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Lord Elton: My Lords, I have to confess that I am here for nostalgic reasons. In 1984 I was in the position of the noble Lord, Lord Simon of Highbury, and taking the first Data Protection Bill through the House. I am very much aware of the difficulty of balancing the need to be absolutely fair to the person who is subject to the regulation and the need to be certain that that fairness does not diminish the protection given to the person being protected. I intervene merely to say that, if the noble Lord intends to resist the first amendments in the group, I hope it will only be on the grounds that it would expose those who are supposed to be protected to unnecessary risk. But otherwise the balance must be in favour of the person who will be in receipt of the broken door, to which reference was made on the previous amendment.

Lord Simon of Highbury: My Lords, I thank noble Lords for their consideration in accepting a large grouping. I shall try to do justice to the sequence of amendments that have been tabled. I shall therefore speak, first, to Amendment No. 116. I am grateful to the noble and learned Lord, Lord Fraser, for drawing to the attention of the House the great importance of procedural safeguards before and indeed after decisions are made by the director. Indeed, the noble Lord, Lord Elton, said that we must try to ensure that we stray neither too far from or too close to the lines of "unbalancing" judgment.

I agree that the procedural safeguards are important and need to be clearly spelt out. Where I differ from noble Lords opposite is in how this result can best be achieved. We have given careful thought to the structure of the Bill. The Bill itself provides the basic framework for the safeguards. Clause 30 provides that, before making a decision on his own initiative following an investigation, the director must give written notice to parties likely to be affected by the proposed decision and allow those parties to make representations. It is right that such safeguards should be made clear on the face of the Bill. That is the balance we require in the case of own initiative decisions of the director.

The Bill itself does not specify how these basic safeguards are to apply in detail. That is a matter where flexibility in primary legislation is desirable. Accordingly, the Bill provides for procedural matters to be prescribed in rules set under Clause 49 and subject to parliamentary scrutiny. I therefore regard questions such as the length of the notice period to be more suitably dealt with in rules and not on the face of the Bill.

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The same is true of the procedures for allowing representation, including whether there should be opportunity for oral representation. I therefore see no need to make explicit provision for the director to take account of representations. It is implicit in the existing provision in Clause 30 that the director must take account of the representations he receives in making his decision. Nor do I see a need for an explicit provision requiring him to comment on such representations, given that the director will be producing reasoned decisions.

As for decisions made pursuant to notification, the director general will clearly have the arguments of the parties before him in the shape of the notification. Once again, we have expressly provided in Schedules 5 and 6 for the director to follow the procedures as laid down in Clause 49. The detail of this procedure will be set out in the director's rules under Clause 49. We expect that a first draft of the rules will be available in the spring. Once again, such rules will be subject to parliamentary scrutiny. It would be wrong for the detail to be enshrined on the face of the Bill in what we consider to be an inflexible form. Therefore, I shall invite the noble and learned Lord, Lord Fraser, to withdraw the amendment when I reach the end of this rather lengthy response.

I now turn to Amendments Nos. 117 and 121. They seek to limit the range of persons to whom the director may give directions for the purpose of bringing the infringement to an end. At present, Clauses 31 and 32 are widely drawn, and intentionally so. They include such persons or such person as he considers appropriate to bring the infringement to an end. This will include both individuals--natural persons--and bodies corporate. The noble and learned Lord's amendment seeks to limit this, in the case of a Chapter I infringement, to a party to that agreement, and, in respect of a Chapter II infringement, to the person or persons whose conduct infringes that prohibition.

On the face of it that might appear reasonable. However, there is a strong possibility that the undertakings involved in infringements will be part of, or even the whole of, a very complex corporate group structure. The company which is directly a party to an infringing agreement or which is apparently responsible for infringing conduct may not be the actual instigator of that infringement. It may be a subsidiary that is directly involved in this way, but the infringement may well have been brought by the ultimate parent company or other prominent entities within the complicated group structure. As has been stressed before in the context of the investigation and enforcement regime under this Bill, the director must have the ability to get at the real culprit.

I turn now to Amendments Nos. 118 and 122. These would limit the powers of the director to require the termination of an infringing agreement or of infringing conduct. As currently drafted, he would be empowered under Clauses 31 and 32 to require by directions the relevant agreement or conduct to be amended or to be terminated. The noble Lords' amendment would make the power to require termination of the agreement or the conduct to be conditional upon there having been a prior

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attempt by means of similar directions to modify the relevant agreement or conduct so as to bring the infringement to an end. This is unnecessary and undesirable. There will be cases where modifying the agreement or conduct is not sufficient and termination is the only proper remedy. The director should have the power to terminate the agreement or conduct in this way.

