In the context of developing the European Digital Single Market, a market in which online barriers are lifted, the EU has been working on some new regulations. The newest adopted regulation is the ‘Regulation on promoting fairness and transparency for business users of online intermediation services’ (hereafter: Regulation). As online platforms (or so-called intermediation services) are key enablers of the digital market, the EU wanted to regulate them, to eliminate potentially harmful trading practices.

In the Regulation, the EU points out the importance of online platforms and warns for the increasing power of the providers of those services. The service providers have superior bargaining power over smaller businesses that use their service, which enables the service provider to behave unilaterally in a way that can be unfair or harmful. To eliminate these frictions in the online platform economy, the EU made this Regulation in which transparency, fairness and effective redress possibilities are key words.

Scope

The Regulation applies to online intermediation services[1] and online search engines[2] provided to professional sellers who are located in the EU and who offer goods and services to consumers located in the Union. The location of the provider of the online platform is not relevant. Accordingly, when an online platform provider is used by a (i) professional seller (ii) located in the EU (iii) who sells to EU nationals, the online platform will have to comply with rules set out the Regulation, no matter where the place of establishment or residence of the online platform is located.

The Regulation does not apply to online payment services (e.g. Ingenico) or online advertising tools (e.g. Google AdWords) or online advertising exchanges. These services do not initiate a direct transaction between the professional sellers and consumers.

I’ve got new rules I count’ em

In order to improve transparency, the Regulation requires that the terms and conditions of online platforms (i) are made up in plain and intelligible language and (ii) are easily available to the professional sellers at all stages of the commercial relationship with the platform provider, including during the pre-contractual stage.

In addition, the Regulation imposes some information obligations. These must be reflected in the terms and conditions. In this regard the platform providers must inform the professional sellers about the effects of the terms and conditions on the ownership and control of intellectual property rights of these sellers.

In addition, the terms and conditions in itself must include information regarding:

  • the grounds on which a platform provider can suspend, terminate or impose any other kind of restriction to the professional seller. When a platform provider decides to restrict or suspend the access of a professional seller to the platform, he is obligated by the new Regulation to inform the professional seller about his decision with a statement of reasons. If the professional seller does not agree with this decision or has a complaint, he should be able to file a complaint in the internal system of the platform or contact a mediator indicated by the online platform, unless the platform has less than 50 employees and achieves less than 10 million euros in revenue.
  • additional distribution channels and/or potential affiliate programmes through which the platform providers might market goods and services to professional sellers using their platform.

When the platform provider wants to change his terms and conditions, he is obliged to notify the professional users. The proposed changes shall not be implemented before the expiry of a notice period. The notice period shall be at least 15 days, or longer when it is necessary to allow business users to make technical or commercial adaptations to comply with the changes. The professional sellers even have the right to terminate the contract with the online platform provider within the notice period.

Finally, the Regulation requires the platform providers to inform the professional sellers about the main parameters used to determine the ranking on their platform.

Entry into force

The Regulation is yet to be signed and published in the Official Journal of the EU but will enter into force on the twentieth day after publication in the Official Journal. The obligations set out in this Regulation will apply twelve months from the date of the publication. Although the Regulation is not yet in force, it is, considering the broad transparency requirements, advisable to already start making the necessary implementations and potentially, making some changes to your platform terms.

If you have any further questions on how to implement these obligations or how to amend your platform terms and conditions, you can contact us via contact@dejuristen.be.

[1]online intermediation services’ means services which meet all of the following requirements: (a) they constitute information society services within the meaning of point (b) of Article 1(1) of Directive (EU) 2015/1535 of the European Parliament and of the Council1 ; (b) they allow business users to offer goods or services to consumers, with a view to facilitating the initiating of direct transactions between those business users and consumers, irrespective of where those transactions are ultimately concluded; (c) they are provided to business users on the basis of contractual relationships between the provider of those services and business users which offer goods or services to consumers;

[2]online search engine’ means a digital service that allows users to input queries in order to perform searches of, in principle, all websites, or all websites in a particular language, on the basis of a query on any subject in the form of a keyword, voice request, phrase or other input, and returns results in any format in which information related to the requested content can be found;

Geschreven door Johanna Coppens