Explanatory Memorandum to COM(2018)238 - Promoting fairness and transparency for business users of online intermediation services - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2018)238 - Promoting fairness and transparency for business users of online intermediation services. |
|---|---|
| source | COM(2018)238  |
| date | 26-04-2018 |
1. CONTEXTOFTHEPROPOSAL
• Reasons for and objectives of the proposal
Online platforms are key enablers of digital trade. At present, more than a million EU enterprises trade through online platforms in order to reach their customers,1 and it is estimated that around 60% of private consumption and 30% of public consumption of goods and services related to the total digital economy are transacted via online intermediaries.2 These online intermediation activities usually benefit from important data-driven direct and indirect network effects which tend to result in only a limited number of successful platforms per intermediated segment of the economy. This growing intermediation of transactions through online platforms, combined with strong indirect network effects that can be fuelled by data-driven advantages by the online platforms, lead to an increased dependency of businesses on online platforms as quasi 'gatekeepers' to markets and consumers. The asymmetry between the relative market strength of a small number of leading online platforms – not necessarily dominant in the sense of competition law – is exacerbated by the inherently fragmented supply-side consisting of thousands of small merchants. To the extent these exist, a similar dynamic is not observed in relation to online platforms that intermediate business-to-business (B2B) relations, where both of the business users and the online platform tend to constitute large and sophisticated firms that are more readily able to ensure balanced contractual relationships. A Commission study from 20063 observed that this awareness of risks was one factor that held back the widespread adoption of B2B e-markets.
The providers of online intermediation services covered by the present initiative include in principle online e-commerce market places, online software application stores and online social media. These different types of online intermediation services all aim to facilitate, through the provision of information society services, the initiating of direct transactions between contractually bound business users and consumers, irrespective of whether the ultimate transactions are executed online or offline. In order to facilitate such direct transactions, these online intermediation services all essentially allow for an online presence of business users that offer goods or services to consumers, without those business users being required, in principle, to operate a standalone website. In addition to allowing for an online presence of business users, online intermediation services frequently facilitate direct communications between individual business users and consumers through an embedded online communications interface. As regards online social media, it is noted that certain providers of this category of online service providers actually incorporate different online intermediation services within one and the same digital environment, all of which can be covered by this initiative. Business pages for example allow consumers to find local businesses and service providers and are an important enabler of business-to-consumer (B2C) transactions. Such business pages are increasingly integrated with a direct booking or purchasing functionality, turning these services into online e-commerce market places.
While offering great potential in terms of efficient access to (cross-border) markets, European businesses cannot fully exploit the potential of the online platform economy due to a number
1 Copenhagen Economics, 'Online Intermediaries: Impact on the EU economy' 2015.
2 Ibid.
3 Legal Study on unfair commercial practices within B2B e-markets, ENTR/04/69 of May 2006.
of potentially harmful trading practices and a lack of effective redress mechanisms in the Union. At the same time, online service providers concerned face difficulties operating across the single market due to emerging fragmentation.
The dependence of businesses on certain online services implies that the providers of such online intermediation services have a scope to engage in a number of potentially harmful trading practices which limit business users' sales through them and risk undermining their trust, notably: unexplained changes in terms and conditions without prior notice; the delisting of goods or services and the suspension of accounts without a clear statement of reasons; lack of transparency related to the ranking of goods and services and of the undertakings offering them; unclear conditions for access to, and use of, data collected by providers; and a lack of transparency regarding favouring of providers' own competing services and so-called most-favoured nation (MFN) clauses which restrict undertakings' ability to offer more attractive conditions through other channels than the online intermediation services.
Furthermore, online general search engines can also be important sources of Internet traffic for businesses and can affect the commercial success of corporate website users offering their goods or services online in the internal market. The ranking of websites by the providers of online search engines, including of those websites through which businesses offer their goods and services to consumers, has an important impact on consumer choice and the commercial success of those corporate website users. Thus, even in the absence of a contractual relationship with their corporate website users, online general search engines equally exhibit a dependency-enabled issue, specifically for potentially harmful ranking practices, which may affect business users.
