On 12 July 2020 Regulation (EU) 2019/1150 on promoting fairness and transparency for business users of online intermediation services (Regulation 2019/1150) became applicable. The aim of the Regulation is to ensure the fair and transparent treatment of business users by online platforms.
For this purpose, Regulation 2019/1150 sets out a series of obligations for providers of online intermediation services. According to a draft Emergency Ordinance which is currently subject to public consultations, the authority in charge with application of Regulation 2019/1150 in Romania will be the Competition Council, and for certain types of infringements the authority will be able to apply fines of up to 1% of a company’s turnover.
What qualifies as online intermediation services
Online intermediation services cover a wide range of activities, such as online e-commerce marketplaces, collaborative economy marketplaces (to the extent they host professional users), price comparison websites, online general search engines, social media or online software applications services such as application stores.
Main requirements under Regulation 2019/1150
a) The terms and conditions of providers of such services in relation to business users must:
- be easy to understand and easily available;
- indicate the possible grounds for restricting, suspending or terminating the services by the provider;
- explain whether the provider will have any rights with respect to the intellectual property of its professional users;
- include information on the conditions for termination of the agreement by professional users;
- describe if the provider maintains any access to the data of its business users after termination of the contract;
- detail any technical or contractual access to personal or other data which business users or consumers provide or which are generated through the provision of services;
- inform business users of any other distribution channels and potential affiliate programs through which the goods and services of business users might be marketed;
- if the case, justify the grounds for restricting business users to offer the same goods and services under different conditions;
- indicate if any ancillary goods or services are offered through the platform and detail if such is also permitted to the professional users (and under which conditions);
- if the case, provide information regarding access and functioning of internal complaint-handling system as well as mediators to whom business users can turn to try to solve any disputes with the provider;
- not produce retro-active effects (except when such is subject to a specific legal obligation or is beneficial to the professional user);
- any amendment must be notified to the business users at least with 15 days in advance, except for the case where such amendment is subject to a specific legal obligation or aims to address unforeseen and imminent cybersecurity risks;
b) In what concerns restriction, suspension and termination of online intermediation services, as a rule, the providers will have to:
- supply professional users with a detailed statement of reasons for a restriction, suspension or termination of their services;
- give the business users the opportunity to clarify the facts and circumstances;
c) Rankings of products and services or websites
- providers of online intermediation services will have to set out within the terms and conditions the main parameters for ranking and their importance;
- similarly, providers of online search engines will have to detail the most significant parameters for ranking and their importance;
- in both cases, providers will have to inform professional users if payment of a specific remuneration may influence ranking, as well as the effects of such remuneration;
d) Differentiated treatment
- providers of online intermediation services will have to include in their terms and conditions a description of any differentiated treatment which they apply in relation to goods and services offered to consumers through the online platform, between (i) the provider itself or a company controlled by the latter and (ii) the business user;
- similarly, providers of online search engines will have to supply a description of any differentiated treatment which they apply in relation to goods and services offered to consumers through the online search engines, between (i) the provider itself or a company controlled by the latter and (ii) the business user;
e) Internal complaint-handling system. Mediation
Providers of online platform with more than 50 employees or achieving more than €10 million in annual turnover must:
- establish and operate an internal system for handling complaints from professional users concerning non-compliance with Regulation 2019/1150 or any technological issues, measures taken or behaviour by providers that could affect business users; and
- identify two or more mediators to whom business users can turn to solve any disputes with the provider of the online platform.
By Oana Bucsa, Senior Associate, PeliPartners