The Marketplace Minefield: Is Your Online Platform P2B Compliant?

By Karam Bhatti, Solicitor in Myerson Solicitor’s Commercial Team

E-commerce marketplaces, online platforms, and other online intermediaries have become an increasingly popular avenue for businesses to market goods and services, both within the UK and globally.

Their popularity stems from several advantages they offer, particularly for SMEs, such as:

• Access to additional channels for marketing and sales
• Reduced marketing costs compared to traditional sales channels
• Convenience for consumers, enabling easy shopping and price comparison

With the growing dominance of online marketplaces, the UK Platform to Business Regulation (P2B Regulation) came into effect on 12 July 2020, following Brexit transition agreements.

This regulation has three primary objectives:

1. To regulate the relationship between platform providers/online marketplaces and the business users who use them to reach consumers
2. To foster a transparent and predictable trading environment on online platforms
3. To prevent imbalances, commercial inequalities, and abusive trade practices by platform providers that control access to vast consumer bases

 

What Are the P2B Regulations and Who Do They Apply To?

 

The P2B Regulation complements existing competition law, aiming to prevent market distortion and promote fair competition without overburdening platform providers. It addresses the perceived imbalance between online intermediaries and their business users.

While the regulation traditionally applies to e-commerce marketplaces like Amazon or eBay, it increasingly captures more holistic platform services, such as booking and food delivery platforms, which may not fit the conventional marketplace model but function as intermediaries connecting businesses to consumers.

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

• Serve business users or corporate websites based in the UK
• Facilitate the offering of goods or services to consumers in the UK

This includes:

• E-commerce marketplaces (e.g., Amazon, eBay, Etsy)
• App stores (e.g., Apple App Store, Google Play Store)
• Price comparison websites (e.g., Go Compare, Skyscanner)
• Search engines (e.g., Google, Bing)

It also captures platform services that enable businesses to showcase and transact with consumers, typically for a commission or subscription fee. Examples include booking platforms and food delivery platforms.

However, the regulation does not cover:

• Peer-to-peer intermediation services
• Business-to-business intermediation services with no consumer interaction
• Online payment services
• Online advertising tools or exchanges

Compliance and Key Requirements of the P2B Regulations

 

The P2B Regulation requires platform providers to enhance transparency and adopt fair practices. Compliance involves two main areas:

1. Contractual Requirements: Ensuring terms and conditions include specified information and are publicly accessible
2. Operational Requirements: Establishing processes like complaints handling and offering mediation for disputes

 

Key Contractual Requirements

 

Platform providers must ensure their commercial terms and conditions:

• Are written in plain and easy-to-understand language
• Are readily accessible to business users before and during the contractual relationship

The terms must also detail:

• Circumstances under which the platform may suspend, terminate, or restrict intermediation services
• How the terms impact business users’ intellectual property rights
• Any preferential treatment given to goods or services offered by the platform provider or connected entities
• Distribution channels or affiliate programs the platform operator uses to market business users’ offerings
• Parameters for ranking goods and services, including the impact of additional payments on ranking
• Conditions for contract termination by business users
• Exclusivity obligations preventing business users from selling on different terms, along with justifications for these restrictions
• Data access and hosting rights post-contract termination, including details on uploaded or processed data

 

Operational Requirements

 

Platform operators must also implement key operational practices, including:

• Clearly identifying business users on the platform
• Providing at least 15 days’ advance notice of changes to terms and conditions in a durable medium
• Offering at least 30 days’ notice before terminating online intermediation services
• Establishing a complaints handling procedure
• Identifying at least two mediators for dispute resolution, ensuring they possess relevant commercial expertise

Why Compliance Matters

 

Failing to comply with the P2B Regulations can lead to significant consequences for platform providers, including:

• Business user claims for loss or damage resulting from non-compliance
• Terms and conditions being declared null, void, and unenforceable by courts

Compliance is essential not only to avoid legal risks but also to maintain trust and transparency with business users and consumers.

Technology law specialists can assist your business in navigating the complexities of P2B compliance. Myerson Solicitor’s provide tailored advice on your obligations and draft terms and conditions that meet all P2B Regulation requirements.