The EU Regulation on platform to business relations (P2B Regulation) entered into force in July 2019. It is the first-ever set of rules designed to create a fair, transparent and predictable business environment for smaller businesses and traders on online platforms.
Using our experience as the largest dispute resolution service provider in Europe we have produced a guide for providers of internet intermediation services (Online Platform Providers) to whom the EU Regulation will apply.
It provides practical guidance on Articles 11 and 12 which concern 'Internal Complaint-Handling Systems' and 'Mediation'.
For more information and to access a copy of the P2B Regulation, please visit the European Union website here.
Our video guide covers everything you need to know about Articles 11 & 12 of the P2B Regulation.
This includes expert advice on issues that will likely arise and detailed, practical ways in which we can help Online Platform Providers comply with regulation.
In video are Lauren McGuirl, Director of Commercial Disputes Services at CEDR and former Senior Associate at Freshfields Bruckhaus Derringer LLP and Wolf von Kumberg, Mediator & Arbitrator and Former Assistant General Counsel for Northrop Grumman Corporation.
The EU Regulation on platform-to-business relations (“P2B Regulation”), which entered into force in July 2019, is the first ever set of rules laid down by the European Union on the use of mediation to resolve issues between, providers of internet intermediation services (“Online Platform Providers”) on one hand, and their online platform business users on the other.
The P2B Regulation seeks to create a fair, transparent and predictable business environment for the use of online platforms and to ensure balanced and effective dispute resolution.
Nearly half of all SMEs in the EU use online marketplaces to sell their services and it is estimated that 7,000 online platforms will fall under the scope of the P2B Regulation. Consequently, the new legal framework will have a significant impact on the platform economy within and outside the EU.
The P2B Regulation applies to all Online Platform Providers servicing businesses in the European Union and United Kingdom (post Brexit).
Online Platform Providers are defined broadly by the P2B Regulation, but explicitly mentioned are:
Online Platform Providers which do not act as intermediaries between businesses and consumers will not be subject to the Regulation.
As such, online advertising exchanges and brands selling their own products direct to consumers, without third party sellers, will not be in scope.
The P2B Regulation came into force prior to the UK’s exit from the EU. Therefore, it is part of the European Union Law which was transposed into domestic UK law in accordance with the European Union (Withdrawal) Act 2018.
The P2B Regulation requires amendments to Online Platform Providers’ Terms and Conditions, policies and published information.
With respect to dispute resolution and mediation specifically, Platform Providers are required to:
It is important to note that Online Platform Providers are not limited to naming just two mediators and in fact naming a mediation provider such as CEDR will comply with the requirements of the P2B Regulation.
Online Platform Providers which employ fewer than 50 persons and which have an annual turnover not exceeding €10 million (small enterprises) are excluded from both of the above obligations.
We spoke to Wolf von Kumberg, former European Legal Director and Assistant General Counsel, Northrop Grumman Corporation to get his thoughts on the impact of the P2B Regulation.
He believes the following issues, among others, are likely to arise as a result of the Regulation:
Using Wolf von Kumberg’s experience as Assistant General Counsel, we asked what advice he would give to Online Platform Providers.
Here are his main pieces of advice:
Article 12 – this article speaks to the naming of at least two mediators but there is scope to utilise a mediation provider. The benefit of using a mediation provider is gaining access to a larger panel of mediators who will have:
Article 11 – the need to install a complaint handling process. Online Platform Providers should seek to utilise the complaints handling mechanism in conjunction with mediation to bring about a more effective and expedited resolution of any dispute which may arise.
The P2B Regulation provides provision for the business, business associations and potentially other bodies to bring claims against the Online Platform Provider. Therefore, it is important to have a clear and effective complaints handling process of which mediation should play a pivotal part.
CEDR can work with Online Platform Providers to manage and resolve disputes arising from P2B relationships at each stage of the conflict escalation curve.
1. CEDR have 30 years of experience as an Alternative Dispute Resolution (ADR) provider, working regularly with multi-national corporates and international organisations (such as the UN and EU) to:
2. Naming CEDR as your mediation service provider will satisfy the requirement under Article 12 of the P2B Regulation to name at least two mediators. Doing this will ensure you have access to mediators who are:
3. Furthermore, CEDR can use our expertise to work with you to design a cost-effective, practical and tested complaint-handling procedure. CEDR can also provide complaints handling services should you wish to outsource this function.
The P2B Regulation requires providers to name two mediators who can be called upon to help resolve disputes. However, from the conversations we have had with platform providers, those two mediators will need to be able to cover a range of disputes, including: property, intellectual property, sale of goods & services, retail and banking - depending on the nature of the company.
Furthermore, you will need access to mediators operating geographically across Europe and able to cover mediate in multiple languages.
CEDR has a panel of 150+ quality assured mediators to resolve disputes at all levels of complexity and claim value. Furthermore, our mediators operate in 11 European countries and cover 15 of the EU's languages.
We provide a range of mediation solutions depending on the type of the dispute. These include:
We have a team of dedicated client relationship associates to guide you and your business customers through the process.
Naming CEDR as your mediation provider gives you the flexibility, scalability and access to mediation services across the complete spectrum of industries and dispute types.
Online Platform Providers can comply with Article 12 by simply naming CEDR in their terms and conditions. You can do this by referring to CEDR as your mediation provider. Alternatively, you can include the following CEDR model clause such as the one set out below.
However, as an Online Platform Provider you may wish to contact CEDR to design a mediation scheme for your business users. The advantages to designing a platform specific scheme are:
Every year CEDR publish a number of model mediation clauses to be included in contracts. These can be found on our website here.
Alternatively, please find set out below a model mediation clause tailored to P2B disputes:
‘If any dispute arises in connection with this agreement, the parties agree to first try to resolve the dispute through the complaints procedure published herein.
If the dispute is not wholly resolved through the complaint’s procedure, then the dispute may be referred at the discretion of the [business user] to the Centre for Effective Dispute Resolution (“CEDR”) for mediation. The Parties agree to enter into mediation in good faith to settle such a dispute and will do so in accordance with the CEDR Model Mediation Procedure. Unless otherwise agreed between the parties within 14 [working] days of notice of the dispute, the mediator will be nominated by CEDR. To initiate the mediation a party must give notice in writing (‘ADR Notice’) to the other party[ies] to the dispute, referring the dispute to mediation. A copy of the referral should be sent to CEDR.
[If there is any point on the logistical arrangements of the mediation, other than the nomination of the mediator, upon which the parties cannot agree within 14 [working] days from the date of the ADR Notice, where appropriate, in conjunction with the mediator, CEDR will be requested to decide that point for the parties having consulted with them.]
If you would like to discuss how CEDR can assist with a P2B dispute or with compliance with the P2B Regulation, please contact Lauren or Marinus.
Marinus Maris joined CEDR in January 2019 as the Director of Sales & Marketing, overseeing commercial effectiveness across our three business units. Along with the oversight of sales & marketing, Marinus will be involved in the strategic leadership across the whole CEDR business.