At the same time, the current regulatory framework may not be effective in preventing some of these practices, nor in providing effective redress. Significant emerging regulatory fragmentation in the EU further complicates the regulatory environment. Whilst primarily resulting in impacts for business users, this situation affects all actors in the multi-sided online platform ecosystems, including consumers, which could face a reduced choice of competitive goods and services.
This proposal is complemented by a Commission Decision setting up the group of experts for the Observatory on the Online Platform Economy which is tasked essentially with monitoring opportunities and challenges for the Union in the online platform economy, including issues related to the application of the Regulation which the Commission now proposes.
Consistency
with existing policy provisions in the policy area
There is no legislation at Union level addressing the online intermediated business-to-business relations at issue here.
Competition law in the Union targets inter alia anticompetitive behaviour by undertakings. The unilateral potentially harmful trading practices covered by this initiative do not necessarily infringe EU competition law under Article 101 or Article 102 TFEU. As a result, competition law at Union or national level may not address all the types of issues covered by this initiative.
Consumer protection law does address a range of potentially harmful trading practices, at EU level notably through the Unfair Commercial Practices Directive 2005/29/EC4 and the Unfair
OJ L 149, 11.6.2005, p.22.
4
Contract Terms Council Directive 93/13/EEC5. These Directives require a high level of transparency and professional diligence. However, their scope is limited to B2C transactions. Conversely, the Misleading and Comparative Advertising Directive 2006/114/EC6 covers certain B2B relations. It aims at protecting traders against misleading advertising and their unfair consequences and lays down the conditions under which comparative advertising is permitted. However, the provisions set forth in the latter instrument are limited to advertising practices and do not generally address the potentially harmful trading practices mentioned above, which occur as part of an existing contractual relationship between online platforms and their business users.
Consistency with other Union policies
The present proposal aims at ensuring a fair, predictable, sustainable and trusted legal environment for business users, corporate website users, providers of online intermediation services and online search engines alike, which will limit the occurrence and the impact of harmful platform-to-business trading practices occurring in certain online activities, thereby safeguarding trust in the online platform economy and preventing further legal fragmentation of the Digital Single Market.
The initiative thus contributes to the goals of the Digital Single Market Strategy by creating a clear, transparent and stable legal environment for online B2C service providers and their business users, to tackle market fragmentation and to allow all players to tap into the new market dynamics under fair and balanced conditions and with an appropriate degree of transparency.
The proposal is also consistent with a number of other Union policies and rules. In particular, it complements the rules of competition and consumer protection law mentioned above, while leaving the application of those rules unaffected.
In addition, particularly where it comes to redress, the proposal should be understood against the background of rules of Union law concerning judicial cooperation in civil matters, such as Regulation (EU) No 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters7, Regulation (EC) No 593/2008 on the law applicable to contractual obligations8, Regulation (EC) No 864/2007 on the law applicable to non-contractual obligations9 and Directive (EC) 2008/52 on certain aspects of mediation in civil and commercial
matters10.
The obligation to provide a description of the main ranking parameters complements the requirements for traders under EU consumer protection law. It can be noted in this respect that the Commission has proposed amendments as part of the New Deal for Consumers11, containing a requirement to clearly identify for consumers any promoted search results based on payments, as well as a requirement to inform about the main parameters determining ranking on online marketplaces.
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OJ L 95, 21.4.1993, p.29. OJ L 376, 27.12.2006, p.21. OJ L 351, 20.12.2012, p.1. OJ L 177, 4.7.2008, p. 6. OJ L 199, 31.7.2007, p. 40 OJ L 136, 24.5.2008, p.3.
COM(2018) 185 (final) of 11 April 2018, see https://eur-lex.europa.eu/legal-
content/EN/TXT/?qid=1523880940100&uri=COM:2018:185:FIN
Finally, the present proposal is compatible with Directive 2000/31/EC on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market12, which lays down a general framework relating to the provision of information society services in the Union.
The proposed Regulation will leave all of the abovementioned existing acts of Union law unaffected.
