European Commission - Press release

Digital Single Market: EU negotiators agree to set up new European rules to

improve fairness of online platforms' trading practices

Strasbourg, 14 February 2019

Traders selling online via marketplaces, hotels using booking platforms, or app developers are amongst
those who will benefit from the new rules agreed today. The new Regulation will create a more
predictable and transparent trading environment online, and will offer new possibilities for resolving
disputes and complaints.
As part of the Digital Single Market strategy, the new rules will apply to the entire online platform
economy - approximately 7000 online platforms or market places operating in the EU, –which include
world giants as well as very small start- ups, but having often an important bargaining power vis a vis
business users. Certain provisions will also apply to search engines, notably the ones concerning
ranking transparency.
Vice-President for the Digital Single Market Andrus Ansip said: “Today's agreement marks an
important milestone of the Digital Single Market that will benefit millions of European companies
relying on digital platforms to reach their customers. Our target is to outlaw some of the most unfair
practices and create a benchmark for transparency, at the same time safeguarding the great
advantages of online platforms both for consumers and for businesses.”
Commissioner for Internal Market, Industry, Entrepreneurship, and SMEs, Elżbieta Bieńkowska,
stated: “Our new rules are especially designed with the millions of SMEs in mind, which constitute the
economic backbone of the EU. Many of them do not have the bargaining muscle to enter into a dispute
with a big platform, but with these new rules they have a new safety net and will no longer worry
about being randomly kicked off a platform, or intransparent ranking in search results.”
Commissioner for the Digital Economy and Society, Mariya Gabriel, added: “These are the first rules of
this kind anywhere in the world, and they strike the right balance between stimulating innovation while
protecting our European values. They will improve the relationship between businesses and platforms,
making it fairer and more transparent, and ultimately leading to great advantages for the consumers.
We will closely monitor the evolution of this field, not least through our Online Platform Observatory.”
According to a Eurobarometer survey almost half (42%) of small and medium companies in the EU said
they use online marketplaces to sell their products and services. An impact assessment carried out by
the Commission ahead of its proposals showed that nearly 50% of European businesses operating on
platforms experience problems. Some 38% of problems regarding contractual relations remain
unsolved, and 26% are solved but with difficulties; around €1.27-2.35 billion are lost directly in sales
as a result.
Small businesses will particularly benefit immediately from:
1. A ban on certain unfair practices

- No more sudden, unexplained account suspensions. With the new rules, digital platforms can
no longer suspend or terminate a seller's account without clear reasons, and possibilities to appeal.
The platform will also have to reinstate sellers if a suspension was made in error.
- Plain and intelligible terms and advance notice for changes. Terms and conditions must be
easily available and provided in plain and intelligible language. When changing these terms and
conditions, at least 15 days prior notice needs to be given to allow companies to adapt their
business to these changes. Longer notice periods apply if the changes require complex adaptions.

2. Greater transparency in online platforms

- Transparent ranking. Marketplaces and search engines need to disclose the main parameters
they use to rank goods and services on their site, to help sellers understand how to optimise their
presence. The rules aim to help sellers without allowing gaming of the ranking system.
- Mandatory disclosure for a range of business practices. Some online platforms not only
provide the marketplace, but are also sellers on the same marketplace at the same time.
 According to the new transparency rules platforms must exhaustively disclose any advantage they
may give to their own products over others. They must also disclose what data they collect, and
how they use it – and in particular how such data is shared with other business partners they
have. Where personal data is concerned, the rules of the GDPR apply.

3. New avenues for dispute resolution.

Today sellers are often left stranded with no ways to appeal or resolve complaints when problems
arise. This will change with the new rules.
- All platforms must set up an internal complaint-handling system to assist business users. Only
the smallest platforms in terms of head count or turnover will be exempt from this obligation.
- Platforms will have to provide businesses with more options to resolve a potential problem through
mediators. This will help resolve more issues out of court, saving businesses time and money.

4. Enforcement Business associations will be able to take platforms to court to stop any non-
compliance with the rules. This will help overcome fear of retaliation, and lower the cost of court
cases for individual businesses, when the new rules are not followed. In addition, Member States
can appoint public authorities with enforcement powers, if they wish, and businesses can turn to
those authorities.
Next Steps
The new rules will apply 12 months after its adoption and publication, and will be subject to review
within 18 months thereafter, in order to ensure that they keep pace with the rapidly developing
market. The EU has also set up a dedicated Online Platform Observatory to monitor the evolution of
the market and the effective implementation of the rules.
Background
Platforms offer a wide range of opportunities for fast and efficient access to international consumer
markets, which is why they have become the go-to place for millions of successful businesses.
However, certain structural issues lead to unfair trading practices between businesses that have come
to depend on online platforms to reach their customers and undermine the innovation potential of
platforms.
The Commission's Communication on Online Platforms of May 2016 identified certain areas where more
efforts are needed to ensure a trusting, lawful and innovation-driven ecosystem in the EU. As a result
in April 2018 theCommission made a proposal for an EU Regulation on fairness and transparency in
online platform trading as well as for the creation of anObservatory on the online platform economy.
This initiative delivers on the commitment made in President Juncker's 2017 State of the Union
address to safeguard a fair, predictable, sustainable and trusted business environment in the online
economy.
The new rules are underpinned by an impact assessment that incorporates evidence and stakeholders'
views collected during a two-year fact-finding exercise.
For more information
- MEMO – Questions & Answers
- Factsheet: Online platforms – new rules to increase transparency and fairness
IP/19/1168

Press contacts:
Nathalie VANDYSTADT (+32 2 296 70 83)
Marietta GRAMMENOU (+32 2 298 35 83)
General public inquiries: Europe Direct by phone 00 800 67 89 10 11 or by email