Marketplace platform regulation is essential if you operate an online intermediation service under Regulation EU/2019/1150 (the Platform to Business Regulation), which, since 12 July 2020, has governed the relationship between platforms and their business users.
Applying to online platforms, including e-commerce marketplaces, online auction sites, software application stores, social media, and search engines, the rules ban unfair practices such as changing terms and conditions without cause and require transparency in ranking parameters and data access. Ensuring your platform meets these fairness and transparency obligations can be challenging, particularly given the retention of EU law after Brexit.
Our financial services solicitors can guide you through auditing your contracts, refining your terms and conditions and implementing compliant complaints and data‑access systems, so you can focus on growing your business with confidence.
Jump to:
- Who must comply with the EU marketplace rules?
- Do the rules apply in the UK?
- Do the rules apply after Brexit?
- What is an online intermediation service?
- What are the rules on marketplace platforms?
- Access to Data
- Ancillary goods and services
- Complaints
- Differentiated Treatment
- Ranking
- Terms and conditions
- Termination and restrictions
- What other rules apply to marketplaces?
Who must comply with the EU marketplace rules?
The rules apply to online intermediation services and search engines that allow businesses to offer goods or services to consumers. Examples of online intermediation services given in the regulation include:
- E-commerce marketplaces, including collaborative ones
- Online software application services, such as application stores
- Social media services
- Intermediation services provided by means of voice assistant technology
It is not relevant whether transactions between business users and consumers involve monetary payments or are concluded partly offline. However, the rules do not apply to peer-to-peer online intermediation services.
The rules underpin contractual relationships between business users who offer B2C goods or services and providers of online marketplaces.
Do the rules apply in the UK?
Yes. The Online Intermediation Services or Platform-to-Business Regulation has been in effect in the UK since 12 July 2020.
Do the rules apply after Brexit?
Yes. Brexit and the end of the UK-EU transition period have not changed the rules on how online platforms must operate. From 1 January 2021, the retained EU law version of Online Intermediation Services or Platform to Business Regulation applies in the UK.
What is an online intermediation service?
Online intermediation services refer to services that enable business users to offer goods or services to consumers, thereby facilitating the initiation of direct transactions between those business users and consumers. They are provided to business users based on contractual relationships between the service provider and business users who offer goods or services to consumers.
The word ‘consumer’ in the context of the regulation means any natural person who is acting for purposes which are outside this person’s trade, business, craft or profession.
What are the rules on marketplace platforms?
The Online Intermediation Services or Platform to Business Regulation sets rules on:
- Access to data
- Ancillary goods and services
- Complaints
- Differentiated treatment
- Ranking
- Terms and conditions
- Termination and restrictions
Access to Data
Under the rules, platforms are required to include in their terms and conditions a description of the technical and contractual access of, or absence of, business users to any personal data or other data. This includes data in an aggregated form, provided by or generated through the provision of online services. A marketplace’s terms and conditions should also state whether any data is provided to third parties.
Ancillary goods and services
When ancillary goods and services are offered to consumers through online marketplaces, the website should include in its terms and conditions a description of the types of goods and services provided, as well as the conditions under which businesses are permitted to offer these goods or services.
Complaints
The Regulation requires online platforms to establish an internal complaint-handling system. The complaint-handling system should be easily accessible and available at no charge to business users. The system should also ensure that complaints are handled within a reasonable time frame.
Platforms must ensure that business users can complain about the following issues:
- Alleged non-compliance by the platform with the regulations
- Technological issues
- Behaviour by the platform relating to the provision of the service
Providers of online marketplaces should establish and make available, at least annually, data on the handling of complaints.
Differentiated Treatment
Online marketplaces and search engines must disclose any differentiated treatment they provide, or may provide, about the services or goods. That description must refer to the main economic, commercial and legal considerations for the differentiated treatment.
Ranking
Platforms must clearly outline the primary ranking parameters and their relative importance in determining rankings.
Online search engines are required to set out the parameters that are individually or collectively significant in determining ranking. These should be provided in plain and intelligible language. The description should explain whether businesses can influence their ranking and describe the impact of this influence.
Terms and conditions
Online platforms must ensure that their terms and conditions are:
- Drafted in plain and intelligible language
- Easily available
- Set the grounds for decisions to suspend or terminate
- Include information on any additional distribution channels or affiliate programmes
- Include information on the ownership and control of intellectual property rights
You should carefully consider what your terms of business agreement should cover.
Termination and restrictions
Where a provider of online intermediation services decides to restrict or suspend a business, it shall provide to the business, prior to the suspension, a statement of the reasons for the decision in a durable medium.
Where a platform decides to terminate the provision of a service to a given business, it must provide at least 30 days’ notice with a statement of its reason for the decision.
What other rules apply to marketplaces?
Other rules that apply to marketplaces include the Unfair Commercial Practices Directive (2005/29/EC) (‘the UCPD’), the E-Commerce Directive, and the Geo-Blocking Regulation (EU/2018/302).
The UCPD
The UCPD prohibits traders from engaging in commercial practices towards consumers which are misleading, aggressive or contrary to the requirements of professional diligence. Recent UCPD guidance clarifies that online platforms will be considered ‘a trader’ where it:
- Charges a commission on transactions between suppliers and users
- Provides additional paid services
- Draws revenues from targeted advertising
The E-Commerce Directive
The E-Commerce Directive requires information society services (ISS) to:
- Acknowledge receipt of an order without undue delay
- Ensure commercial communications are clearly identifiable
- Provide information about themselves and about how contracts concluded electronically will be made
An ISS is broadly any service “provided for remuneration, at a distance, by electronic means”.
The Geo-blocking Regulation
The Geo-blocking Regulation aims to ensure that customers residing in one member state can purchase goods from a trader on the terms offered by that trader in any other EU member state. Its purpose is to prevent traders from blocking EU customers based on their geographic location.
The Geo-blocking Regulation was revoked in the UK following the end of the UK-EU transition period. A UK trader is no longer prevented from discriminating between its UK and EU customers in the ways prohibited by the Geo-blocking Regulation. However, the rules will continue to apply where a trader supplies goods or services into the EU single market. This means that UK traders cannot discriminate between a customer based in France and a customer based in Spain.
Get specialist support
Complying with the Platform-to-Business Regulation requires meticulous attention to your terms and conditions, data-access provisions, and ranking disclosures. When ancillary services or differentiated treatments come into play, the compliance becomes even more intricate. Whether you’re revising your internal complaints system or reassessing termination notice procedures, our financial services solicitors can work alongside you to draft clear policies, negotiate with regulators and defend your practices. Speak to our team today to secure hands‑on support and protect your marketplace platform from regulatory pitfalls:
