Platform Regulation

As of 12th July 2020, Regulation No. 2019/1150 on promoting fairness and transparency for business users of online intermediation services will apply in the countries of the European Union. The purpose of the regulation is to contribute to the proper functioning of the European internal market. The regulation is directly applicable and is not transposed into Estonian law.

Who will be affected by the requirements?

The requirements contained in the regulation apply to:

• online intermediary services such as service platforms and sales portals 
• web-based search engine providers, i.e. portals that enable internet searches

Web-based intermediary services include information society services that enable business users to offer goods and services to consumers through direct transactions, such as Kaup24, Hookusbookus.com, Osta.ee, Bolt, Wolt, etc.

The regulation does not apply to the mediation of online payment services, advertising tools, or advertisements, the purpose of which is not to facilitate the initiation of direct transactions and which do not involve a contractual relationship with consumers (for example, mediation of transactions between private individuals), e.g. Neti.ee, Kuldnebors.ee.

Business users have the right to demand compliance with the requirements arising from the regulation.  A business user is a private or legal person who operates within the scope of their economic, skill, or professional activity and offers goods or services to consumers through online intermediary services.

Since the regulation also contains requirements for search engine service providers, these provisions should also ensure fairness and transparency in the ranking of users of commercial websites in the search results obtained through the search engine. The user of a commercial website is also a natural or legal person who offers goods or services to consumers through the web interface, which are related to this person’s commercial, economic, professional, or professional activities. Such web interface can encompass any type of software, which includes websites or their components, as well as applications, including mobile applications.
 
The regulation presupposes that adherence to the specified requirements can be directly enforced either via the complaint processing system of the online mediation service provider, with assistance from conciliators in an arbitration court, or through legal action in a court of law. Unlike court proceedings, resolving a dispute through conciliation or arbitration is kept confidential, typically offers a swifter resolution process, and generally incurs lower costs.
 

Requirements for online platforms

 Primarily, the regulation mandates that service providers undertake measures to enhance the clarity of information provided to service users, who include the previously mentioned business users and users of commercial websites. Requirements include:

1.    clarity and transparency in the service conditions, as well as requirements and restrictions in the event of changes to these conditions, including notice periods (Article 3)
 
2.    specified conditions for limiting, suspending and terminating the services offered (Article 4)
 
3.    ensuring informative clarity when ranking goods and services or search results (Article 5)
 
4.    ensuring informative clarity in the offer of goods and services related to purchase or search (Article 6)
 
5.    ensuring informative clarity in the presence of differentiated treatment, if, like other business users, the intermediary themselves or a business user controlled by them also offers competition (Article 7)
 
6.    special contractual provisions that intermediary service providers must comply with (Article 8)
 
7.    ensuring informative clarity regarding access to data related to the business user (Article 9)
 
8.    ensuring informative clarity regarding restrictions on the supply of goods and services offered through other channels (Article 10)
 
9.    the requirement to create an internal complaint processing system (Article 11)
 
10.    requirement to appoint two or more conciliators for extrajudicial conciliation proceedings (Article 12)
 

Internal complaints handling system
 

The complaints handling system must allow business users to submit complaints to the online intermediation service provider on the following issues:

• the service provider has allegedly failed to fulfil an obligation set out in the regulation, which affects the business user making the complaint
• technological problems directly related to the provision of online mediation services that affect the complainant
• measures taken by the service provider or his conduct, which is directly related to the provision of online mediation services and which affects the complainant.

The creation of an in-house complaint handling system is not mandatory for small enterprises with fewer than 50 employees and an annual turnover and/or balance sheet volume of less than EUR 10 million.

Conciliation and finding and appointing conciliators

 
Conciliation is an out-of-court dispute resolution option, where the parties choose a conciliator or turn to a conciliation body. The conciliator can be a notary public, attorney-at-law or other person designated by the parties to the dispute. The agreement concluded as a result of the conciliation procedure is mandatory for the parties.

The regulation requires providers of online mediation services to designate in their terms and conditions two or more conciliators with whom they are willing to work to reach an out-of-court settlement with business users in a dispute related to online mediation services, including complaints that could not be resolved through the enterprise's internal complaint handling system.

Conciliators offering mediation services located outside the European Union may only be appointed if it is ensured that business users seeking mediation are not deprived of the opportunity to exercise legal remedies provided for by European Union law or national law.

Finding and appointing conciliators is not mandatory for small enterprises with fewer than 50 employees and an annual turnover and/or balance sheet volume of less than EUR 10 million.