schemes, and introduces reforms to alternative dispute resolution. Chapter 2 of Part 5 allows UK regulators to provide investigative assistance to overseas regulators in relation to competition, consumer protection and digital markets. Many noble Lords contributed to this legislation through their scrutiny of it during its parliamentary passage, but I particularly thank the noble Lord, Lord Tyrie, who made the recommendations that led to the granting of the CMA’s new enforcement powers, and the noble Lord, Lord Offord of Garvel, who took the Bill, as it was then, through this House. To ensure the provisions of the Act take effect as Parliament intended, it is necessary to make consequential amendments to the enactments listed in the Schedule to the regulations. These are relatively minor changes that do not materially alter policy but are needed to ensure the seamless functioning of consumer protection law and enforcement. The amendments within the instrument fall into three broad categories. The first extends the application of legislative provisions that permit public authorities to share certain information with consumer enforcers. At present, persons or bodies that gather information using powers under certain statutes may share that information to facilitate consumer enforcement, consumer protection or overseas investigatory assistance, in certain circumstances. This sharing is permitted by sections of the relevant statutes, which I will refer to as information gateways. These information gateways list the consumer protection legislation in relation to which information may be shared. For example, where Ofcom gathers information using powers in the Telecommunications Act 1984, the information gateway in Section 101 of that Act permits it to share that information with the Competition and Markets Authority for the purpose of enforcement of, among other things, the Consumer Protection from Unfair Trading Regulations 2008. As I have already said, the DMCC Act introduces a new consumer enforcement framework, new and updated consumer protections, and new provisions on investigative assistance to overseas regulators. It is therefore necessary to add references to these provisions to the information gateways in various statutes. Were these provisions not to be updated, the current approach, whereby public authorities may share information gathered under statutory powers to facilitate consumer enforcement, consumer protection or overseas investigatory assistance, would be unavailable. This would compromise consumer protection, which could lead to consumer harm. The second group of amendments is to Schedule 5 to the Consumer Rights Act 2015. These amendments ensure the CMA can use relevant investigatory powers in respect of its new direct enforcement powers. This will enable the CMA to monitor compliance with its direct enforcement notices as it currently can in relation to court enforcement orders. For example, at present, the CMA can require a person to provide information for the purposes of ascertaining whether a person is complying with a court enforcement order against them. This enables the CMA to ensure the enforcement orders are being complied with, and therefore that enforcement proceedings are having the desired effect. Under the DMCC Act, the CMA will also be able to use investigatory powers to monitor compliance with certain of its direct enforcement functions. The DMCC Act introduces a new power for the CMA to give final enforcement notices for failing to respond to an information notice alongside its other direct enforcement powers. The amendments in these regulations are necessary to ensure that the CMA is empowered to monitor compliance with this new power in the same way as in relation to the rest of the court-based and direct enforcement regime. Finally, this instrument updates references to consumer laws that have been repealed and replaced by the Act with references to the relevant new provisions introduced. These amendments do not materially change the policy or effect of the underlying law; they simply keep the statute book up to date in the usual way. As I hope is clear from my remarks, the intention of these regulations is to update and maintain the frameworks that underpin consumer law and its enforcement to ensure that the DMCC’s consumer reforms can be introduced seamlessly, with no inadvertent detriment to consumers. I invite noble Lords to support the passage of this instrument. I commend these regulations to the Committee.

