The EU is set to move ahead with a new regulation requiring greater transparency in online B2B platform services. The measure targets large players such as Amazon and Google and would require them to be more transparent about their terms of sale and service, as well as set up internal systems for handling customer complaints. The European Parliament's Internal Market Committee approved the legislation, and following formal approval from the full Parliament, will start negotiations with the Council and European Commission on the final text. The Council approved its position on the plan already in late November.
First proposed by the European Commission in April, the so-called Platform-to-business regulation covers online intermediation services, such as e-commerce market places, search engines, app stores, social media and price comparison tools. MEPs also decided that operating systems acting as intermediaries between business users and consumers should also be covered by these rules.
The aim is to prevent harmful trading practices identified in the market, such as sudden, unexplained changes in terms and conditions, suspending accounts, delisting products and difficulties understanding rankings, as well as a lack of effective redress mechanisms for businesses using the online platforms.
The detailed rules approved by the parliament committee cover a wide range of practices. For example, search engines and marketplaces would need to explain the reasons for removing goods or services from search results or delisting them from a marketplace and provide a description of the parameters for determining the ranking in search results. They would also have to disclose in the results whether a ranking has been influenced by direct or indirect remuneration, among other factors, and provide business users with anonymised information regarding their online reputation (ratings and reviews) to help them to improve their performance.
The regulation also targets arbitrary changes in service terms. The terms and conditions of a service must be clear and intelligible, and if businesses must make significant technical adjustments to their goods or services, the notice period should be at least 30 days rather than 15. Furthermore, online platforms could not disclose data generated by the transactions of a business user to third parties for commercial purposes without consent. Platforms also could not restrict a business from offering the same goods or services under different terms on another platform.
A further 'black list' of unfair trading practices to be banned under the regulation was also introduced by MEPs. In addition, all but the smallest platforms would be required to set up an internal complaints-handling system and facilitate out-of-court dispute resolution. The proposal would also give businesses the possibility to sue platforms collectively, if they fail to deal with complaints properly.
The text approved by the parliament committee extended the scope of the regulation, to cover more types of platform and in more detail. The Computer & Communications Industry Association, which lobbies on behalf of large internet players such as Amazon, Facebook and Google, said the regulation of business practices "makes little sense in a 'one size fits all' proposal" and goes beyond the Commission's initial proposal for increased transparency. As EU states "clearly do not want any regulatory experiments, we hope that the result of trilogue negotiations will be as workable for online companies as possible", the CCIA said in a statement.
