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Digital Economy Bill [HL]

My Lords, this clause seeks to make significant changes to the implementation of the EU electronic commerce directive. This was not an issue that was covered in the Digital Britain report and, whatever the merits of these proposals, we do not believe that it would be appropriate to make such changes without consulting all interested parties. The amendment attempts to do a number of things. First, by the amendment to Regulation 17 of the e-commerce regulations that implement the directive, the regulations would specify that limitations of liability currently available to mere conduits should apply specifically to wireless networks—the noble Lord’s new definition. I believe that the current term encompasses the noble Lord’s new definition and that therefore this new provision is unnecessary and, indeed, would confuse the intention to deliver a wide interpretation of the networks to be covered. Secondly, the amendment would specify that the limitations on liability should apply to search engines, hyperlinkers and aggregators. The Department for Business, Innovation and Skills, in an earlier incarnation, consulted on the possibility of amending the regulations to make it clear that these activities were subject to the limitations of liability granted by the directive. The result of that consultation was that there was not a strong case that we should do so. We believe that it would be wrong to make these changes now without further consultation with all relevant stakeholders. Thirdly, I note that the next proposed amendment is designed to clarify the scope of the regulations to cover non-commercial services. While the main thrust of the directive is to harmonise the regulation of those services provided for remuneration, it is clear from the recitals to the directive that the scope of the directive covers a wide range of economic activities extending to services for which the recipient does not pay, such as online information. I refer noble Lords to Recitals 17 and 18 of the directive. I understand that there are cases before the European Court that will help to refine the scope of the directive. It would be rash to consider such amendments while such cases are in train and before the court has reached its conclusion. Lastly, the amendment would give prospective effect to the limitation of liability in the directive. That means that the limitation should be applied to all future legislation, not simply to legislation that had been enacted before the regulations came into force in 2002. This aspect of the implementation of the electronic commerce directive has been the subject of much discussion with the industry. There are attractions to the idea of prospective effect but also merits to the industry of the approach that we have adopted of creating bespoke implementation of the limitation of liability, which is specific to the legislation in question. Moreover, we have serious concerns about the danger of unintended consequences and the potential uncertainty of prospective effect. I hope that the noble Lord will consider withdrawing his amendment in the light of that explanation.