Documents considered by the Committee on 16 January 2019 Contents

Meeting Summary

The Committee looks at the significance of EU proposals and decides whether to clear the document from scrutiny or withhold clearance and ask questions of the Government. The Committee also has the power to recommend documents for debate.

Brexit-related issues

The Committee is now looking at documents in the light of the UK decision to withdraw from the EU. Issues are explored in greater detail in report chapters and, where appropriate, in the summaries below. The Committee notes that in the current week the following issues and questions have arisen in documents or in correspondence with Ministers:


Whistleblowing and breaches of EU law

This week we considered three documents relating to whistleblowing at EU level: a Commission Communication, a proposed Directive and a Court of Auditors’ Opinion assessing the proposal.

The proposed Directive aims to harmonise national laws to a minimum standard on whistleblowing in relation to breaches of EU law. The proposal seeks to improve on the current piecemeal approach to whistleblowing at EU level by introducing a horizontal approach across many policy areas. It follows in the wake of recent scandals disclosed by whistleblowers like Cambridge Analytica.

The UK leads in the EU in providing legal protection for whistleblowers (see the Public Interest Disclosure Act 1998 and Employment Rights Act 1996). But initially, the Government has not been supportive of the proposal due to the potential costs and burdens for business of internal reporting procedures (the main difference between the UK and proposed EU frameworks).

As currently drafted, an adopted Directive would not have to be transposed before 15 May 2021. So the UK would not have to implement it nor preserve it as EU retained law under the EU Withdrawal Act, either the case of no-deal or a negotiated exit where the implementation period is not extended beyond 31 December 2020.

This chapter reports on the Government’s latest letter and its outstanding responses to Committee questions. The Government does not indicate any substantial progress in Council negotiations, despite the European Parliament having agreed its position. The conclusions ask:

Communication and Court of Auditors’ Opinion cleared from scrutiny, but proposed Directive retained; further information requested; drawn to the attention of the Business, Energy and Industrial Strategy Committee

Privacy and Electronic Communications

This proposed ePrivacy Regulation was published in January 2017 to replace the current 2002 Directive on privacy and protection of personal data relating to electronic communications (e-coms). E-coms can be very sensitive, for example, if they reveal an individual’s state of health, religion, politics or sexual preferences or a company’s commercial information. An adopted Regulation could have major implications for individual privacy and the way that sectors such as technology, digital advertising and publishing do business. The current Directive covers confidentiality of e-coms provided via traditional communication services (e.g. emails, SMS). But the proposal will update the rules in the Directive to apply to “Over the Top” services, including internet-based messaging such as What’s App and Voice over Internet Protocol (e.g. Skype). It will also govern the use of cookies, other tracking technologies as well as email marketing.

The Commission wanted the proposal to come into force with the GDPR on 25 May 2018. However, it has proved very controversial, delaying negotiations in the Council. Areas of contention include when service providers can use e-coms content and metadata in the running of their business. The EP has taken a restrictive approach, taking the position in October 2017 that processing should only be permitted by explicit consent or if “strictly necessary” for specified purposes. Businesses and some Member States, including the UK, want a different approach which aligns more with the GDPR and allows processing on grounds of “legitimate interests”. As a compromise the Austrian Presidency has attempted to include some additional processing grounds in the text. Rules governing cookies and other tracking technologies are also proving contentious.

As the Minister’s most recent letter now indicates, it remains unclear when, if at all, an adopted proposal would apply to the UK. We provide an assessment of the position in the case of “deal” and “no-deal” scenarios in the conclusions to our chapter on this dossier. We also highlight the continued relevance of the adopted Regulation to the UK in any event as a third country wishing to trade with the EU, irrespective of the exit outcome. We note the Government’s concern about needing an exemption to allow processing for combatting child online abuse as it is relevant to the ongoing inquiry of the Science and Technology Committee on “Impact of social media and screen-use on young people’s health”. Finally, we ask to be kept up-to-date on the Privacy International reference to the CJEU on the question of the interpretation of the Article 4(2) TEU exemption and how it could impact on this proposal and the UK’s future position.

Proposed Regulation retained under scrutiny; further information requested; drawn to the attention of the Digital, Culture, Media and Sport Committee, the Science and Technology Committee, the Home Affairs Committee, the Justice Committee, the Joint Committee on Human Rights and the Exiting the EU Committee

Unfair trading practices in the food supply chain

Agreement on new EU legislation to combat unfair trading practices in the food supply chain has now been reached, but there remain some open questions relating to UK relevance, notably the length of the post-Brexit implementation period and the extension of geographical scope to cover relationships between EU sellers and non-EU buyers (including the UK). Thus far, the Government has been given no indication as to what will be expected of non-EU enforcement authorities and so is unable to give any assessment of the impact of the agreement on the UK. Should the post-Brexit implementation period be extended beyond Autumn 2021, the UK would be obliged to apply the legislation in the UK.