My Lords, the shocking thing is that it was only in May of last year that we were working on the then DMCC Bill. It feels, frankly, a great deal longer ago; an awful lot has happened and a lot has changed. Some of the substantive aspects of what I will ask the Minister include getting some sense of how the tone has changed in our relationship with digital issues; and a question to get some sense of how the Government see things now, rather than how the previous Government saw things when we initially debated some of these issues. As the Minister ably and clearly set out, this statutory instrument deals with three areas: consumer protection and law enforcement; unfair commercial practice and consumer rights; and international co-operation. On the latter, the measures facilitate Chapter 2 of Part 5 of the Act, which allows UK regulators to assist overseas regulators in matters related to competition, consumer protection and digital markets. This involves updating information gateways to permit the sharing of relevant information for investigative purposes. That is really important when we look both to the west and to the east—that is, to the United States and to the European Union—because that bridge between our three data regimes is vital to the commercial future of this country. Although, when we were discussing the then Bill, there was relative harmony between the European Union and the United States in establishing their own data bridge, which underpins many of the issues that this part of the statutory instrument could change, I would suggest that that relationship is at best taut, if not snapped. We have yet to see the consequences of that snapping but, at some point, it will happen. Our relationship is almost literally sitting in the middle: we have an equivalence relationship with the European Union, and our data relationship with the United States rides on the back of the European Union’s data bridge. So a huge political issue is welling up here. I would like the Minister to tell your Lordships that the department is aware of it and is doing work; there is as much diplomatic work as data protection work to be done here because, in the end, it will be crucial to our service industries that we get this right, and calling it is going to be no easy measure. That is my first point. Secondly, the Minister will be aware that there have been discussions about the Act’s scope—or, indeed, the lack of it. Some issues, such as secondary ticketing and greenwashing, have not been addressed by the Act; that is still seen as a limitation by stakeholders. As the Minister knows, a secondary ticketing review is going on. It would be useful if she could update your Lordships on where we are with that and when we might see some resolution. Also, how might any recommendations of that review find their way into statute, given that the Bill has already passed? There is a general issue I would like to address before I address a specific one. We have heard a lot in the last week or two about bonfires of quangos. We have also seen a regime change in the CMA. I think it would be helpful for the Minister to set out that we will not see a stepping back by the CMA in doing its job, which is enabled through this Act. In her speech, she made clear the central role of the CMA, but it has to have the support of the Government to go after these sorts of things. We need to know that the Government still support the CMA in these kinds of activities. One further point is that the noble Baroness, Lady Stowell of Beeston, asked His Majesty’s Government “when they plan to make regulations under Schedule 7 to the Digital Markets, Competition and Consumers Act 2024 to provide limited exemptions for permissible investment funds associated with foreign powers”, such as sovereign wealth or public sector pension funds, to invest in UK newspapers and news magazines. This was an important point, which has been debated at length. Section 130 of the DMCC Act introduced Schedule 7, which makes provisions for the purposes of preventing foreign powers from gaining control or influence over newspaper enterprises. There is more that I will not go into, but there is also a debate around particular exemptions that might or might not exist—a state-owned investor exemption and a diversified business exemption. All of these are still in the wash. The UK Government announced plans to commence parts of the Act, including those related to competition reforms, in December 2024 or January 2025. A technical consultation, which included draft secondary legislation that also debated the threshold points I just mentioned, was launched in mid-2024 to gather feedback before the implementation of these additional statutory instruments. These are expected to be laid before Parliament for scrutiny before entering into force. However, the Library tells us that this has not yet happened, nor has DCMS published a formal response to that consultation. It is high time that we knew where we are on this and that these statutory instruments see the light of day. There is an ominous feeling around this. Look at the Answer that the noble Baroness, Lady Twycross, gave to an Oral Question. “On the SI to which the noble Baroness referred”— this is the one that the noble Baroness, Lady Stowell, raised— “there has been a general election in the interim since the legislation was passed by the previous Government. Ministers recognise the high importance of foreign states not being allowed to influence the policy of UK newspapers, but there should be a balance to encourage investment into the press sector. Therefore, we are carefully considering a response to the consultation. We hope to publish a response very soon”.—[Official Report, 5/3/25; col. 251.] That is an ominous response given the debate that we had in May last year. I would like the Minister to put it into context.

15:58:00

Sitting suspended for a Division in the House.

16:08:00

My Lords, we will resume. By popular request, the noble Lord, Lord Fox, is going to quickly repeat what he said as we adjourned for a Division in the House.

Lest you forget, my Lords. The rest of the Minister’s response to the question from the noble Baroness, Lady Stowell, was: “Ministers recognise the high importance of foreign states not being allowed to influence the policy of UK newspapers, but there should be a balance to encourage investment into the press sector. Therefore, we are carefully considering a response to the consultation. We hope to publish a response very soon and lay the SI shortly after that”.—[Official Report, 5/3/25; col. 251.] We need to be reassured that this will not see a watering down of the intentions of the original Act.

