To say that the past 6 months have been a testing time for the travel industry would be a fairly significant understatement. 2020 has presented a number of varied and novel challenges that have served to test even the best run business.
In the midst of this upheaval, however, the legal and regulatory landscape has not stood still. Legal developments have continued and one recent development that may easily have been overlooked, given the state of play over the past few months, comes in the form of the new EU Platform to Business Regulation (the Regulation), which came into force on 12th July 2020.
Why is this relevant to me?
The purpose of the new Regulation is, for the first time, to establish certain rules on online platforms’ trading practices with their business customers, with the intention being to create a fair, transparent and predictable business environment for businesses and traders when using online platforms.
This means that if you are the provider of an online travel platform or search engine the Regulation may apply to you and, if it does, you will need to take steps to comply with its obligations.
Conversely, if you sell online via marketplaces and platforms (for example if you are an airline or hotel that uses booking platforms or an app developer promoting your apps on third party app stores) you may benefit from the rights provided by the Regulation and so it is worth being familiar with what those rights are.
What has changed?
The Regulation imposes a number of new rules and obligations, which can be summarised as follows:
- Terms and Conditions
Platforms must ensure that their T&C’s are drafted in plan and intelligible language and include the following information (not an exhaustive list):
IP Rights - Information regarding the business user’s ownership and control of their IP rights, in an effort to clarify general usage of logos, trademarks and brand names;
Rankings - The main parameters determining ranking and the reasons for the relative importance of those main parameters as opposed to other parameters. Additionally, where ranking is influenced by remuneration, platforms must provide a description of the options available and the effects of remuneration on rankings;
Differentiated treatment - A description of any advantage the platform gives to its own goods or services over those of business users;
Most favoured nation provisions - Details of any restriction on the ability of its business users to offer same goods/services under more favourable conditions on other platforms and the grounds for that restriction.
- Minimum notice period, for changes to Terms and Conditions
The Regulation introduces (in most cases) a minimum notice period of 15 days for any changes to a platform’s T&C’s and a right for business users to terminate the contract if they do not agree to the proposed changes.
This change will be particularly welcomed by app developers who will now have some time to adapt their apps to changing T&C’s, instead of facing removal from app stores.
- Restriction, Termination and Suspension of Services
If a platform decides to restrict or suspend the provisions of its services to a business user, it must (in most cases) provide the business user with reasons for that decision prior to or at the time of the restriction or suspension taking effect.
If a platform wishes to terminate its contract with a business user the platform must provide a minimum of 30 days’ notice of termination and the notice must be accompanied by a statement of reasons why the platform is taking such action.
- Complaint Handling
Platforms will have to provide an internal system for handling complaints of business users. The complaint handling systems must be easily accessible, free of charge and ensure handling of the compliant within a reasonable time frame.
Platforms must provide details in their T&C’s of at least two mediators that can be used to settle disputes between the platform and is also obliged to bear a reasonable proportion of the total costs of mediation in each case.
However note, the above complaint-handling obligations do not apply to small enterprises.
- Obligations imposed on search engines
The Regulation imposes similar transparency obligations on search engines in relation to ranking and differentiated treatment as are imposed on platforms.
Search engines will be required to inform corporate website users of the main parameters determining ranking by providing a publicly available description and that description must be kept up to date.
Where ranking is influenced by remuneration, search engines must provide a description of the options available and the effects of remuneration on ranking must be provided.
The Regulation came into force in July and so any travel platform that is caught by it should, if it has not already, review its contracts, processes and procedures and implement any changes that are necessary to comply with its requirements.
Similarly, if you are a travel company that uses online platforms in the sale of your services, it would certainly be worth gaining familiarity of the new rights afforded to you by the Regulation, in case you encounter any problems or challenges with the platform provider, in the future.