20 July 2020
Radar - July 2020 – 3 of 5 Insights
The EU Online Intermediation Regulation or Platform to Business Regulation (P2BR) came into effect on 12 July 2020 (see here for more). Some major aspects remained unclear: the way it would be enforced in the UK, and how the P2BR would apply in the UK after the end of the Brexit transition period.
The Online Intermediation Services for Business Users (Enforcement) Regulations 2020 (Enforcement Regulations) were published at the end of June. They came into force at the same time as the Regulation on 12 July 2020, and confirm that enforcement of the P2BR will be through the courts. Business users will be able to bring actions against Online Intermediation Service (OIS) providers which fail to comply with Articles 3 (terms and conditions), 4 (restriction, suspension and termination) and 8 (specific contractual terms).
Qualifying organisations may also bring proceedings for an appropriate remedy (an injunction or any other appropriate remedy or relief) to secure compliance by OIS providers with any provision referred to in regulation 3(1) or any of Articles 5, 6, 7, 9, 10, 11 and 12 P2BR.
The draft Brexit SI for the legislation has also now been published, giving greater clarity on long term application in the UK. The majority of changes replace references to the EU and EU law with ones to the UK.
Most significantly, the P2BR will apply to: "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 UK and that, through those online intermediation services or online search engines, offer goods or services to consumers located in the UK, irrespective of the place of establishment or residence of the providers of those services and irrespective of the law otherwise applicable."
There are also significant changes to Article 14, which covers judicial proceedings by representative organisations or associations which may apply to the courts to remedy non-compliance by an OIS provider. Most notably, the changes remove references to public bodies in that context. In addition, mediators outside the UK can only be identified by OIS providers where there would be no detriment to the business users in using a non-UK mediator.
Finally, the EC has published a lengthy set of Q&As by way of guidance on how to implement the requirements of the P2BR, who is caught by the legislation and who can benefit from and enforce requirements. The 58-page document goes into some detail about what OIS providers need to include in their terms and conditions, placing an emphasis on plain and intelligible language. Around half the Q&As are focused on the rights of business users selling on online platforms. Having said that, they also have a tendency to repeat the elements of the legislation.
It is now clearer how the P2BR will be enforceable in the UK and we have confirmation that there will be no regulatory oversight of compliance.
The change to the territorial scope from the end of transition means that businesses located outside the UK but contracting with a UK platform to sell to UK consumers, will not be within scope of the UK P2BR. Conceivably, UK platforms could contract with those businesses on different terms to those businesses with a UK establishment selling on the platform. Realistically though, this seems an unlikely scenario, especially where platforms have establishments in other EU countries and are aiming to harmonise their terms and conditions.
The EC guidance is helpful to UK businesses but should be read carefully in light of changes made to the post-Brexit version of the legislation which will apply in the UK. In particular, the section on public bodies enforcing against OIS providers or search engines, will not be relevant after the end of the implementation period.