We wanted to highlight a new EU regulation coming into force on the 12th July that will apply to some online service providers, where their platform targets consumers. The regulation applies to providers of online intermediation services throughout the EU regarding their relationships with business customers who use online platforms to access consumers. It imposes common transparency obligations aimed at tackling unexplained account suspensions and opaque rankings in search results of small and medium enterprises.
The Platform to Business Regulation comes into force on 12 July 2020
Back in 2019 a new EU Regulation governing online marketplaces was enacted. It is called the Platform to Business Regulation and platforms will need to comply with it by 12 July 2020.
Who does it apply to?
The Regulation applies to any online business used by EU businesses to offer goods or services to EU consumers (“providers of online intermediation services” or “Platforms”). Search providers, online marketplaces such as eBay and Amazon – businesses such as these, and many others, will be subject to the Regulation irrespective of size.
What does it do?
Its aim is to regulate the ability of Platforms to abuse their position as an intermediary to impose unfair conditions on their business customers. It does this by requiring Platforms to comply with a number of new rules.
As an illustration Platforms will be required to:
- Check their terms to ensure that there are fair periods for variation (15 days at least) and termination (30 days at least) of agreements with business customers;
- Provide better information to business customers about these provisions, and on the ways in which these terms might affect their IP/customer data;
- Provide an internal complaints/dispute resolution process and mediation options via at least two acceptable mediators (unless they are SMEs);
- Update information and transparency in relation to search rankings and delistings as a result of third party complaints; and
- Be transparent over any difference in treatment given to goods/services sold by the Platforms directly as opposed to goods/services sold by business customers.
What about Brexit?
The Platform to Business Regulation is directly enforceable in the UK from 12 July. Presently it forms part of the body of EU law remaining in force after the transition, however if it is removed, then it is quite possible that it will not remain in force following the end of the Brexit transition (currently 31 December 2020). This will depend on the terms of bilateral negotiations with the EU and the decisions made by the UK government at the time. Businesses should not rely on Brexit day absolving them of any liability under the Regulations.
We are working with our clients to ensure that they are well prepared for these changes, and would be only too happy to help with any questions you might have. Please feel free to contact our commercial team.