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Draft opinion on regulation for online intermediation services

Platforms should be required to disclose the principles underlying the parameters determining ranking, but not the algorithms themselves, which should be considered to be trade secrets. It is similarly very important to distinguish between a transaction and the initiation of a transaction. A simple search for a product or service on a search engine should not be considered to be an initiation of a transaction but merely a request for information which could lead to the initiation of a transaction.

Online intermediation services and online search engines, as well as the transactions facilitated by those services, have an intrinsic cross-border potential and are of particular importance for the proper functioning of the Union’s internal market in today’s economy. The potentially unfair and harmful trading practices of certain providers of those services in respect of business users and corporate website users hamper the full realisation of that potential and negatively affect the proper functioning of the internal market.

In addition, the full realisation of that potential is hampered, and the proper functioning of the internal market is negatively affected, by diverging laws of certain Member States which, with a varying degree of effectiveness, regulate those services, while other Member States are considering adopting such laws. Since online intermediation services and online search engines typically have a global dimension, this Regulation should apply to providers of those services regardless of whether they are established in a Member State or outside the Union, provided that two cumulative conditions are met.

Firstly, the business users or corporate website users should be established in the Union. Secondly, the business users or corporate website users should, through the provision of those services, offer their goods or services to consumers located in the Union at least for part of the transaction. Such consumers should be located in the Union, but do not need to have their place of residence in the Union nor have the nationality of any Member State.

Accordingly, this Regulation should not apply where the business users or corporate websites users are not established in the Union or where they are established in the Union but where they use online intermediation services or online search engines to offer goods or services exclusively to consumers located outside the Union or exclusively to persons who are not consumers.

A wide variety of business-to-consumer commercial relations are intermediated online by providers operating multi-sided services that are essentially based on the same ecosystem building business model. In order to capture the relevant services, online intermediation services should be defined in a precise and technologically-neutral manner. In particular, the services should consist of information society services, which are characterised by the fact that they initiate transactions between business users and consumers, irrespective of whether the transactions are ultimately concluded on the online portal of the provider of the online intermediation services in question or that of the business user.

In addition, the services should be provided on the basis of contractual relationships both between the providers and business users where providers act as intermediaries towards consumers. Such a contractual relationship should be deemed to exist where both parties concerned express their intention to be bound in an unequivocal and verifiable manner, without an express written agreement necessarily being required. However, it is clarified that this definition covers voice search as well as online search engines that directly return the information related to the requested content.

In order to protect business users it should be possible for a competent court to establish that non-compliant terms and conditions are not binding on the business user concerned, with effects ex nunc. Any such finding by a court should however only concern the specific provisions of the terms and conditions which are not compliant. The remaining provisions should remain valid and enforceable, in as far as they can be severed from the noncompliant provisions. Sudden modifications to existing terms and conditions may significantly disrupt business users’ operations. In order to limit such negative effects on business users, and to discourage such behaviour, modifications made in contravention of the obligation to provide a set notice period, should therefore be null and void, for the duration of that notice period.

For the purposes of this Regulation, a provider’s service competes with those of its other business users if it is regarded as interchangeable or substitutable by consumers of the online intermediation service, including by reason of the characteristics, prices, or intended uses of the services. Business users should be granted full control over their own intellectual property rights. Providers of online intermediated services should make use of these rights only upon explicit consent of the business user. The terms of use of such rights should be adhered to.

Providers of online search engines shall set out for corporate website users the main parameters determining ranking, by providing an easily and publicly available description, drafted in clear and unambiguous language on the online search engines of those providers. They shall keep that description up to date with regard to material changes that can reasonably be expected to affect corporate website users in a non-negligible manner. Providers of online intermediation services and providers of online search engines shall not be required to disclose any information that would be likely to facilitate either the manipulation of results or the deception of consumers.

Providers of online intermediation services shall provide an easily available description of the main types of problems businesses may face when using the online intermediation service. That information shall include the total number of complaints lodged, the main types of complaints and the average time period needed to process the complaints.

Providers of online intermediation services should aim to identify in their terms and conditions one or more mediators with which they are willing to engage to attempt to reach an agreement with business users on the settlement, out of court, of any disputes between the provider and the business user arising in relation to the provision of the online intermediation services concerned. The parties involved in the mediation shall engage in good faith in any attempt to reach an agreement through the mediation of any of the mediators which they identified, with a view to reaching an agreement on the settlement of the dispute within a time period of no longer that 25 days from commencement of the mediation, unless fulfilling this deadline would constitute an unreasonable burden taking into account the complexity of the dispute. In this case, an agreement should breached within a time period of no longer than 90 days.

Should the mediator find that the business user is acting in bad faith or is seeking to abuse the mediation process, it can decide to make the business user bear more than half of the total cost. Any attempt to reach an agreement through mediation on the settlement of a dispute in accordance with this Article shall not affect the rights of the providers of the online intermediation services and of the business users concerned to initiate judicial proceedings at any time during or after the mediation process. Initiation of judicial proceedings is not conditional on the initiation of mediation process.