The European Parliament, the Council of the European Union (EU) and the European Commission last week arrived at a political deal on the first-ever rules to create a fair, transparent and predictable business environment for businesses and traders when using online platforms. It will benefit traders selling online via marketplaces, hotels using booking platforms.
The new rules are aimed at creating a more predictable and transparent trading environment online and will offer new possibilities for resolving disputes and complaints, according to an EU press release.The European Parliament, the Council of the European Union and the European Commission last week arrived at a political deal on the first-ever rules to create a fair, transparent and predictable business environment for businesses and traders when using online platforms. It will benefit traders selling online via marketplaces, hotels using booking platforms.#
As part of the Digital Single Market strategy, the rules will apply to the entire online platform economy–nearly 7,000 online platforms or market places operating in the EU. Certain provisions will also apply to search engines, notably the ones concerning ranking transparency.
Small businesses will particularly benefit immediately from a ban on certain unfair practices, greater transparency in online platforms and fresh avenues for dispute resolution.
Digital platforms can no longer suspend or terminate a seller's account without clear reasons, and possibilities to appeal. The platform will also have to reinstate sellers if a suspension was made in error.
Terms and conditions must be easily available and provided in plain and intelligible language. When changing these terms and conditions, at least 15 days prior notice needs to be given to allow companies to adapt their business to these changes.
Marketplaces and search engines need to disclose the main parameters they use to rank goods and services on their site, to help sellers understand how to optimise their presence.
It is mandatory for all platforms to set up an internal complaint-handling system to assist business users. Business associations will be able to take platforms to court to stop any non-compliance with the rules.
The new rules will apply 12 months after its adoption and publication and will be subject to review within 18 months thereafter, to ensure that they keep pace with the rapidly developing market.
The EU has also set up a dedicated Online Platform Observatory to monitor the evolution of the market and the effective implementation of the rules.
A group of small Indian sellers on Amazon and Flipkart has written to the Department for Promotion of Industry and Internal Trade (DPIIT) seeking similar stricter norms and transparency so that e-commerce companies cannot arbitrarily change the terms of business and suspend accounts.
The department is reportedly drafting a policy for the e-commerce sector. (DS)
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