Platform to Business Regulation
https://ec.europa.eu/digital-single-market/en/business-business-trading-practices
The EU Regulation on platform-to-business relations (“P2B Regs) entered into force in July 2019 and is due to be complied with by 12 July 2020.
It is a set of rules laid down by the European Union on the use of mediation to resolve issues between providers of internet intermediation services (“Online Platform Providers”), and their online platform business users.
A better jargon free way to explain this is that it covers online businesses which sell products and services for other smaller businesses.
What do the P2B Regs Require?
The P2BR requires amendments to Online Platform Providers’ Terms and Conditions, policies and published information.
With respect to dispute resolution and mediation specifically, Platform Providers are required to:
- Set-up an internal complaint handling system (Article 11); and
- Name a minimum of two mediators that the Online Platform Providers would be willing to use to resolve a dispute (Article 12).
It is important to note that Online Platform Providers are not limited to naming just two mediators and in fact naming a mediation provider such as ProMediate will comply with the requirements of the P2BRegs.
What online platforms are involved?
Answer? A lot of them! The Regs will cover a lot of websites.
The P2BRegs apply to all Online Platform Providers servicing businesses in the European Union and United Kingdom (post Brexit).
Online Platform Providers are defined broadly by the P2B Regulation, but explicitly mentioned are:
· Search engines;
· Providers of online market places;
· Social media providers; and
· App stores.
The EU explains that these platforms are: Marketplaces on which a commercial transaction between a customer and a business user takes place. Characteristics: The transaction and payment takes place on the platform. Common business model: The platform charges a commission.
Services therefore included:
E-commerce market places (Amazon market place, eBay, Etsy, Zalando, Fnac MarketPlace, Opodo, Chrono24 Trusted Checkout, Booking.com, Expedia, Hostelworld, Tripadvisor Instant Booking, Skyscanner Direct Booking, Uber, Airbnb, Deliveroo, Uber Eats, Upwork, Idealo.de, Kindle Direct Publishing, Vimeo (can rent movies), Xbox self-publishing games, Facebook – direct buy function integrated in profiles & Messenger)
App stores (Google Play, Opera Mobile Store, Samsung Smart TV, LG Smart World, Sony Playstation, Oculus Gear VR, Alexa Skills)
These are services offered on marketplaces on which a commercial transaction between a customer and a business user takes place (transaction takes place on the platform).
Online platforms bring together users with the aim to “facilitate” a commercial transaction (which does not necessarily take place on the platform itself).
This includes both platforms on which the entire transaction takes place and those where a transaction is initiated, where the customer makes a choice from among different offers, but where the business user can also be contacted to finalize the transaction outside the platform.
The commercial transaction does not necessarily take place on the platform itself (“facilitator” role). The consumer joins the platform for a variety of reasons, sometimes pro-actively looking to choose between a variety of offers (e.g. houses to buy or rent). The consumer may contact the business user directly (e.g. make a call, schedule a visit, etc.). The actual payment can take place outside of the platform. The business user may be charged by the platform in different ways, such as listing fees (the level of which may depend on level of service provided – e.g. additional promotion, improved content, better visibility), charges per click and commissions.
Online platforms bringing together users with the aim to “facilitate” a commercial transaction (which does not necessarily take place on the platform itself)
Characteristics and business models:
The business user has a contractual relationship with the platform.
The consumer joins the platform for a variety of reasons, sometimes pro-actively looking for a possibility to choose between a variety of offers (e.g. houses to buy or rent).
The business user may be charged by the platform in different ways, such as:
o Listing fees (the level of which may depend on level of service provided – e.g. additional promotion, improved content, better visibility)
o Charges per click
o Commissions
Services therefore included: Facebook (pages, marketplace), Google My Business, Instagram (profiles used by artists, makers), Olx classifieds, Ebay classified ads, Immoweb, Funda, Autoscout, Instagram (‘shop now’ button), la Fourchette (restaurant booking), SoundCloud (can purchase tracks), price comparison websites (to the extent that business users present on those websites have a contract with the platform).
