A Win For Small Businesses In The Online Marketplace

As the global marketplace grows, so too does the online marketplace which facilitates it. This has led to a huge discrepancy in the opportunities afforded to large businesses compared to small and medium-sized businesses, as marketplaces and search engines do not weight them equally.

It is commonplace for the largest businesses to pay enormous sums of money just to appear within the first few search return from such platforms, as featuring below this means very few consumers will even see their page. This has meant smaller businesses that cannot compete with these large payments have not been able to assert their presence online in the same way, whatever the quality of their goods or services.

In an ever-increasingly regulated world, businesses paying money for consumer attention is something the EU is keen to moderate, in order to give smaller businesses their share of representation on online marketplaces and search engines.

The European Commission ruled on 14 February 2019 that:

  • There is to be a ban on unfair practices such as unexplained sudden account suspensions and clearer, intelligible terms of use.
  • Platforms must have transparent rankings for goods and services and disclosure of any advantages given to certain goods or services.
  • Platforms must have an internal complaint handling system (with only the smallest platforms exempt from this requirement) with the intention of more disputes being settled out of court so smaller businesses are not deterred by large court fees.
  • Business associations will be able to take platforms to court when they are not complying which will also reduce the cost for those small businesses looking to take a platform to court for non-compliance.

Elzbieta Bienkowska, Commissioner for Internal Market, Industry, Entrepreneurship, and SMEs has stated that "Our new rules are especially designed with the millions of SMEs in mind, which constitute the economic backbone of the EU." This ruling will afford these SMEs the bargaining-power they deserve, in line with the economic contribution they made to the EU.

If you would like any further information regarding this European Commission ruling, or any other advice concerning your business, please contact one of our Business & Commercial Norwich Solicitors by calling 01603 723799 or .