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Online selling and the Platform to Business (P2B) Regulation

If you are a small business, online platforms such as Amazon or Alibaba have ushered in business opportunities beyond just a local brick and mortar presence. And with more purchases moving online, it’s an economic necessity. Yet, the power of these platforms over your connection to customers can make or break your business.

For over two years now, the EU’s Platform to Business (P2B) regulation (EU Regulation 2019/1150) (the “P2B Regulation”) has provided protection to businesses that rely on online platforms to reach their customers. The P2B Regulation provides more transparency and fairness to the online business environment for small businesses and traders while still supporting healthy competition and innovation. This article highlights some key aspects of the P2B Regulation that might affect your online business.

Who is covered under the P2B Regulation?

The provisions concern two main types of online platforms (“Providers”):

  • online intermediation service providers such as e-commerce marketplaces, price comparison tools, application stores and social media services
  • online search engines

The P2B Regulation applies to Providers

  • that supply services or products to EU-based business (or professional) users and
  • which businesses use the platforms to offer goods or services to consumers located in the EU

So, for example, it does not apply to platforms that only connect consumers to consumers or platforms that are purely business-to-business. As stated above, there must be a connection between business users and the provision of services to consumers.

What does the P2B Regulation focus on?

One of its main objectives is to set rules for more information and transparency from Providers when dealing with business users. Therefore, the P2B Regulation establishes a regulatory framework for T&Cs, which includes, but is not limited to:

  • clearly written and easily available T&Cs, including information about pre-contractual stages;
  • providing information on restriction, termination and suspension of a business’ account;
  • describing the type of data that will be shared with business users, including data processed by third parties;
  • providing information about the impact on the business’ ownership and control of intellectual property (IP) rights;
  • disclosing and providing justification for any preferential treatment of the Provider’s own products and services and indicating the availability of other channels for the sales of the business user’s goods and services; and
  • properly disclosing how the rankings and the related parameters work.

Furthermore, any changes to the T&Cs must be notified to business users in advance, with a minimum 15-day notice period or longer if technical or commercial adaptations are needed. Business users can terminate contracts without penalty if they disagree with the proposed changes.

Before a Provider can restrict a business user’s access to the platform, it must provide a 30-day minimum notice, including a statement of reasons for the termination. Providers must also provide an internal complaint-handling system so that business users can challenge delisting or similar measures and allow mediation for disputes.

The P2B Regulation also provides greater transparency on how platforms collect and use business’ data. As stated, Providers need to provide clear and concise information on what data they collect and how they use it.

Providers should ensure its T&Cs are clear, transparent, easily accessible, and in line with all the requirements outlined in the P2B Regulation. In addition, business users of platforms subject to the P2B Regulation should check the T&Cs in place to ensure they are being treated fairly.

Conclusion

This P2B Regulation protects the rights and interests of online businesses. It creates a more level playing field while allowing competition and innovation to thrive. Whether a new or existing business, you should review your terms with online service providers to make sure they align with the rules so that you can protect your business.

For more information on how Logan & Partners can help you with terms and conditions or legal review of your contract with online service providers, please contact Isadora Werneck and schedule a free 20-minute consultation.

 

Image by vectorjuice on Freepik

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Tracy Starr

Author

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Isadora Werneck

Contributor

isadora.werneck@loganpartners.com

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