There are only a few weeks remaining before the Regulation for online platforms will come into effect in the UK on 12 July 2020.
Before this date, online platform providers are required to update their terms and conditions and search engine providers are required to make certain information available to meet the requirements specified in the Regulation. Additionally, where not already available, online platform providers would need to set up internal complaint handling systems in order to ensure compliance with the Regulation.
Who is affected by the Regulation?
Regulation (EU) 2019/1150 on promoting fairness and transparency for business users of online intermediation services (“OIS”) will apply to online platforms and search engines, irrespective of their place of establishment or residence, where they offer services to business users and corporate website users that are established in the EU and which offer goods or services to consumers located in the EU through the online platforms or search engines.
The Regulation contains the following new rules:
- Terms and conditions
The Regulation requires OIS to have clear and easily available terms and conditions, which set out the “grounds for decisions to suspend or terminate” services. An OIS will also be required to provide business users at least 15 days’ notice of any change to their terms and conditions prior to the changes taking effect. If the change requires the business user to make technical or commercial adaptions in order to comply with the OIS terms and conditions, the notice period must be longer than 15 days. Any terms and conditions which do not comply with the Regulation will be null and void.
- Restriction, suspension and termination of services
Where an OIS decides to restrict or suspend the provision of services, it shall provide a written statement of reasons for that decision to the business user. Equally, if an OIS decides to terminate the provision of the whole of its services, it shall provide the business user with at least 30 days’ written notice prior to the termination taking effect, with a statement of reasons for that decision.
The Regulation provides new transparency obligations on OIS for search results and ranking. It requires an OIS to set out in their terms and conditions “the main parameters determining ranking and the reasons for the relative importance of those main parameters as opposed to other parameters”. Similarly, search engines are required to provide publicly available descriptions of the main parameters determining ranking and must ensure that such information is kept up to date. Furthermore, where relevant a description of the influence on ranking of any direct or indirect remuneration mechanism should also be included.
The European Commission is expected to publish guidance on this ranking requirement in the near future.
- Differentiated treatment
In addition to a description of the parameters that determine ranking, OIS are required to disclose any differentiated treatment which they give in relation to goods or services they (or a business they control) offer to consumers on the one hand, and those of their business users on the other hand.
- Access to data
The terms and conditions of an OIS should include a description of what personal data or other data the platform receives through the use of its services. Such description shall include details as to whether the business user or the OIS has access to the data and under what conditions.
- Restriction on providing services under different conditions through other means
Where an OIS restricts business users from offering the same goods and services to consumers under different conditions through other means, they must specify that they do so in their terms and conditions and include the grounds for the restriction.
- Dispute resolution and complaint handling
The Regulation requires OIS to provide for an internal system for handing the complaints of business users. This system is required to be easily accessible and free of charge for business users and should ensure the handling of complaints within a reasonable timeframe. All relevant information concerning the system should be provided within the terms and conditions of the OIS.
Additionally, OIS are required to identify in their terms and conditions two or more mediators with which they are willing to engage to attempt to reach an agreement with a business user out of court in relation to any dispute arising between the parties in relation to provision of the OIS that could not be resolved through the internal complaint-handling system.
The Regulation permits organisations and associations with a legitimate interest in representing business users or corporate website users as well as public bodies set up in Member States to take action within national courts for non-compliance with the Regulation. In addition, business users and corporate website users can take action based on individual rights to bring an end to non-compliance.
- Brexit and the UK
The Brexit transition period agreed between the UK and the EU is due to last until 31 December 2020, unless an extension is agreed by 1 July 2020. During this period, though the UK is no longer a member of the EU, it is still subject to EU rules and remains in the single market and customs union. As such, because the Regulation is directly applicable in Member States of the EU, it will apply to the UK. Following the transition, the Regulation will remain part of UK law unless the UK decides to introduce a different approach at that stage.