Online platforms required to deal with business users fairly and transparently from 12 July 2020

Online platforms required to deal with business users fairly and transparently from 12 July 2020

Directors decision making: considerations for virtual meetings

The Online Platforms Regulation (EU 2019/1150) (“the Regulation”) came into force on 12 July in an attempt to promote fairness and transparency for business users of online intermediation services (services which constitute information services and which offer goods or services to consumers with a view to facilitating direct transactions between those business users and consumers).

The Regulation includes new obligations on platforms to provide clear terms and conditions for business customers, suitable notice periods and reasons for charges to or termination of services, and suitable internal complaints procedures and external mediation services. Platforms and search engines will also be subject to new transparency requirements related to how they rank listed services/goods.

Who?

The Regulation is intended to benefit businesses, particularly SMEs, who may fall foul of unfair trading practices when relying on online platforms and search engines to target their customers. It applies to online service providers and search engines, including app stores, social media platforms, price comparison sites and booking sites that provide services to EU businesses or customers whether or not they are established in the EU. The Regulation does not apply to online platforms which do not act as an intermediary between businesses and their end consumers (e.g. online advertising services, payment services and retailers selling directly to customers) as these are not provided with the aim of facilitating the initiation of direct transactions and do not involve a contractual relationship with consumers.

What?

Platforms and search engines that fit the above description will be subject new rules, including:

Rankings (Article 5) – business users must be given a description in plain and intelligible language of how goods and services of businesses are ranked within the platform or search engine. This means disclosing the parameters determining rankings, the factors influencing those parameters and other deciding information in either a public document or in their terms and conditions. The EU is due to provide further guidance on this.

Differentiated treatment (Article 7) – platforms and search engines are obliged to disclose any differentiated (and specifically advantageous) treatment given to its own products and services over others, for example in relation to remuneration charged for use of the platform or search engine, access to personal and/or other data or rankings which influence consumer access to the goods or services on the platform/search engine.

Platforms alone will also be subject to the following rules:

T&Cs – terms and conditions provided to business users are required to provide a higher level of transparency in relation to suspension/termination, data and differentiated treatment (as above). The presentation and contents of the terms and conditions must also be plain, intelligible and easily available and reasonable notice (generally at least 30 days) must be given of any changes.

Complaints – platforms must have a sufficient complaints handling system in place, including ensuring free, timely and proportionate treatment of complaints and identifying at least two mediators who are engaged in helping resolve disputes.

Third parties – platforms must be transparent about the identity of any third party business users providing goods and services to it.

Brexit

The Regulation is now in force, despite UK’s withdrawal from EU on 31 January 2020, as the withdrawal arrangements mean that EU law continues to apply in the UK until the transition period comes to an end (currently 31 December 2020). We would expect the position in the UK after the end of the transition period to remain broadly similar on the basis that other EU platforms and search engines will still have to comply with the regulation, however the detail remains to be seen.

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