Examination of Witnesses

Digital Markets, Competition and Consumers Bill – in a Public Bill Committee at 4:15 pm on 13 June 2023.

Alert me about debates like this

Owen Meredith, Peter Wright and Dan Conway gave evidence.

Photo of Rushanara Ali Rushanara Ali Labour, Bethnal Green and Bow 4:30, 13 June 2023

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?

Owen Meredith:

Hi. I am Owen Meredith, chief executive of the News Media Association. We represent companies across local, regional and national news media in about 900 brands across the UK.

Peter Wright:

I am Peter Wright. I am editor emeritus of DMG Media. We are a major British and international news publisher.

Dan Conway:

Hello, everyone. I am Dan Conway. I am chief executive of the Publishers Association. We represent publishers of books, journals and educational materials of all shapes and sizes in the UK.

Photo of Alex Davies-Jones Alex Davies-Jones Shadow Minister (Digital, Culture, Media and Sport), Shadow Minister (Tech, Gambling and the Digital Economy)

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?

Owen Meredith:

First, it is important to welcome the Bill. As many people around the room know, alongside many other organisations across the economy we have been pushing for this Bill for some time, so it is pleasing to see it. It is in very good shape, albeit we will want some parliamentary scrutiny no doubt and the opportunity to tighten up some of the policy intent to ensure that it is fully reflected in the language on the face of the Bill.

Clearly, the imbalance of power that exists between news publishers and platforms is self-evident. It has been documented extensively from the Cairncross and Furman reviews through to various CMA reviews. At the moment, a handful of tech platforms are an essential gateway and a key discovery route for consumers to find news online. As consumers increasingly shift their consumption of news online, rather than from print—in the local market, north of 70%, and in the national market, north of 80% of consumers read news online—that is not fairly renumerated and rewarded back to the original investors and content creators of that journalism.

For society, we all understand the importance of that journalism, particularly in the online world combating mis and disinformation, but we just do not have a balance of power between those two players. On the one side, we have in particular smaller, local, independent news publishers, even up to large multinationals, but on the other, we do not have access to the right information or data about how our news is being surfaced and used on the platforms, including search and across social. We do not have an asymmetry of information to be able to negotiate fairly, so it is a take-it-or-leave-it approach by the tech platforms to how our content is used by them.

Peter Wright:

You asked where the Bill possibly does not do the job. I would agree with Owen: it is a very good Bill and long overdue. I was on the Cairncross review five years ago, and it is great to see some of the things we were talking about bearing fruit.

One area you might want to look at is the final offer mechanism; there is a helpful table on page 38 of the explanatory notes. You can see it is a 13-stage process, and I think what to us might be the most important bit is information sharing, which comes at stage 8. If that process can be speeded up in any way, that would be immensely helpful.

The other thing that I would like to flag up and the thing that concerns most of us in the industry most of all is that you are likely to face concerted lobbying from the online platforms over the review process. From our point of view, that will not truthfully be about the justice of decisions made by the CMA; it is a delaying tactic. We hear that the platforms and the big City law firms will get together and to ask for a merits-based process, which would mean that every decision by the DMU is subject to appeals that are likely to involve weeks in court, with months or even years before decisions are taken.

If that happens, the whole purpose of the Bill—this whole structure, which we believe to be very good, and a great deal of work has gone into it; it is legislation that is likely to be copied around the world—will simply be nullified. It is vital that we stick with the judicial review process that is in the Bill.

Photo of Alex Davies-Jones Alex Davies-Jones Shadow Minister (Digital, Culture, Media and Sport), Shadow Minister (Tech, Gambling and the Digital Economy)

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.

Peter Wright:

The crossover between the two Bills is not that great. The real risk regarding fake news is that the most expensive news to produce is the high-quality public interest journalism that I am sure everybody in this room wants to encourage. If you cannot fund it, and at the moment it is a great struggle to fund it, the space will be taken by people who are not proper journalists and are not working for responsible news organisations with complaints procedures and people you can sue if you get it wrong.

The really serious danger is that because the online platforms have over the last 20 years sucked billions of pounds out of the news production in this country, the internet will be filled with conspiracy theorists and people producing cheap, easy-to-manufacture news, largely copied from other outlets.

Photo of Kevin Hollinrake Kevin Hollinrake Parliamentary Under Secretary of State (Department for Business and Trade)

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.

Owen Meredith:

We broadly support the Government’s policy and intent as I understand it in terms of helping consumers to manage subscriptions, particularly subscriptions that they are not aware they are in or for services they are not using. My concern and our organisational concern is that currently it is set out in the Bill too prescriptively, and there is a real danger that you end up in a situation where consumers are being bombarded by subscription notices and they become blind to them.

I would put the analogy out there of the cookie banner, which I think they are hoping to get rid of through different legislation before the House at the moment. There is a danger that consumers are just blinded by the amount of information they are being presented with as stand-alone notices, with the frequency and nature in which they have been spelt out in legislation. While I do not fundamentally disagree with the Government’s policy intent, I do not think how it has been crafted in the Bill at the moment necessarily achieves that in the way we would need it to.

