Insights Council of the EU adopts Regulation on promoting fairness and transparency for business users of online intermediation services

The Council has formally adopted the Regulation, which addresses relations between online platforms and businesses that conduct their business through them. This follows the provisional agreement reached on 13 February 2019 with the European Parliament.

The Council explains that the main aim of the Regulation is to establish a legal framework that guarantees transparent terms and conditions for business users of online platforms, as well as effective opportunities for redress when these terms and conditions are not respected.

Online platforms covered by the Regulation include online market places, online software application stores and/or online social media, as well as online search engines, irrespective of their place of establishment, provided they serve business users that are established within the EU and offer goods or services to consumers also located within the EU.

To improve transparency, platforms are required to use plain and intelligible terms and conditions for the provision of their online intermediation services. They will have to provide a statement of reasons each time they decide to restrict, suspend or terminate the use of their services by a business user. Further, platforms will have to disclose publicly the main parameters behind the ranking of business users in search results, as well as any differential treatment granted to goods and/or services offered directly by them or through connected businesses. They will also have to disclose the main economic, commercial or legal considerations for restricting the ability of business users to offer different terms to consumers outside the platform.

To provide effective redress, the Regulation obliges all platforms (apart from the smallest) to set up an efficient and swift internal system for handling complaints, and to report annually on its effectiveness. It also requires platforms to list in their terms and conditions two or more mediators for cases when the internal complaint-handling system is not able to resolve a dispute between business users. The Regulation also establishes the right of representative organisations, associations or public bodies to initiate judicial proceedings against platforms that do not comply with the requirements of the Regulation. The Regulation also gives Member States the power to set penalties in line with their national systems for infringements of the Regulation.

The Council invites the Commission to:

  • encourage platforms to set up bodies of independent specialised mediators;
  • draw up codes of conduct; and
  • regularly assess the functioning of the new rules.

The Regulation will enter into force on the twentieth day following publication in the Official Journal. It will apply twelve months from the date of publication. To read the Council’s press release in full and for a link to the adopted Regulation, click here.