New Commission digital market proposal will protect SMEs, says the EESC

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The new regulation on the digital single market proposed by the European Commission will not only protect e-commerce consumers, but - for the first time ever - SMEs too. Business operating on online platforms and search engines will be able to resolve possible conflicts out of court. This is the progress highlighted by the opinion drafted by Marco Vezzani and adopted by the EESC plenary session on 19 September 2018.

According to a Commission study, almost 50% of European businesses operating on online platforms encounter problems. In 38% of cases, problems arising from contractual relations are not resolved, while in 26% they are resolved, but only with difficulty. To date, European legislation has focused on defining the relationship between businesses and consumers in online trade (B2C), whereas the relationship between businesses and online platforms (B2B) has never been dealt with decisively.

For this reason, with a view to increasing fairness and transparency, the Commission has decided to tackle the business relationship between SMEs and online platforms as part of the review of the digital single market strategy. We welcome this Commission's proposal as a first attempt to regulate B2B relations in the area of e-commerce and to protect business users of online intermediation services, said Mr Vezzani. However, this regulation alone cannot resolve all the problems of the digital single market, he continued. Global players and business users, in particular SMEs, have a different strength in this highly dynamic and complex market. The Commission should establish clear boundaries and relationships between stakeholders and combat abuse of a dominant position.

In order to fine-tune the new regulation, the Committee is putting forward the following proposals.

  • Extrajudicial resolution of conflicts

The EESC is in favour of introducing mechanisms for settling disputes out of court and recommends that harmonised criteria be identified, guaranteeing the independence of mediators. Chambers of commerce already perform these activities effectively at national level and could be a valid option.

  • Fighting abuse of a dominant position

The Committee recommends including in the regulation a ban on "price parity clauses", which force business users to quote their lowest price on a given online platform, rather than on other online platforms or their own website. This practice hinders competition, reinforces the position of online platforms currently in operation, turning them into oligopolies or monopolies, and prevents the development of new ones. On the contrary, it is vital that consumers be able to buy goods and services at lower prices and that new online platforms be able to grow and operate with existing ones on a level playing field.

  • Social dimension of digitalisation

The EESC also urges the Commission to take prompt action on the social dimension of digitalisation. Social dialogue must remain the cornerstone, and issues like wages, contracts, working conditions and hours of people employed either through digital platforms or to provide services connected to these platforms should be dealt with swiftly.

  • Setting up the EU Observatory on the Online Platform Economy

Finally, the Committee suggests establishing the EU Observatory on the Online Platform Economy and contributing to its work through a delegate, who will act as an observer and help convey the views of civil society organisations. The observatory will have a key technical and political role to play: it will support the Commission by analysing developments in the digital market and assessing the implementation and impact of the regulation. The findings will be used in the three-yearly review of the proposal for a regulation.

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