Regulation (EU) 2019/1150 of 20 June 2019, known as the “Platform to Business” Regulation promoting fairness and transparency for business users of online intermediation services, entered into force on 12 July 2020 (hereinafter the “Regulation”).

Following the entry into force of this Regulation, a law of 5 March 2021 implemented the Regulation in the Grand Duchy of Luxembourg.

As a preliminary remark, it is interesting to note that the title of the Regulation clearly points to the two major problems faced by business users in dealing with the new giants of the global economy, namely the lack of fairness and transparency of online platforms defined in the Regulation as online intermediation providers or online search engine providers (e.g. Amazon, Alibaba, App Store, Google, etc..).

The Regulation shows a clear intention to refocus the existing balance of power between business users and online search engine providers and online intermediation service providers.

• Which platforms are targeted?

Online intermediation providers are defined by the Regulation as any natural or legal person who provides, or offers to provide, online intermediation services to business users.

The Regulation shall apply to online intermediation services and online search engines provided, or offered to be provided, to business users and users of business websites whose place of establishment or residence is in the EU and who, through such online intermediation services or online search engines, offer goods or services to consumers located in the EU, irrespective of the place of establishment or residence of the providers of such services and irrespective of the applicable law

This definition includes the most well-known onlinebusiness platforms (e.g. Amazon, Google, Airbnb, Uber, the App store etc.).

However, the Regulation does not apply to online payment services, online advertising tools, or online advertising exchanges, which are not offered to facilitate direct transactions and which do not involve a contractual relationship with consumers (e.g. Paypal, etc.).

• Providing a framework for the General terms and conditions

The relationship between the user company and the online intermediation service/provider is governed, among others, by general terms and conditions (the “Terms”).

Considering the impossibility of (re)negotiating the clauses of the Terms, this legal relationship can be considered as a contract of adhesion.

In addition, it was found that the Terms of online intermediation providers were often vaguely drafted and insufficiently detailed on important commercial issues.

In view of this, the Regulation has sought to provide a stricter framework for certain clauses binding on the parties.

In this context, providers of online intermediation services must ensure that their Terms :

(a) are written in a clear and understandable manner ;

(b) are easily accessible to business users at all stages of their business relationship with the online intermediation service provider, including during the pre-contractual phase (i.e. even before the business user registers as a member on the platform);

(c) define the grounds for decisions to suspend, terminate or impose any other restriction, in whole or in part, on the provision of their online intermediation services to business users ;

(d) include information on any additional distribution channels and potential affiliate programmes through which online intermediation service providers may market the goods and services offered by business users ;

(e) include general information on the effects of the terms and conditions on the ownership and control of intellectual property rights of user undertakings.

The Rules provide that clauses which do not comply with the General Conditions in respect of the points listed above shall be considered null and void.

In addition to these requirements regarding the content of the general terms and conditions, the legislator has also provided for a mechanism to protect the user in the event of a change in these terms and conditions.

By way of illustration, a minimum period of acceptance or refusal of proposed changes is set, which may not be less than 15 days (Article 3(2) of the Regulation).

• Restriction, suspension and termination of accounts

It is not uncommon for online intermediation providers to unilaterally restrict, suspend or terminate access to their platform for reasons that are not always immediately apparent to the user companies.

In the past, this decision could be taken extremely abruptly, and the user company found itself in a very difficult position, as even access to the sales account could be blocked at any time.

The Regulation has therefore imposed certain measures, which, although extremely sensible in the context of a classic contractual relationship, were rarely or only partially reflected in the general terms and conditions of the best-known digital platforms.

By way of illustration, the Regulation now requires platforms to ensure that :

• the reasons for decisions to restrict or suspend the account are sent to the user undertaking (before or at the time of the decision to restrict or suspend);

The user undertaking must be given the opportunity to react to this restriction/suspension;

• reasons for termination must be sent 30 days before the effective termination of the account.

 

However, this 30-day period does not apply if the platform:

(a) is subject to a legal or regulatory obligation to terminate the provision of all of its online intermediation services to a particular business user in a manner that does not allow it to meet that notice period; or

b) exercises a right of termination for a mandatory reason under national law in accordance with European Union law;

(c) can provide evidence that the user undertaking concerned has repeatedly breached the applicable terms and conditions, resulting in the termination of the provision of the entire online intermediation service in question.

• Conflict resolution

The Regulation required the establishment of an internal complaints handling system and the use of impartial and independent ombudsmen.

This internal complaints handling process was already included in many general terms and conditions, but this text imposes it on online intermediation providers who have not put it in place.

The Regulation also provides for the possibility for a user undertaking or other listed entities (representative organisations or associations / public bodies) to apply to a local court for an order to cease acts contrary to the provisions of the Regulation.

• As of 17 January 2022

Despite the entry into force of the Regulation on 12 July 2020, it should be noted that some online intermediation providers have not, or have not yet, fully updated their terms and conditions to comply with the Regulation.

It should also be noted that the Regulation provides for a review of these provisions and that the first review must be carried out by 13 January 2022. To date, this review, which could have provided guidance on its effective application, has not yet been published.