New law enhances companies’ legal rights on online platforms

BACKGROUND TO THE NEW RULES

The new law is based on the so-called P2B regulation (Regulation of the European Parliament and of the Council on promoting fairness and transparency for business users of online intermediation services), which is thereby enforced in Danish law in form of this new law.

ONLINE PLATFORMS CREATE NEW OPPORTUNITIES, BUT ALSO CHALLENGES

Online platforms have increased in the market, especially over the past decade, creating new opportunities for companies that are increasingly using online platforms to reach customers. Online platforms can also be a very effective tool for reaching many customers in an easy and accessible way.

However, more companies are experiencing that, without notice and justification, terms and conditions are changed for the use of the online platforms, and companies are thrown off the platforms without justification. An analysis by the Danish Competition Authority and the National Consumer Agency concludes that one in four companies has recently been treated unfairly by the big online platform providers. This can have major consequences for the individual business, as the platforms are often a central part of a company's setup and thus are crucial for businesses to reach the consumers.

In fact, companies that use the online platforms do not have the opportunity to negotiate the terms and conditions. The new law is therefore intended to enhance the justice and security of online platforms and to give the authorities a real opportunity to intervene against unreasonable behavior.

BUSINESSES CAN NOW FILE A COMPLAINT WHEN THEY ARE TREATED UNFAIRLY

The new law allows companies to file a complaint against the online platforms to the Competition Authority and the National Consumer Agency, which can intervene if the company is subjected to unfair treatment, for example, in cases where the terms conditions are changed to the disadvantage of the company without reasonable notice and justification.

From 1 July 2020, when the law becomes effective, the Competition Authority and Consumer Agency has been given the opportunity to collect information on the platform's algorithms, make sector inquiries, issue enforcement notices and, ultimately, issue fines.

In this way, businesses and authorities are given better opportunities to react when companies are treated unfairly by big online platform providers.

You can read about the proposed law on the Parliament website here (in Danish).

If you have questions about the new law and how it affects your business, please do not hesitate to contact Lund Elmer Sandager's specialists in IT law, Attorney Anders Linde Reislev at alr@les.dk or Associate partner, Attorney Torsten Hylleberg at thy@les.dk.