2. LEGALBASIS, SUBSIDIARITYAND PROPORTIONALITY
• Legal basis
Given (i) that the initiative constitutes a core part of the Digital Single Market strategy, (ii) the intrinsic cross-border nature of the online services under consideration, and (iii) the emerging fragmentation of the single market through specific national legislation on the issues covered, Article 114 TFEU constitutes the relevant legal basis for this initiative.
The objective of Article 114 TFEU is to approximate provisions in Member States and to ensure that coherent, non-discriminatory rules are applicable throughout the Union. Such an application of common rules throughout the Union addresses and avoids divergences between Member States and ensures legal certainty, thus allowing undertakings and consumers to exploit the benefits of the internal market. As such, this initiative contributes to the establishment and good functioning of the internal market.
• Subsidiarity (for non-exclusive competence)
The intrinsic cross-border nature of the online services at issue implies that the objectives cannot be reached effectively by Member States alone. Leading online intermediation services providers are established in one Member State, but provide access to almost the entire EU population, both from their place of normal residency and while travelling across the Union. Importantly, certain types of online services are at the same time used for commercial communications through having an online presence by 90% of the respondents to the Commission's fact-finding on platform-to-business relations.
Union action therefore constitutes the only way to ensure that common, suitable and effective rules apply to providers of the services concerned and the users of those services regardless of the law and forum identified in terms and conditions. On the specific set of issues described here, the European Council "underlined the necessity of increased transparency in platforms' practices and uses"13 as part of a future oriented regulatory framework for the Union.
• Proportionality
This proposal aims to offer business users and corporate website users trading in the Union an improved business environment. At the same time, the online service providers concerned remain free, in principle, to set the general policies for the provision of their services and are offered the opportunity to shape their voluntary commitments by way of industry codes of conducts within a principles-based legal framework. It therefore seeks to provide an adequate response to the problem identified, whilst safeguarding the innovation capacity of online service providers. In addition, the choice of a Regulation will facilitate the scaling-up of
12 OJ L 178, 17.7.2000, p. 1
13 European Council Conclusions, 19 October 2017, ST 14 2017 INIT .
providers to the benefit of all actors in online intermediated services, as common rules applicable throughout the Union will inherently lower compliance costs and enhance legal certainty in particular for cross-border operations.
The proportionality of the preferred option, as reflected in this proposal, also lies in the combination of comparatively general, principles-based Union rules, with an important scope for industry action and targeted monitoring. This approach is tailored to the fast changing technological and economic environment online. The group of experts for the Observatory on the Online Platform Economy, which will be set up in parallel to this proposal, will follow both the general evolution of the wider online platform economy and the specific issues covered here, informed amongst others by the legal transparency obligations. The approach put in place in this proposed Regulation therefore remains proportionate to the issues identified in online business-to-business relations.
Considering the administrative burden of the various components of the initiative, small enterprises will benefit from a targeted exemption from the obligation to put in place an effective internal complaint-handling system. It should be noted that this particular obligation sets only relatively high-level effectiveness and accessibility criteria, which will leave providers free to implement cost-effective technical solutions resulting in lower than average costs. The targeted exemption will guarantee that where an administrative burden resulting from the initiative cannot be fully excluded, only undertakings that generate sufficient revenue to absorb this are covered.
• Choice of the instrument
Limiting Union action to promoting voluntary industry-action and certain accompanying measures is possible but unlikely to be effective, as this would essentially rely on the industry's own incentives and willingness to change the status quo. While both service providers and their business users have an interest in maximising interactions and transactions with consumers on platforms, their short-term interests in tackling issues arising in their business relationships are only imperfectly aligned. Previous experience with the Supply Chain Initiative (SCI) in the food sector also suggests that purely voluntary initiatives are not suited for creating a functioning independent redress mechanism and fairness rules that are attractive and credible for both sides of the market. Despite some progress (elaboration of principles of good practice and setting up of a governance group), agricultural providers – the main supposed beneficiaries of the scheme – did not sign up to the scheme because of confidentiality and enforcement concerns. In the meantime, 21 Member States have already adopted national legislation and initiatives to combat potentially harmful trading practices in the food supply chain.
