New regulation to facilitate online trading and help consumers
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A new regulation has been endorsed to facilitate online trading and help consumers identify best value deals.
MEP Francis Zammit Dimech , said “online platforms and search engines are crucial for entrepreneurship and trade. They open access to new markets and commercial opportunities for businesses and SMEs. They also provide consumers with benefits by increasing their choice of goods and offer competitive prices online.
“This is why regulating this sector and ensuring transparency and fairness is crucial and why this vote is a step forward for businesses and consumers,” the MEP added
Zammit Dimech made these remarks after his proposals on a regulation promoting fairness and transparency for businesses using online platforms were endorsed by the European Parliament’s Committee on Internal Market and Consumer Protection (IMCO).
Zammit Dimech’s report received backing from all political groups earlier last month and was approved unanimously (24 votes in favour, 0 abstentions and 0 against) in the Committee on Legal Affairs (JURI) which has shared competence on the dossier.
The MEP explained that consumers make use of business on platforms for goods but also for services such as flights and accommodation when travelling basing their choice on search results and information provided by business on platforms.
In his report Zammit Dimech made legislative proposals to ensure transparency in terms of ranking used by platforms and therefore the prominence given to products/services in search results.
As a result, platforms should disclose the principles underlying the parameters determining ranking without disclosing trade secrets, the MEP said.
“This implies that small SMEs will now have more information on how to market their products.”
Zammit Dimech said that his proposals reflect the views of various stakeholders with whom he met over the past months both in Malta and Brussels.
Zammit Dimech thanked in particular the Malta Business Bureau (MBB) and representatives of the hospitality sector for their contribution.
Speaking at the ARISE Tourism Conference, Zammit Dimech a former Tourism Minister said that through his report he called for data collected through platforms as a result of commercial activity of a business user to be made available to the respective business.
“This is data that concerns the sector and which is vital to study in order to provide customers with a better service and to improve targeted marketing. Data is considered as the new oil and that is why I have supported SMEs in their argument asking for such data to be made available to them. Of course, measures have been taken to ensure that data protection of EU citizens is also respected” added Zammit Dimech.
The legislation also provides various safeguards to SMEs including to be informed in case changes are made in the terms and conditions of platforms, and the possibility to terminate any agreement without any charge in case modification done by the platform are detrimental to businesses.
He said that “noting that some platforms might have additional distribution channels and affiliates programmes, businesses using platforms have also been granted the right to be informed about this and granted the right to ask for their removal from such additional channels.”
The proposals of Zammit Dimech also included improvement on the internal complaint-handling system calling for equal treatment of businesses without retaliation on businesses using the system. A list of unfair commercial practices have also been outlined to encourage platforms to steer away from such practices.
One example includes when platforms prohibit businesses from using competing platforms to promote other services and products. The MEP added that, “safeguards have also been taken to protect consumers obliging businesses to provide accurate data of their goods and services including all elements of the price and their legal obligations vis-a-vis the consumer.”
Following approval in IMCO, inter-institutional negotiations between the European Parliament, Council and Commission will kick-off shortly. Zammit Dimech will be co-representing the European Parliament.