Question proposed, That the clause stand part of the Bill.

With this it will be convenient to discuss the following:

Clauses 203 to 207 stand part.

Government amendments 62 to 64.

That schedule 16 be the Sixteenth schedule to the Bill.

Clause 208 stand part.

Government amendment 65.

That schedule 17 be the Seventeenth schedule to the Bill.

Clauses 209 to 215 stand part.

Clause 202 provides for the practicalities of giving notices. It sets out the permissible means for the CMA and other enforcers to give a notice: by delivering it to the person; by leaving it at the person’s address; by post; or by email.

Clause 203 empowers the CMA to make rules about procedural and other matters in connection with its direct enforcement functions. This clause expressly permits the CMA to delegate decision making for its direct enforcement functions to its board, panel and/or staff. The clause provides the CMA with a vital tool with which it can establish the technical details of a robust and predictable direct enforcement process that will achieve the stronger enforcement that we need without compromising fair process or certainty for traders.

Clause 204 requires that the CMA’s rules must be publicly consulted on, and given the approval of the Secretary of State through regulations, before coming into force. Public consultation will ensure that the views of all stakeholders, including consumer groups and traders, are adequately considered as rules are prepared. The Secretary of State also has the ongoing power to vary or revoke rules, which will ensure that the wider needs of the economy continue to be reflected in the operation of the direct enforcement regime. This clause ensures that the CMA’s discretion to make technical rules governing its direct enforcement functions is exercised in a balanced way that serves the needs of the economy.

Clause 205 requires the CMA to prepare and publish guidance about its general approach to the carrying out of its direct enforcement functions, and to keep under review the guidance, which it may update from time to time. The CMA is required to publicly consult, and obtain the Secretary of State’s approval, before issuing its first guidance.

Clause 206 provides that, for the purposes of the law of defamation, absolute privilege applies to anything done by the CMA in the exercise of its direct enforcement functions. There are strong precedents for that approach: judicial or tribunal proceedings are protected from defamation. There is also protection from defamation for the CMA’s direct enforcement regime for competition law and its merger and market investigation powers. Those suspected of infringing are not unfairly prejudiced by this clause, which merely reflects the long-standing principle that the exercise of regulatory and judicial functions should not give rise to defamation claims.

Clause 207 formally introduces schedule 16 and its contents within the body of the Bill. Schedule 16 makes numerous minor and consequential amendments to other legislation. This schedule is important to provide for the smooth functioning of the enforcement regimes and to ensure legislative consistency.

Government amendments 62 and 63 add a reference to chapters 3 and 4 of part 3 of the Bill to schedule 14 to the Enterprise Act 2002. These amendments will ensure legislative consistency.

Government amendment 64 is a consequential amendment. It includes part 4 of the Bill in the list of enactments in respect of which investigatory powers under schedule 5 to the Consumer Rights Act 2015 are conferred.

Clause 208 introduces schedule 17, which makes transitional and saving provision in relation to the court-based and CMA direct enforcement regimes. Schedule 17 provides for the general rule that the new law will apply to conduct that takes place on or after the commencement date of chapters 3 and 4 of part 3 of the Bill. Conversely, as a general rule, the “old law”—that is, part 8 of the Enterprise Act 2002 and related provisions—will continue to apply to conduct that takes place before the commencement date of chapters 3 and 4 in part 3 of the Bill.

Schedule 17 also makes specific rules for continuing conduct that is essentially an act or omission that starts before the new law has commenced but is repeated or continues after the new law’s commencement. In such a scenario, as well as applying to the post-commencement conduct, the new law will apply to the pre-commencement conduct for the purpose of enabling enforcement action under part 3 of the Bill.

However, no requirements or penalties can be imposed on a person for the pre-commencement parts of the continuing conduct, unless such a requirement is already imposable under part 8 of the Enterprise Act 2002. Similarly, the court and the CMA will not be able to use their new powers to impose penalties for breaches of any undertakings given under part 8 of the 2002 Act.

