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Mandatory Mediation for Online Platforms and Business Users: P2B Regulation

Regulation (EU) 2019/1150  of the European Parliament and of the Council of 20 June 2019 on promoting fairness and transparency for business users of online intermediation services (“Platform to Business Regulation” or “P2B Regulation”) makes it mandatory for online intermediation services providers (such as appstores and marketplaces) to identify in their terms and conditions two or more mediators with which they are willing to engage to attempt to reach an agreement with business users on the out of court settlement of any disputes between the provider and the business user arising in relation to the provision of the online intermediation services concerned, including complaints that could not be resolved by means of their internal complaint-handling system.

What’s more is that the internal complaint-handling system is made mandatory for handling the complaints of their business users.

What is Regulation 2019/1150 About?

Regulation 2019/1150 ensures that online intermediation services providers include in their conditions for use of their platform, terms and conditions which are transparent – i.e. they are written in a plain and intelligible language, are easily available to business users at all stages of their commercial relationship, set out the grounds for decisions to suspend or terminate or impose any other kind of restriction relating to the provision of such services, the information is made readily available and, such conditions include general information regarding their effect on the ownership and control of intellectual property rights of business users.

Furthermore, in case the online intermediation services provider decides to amend such terms, they have an obligation to notify the changes with a notice of at least 15 days prior to the changes taking place and the business user has the right to terminate the contract before the expiry of the notice period.

In case an online intermediation services provider fails to comply with these requirements, then any such terms are null and void.

When does Regulation 2019/1150 Apply?

Regulation 2019/1150 mainly applies to marketplaces, app stores, trading platforms, hotel or flight booking websites and social media platforms where the business users of those platform have their place of establishment or residence in the Union and provided that they offer goods or services to consumers located in the Union.

It does not apply to online payment services or to online advertising tools or online advertising exchanges.

Who is an Online Intermediation Services Provider?

An online intermediation services provider is defined in the P2B Regulation as a natural or legal person which provides, or which offers to provide, online intermediation services to business users.

Such services are services which are:

  • information society services i.e. services normally provided for remuneration at a distance, by electronic means at the individual request of a recipient of services and
  • they allow business users to offer goods or services to consumers, with a view to facilitating the initiating of direct transactions between those business users and consumers, irrespective of where those transactions are ultimately concluded and
  • they are provided to business users on the basis of contractual relationships between the provider of those services and business users which offer goods or services to consumers.

Online intermediation services exclude services relating to:

  • medical examination or treatment at a doctor’s surgery using electronic equipment where the patient is physically present,
  • consultation of an electronic catalogue in a shop with the customer on site,
  • plane ticket reservation at a travel agency in the physical presence of the customer by means of a network of computers,
  • electronic games made available in a video arcade where the customer is physically present

Who is a Business User?

A business user is a private individual  acting in a commercial or professional capacity who, or any legal person which, through online intermediation services offers goods or services to consumers for purposes relating to its trade, business, craft or profession

Mandatory Mediation by Online Intermediation Service Providers and Business Users:

Under the Regulation, providers of online intermediation services must identify in their terms and conditions two or more mediators with which they are willing to engage to attempt to reach an agreement with business users on the settlement, out of court, of any disputes between the provider and the business user arising in relation to the provision of the online intermediation services concerned, including complaints that could not be resolved by means of the internal complaint-handling system.

Such mediators must be impartial and independent, offer their services at affordable rates for the business users, must be capable of providing their mediation services in the language of the terms and conditions which govern the P2B relationship, they must be easily accessible, and they must be fast and have sufficient understanding of general business-to-business commercial transactions.

Mediation is made mandatory, as providers of online intermediation services and business users, under the Regulation must engage in good faith throughout any mediation attempts conducted.

This article does not constitute legal advice.

The publication of this article is partly funded by the European Union’s “Consumer Programme (2014-2020)”.

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Evripides Hadjinestoros Lawyer
Evripides is a lawyer and a mediator. He is the founder of the Cyprus Consumer Center for ADR and a member of the Arbitration and Mediation Committee of the Cyprus Bar Association. He teaches law at the European University of Cyprus and provides mediation training at the Cyprus Consumer Center for ADR. After completing the LLB Law degree at Queen Mary University in London in 2009, he then completed a post-graduate diploma in Company Law LLM, at University College London. He graduated with Distinction. In 2016, Evripides published the book «The Law on the Sale of Goods and Consumer Protection in Cyprus», which was published by Nomiki Vivliothiki. He has also published several legal articles in journals in Cyprus and abroad and he has been quoted in legal textbooks such as Lee Roach, Card & James Business Law (2016, Oxford University Press), Stefan H.C. Lo, In Search of Corporate Accountability: Liabilities of Corporate Participants, (2015, Cambridge Scholars Publishing) and Thomas B. Courtney and Daibhi O’ Leary, The Law of Companies (2016, Bloomsbury Publishing).