Table 5 below summarises the specific objectives as well as a series of quantitative and qualitative indicators to be used for monitoring the effectiveness and efficiency of the Preferred Option. Importantly, the procedural monitoring will be accompanied by a monitoring of emerging practices on both the platforms' and the business users' side. Consequently, the impact of the Initiative will be assessed in the context of an evaluation exercise and activate, if so required, a review clause 3 years after entry into force of the adopted instrument.

The Commission will also analyse how to enhance the monitoring of the online platform economy through a dedicated study supporting the work of the EU Observatory, additional data sources and data collection, as well as collaboration with national statistical offices and Eurostat.

This analysis includes data such as, but not limited to: number and types of businesses trading on online platforms, number and type of complaints handled through internal and mediators, number of cases successfully solved, the amount of time needed to resolve the case, the place of establishment, size of online platforms trading in the EU including turnover realised in the EU market as an online intermediary. Through the EU Observatory, the Commission will also monitor emerging challenges and opportunities for the EU in the wider digital platforms economy and online general search. This implies data and evidence gathering on matters such as access to data flows and their monetization opportunities controlled by platforms; transparency and accountability in the wider online advertising ecosystem; alleged discriminatory practices of platforms competing with their users; use and effect of MFN clauses including the justifications put forward by platforms or algorithmic decision-making in online platforms. In the context of search engines, data gathering and analysis will also cover issues such as: conditions for inclusion in and display of search results. This will include the use of third party content, including issues on access to data and the monetisation of the original content that this may raise and the information given to users when such content is displayed. It will also gather impacts from regulatory trends in the Member States or where relevant in third countries and on this basis prepare a set of evidence-based analytic papers to inform EU policy making. To this end, the Observatory will conduct data and evidence collection, collect opinions from a broader stakeholder base and experts and interact with and consider results of relevant research and studies, including European Commission funded studies and projects. Given the diverse nature of issues emerging in the Online Platform Economy, the Observatory would also liaise with relevant expert bodies at EU and national level to ensure holistic, multi-disciplinary outputs to inform EU policy-making.

The European Commission will monitor market indicators for the online platforms environment through the EU Observatory, consisting of a group of independent external experts, supported by a dedicated Commission secretariat and by a study which will provide a website, as well as evidence and data gathering capacity.

Monitoring of the evolution of impacts constitutes a key part of the intervention in this domain, as the online platform economy remains a dynamic, fast evolving area of the economy. The monitoring is therefore divided into two strategic parts, the EU Observatory of the Online Platform Economy, and the specific monitoring of the evolution of impacts related to the regulatory and self-regulatory components of the intervention.

Although the Preferred Option was not tested with consumer organisations, consumers are expected to be supportive of the Preferred Option despite the high-quality products/services they are currently benefitting from. Longer term competition- and choice-related considerations have been put forward by one consumer association in one of the Commission's workshops. A representative of this association has in particular argued in favour of some stricter non-discrimination measures more in line with the telecommunications regulatory framework.

Based on a questionnaire and a meeting with national authorities, many national experts are of the view that addressing issues around terms and conditions is core to the entire P2B issue. They also consider that the proportionality of a transparency obligation would depend on the precise wording and on the size of the platform. On issues such as notice periods views diverge depending on the experience at national level ranging from no need to regulate to mandatory fixed notice terms. Some national experts are also of the view that terms and conditions should be simplified in order to make them transparent and user-friendly for businesses – similarly to B2C legislation. National experts supporting a legal transparency obligation find legitimate the requirement on platforms to provide a statement of reasons for delisting. National experts share the general view that delisting-related requirements should be aligned with illegal content/notice and action procedures. A transparency obligation on ranking criteria is overall considered proportionate and legitimate. The experts with more experience on ranking issues are supportive of measures solving the problems encountered in a timely manner, although some say that the issue should be left to commercial and competition law. A general preference to (i) opt for a transparency obligation covering ranking practices in general, and (ii) work towards identifying best practices in ranking captures the broad consensus view. On data, non-discrimination and MFNs experts cautioned that further reflection was needed. However, there is an overall agreement among experts on the importance of effective redress. Some concerns exist that internal complaints mechanisms could be more burdensome for SMEs. Some national experts are in favour of promoting existing best practices (possibly as part of a self-regulatory measure). Experts representing national authorities overall recognise the interest of the monitoring exercise. They are, however, generally opposed to the creation of a new body or European Agency created for that purpose.

