EU Regulation on online platforms
On 14 June 2019, the Council of the European Union approved a new regulation aimed at promoting fairness and transparency for online platforms. The measure takes effect in summer 2020 without requiring additional implementation by member states.
The Problem
The regulation addresses two key issues. First, certain online platforms possess significant bargaining power, allowing them to treat business users unfairly despite their dependence on these platforms for commerce. Second, many online businesses rely on search engine rankings, necessitating transparency standards for how rankings are determined.
Primary Objectives
The regulation seeks to establish “a fair, predictable and trusted online business environment” for EU consumers.
Terms and Conditions Requirements
Platform operators must clearly outline operational rules in their terms and conditions. Any amendments require 15 days’ advance notice, with business users given an additional 15 days to terminate if they reject changes. Terminations by the platform must include written reasons and 30 days’ notice.
Platforms must also display business user identities to help consumers build confidence.
Search Engine Transparency
Search engines must disclose how rankings are determined. Any influence from direct or indirect payments must be revealed. When rankings change or websites are delisted based on third-party complaints, those notifications must be available for review. Trade secret algorithms remain protected.
Data Transparency
Platform operators must describe technical and contractual data access in their terms, and disclose any personal data transfers to other parties.
Dispute Resolution
The regulation establishes multiple remedies. Platforms must provide free, accessible internal complaint systems. Unresolved complaints can go to independent mediators, with judicial proceedings as a final option.