Today, the European Parliament, the Council of the European Union and the European Commission agreed on new rules for online platforms. As part of the Digital Single Market Strategy, these regulations seek to prevent unfair practices in online commerce. This obliges e-commerce marketplaces such as Amazon and eBay as well as search engines such as Google Search to make their contractual relationships with businesses (online retailers, hotels, restaurants or app developers) more transparent.
These are the key points:
1. Ban of unfair practices:
- Online platforms can no longer suspend or terminate a seller's account without clear reasons or the possibility to appeal. In case of a false erroneous suspension, the account must be re-activated. Moreover, the terms and conditions must be easily available and comprehensible. Any changes must be announced at least 15 days in advance.
2. Greater transparency in online platforms:
- Digital marketplaces and search engines must disclose their key parameters for ranking goods and services, so that sellers can improve their own online product positioning.
- Online platforms that provide a marketplace, in which they also act as a seller, must disclose all business practices that put their own products at an advantage over others.
- They must also disclose how they collect, use and transfer data to other business partners. Personal data is subject to the General Data Protection Regulation.
3. New ways for dispute resolution:
- For commercial users, platforms must set up an internal complaint-handling system and offer more options for out-of-court dispute resolution through mediators.
- Furthermore, business associations are able to take platforms to court if they fail to comply with these new rules. This will lower cost of court cases for individual companies.
Mariya Gabriel, Commissioner for the Digital Economy and Society, added: “These are the first rules of this kind anywhere in the world, and they strike the right balance between stimulating innovation while protecting our European values. They will improve the relationship between businesses and platforms, making it fairer and more transparent, and ultimately leading to great advantages for the consumers. We will closely monitor the evolution of this field, not least through our Online Platform Observatory.”
Source: European Commission
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