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P2B Regulation

P2B Regulation

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In recent years, online platforms have become crucial for individuals and small businesses, providing them with enhanced capabilities to interact, purchase and organize due to the data sharing among all market participants. However, many of these platforms have become quasi-monopolies and engage in anticompetitive conduct against their small-business counterparts, leading to calls for regulation from both theoreticians and EU institutions. The P2B Regulation aims to protect business users of online intermediation services by promoting fairness and transparency.

Although the P2B Regulation has already been applicable, there have been important developments related to the sanctioning regime.

The P2B Regulation does not contain any sanctioning regime but, instead, it has “delegated the responsibility of adopting the legal tools ” to each EU member considered necessary to ensure compliance with this regulation. The time for “enforcing” measures in place has come, so not complying with the P2B Regulation may have severe consequences, depending on the specific country where the breach occurs.

The P2B Regulation pertains to online search engines and online intermediation services (Online Services and Providers). Online search engines are a familiar concept, while online intermediation services are a new and potentially impactful concept in EU legislation. Unlike other Digital Single Market legislation, such as the Copyright Directive, which commentators have criticized for lacking clarity, the P2B Regulation offers a detailed definition of the enterprises to which it applies. Additionally, the Commission has released a Q&A document to provide further clarity on the scope of the regulation, the actions necessary for compliance, and the rights of business users.

The P2B Regulation defines online intermediation services as any service provided electronically for payment, allowing business users to offer goods or services to consumers and provided under contractual relationships between the service provider and business users.

The P2B Regulation specifically includes e-commerce marketplaces, price comparison tools, app stores, and social media within its scope. However, it does not cover peer-to-peer online intermediation services where no business users are involved, pure business-to-business online intermediation services that are not provided to consumers, online payment services, online advertising tools, or online advertising exchanges. It's worth noting that the P2B Regulation applies regardless of whether transactions between business users and consumers involve monetary payments or are partially conducted offline.

In order to meet this objective and prevent unfair situations, the P2B Regulation imposes a series of measures.

Transparency in the general conditions for business users:

  • Vague, confusing, or unclear terms are prohibited. They must be accessible at all stages of the contractual relationship (including the pre-contractual phase).
  • The reasons for suspending, terminating, or restricting user accounts must be clear.
  • The general conditions can only be changed with a minimum of 15 days' notice. During this period, the affected business user may terminate the contract with the online intermediation service provider.
  •  Online intermediation service provider platforms shall ensure that the identity of the business user is clearly visible.

Suspension, restriction, or termination of accounts:

The affected business user must be given a detailed explanation for any suspension, termination, or similar actions taken against them. They should also have the opportunity to clarify any facts that led to the action. If the action was initiated by a third-party notification, the content of the notification must be shared with the affected business user.

Transparency in the ranking and visibility parameters:

Online platforms must disclose their ranking parameters and possible remuneration opportunities to achieve better visibility of the business user's offer or profile. While there is no obligation to disclose algorithmic workings, the European Commission has issued guidelines to help platforms comply with transparency requirements.

Differentiated treatment of its own products:

In the event that the platform offers its own products or services (directly or through third parties) in a differentiated manner, the description in this regard must be included in the general terms and conditions, including the main economic, commercial, or legal considerations underlying the differentiated treatment.

Access to data:

Platforms must describe in their terms and conditions the technical access they will obtain to personal data for providing the online service.
Restrictions to the offer of goods or services under different conditions by other means:
Any possible restriction by the platform to offers made by the business user of its goods or services on other platforms and under different conditions must be duly justified in the general terms.

Internal complaints and mediation system:

Online service providers must have an internal system to handle complaints from business users, which should be easily accessible and processed within a reasonable time. The platform must provide information about the system in its general terms and conditions. They must also appoint two or more mediators to resolve disputes with business users, which process is voluntary.

Legitimacy of associations to bring legal actions:

The P2B Regulation includes the legitimacy that users have so that, provided there is a legitimate interest, they can bring legal actions with the aim of preventing or prohibiting any breach committed by an online intermediation service provider.

Regulation 2019/1150 reflects EU efforts to regulate the "online platform economy" and all players, especially providers of online intermediation services and search engines, must comply with it. If not, we recommend acting on it, starting by amending the conditions of the platform according to the requirements of the P2B Regulation.
However, this should be treated with delicacy and legal assistance is highly recommended.

By Yoanna Ivanova, Partner and Tsvetelina Paskova, Associate, Gugushev & Partners Law Office, PONTES

Bulgaria Knowledge Partner

Schoenherr is a leading full-service law firm providing local and international companies stellar advice that is straight to the point. With 15 offices and 4 country desks Schoenherr has a firm footprint in Central and Eastern Europe. Our lawyers are recognised leaders in their specialised areas and have a track record of getting deals done with a can-do, solution-oriented approach. Quality, flexibility, innovation and practical problem-solving in complex commercial mandates are at the core of our philosophy.

Firm's website: www.schoenherr.eu

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