On July 12, 2020, the Regulation (EU) 2019/1150 of the European Parliament and of the Council on promoting fairness and transparency for business users of online intermediation services entered into force (hereinafter referred to as “Regulation”). From this article you will learn its most important principles and how to judge for yourself whether you need to adapt to it, or not, and if so – how.
Let’s start by explaining who will be affected by this Regulation and who must comply with it.
The Regulation will apply on the same terms as GDPR, which means that there is no need to wait for internal legislators of individual countries and we must comply with it right away. It will apply to online intermediation services and online search engines provided, or offered to be provided, to business users and corporate website users, respectively, that are based in the EU and that, through those services and search engines, offer goods or services to consumers located in the EU. Importantly, the seat or location of the provider of the platform or search engine is irrelevant. The Regulation will apply to a given online service or search engine also when they only enable offering goods or services to consumers, and thus facilitate the very initiation of transactions, regardless of where these transactions are ultimately concluded. For the purposes of this article, the online intermediation services and online search engines will be jointly referred to as “B2B2C Platforms” (as in business-to-business-to-consumer).
Now that we know who will have to comply with the new Regulation, it is time to discuss their most important new duties.
The B2B2C Platform provider must ensure that proper regulations are in place. This should be done by creating proper Terms and Conditions. The Terms must be written in simple and intelligible language and must be available to users at every stage of using the B2B2C Platform. The Terms must set out clear rules of any way of suspension or limitation of the scope of services provided to business users. The Terms must also contain information about any additional distribution channels and potential affiliate programmes, through which the Platform providers might market goods and services offered by business users. Finally, the Terms must include general information regarding the effects of the Terms on the ownership and control of intellectual property rights of business users.
All proposed changes to the Terms and Conditions must be provided on a durable medium, i.e. in the form of PDF. Changes to the Terms may be introduced with a notice period no shorter than 15 days and during this period, all business users must be able to opt out from the Platform. Whenever a B2B2C Platform provider decides to limit or suspend the provision of its services to a given business user, they must be informed in advance and given justification. If the provider plans to terminate all services, they must notify the user at least 30 days in advance.
Furthermore, the Terms should properly describe the main parameters determining ranking of offers on the B2B2C Platform and the reasons why these parameters are important. This applies, for example, to any paid featuring. The Terms should also explain any possible economic, commercial or legal considerations for which the provider treats services offered to consumers by the Platform provider himself and services offered to consumers by other users, differently.
If any additional goods and services are offered on the Platform, e.g. insurance of the purchased goods, the Terms should describe the types of goods and additional services offered, as well as as explain whether and under what conditions business users may offer their own goods or additional services. If the Platform reserves the exclusive right to offer services and does not allow business users to advertise anywhere else, then information on this subject must also be included in the Terms and Conditions, as well as justification with economic, commercial or legal reasons for such restrictions.
Moreover, each B2B2C Platform provider must create an internal complaint-handling system
The system must be easily accessible and free, and the entire complaint submission and handling procedure should be carried out in plain, simple language. All relevant information regarding access to the internal complaint-handling system and the functioning of this system must be included in the Terms and Conditions. Furthermore, B2B2C Platform providers must compile information on the functioning and effectiveness of their internal complaint-handling system and provide easy public access to this information. This information should be reviewed at least once a year and should include the total number of complaints submitted, the main types of complaints, average complaint handling time, and aggregated information on how individual cases ended.
Each B2B2C Platform provider must indicate at least two mediators,
with the help of whom they will be ready to try to reach agreement with their business users in the event of a dispute, including complaints that could not be resolved as part of the internal system. The mediators must meet the requirements set out in the Regulation, including but not limited to being impartial, independent and affordable.
As you can see, there are quite a lot of new rules and they basically all come down to the Terms and Conditions. So if you run this type of platform or search engine, be sure to verify your T&C, and if you do not have such regulations yet, it is worth taking care of it now. If you need professional help in this area, do not hesitate to contact us!
We will have your business compliant in no time.