How the UK’s Platform to Business Regulation impacts e-commerce

The P2B Regulation stipulates what a platform must include in its terms and conditions with business users and what a platform must put into practice. While these two sets of requirements are not distinguished in the regulation itself, it can be helpful to separate them, working on the contract in isolation first, before then ensuring compliance with the operational requirements.

What is the Platform to Business Regulation?

The P2B Regulation is an EU regulation which came into force in the UK in accordance with the Brexit transition agreements. The retained regulation came into force on 12 July 2020 and seeks to prevent market distortion and encourage healthy competition, without placing an administrative burden on platform providers.

Because the development of strong marketplace brands has created a potential imbalance in the online trading landscape, the P2B Regulation tries to address that perceived imbalance between the providers of e-commerce platforms and online search engines on the one hand, and their business users on the other.

Who does the P2B Regulation apply to?

The UK P2B Regulation applies to online intermediation services and online search engines:

• that provide their services to business users and corporate websites that are established in the UK; and
• offer goods or services to consumers located in the UK.

The UK P2B Regulation therefore applies to e-commerce marketplaces.

The regulation sets out what must be included in the terms and conditions relating to the provision of the online intermediation services and search engines. If caught by the regulation, the platform is required to provide certain specified detail and information in its T&Cs. The regulation also has operational requirements weaved throughout it which, while not contractual, still need to be put into practice in the online service provider’s business.

Contractual requirements

Online service providers must include a description of any ancillary goods or services offered to consumers by the platform or by third parties in their T&Cs, as well as a description of whether the seller is able to offer its own ancillary goods or services. Online service providers must also include in their T&Cs:

• details of an internal complaint handling system;
• details of two mediators appointed for handling disputes;
• preferential treatment the platform may give to its own products vs seller products;
• the rights that a business user has to terminate the online services;
• any exclusivity obligations which restrict sellers from selling goods and services on different terms elsewhere, and reasons for such restrictions; and
• any access rights that sellers have to the platform’s collected data

Online service providers should also include information on the type of data they collect and maintain during and after the termination of the services. While the UK P2B Regulation doesn’t restrict the platform’s ability to use and share data, transparency is still required. If data is shared with third parties in a way that is not necessary for the proper functioning of the service, the description in the T&Cs needs to explain the purpose of such data sharing and how business users can opt out of such data sharing.

Operational requirements

In addition to the regulation’s contractual requirements, the P2B Regulation also imposes a number of operational requirements. Online service providers must ensure that sellers are clearly identifiable on the platform and maintain transparency at all times. When changing their T&Cs, online service providers must give sellers at least 15 days’ written notice. Notice periods do not apply where changes to T&Cs are required by law, or are needed to address an unforeseen danger – such as to protect users from fraud.

Online service providers must give 30 days’ written notice when terminating a contract and must include a statement of reasons for terminating, suspending or restricting the contract. Exceptions to this rule include when a seller has repeatedly breached the terms of its contract; when there is a legal or regulatory obligation to terminate a contract without notice; or there is an ‘imperative reason’ under the law to do so. In these cases, however, a statement must still be provided to the business user without undue delay and be accompanied by a statement of reasons – unless the online service provider is not allowed to give reasons by law.

When dealing with disputes, an online service provider must appoint two mediators, and ensure that both have relevant commercial understanding and experience. They must also make the effectiveness of their internal complaint-handling system publicly available. This information includes the total number of complaints lodged, the types of complaints and the average time period needed to process the complaints.

Continued compliance

Although some of the P2B Regulation’s requirements may not be applicable to a business initially, they could become relevant if the scope of the business changes in nature. For example, a business might begin selling its products and services to customers outside of the UK. If this happens, the business should update its T&Cs to reflect the change to ensure continued compliance with the P2B Regulation. It should also consider further regulatory requirements, like compliance with the Digital Services Act.