Sweeping new rules that will have significant impact on how digital marketplaces like Google Shopping and Amazon operate within the European Union go live today.
Those operating in or running digital marketplaces will be required to be more transparent in how they rank products in searches, the readability of terms and conditions, and how they approach data processing. The rules also aim to make it easier for businesses to reach out-of-court dispute settlements.
The new rules will instrumentally affect how companies rank products: “According to the new transparency rules platforms must exhaustively disclose any advantage they may give to their own products over others,” the agreement states.
“They must also disclose what data they collect, and how they use it – and in particular how such data is shared with other business partners they have. Where personal data is concerned, the rules of the GDPR apply,” the EU determined.
The rules mandate that platforms must build internal complaint-handling systems that work with businesses to remedy problems.
Very small companies with low employee numbers will be exempt from this requirement, however no clear limit on headcount has been defined.
EU Digital Marketplace
With the new regulations platforms must make the processes in which they rank products and services transparent to sellers. This is done so sellers not only understand the systems their products are placed in, but it also allows everyone to have an equal chance in optimising their presence in the market. “The rules aim to help sellers without allowing gaming of the ranking system,” the EU has said.
The terms of the rules were agreed by the European Parliament, the Council of the European Union and the European Commission late last night. They described them as “the first-ever rules aimed at creating a fair, transparent and predictable business environment for businesses and traders when using online platforms.”
The European Commission stated: “This unique set of European rules establishes obligations for online platforms and search engines within the Single Market, allowing companies to better understand their rights, especially with regard to ranking in search results, access data and dispute resolution. Thanks to the improved competition principles ensured by these rules, consumers will benefit from a wider choice of goods and services, of better quality and at lower prices.”
Companies have until July 2020 to fully comply.