For this reason, only a legislative instrument can effectively address the problems identified. A Regulation is in addition preferred, as it is directly applicable in Member States, establishes the same level of obligations for private parties, and enables the coherent application of rules in the inherently cross-border online intermediated trade and online search. This will also address and prevent fragmentation of the Digital Single Market.
3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER
Contents
- CONSULTATIONS
- While offering great potential in terms of efficient access to (cross-border) markets, European businesses cannot fully exploit the potential of the online platform economy due to a number
- Although e-commerce market places, one of various types of providers which are in principle covered by the initiative, can involve the physical delivery of goods supplied by business
- Article 2 contains the applicable legal
ANDIMPACTASSESSMENTS
• Ex-post evaluations/fitness checks of existing legislation
The report of the Fitness Check of Consumer and Marketing law14 concluded there was a need to consider changes to the Misleading and Comparative Advertising Directive in respect of B2B relations, largely confirming the findings of the 2012 Commission Communication announcing the intention to revise that Directive15. The Inception Impact Assessment on a targeted revision of EU consumer law directives however underlined that the findings of the Fitness Check would rather inform this initiative on platform-to-business relations specifically within the Digital Single Market context. This initiative therefore, builds on the findings made during the most recent Fitness Check of Consumer and Marketing law.
Stakeholder
consultations
The Commission has consulted broadly on the B2B related issues emerging in the online platforms' ecosystem. First, preceding the Commission Communication on online platforms of May 201616, a wide consultation led to a clearer definition of the problem space and the start of an in-depth fact-finding exercise. Second, a series of workshops and broad consultation through several surveys informed the problem definition and led to preliminary policy options. Finally, in-depth focus groups, workshops, a questionnaire and open presentation to the Member States contributed to the design and testing of policy options. In addition to the consultation tools used, the Commission's services have met or interviewed through bilateral meetings a series of stakeholders.
Business users, particularly micro, small and medium-sized enterprises, generally support legislative action to ensure effective redress options and greater transparency of ranking practices, of MFN (price parity) clauses, and transparency in delisting processes.
Most online service providers concerned that were consulted agree that providing an explanation to a business user upon delisting or take-down of an offer is a reasonable legal obligation, provided their legal obligations to take down illegal content and to cooperate with investigations are respected. Consulted providers argued that they do not see the value added of external dispute resolution because they trust their own internal dispute resolution systems. They do not see in general a problem with implementing notice periods for changes in terms and conditions, however they are not in favour of rigid notice periods. Regarding transparency around rankings and data use, providers tend to agree with relatively high-level disclosure obligations, but warn of 'gaming' and manipulation of algorithms with too much transparency. Generally providers are supportive of the idea of monitoring the online platform economy provided that such monitoring happens in full respect of their trade secrets.
Many national experts from Member States' administrations are of the view that addressing issues around terms and conditions is core to all online business-to-business issues. They also consider that the proportionality of a transparency obligation would depend on the precise wording and on the size of the provider. On issues such as notice periods, views diverge depending on the experience at national level, ranging from no need to regulate to mandatory
14 For an overview of the REFIT Fitness Check of EU consumer and marketing law see ec.europa.eu/newsroom/just
15 COM (2012) 702 final.
16 COM (2016) 288 final.
fixed notice terms. Some national experts are also of the view that terms and conditions should be simplified in order to make them transparent and user-friendly for businesses. The consulted national experts support a legal transparency obligation to provide a statement of reasons for delisting. They share the general view that delisting-related requirements should be aligned with illegal content/notice-and-action procedures. A transparency obligation on ranking criteria is overall considered proportionate and legitimate. The experts with more experience on ranking issues are supportive of measures which would solve the problems encountered in a timely manner, although some say that the issue should be left to commercial and competition law. A general preference to (i) opt for a transparency obligation covering ranking practices in general, and (ii) work towards identifying best practices in ranking captures the broad consensus view. On data, non-discrimination and MFN experts cautioned that further reflection was needed. However, there is an overall agreement among experts on the importance of redress. Some concerns exist that internal complaint-handling systems could be burdensome for small and medium-sized enterprises (SMEs). Some national experts are in favour of promoting existing best practices (possibly as part of a self-regulatory measure). Experts representing national authorities overall recognise the interest of the monitoring exercise. They are however, generally opposed to the creation of a new body or European agency for that purpose.
