rules to make online trading platforms more transparent

Feb

14

2019

EU adopts
According to new EU regulations, technology companies will soon have to make clear how they arrange products on their own platform. The EU hopes that this will prevent unfair commercial practices.

Marketplaces and search engines have to show with the new rules how they rank goods and services on their site, so sellers understand how they can improve their visibility. The idea is to be able to help sellers, without being able to manipulate the ranking system in order to come out better as a company company.

Some market places are not only providers of a platform, but also supply goods or services on the platform themselves. For example, if you search for a music service in the Google Play store, you will also see a service from Google itself, Google Play Music. According to the new rules, providers must make clear if and how their platform gives advantages with respect to its own products over another. In the Google example, the internet giant should therefore indicate whether and how they favor Play Music compared to, for example, Spotify. In addition, platform providers must indicate which data they collect, what they do with them and how they share that data with partners.

Furthermore, digital platforms will soon not be able to simply remove or suspend an account from a seller without a clear reason and the seller must be able to appeal. The platform must also restore a vendor’s account if a suspension is unjustified. The terms and conditions must be readily available and in plain language and when adjusting the conditions, sellers must receive at least fifteen days to comply. If the changes in the conditions require ‘complex adjustments’ from a salesperson, they need more time.

Platforms must further develop an internal complaint system to help business customers. Platforms with few employees or sales do not have to comply with this. Digital marketplaces also need to offer business customers more opportunities to solve any problems with mediators. This way more conflicts can be solved outside the courtroom, which saves companies a lot of time and money.

Business customers can, according to the new rules, sue platforms if they do not comply with the new legislation. According to the EU, that would remove the fear of retaliation and the legal costs would be a disadvantage for the companies. Member States have the possibility to give public institutions enforcement powers, so that companies can go to these institutions.

According to the EU, there are about seven thousand platforms and trading places that will be subject to these new rules, including large companies such as Google, Amazon and Apple, to small start-ups. A study commissioned by the EU indicates that 42 percent of all small and large companies use online marketplaces. According to a separate EU estimate, almost half of all European companies trading on such markets experience problems with the platforms.

After publishing the rules companies have a year to meet them. After that period, the new regulations come into force.

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In: A Technology & Gadgets Asked By: [23633 Red Star Level]

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