Amendments Nos. 119 and 123 seek to add new safeguards before the giving of directions under Clauses 31 and 32. Such new procedure would involve the director, where he had decided that there was an infringement of either of the prohibitions and intended to issue directions, to go through the process of giving written notice of the proposed direction to the person concerned, affording him the opportunity to make representations and to take any such representations into account. Effectively the director would have to repeat the same process he had possibly only just gone through and which he is required to do by Clause 30 before making the decision that there had been an infringement. Again, such duplication would serve no useful purpose and would simply delay the remedial action. I believe that it is right in these circumstances for the safeguards to be prescribed in the director's rules under Clause 49. Schedule 9 explicitly refers to the fact that rules may cover the procedure to be followed when the director takes enforcement action.

Amendments Nos. 120 and 124 in our view are also undesirable. Clause 45 of the Bill provides for appeals to the competition commission against decisions made by the director, and this includes directions made under Clauses 31 and 32 to bring infringements of either of the prohibitions to an end. These amendments would prevent such directions from taking effect until the period of notice of appeal had expired or until any such appeal had been dealt with, except where the persons concerned gave written notice to the director that they did not intend to appeal. One of our concerns about the enforcement of these prohibitions has been to ensure that infringing agreements or conduct are brought to an end as swiftly as possible to minimise the damage they cause. The requirements proposed here would inevitably involve delay and because of this we have made it clear in Clause 45 that, as far as is relevant here, the making of an appeal will not suspend the effect of the direction. We recognise the need for safeguards, however. Schedule 8 to the Bill, in providing further for the appeal process, allows a tribunal to make an interim order and such an order can suspend the effect of a direction. We consider that providing for such suspension on the merits of the case is preferable to deferring the operation of directions almost automatically and across the board, which would be the effect of these amendments.

Finally, I turn to Amendments Nos. 125 and 126, as spoken to by the noble Lord, Lord Kingsland. They seek to ensure that responsible officers of undertakings are not made the subject of orders requiring the remedying of failures to comply with directions. The circumstances contemplated here are that the director has decided that there has been an infringement of one of the

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prohibitions. He has given directions which involve the officers of an undertaking taking some managerial or administrative action which they have failed, without any reasonable excuse, to do. This provision enables a court to compel the officers to take that action. If there is no power to achieve this end, then the direction will not be complied with and the infringement may go on unchecked. In these circumstances we consider it right that such officers who are wilfully in default may be liable for the costs of obtaining such an order.

I am grateful to noble Lords for their patience while I responded extensively to a number of clauses. I am satisfied that procedural safeguards are adequately provided for in the Bill as it is drafted. Amendments in this group also limit the powers of the director general to take enforcement action and weaken the Bill's effectiveness against anti-competitive conduct, when we know it is having a very stark effect on the competition circumstances that are being investigated.

In response to the point made by the noble Lord, Lord Elton, we have tried to achieve balance between what should be on the face of the Bill and what should be in the guidelines and whatever written directions are given by the director general. Therefore, I am sure that it will come as no great surprise to learn that I ask both the noble and learned Lord, Lord Fraser, and the noble Lord, Lord Kingsland, whether they are prepared to withdraw their amendments.

5.45 p.m.

Lord Fraser of Carmyllie: My Lords, as regards the Minister's response to Amendment No. 116, he wholly persuades me. I agree that, on reflection and having listened to what he had to say, the course the Minister has suggested for these procedural matters is a more appropriate one. It may be some small comfort to him, and certainly to his officials, to know that I shall not be returning to the matter at Third Reading.

I am also grateful to the noble Lord for expressing more clearly than I did that Amendments Nos. 117 to 124 are parallel amendments to Clauses 31 and 32. I believe that at one point I inadvertently slipped from one clause to the other. I would like to read what the Minister said as regards the first of the three amendments. I am grateful to him for his full response. But perhaps I may indicate to him that as regards Amendments Nos. 120 and 124, I do not propose to consider them again at the final stage. I very much agree with the argument that the noble Lord has advanced, that given the power to suspend that is to be found in Schedule 8, paragraph 2, that is a more appropriate way to deal with a case where there is a desire to see the decision suspended while an appeal is being heard. With that exposition, and again with my thanks to the Minister, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 31 [Directions in relation to agreements]:

[Amendment No. 117 not moved.]

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