The P2B regulation has come into force: New obligations for online platforms and search engines
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The P2B Regulation regulates some situations that can also be caught by antitrust law. In this respect, the P2B Regulation complements antitrust law.
Content of the P2B Regulation
The P2B Regulation applies to both online platforms ("online intermediation services") and online search engines. It distinguishes between these types and imposes more extensive transparency obligations for intermediation services. The European Commission offers assistance - in the form of a "Questions and Answers" catalogue - to help platform operators, but especially commercial users of the platforms, to implement the new requirements. The requirements of the P2B Regulation refer to the relationship of online brokerage services "to commercial users" and of online search engines to "users with corporate websites", respectively.
Essential content of the P2B-VO:
1. The P2B Regulation applies to the following platform types (the companies listed as examples are also listed on the Commission's website):
- E-Commerce marketplaces (Amazon Marketplace, eBay, Fnac Marketplace, etc.)
- App stores (Google Play, Apple AppStore, Microsoft Store, etc.)
- Social networks for companies (Facebook, "commercial use" of Instagram, etc.)
- Booking and price comparison portals (Skyscanner, Google Shopping, etc.)
- Online search engines (Google Search, Seznam.cz, Yahoo!, DuckDuckGo, Bing etc.)
- Business-to-business platforms
- Company owned websites
- Peer-to-peer mediations in which commercial providers are not involved
- Online payment services
- Online advertising tools or online advertising exchanges that are not provided to facilitate the initiation of direct transactions and where there is no contractual relationship with consumers
- Disclosure of ranking parameters (Art. 5 P2B Regulation)
The providers are obliged to disclose the "main parameters" that are most important for determining the ranking. This aims to make it possible for commercial users of the platforms to understand how the offered goods / services are highlighted. However, this does not apply if the disclosure would allow users to manipulate the rankings. Nonetheless, the provider must disclose if payments of fees can influence the ranking.
- The design of general terms and conditions (GTCs) (Art. 3, 6 P2B Regulation)
It is intended that the general terms and conditions should be clear and understandable - as is also the case in the German regulations of §§ 307 ff. BGB (German Civil Code) and are easily available to commercial users prior to conclusion of the contract.
In particular, the GTCs should show how commercial users and their products/services are dealt with. In this respect, the commercial users shall also be provided with concrete information regarding the indication and justification of restrictions as well as amendments to the GTCs.
In addition, the platforms must also provide information on whether and how own products or products of affiliated companies are offered on the platforms or even preferred.
- Restriction, suspension and termination (Art. 4 P2B Regulation)
Restriction, suspension and termination of services for users are now subject to conditions. For example, the provider of online intermediation services must give 30 days' notice of any termination of its services for a user and must also give reasons for such termination.
- Self-preferential treatment (Art. 7 P2B Regulation)
Providers must transparently disclose self-preferences with regard to their own products and services, insofar as these are offered via the search engine or the intermediation service. This refers to more favorable treatment with regard to rankings, fees, access to data and services, for example.
- Access to data (Art. 9 P2B Regulation)
Providers of online mediation services must explain in their GTCs the technical and contractual access or the lack thereof for commercial users to personal or other data, or both. They are therefore obliged to disclose to their commercial users the extent to which they have access to the data generated in the course of providing the services.
- Most Favored Nation clause (Art. 10 P2B Regulation)
To the extent that providers of online intermediation services restrict their commercial users in their ability to offer the same goods/services to consumers on terms that are more favorable by other means, they must state the reasons for this restriction in their GTCs and make them easily available to the public.
- Internal complaint management system (Art. 11, 12, 13, 14 P2B Regulation)
The platforms are obliged to create an internal complaints system. This system must be easily accessible and free of charge for users. The system should also mention mediators who can find amicable out-of-court solutions to disputes between the platforms and users. In addition, business interest groups shall be granted the right to bring an action in the event of non-compliance with these rules.
