Written by Claire Leonelli and Claire Denoual, Avocats à la Cour
Published on 15.10.2019
The European legislator has just adopted a series of rules designed to protect professionals who use online platforms designed along the lines of marketplaces or uberization to find their customers.
Popularized a few years ago by Maurice Lévy and entered the dictionary in 2017, the term "uberisation" refers, in a general way, to the new models of the digital economy consisting essentially of putting individuals in contact with individuals (CtoC) or professionals with consumers (BtoC). If the principle of such intermediation is not new - let's remember the classified ads published by everyone in the newspapers - their disruptive effect on the traditional channels of the economy inherent to their digital dimension is.
Some people welcome these new models as allowing a movement of liberation for employees and an increase in the purchasing power of consumers, while others see in them a risk of diluting social benefits and an unfair threat to traditional businesses.
The European legislator did not intend to interfere in this debate and preferred another angle of attack: the Platform to Business (PtoB) relationship.
We knew the BtoC (Business to Consumer), the BtoB (Business to Business), we now discover the PtoB (Platform to Business)
The new European regulation n°2019/1150, adopted on June 20, 2019, is based on the observation that professionals who use online platforms to contact potential customers are in a weak position when faced with general conditions that are imposed on them without any possibility of negotiation. The logic followed is then similar to the one in place in consumer law, as well as the objective pursued: to rebalance the balance of power.
However, GAFA are not the only ones concerned by this new regulation. Any platform that connects professionals and consumers, regardless of its purpose, size or market share, will have to comply.
This includes marketplaces, i.e. eCommerce sites acting on behalf of third parties (Amazon, eBay, Rakuten, Letzshop, etc.), price comparison or booking sites (Tripadvisor, Kayak, Booking, etc.), application stores (Google Play, App Store, Galaxy Store, etc.) or social media reserved for professionals. New entrants in this type of PtoB model will have to take these new parameters into account. On the other hand, platforms that connect individuals (e.g. Blablacar, Airbnb, LeBoncoin, etc.) or eCommerce sites for their own account are not affected.
More than 7,000 online platforms or marketplaces operating in the European Union are impacted by these new rules that will come into force on July 12, 2020.
In concrete terms, what does the protection offered by this new regulation consist of?
Primarily, through greater transparency.
The platform must have clear, understandable and easily accessible general conditions. Any modification will have to be notified at least 15 days in advance in order to allow sellers to adapt their activities to the changes made, or, if necessary, to terminate their contract.
The key metrics used to rank goods and services will need to be communicated to sellers to help them understand how to positively influence their ranking.
Marketplaces that also act as sellers and not just intermediaries will have to make public any advantages they give to their own products over those of other sellers.
The regulation also aims to put an end to certain unfair practices by online platforms, such as sudden suspension of user accounts or delisting.
From now on, online platforms will have to very clearly define the grounds for suspension or termination of their services in their terms and conditions. They will not be able to suspend or close a seller's account without a clear reason having been previously notified to him or the possibility of appeal.
Finally, given that sellers are currently often blocked without being able to appeal or find an effective and immediate solution to their complaints, the regulation provides that, except in exceptional cases, platforms will have to set up an internal and free system for settling disputes that may arise between the platform and professional sellers (for example, related to non-compliance with the platform's general terms of use).
The regulation will come into effect on July 12, 2020, giving platforms and their lawyers time to adapt. As of that date, any provision of the general terms of use that does not comply with the regulation will be deemed null and void. This will deter any potential recalcitrant users!