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EU agrees on new rules on on-line trading platforms

The three EU institutions, the Parliament, the Council and the Commission, reached this week a political deal on rules aimed at creating a fair, transparent and predictable business environment for businesses and traders when using online platforms. This will be the first-ever set of rules on on-line platforms. Traders selling online via marketplaces, hotels using booking platforms, or app developers are amongst those who will benefit from the new rules agreed today.

The new rules will apply to the entire online platform economy – approximately 7000 online platforms or market places operating in the EU – which include world giants as well as very small start- ups, but having often an important bargaining power vis a vis business users. Certain provisions will also apply to search engines, notably the ones concerning ranking transparency.

Vice-President for the Digital Single Market Andrus Ansip said (14 February): “Today’s agreement marks an important milestone of the Digital Single Market that will benefit millions of European companies relying on digital platforms to reach their customers,” said Commissioner Andrus Ansip, Vice-President for the Digital Single Market.

According to a Eurobarometer survey, almost half of small and medium companies in the EU said they use online marketplaces to sell their products and services and nearly half of them experience problems. Some 38% of problems regarding contractual relations remain unsolved, and 26% are solved but with difficulties; around €1.27-2.35 billion are lost directly in sales as a result.

The rules will ban certain unfair practices. Marketplaces and search engines will need to disclose the main parameters they use to rank goods and services on their site, to help sellers understand how to optimise their presence. The rules aim to help sellers without allowing gaming of the ranking system. All major platforms must set up an internal complaint-handling system to assist business users.

An IT-lawyer told The Brussels Times that he welcomed the initiative but doubted that it went far enough considering the dominance of certain platforms and the risk of them abusing their position. Search engines are still partly exempted from clarifying the functioning of their algorithms.

The Brussels Times