EU regulation to increase openness of online platform and search engine activities
The Government proposes a new act on a prohibition procedure concerning online intermediation services and search engines. The act is based on an EU regulation, which lays down provisions on the relationship between online platforms and the companies using these in their business operations. In practice, the regulation means that, among other things, search engines must make information about matters affecting the order of search results available to companies. The regulation also indirectly improves the status of consumers.
The government proposal is concerned with national regulation that complements the EU regulation. Companies and the organisations representing them could bring a prohibition procedure aiming to end an incompatible procedure before the Market Court. The Market Court could prohibit a provider of online intermediation services, i.e. an online platform or search engine, from using a procedure incompatible with the regulation. The prohibition could be made more effective with a penalty payment. Disputes between companies will continue to be resolved in the district courts.
The regulation improves the position of companies and prevents unclear practices in expressing search results
The aim of the regulation is to increase the transparency of the activities of online platforms and to address the practices followed in the contractual relations between online platforms and companies. The regulation lays down more detailed provisions on issues such as the deadlines within which online platforms must notify the company of contractual changes or the termination of the service. The regulation also contains provisions on an obligation to provide companies with access to information affecting the order of search results displayed by the online platform or search engine. For example, platforms and search engines must indicate how payments can be used to affect the order of displayed search results.
As a result of the introduction of this regulation, online platforms will be obliged to establish an internal complaint handling system for dealing with disputes arising from the regulation and to appoint independent mediators.
The goal is to increase the trust of companies in the platform economy and increase turnover
Businesses are increasingly dependent on online platforms, as their significance in transactions between consumers and businesses has increased. The regulation aims to improve the trust of companies in the platform economy and to increase the benefits brought by the platform economy.
The regulation is expected to increase the turnover of an increasing number of companies that carry out their transactions via online platforms. The regulation would be most beneficial for smaller companies that are at a poorer position in negotiating with large platforms. Growing sales will also benefit online platforms, and the demand for the services they offer will increase.
The new prohibition procedure of the Market Court also improves the legal protection of companies providing services and goods through platforms. For example, when a company introduces a new service marketed on the platform, the Market Court may be requested to assess whether the standard conditions used in the contractual relationship between the platform and the company is compatible with the regulation. In turn, the improved legal certainty enhances the growth potential of the Finnish companies using the platforms.
The Government proposes for the act to enter into force on 12 July 2020.
Sami Teräväinen, Senior Officer, Legal Affairs, Ministry of Economic Affairs and Employment, tel. +358 295 060 088