Online platforms connect traders with buyers. In Regulation (EU) 2019/1150 of the European Parliament and of the Council of 20 June 2019 on promoting fairness and transparency for business users, platforms are legally termed "providers of online intermediation services".
The Regulation governs P2B (Platform-to-Business) relations to ensure a predictable and fair online business environment. Given the economic position of platforms and their ability to influence the market, the goal of the Regulation is to provide business users with adequate protection in their relations with platforms—similar to the protection consumers have against traders.
The same Regulation also legally regulates online search engines and the transparency with which the ranking of a given good or service must be conducted (including when it results from an SEO optimization contract). A legal framework is also provided for:
-
The internal complaint-handling system.
-
The restriction, suspension, or termination of the provision of services to business users.
-
Legal remedies for business users.
-
The encouragement of drawing up codes of conduct by providers of intermediation services.
Who is a provider of online intermediation services?
A provider can be a natural or legal person that provides, or offers to provide, online intermediation services to business users. These services are characterized by the following three criteria:
-
They constitute information society services (within the meaning of Directive (EU) 2015/1535).
-
They allow business users to offer goods or services to consumers, with a view to facilitating the initiating of direct transactions between those business users and consumers.
-
They are provided to business users on the basis of contractual relationships between the provider and the business user.
Territorial Scope of the Regulation
The Regulation applies to providers established in an EU Member State, as well as to those outside the EU, provided two cumulative conditions are met:
-
The business users (or corporate website users) must be established in the EU.
-
Through the provision of those services, the business users offer their goods or services to consumers located in the EU, for at least part of the transaction.
Important: The consumers must be located in the EU, but they do not need to have their place of residence in the Union, nor do they need to be citizens of a Member State. The Regulation applies regardless of the law otherwise applicable to the specific contract under the rules of private international law.
Criteria for directing activities to the EU
To determine whether a business is offering goods to consumers in the EU, it is assessed whether it is apparent that it directs its activities to those Member States (in accordance with the case law of the Court of Justice of the EU). Indicators for this can include:
-
The international nature of the activity.
-
Mentioning itineraries from other Member States to the place where the trader is established.
-
Use of a language or currency other than that generally used in the Member State where the trader is established.
-
The possibility of making and confirming the reservation in that other language.
-
The use of telephone numbers with an international dialing code.
-
Outlay of expenditure on an internet referencing service (SEO) to facilitate access to the trader’s site by consumers domiciled in other Member States.
-
Use of a top-level domain name other than that of the Member State in which the trader is established.
-
Mention of an international clientele.
Types of Platforms from a Technical Perspective
From a technical point of view, platforms fall into two main categories:
-
SaaS (Software as a Service): The provider manages the platform for a fee and provides hosting, maintenance, and technical updates.
-
Open source code: Maintenance and hosting must be provided by the user themselves or by a hired third party.
Mechanisms for Concluding Contracts through Online Platforms
Concluding a contract with the help of a platform can be carried out through two main models:
1. The Distributor Model (Marketplace)
The platform acts as a pure intermediary—it connects the trader and the customer for a commission. It can be compared to a virtual mall housing individual stores.
-
Specifics: The customer concludes a contract directly with the specific trader, not with the platform.
-
Liability: The responsibility for defective goods and compliance with legislation (e.g., the ban on geoblocking) lies with the individual trader. (Example: Amazon Marketplace).
2. The Representation Model (Retailer)
Here, the platform acts as a trader itself and concludes the contract directly with the end customer.
-
Specifics: The platform acquires the goods from the trader, assumes the risk, and resells them to buyers.
-
Liability: Because the platform is a party to the contract as a seller, it bears the responsibility to the consumer for any non-conformity of the goods. (Example: Direct sales by Amazon).
General Terms and Conditions in P2B Contracts
Contracts between the trader and the platform are usually based on General Terms and Conditions drafted by the provider of the intermediation services. They most commonly regulate:
-
The allocation of liability.
-
The protection of intellectual property and copyrights.
-
Compensation upon contract termination.
-
The use of advertisements and goods insurance.
-
Non-compete clauses, pricing rules, and conditions for terminating access.
In Conclusion
The legal framework inevitably follows the rapidly developing social relations in the digital age. The new regulations offer solutions that are absolutely necessary to establish a transparent, stable, and predictable business environment, overcoming the obstacles of cross-border contracting.