European Union's ("EU") proposal for regulation on online intermediation services and search engines ("Regulation") is expected to be published shortly on the Official Journal of the European Union and become effective twelve months following its date of publication.
The purpose of the Regulation is set out as contributing to the proper functioning of the internal market by laying down rules to ensure that business users of online intermediation services and corporate website users in relation to online search engines are granted appropriate transparency, fairness and effective redress possibilities.
The Regulation defines online intermediation services as information society services which 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, irrespective of where those transactions are ultimately concluded and which are provided to business users on the basis of contractual relationships between the provider of those services and business users which offer goods or services to consumers (Article 2/2 of the Regulation).
Online search engine is defined as a digital service that allows users to input queries in order to perform searches of, in principle, all websites, or all websites in a particular language, on the basis of a query on any subject in the form of a keyword, voice request, phrase or other input, and returns results in any format in which information related to the requested content can be found (Article 2/5 of the Regulation).
B. Scope and Jurisdiction of the Regulation
Pursuant to Article 1/1 of the Regulation, the Regulation applies to online intermediation services and online search engines provided, or offered to be provided, to business users and corporate website users (i) that have their place of establishment or residence in the EU and (ii) that, through those online intermediation services or online search engines, offer goods or services to consumers located in the EU, irrespective of the place of establishment or residence of the providers of those services and irrespective of the law otherwise applicable.
In order words, the Regulation would apply to providers of online intermediation and online search engine services regardless of whether they are established in a Member State or outside the EU, provided that these two cumulative conditions are met: (i) the business users or corporate website users should be established in the EU and (ii) the business users or corporate website users should, through the provision of those services, offer their goods or services to consumers located in the EU at least for part of the transaction. As per the Recital, in order to determine whether business users or corporate website users are offering goods or services to consumers located in the EU, it would be necessary to confirm whether it is apparent that the business users or corporate website users direct their activities to consumers located in EU.
The Regulation shall not apply to online payment services or to online advertising tools or online advertising exchanges, which are not provided with the aim of the facilitating the initiation of direct transactions and which do not involve a contractual relationship with consumers (Article 1/2 of the Regulation).
The Regulation also does not apply to peer-to-peer online intermediation services without the presence of business users, pure business-to-business online intermediation services which are not offered to consumers (Paragraph 11 of the Recital).
The preamble of the Regulation indicates that it is without prejudice to EU law, in particular EU law applicable in the areas of judicial cooperation in civil matters, competition, data protection, trade secrets protection, consumer protection, electronic commerce and financial service.