On 20 June 2019, the EU adopted the Regulation on promoting fairness and transparency for business users of online intermediation services (also known as the P2B Regulation). As from 12 July 2020, the P2B Regulation directly applies in all EU Member States.
The main objective of the Regulation is to address situations of imbalances in bargaining power between online platforms and the professional suppliers who use their services. Indeed, online platforms, including online search engines, have become key players in the e-commerce market over the past few years and act as a gateway to consumers for numerous businesses. This situation opens up the scope for certain unilateral and harmful trading practices such as delisting goods or services, suspending accounts, changing terms and conditions without explanation or prior notice, favouring the platforms’ own products or services, etc.
The P2B Regulation applies to online platform intermediaries and search engines that provide services to businesses established in the EU and that offer goods or services to consumers located in the EU. This includes e-commerce marketplaces (such as Amazon, eBay, Alibaba, etc.), app stores (such as the Apple App Store, Google Play, etc.), social media for business (such as Facebook pages, etc.), price comparison tools and booking websites (such as Skyscanner, etc.), as well as online search engines (such as Google Search, Yahoo!, etc.). Excluded from the Regulation’s scope are, among others, online advertising and payment services, as well as intermediaries that operate in a B2B context only. Online retailers such as supermarkets and brand retailers also fall outside the Regulation’s scope to the extent that they only sell their own products directly to consumers.
The new obligations imposed by the P2B Regulation on online platforms include:
• increased transparency measures regarding terms and conditions for business users of online platforms;
• the obligation to provide a detailed statement of reasons for any decision to suspend or terminate a business user’s account;
• the obligation to describe the main parameters determining rankings and differentiated treatments, except when these parameters contain trade secrets;
• the obligation for online platforms that are also sellers of goods to disclose any differentiated treatment or advantage given to the platform’s own goods and services over those of business users;
• the obligation for platforms to describe the access, or absence thereof, by business users to personal data or other data which business users or consumers provide for the use of the platform or which are generated through the provision of the platform’s services;
• more transparency regarding the restrictions that platforms may impose on professional users, in particular regarding the use of other distribution channels;
• the obligation to set up an effective internal complaint-handling system and to facilitate out-of-court dispute settlement.
Apart from these obligations, the P2B Regulation further adds that any terms and conditions, or specific provisions thereof, that do not comply with the requirements of the Regulation shall be null and void. A form of enforcement is also guaranteed, as the Regulation provides that representative organisations and/or public bodies can initiate judicial proceedings against platforms that fail to comply. Other enforcement measures or penalties are left to the Member States to implement.
The P2B Regulation is expected to impact the platform economy significantly in coming years. It is, however, not the end of the story. At the start of June 2020, the European Commission launched a public consultation on the Digital Services Act, which will replace or amend the e-Commerce Directive and will introduce new measures to ensure a level playing field in European digital markets.
Please contact Karel Janssens for further information on this Regulation and/or general legal advice relating to the digital and platform economy