Online general search engines already provide substantial guidance on how to optimise the ranking, but warn of the ineffectiveness of disclosing algorithms, not least in light of many and frequent changes to search algorithms, as well as on the risks to manipulation of search results.

Regarding transparency around rankings and data use, platforms would agree with high-level disclosure as in the Preferred Option, but warn of "gaming" and manipulation of algorithms subject to too much transparency. Generally platforms appear supportive of the idea of monitoring the platform economy, if such monitoring is not intrusive in their trade secret policies.

Online platforms- most would agree that providing an explanation to a business user in case of delisting or take-down of an offer seems to be a reasonable legal obligation - provided their legal obligations to take down illegal content and cooperate with investigations are respected. Online platforms do not see the value added of external dispute resolution, because they trust their own internal dispute resolution systems. While platforms do not generally see a problem with implementing notice periods for changes in terms and conditions, they are, however, not in favour of rigid notice periods.

Business users are generally supportive of the intervention proposed under the Preferred Option and generally in favour of a stronger and co-regulatory intervention. The main requests by business users focus on effective redress options, greater transparency of platforms' ranking practices, the prohibition of MFN clauses, and transparency in delisting processes. Some business users also ask for an access to data obligation requiring platforms to share certain data, e.g. customer names, addresses, telephone numbers, email addresses and provenance. In business users' view, more transparent ranking criteria would give the possibility to business users to make informed and substantiated complaints towards the platforms. Platforms should instruct business users of the reasons having led to their de-ranking or the suspension. Business users stressed the need for legislation to set up a contact point or a support function to deal with errors in ranking algorithms.

Given the fast moving nature of the platform environment, any threshold which would be set, may need to be reviewed to ensure that it continues capturing platforms displaying specificities underlying the problem identified. A review clause should therefore allow for a revision of the threshold if needed. The work carried out under the Observatory would allow monitoring the efficiency of the proposed threshold and adjusting it as appropriate.

On the basis of the analysis in Section 6 platforms qualifying as a small enterprise would be exempted from the internal redress mechanism. While available data does not allow drawing a clear line as to whether this threshold should apply to micro- or small enterprises, the proportionality principle would advocate for setting the internal mechanism-specific threshold at a higher level. This would prevent any disproportionate regulatory burden to be imposed on start-up and scale-up platforms. Either the turnover or the employee count of a platform can be considered to be acceptable metrics to determine the threshold. Indeed the Recommendation on the Definition of SMEs combines both factors in its definitions as a cumulative requirement. Turnover is an indicator of the number of transactions intermediated by a given platform, and once a platform exceeds a turnover of EUR 10 million (threshold above which an enterprise is considered as medium-sized) both the degree of intermediation can be assumed to be significant, while such platforms can then also be assumed to be able to absorb the additional cost of the measure. At the same time, employee count is frequently easier to measure, and platforms may already exercise relative bargaining power before generating significant turnover, as a general characteristic of the platform business model. As to the possibility to set an additional threshold exempting enterprises from the entire regulation, the analysis of pros and cons does not allow concluding on the need to add a horizontal exemption to the internal mechanism-specific one (cf. Section 6.1.2.3).

The geographical scope of the Preferred Option would be based on the contractual relations of online platforms with EU business users. Online platform companies would be covered regardless of whether they are established in the EU, as long as they intermediate between EU business users and consumers located in the EU. Similarly, online search engines would be covered regardless of whether they are established in the EU, as long as they allow users located in the EU to perform searches of websites of business users established in the EU. This would prevent online platforms from excluding relations that are capable of producing effects in the EU from the scope of the intervention by simply diverting this to a .com domain name operated from outside the EU. Evidence suggests, however, that virtually all important non-EU platforms have an EU establishment, which reduces the risk of avoiding application significantly. Furthermore, the proposed provision on legal standing granting associations or representative bodies having a legitimate interest in representing business users the right to seek action in court to remedy or prevent economic harm arising as a result of general non-compliance with the proposed legal obligations will further reduce this risk.