The P2BRegs are intended to create a fair, transparent and predictable business environment for the use of online platforms and to ensure balanced and effective dispute resolution.
Nearly half of all SMEs in the EU use online marketplaces to sell their services and it is estimated that 7,000 online platforms will fall under the scope of the P2B Regs.
Although the UK is no longer a member of the EU it is in the transition period and has to comply with EU law. Even after the end of the implementation period UK businesses wanting to trade in the EU will need to comply with the P2BRegs. It is part of the European Union Law which was transposed into domestic UK law in accordance with the European Union (Withdrawal) Act 2018.
To whom do the P2B Regs not apply?
Online Platform Providers which do not intermediate between businesses and consumers will not be subject to the Regulation. So, online advertising exchanges and brands selling their own products direct to consumers, without third party sellers, will not be in
Online Platform Providers which employ fewer than 50 persons and which have an annual turnover not exceeding €10 million (small enterprises) are excluded from both of the complaints obligations.
The following issues, among others, are likely to arise:
- Algorithms – how they push certain suppliers to the top of the results list when you search using a search engine and the need for greater transparency on how the algorithms work.
- ‘Most preferred customer status’ – transparency about the criteria applied to provide certain businesses preference over others on a particular site.
- Data handling – issues over how data is being gathered, used and protected. This stems from a wider push within the EU to improve data protection and what recourse businesses and consumers have if their data has been misused or not properly controlled.
Advice for Online Platform Providers
Article 12 – this article speaks to the naming of at least two mediators but there is scope to utilise a mediation provider. The benefit of using a mediation provider is gaining access to a larger panel of mediators who will have:
- Greater depth and breadth of experience in handling different types of disputes
- Greater capability to conduct mediations in terms of time and geographic location
- Greater scalability – ability to handle a large number of cases. It is unclear how many disputes will arise from the P2B Regulation and there may be a need to scale up very quickly. Using a mediation provider under Article 12 allows you to do this seamlessly.
Article 11 – the need to install a complaint handling process. Online Platform Providers should seek to utilise the complaints handling mechanism in conjunction with mediation to bring about a more effective and expedited resolution of any dispute which may arise. The PB Regs provide for the business, business associations and potentially other bodies to bring claims against the Online Platform Provider. Therefore, it is important to have a clear and effective complaints handling process of which mediation should play a key part.
How can ProMediate help Online Platform Providers Comply with the Regulation?
ProMediate can help Online Platform Providers to manage and resolve disputes.
ProMediate has many years of experience as an Alternative Dispute Resolution (ADR) provider, working as an ADR provider to many traders in disputes with consumers under the ADR Regulations.
We provide mediation services for those disputes that escalate beyond the complaints stage.
Naming ProMediate as your mediation service provider will satisfy the requirement under Article 12 of the P2B Regs to name at least two mediators. Doing this will ensure you can use mediators who are:
a. Impartial and independent;
b. Able to provide mediation services at a proportionate and affordable price;
c. Have extensive business-to-business dispute experience;
d. Able to set-up and run a mediation at short notice and to provide services in-person or via telephone or video conferencing.
Why use ProMediate as your Mediation Provider?
ProMediate has a panel of 50+ quality assured mediators to resolve disputes at all levels of complexity and claim value.
We provide a range of mediation solutions depending on the type of the dispute. These include:
- telephone and video conference mediations;
- fixed-time period mediations;
- fixed-fee mediations;
- standard one-day mediations; and
- bespoke mediations for complex, multi-party and or multi-jurisdictional disputes.
We can guide you and your business customers through the process.
We are better value than other larger mediation providers based in London and more flexible.
How to Use ProMediate as your Mediation Provider
Online Platform Providers can comply with Article 12 by simply naming ProMediate in their terms and conditions. You can do this by referring to ProMediate as your mediation provider. Alternatively, you can include the following ProMediate model clause (click here to download)p2B clause
ProMediate Model Mediation Clause for P2B Terms and conditions.
Contact Us
If you would like to discuss how ProMediate can assist with a P2B dispute please contact us!