On June 14, 2019, the European Council adopted the “Regulation on promoting fairness and transparency for business users of online intermediation services” (the “Regulation”). The Regulation seeks to address a range of issues in online search and intermediation platform-to-business relationships. It is the first piece of EU legislation to do so.
The Regulation’s focus and structure
The stated purpose of the Regulation is to guarantee transparency, fairness, and “effective redress” for business users of online platforms. It applies to two main types of platforms: online search engines, such as Google, Yahoo, and Bing, and online intermediation service providers, such as e-commerce market places like Amazon and eBay, app stores, and business pages on social media sites. The Regulation chooses this focus because it considers that many business users and corporate-website operators increasingly “depend” on such services.
Requirements applying to both intermediation service providers and search engines
Articles 5 and 7 cover ranking and differentiated treatment. They mandate different transparency requirements depending on the type of service they cover.
Ranking. Under Article 5, platforms are required to set out the main parameters determining ranking and explain their “relative importance.” Online search engines should provide this information in “an easily and publicly available description, drafted in plain and intelligible language.” Intermediation platforms, however, only need to provide it in their terms and conditions, among other requirements. Both types of service must clearly indicate whether or not payment can influence ranking.
Where an online search service has altered the ranking in a “specific case” based on a “third-party notification,” it must make the contents of that notification available to the website that was impacted.
The Regulation clarifies that the requirements do not imply that any service will need to disclose algorithms or information that would likely allow for the manipulation of the results. It also explains that Guidelines on the transparency requirements will follow.
Differentiated treatment. Article 7 deals with situations where platforms provide sets of results that include results sourced from their own service. For intermediation services, this may include, for example, a merchant platform that hosts third- party sellers’ goods but also sells goods itself. The Regulation requires that online platforms describe in a transparent manner any differentiated treatment they grant their own goods or services compared to those of other business users. Article 7(3) seeks to give a degree of clarity as to what should be mentioned in the platforms’ explanations to businesses around this issue. It lists factors such as data, payment, and ranking, but the precise interplay of these factors with the platforms’ own services are not clear. Guidance from the Commission along the lines of that mentioned in Article 5 would likely also be useful here.
Requirements applying only to intermediation service providers
“Most-favoured-nation” clauses. If an intermediation service restricts a business’ ability to offer the same goods and services to consumers under different conditions elsewhere, it must explain this restriction in its terms and conditions. This provision appears designed to address contractual terms like parity requirements or “most-favoured-nation” (“MFN”) clauses. These terms have previously given rise to antitrust scrutiny, for instance, in the Amazon e-books case. This issue is still a live one, as exemplified by the recent complaint made by Nustay against Booking.com and Expedia, which is discussed in this month’s EU Competition Newsletter.
Ancillary services. The regulation also introduces a requirement that the terms and conditions of online intermediation services set out whether ancillary goods and services are offered by the platform or by third parties and if so, under what conditions business users of the platform may also offer their own. This too has been an area of antitrust activity. The Italian Competition Authority is investigating Amazon for alleged discrimination on its market-place in favor of merchants using Amazon’s logistics services.
Access to Data. Online intermediation services are required to provide business users with a clear explanation of the scope, nature, and conditions of their access to data. The goal is to inform business users of the sort of data that the platform may be collecting from their participation.
Terms, conditions, and terminations. The Regulation also touches on the accessibility of the terms and conditions used by online intermediation service providers. These terms and conditions should explain potential reasons for termination. Were termination or suspension to occur, the intermediation service provider must give prior notice to the business user and justify the action.
Dispute resolution. Online intermediation providers are required to establish an internal complaint-handling system. This system must be easily accessible and free to use for business users. These providers will also have to identify mediators that are willing to engage in settling disputes. Additionally, companies can take legal action directly against a platform for infringing the Regulation. Recognizing that business users may be deterred from settling disputes individually for financial reasons or fear of retaliation, the Regulation establishes that collective proceedings may be brought by representative associations with a legitimate interest.
Although legislation in this area is a new step, online platforms have already been subject to considerable political and antitrust scrutiny for some time, especially in Europe. For instance, in the ongoing Amazon investigation, the Commission is scrutinizing how Amazon uses the data of third-party merchants that rely on its platform to improve its own product positioning, which competes against theirs. This scrutiny is also becoming increasingly common abroad. The themes at the center of most of these cases, including “self-preferencing,” ranking, and access to data to name but a few, are similar to those in the Regulation.
The extent to which these transparency requirements will require platforms to change their current practices is not yet clear. Many online platforms already disclose that certain content is paid for; explain their ranking mechanisms; and stipulate that they offer services that may compete with the sellers they host.
 Regulation (EU) 2019/1150 of the European Parliament (EP) and of the Council of June 20, 2019 on promoting fairness and transparency for business users of online intermediation services was published in the Official Journal on July 11, 2019. Publication in the Official Journal follows formal first-reading adoption by the Economic and Financial Affairs Council on June 14, 2019 and by the EP on April 17, 2019. The European Commission adopted its proposal for this Regulation on April 26, 2018 as part of its Digital Single Market Strategy.
 This issue is also discussed in the Preamble, ¶27, which stipulates that platforms’ “ability to act against bad faith manipulation of ranking by third parties, including in the interest of consumers, should […] not be impaired.” As such, only a “general description” of the ranking mechanisms is required.
 See Article 10 of the Regulation.
 See E-Book MFNS and related matters (Case AT.40153), Commission decision of May 4, 2017.
 See Article 6 of the Regulation.
 See Italian Competition Authority Press Release of April 16, 2019 available at: https://en.agcm.it/en/media/press-releases/2019/4/Amazon-investigation- launched-on-possible-abuse-of-a-dominant-position-in-online-marketplaces-and-logistic-services.
 See Article 9 of the Regulation.
 See Article 3 of the Regulation.
 See Article 4 of the Regulation.
 See Article 11 of the Regulation.
 See Article 12 of the Regulation.
 See Article 14 of the Regulation.