We conclude that—under all scenarios—the UK will be obliged to make provision for this legislation. The intensity of that requirement will be dependent on the nature of the UK’s continued obligations under EU law which may be unclear for some time. In the light of the continuing uncertainties over the impact of this legislation on the UK, we retain the document under scrutiny but waive the scrutiny reserve in order that the Government may support the Directive should such support be considered to be in the national interest.

Not cleared; further information requested, scrutiny waiver granted, drawn to the attention of the Environment, Food and Rural Affairs Committee and the Business, Energy and Industrial Strategy Committee

Safeguarding competition in air transport

Trilogue negotiations have concluded regarding this proposed Regulation which would safeguard competition in air transport against subsidisation and unfair pricing practices in the supply of air services from third countries. The Regulation would broaden the scope of the unfair practices covered, set out the procedures to be followed, and allow individual Member States and operators to make complaints in their own right.

The Committee’s concerns regarding competence have been addressed by the final text, which the Minister (Baroness Sugg) confirms is in line with UK objectives: the text provides that fair competition between air carriers should preferably be addressed in the context of air transport or air services agreements with third countries, rather than through this Regulation; the text enables an investigation to be suspended if the Member States involved intend to address the same practice under an applicable agreement they have concluded with the country in question; and, although the concept of ‘Threat of Injury’ is retained, it is clarified so that it relates to more definite circumstances and any redressive measures will not enter into force before the threat of injury has developed into actual injury.

Post-exit, the Regulation will be of relevance to the UK, assuming that it leaves the single market for aviation, as UK stakeholders could potentially be subject to the Regulation if there were any concerns regarding fair competition between EU carriers and UK aviation stakeholders. However, the prospect of it being used in relation to the UK (e.g. due to excessive state subsidies) is low, and the changes made to the Regulation mean that these issues would be more likely to be dealt with through any bilateral air transport agreement.

Cleared from scrutiny

Market surveillance

The Minister (Kelly Tolhurst MP) has written on the mandate issued by the Committee of Permanent Representatives to the European Union (COREPER) in November and subsequent trilogue negotiations with the European Parliament regarding this substantial revision of its market surveillance framework. The proposed Regulation would strengthen enforcement of EU goods rules through the creation of a Union Compliance Network, a system of pre-export checks and controls, and the introduction of a requirement for there to be an authorised representative in the Union who is responsible for compliance.

In the COREPER mandate, the Government secured a dilution of the requirement for businesses outside the Union to identify a responsible person within it with the effect that this requirement is rendered somewhat more risk-based, although the Minister provides very little detail about what precisely has been achieved. Presumably, the provision is applicable to certain higher risk product categories—e.g. chemicals—but not less risky categories. Although the European Parliament appears to be supportive of the Council’s text on this point, the Minister indicates that on a wide range of other provisions the Parliament is pressing for a tougher approach which is more closely aligned to the Commission’s original proposal. The Minister requests that the Committee clear the proposal from scrutiny or grant a waiver in advance of Competitiveness Council on 18–19 February 2019.

We decided not to grant the Government’s request until it provides it with clear information about the outcome of trilogue negotiations. We also ask questions on the scope of Government commitments regarding market surveillance in relation to the Protocol on Ireland/Northern Ireland in the Withdrawal Agreement.

Not cleared from scrutiny; further information requested; drawn to the attention of the Business, Energy and Industrial Strategy Select Committee

Documents drawn to the attention of select committees:

(‘NC’ indicates document is ‘not cleared’ from scrutiny; ‘C’ indicates document is ‘cleared’)

Business, Energy and Industrial Strategy Committee: Whistleblowing and breaches of EU law [(a) Proposed Directive (NC); (b) Communication; (c) Court of Auditor’s Opinion (C)]; Market surveillance [Proposed Regulation (NC)]; Unfair trading practices in the food supply chain [Proposed Directive (NC; scrutiny waiver granted)]

Digital, Culture, Media and Sport Committee: Privacy and Electronic Communications [Proposed Regulation (NC)]

Environmental Audit Committee: Green Finance: Low Carbon Benchmarks [Proposed Regulation (C)]

Environment, Food and Rural Affairs Committee: Unfair trading practices in the food supply chain [Proposed Directive (NC; scrutiny waiver granted)]

Exiting the EU Committee: Privacy and Electronic Communications [Proposed Regulation (NC)]

Home Affairs Committee: Privacy and Electronic Communications [Proposed Regulation (NC)]

Joint Committee on Human Rights: Privacy and Electronic Communications [Proposed Regulation (NC)]

Justice Committee: Privacy and Electronic Communications [Proposed Regulation (NC)]

Science and Technology Committee: Privacy and Electronic Communications [Proposed Regulation (NC)]

Treasury Committee: European System of Financial Supervision [(a) Proposed Regulation (NC); (b) Proposed Directive (NC); (c) Proposed Regulation (NC); (d) Proposed Regulation (C)]

Published: 22 January 2019