Online intermediation services — fairness and transparency for business users

SUMMARY OF:

Regulation (EU) 2019/1150 on promoting fairness and transparency for business users of online intermediation services

WHAT IS THE AIM OF THE REGULATION?

It aims to ensure the fair and transparent treatment of business users by online platforms, giving them more effective options for redress when they face problems, creating a predictable and innovation-friendly regulatory environment for online platforms within the EU.

KEY POINTS

Scope

The regulation introduces new rules for online intermediation services* (online platforms) and online search engines that aim to connect EU businesses and professional websites with EU consumers.
Online platforms cover a wide range of activities including:
- online marketplaces;
- social media and creative content outlets;
- application distribution platforms;
- price comparison websites;
- collaborative economy marketplaces, to the extent these host professional users; and
- online general search engines.
They share key characteristics including the use of information and communication technologies to facilitate interactions (including commercial transactions) between users, collection and use of data about these interactions, and network effects which make the use of the platforms with most users most valuable to other users.

Terms and conditions

Providers of online platforms must:

ensure that their terms and conditions for professional users are easy to understand and easily available;
spell out upfront the possible grounds for restricting, suspending or terminating their services;
notify their professional users at least 15 days in advance of any modifications of their terms and conditions unless they are subject to a specific legal obligation or to address unforeseen and imminent cybersecurity risks — non-respect of this obligation would mean that any modifications are null and void;
act in good faith by refraining from implementing retro-active changes to terms and conditions, by providing a termination right to their professional users and by describing whether they maintain any access to the data of their business users post-termination of their contract;
explain whether they reserve any rights in respect of the intellectual property of their professional users or in terms of the platforms’ ability to market the goods or services of their professional users outside the relevant platform;
provide professional users with a detailed statement of reasons for a restriction, suspension or termination of their services — in the case of overall termination, such a statement shall be provided 30 days in advance;
ensure that the identity of its professional users is clearly visible.

Terms and conditions must include:

the main parameters determining ranking and the relative importance thereof relative to all other parameters — this description shall include any possibility to influence ranking against direct or indirect remuneration (in addition to online platforms, online search engines must also set out the main parameters determining ranking);
if applicable, a description of any ancillary goods or services that the online platform may itself offer as a complement to the goods or services of its professional users;
a description of any differentiated treatment given to goods and services they offer themselves (or by professional users they control), compared to the treatment they give to goods and services offered by other professional users (this obligation equally applies to online search engines);
a description of the technical and contractual access of professional users to personal or other data that business users or consumers provide to online intermediation services or that are generated through the use of those services;
if applicable, the legal, economic or commercial consideration for any restriction of the ability of professional users to offer their goods or services under different terms through other channels;
information regarding the access and functioning of online platforms’ internal complaint-handling system as well as one or more mediators to whom business users can turn to attempt to solve any disputes with the relevant provider of the online platform.

Complaints, mediation and redress

Online platform providers employing more than 50 persons or achieving more than €10 million in annual turnover must establish and operate an internal system for handling complaints from professional users about non-compliance with a legal obligation laid down in the regulation, or any technological issues, measures taken or behaviour by providers that could affect business users. Complaints must be processed swiftly and effectively, and the outcome communicated individually, in plain and intelligible language.
To inform oversight including by the Observatory on the Online Platform Economy, online platform providers have to publish statistics on the effectiveness of their internal complaint-handling systems.
To further facilitate quick and effective dispute settlement, online platform providers must identify one or more mediators to whom business users can turn to attempt to solve any disputes with the relevant provider of the online platform.

Enforcement

Representative organisations and public bodies have a self-standing right to take action before national courts and to counter any non-compliance with the regulation by providers of online intermediation services and search engines.
EU countries will in addition provide effective public enforcement mechanisms.

Review

The Observatory on the Online Platform Economy will assist the Commission in monitoring the impact of the new rules as well as emerging issues and opportunities in the digital economy. By 13 January 2022, the Commission will assess whether additional or different rules may be needed as part of the foreseen review of the regulation.

FROM WHEN DOES THE REGULATION APPLY?

It applies from 12 July 2020.

BACKGROUND

For more information, see:

Online platforms (European Commission)
Expert group to the EU Observatory on the Online Platform Economy (European Commission).

KEY TERMS

Online intermediation services: online platforms — information society services that 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; they are provided to business users on the basis of contractual relationships between the provider of those services and business users offering goods or services to consumers.

MAIN DOCUMENT

Regulation (EU) 2019/1150 of the European Parliament and of the Council of 20 June 2019 on promoting fairness and transparency for business users of online intermediation services (OJ L 186, 11.7.2019, pp. 57-79)