Online platforms currently represent a fundamental element of digital commerce and the increasing use of intermediation services – such as online e-commerce market places, online software applications services, and online social media services -on which businesses’ success depends, implies that the providers of those services have often a higher bargaining power, which enables them to behave unilaterally in a way that sometimes can harm business users and, indirectly, their consumers.
In order to prevent this phenomenon, on 13 February 2019, EU negotiators agreed to lay out new rules – as part of the mid-term review of the Digital Single Market strategy of the European Union – aimed at addressing “the issues of unfair contractual clauses and trading practices identified in platform-to-business relationships, by exploring dispute resolution, fair practice criteria and transparency.”
The legislative instrument adopted is a regulation, which will apply regardless of whether online intermediation services and search engines are established in a Member State or outside the Union, as long as the business users are established in the Union and they offer goods or services to EU consumers. The main provisions of the proposed regulation focus on the need to ensure clear, easily comprehensible and accessible platform terms and conditions, also setting out objective reasons justifying any suspension or termination of the services provided. Online search engines will also be required to outline main parameters determining the positioning of the websites in search results, providing a description of differentiated or preferential treatments, if any. Moreover, Courts shall be able to declare provisions found to violation the Regulation as non-binding on users.
Once again the EU has opted to harmonize various competing Member State regulations on this topic, to avoid the applicability of substantially divergent regimes among the various countries that already have implemented laws on the matter (such as France), or to avoid inconsistencies.
The regulation requires that providers of online intermediation services create an internal system to handle business users’ complaints. In addition, to encourage out-of-court dispute resolution, the providers should indicate in their terms and conditions the mediators that they are willing to work with. The new set of rules also provides for the possibility of organisations and associations representing business users’ interest to take action before competent national courts in case of violations of the regulation.
The regulation is still under discussion and will apply 12 months after its adoption and publication, and will then be regularly subject to review. Once in force, the regulation will be directly applicable in all Member States.
Consumer law harmonization in the digital single market is one of the main priorities of European policy makers. These new legal requirements can lead to substantial technical or business changes.