The targeted and co-regulatory nature of this initiative, which is built on transparency and redress measures combined with enhanced monitoring through the group of experts set up in parallel, reflects common grounds in the views of the various groups of stakeholders consulted.
• Collection and use of expertise
Several surveys, a public consultation and multiple studies were carried out by the Commission or external contractors between 2015 and 2017. In-house economic research as well as policy design support by the Joint Research Centre further informed the Impact Assessment underlying this initiative. Member States were in addition consulted through an online consultation which fed into a meeting of the e-commerce expert group dedicated to this initiative. Finally, the Commission organised a large number of seminars with academic experts, whose views have contributed to the problem framing and evidence collection strategy.
Impact
assessment
This proposal is based on an Impact Assessment. The Regulatory Scrutiny Board first issued a negative opinion with comprehensive comments on this Impact Assessment on 1 December 2017. After a significant revision of the Impact Assessment, the Board subsequently issued a positive opinion with reservations on 22 March 2018. The opinion of the Board, the recommendations and an explanation of how they have been taken into account are included in Annex 1 of the Staff Working Document accompanying this proposal. Annex 4 provides an overview of who would be affected by this proposal and how.
The Commission examined different policy alternatives to achieve the general objective of the present initiative, which is to establish a fair, predictable, sustainable and trusted online business environment, while maintaining and further encouraging an innovation-driven ecosystem around online platforms across the EU. In such a business environment business traders should have the necessary safeguards to prevent harm from unfair trading practices and the ability to seek effective redress where necessary. It should also address and prevent regulatory fragmentation across the EU. Within a preferred co-regulatory design required to
ensure legal certainty and predictability for business users while safeguarding online service providers' innovation potential, four policy options were ultimately retained. All of these policy options foresaw comparatively high-level, principles-based legal transparency and redress obligations to be imposed on providers, but they differed in terms of the breadth of potentially harmful trading practices that they covered. In addition, two out of four retained options extended the application of the legal transparency obligation on ranking to providers of online general search engines, in order to maximise efficiency and to ensure equal treatment. Finally, one of the latter two options contained a single, more far-reaching obligation for providers to give business users the opportunity to ask, in line with the General Data Protection Regulation17, for customers' consent to obtain and process their e-mail addresses after the completion of a transaction through the use of the services.
The policy option that foresaw legal transparency obligations on a more limited number of potentially harmful trading practices was judged to be of limited effectiveness. While it would increase legal certainty through legal transparency and redress measures, the risk of direct harm to businesses and of fragmentation would importantly remain since some high-impact trading practices (ranking, data, discrimination, MFNs) were judged unlikely to be sufficiently tackled through self-regulation.
The three other policy options that foresaw legal transparency obligations on the full range of potentially harmful trading practices identified as part of this initiative were all found to be effective. Extending the scope of application of the specific legal transparency obligation on ranking to providers of online general search engines was in this regard judged to achieve the relative greatest degree of effectiveness. The option to include a single, more far-reaching data sharing obligation was at the same time judged to be disproportionate, considering on the one hand the specific objective of maintaining the innovation potential of the online platform economy, and, on the other hand, non-legislative measures that are being presented in parallel to foster fair policies for business-to-business data sharing. Moreover, the retained policy option entails that the legal transparency obligations are accompanied by an enhanced external scrutiny of online platforms' trading practices, which is an important factor to incentivise a fair and predictable environment for business users.
Providing legally binding transparency and redress obligations on the full range of potentially harmful trading practices identified as part of this initiative, including transparency for the issue of ranking in online general search (to which only the collective redress enforcement provision – rather than also the other redress provisions of this proposed Regulation – would apply, to ensure proportionality), is therefore the optimal policy choice. In addition to safeguarding the Single Market potential of the online platform economy, the proposal is estimated to be capable of reversing a dampening effect on the online platform economy resulting from a lack of trust of business users amounting to at least between EUR 0.81 billion and EUR 4.05 billion. It will also have a positive social impact, as the proposed Regulation will lead to an increase in turnover for the growing number of EU undertakings using online intermediation services which, in turn, is expected to yield additional employment opportunities.
