Tag: competition

New Rules to Improve Fairness within the Online Platform Economy

Over the past decade, online platforms (such as Shopify, Magento, Etsy, etc.) have established their presence as important economic players, connecting economic actors and boosting efficiency while spurring innovation and new business models.

As of today, they play an important role in many industries, since they allow buyers and sellers of goods and services to trade and communicate with each other. At the same time, they create network effects, and raise new issues related to fairness, transparency, and market distortions.

This ecosystem is now regulated by means of Regulation 2019/1150 on online platform-to-business relationships (P2B Regulation).

The regulation, which directly applies throughout the Union since 11 July 2020, has introduced a set of transparency rules to be followed by online platforms in their relations with business users, to address unfair and potentially harmful contractual clauses and trading practices, and lack of effective redress.

Its scope covers online intermediation services and online search engines provided, or offered to be provided, to business users and corporate website users, respectively, that have their place of establishment or residence in the Union and that, through those online intermediation services or online search engines, offer goods or services to consumers located in the Union, irrespective of the place of establishment or residence of the providers of those services and irrespective of the law otherwise applicable.

The key points covered by the regulation can be summarized as follows:

    • Terms and Conditions will have to be written in plain and intelligible language;
    • Business users will have to be informed of any modification of the Terms and Conditions;
    • Platforms will have to respect a reasonable notice period depending on the nature of the modification (minimum is fixed at 15 days) unless a business user gives an explicit agreement for this period to be shortened;
    • Providers of online intermediation services will have to provide business users with the reasons for restricting or suspending individual products/ services;
    • In case of definitive termination of the online intermediation service offered, the platform will provide the business user concerned with a statement of reasons at least 30 days in advance;
    • The providers of these services have to formulate and publish general policies on what data generated through their services can be accessed, by whom and under what conditions;
    • Providers of online intermediation services as well as online search engines will be required to clearly inform businesses about the main parameters determining how goods and services are ranked;
    • Online search engines should be transparent about any preferential treatment they give to their own products and services offered through their search sites;
    • Providers of online intermediation services will be required to explain the use of contract clauses demanding the most favourable range or price of products and services offered by their professional users;
    • Online platforms will have to set up or have in place internal complaint handling mechanisms (small enterprises with less than 50 staff members and generating ≤€10 million turnover will be exempted from this obligation);
    • Business users will have access to out-of-court dispute settlement through easily accessible external mediators (small enterprises with less than 50 staff members and generating <€10 million turnover will be exempted from this obligation);
    • Representative organisations or associations will be able to defend businesses in courts against possible infringements of the proposed rules by online platforms or search engines.

Furhtermore, an EU Observatory of the Online Platform Economy has been established to look into the current and emerging challenges and opportunities for the EU in the online economy. The observatory shall be monitoring online trends, the evolution of trading practices, and the development of national policies, in order to monitor, anticipate and solve issues arising in the online economy.

Live your Anti-Trust Legend in Greece

Private enforcement of anti-trust law is here to stay; the long awaited introduction of Law 4529/2018 on Wednesday 14 March 2018 offers a valuable tool in the hands of the Greek market player, who now plays an equally essential part in applying competition rules (private enforcement). Law 4529/2018 transposed Directive 2014/104/EU and applies to individual civil actions for damages incurred following a breach of competition law.

Key features of Law 4529/2018:

  • The Law clarifies that victims are entitled to full compensation for the harm suffered, which covers compensation for actual lossand for loss of profit, plus payment of interest from the time the harm occurred until compensation is paid.
  • Parties will have easier access to evidence  they need in actions for damages in the antitrust field. In particular, if a party needs documents that are in the hands of other parties or third parties to prove a claim or a defence, it may obtain a court order for the disclosure of those documents. The judge will have to ensure, however, that disclosure orders are proportionate and that confidential information is duly protected.
  • Any participant in an infringement will be responsible towards the victims for the whole harm caused by the infringement (joint and several liability), with the possibility of obtaining a contribution from other infringers for their share of responsibility. However, to safeguard the effectiveness of leniency programmes, this will not apply to infringers which obtained immunity from fines in return for their voluntary cooperation with a competition authority during an investigation; these immunity recipients will normally be obliged to compensate only their (direct and indirect) customers.
  • The Law establishes a rebuttable presumption that cartels cause harm. This will facilitate compensation, given that victims often have difficulty in proving the harm they have suffered. The presumption is based on the finding that more than 90% of cartels cause a price increase. In the very rare cases where a cartel does not cause price increases, infringers can still prove that their cartel did not cause harm.
  • Clear limitation period rules are established so that victims have sufficient time to bring an action. In particular, victims will have at least 5 years to bring damages claims, starting from the moment when they had the possibility to discover that they suffered harm from an infringement. This period will be suspended or interrupted if a competition authority starts infringement proceedings, so that victims can decide to wait until the public proceedings are over.
  • From 16 September 2018 onwards, all actions raised on the basis of Law 4529/2018 shall be heard before a special devision of the First Instance Court of Athens, which shall be comparted by judges specialized in competition law.