Photo of Kevin Hollinrake Kevin Hollinrake Parliamentary Under Secretary of State (Department for Business and Trade)

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.

Owen Meredith:

It would not make it more difficult for people to exit contracts; it would ensure that consumers still have access—

Owen Meredith:

It would ensure that consumers still have access to the offers that would be available to them in the current system of processing. If you subscribe to a service that you are using and you wish to terminate it, there are multiple ways you can do that, either via online touchpoints for most of our subscribed services at the moment or via a call centre. If a call centre phoned you and said, “You’ve been using this service for 12 months. We can identify through data that you have been reading the content. Can we ask you what the reason for cancelling is and if we can retain you as a customer with the right promotion?”, I think that would be in the consumer’s interest.

Photo of Kevin Hollinrake Kevin Hollinrake Parliamentary Under Secretary of State (Department for Business and Trade)

Q But the removal of the cooling off period would make it more difficult for some people to exit a contract, wouldn’t it?

Owen Meredith:

The removal of the cooling off period for us is a concern around how that technically applies and whether consumers have had benefit that they are then seeking to be refunded for, despite having engaged with and received the benefit.

Photo of Dean Russell Dean Russell Chair, Speaker's Advisory Committee on Works of Art

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?

Peter Wright:

They will benefit through the quality of the journalism they are offered. Every news organisation —we are no exception; we went through a period of redundancies earlier this year—is having to trim their editorial budgets, because you cannot make sufficient revenue in the present digital advertising market to support the scale of editorial resource that you would really like.

Commercial news publishers have seen revenues falling, despite inflation, over the last two decades. At some point, we need to have a mechanism that gives us—this particularly applies to smaller and regional publishers—a level playing field and levers we can pull to bargain with these vast companies. I have colleagues who work at not inconsiderable regional publishing companies, who do not even have a telephone number they can ring at Google, so they just have to accept whatever terms Google offers. We are slightly more fortunate in that we can ring Google, but we do not necessarily get an answer.

Photo of Dean Russell Dean Russell Chair, Speaker's Advisory Committee on Works of Art

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?

Peter Wright:

Absolutely. I once worked as a local paper journalist in Watford. Tristan Garel-Jones was the MP then; he used to pop into our office once a week. He was very assiduous—I would recommend it! I do see this legislation benefiting them. It is more important to them than to anybody else.

Photo of Rushanara Ali 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.

Photo of Andy Carter 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?

Dan Conway:

Thank you for the question. I will keep it brief, as I am conscious of everybody’s time. I am primarily here to talk about the role of Amazon in our area of publishing. Amazon has done great things to expand digital markets in books, has great partnerships with UK publishers and has got books into the hands of readers all over the world—and that is a great thing. But we firmly believe that we are now at a tipping point in terms of regulation with Amazon, as they have such entrenched market power in the book market that we need modern proportionate regulation to make sure that that entrenched market power does not lead to anti-competitive outcomes.

By our best estimates, Amazons sell over 50% of the print books in the UK market and about 90% of the e-books and audiobooks. That is monopoly power in selling print books and monopsony power as the sole buyer in retail books. It makes them a gateway company for my members; they are an unavoidable trading partner for any UK publishing company in the UK market, and we strongly support the Bill because we think it will help.

We think Amazon should be assigned strategic market status with the code of conduct that goes alongside it. We particularly support clause 20(2)(a) on trading on “fair and reasonable terms”. It is our view that currently, because of Amazon’s role in the market, publishers are not often able to trade on fair and reasonable terms. We heard from other witnesses about “take it or leave it” terms; effectively, if you are a small publishing business in the UK market, if you enter into a negotiation with Amazon, you are offered “take it or leave it” terms and you cannot negotiate with a retailer of that size.

Photo of Andy Carter 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?

Dan Conway:

Yes, absolutely. As a trade association, we have to be one stage removed from that for obvious legal reasons, but our members have fed back to us on areas of concern, and we hear that Amazon is removing buy buttons, labelling products as out of stock, delisting products and refusing to stock products without reasonable cause—and all that is in the middle of a commercial negotiation. You have a major retailer that is able to use its size effectively to distort upstream competition through those kinds of tactics. I can absolutely look and see what we can write to you about that.

Photo of Rushanara Ali 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.

Ordered, That further consideration be now adjourned. —(Mike Wood.)

Adjourned till Thursday 15 June at half-past Eleven o’clock.

Written evidence reported to the House

DMCCB01 NatWest

DMCCB02 NatWest

DMCCB03 Consumer Scotland

DMCCB04 GlobalCharge Limited

DMCCB05 Consumer Council

DMCCB06 Gener8

DMCCB07 Oles Andriychuk

DMCCB08 National Consumer Federation

DMCCB09 Trustpilot

DMCCB10 Radiocentre

DMCCB11 News Media Association