The Council of the EU has adopted new rules obliging businesses to commit to a degree of transparency when operating online.
With around 60% of private business transactions and 30% of public consumption of goods and services relating to the digital economy conducted wholly or partially online, concerns have grown over fragmentation of the market and the infinite potential of the internet to facilitate harmful trading practices. The new regulation therefore aims to promote online business transparency by establishing a framework both to guarantee transparency in the terms and conditions of online platforms for business users and to ensure tangible consequences where the terms and conditions are not observed.
Romanian Minister of Economy Niculae Bădălău said: “Predictability is key for business. Companies doing business through online platforms should be fully aware of the terms of this relationship and when necessary be able to seek quick and efficient redress. The new regulation, the first of its kind in the world, will enable EU businesses to reap the full benefits of the digital economy.”
The regulation covers online platforms which are used for business purposes or provide goods and services to consumers within the EU – irrespective of the region in which they are based – including online marketplaces, application stores and search engines. Platforms providing online intermediation services are obliged to phrase their terms and conditions in ‘plain and intelligible’ language and publicly disclose any preferential treatment accorded to businesses, for example in the form of search ranking placement. Platforms are also compelled by the regulation to establish ‘efficient [and] swift’ internal complaints handling systems; and to commit to participating in mediation where complaints cannot be sufficiently addressed internally.
The Council has invited the European Commission to take further action to ensure online business transparency by developing codes of conduct for online platforms and establishing independent specialised mediation bodies to oversee disputes.