My Lords, where necessary, the regulator will be able to apply to the courts for business disruption measures. These are court orders which will require third-party ancillary services and access facilities to withdraw their services from, or impede users’ access to, non-compliant regulated services. These are strong, flexible powers which will ensure that Ofcom can take robust action to protect users. At the same time, we have ensured that due process is followed. An application for a court order will have to specify the non-compliant provider, the grounds and evidence on which the application is based and the steps that third parties must take to withdraw services or block users’ access. Courts will consider whether business disruption measures are an appropriate way of preventing harm to users and, if an order is granted, ensure it is proportionate to the risk of harm. The court will also consider the interests of all relevant parties, which may include factors such as contractual terms, technical feasibility and the costs of the measures. These powers will ensure that services can be held to account for failure to comply with their
duties under the Bill, while ensuring that Ofcom’s approach to enforcement is proportionate and upholds due process.
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The proposed new clause in my noble friend Lord Bethell’s Amendment 217 appears to draw on provisions made in Part 3 of the Digital Economy Act 2017 for the age-verification regulator to notify payment service and ancillary service providers of non-compliant services. The noble Lord, Lord Clement-Jones, is right to point to the absence of the noble Baroness, Lady Benjamin; she is unavoidably absent today because of the Windrush Day commemorations, and I know she would have made her points in a similar but perhaps different style from her noble friend.
I am pleased to reassure her and my noble friend Lord Bethell that the enforcement powers in the Bill are stronger than those in the Digital Economy Act. Ofcom will be able to apply to the courts to require ancillary services and access facilities to withdraw their services from, or block users’ access to, non-compliant regulated services, rather than rely on the voluntary action of third parties as under the Digital Economy Act. Furthermore, Ofcom can publish the details of enforcement action and must publish details related to confirmation decisions and penalty notices. Ofcom can also require that the provider publish details of its enforcement action, or otherwise notify users of that action, or both. This will provide greater transparency to third parties and users about whether a service has been found to be non-compliant. Ofcom cannot require providers to publish provisional notices of contravention. The provider has the right to make representations to Ofcom before it issues a confirmation decision.
The amendments from the noble Lord, Lord Curry of Kirkharle, mandate that Ofcom must seek business disruption court orders in specific circumstances of non-compliance or breach. I want to reassure your Lordships that we have provided Ofcom with a robust range of enforcement powers to use against companies that fail to fulfil their duties, including in the circumstances described in the noble Lord’s amendments. Ofcom will be able to use those powers and sanctions according to what it deems to be the most effective way forward in each case, including issuing enforcement decisions that direct companies to take specific steps to come into compliance or remedy a breach, issuing fines of up to £18 million or 10% of global qualifying revenue—whichever is higher—and applying to the courts for business disruption measures. Ofcom will determine the most effective, proportionate and fair intervention on a case-by-case basis.
The circumstances in which business disruption measures can be sought are set out in Clauses 131 to 135—for example, where a regulated provider has failed to comply with any enforceable requirement, that failure is continuing and the provider has not complied with Ofcom’s confirmation decision, or where the risk of harm warrants an application. This provides both services and the regulator with clarity about when these measures could be used. The Government are confident that Ofcom will apply to the courts for business disruption measures where necessary and
proportionate, but it is important that it remains for the independent regulator to determine when to use these powers.
Introducing mandatory requirements would undermine Ofcom’s independence and discretion to manage enforcement on a case-by-case basis. This would also frustrate Ofcom’s ability to regulate in a proportionate way and could make its enforcement processes unnecessarily punitive or inflexible. It could also overwhelm the courts if Ofcom is strictly forced to apply for business disruption measures where any grounds apply, even where the breach may be minor. Instead, Ofcom will act proportionately in performing its regulatory functions, targeting action where it is needed and adjusting timeframes as necessary. I am mindful that on the final day in Committee, the noble Lord, Lord Grade of Yarmouth, continues to be in his place, following the Committee’s deliberations very closely on behalf of the regulator.