On 14 June 2019, European institutions adopted the “Regulation of the European Parliament and of the Council on promoting fairness and transparency for business users of online intermediation services”, also known as the Platform-to-Business or P2B. As stipulated by law, the regulation goes into effect 12 months from the date of publication in the Official Journal of the European Union (EU). That day is 12 July 2020 – which is coming up soon! We are using this special occasion to recap the most important points of the regulation and explain what it means for our members, so you can be ready for P2B day.
The P2B regulation aims to increase fairness, transparency, and predictability in the online environment for business users of online intermediation services, also known as platforms. It will apply to online platforms and search engines that provide services to EU-based businesses and European consumers. This includes online marketplaces, social media, content outlets, application distribution platforms, price comparison pages, and general search engines. With the P2B regulation, the EU is trying to address contractual clauses that it deems unfair and to improve dispute resolution mechanisms for business users of platforms. The goal is to protect companies that depend on online intermediation services to reach their customers while simultaneously preserving the platforms’ ability to innovate.
Key points of the P2B include terms and conditions, ranking/search results, differentiated treatment, and dispute resolution.
- Terms and conditions (T&C) must now adhere to the following requirements:
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- Must be easily available and in plain, intelligible language
- Minimum 15-day notice period prior to any changes to the T&C to business users, which have the right to terminate their contract if they do not agree with changes
- Minimum 30-day notice period prior to suspension or termination or other kinds of restrictions and must give an explanation of why this action is being taken
- Include information for business users on their rights to terminate the contract
- Inform business users about any available additional channels of distribution (i.e., other websites, apps, platforms on which the business user can offer goods and services)
- Explain the effects of the T&C on the business users’ ownership and control of their intellectual property rights (IPR), such as brand names, logos, and trademarks
- Describe the platform’s access to personal and other data generated by the business user after the contract between platform and business user expires
- Identify a minimum of two mediators for dispute settlements (you can read more about mediation in our App Launch Guide)
- Obligations related to ranking and search result transparency (we explained ranking transparency in more detail here)
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- Online intermediation service providers should describe the main parameters that determine ranking in their T&C
- If ranking can be influenced by remuneration, business users must be made aware of the options available and of the impacts of remuneration on ranking
- Platforms are not required to disclose the exact functioning of their ranking algorithms
- Obligations related to differentiated treatment
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- If an online intermediation service hosts its own goods and services on its platform, it must describe any kind of differentiated treatment (legal, commercial, or technical) given to its own products
- To facilitate dispute resolution:
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- Platforms must provide an internal complaint handling system for business users so that business users complain directly to the platform provider
- Platforms must facilitate mediation by identifying a minimum of two public or private mediators in the T&C with which they are willing to engage
- Trade associations and other representative organisations will be able to take legal action before national courts in the EU against platform providers that fail to comply with P2B
What P2B Means for You
As you can tell, these new rules will likely have a significant effect on the digital market and the platforms operating on it, including app stores. The P2B regulation mainly creates more transparency for app developers. As they learn more about the workings of the app stores, developers may have the opportunity to improve their app store optimisation processes.
Requiring platforms to explain some of their ranking parameters is valuable for developers. Developers can use this knowledge to refine their apps and app store optimisation (ASO) practices, optimizing rankings and getting more downloads for their app. Appearing near the top of app store searches can be crucial for an app’s success. Read more about ASO here.
The obligation for online intermediaries to be transparent about self-preferencing is meant to address complaints both Google and Apple were facing of favouring their own apps. The transparency about upcoming changes in the terms of conditions increases legal certainty for developers. The P2B regulation ensures that developer accounts can’t be suspended without an explanation.
While the majority of conflicts around app store conditions and app approval are resolved, it is encouraging to see that the P2B requires the identification of mediators in the terms and conditions. If regular methods of finding a solution have been exhausted, the mediation process provides a useful addition to the list of things developers can do to resolve issues with the app stores. You can read more about ways to launch your app successfully and without disputes here.
Overall, the P2B will increase transparency and clarity in the platform ecosystem. We look forward to seeing it implemented and watching the impact it will have on the app economy. We believe that crafting additional regulation at this point would be premature. It’s important to let the P2B take effect while monitoring its practical impact. We encourage European lawmakers to continue on a path that ensures a complementary approach to existing legislation like the P2B, rather than creating additional legislation.
If you have questions about the P2B regulation, please reach out to our EU team!