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Platforms' data use to come in for EU scrutiny

Out-Law News | 14 Sep 2015 | 5:25 pm | 2 min. read

Online platforms' use of data is to be scrutinised in a consultation exercise expected to be launched by the European Commission later this month.

According to a leaked draft of the consultation (27-page / 1.05MB PDF), published by technology news site POLITICO, the Commission will ask stakeholders about whether they see "a need to strengthen the capacity of online platforms' users to switch freely and easily from one platform to another and port their personal data".

It will also ask if businesses and consumers think "independent rating or reputational systems" could help address problems associated with gaining access to data held by platforms, the document said.

"While their emergence has been generally seen as beneficial, the way that online platforms operate raises issues that require further exploration," the Commission will say, according to the leaked draft. "These include how online platforms collect and make use of users' data and the transparency with which the do it, the impact of some platforms' relative bargaining power when negotiating the terms and conditions of access to a given market with other market players (particularly SMEs but also content providers), as well as the dual role of some platforms, acting both as marketplace operators and suppliers competing with their customers in downstream markets."

"The growing role of platforms also poses challenges as regards consumer protection. There is a need to further explore whether platforms provide sufficient information and safeguards to consumers where they act on their own behalf, or on behalf of their suppliers. There is also the question of whether platforms engaging directly or indirectly in content distribution rely on the limitation of liability provided under … the E-Commerce Directive to not take or negotiate licences with the holders of rights in digital content," it said.

According to the leaked document, the Commission has defined an 'online platform' as a business that operates in "two (or multi)-sided markets, which uses the internet to enable interactions between two or more distinct but interdependent groups of users so as to generate value for at least one of the groups".

Examples include search engines, online maps, news aggregators, online market places, social networks, payment systems, app stores, audio-visual and music platforms, video sharing platforms and collaborative economy platforms, it said. Google, Facebook, Amazon, Netflix, Uber and PayPal were among the companies specifically referenced by the Commission as being online platforms.

The Commission confirmed its intention to launch "a comprehensive assessment" of the role of platforms and intermediaries in the digital economy before the end of this year in its digital single market strategy published in May.

Last week, UK culture minister Ed Vaizey called on EU countries pushing for stiffer regulation of online platforms to explain the rationale for their views in more detail. Vaizey said there needs to be a "pretty convincing case" for new regulations to be imposed on top of the existing competition law regime he said "already exists to deal with any perceived or actual anti-competitive behaviour".