Published January 13, 2020
The EU’s new “marketplace” regulation
On July 12th, 2020 the EU’s new marketplace regulation no. 2019/1150 will become effective. Being a regulation, it will become immediately binding throughout the EU without need for any national implementation.
This regulation applies to any online intermediation service that allows business users based in the EU to offer goods or services to consumers based in the EU. One good example coming to mind is Amazon’s marketplace service, which allows EU businesses to sell their stuff to EU consumers via its platform.
Given the increasing dependence of small and medium market players from such intermediation services, “the providers of those services often have superior bargaining power, which enables them to, in effect, behave unilaterally in a way that can be unfair and that can be harmful to the legitimate interests of their businesses users and, indirectly, also of consumers in the Union.” (recital no. 2 of the regulation).
The regulation’s goal is therefore to impose fair commercial practices and transparency in relationships and transactions between intermediaries and business users, while it does not intervene on the relationship with consumers.
Let’s see some of the most relevant provisions:
General terms and conditions
The regulation establishes a set of criteria that general terms and conditions of intermediaries must meet in order to be considered valid. Inter alia, they must drafted in plain language, be easily and constantly accessible and inform about
– cases in which the service might be interrupted;
– any additional distribution channels and potential affiliate programmes through which intermediaries might market goods and services offered by business users;
– the effects of the terms and conditions on the ownership and control of intellectual property rights of business users.
Changes to the terms and conditions must be communicated to business users on a durable medium and may not be implemented before the expiry of a reasonable notice period of at least 15 days.
In an attempt to make it harder for marketplaces to simply kick out single users for purely strategic or economic reasons, art. 4 states that, in case an intermediation service plans to suspend or terminate the provision of its services to a specific business user, it has to motivate its decision extensively and to communicate such motivation on a durable medium.
Goods or services offered on marketplaces are always displayed in a specific order tht is predetermined by the marketplace owner. Following the implementation of this regulation, intermediaries will have to disclose their ranking criteria, specifying in “the main parameters, which individually or collectively are most significant in determining ranking and the relative importance of those main parameters” (see art. 5).
Such description must be sufficient to enable business users to determine, whether and to what extent
– the characteristics of the goods and services offered to consumers through the online intermediation services or the online search engine;
– the relevance of those characteristics for those consumers; and
– as regards online search engines, the design characteristics of the website used by corporate website users
are taken into account.
Intermediation services must set up an internal complaint-handling system dedicated to business users, which must free of charge, easy to use and ensure a handling within a reasonable time frame.
Challenges to compliance
Intermediation service providers have 6 months left to comply with this new regulatory framework. Some of the provisions require an actual implementation, involving the creation of new structures and processes (e.g. for the handling of complaints), while others merely require adaptations of contracts and further documentation in the interest of greater transparency.
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