Bird & Bird has contributed to a new report on the EU Platform to Business Regulation recently published by the Digital Future Society, a non-profit transnational initiative aiming to engage stakeholders to understand how technologies can facilitate a more inclusive and equitable society. The report entitled: “Platform-to-Business regulation: Maximising the opportunities the P2B regulation offers SMEs and platforms in Spain and Abroad” was prepared in conjunction with the Spanish Ministry for Economic Affairs and Digital Transformation and Mobile World Capital Barcelona. Several experts including Francine Cunningham, Bird & Bird’s Director of Regulatory and Public Affairs, were interviewed to provide insights regarding how the regulation might impact businesses, in particular SMEs.

To recall, the Platform-to-Business Regulation (“P2B”), which has applied since 12 July 2020, aims to create a fair, transparent and predictable business environment for smaller businesses and traders on online platforms. It applies to e-commerce marketplaces, app stores, social networks (used by companies), booking and price comparison portals as well as online search engines. Obligations placed on platforms include requirements to disclose ranking parameters, to have clear and understandable general terms and conditions and to set up an internal complaint management system. Business users of such platforms are now entitled to 30 days’ notice if a platform intends to terminate its services to that user and must be provided with reasons for that decision.

In addition, business users now have the right to know when providers are self-preferencing their own products or services and the extent to which providers have access to data generated in the course of providing those services. The Report notes that “the regulation should make it easier to hold platforms accountable and allow businesses to design their business models strategically.”

On the obligations that have been imposed, Francine Cunningham is quoted in the Report, stating “The final regulation is rather ‘light touch’ and does not go as far as some SMEs would have hoped. Operating systems are out of the scope of the new rules and algorithms are still largely out of the firing line, despite the general transparency requirements. The final regulation also did not include the ‘blacklist’ of unfair trading practices that some Members of the European Parliament had pushed for during the negotiations.”

Furthermore, the Report notes that the COVID-19 pandemic has accelerated the digitization of our economy, so the ability to operate effectively online has become even more crucial for businesses to survive. The general consensus in the Report is that businesses which rely on online platforms will be positively impacted by the P2B Regulation. However, it also notes that the Regulation “runs the peril of being ineffective if SMEs and the associations that support them do not exercise their attributed rights.” In this respect, Francine Cunningham is quoted in the report as stating: “SMEs should be mindful of these new rights when contracting with online platform operators and in the event that difficulties arise.”

The Report offers four lines of action: address the SME knowledge gap concerning the new Regulation; externalise the complaint mechanism for platforms; create general guidelines regarding auto-evaluation and compliance; and increase the competencies of the Observatory on the Online Platform Economy (OPE). Together these recommendations aim to enhance awareness of the Regulation among SMEs and legal certainty, so that smaller enterprises can take full advantage of the opportunities provided by the P2B Regulation, while ensuring that platform innovation is not negatively affected.