Blog » HOW EU PROTECTS COMPANIES FROM ONLINE PROVIDERS? - NEW REGULATION FROM JULY 2020
HOW EU PROTECTS COMPANIES FROM ONLINE PROVIDERS? - NEW REGULATION FROM JULY 2020
15 July 2020
The European Union adopted the so called P2B (Platform-to-business) Regulation, providing enhanced protection to the business users against dominant online intermediation service providers like Amazon, eBay, Booking.com and other similar online marketplaces. In this short article we summarize the most important provisions of the Regulation applicable from 12th July 2020.
1. To which services is the Regulation applicable?
The P2B Regulation is applicable to such online intermediation service providers (e.g. providers of online marketplaces, online search engines) who offer their services to EU-based business users who offer goods and services to consumers located in the European Union.
Nevertheless, the Regulation is not applicable to online payment services, online advertising tools or online advertising exchanges which only serve the initiation of business to business transactions, meaning that goods and services are not offered to consumers.
To use our previous example: the Regulation is applicable to the activity of, Amazon, eBay or Booking.com since on these sites business having their registered seat in the EU can offer products & services to consumers located in the EU.
2. More transparent and comprehensible terms and conditions
The aim of the Regulation is to prevent that the dominant online intermediation service providers use unfair l conditions when contracting with the business users using the online platform.
That is why the Regulation sets forth that the conditions shall be drafted in plain and intelligible language and is shall be easily available for the users before the conclusion of the contact and throughout the whole business relationship. Further, the Regulation provides certain obligations in relation to the content of the GTC for example regarding the grounds for decisions to suspend, terminate or restrict the provision of the service.
Such terms and conditions which do not comply with the above provisions shall be null and void.
3. Changes in the terms and conditions and right to terminate
The online intermediation service provider shall notify the business users about any proposed changes of the terms and conditions. The changes cannot be applicable with “immediate effect” since a reasonable and proportionate period shall pass between the notification and the entry into force of the new terms and conditions which cannot be less than 15 days. Such changes of the T&C where the online service provider did not follow the above procedure shall be null and void.
The user who does not accept the changes can terminate the contract during the period between the notification and the entry into force of the new conditions.
The notice period however shall not be applicable in certain cases: such situation is where the T&C shall be amended due to legal obligation which does not allow it to respect the notice period or of the modification is necessary for data protection, cybersecurity related reasons.
4. Restriction, suspension and termination of the service
In case the online intermediation service provider restricts or suspends the provision of the service for the business user, he shall inform the user about decision and its reasons in advance or at latest at the time of the restriction or suspension taking effect.
Furthermore, if the online service provider decides to terminate the provision of services to a given business user, he shall inform the user about the reasons of his decisions at least 30 days prior to the termination taking effect.
Nevertheless, if the online service provider shall terminate the provision of the service based on the law or the user repeatedly infringed the terms and conditions, the 30 days’ notice period shall not be applicable.
5. Ranking, restrictions to offer different conditions
The online intermediation service provider shall set forth the in the terms and conditions the main parameters determining ranking of the goods and services. This does not mean that full showdown is necessary but the business user shall be informed for example about the fact that ranking may be influenced by the payment of remuneration.
The Regulation makes it possible for online service providers to restrict their business users to offer their goods or services available on the platform with different conditions on other platforms. If that is the case, the service provider shall set forth in the terms and conditions the reasons of the restriction and its main economic, commercial or legal considerations.
The additional obligations set forth by the P2B Regulation (e.g. more transparent terms and conditions or right to termination in case of changes in the T&C) may provide certain advantages to those business users who were rather vulnerable to online platform giant like the Booking.com.
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