Regulating in a Digital World (Communications Committee Report) - Motion to Take Note

Part of the debate – in the House of Lords at 9:07 pm on 12th June 2019.

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Photo of Lord Stevenson of Balmacara Lord Stevenson of Balmacara Opposition Whip (Lords) 9:07 pm, 12th June 2019

My Lords, I declare that I was once very briefly a member of the Communications Committee, I think before the noble Lord, Lord Inglewood, took the Chair, although there was a point where he did appear in the Chair. I am not quite sure why that was, but it sticks in my memory. I therefore speak personally of the skills and expertise that have often gathered around that group.

We all owe a debt to the noble Lord, Lord Gilbert, for introducing this report. To say that it is a powerful and useful report is to repeat what a lot of people have said. However, the test is whether the members of the committee rally round and support it, and we have had a brilliant demonstration of that today. It is clearly a well-functioning and powerful group, but it has picked a topic of considerable importance and brought forward something which has made the whole House think again. The excellent speeches and the good debate we have had tonight are only part of the process. The report itself is a very good read. It may be abstract, but it certainly hits home.

The Government’s response was unusually prompt, but DCMS has a good record on this—certainly better than a lot of other departments. However, I felt, like others, that it was a bit defensive. It claims that the committee’s recommendations are closely aligned with what the Government are doing, although, as we have heard, the committee feels that it goes much further. It argues that the issues are covered in the online harms White Paper, but if they were not, they would be picked up by Centre for Data Ethics and Innovation—talk about having it both ways. We will see how that goes. Is it true that the centre is not yet established as a statutory body? If so, will the Minister explain how it will provide independent expert advice on the measures needed if it remains an NDPB within his department?

I shall argue tonight that if, as the Government say in their response, it is clear that they must lead the way in tackling these challenges and there really is firm commitment to do what is needed, they need to be prepared to take on vested interests so that they can shift expectations of behaviour, agree new standards and update our laws, which is what they say they want to do.

Several members of the committee, perhaps reflecting their own contexts, have expressed concern about the Government’s commitment here, but I put it to the Minister that the Government should use this excellent report as a spur to further action. I suggest that the best way forward, as the noble Lord, Lord McNally, said, is to publish a draft Bill and allow it to be subject to pre-legislative scrutiny. That way, we can see what is happening, get the transparency we need and pick up the comments and expertise required.

We have a White Paper, which in common parlance means that a Bill is in prospect or might be in preparation—perhaps the Minister will confirm where we are on that. The Government and the committee certainly agree that the centrepiece of the new approach should be, as the Government propose, tripartite. It is a significant and welcome decision of the Government to legislate to establish a new statutory duty of care to make companies take more responsibility for the safety of their users online and tackle the harm caused by content or activity on their services, combined with legislation to ensure compliance with this duty by establishing an independent regulator with powers to implement, oversee and enforce any regulatory framework. Most importantly, the third leg of the stool is to create a new form of regulatory intervention which will help companies to thrive, while ensuring the safety of users promoting innovation, guaranteeing freedom of expression and establishing other norms that underpin our democratic society—the democracy element is very important.

The reason that is so interesting is that it is a tripartite and interlocking approach. Like the committee, I broadly agree with what the Government are trying to do in ensuring that digital technology and the internet work for everyone—citizens, businesses and society as a whole. But there is far too little in the response to the committee to back up the Government’s assertion that the new system will answer the committee’s concerns that new technology will be deployed ethically as well as safely and securely, or that consumers will have the powers they need to ensure that their rights and views are not ignored, as they are at present, which is why the committee’s report is so important.

We all owe the committee a debt of gratitude for its work in setting out so comprehensively the challenges that the new regulatory environment will face, and the comments made by speakers today have been most useful in fleshing out the issues. How could it be otherwise, given that the skills, knowledge and experience represented on the committee are so incredibly useful?

I join several previous speakers in suggesting more action from the Government. I shall mention three of the committee’s recommendations which seem to me to have real merit, but which the Government seem to have downplayed. Like my noble friend Lady McIntosh—who is wearing three hats today—I felt that the Government’s response did not quite convince the neutral witness that they have the momentum, as I think she put it, to see this job through to the end. As I said, there is a test, which is the publication of a draft Bill.

First, on the smarter regulation proposal—the centrepiece of the speech of the noble Lord, Lord Gilbert, and the first point raised by him—the committee said that we need not more but different regulation for the internet. I agree with that. In paragraph 240, it comes up with a very interesting idea which fleshes out that concept. As the noble Lord said, the Government should establish another body with additional powers to ensure that digital regulation, wherever it happens, is kept up to date and in step. It has called it the digital authority and has listed the powers that it might have, aimed at co-ordinating regulation and regulators in the digital world.

There are very few new ideas in public policy, but I wonder whether this is one. There is the germ of a very good idea here, and I hope that the Government will take seriously the case for creating a body with powers to instruct other regulators to address specific problems or areas in the digital space. In cases where that is impossible because the problems are not within the remit of any one regulator, the digital authority should be well placed to advise the Government and Parliament of new or strengthened legal powers which are needed. The suggestion of combining this with a standing Joint Committee of Parliament is a very good one; that seems to square that circle very well.

Turning to the principles underlying regulation, the committee makes a very good point, which is that there should be a much more explicit set of principles underwriting the way in which any regulation applying to the internet should work. This may answer some of the points made by my noble friend Lord Maxton and others about the need for universal appeal for this, because if the principles are well constructed, they will be beyond any particular national boundary; they will be strong enough to go across them.

