Europe wants to better protect sellers on marketplaces

Europe wants to better protect sellers on marketplaces

The European Parliament, the Council of the European Union and the European Commission want rules to make it easier for businesses and traders to use online marketplaces and platforms. They have now agreed to set up seven new rules to improve the fairness of online platforms’ trading practices.

The new rules are aimed at traders who sell online via marketplaces, hotels using booking platforms and app developers selling their apps online. The goal is to create a more predictable and transparent trading environment online, the European Commission says.

42% of SMEs use online marketplaces

It’s no surprise Europe is proactively trying to protect online sellers. Almost half (42 percent) of small and medium-sized enterprises in the European Union uses online marketplaces to sell their products and services. And nearly 50 percent of these companies experience problem. About 38 percent of problems regarding contractual relations remain unsolved, while 26 percent are solved but with difficulties. And this results in about 2 billion euros that are lost directly in sales.

7,000 online marketplaces operate in the EU

There are approximately 7,000 online marketplaces and platforms operating in the European Union. These are not only big players, such as Amazon, or eBay, but also very small startups. And these platforms often have an important bargaining power towards business users, the EC writes.

These are the seven new rules that should apply to not only online marketplaces and platforms, but also to search engines:

  • No more sudden, unexplained account suspensions
  • Plain and intelligible terms and advance notice for changes
  • Transparent ranking
  • Mandatory disclosure for a range of business practices
  • All platforms must set up an internal complaint-handling system to assist business users
  • Platforms will have to provide businesses with more options to resolve a potential problem through mediators
  • Business associations will be able to take platforms to court to stop any non-compliance with the rules
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