Early on Thursday morning, the European Parliament and the Council of the EU reached a political agreement on a new regulation ensuring fair and transparent online environment for businesses using online platforms to reach their customers.
Zammit Dimech was the Rapporteur and led the negotiations on behalf of the Committee on Legal Affairs that together with the Committee on Internal Market and Consumer Protection was responsible to represent the European Parliament during negotiations.
Zammit Dimech, over the past weeks, had consulted with stakeholders in Malta to ensure that the regulation reflects the challenges and aspiration of SMEs, the hospitality sector and customers.
Reacting after concluding the fourth trialogue, Zammit Dimech said “This is an important milestone for Maltese SMEs, it provides protection from big giants and ensures fair competition online including when accessing cross-border consumer markets. It is also an important goal for customers such as those who book a hotel or a flight online. This regulation ensures that customers truly get the best value deals when searching for products and services online.”
Zammit Dimech said that similar to trends across the EU, online platforms in Malta are on the rise and that highlights the importance of this regulation. He said that contracts in the sector between platforms and businesses must be guided by the principles of fairness and good faith. Zammit Dimech recalled how up till this week, shop owners selling online had spoken to him about unfair practices. Zammit Dimech said that the regulation will provide legal certainty for a sustainable business environment online. This is critical to ensure no harm is caused to businesses and to promote trust in the online platform environment in the EU.
During negotiations, Zammit Dimech pushed to protect small businesses users from unfair practices by listing unfair trading practices which will no longer be allowed and and cannot be made use of by platforms when dealing with business users. He also ensured transparency in terms of ranking used by platforms and therefore the prominence given to products/services in search results ensuring there is no abuse of power by platforms or unfair competition. Data collected through platforms as a result of commercial activity of a business user is to be made available to the respective business. This is crucial for the hospitality sector and will ensure better service and facilitate targeted marketing.
The legislation also provides various safeguards to SMEs including the right 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 modifications done by the platform are detrimental to businesses. The deal also improves the internal complaint-handling system calling for equal treatment of businesses without any harmful effects on businesses using the system.