Traders selling online via marketplaces, hotels using booking platforms, or app developers are among those that stand to benefit from new EU rules which have started to apply as from July 12, and which regulate platform to business (P2B) relationships.
The EU regulation on platform-to-business relations is the first-ever set of rules enacted with the objective of ensuring that businesses using online intermediation services and general online search engines enjoy greater legal certainty and clarity with respect to the rules governing their relationships with these platforms and how to resolve potential disputes.
The regulation applies to online platform intermediaries and general online search engines that provide their services to businesses established in the EU and that offer goods or services to consumers located in the EU. Such online platform intermediaries include third-party e-commerce marketplaces such as Amazon Marketplace, app stores such as Google Play, social media for business such as Facebook pages and price comparison tools such as Skyscanner.
Online search engines that facilitate web searches based on a query on a subject and provide results in various formats corresponding with the search request such as Google Search also fall within the scope of this regulation.
By virtue of these new rules, online platform intermediaries are required to make their standard terms and conditions more transparent, easily available and announce changes well in advance. The terms and conditions must clearly state the reasons for suspending or terminating a business’s account and include a description of certain elements. Online intermediation platforms cannot prevent the business user from making its identity visible. Businesses should also be informed how these platforms can influence their ranking position, for example, through the payment of additional commissions. Online search engines must also now inform consumers in those cases where the ranking result has been influenced by any agreement with the website user.
Almost half of small and medium companies in the EU use online marketplaces to sell their products and services
Should an online platform intermediary decide to restrict, suspend or terminate a business’s account, including the delisting of individual goods or services or effectively remove them from search results, it is required to abide by a number of requisites. It must provide a statement of reasons to the business concerned, give 30 days prior warning in most cases of termination and preserve the data associated with business users’ account, so that this can be reinstated if a business users’ account was closed in error.
The regulation also provides effective and quick means to resolve disputes between businesses and online platform intermediaries. All, except for the smallest platforms, must set up an internal complaint handling system. This will allow businesses to lodge complaints directly with the platform. Platforms will need to respond to complaints appropriately and communicate the outcome to businesses.
Organisations and associations representing business users’ interest have the option to take action before competent national courts to stop or prohibit non-compliance by online intermediation services and search engines with the regulation. In addition, member states can appoint public authorities with enforcement powers, if they wish, and businesses can turn to those authorities.
The European Commission has recently also published a Q&A document which can serve as a checklist for online platforms and search engines, particularly smaller ones, when implementing the new requirements. It also provides valuable information to businesses seeking to ascertain what their new rights are. Next in the pipeline are guidelines on ranking which will help online platforms and search engines improve predictability and transparency and help businesses assess how best to increase and manage their online visibility.
Statistics show that almost half of small and medium companies in the EU use online marketplaces to sell their products and services. Harmonised EU rules will ensure a level playing field and at the same time generate legal certainty and trust for those businesses wishing to avail themselves of the choice to sell their products online. Consumers too stand to gain not only from possibly a wider choice of products on the online market but also from the new rules, particularly those relating to the visibility of the identity of the business offering the goods and services as well as from the fact that they must now be made aware that specific general search results were influenced by a payment.
Mariosa Vella Cardona, M’Jur, LLD, freelance legal consultant