New regulations for online platforms

Do you run an online platform or are you planning to set up a new online platform? Starting from May next year, you will face an information obligation and new regulations. These include reviews, prices, offers, and "free" digital services. Read about the 6 changes in advance and how you can prepare for them with your online platform.

Proposal for online platforms 

The rules for online platforms are changing due to new European guidelines to protect consumers. As a result of these changes, the Ministry of Economic Affairs and Climate has drafted a bill. This will apply to online platforms. This proposal must be converted into Dutch law by November 28 of this year. The law is expected to come into effect on May 28, 2022.

Guideline

Jurist and policy advisor Vincent Romviel of Thuiswinkel.org is pleased with the new guideline. "The rules from the guideline match the new digital developments and provide equal rules for entrepreneurs in the European market. They also better protect the consumer and strengthen consumer confidence in online shopping."

Changes in online platform regulations

Waiting until May 2022 is not necessary. The changes to comply with the upcoming rules are already known. Setting up your online platform under the new rules in advance is a good idea. This will distinguish you in a positive way from competitors. Ultimately, your customers will benefit from the new rules because they will know more about your way of working.

Reviews on online platforms

Do you post reviews and ratings on your online platform? Then, from 28-05-22, you must include the following information:

1. The method by which you verify that reviews are from customers who have actually purchased and used this item. This can be done, for example, by looking for suspicious patterns, such as common short-term reviews for a particular product or the presence of the same texts for other products. 
2. Processing of both positive and negative product reviews. 
3. Presence of sponsorship or paid reviews.

It is also prohibited on social networks to post fake consumer reviews. This includes (having) likes and displaying them.

Consumers rely on opinions and recommendations. With this broader disclosure obligation, customers can better and more honestly assess whether reviews are genuine and make an informed decision to buy or not.

Romviel: "Entrepreneurs who are affiliated with rating agencies such as Kiyoh or Trustmaster, for example, meet their information obligation about reviews by indicating on their website how they handle reviews. If you are not affiliated with parties like Kiyoh or Trustmaster, then you must indicate and adhere to this yourself. We believe that the time and costs involved will not be too high."

Personalization on online platforms

Do you want to offer your customers a personalized selection of goods or services? Think of an automatic offer based on recent searches, purchase history, place of residence, or other  characteristics of customers you know. In that case, it is mandatory to inform your customers about this before they make a purchase. A pop-up or a message on the checkout page is obvious for this purpose.

The customer can choose to check whether your offer is truly attractive. This way, a customer can look for a provider who does not use this customer data or compare prices.

Advertising on online platforms

Are you familiar with them? Common ways of advertising. Such as Great discount, from amount A now for amount B. Next year, for discounts on an online platform, you can no longer rely on "random" prices. If you promote a sale, you must use the lowest price at least 30 days before the sale. This compels you to advertise fair prices and not increase the price first and then offer a discount.

You can still show discounts compared to a competitor or the recommended retail price of a specific product.

Data mining via online platforms

Do you offer "free" digital services where consumers have to provide their personal data? Then you will have to provide more information in the future about how long a customer is linked to the digital service and how the customer can unsubscribe. In any case, a customer must be able to cancel within 14 days at no cost and without giving a reason. That is the right consumers will have on your online platform. If canceled, as an online platform owner, you must immediately stop the service and delete customer data.

Obligations for online platforms

If you have your own online platform, a customer can purchase a product or service from you. But products or services can also be purchased from the entrepreneurs or consumers who offer their products or services on your online platform. The new guidelines require that consumers using your online platform be directly informed about who they are dealing with. Indicate whether it is an entrepreneur or a consumer and which conditions apply to the agreement. 

Make this information visible on your checkout page. Hiding this information in the terms and conditions of your online platform is no longer allowed, for example. 

As an online platform owner, you have an obligation to provide information and also a duty to investigate. As an online platform, you must provide information in advance about the legal status (entrepreneur or private individual) of the sellers and the terms and conditions of those who sell services or goods via the platform. 

If products or services are offered by others via your online platform, you are an online platform holder, and the above rules apply.

Search results on online platforms

Do you offer online search functions? Think of an online platform that compares energy providers, travel, hotels, or other products or services. In that case, too, you will face an extensive obligation to provide information. You must inform customers in advance about which factors determine the results of a search. You don't have to disclose your algorithms, but you must indicate on what basis the search results are produced. If companies, for example, pay for a higher position in the search results, you must be honest about that. You provide this information from the page where your search results are displayed, regardless of whether the visitor makes a purchase or not.

Compliance with rules for online platforms

Do you have an online platform? The ACM and AFM can impose fines or give offenders a deadline to resolve the incorrect situation. Fines can amount to 4% of the annual turnover of an online platform or a maximum fine of 2 million euros. If an infringement occurs more frequently, the percentage can even increase to 10% of the annual turnover of the online platform.

If your online platform does not comply with the new regulations, the Authority for Consumers and Markets (ACM) and the Financial Markets Authority (AFM) consider it unfair business practices. Enforcement will be carried out. A distinction is made in the violation based on the following aspects: nature, extent, severity, duration, and frequency. Be aware, as an online platform holder! The ACM and AFM have the authority to impose fines. They can also choose to give your online platform a deadline to resolve the incorrect situation. 

"We expect that the enforcement of the new rules by the ACM and AFM will largely be based on signals from customers," says Romviel.