Although e-commerce market places, one of various types of providers which are in principle covered by the initiative, can involve the physical delivery of goods supplied by business
Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (OJ L 119, 4.5.2016, p.
1).
17
users to consumers, the increased use of this type of service as a result of the proposal is not expected to have a significant detrimental impact on the environment. Compliance costs associated with the proposal are expected to be limited, and to mainly affect providers of online intermediation services and of online search engines. The proposed legal obligation to establish an internal complaint-handling system places the comparatively highest potential burden on providers, with smaller providers being most likely to face some compliance cost. Therefore those small enterprises, as defined in the Commission's SME Recommendation of 200318, are exempted from this specific provision. The proposal is therefore also judged to be proportionate.
• Regulatory fitness and simplification
As mentioned above, small enterprises will benefit from a targeted exemption from the obligation to put in place an internal complaint-handling system. The proposal specifically aims at facilitating the sustainable growth of online intermediation services and is designed to be fully technologically-neutral.
• Fundamental rights
The Union is committed to high standards of fundamental rights. The specific objective of timely and effective redress for business users contributes to enhancing business users' right to an effective remedy and to a fair trial (Article 47 of the Charter of Fundamental Rights of
the
European Union) as far as it would involve improved access to the judiciary.
Moreover, the fair, predictable, sustainable and trusted online business environment that this proposal aims to create will contribute to safeguarding an appropriate balance between the respective freedoms to conduct a business of service providers and their business users (Article 16 of the Charter of Fundamental Rights of the European Union). In particular, the transparency measures laid down in the proposed Regulation are a precondition for monitoring whether the fundamental right to conduct a business is not unduly constrained as far as the weaker party in business-to-business relations is concerned.
4. BUDGETARYIMPLICATIONS
The proposal will not have any implications for the EU budget.
5. OTHERELEMENTS
• Implementation plans and monitoring, evaluation and reporting arrangements
Monitoring of the evolution of impacts constitutes a key part of the proposed intervention in this domain, as the online platform economy remains a dynamic, fast evolving area of the economy. The monitoring is therefore divided into two strategic parts:
One is entrusted to a dedicated expert group which, jointly with a team of Commission officials, constitutes an EU Observatory on the Online Platform Economy. As set out in the Commission Decision C(2018)2393, the expert group will provide advice on, and expert analysis of, the evolution of the online platform economy in particular related to algorithmic decision-making, access to data, remuneration for material displayed online, transparency and accountability in B2B relations in online advertising, differentiated treatment and restrictions
18 Commission Recommendation 2003/361/EC of 6 May 2003 concerning the definition of micro, small
and medium-sized enterprises (OJ L 124, 20.5/2003, p. 36).
on business users to offer different conditions when using other distribution channels. It will also liaise with other relevant expert groups and centres of excellence set up by the EU and Member States, where appropriate.
The second is the specific monitoring of the evolution of impacts related to the regulatory and self-regulatory components of the proposed Regulation.
The Commission will monitor market indicators for the online platform economy, notably through the EU Observatory on the Online Platform Economy and based on the work of the group of experts. This analysis includes data such as: number and types of businesses trading on online intermediation services, number and type of complaints handled through internal and external redress, number of cases successfully solved, the amount of time needed to resolve the case, the place of establishment, size of the providers trading in the EU, including turnover realised in the EU market as an online intermediary. Within two years from the EU Observatory becoming active, the Commission services will prepare a report based on its activities and taking stock of the state of play, the progress made towards the achievement of the policy objectives and any unresolved issues.
The effectiveness and efficiency of the proposal will be monitored using defined indicators, to inform policy development with regards to the evolution of the potentially harmful trading practices. Consequently, the impact of the intervention will be assessed in the context of an evaluation exercise and that assessment will, where appropriate, feed into the review of the proposed Regulation as specified in the review clause thereof, which is to take place three years after its entry into force and subsequently every three years.
