The new Platform to Business Regulations (P2B Regulations) aims to regulate online platforms to increase fairness and transparency for businesses and will apply to all Member States of the EU from 12 July 2020. The P2B Regulations aim to regulate the relationship between online platforms and the businesses who use their services and prevent the former from imposing unfair terms and practices.
What are the key provisions?
Some of the key provisions of the P2B Regulations include:
Transparent Terms and Conditions
Platforms must have terms and conditions that are transparent, written in plain language, clearly accessible and provide sufficient information on when the platform can suspend, restrict or terminate a business user’s use of their service; when a business user can terminate; and confirm what additional distribution channels (if any) a business user’s goods and services will be marketed by the platform provider. Terms and conditions which fail to ensure compliance with the P2B Regulations will be deemed null and void.
Ranking
The prominence given to a business user’s goods and services in a consumer search will directly impact the business’ subsequent sales. For this reason, the P2B Regulations require platform providers to set out the main parameters determining ranking and provide reasons for their importance.
Limits on suspension and termination
The P2B Regulations introduce controls on a platform provider’s ability to terminate or suspend a business user, such as requiring the provider to give a statement of reasons for such decision and provide 30 days’ notice in the case of termination.
Dispute Resolution
Platforms must provide an internal complaint handling process to provide business users with the means to lodge a complaint.
Exclusivity
Where a platform provider restricts its business users from offering the same goods and services through other platforms or means, it must clearly set out those restrictions within its terms and conditions and explain the reasons for those restrictions.
When do the P2B Regulations apply?
The P2B Regulations will apply to online intermediation services and online search engines. This includes:
- E-commerce marketplaces
- Hotel and travel booking platforms
- App stores
- Social media (for businesses only)
- Price comparison tools
- Online search engines
The P2B Regulations do not apply to businesses who deal directly with consumers, such as those that provide online payment services, or business-to-business networks that have no interface with consumers.
Will Brexit impact the P2B Regulations?
The P2B Regulations are EU Regulations and will apply in all Member States of the EU from 12 July 2020. The UK left the EU on 31st January 2020, however, remains subject to EU law whilst in the transition period (due to expire on 31st December 2020). Upon expiry of the transition period, online service providers based within the UK will remain subject to the P2B Regulations if their platform is used by businesses based within the EU.
What action should online platforms take?
Online platforms should ensure their compliance with the P2B Regulations, and take steps to:
- conduct a review of their existing terms and conditions and ensure they are compliant with the new regulations and provide all the information required;
- implement an internal complaint handling process and ensure businesses are made aware of the processes in place and how to utilise them;
- provide a copy of the updated and compliant terms and conditions to all existing business users; and
- establish clear and identifiable parameters for ranking goods and services and prepare a means of disclosing this information to all business users.
Our team of specialist IT solicitors regularly draft e-commerce and tech-sector terms and conditions and will be able to advise you on how to ensure your terms and conditions are compliant with the P2B Regulations. If you have any questions or would like your terms and conditions drafting or reviewing, contact us by email lawyers@myerson.co.uk or calling 0161 941 4000.