The European Commission has proposed a new regulation aimed at increasing transparency in the online search market. Following its EUR 2.4 billion fine against Google last year for abusing its dominant position, the Commission wants new rules to help business users understand better how they're ranked on search engines and to give them the ability to appeal any delistings.
The case against Google centred on the company favouring its own shopping service over other comparison websites in Google search results. The Commission found this was a clear violation of competition law. Google has been implementing agreed remedies, but is also appealing the fine.
To prevent such abuses occurring in future, the EC is proposing online platforms must disclose to business users which principles are used to determine the site rankings, including how the platform's own services are treated, as well as which criteria can lead to a delisting of a site or its products. This would apply to general search engines as well as online intermediaries such as comparison websites that charge commissions for ranking businesses.
Larger online platforms would also be required to set up an internal complaints handling system and join a mediation platform, so business customers have a platform for disputes. If a dispute goes to court, the regulation would allow businesses to group together and be represented by associations or organizations.
The regulation applies only to the commercial contracts between businesses and online platforms. For consumers, the Commission earlier proposed similar transparency obligations. The new proposal follows extensive consultation with industry stakeholders over the past three years and will include the formation of a group of experts to act as the EU Observatory on the online platform economy.
If approved, the regulation would apply immediately throughout the EU, without the need for member states to update national legislation.
Industry opposition
The plan was criticised by the CCIA, the industry lobby group for major internet groups such as Amazon, Google and Facebook. They said the Commission's research had found no evidence of "systemic issues" in the market and rather "the biggest problem business users had with online platforms were actually technical". It also underlined that there were "big differences in what platforms do, but one factor they share is the need to be responsive to their business customers’ feedback and requests to keep them using their services".
The group is against the EC's proposal to address the issue with a regulation, which it noted is "the strongest legislative instrument available to the EU", saying "a more flexible approach, rather than an outsized, one-size-fits-all Regulation, would be more conducive to the growth of Europe’s digital economy." It also noted that discussions to date had not included the expansion of the regulation’s scope to non-contractual business relations, saying that it was difficult to see how "such last minute change was guided by anything other than politics."
