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

The Council says that the new rules will give business users in the EU a more transparent, fair and predictable online platform environment, together with an effective system for seeking redress.

The proposed Regulation is the first EU legislative act that addresses relations between online platforms and the businesses using them.

The Council having agreed its position on the draft Regulation paves the way for negotiations to open with the European Parliament.

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

As regards transparency, platforms will be required to use clear and easily accessible terms and conditions in relation to their online intermediation services. They will have to provide a statement of reasons each time they decide to suspend or terminate the use of their services by a business user. Further, they will have to disclose publicly the parameters that determine the ranking of business users in search results, as well as any different treatment they might apply to goods and/or services offered directly by them or through any business falling under their remit. Finally, they will also have to disclose the reasons for restricting the ability of business users to offer different terms to consumers outside the platform.

As for redress mechanisms, the Regulation will oblige all platforms (apart from the smallest, as clearly defined in the Regulation) to set up an efficient and swift internal complaint-handling system and to report annually on its effectiveness. It will also require platforms to list in their terms and conditions two or more mediators for cases where the internal complaint-handling system is not able to resolve a dispute. The Regulation will also establish 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 empowers Member States to set penalties for infringements of the Regulation. Finally, the Regulation 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.

Member States have stressed the need for the Regulation to apply twelve months from the date of its publication in the Official Journal.

The Council will now start negotiations with the European Parliament with the aim of reaching an agreement as soon as possible. To read the Council’s announcement in full and for a link to the draft Regulation, click here.