My Lords, I thank the Minister for introducing this SI and the noble Lord, Lord Fox, for his characteristically thought-provoking remarks, particularly those on the dynamics of data bridges between the EU and the US, which were very pertinent. The measures in this SI are intended to facilitate the effective implementation of the DMCC Act 2024. His Majesty’s Opposition do not object to the instrument in principle, given that it implements a Bill introduced under the last Government, but we still welcome the opportunity to scrutinise its provisions carefully to ensure that they deliver the outcomes intended. In that spirit, let us consider the impact of these measures. This SI makes amendments to existing legislation to facilitate the implementation of the DMCC Act, whose purpose is to enhance consumer protections and improve their enforcement. Part 3 strengthens the powers of regulators to investigate and enforce consumer protection laws and Part 4 introduces stronger safeguards for consumers, particularly regarding unfair commercial practices, subscription contracts and alternative dispute resolution. Chapter 2 of Part 5 enables UK regulators to assist their international counterparts in matters related to competition and consumer protection. The amendments in this SI update existing consumer law frameworks to align with the changes introduced by the DMCC Act. These provisions enable the necessary disclosure of information for enforcement purposes and ensure consistent application of the statutory provisions across different regulatory contexts. This is particularly important, as the updated consumer protection measures require regulators to access relevant information in order effectively to carry out their functions. The SI also ensures the continuity of consumer policy during the transition to the new framework. While Part 4 of the Act will replace existing regulations, transitional provisions are in place to allow for the continued protection of consumers’ rights to redress for unfair trading until the new regulations are fully implemented. The instrument also updates the Consumer Rights Act 2015 and the Consumer Protection from Unfair Trading Regulations 2008 to facilitate a smooth transition to the new framework and ensure that consumers’ protections remain intact during this period. While we on these Benches broadly support the measures, I have a few questions to clarify some important aspects. First, the instrument extends the ability of regulators and public authorities to disclose information to consumer enforcers, enabling them to more effectively investigate and enforce breaches of consumer protection laws. This includes amendments to various Acts, including the Water Resources Act 1991, to allow such disclosures. Can the Minister give an overview of the safeguards in place to ensure that information shared between bodies remains secure and is handled appropriately, particularly with regard to sensitive business or personal information? While information sharing is crucial for effective enforcement, it is equally important that the privacy and confidentiality of individuals and businesses are respected. Secondly, the instrument seeks to ensure that the protections in Part 4 of the DMCC Act, particularly around subscription contracts, prepayments to savings schemes and unfair commercial practices, are properly enforced. Subscription traps have been a long-standing concern and, while the DMCC Act aims to address this, we must consider whether the proposed changes are sufficient to prevent such practices. How will the Minister ensure that the protections in place will be fully effective in addressing subscription traps? Can she assure us that businesses will be held to account under the new regime in a way that is both transparent and fair? Finally, this instrument updates various references across the statute book to ensure that outdated provisions are replaced with those in the DMCC Act. This helps maintain the clarity and consistency of the legal framework. However, can the Minister confirm that relevant stakeholders, including regulators and businesses, have been adequately consulted on and prepared for the transition to these new rules, especially where they replace long-standing regulations? I acknowledge the positive steps taken by this SI, but we must ensure collectively that they meet their three goals: to protect consumers, to promote fair competition and to ensure the right balance between privacy and transparency. I look forward to the Minister’s response and to further assurances that will aid the successful implementation of these important reforms.

16:15:00

I thank the noble Lord and the noble Viscount for their thoughtful contributions in this debate. I will try to address each of the points raised in turn. First, the noble Lord, Lord Fox, talked about how much has changed since May 2024 and I really see that, whether it is in terms of innovation and the types of technology that we are using and need to protect consumers from, or global international relations and all the conversations that are happening on that side. If anything, I feel that international co-operation is going to be more important than ever, given these times, in terms both of co-operation on policy and communication about what has worked. I can assure the Committee that the Government will continue to work to ensure that there is effective collaboration with all their international partners in this regard. The noble Lord also mentioned secondary ticketing and asked whether there has been any progress. I can confirm that on 10 January 2025, the consultation process commenced on the resale of live events tickets, alongside a call for evidence on pricing practices in the live events sector. Coming just off the back of what was a very exciting football event—my husband was particularly excited to see its outcome—we have a really thriving entertainment and sports sector, so making sure that we are protecting consumers in this space is an issue which is close to many of us. The consultation and call for evidence close on 4 April and the Government will consider all responses carefully before setting out their position. With regard to any changes with the CMA, I can confirm that the Government are fully committed to the CMA and its independence. The reform agenda is really about ensuring that our regulators are delivering a stable and predictable environment that can support growth. We know that independent regulation is at the heart of providing that competition, but a market that our consumers believe and trust in will also support the economy and the growth that the Government are so aligned to. As Sarah Cardell, the CEO of the CMA, highlighted in her recent speech, there is no conflict between going for growth and driving competition. The reform programme will be all about complementing this approach. The noble Lord, Lord Fox, raised the question of foreign ownership of state media. The Government are of course making sure that we can protect freedom of speech and a free press that is not subject to foreign state interference. I am as not deeply familiar with the consultation that the noble Lord referred to, so we will write to him to find further details and clarification, where we are able to do so, with regard to the Government’s position. Turning to the questions raised by the noble Viscount, Lord Camrose, he talked about the overview of the protection afforded for information sharing. Protecting that data is a topic that is also close to my heart, so I commend any questions on it. Public authorities are and will continue to be subject to data protection law and other legal protections around confidentiality. Each regulator will have its own processes in place. For example, in the CMA’s recently published rules and guidance governing its new consumer enforcement powers, it sets out how confidential information provided by traders subject to enforcement will be protected. With regard to subscription traps, another area that has been reviewed as part of this legislation, further detail on the operations of the subscriptions regime will be set out later this year in the regulations. They will be consulted on to ensure a balance between consumer protection and business freedom. There will also be a familiarisation period for businesses, once the regulations are finalised, to make sure that they have time to properly transition to the new framework, as well as any technology systems that will be needed to provide it. The successful passage of these regulations will help to ensure the smooth commencement of Part 3, and Chapter 1 of Part 4, on 6 April 2025. I am hugely grateful for the support across the Committee on the Digital Markets, Competition and Consumers Act 2024 (Consequential Amendments) Regulations 2025. I commend these regulations to the Committee.

Motion agreed.