Moving forward with the Platform-to-Business economy: The European Commission publishes Q&As on Regulation (EU) No. 2019/1150 and three reports on online platforms

The European Commission (“Commission”) is developing further means to move forward with work on the Digital Service Act package and, in particular, to raise awareness about the new “Platform-to-Business” rules, namely Regulation (EU) No. 2019/1150 of June 20, 2019 promoting fairness and transparency for business users of online intermediation services (“Regulation”), applicable as of July 12, 2020.

More specifically, the Commission has published both a Questions & Answers Document (“Q&As”) to guide online platforms, search engines, and businesses in the implementation of the Regulation and a set of Progress Reports drafted by the Expert Group for the Observatory on the Online Platform Economy. These Progress Reports deal with data access, differentiated treatment, and the identification of indicators for monitoring the online platform economy. The Commission also asked for stakeholders’ feedback on the Progress Reports.

The Q&As

As the Q&As themselves explain, their aim is “establishing a fair, trusted, and innovation driven ecosystem in the online platform economy”. Nevertheless, they do not provide an authoritative interpretation of the Regulation.

After a first paragraph focused on the subjective scope of application of the Regulation, the document describes the impact of the Regulation on providers of both online intermediation services and online search engines. In order to do that, the Commission takes a practical approach, providing, by means of specific questions and answers, a sort of checklist of the requirements with which online intermediation services and online search engines must comply. Furthermore, the Q&As help to bring into focus specific and relevant aspects introduced by the Regulation (e.g., exemptions for small enterprises concerning the adoption of the internal complaint-handling system and inclusion of the mediators in the terms and conditions), as well as to highlight input and examples that are mentioned in the Regulation’s recitals (e.g., indication of online intermediation services not covered by the Regulation, just to provide an example, but the Q&A is full of references to the recitals concerned).

Then the Commission shifts to the business users’ point of view and explains how the Regulation improves the role of business users in the “Platform-to-Business” environment – for instance, by requiring the contractual relationship between online intermediation services or online search engines and business users to be described more clearly – and describes their rights. Moreover, specific questions clarify the meaning of the Regulation’s provisions for corporate website users. The last part of the document examines the role of the representative organizations and associations in case of judicial actions.

The Progress Report on the Work stream on Data

The Progress Report on the Work stream on Data (“Data Report”) aims first and foremost to analyze the complex and heterogeneous concept of “data,” which plays a pivotal role in the digital intermediaries’ economy. In fact, the aim is to create a new point of departure for discussing the nature of data and the related policies adopted in the platform economy. Against this backdrop, the Data Report gives an overview of the meaning of the term “data” in different contexts, e.g., economic perspective, legal approach, and so on, and then classifies the data categories within the online platforms.

Thereafter, it proceeds to analyze some critical issues related to the use of data by online platforms. Data represents a fundamental tool for the functioning and growth of platforms, which have often been pioneers in introducing data-driven innovations. However, the data-related practices implemented can present – and have presented – some critical issues that are discussed in the Data Repot with a focus on certain aspects, such as fairness, market power, and so on.

Finally, the Data Report maps the data-related practices in the platforms’ economy that entail data access, data collection, and data sharing. In this regard, Article 9 of the Regulation is expressly mentioned: it deals with access to data and requires online intermediation services to enhance transparency in their practices. Nevertheless, the Data Report points out that it will be necessary to keep an eye on how Article 9 requirements are met by online intermediation services, monitoring both Regulation enforcement and a possible shift in the platforms’ economy.

The Progress Report on the Work stream on Differentiated treatment 

The Progress Report on the Work stream on Differentiated treatment (“Differentiated Treatment Report” or “Report”) is designed to investigate cases in which differentiated treatment by online platforms can be configured as “unfair.” Indeed, although such practice is not per se problematic, under certain conditions it may have a negative impact on Platform-to-Business relationships.

In particular, the above-mentioned Report analyzes two kinds of “unfair” differentiated treatment. The first is due to the fact that online platforms are vertically integrated, meaning they can benefit from their dual role as online platforms and as businesses that offer specific goods or services to consumers through the online platforms themselves. In this case, an online platform may give preferential treatment to its own goods or services, which are sold in the same marketplace. In the second type of differentiated treatment, there is a general practice that entails providing more favorable treatment to one or more business users on the online platform.

On this basis, the Differentiated Treatment Report aims to provide guidance to understanding the impact of such practices from a technical, economic, and legal perspective. Hence, the Report first focuses on similar issues in different sectors, such as the brick-and-mortar context, and on the interests of all the actors involved (i.e., consumers, businesses, and platform). Secondly, economic and legal insights are provided.

Finally, the Report suggests possible actions to further analyze differentiated treatment practices and improve the current market environment. Among other remarks, the Report asserts that the Regulation is a good starting point for regulating differentiated treatment and countering unfair practices.

The Progress Report on Work stream on Measurement & Economic Indicators

The Progress Report on Work stream on Measurement & Economic Indicators (“Indicators Report”) addresses the need to collect information and data on online platforms so that relevant phenomena can be studied and policies in different domains can be guided accordingly. Indeed, it is important to identify and develop indicators that can be used to monitor the online platform economy and design corrective actions.

Firstly, the Indicators Report deals with the economic significance of online platforms, focusing, for instance, on the volume of trade mediated by the platforms, the size and importance of the latter, and the data on data. Secondly, it focuses on the economic power that platforms wield over their users, highlighting that this area lacks reliable data.

Moreover, the Indicators Report analyzes the acquisitions used by platforms as part of a competitive strategy. In this regard, Annex 1 provides a list of questions for monitoring such phenomena. A further subject taken into consideration concerns the consequences of platforms’ economic power; among these, transparency issues – also addressed in the Regulation – stand out. In conclusion, several recommendations on indicators, directed mainly at the Commission, are provided.

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