Government amendment 65 specifies that schedule 5 to the Consumer Rights Act 2015, as it has effect before the commencement of the Bill, is a provision related to part 8 of the 2002 Act. Clause 209 sets out how

“supply of goods or digital content” should be interpreted. It makes it clear that for the purposes of this part of the Bill, supplying goods and digital content includes seeking to supply goods and digital content.

Clause 210 sets out how “supply of services” should be interpreted. It provides that the act of supplying or receiving services is not necessary to bring a person within scope of the Bill. Seeking to do so will satisfy references in the Bill to a person who supplies or receives goods or digital content. The clause also clarifies that the supply of services includes the broad category of

“performing for gain or reward any activity other than the supply of goods or digital content”.

That provision helps to ensure that the part 3 enforcement regimes have a sufficiently wide application in relation to services.

Clause 211 provides that accessories to an infringing commercial practice engaged in by a body corporate can be subject to enforcement action. This clause and clause 212 replace section 222 in part 8 of the Enterprise Act 2002. Clause 211 also sets out the conditions that must be satisfied for a person to be an accessory to a past or ongoing commercial practice by a body corporate. Where the infringer is a body corporate, an accessory to the infringing practice is a person who has a special relationship with the infringer and has consented or connived in the commercial practice. Enforcement against accessories is essential to facilitate enforcement against bodies with complex corporate structures and where directors, shareholders or other bodies corporate may direct or influence infringing practices.

Clause 212 defines what is meant by “special relationship” in the context of the preceding clause. A person has a special relationship with a body corporate in two scenarios: where they are a controller of the body corporate; or where they are an officer of the body corporate, such as a director, manager, secretary or similar, or where they purport to act in such a capacity. Taken as a whole, these detailed provisions reflect the starting position that those who either direct or influence the commission of infringing practices should be held liable for them.

Clause 213 defines enhanced consumer measures, or ECMs. The clause provides that there are three types of ECM: first, redress measures, which require payment of compensation or the making of some other form of redress; secondly, compliance measures, which require the taking of steps to prevent or reduce the risk of future infringement; and, thirdly, choice measures, which are intended to facilitate effective consumer choice. The clause establishes a common threshold for when redress measures can be used—namely, where affected consumers have suffered loss as a result of the infringing conduct or where they have been affected in any other way by the conduct. The result is that redress measures are not limited to consumers who have suffered a financial loss.

Clause 214 gives definitions or interpretative guidance for those words and terms. Many of the definitions are self-explanatory, but I draw hon. Members’ attention to the definition of “business”. The definition is non-exhaustive and widely drawn to capture any kind of gain or reward. As under the existing definition of “business” under part 8 of the Enterprise Act 2002, monetary payment is not a prerequisite, and so for example a service carried out in exchange for the consumer’s data or for reputational advantage would also qualify. The Government’s intent is to give part 3 of the Bill a wide scope, so that any infringing commercial practice that harms the collective interests of consumers may be enforced against.

Clause 215 acts as an interpretation aid. It lists certain important or technical words and expressions used in part 3 and refers the reader to the clause that defines or gives guidance on the interpretation of said word or expression.

I hope that the Committee accepts Government amendments 62 to 65, and I commend clauses 202 to 215 and schedules 16 and 17 to the Committee.

Clause 202 sets out the process for giving notices under part 3 to persons within and outside of the UK, including business entities registered or operating outside the UK. It defines acceptable means of service and the meaning of a recipient’s proper address. We welcome the clause.

Clause 203 allows the CMA to make rules, subject to approval by the Secretary of State through secondary legislation, to set out the procedural administrative details of the CMA’s enforcement regime. The rules supplement the framework provided in chapter 4 of part 3. We welcome the clause and the clarification, and also the important points made in the explanatory notes, including the point that the rules will cover “arrangements for complaints’ handling”. The clause is a common-sense provision.

Clause 204 sets out the process for the exercise of the rule-making power under clause 203. We welcome the fact that the CMA will be required to consult with stakeholders during the preparation of the rules, and we discussed that in relation to earlier clauses. The CMA will also be required to obtain the Secretary of State’s approval before bringing any rule into operation or varying a rule. We welcome that measure too.

