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Lord Fraser of Carmyllie: My Lords, I do not wish to add anything of substance to what has already been said by the noble Baroness. However, her suggestion as regards a meeting is a constructive one. I am certainly aware of the concerns that have been expressed and which she has so articulately spelt out. If those concerns could be met, I have no doubt that would be of considerable interest to the industry.

Lord Simon of Highbury: My Lords, I wonder whether I detected in the opening remarks of the noble Baroness, Lady Hamwee, that she might rather have been at the Brits award having an enjoyable evening than singing this song tonight. I appreciate the clear way in which the points were expressed. I do not intend to answer all of them tonight, but I certainly take seriously the invitation to meet and discuss some of the finer detail. I shall make one or two points. First, I should make it clear that copyright agreements are already subject to Articles 85 and 86 of the treaty. We need to bear this carefully in mind. Agreements made void by Article 85 cannot be made valid by an exclusion from a domestic provision.

Copyright, like other forms of property, can be abused. The European Court has sought to strike a proper balance in this area. I see no reason to depart from the principles established, and Clause 58 of the Bill will ensure that UK law follows the same path. Accordingly there is no reason to believe that the Bill would interfere with such agreements unless they are found to be appreciably anti-competitive and cannot satisfy the exemption criteria in the Bill.

I can assure noble Lords that the wording of Article 85 has been given a wide interpretation by the European Court of Justice, as the study prepared by Professor Whish--to which I referred earlier--demonstrates. This wide interpretation will be imported into the domestic system by virtue of the governing principles clause in the Bill, Clause 58. I see no reason why justified copyright agreements, even if they were restrictive in some respects, could not satisfy the exemption criteria in Clause 9 as they stand.

The noble Baroness has argued that the existence of the Copyright Tribunal in the UK provides a reason for our not following the position at European level. Amendments Nos. 46 and 61 would have the effect of excluding those matters which are within the jurisdiction of the Copyright Tribunal from the scope of both the Chapter I and Chapter II prohibitions. The role of the Copyright Tribunal is, however, different from that of enforcing competition law. Its role is to resolve disputes between copyright owners acting collectively and those who wish to use copyright works. In doing so, it is not required to apply a competition test, and therefore it would be wrong to see the Copyright Tribunal as a competition scrutiny regime. Moreover, I understand that the tribunal adjudicates on aspects of an agreement

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or potential agreement as it affects the two parties to the agreement and not on any wider anti-competitive effects.

Amendment No. 62 achieves an effect which extends far beyond the sphere of music rights. It would exclude from the prohibition recommendations made by trade associations to their members so long as those reflect the terms of an agreement negotiated between the trade association and a third party; and it would apply across the economy. My view is that the effect of such an exclusion would be to open a loophole which would allow lawyers to frame anti-competitive agreements in a manner which would fall within the scope of the exclusion. This would significantly undermine the prohibitions.

I remain unconvinced that it would be desirable if the Bill were to afford any special treatment to the field of copyright or music rights, notwithstanding, as the noble Baroness says, the great importance of the industry in its competitive position for our UK performers and writers. It would certainly be wrong to exclude certain recommendations of trade associations as proposed by Amendment No. 62.

I refer to Amendment No. 70 and the question of exemption. Clause 9 of the Bill makes provisions to ensure that those agreements which have sufficient countervailing benefits will be eligible for an exemption. Amendment No. 70 would alter the exemption criteria in the Bill to add a specific reference to the facilitation of copyright works.

Criteria in the clause are already framed in a broad manner to allow for an exemption on the basis that an agreement improves production or distribution or that it promotes technical or economic progress. It is the fact that they do not mention any specific sector of the economy that is the strength of the criteria. Regardless of the sector, where agreements satisfy the criteria they will be able to benefit from an exemption.

Having given that rather brief response, I wish to underline again that I think there are technical matters within this wide-ranging issue of copyright relative to the Competition Bill that it would be wise for us to discuss. I hope that with that in mind at this stage the noble Baroness, Lady Hamwee, will be prepared to withdraw the amendment.

