The EU plans to step up security for businesses that depend on digital platforms
Alfonso Lamadrid (principal associate of the E.U. & Antitrust department) andy Enrique Colmenero (associate of the E.U. & Antitrust department).
On 26 April, the European Commission published its Regulation on promoting fairness and transparency for business users of online intermediation services. The Commission hopes that these regulations will provide more security for business users and companies that depend on large digital platforms in order to develop their businesses online. This legislative project is part of the Commission's strategy for a Single Digital Market presided over by Jean-Claude Juncker.
If approved by the EU European Parliament and the Council, the new regulations would apply to any company offering intermediation services on-line to other traders and companies whose activity was aimed at European Union consumers. The foregoing includes different types of company including (i) electronic commerce platforms such as Marketplace or eBay; (ii) application stores such as Apple App Store o Google Play Store; (iii) social network services for professional users such as Facebook pages; and (iv) price comparison sites such as Booking.com or Skyscanner
The new regulations would also be applicable to search engines such as Google Search or Yahoo!, which index websites that professional users use to offer services to consumers, even in the absence of any contractual relation between the parties.
The rules proposed by the Commission generally aim to reinforce regulatory obligations of transparency linked to operation of the on-line platforms.
In view of the proposal, the conditions in which these platforms provide their services should be easy to access and understand for businesses and the traders using them. The platforms should motivate their professional users regarding any grounds that could lead to suspension or cancellation, albeit partial or total, of their intermediary services. The foregoing includes withdrawal of a product or services from the search results page.
In addition, the online intermediation services should inform on the criteria used to determine classification of the goods services and /or web pages of businesses, as well as the way in which they offer their goods and services on their platform, compared to those of other businesses and traders. They should also clearly communicate and motivate any possible restriction of freedom of their professional users, in order to offer improved commercial conditions in other environments or platforms (those known as Most Favoured Nation or “MFN” clauses). Although in recent years these issues have been investigated in cases of competition law, the regulations proposed by the Commission seek to amplify these obligations, extending them to all operators.
The new regulations will also require platforms to inform how, who and in what conditions data generated by professional users on online platforms may be accessed.
The foregoing regulations will be accompanied by new mechanisms for resolving disputes between businesses and online platforms more rapidly and effectively. The new draft Regulation requires major platforms to establish internal systems for processing complaints. Furthermore, all the platforms, albeit large or small, shall be required to use independent mediators to resolve these disputes. Finally, the new regulations will permit companies to be represented in the courts by associations in claims against failure to comply with the requirements of the draft Regulation.
Lastly, the Commission seeks to encourage the adoption of codes of conduct by online platforms in order to ensure correct application of new regulations.
This new draft Regulation will complement the Commission Decision on setting up the Group of experts for the Observatory on the Online Platform Economy.. This Observatory will analyze the problems and opportunities of the digital economy both present and future. This Group of Experts will enable the Commission to monitor implementation of the regulations proposed in an appropriate manner.
The Commission proposal is the start of an ordinary legislative procedure which is now in the hands of the Council of the EU and the European Parliament.