Overview of Platform to Business Regulation

Background

The Platform to Business Regulation (the P2B) entered into force in July 2019 and became effective from 12 July 2020. It is part of the EU's Digital Single Market Strategy initially proposed in December 2015.

It aims to set out to implement a fair, transparent and predictable business environment for smaller businesses and traders relying on search engines and online platforms such as online marketplaces, app stores, certain price comparison tools or business pages on social media for their activities.

Application

The P2B Regulation applies to providers of 'online search engines' and 'online intermediation services' that enable businesses to sell goods or services to consumers located in the EU, regardless of where that business is based (article 1(2)).

Online intermediation services are defined as (i) Information Society Services (which are defined under article 1(1) of the Directive (EU) 2015/1535 ie a service normally provided for remuneration, at a distance, by electronic means and at the individual request of a recipient of services) that (ii) allow business users to offer goods or services to consumers with a view to facilitating the initiating of direct transactions between those business users and consumers, irrespective of where those transactions are ultimately concluded, which (iii) are provided to business users on the basis of contractual relationships between the provider of those services and business users which offer goods or services to consumers.

What does this mean?

Providers of online search engines and online intermediation services (each a Platform) should note the P2B Regulation impacts the contents of their terms and conditions (T&Cs) which should be drafted in 'plain and intelligible language' and should be easily available to business users at all stages of the commercial relationship (including the pre-contractual stage).

Some of the key points that T&Cs should cover or include are:

1. a 30 day minimum notice period for terminating the contract, accompanied by reasons why such action is being taken;

2. a 15 day minimum notice period for changes to the T&Cs and a termination right for business users if they do not agree to the proposed changes;

3. information on business user's termination right of the contract with the Platform;

4. an explanation of the impact that the contract has on a business user's control and ownership of its IP rights;

5. which additional channels and affiliate programmes Platforms may use to distribute business users' goods and/or services, and what, if any, ancillary goods and services Platforms may offer;

6. a description of the technical and contractual access to personal data and other data provided or generated by the business user after expiry of the contract;

7. the main parameters determining ranking of goods and services and the reasons for the relative importance of those parameters as opposed to other parameters;

8. a description of any differentiated treatment in respect of goods and services offered by the Platform and other business users; and

9. the details of at least two mediators for settling disputes between the Platform and the business user.

Non-compliance with the P2B could lead to T&Cs or specific provisions being declared null and void.

Next steps

Businesses who are subject to the P2B Regulation should conduct an assessment and modification of their terms and conditions in accordance with the regulation to ensure they are compliant. Platforms will also need to consider adopting new procedures when handling complaints and disputes together with any changes to terms and conditions. In addition, business users of Platforms which are subject to the P2B Regulation should check T&Cs they have with Platforms to ensure they are being treated in line with the Regulation.