Antitrust law context
The P2B Regulation regulates some situations that are also caught by antitrust law. In this respect, the P2B Regulation complements antitrust law. The following constellations are possible:
Rankings
Under antitrust law, market-dominant platforms could be prosecuted for discriminating against providers by designing their rankings accordingly. An example would be an unjustifiably bad listing of users, although they provide particularly attractive / low-cost offers. The Regulation could facilitate the enforcement of antitrust law, as the platforms are obliged to publish the main parameters and such abusive behavior would attract attention.
Preference of own services
The preferential treatment of own services may constitute an infringement under antitrust law. For example, the Commission found that Google had preferred its own price comparison service over competing price comparison services on its search results pages through better placement and display.
The P2B Regulation does not prohibit self-preference as long as it is transparent. If the practice described in the context of the transparency obligation can already be criticized as being abusive, then the proof is much easier to obtain.
A further point of attack may be that the actual practice of the platform deviates from the original explanation given for preferential treatment of own services.
Suspension and termination
Should the platform refuse to (further) admit certain users, this could be critical from an antitrust law perspective, as refusals to supply could fall under the antitrust law as well (prohibition of abusive behaviour).
Due to the P2B Regulation providers are now obliged to justify such suspensions and terminations (and announce them in advance). However, a violation of the P2B Regulation does not automatically constitute a violation of antitrust law. Nonetheless, such behaviour could be followed by an antitrust investigation if the justification of a market-dominant platform was insufficient and the behaviour was discriminatory.
Data
According to the P2B Regulation, providers are obliged to disclose to their commercial users the extent to which they have access to the data processed within the scope of the use of the services. The collection of data itself is not prohibited.
Under antitrust law, there may already be a right to access data today. In the context of the 10th amendment to the German Competition Law, the claims to access to data from other companies will be clearly specified. Antitrust law claims to access to data (e.g. from competitors) could be facilitated by the transparency obligations of the P2B Regulation.
Most-favoured nation
The P2B Regulation does not prohibit most-favoured nation clauses. However, the providers must state and explain these transparently in their own GTCs.
Such clauses can be critical under antitrust law. The most prominent example is the HRS case. In the HRS case, the BKartA had prohibited the best price clauses used by HRS.
Legal consequences
With regard to the legal consequences, the questions arise whether (a) the P2B Regulation can be directly enforced by the authorities, (b) whether violations within the scope of the German law against unfair competition (UWG) become relevant and (c) how such violations have within the scope of antitrust law:
Direct, official enforcement of the P2B Regulation in Germany
Art. 15 (1) P2B Regulation stipulates that the enforcement of the regulation is carried out by the member states and that the latter are responsible for the implementation of regulations on sanctions, c.f. Art. 15 (2) P2B Regulation. According to the Federal Ministry of Economics and Energy (BMWi), there are no plans for official enforcement in Germany; rather, enforcement should be carried out by means of civil law instruments.
UWG
The focus is on the law against unfair competition (UWG). The BMWi classifies the rules of the P2B Regulation as market conduct rules in the sense of Section 3a UWG.
Non-compliance or violation of these rules constitutes an unfair act.
Unfair business practices are prohibited under Section 3 of the UWG. They can have the legal consequences listed in Section 8 and following UWG (civil law). According to the UWG, claims for removal, injunction as well as for damages can be considered.
Antitrust Law
Certain actions not only violate the P2B Regulation, but also, as described above, antitrust law. In addition, antitrust law is based on the principle that legal infringements (e.g. of the P2B Regulation) by market-dominant companies can be regarded as abuse. This is also clarified in the explanatory memorandum to the draft of the 10th amendment of the German Competition Law
In case of an antitrust law violation, official sanctions such as fines (by the FCO) as well as civil law injunctions and claims for damages are possible.
Further notes
European Commission - The "P2B Regulation"
European Commission - "P2B Regulation" - Questions and Answers Catalog
European Commission - Cartel fine against Google
The German Federal Cartel Office provides guidance on B2B Internet Platforms - Launch of a digital agricultural platform approved
BGH sets antitrust law limits to Facebook's data collection
FCO: Online hotel portal HRS's "best price" clause violates competition law - Proceedings also initiated against other hotel portals
German Bundestag, Scientific Service, Status of the implementation of the P2B Regulation, 29.4.2020 (German version only)