EU Regulation 2019/1150 (the "P2B Regulation") became directly applicable across the EU on 12 July 2020. The European Commmission called the P2B Regulation "the first-ever set of rules creating a fair, transparent and predictable business environment for smaller businesses and traders on online platforms".
The P2B Regulation is intended to introduce greater fairness into the relationship between platforms and the businesses which rely on the use of platforms to connect with their customer base. For the purposes of the P2B Regulation, platforms include: (i) online search engine providers, such as Google; and (ii) online intermediation service providers which aim to facilitate the initiating of direct transactions between business users and consumers, or where there is a contract between the platform and the business which allows the business to offer goods or services to consumers. This second category covers a range of platforms, such as price comparison sites, social media platforms and app stores/market places.
The key changes are to introduce requirements for the terms and conditions used by online intermediation service providers. Terms which do not comply with these requirements will be unenforceable. These requirements include providing transparency in relation to any suspension of access to the service, cancellation rights, having in place complaints procedures, and ensuring that changes to the services are notified to the business, with the business having to approve these, rather than being deemed to have accepted.
For search engine providers, there additional changes. These include new transparency requirements in relation to their process of ranking, including notifying businesses whether ranking can be influenced, for example by payment to the search engine provider.
There is an overarching requirement for fairness and clear terms. Against this backdrop, platforms will need to consider their business practices and contractual terms in light of the P2B Regulation. Terms which do not comply with the requirements will be treated as "null and void", and there will be potential complaints from businesses through the new process.
The P2B Regulation no forms part of UK law and it will continue to apply after the transition period. While it could be amended or revoked at a later date, it should be noted that the P2B Regulation would still apply to a UK platform provider where the provider's services are provided to to businesses in the EU or where the relevant business offers its goods/services to consumers in the EU.
Platforms offer unparalleled efficiencies in access to cross-border markets and are crucial for millions of successful firms. While the gateway position of online platforms enables them to organise millions of users, it also opens the possibility unilateral trading practices that are harmful, and against which no effective redress is available for the businesses using these platforms. Both direct harm to businesses, as well as the possibility for such harm, undermine the innovation potential of platforms. With this regulation, the Commission delivers on this commitment to take actions on unfair contracts and trading practices in platform-to-business relations.