Obligations under Articles 5, 6 and 7 of the Digital Markets Act (Regulation 2022/1925) (the "DMA") come into operation from 7 March 2024 for core platform services designated in September 2023, and those under the Digital Services Act (Regulation 2022/2065) (the "DSA") have applied to all online intermediaries in scope since 17 February 2024. As these key dates arrive, you might say that 2024 marks a year of significant regulatory change for digital services and online platforms.
However online intermediation services, such as marketplaces (e.g. Amazon and eBay), app stores (e.g. Apple App and Google Play Stores), social media sites used for business purposes (e.g. YouTube and Facebook), and specialised platforms (e.g. Booking.com and Groupon), and online search engines (e.g. Google and Bing) are already subject to rules concerning transparency, fairness and effective redress as laid down in the Business to Platform Regulation (Regulation 2019/1150) (the "P2B Regulation"). Nonetheless, a recent European Commission evaluation identified a lack of compliance by providers of online intermediation services with the P2B Regulation, coupled with a lack of awareness among business users.
Despite the lack of compliance and awareness, the overall findings of the Report on the first preliminary review of the P2B Regulation (published in September 2023) (the "Report") also note initial positive effects of the EU's P2B Regulation, although its full potential is not yet reached, and "complementarity" with the DMA, DSA and the proposed directive on improving working conditions in platform work.
Synergy with other EU acts
The P2B Regulation, which has applied since 12 July 2020, is in some ways, the forerunner to the DSA and DMA covering similar topics from different perspectives, such as ranking transparency, contract transparency, obligations as regards restriction, suspension and termination, access to data, dispute resolution and more. It focusses on online intermediation services that provide services to business users to enable them to reach consumers, and to a lesser extent it lays down rules for providers of online search engines that provide services to corporate users. It aims to secure appropriate transparency, fairness and effective redress possibilities for both categories of business and corporate user. Some of the themes in the P2B Regulation are further extended in the DMA or mirrored in the DSA. For example, the Commission's Guidelines on ranking transparency, adopted pursuant to Article 5 of the P2B Regulation, are specifically called out in the DMA as a means to facilitate the implementation and enforcement of the DMA's obligations on ranking. The P2B Regulation contains detailed requirements as regards transparency in terms and conditions, which are mirrored in the DSA for the benefit of all users of the service, not just business users. (For more information on the DSA, please see our briefing EU Digital Services Act – Who, what and when.)
In fact, the terms 'online intermediation service' and 'online search engine' are defined in the DMA by reference to the definitions in the P2B Regulation. Both are a category of core platform service under the DMA, although the DMA creates additional rules for designated 'gatekeepers' and applies without prejudice to the P2B Regulation. The DSA also applies to online intermediary type services which are information society services (i.e. any service normally provided for remuneration, at a distance, by electronic means and at the individual request of a recipient of services), but more specifically those that are 'mere conduit', 'caching' or 'hosting' services.
Report findings
Transparency
The Report notes that transparency in general, and specifically on the main ranking parameters, are at the core of the P2B Regulation. While Article 3 of the P2B Regulation contains obligations around accessibility, availability and presentation of terms and conditions, among other requirements, the Regulations are replete with obligations to include certain prescribed information in terms and conditions. For example, the P2B Regulation requires platforms to provide information on: parameters determining ranking (Article 5); ancillary goods and services offered to consumers (Article 6); differentiated treatment (Article 7); conditions under which business users can terminate (Article 8); access to personal data which business users or consumers provide (Article 9). However, the Report finds limited compliance with respect to transparency in the private law contracts of online intermediation services, with 42.4% of the online intermediation services in the study achieving a low level of alignment with P2B Regulation's requirements regarding contractual transparency. For example, as regards the right of business users to receive a description of the technical and contractual access they have to any personal or other data, which business users or consumers provide for the use of the online intermediation services, the Report finds that information provided was often described in general terms, commenting that "[i]t appears that the lack of actual access to data generated through business user activities on the major online platforms remains the major issue."
With respect to the requirement to set out the main parameters that determine ranking and the reasons for the relative importance of those parameters, as opposed to other parameters, the Report finds that only around a third of all intermediation services and online platforms listed information on their ranking parameters in the terms and conditions. (Notably in this context the Report comments on the value of its then fledgling database of platforms' published terms and conditions for research and other purposes. The Digital Services Terms and Conditions Database is now available here.) As regards transparency on differentiated treatment, as prescribed by Article 7 of the P2B Regulation, the Report states that its review showed that very few online intermediation services include any information.
Dispute resolution
In the context of internal complaint-handling procedures and access to mediators, as prescribed by Articles 11 and 12, the Report lays out the information and procedural rights around restriction, suspension and termination of accounts, noting that these rights for business users add up to a legally codified EU-wide system for complaint handling by online intermediation services. With the exception of small enterprises, providers of online intermediation services must provide for an internal system for handling the complaints of business users and must also identify in their terms and conditions two or more mediators with which they are willing to engage to attempt to reach an agreement with business users on the settlement, out of court, of any disputes. The Report finds that the effectiveness of these redress mechanisms has been limited. Among other issues, it points to a lack of awareness of the contractual possibility of mediation and a lack of clarity around certain terms and concepts, suggesting that the term 'complaint' should be given a broad interpretation.
Enforcement
In Ireland, the Competition and Consumer Protection Commission ("CCPC") is charged with defending the collective interests of business users and corporate website users and ensuring compliance with the requirements of the P2B Regulation, supported by Irish regulations; European Union (Promoting Fairness and Transparency for Business Users of Online Intermediation Services) Regulations 2020 ("2020 Regulations"). The CCPC led the establishment of an online pan-European P2B network to promote greater consistency in the application of the P2B Regulation and achieve better outcomes. In its 2022 Annual Report, the CCPC shares that it actively engaged with 24 online platforms on the P2B Regulation during the year. Nonetheless there are currently no entries to the CCPC's register of unlawful acts, which it is required to maintain under the 2020 Regulations, for those acts that have been the subject of an order before the Circuit Court or the High Court under section 71 of the Consumer Protection Act 2007.
Next steps
The Report notes that "the full potential of the P2B Regulation's transparency provisions may crucially depend on business users having sufficient awareness of their rights, and on online intermediation services and online search engines having sufficient awareness of their obligations." In line with this, as part of its follow-up actions, platforms within scope of the P2B Regulation and their business users can expect; more information about the rights and obligations under the enactment, including on a sector specific level (for example in the hospitality sector), further alignment on mediation among SME platforms, and possibly codes of conduct in the hotel bookings and online marketplace sectors.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.
