New rules on online platform transparency

New EU platform-to-business rules aimed at enhancing transparency of online platforms for business users are now applicable. Implementation of certain procedural aspects in Luxembourg is pending. An enforcement role is given to the Competition Council.

Regulation (EU) 2019/1150 of 20 June 2019 on promoting fairness and transparency for business users of online intermediation services (“Regulation”) has been applicable since 12 July 2020. It aims to ensure the fair and transparent treatment of business users by online search engines and online intermediation services (online platforms) such as, inter alia, online marketplaces, social media and creative content outlets, application distribution platform, price comparison websites or collaborative economy marketplaces (“Providers”). They are in scope irrespective of their place of establishment or residence and irrespective of the law otherwise applicable if they offer services to business users in the EU.

In a nutshell, the Regulation imposes obligations on Providers on the following topics:

• terms and conditions - these shall be easily accessible to business users, written in plain and intelligible language and contain specific information such as grounds for restriction, suspension, and termination of the contractual relationship;
• treatment of goods and services – the general criteria of ranking of goods and services have to be set out and justified and the treatment by Providers of their own goods and services compared with those of business users has to be transparent;
• complaint-handling system – a complaint-handling system has to be provided;
• data access - general polices on the type of data generated through the services have to be published;
• imposed restrictions –the economic, commercial, or legal reasons for limiting business users' ability to offer better conditions to other parties through means other than through the Provider's services have to be explained.

Member States must ensure adequate and effective enforcement of the Regulation. In Luxembourg, the methods are provided in Bill of law 7537, currently discussed in Parliament (“Bill”). According to the Bill, certain organisations and associations shall be empowered to act before the court to cease or prohibit any act violating the Regulation. Any failure to comply with the injunctions or prohibitions issued by a court decision is proposed to be punishable by a fine of up to 1 million euros.

The Competition Council will also have the power to introduce such court procedures. Hence, platform transparency will become an additional field of action for the Competition Council next to the powers newly allocated to it by Bill of law 7646 regarding the prohibition of unfair trading practices in B2B relationships in the agricultural and food supply chain. This latter Bill is discussed in the Dispute Resolution section of this Newsletter.