The 10 principles which the committee says should guide the development of the regulation have already been discussed by both the noble Baronesses, Lady Harding and Lady Kidron, but they bear repeating: parity, accountability, transparency, openness, privacy, ethical design, recognition of childhood, respect for human rights and equality, education and awareness raising and democratic accountability. This is a very powerful group of principles, which, if they are taken properly and put into words which apply to those who have to operate in this space, will bite. The Government say that the six principles they have specified in their White Paper, are,

“closely aligned with those set out in this report”.

As the noble Baroness, Lady Harding, said, they are not exactly similar, and there are three important gaps. There is no mention of accountability: the processes that need to be in place to ensure individuals and organisations are held to account for their policies and actions. Nor is there mention of transparency: how we will see into the businesses and organisations operating in the digital world so that they are open to scrutiny—this very strongly picks up the point about algorithms. The other gaps are democratic accountability, which was picked up by the noble Lord, Lord McNally, and proportionality and evidence-based approaches. There may be ways in which these words appear in the Government’s list, but the fact that they have been drawn out in the committee report is important, and we should not lose that.

Market concentration was raised by a number of speakers. The report makes two important points that the Government have not picked up on well. The first is on the way in which the internet operates specifically against the public interest, with large companies becoming data monopolies, mainly through mergers and acquisitions. The committee recommends that, in their review of competition law in the context of digital markets, the Government consider implementing a public interest test for data-driven mergers and acquisitions, so that the CMA can intervene, as it currently does in cases relevant to media plurality or national security. I agree with this. Secondly, the internet is characterised by a concentration of market power in a small number of companies that operate online platforms and values brands, platforms and other issues that are not well recognised within the physical world. The Committee make the point that these aspects of digital markets challenge traditional competition law and it suggests that Government broaden the consumer welfare standard to ensure that it takes adequate account of long-term innovation and strengthens the power of the CMA to bring the process of imposing interim measures up to date and make it more effective. I think this is something that the noble Lord, Lord Tyrie, has already proposed, so the Government may be able to respond to.

Other speakers have picked up that the government response here is rather weak:

“We continue to consider policy options across the range of measures proposed”.

But the independent Digital Competition Expert Panel led by Professor Jason Furman published its recommendations for government on 13 March 2019, so there has clearly been plenty of time to pick this up and bring forward proposals. There needs to be legislative change here, so why not put this in a draft Bill since we already have the proposals?

I do not think anybody has picked up on the elephant in the room: the e-commerce directive. I think that is partly because it is complicated and made more difficult by Brexit. The point made by the committee is important: online communication platforms are utilities, in the sense that users feel they cannot do without them. As the report points out, the providers of these services have a safe harbour at the moment under the e-commerce directive. What are the Government going to do about that? I ask the Minister to pick up this point in particular. If we are staying in the single market, this would have to be done conjointly with the EU, and there are measures afoot to try to do something here. If we leave, we will have some flexibility. Can the Government share its thinking on this issue?

Finally, on my list of actions for the Government: content moderation. Again, this has not been picked up very strongly, but perhaps we have just become so used to it that we are unable to think again about this. One of the greatest frustrations of the internet is that the powers to remove content that is either illegal or causes harm are so ineffective—in paragraph 224 the Committee adjures for this. One problem is that major platforms have failed to invest in their moderation systems, leaving human moderators overstretched and inadequately trained. AI is also not proving effective. There is little clarity about the expected standard of behaviour, and little recourse for a user to seek to reverse a moderator’s decision. I worry that relying on a new duty of care is not enough. What we also need is a much stronger consumer right, backed by a regulator who has the power to require action when users have genuine concerns. Will these new powers be considered?

I end with three smaller points, but which are still important. Two or three speakers in the debate were concerned about data acquisition and the need for the publication of an annual data transparency statement. I absolutely agree with that. There is something here that we are not picking up. The Government do not do credit to this important recommendation and it is surely not sufficient to rely on the fact that this information should be set out clearly in a privacy notice.

The noble Viscount, Lord Colville of Culross, picked up the issue of addiction and made a very strong case. There are clear worries about how people become addicted to the internet in a way that has not yet been picked up well, although there are now some changes from medical authorities on this. We need to learn from the failure so far to deal with gambling addiction and gaming addiction. What is suggested in the paragraph is not going to solve this crisis, but it is a start. Voluntary efforts by the companies responsible for the problem is not the way forward. Will the Government look at this again?

Finally in this group, I turn to the matter of algorithms, which have already been touched on. How do you discover which algorithms are being used, what they are doing to your data and how is that going to work? We spent a lot of time on this when considering the Data Protection Bill. Had the noble Lord, Lord Clement-Jones, been here for the debate, I suspect that we would still be talking about it, but I am sure that the Minister is well rehearsed in the arguments. I look forward to a positive response. Something needs to be done here, but the Government are ducking the issue and are not doing well.

The Government are fond of saying that their White Paper is world-leading in terms of laying down statutory rules for the internet, but this report and our excellent debate tonight show that a bit of a gap is emerging between the rhetoric and the likely reality. I hope that I am wrong and I hope that the Minister can reassure us. Backing the kids’ code would be a start, but accepting the idea of bringing forward a draft Bill for consideration would be the way forward.