EU Sets New Rules to Ensure Online Fairness, Transparency

EU authorities agreed this week on the first-ever rules aimed at ensuring a fair, transparent and predictable business environment for traders and businesses selling online, hotels using booking platforms, or app developers as well as offering new options for resolving disputes and complaints.

The new rules are set to apply 12 months after their adoption, and will be subject to review 18 months later in order to ensure that meet the demands of the developing market.

The new regulations endorsed by the European Parliament, the EU Council and the European Commission, will apply to approximately 7,000 online platforms or market places operating in the Union, among these international giants as well as small start-ups. Provisions are also in place for search engines, with emphasis on those concerning ranking transparency.

“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 Vice-president for the Digital Single Market Andrus Ansip, adding that “our target is to outlaw some of the most unfair practices and create a benchmark for transparency, at the same time safeguarding the great advantages of online platforms both for consumers and for businesses.”

The EU has also set up an Online Platform Observatory to monitor the evolution of the market and the effective implementation of the rules.

Indicatively, almost half (42 percent) of small and medium companies in the EU said they use online marketplaces to sell their products and services, a Eurobarometer survey found.

At the game time, half (50 percent) of European businesses operating on platforms experience problems. Approximately 38 percent contractual relations issues remain unsolved, and 26 percent are solved “with difficulties” leading to a loss of some 1.27-2.35 billion euros in sales.

The new rules foresee a ban on certain unfair practices, greater transparency in online platforms, and new channels for dispute resolution. More specifically, digital platforms can no longer suspend or terminate a seller’s account without clear reasons, allowing room to appeal.

Search engines will need to disclose the main parameters they use to rank goods and services on their site. All platforms will be required to set up an internal complaint-handling system to aid users. Business associations will be able to take platforms to court to stop any non-compliance with the rules.