European Commission sets new online rules for small businesses

By Sommer Brokaw  |  April 26, 2018 at 3:05 PM
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April 26 (UPI) -- The European Commission proposed a new set of rules on Thursday regarding online platform transparency and fairness to protect small business and traders.

The new rules require online intermediation service providers to make their terms and conditions for professional use easy to understand, according to a commission news release. In particular, the rules must spell out why a user would be disciplined or suspended from the online platform in advance of the discipline. Professional users must also be given reasonable notice before terms and conditions are changed.

The providers are also required to publish general policies on what data is accessible through their services, who can access the data and under what terms they can access it. Transparency in how goods and services are ranked in search engine results must also be improved under the new rules.

"The aim of the new rules is to create a fair, transparent and predictable business environment for smaller businesses and traders when using online platforms," the release states. "Businesses such as hotels, traders selling online, app developers, and other similar companies that rely on search engines for attracting internet traffic to their websites are amongst those who will benefit from the new rules."

Another change proposed is improving dispute resolution to resolve disagreements more effectively through qualified mediators. A European Union observatory will also be set up to monitor the impact of the new rules.

Forty-two percent of the small and medium companies who responded to a recent Eurobarometer survey said they use online marketplaces to sell their products and services.

Thursday's legislative proposal of the new rules follow European Commission President Jean-Claude Juncker's guidance in his State of the Union announcement last year to initiate online platforms that "safeguard a fair, predictable, sustainable and trusted business environment in the online economy."

It also follows a mid-term review of the digital market that urged legislators to take action.

"Platforms and search engines are important channels for European businesses to reach consumers, but we must make sure they are not abusing their power, and thus bring harm their business users," said European Commissioner Mariya Gabriel. "We are taking a very important step with clear rules on transparency, efficient dispute settlement and the launch of an observatory to analyse[sic] online platforms' practices in greater detail. Ensuring that platforms and search engines treat other businesses fairly is critical including for promoting trust in online platform environment in the EU."

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