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| A new set of comprehensive regulations to help businesses in the EU regarding large technology companies came into force over the weekend, which is a key part of the EC’s larger plans to modernize and strengthen its regulatory system. |
A European Union (EU) set of regulations announced last year to govern large technology and online platforms are now effective. This new regulatory framework will apply to online search engines, app stores, online marketplaces, and social media platforms when used for business purposes. The European Commission (EC) stressed that this is to be but a part of its strategy to remake how the EU regulates technology, with several major pieces still to be unveiled. The EC emphasized how these regulations will help medium and small sized businesses manage their relationships with large online platforms, and without naming the major United States’ technology companies, it is clear the new regulations are meant to constrain and govern entities like Apple, Amazon, Facebook, Google, and others.
The European Union’s “Regulation (EU) 2019/1150 of the European Parliament and of the Council of 20 June 2019 on promoting fairness and transparency for business users of online intermediation services” (P2B-Regulation) became effective on 12 July. The purpose of these regulations “is to contribute 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 regulations “apply to online intermediation services and online search engines provided, or offered to be provided, to business users and corporate website users, respectively, that have their place of establishment or residence in the Union and that, through those online intermediation services or online search engines, offer goods or services to consumers located in the Union, irrespective of the place of establishment or residence of the providers of those services and irrespective of the law otherwise applicable.” However, they do “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.”
In concert with these regulations, the EC established the Observatory on the Online Platform Economy that published three progress reports along with the P2B Regulation coming into force:
- Progress Report – Work stream on Differentiated treatment that “aims to provide guidance on how to assess the impact of differentiated treatment by online platforms from a technical, economic and legal perspective, and identifies areas requiring further scrutiny because of the especially problematic nature of certain practices implemented by platforms.”
- Progress Report – Work stream on Data that “fills the gap by providing a structured overview of how data is generated, collected and used in the online platform economy…[and] maps out the diversity and heterogeneity of data-related practices and expands on what different types of data require a careful examination in order to better understand their importance for both the platforms and their users as well as the issues and challenges arising in their interactions.”
- Progress Report – Work stream on Measurement and Economic Indicators “to identify indicators that could be used to monitor the online platform economy for the purposes of policy making and, where considered necessary, further regulation, and to recommend corrective actions in areas where no indicators are available to ensure such data becomes available in the future.”
However, the chair of this body made clear the progress reports “not intend to provide either final answers or final policy recommendations.”
The EC added
The progress reports will feed into the Commission’s current work priorities in the digital area as announced in the Commission’s Communication on Shaping Europe’s Digital Future as well as in its data strategy and provide input for the Digital Services Act package. Two more reports will be produced on online advertising and platforms with significant market power that will, alongside the present reports, feed into a final contribution by the expert group of the Observatory later this year.
The EC published “Questions and answers on Platform to Business for small businesses and other online operators” “to provide practical guidance on the main provisions” of the P2B Regulation “in the form of detailed questions and answers which can be useful to:
(i) providers of online intermediation services (sometimes also called “online platforms”) and online search engines (“search engines”) which may need to adapt their commercial practices in accordance with the P2B Regulation;
(ii) business users or corporate website users (i.e. the businesses (including private individuals acting in a commercial or professional capacity) that use those online intermediation services and who depend on online search to be visible to their customers, respectively);
(iii) representative organisations or associations, or public bodies, in particular as regards their right to take action before competent national courts against providers of online intermediation services and search engines not complying with their obligations; and
(iv) for the authorities in the Member States who are responsible for the enforcement of the P2B Regulation.
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Michael Kans 