Under 204(5), the Secretary of State will be empowered to vary or revoke rules or to direct the CMA to vary or revoke rules, and regulations made under the clause will be subject to the negative parliamentary procedure. Although we welcome the clause, will the Minister clarify why that has been left to the negative procedure? The inclusion of affirmative and negative procedures in the Bill seems to be slightly random, so I would be grateful for that clarification.

Under clause 205, the CMA will be required to prepare and publish guidance about its general approach to carrying out its direct enforcement functions. The guidance will provide more detailed information to traders and other stakeholders about how the direct enforcement regime would work in practice. The Opposition welcome the clause because it introduces more transparency and clarity into the regime, but will the Minister tell the Committee what timeframe is considered appropriate for the publication of the guidance? He said that he saw publication happening after Royal Assent, but does he expect it to happen within a certain period of time? I am sure that he wants the legislation to be implemented as soon as possible, as do I.

Clause 206 would protect the CMA against actions for defamation as a result of the exercise of functions under part 3. We welcome the clause. It is important that the CMA is protected in carrying out its job as the co-ordinating enforcement authority.

Clause 207 introduces schedule 16, which contains minor and consequential amendment in relation to part 3. We support schedule 16 and do not consider the consequential amendments contentious. We also support Government amendments 62 and 63.

Clause 208 introduces schedule 17, which provides transitional and saving provisions in connection with part 3. Those provisions concern the operation of the new law introduced by chapter 3 and CMA direct enforcement powers under chapter 4 of part 3. They also relate to the operation of the old law, which constitutes part 8 of the Enterprise Act 2002. It lays out how the new law would apply to conduct that takes place on or after the commencement date of the Bill, and to conduct of concern that a person is likely to engage in, where such conduct is likely to take place on or after the commencement date. The old law would continue to apply to conduct that takes place before the commencement date, as well as to various other forms of conduct. We welcome this technical schedule and clarification, and we support amendment 65.

Clause 209 introduces definitions for references to supply of goods or digital content as used across part 3 and we support the clause. Clause 210 defines how references to the supply of services should be construed across part 3 and we support the clause. Clause 211 defines what is meant by an accessory to the commercial practice of a body corporate. Will the Minister clarify whether he is confident the clause adequately captures anyone who may act as an accessory and how the definition was brought together? Was it through consultation? That will provide full clarity on what constitutes an accessory.

Clause 212 defines what constitutes having a special relationship with a body corporate, covering two scenarios outlined by the Minister. As such, we support its inclusion in the Bill. Clause 213 defines three types of enhanced consumer measures, referred to as redress, compliance and choice measures. I am grateful to the Minister for outlining some detail on that and the definitions, so that those set out in subsections (2) to (4) are straightforward and clear, and that that also applies to their interpretation by consumers. We thus welcome the clause’s inclusion in the Bill.

Clause 214 defines other terms for the purposes of this part, including the definitions of “businesses”, “goods”, “enforcement orders”, “subsidiary” and “supply”, which are important, and we support their inclusion. Further, clause 215 sets out an index of defined expressions and we welcome and support it.

I will make a couple of points, the first of which is on the negative procedure. On regulations, there is a combination in clause 204 of public consultation followed by review by the Secretary of State, which will allow for a significant level of scrutiny. On that basis, we feel the negative procedure is justified and appropriate.

On the guidance, the CMA must undertake several actions, including a public consultation on the practices. This may take some time, and we expect that the guidance may be ready by autumn 2024, but that will depend upon a number of factors. We clearly want it in place as quickly as possible, but we must ensure that it is fit for purpose.

The definition of “accessory” in clause 211 is consistent with, and restates with minor clarifications, the current definition in part 8 of the Enterprise Act 2002.

Question put and agreed to.

Clause 202 accordingly ordered to stand part of the Bill.

Clauses 203 to 207 ordered to stand part of the Bill.