The Platform-to-Business regulation, aimed at creating a fair(er) relationship between platforms and entrepreneurs, entered into force last year. Although platforms already have to comply with these rules, work is still in progress to strengthen the monitoring of their compliance. The Dutch legislator is preparing a proposal appointing the Netherlands Authority for Consumers and Markets (ACM) as supervisory body.
In preparation, the ACM will investigate how online platforms deal with these rules and what problems entrepreneurs who are active in this market encounter.
The Platform-to-Business Regulation (“P2B-regulation”) entered into force in July 2020. It regulates all platforms that allow entrepreneurs who are active within the EU to offer their goods or services to consumers. The P2B-regulation is meant to provide business users of these ‘online intermediation services’ with an appropriate level of transparency and effective redress. Consequently, this should lead to a fair(er) relationship between platforms and entrepreneurs.
When it comes to transparency under the P2B-regulation, requirements for online platforms include having clear and easily accessible terms and conditions. These terms have to be transparent about the ranking of search results and offer transparency about the way the platforms’ own products are handled in comparison to products offered by other entrepreneurs using the platform. Terms and conditions that do not comply with these transparency requirements are null and void.
Additionally, the P2B-regulation requires effective means of dispute resolution. In the first place, online platforms are required to set up an internal system for handling complaints that is easily accessible and free of charge. Secondly, the terms and conditions should appoint at least two independent and external mediators in charge of settling disputes out of court.
These obligations do not apply to small online platforms with less than 50 employees and an annual revenue that does not exceed €10 million.
More information on the P2B-regulation can be read here in our Whitepaper.
Enforcement of the P2B-regulation
Additionally, the P2B-regulation imposes the obligation onto member states to facilitate adequate enforcement measures. Member states are free to decide which measures they take, these can include enforcement through civil law procedures in court or via public law enforcement by a supervisory authority. In the Netherlands enforcement is currently carried out by civil courts, as is customary in contract law. This means that any entrepreneur involved in a dispute with an online platform can go to court. This, of course, in addition to any direct means of dispute settlement offered by the platforms.
Nonetheless, these measures do not always prove to be effective. In cases where platforms grow very rapidly, for example, entrepreneurs become increasingly dependent on platforms and are less inclined to seek remedies in court or with the platforms themselves. In addition to this, certain platforms have structural problems with compliance that affect all entrepreneurs using the platform.
This means that online platforms remain unpunished in many cases.
ACM as supervisory body
To increase supervision, the Dutch government has decided to make use of their power to appoint a specific supervisory body as enforcer of the P2B-regulation. For this reason the Legislative Proposal Platform-to-Business was made, appointing the ACM as public supervisor.
Read more about the enforcement of the P2B here in my previous blog.
Consequences of the Legislative Proposal Platform-to-Business
The ACM will have the authority to act in cases where platforms violate the regulation and therefore harm the collective interests of entrepreneurs.
The possible enforcement tools of the ACM include the imposition of a binding course of action, a penalty payment or an administrative fine. Entrepreneurs will be able to report non-compliance with the P2B-regulation to the ACM. However, the ACM does not have the power to settle individual disputes.
Appointment of the ACM as supervisory body provides entrepreneurs with an additional low-threshold opportunity to raise disputes with platforms. For platforms, supervision and enforcement by the ACM will lead to higher supervisory burdens. On the other hand it may reduce compliance costs, for example because the ACM can then provide clarity on the interpretation of provisions.
In order to prepare for their possible new task the ACM has started conducting a market survey, the first part of which is expected to be finished in the spring of 2022. After this, the ACM will decide on whether the P2B-regulation requires additional clarification.