While the European Commission consults on a package of widespread legal reforms for the digital economy, new measures aimed at ensuring a fair and transparent platform ecosystem began to apply on 12 July 2020.
The P2B Regulation applies to “online intermediation services”, which includes e-commerce marketplaces, online software applications services such as app stores, social media services used by businesses and price comparison tools. Online search engines are also covered by rules governing the transparency of rankings. The P2B Regulation will apply to these businesses regardless of their place of establishment, provided they offer their services to other businesses that: (i) are established in the EU; and (ii) offer goods or services (via the relevant platform or search engine) to consumers located in the EU.
Among other obligations, the P2B Regulation requires online intermediaries to:
- ensure their terms and conditions are easy to access and understand, and to provide users with at least 15 days notice before implementing modifications to those terms;
- provide users subject to delisting or suspension with a statement of reasons at least 30 days before the measure enters into effect (with some limited exceptions);
- set out the general criteria determining search results rankings and, to the extent rankings can be influenced by payments, explain the nature and effects of such payments;
- describe any differentiated treatment given to the platform’s own goods and services compared to those offered by business users;
- explain what data is collected and how it is used or shared; and
- publish a description of the economic, commercial or legal grounds for using any most-favoured-nation clauses.
The EU Member States are required to enforce the P2B Regulation and take “appropriate action” to guarantee that online intermediaries are compliant. Industry organisations and associations are also given the right to bring court proceedings on behalf of businesses to challenge non-compliance.
The P2B Regulation also requires online intermediaries (other than those with <50 employees and <€10 million turnover) to set up internal complaint handling systems and nominate mediators with whom they are willing to engage in out of court settlements.
An “Observatory of the Online Platform Economy”, made up of independent experts, will monitor the implementation of the P2B Regulation and the evolution of the online platform economy. On 10 July 2020, the expert group published three draft progress reports covering data access, differentiated treatment and measuring the online platform economy. The deadline for stakeholders to provide feedback on the reports is 8 September 2020.
The P2B Regulation will be reviewed within 18 months (and subsequently every three years) to ensure it keeps pace with developments in the market. It marks an opening salvo in the move to greater regulation in this space. The European Commission has announced its intention to introduce the Digital Services Act by the end of this year, which is expected to herald more rules for online platforms and an additional regulatory framework for digital “gatekeepers”.