MEP Zammit Dimech strikes deal on new regulation protecting SMEs
Early yesterday morning, the European Parliament and the Council of the European Union reached a political agreement on a new regulation to ensure a fair and transparent online environment for businesses using online platforms to reach their customers.
MEP Francis Zammit Dimech was the Rapporteur and led the negotiations on behalf of the Committee on Legal Affairs, which together with the Committee on Internal Market and Consumer Protection was responsible for representing the European Parliament during negotiations.
MEP Zammit Dimech, over the past few weeks, has been consult- ing with stakeholders in Malta to ensure that the regulation reflects the challenges and aspirations of SMEs, the hospitality sector and customers.
Reacting after the conclusion of the fourth trialogue, he said: “This is an important milestone for Maltese SMEs, providing protection from giants and ensuring fair competition online, including when accessing cross-border consumer markets. It is also an important goal for customers such as those booking accommodation or flights online. This regulation ensures that customers truly get the best deals when searching for products and services online.”
MEP Zammit Dimech said that, similarly to trends across the EU, online platforms in Malta were on the rise, highlighting 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. He said that shop owners selling online had spoken to him about unfair practices. The MEP said that the regulation would provide legal certainty for a sustainable business environment online – critical to ensuring no harm was caused to businesses and to promote trust in the online platform environment in the EU.
During negotiations, MEP Zammit Dimech pushed to protect small businesses from unfair practices by listing unfair trading practices which will no longer be allowed and which cannot be made use of by platforms when dealing with business users. He also sought to ensure transparency in terms of ranking used by platforms and, therefore, the prominence given to products and services in search results, ensuring there is no abuse of power by platforms or unfair competition. Data collected through platforms as a result of the 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 if changes are made to the platform’s terms and conditions, and the possibility to terminate any agreement at no cost if modifications carried out 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.