• Detailed explanation of the specific provisions of the proposal
Article 1 specifies the subject matter and scope of the proposed Regulation. It explains that it lays down obligations for providers of online intermediation services and, in certain respects, online search engines to provide business users and corporate website users, respectively, with appropriate transparency and to offer them certain redress possibilities. It also explains the geographic scope of the proposed Regulation, which reflects the inherent cross-border nature of the online services at issue, where activities and transactions occurring within the Union can be intermediated by providers not established there.
definitions.
Article 3 establishes requirements for the clarity, accessibility and modifications of pre-defined, standard terms and conditions used by providers of online intermediation services.
Article 4 establishes requirements for a statement of reasons from a provider of online intermediation services if it suspends or terminates the use by a business user of its intermediation services.
Article 5 establishes requirements for a description of the main parameters determining ranking of business users in search results, including a description where ranking is influenced by the business user giving direct or indirect remuneration to them, in the terms and conditions used by providers of online intermediation services. The Article establishes a similar requirement to provide the main parameters determining ranking for providers of online search engines by means of an easily accessible and publicly available description. It also requires that the description of the main parameters determining ranking should give the business users or corporate website users concerned an adequate understanding of the possible implications of the characteristics of the goods or services offered, the relevance of those characterics for consumers, as well as of the design characteristics of websites used in the context of online search engines.
Article 6 establishes requirements for a description of any differentiated treatment given to goods and services offered by the provider of online intermediation services itself, or by business users which it controls, in the terms and conditions used by providers of online intermediation services.
Article 7 establishes a requirement to include a description of the access to personal data or other data which business users or consumers provide to online intermediation services or which are generated through those services, in the standard terms and conditions used by providers of online intermediation services.
Article 8 establishes a requirement to provide and publish a description of the grounds for restricting the ability for business users to offer different conditions to consumers for obtaining goods or services through means other than the online intermediation services, in the terms and conditions used by providers of online intermediation services.
Article 9 establishes a requirement for a provider of online intermediation services to provide for an internal system for handling complaints of business users together with requirements relating to the handling of such complaints, including obligations to duly consider complaints swiftly and effectively and communicate the outcome clearly and unambiguously to the business user. It also establishes the requirement to include certain information on the internal complaint-handling system in the terms and conditions. In addition, it establishes an obligation on providers of online intermediation services to publish reports on the number of complaints lodged, the subject matter of the complaints, the time period needed to process the complaints and the decision taken on the complaints.
Article 10 establishes a requirement for providers of online intermediation services to list in their terms and conditions one or more mediators with which the provider is willing to engage to reach an agreement out of court on a dispute, for instance where an issue has not been resolved by the internal complaint handling system (established under Article 9). In addition, it establishes certain requirements for the mediators, including impartiality, accessibility, competency and resources as well as an obligation for the providers of online intermediation services to engage in mediation in good faith. The requirements in the Article are without prejudice to the right of either party to initiate judicial proceedings.
Article 11 establishes a requirement for the Commission to encourage providers of online intermediation services to individually or jointly set up one or more independent mediator organisations to facilitate the settlement, out of court, of disputes that arise in the course of online intermediation services, particularly given their cross-border nature.
Article 12 establishes a right for judicial proceedings to be brought by representative organisations, associations or public bodies to stop or prohibit any non-compliance by providers of online intermediation services with the requirements contained in the Regulation. In addition, it requires representative organisations and associations to meet certain requirements such as having a non-profit making character, establishment as a legal entity under the law of the relevant Member State, and pursue objectives that are in the collective interests of the business users they represent.
Article 13 establishes a requirement for the Commission to encourage providers of online intermediation services as well as of online search engines, and organisations and associations representing them, to draw up codes of conduct.
Article 14 establishes a requirement for the Commission to regularly evaluate the Regulation, for the first time three years after the date the Regulation enters into force.
Article 15 establishes the date the Regulation shall apply six months from the date of publication.