Appendix 1: Correspondence on draft Breaching of Limits on Ticket Sales Regulations 2018
Letter from Lord Trefgarne, Chairman of the Secondary Legislation Scrutiny Committee, to Lord Ashton of Hyde, Parliamentary Under Secretary of State at the Department for Digital, Culture, Media and Sport
I am writing as Chairman of the Secondary Legislation Committee which considered these draft Regulations at its most recent meeting.
The draft Regulations have been laid under section 106 of the Digital Economy Act 2017 (power to create offence of breaching limits on internet and other ticket sales). The Delegated Powers and Regulatory Reform Committee (DPRRC) reported on that provision when it was introduced during the passage of the Bill (21st Report, Session 2016-17, HL Paper 139). It concluded that the power to create the new offence was too wide, and that the offence, together with appropriate exceptions and defences, and the penalty should be set out on the face of the Bill. The Committee suggested that the proposal was “really quite straightforward” since the Government simply wanted “to make it an offence for a person to purchase excess tickets for a recreational, sporting or cultural event with a view to commercial gain by using special computer software”. The Committee also said that it could not see “any need for the legislation to contain technical detail about the software”.
The Government’s justification for the width of the power included the following: that the proposed offence was “by its nature ... intricately bound up with behaviour driven by technology” and that “the way in which the ticketing market operates is constantly changing and as technology evolves it may be necessary to revisit the details of the offence in terms of how it can be committed and what it comprises”. In their response to the report of the DPRRC, the Government reiterated the argument that the power was necessary to ensure that “the terms of the offence remain relevant in light of technological changes ... “, but stressed that it was intended only to create a criminal offence for the “use of bots” to purchase tickets in excess of a limit (24th Report, Session 2016-17, HL Paper 149).
The Government also raised a second argument, namely that there was a strong possibility that the new offence would be subject to procedures under the Technical Standards and Regulations Directive which required the European Commission to be given at least three months’ notice of measures which might create new technical barriers to trade. We note that the Explanatory Note accompanying the draft Regulations states that the Commission was notified about the draft Regulations, in accordance with the Directive, on 12 December 2017.
The draft Regulations appear to have addressed to some extent points made by the DPRRC. Whereas section 106 of the Act captures “an act ... using anything that enables or facilitates” a relevant purchase, the draft Regulations refer to it being an offence for a person to “use software that is designed to enable or facilitate” a relevant purchase. They also include, as an ingredient of the offence, an “intent to obtain tickets in excess of the sales limit, with a view to any person obtaining financial gain”.
That said, the SLSC would welcome your response to the following questions:
- Why was the wording of the draft Regulations - in particular, the reference in regulation 3(a) to using “software designed” to purchase electronically tickets in excess of a limit - not used in the Bill which, in section I 06(3), refers to the very broad concept of using “anything”?
- The Government said that the way in which the ticketing market operates was constantly changing and “as technology evolves it may be necessary to revisit the details of the offence”. We note that the offence, as set out in the draft Regulations, contains no technical detail and is drafted in very broad terms. What has led the Government to adopt this approach given their original reference to having to revisit the details of the offence?
- The Government said that there was a “strong possibility” that the EU Technical Standards and Regulations Directive might apply. How did this impact the development of the draft Regulations?
- Finally, please can you explain why the level of fine is unlimited in England and Wales but capped at £50,000 in Scotland?
The Committee would be grateful to receive your response to these questions by Friday 18 May 2018. I have no doubt that the DPRRC will also be interested in your answers. I will therefore copy this letter to Lord Blencathra, who chairs the Committee, and send him a copy of your reply. We will also publish both letters.
9 May 2018
Letter from Lord Ashton of Hyde to Lord Trefgarne
Thank you for your letter on behalf of the Secondary Legislation Scrutiny Committee following your consideration of these draft regulations.
I am pleased that the Committee recognises that the draft regulations have sought to address the points raised by the Delegated Powers and Regulatory Reform Committee (DPRRC) during the passage of the Digital Economy Act last year, specifically in relation to the wording in the offence to describe the mechanism to facilitate a relevant purchase and the addition of financial gain as an ingredient of the offence.
You have invited a response on four points raised by the Committee, which I will address in the order given in your letter.
- At the time that the Digital Economy Act was going through Parliament, we were very conscious of the need to ensure that the proposed offence did not contain loopholes which could be abused. Given the rapid evolution of technology we thought that we would need to include technical detail in the regulations, which could be updated if necessary to avoid abuse and to deal with new situations. Despite carrying out a consultation we found it difficult to come up with wording that would limit the commission of the offence to the use of bots but which would not allow abuse by operators. When drafting the regulations we eventually concluded that using the concept of ‘software designed’ to purchase tickets electronically was most apt to cover the mischief which the Bill provision was designed to cover, without making the offence too wide or uncertain.
- As set out in the memorandum and in the parliamentary debates during the passage of the Bill, we intend to revisit this once the Regulations have been in force for a period of time, in order to ensure that the behaviour at which the measure is directed continues to be targeted most effectively. At that point in time we may need to amend the Regulations to include further technical detail.
- As you state in your letter, the draft offence was subject to procedures under the Technical Standards and Regulations Directive and the Government notified the European Commission on 12th December 2017. No responses were received from either the Commission or Member States.
- Finally, the Committee asked why the level of fine is unlimited in England and Wales but capped at £50,000 in Scotland. This is because magistrates’ courts in Scotland do not have the power to issue an unlimited fine and so we have had to set an exceptional summary maximum of £50,000.
I hope this addresses your Committee’s questions satisfactorily. I believe these regulations will be a valuable tool in our drive to crack down on unacceptable behaviour in the ticketing market and improve consumers’ opportunities to purchase tickets at a fair price.
17 May 2018