Baroness Hamwee: My Lords, these are issues which may be more conveniently dealt with at this stage of the Bill within the forum of a meeting. I shall not seek to respond to the Minister's answer save to say that the entertainment in your Lordships' House today has outshone anything that anyone could hope to be enjoying this evening at the Brit Awards. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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Schedule 3 [General Exclusions]:

Lord Simon of Highbury moved Amendment No. 47:

Page 47, line 14, at end insert--

("Section 21(2) agreements

1A.--(1) The Chapter I prohibition does not apply to an agreement in respect of which a direction under section 21(2) of the Restrictive Trade Practices Act 1976 is in force immediately before the coming into force of section 2 ("a section 21(2) agreement").
(2) If a material variation is made to a section 21(2) agreement, sub-paragraph (1) ceases to apply to the agreement on the coming into force of the variation.
(3) Sub-paragraph (1) does not apply to a particular section 21(2) agreement if the Director gives a direction under this paragraph to that effect.
(4) If the Director is considering whether to give a direction under this paragraph, he may by notice in writing require any party to the agreement in question to give him such information in connection with the agreement as he may require.
(5) The Director may give a direction under this paragraph only as provided in sub-paragraph (6) or (7).
(6) If before the end of such period as may be specified in rules under section 49 a person fails, without reasonable excuse, to comply with a requirement imposed under sub-paragraph (4), the Director may give a direction under this paragraph.
(7) The Director may also give a direction under this paragraph if he considers--
(a) that the agreement will, if not excluded, infringe the Chapter I prohibition; and
(b) that he is not likely to grant it an unconditional individual exemption.
(8) For the purposes of sub-paragraph (7) an individual exemption is unconditional if no conditions or obligations are imposed in respect of it under section 4(3)(a).
(9) A direction under this paragraph--
(a) must be in writing;
(b) may be made so as to have effect from a date specified in the direction (which may not be earlier than the date on which it is given).").

The noble Lord said: My Lords, this amendment is grouped with Amendment No. 217.

In Committee, my noble friend Lord Currie suggested that agreements which had received a direction under Section 21(2) of the RTPA should be given a permanent exclusion from the Chapter I prohibition, rather than the five-year transitional exclusion at present provided for in the Bill. I was grateful to my noble friend for raising the matter.

Many of the respondents to the August consultation document had emphasised the effort and cost that would be required to review such agreements, even after a five-year transitional period. This was the largest element of the non-recurring compliance costs in the compliance cost assessment on the Bill. I was therefore pleased to be able to say that we would bring forward an amendment at Report stage.

This amendment fulfils that commitment and provides an exclusion for agreements in respect of which at commencement a direction under Section 21(2) RTPA is in force. It includes the power for the director to claw back the exclusion in certain circumstances, as I said in Committee it would. It includes a power for the director to require parties to an agreement to provide information, of the kind that this House considered

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earlier in relation to the mergers exclusion. And it provides that an agreement should continue to enjoy the benefit of this exclusion as long as there has been no material variation to it.

As a consequence of the exclusion Amendment No. 217 removes the existing provision for a five-year transitional period. I beg to move.

On Question, amendment agreed to.

Lord Simon of Highbury moved Amendment No. 48:

Page 47, line 14, at end insert--
("EEA Regulated Markets
1B.--(1) The Chapter I prohibition does not apply to an agreement for the constitution of an EEA regulated market to the extent to which the agreement relates to any of the rules made, or guidance issued, by that market.
(2) The Chapter I prohibition does not apply to a decision made by an EEA regulated market, to the extent to which the decision relates to any of the market's regulating provisions.
(3) The Chapter I prohibition does not apply to--
(a) any practices of an EEA regulated market; or
(b) any practices which are trading practices in relation to an EEA regulated market.
(4) The Chapter I prohibition does not apply to an agreement the parties to which are or include--
(a) an EEA regulated market, or
(b) a person who is subject to the rules of that market,
to the extent to which the agreement consists of provisions the inclusion of which is required or contemplated by the regulating provisions of that market.
(5) In this paragraph--
"EEA regulated market" is a market which--
(a) is listed by an EEA State other than the United Kingdom pursuant to article 16 of Council Directive No. 93/22/EEC of 10th May 1993 on investment services in the securities field; and
(b) operates without any requirement that a person dealing on the market should have a physical presence in the EEA State from which any trading facilities are provided or on any trading floor that the market may have;
"EEA State" means a State which is a contracting party to the EEA Agreement;
"regulating provisions", in relation to an EEA regulated market, means--
(a) rules made, or guidance issued, by that market,
(b) practices of that market, or
(c) practices which, in relation to that market, are trading practices;
"trading practices", in relation to an EEA regulated market, means practices of persons who are subject to the rules made by that market, and which--
(a) relate to business in respect of which those persons are subject to the rules of that market,
(b) are required or contemplated by those rules or by guidance issued by that market, or
(c) are otherwise attributable to the conduct of that market as such.").

On Question, amendment agreed to.

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