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Our report Platform-to-business regulation under two minutes.
With online platforms playing a key role, the digital economy presents small and medium sized enterprises (SMEs) a whole new world of opportunities for growth and insights. Now, and especially in the midst of the Covid-19 pandemic, the pressure to digitise is on, and the way governments deal with platform-to-business relations, will shape the future for smaller players in the market. Around the globe, data asymmetry and winner-take-all dynamics are what concern governments most about online platforms’ potential monopolistic behaviour.
According to a survey by the Instituto Nacional de Estadística (Spanish Statistical Office), there is a correlation between the size of the business and its use of digital technologies. The larger the business, the more likely it is to have a webpage, use social media and sell through e-commerce. In a country where 95% of businesses have less than 10 employees, we can generalise that a majority of Spanish businesses are on the low end of the digital transformation spectrum.
Within this context, the EU implemented the Regulation (EU) 2019/1150 of the European Parliament and of the Council Of 20 June 2019 on promoting fairness and transparency for business users of online intermediation services to promote transparency and fairness between platforms and businesses (P2B regulation). In broad strokes, this new regulation promotes transparency by requiring platforms to spell out their terms and conditions and so offer SMEs a clearer idea of the “rules of the game”.
The general opinion is that the P2B regulation defines best practices, does not pose a burden for platforms themselves and offers small businesses a channel to address any grievances they may have. However, as the regulation’s main objective is to shape platform behaviour in the long-term, it runs the peril of being ineffective if SMEs and the associations that support them do not exercise their attributed rights. In this light, the report offers four lines of action, that draw on considerable relevant expertise, to illustrate how both platforms and SMEs can maximise the benefits the regulation proposes both in Spain and abroad.