February 18, 2019

The European Parliament says that the draft Regulation sets out measures to halt unfair practices in the digital market. Online intermediation services, such as e-commerce market places (e.g. Amazon, eBay) and search engines (e.g. Google Search) would be required to implement these measures to ensure that their contractual relations with businesses are transparent. The new rules would also apply to app stores (e.g. Apple App Store, Microsoft Store), social media (e.g. Facebook, Instagram) and price comparison tools (e.g. Skyscanner, TripAdvisor).

The European Parliament says that potentially harmful trading practices, such as sudden, unexplained changes in terms and conditions, termination of accounts, unexplained delisting of products and incomprehensible ranking criteria, as well as a lack of effective redress mechanisms, are among the problems in platform-to-business (P2B) relations.

The new rules would require online platforms to:

• explain the reasons for removing goods or services from search results or delisting them;
• provide a description of the parameters determining the ranking;
• put an end to several unfair trading practices listed in the Regulation (a “blacklist”);
• set up an internal complaints-handling system (small platforms would be exempted) and facilitate out of court dispute resolution;
• ensure effective enforcement of the regulation; and
• give a right to business users to terminate their contracts if platforms impose new unacceptable terms and conditions.

Businesses would also be able to sue platforms collectively if they fail to deal with complaints properly.

The provisional agreement still needs to be confirmed by Member States’ ambassadors (Coreper) and by the Parliament’s Internal Market and Consumer Protection Committee. The draft Regulation will then be put to a vote by the full Parliament and submitted for approval to the EU Council of Ministers. To read the European Parliament’s press release in full, click here.