New EU “Platform to Business” Rule Took Effect Over Weekend

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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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Photo by Sara Kurfeß on Unsplash

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