Out-Law News | 05 Apr 2022 | 4:18 pm | 1 min. read
Online marketplaces will have to disclose the “main parameters” that determine how they rank product offers in response to consumer search queries, under new laws finalised in the Netherlands.
The new legislation, which takes effect on 28 May 2022, implements EU consumer laws that were set in 2019.
Under the new law, general information on the main parameters determining the ranking of products must be shared on a specific part of an online marketplace’s interface and be directly and easily accessible from the page where the search results are presented. As well as listing the main parameters, online marketplaces must provide information about their relative importance compared to other parameters that shape their indexing.
The law also requires there to be disclosure of paid-for adverts or priority search listings on online marketplaces, as well as where consumers are presented with personalised prices on the basis of automated decision making.
The law further regulates consumer reviews on online marketplaces. Traders must take reasonable and proportionate steps to ascertain whether people who leave reviews about their products on online marketplaces have bought their products. Information on whether and how traders ensure consumer reviews come from consumers who have purchased their products must also be disclosed to online marketplace users.
Businesses that breach the new legislation could be fined up to 4% of their annual turnover in the Netherlands, or up to 10% of their turnover if the practice is classed as an unfair commercial practice.
Similar national legislation is expected to be finalised in other EU member states ahead of the 28 May deadline for implementation of the 2019 consumer protection modernisation directive. Cooperation between national regulators, such as the Authority for Consumers & Markets (ACM) in the Netherlands, is anticipated in cases where a company is suspected of breaching the new rules in more than one EU country.
Amsterdam-based technology law expert Wouter Seinen of Pinsent Masons said: “The new rules will place a burden on online retailers that trade via online marketplaces and the marketplaces themselves, but they recognise that the position of online marketplaces is fundamentally different to those of the merchants that offer their products or services via such platforms."
“The transparency rules will help consumers and authorities to better understand who to address in respect of purchases made on online marketplaces. This is a welcome development for the sector, as it is limits legal risk and uncertainty,” he said.