The Preferred Option would apply to platforms falling in the scope of this Impact Assessment, as specified in Section 1.3, including online search engines. A detailed explanation of the legal definition is provided in Annex 1.12 (cf. also annex 1.4).

Granting to associations or representative bodies that have a legitimate interest in representing business users the right to seek action in court to remedy or prevent economic harm arising as a result of general non-compliance with the proposed legal obligations for online platforms. Annex 1 explains the compatibility with the Commission's collective redress Recommendation of 2013. Although the principal aim of the Initiative is to improve bilateral conflict resolution rather than judicial redress in a first step, granting representative organisations legal standing is a key element to convince EU Courts to enforce the proposed targeted legal obligations in EU courts notwithstanding the choice of law and forum clauses included in the contracts between online platforms and their business users that designate non-EU courts. This approach builds on case-law of the CJEU that explains that actions by representative bodies, which are in the collective interest (as opposed to merely in the interest of a group of specifically identified individuals) are not subject to the jurisdictional provisions included in any private contracts. Therefore, such actions are more likely to be capable of being brought before the court of the Member State where the alleged (future) harm will occur. This provision therefore also helps to address the fear of retaliation, as it will enable representative bodies to act in the collective interest of business users, who may prefer to remain anonymous, to ensure the effectiveness of the proposed legal obligations. While firmly based on existing case-law of the CJEU, the effectiveness of this specific provision on legal standing for representative bodies will benefit from any further horizontal action the Commission may take as part of its follow-up to the 2013 Recommendation on Collective Redress (2013/396/EU) and accompanying study on its implementation. This study has recognised that collective redress mechanisms for consumer matters for injunctive relief are in place in all EU Member States, and that deficiencies remain only in respect of collective redress – the latter not being part of this proposal. It is also complementary to the pending revision of the Injunctions Directive, as part of which several options to protect the collective interests of consumers are being explored. Although providing standing to business organisations (in addition to consumer organisations) to strengthen this enforcement is one of the options considered, this will indeed not provide the required enforceability of the proposed P2B rules which aim to protect individual businesses rather than consumers. This option may nonetheless work in synergy with this proposed revision and the improvements that shall flow from it and lead to an increase in the number of business associations broadly monitoring law compliance in the field of online platforms, in particular on the issue of ranking transparency where consumer protection rules (the Unfair Commercial Practices Directive) complement the business-facing transparency measure included in the Preferred Option. In addition, under the preferred option 2c, associations or representative bodies that have a legitimate interest in representing businesses whose websites are indexed by online general search engines have the right to seek action in court to enforce – exclusively – the legal transparency obligation on ranking in online general search.

5.Formulating the legal transparency and redress obligations as mandatory rules to the greatest extent possible (cf. Annex 1.4 in this respect) as a key element to improve the chances of enforcement of the proposed targeted legal obligations in EU courts notwithstanding the exclusive choice of law and forum clauses included in the contracts between online platforms and their business users that frequently designate non-EU courts.

4.Legal obligation for platform operators to list in their contractual terms and conditions existing mediators who meet certain objective quality criteria, and with whom they are willing to engage. This shall include any platform-specific, independent mediators. Platform operators will in addition be subject to a legal obligation to act in good faith towards attempts by their business users to engage with such mediation process in the EU.

3.Legal obligation to issue annual public reports on the effectiveness of the internal appeals mechanisms, which will be designed to limit costs for the platforms concerned. Rather than implying any continuous publication of data (feeds), the reporting obligation would take the form of high-level reports published only annually and these reports would moreover cover only a limited number of elements such as the total number of complaints received, the subject matter of the complaints, the time period needed to process the complaints and the decision taken. Online platforms can largely automate data collection and reporting.

2.Legal obligation for platform operators to put in place an effective and accessible internal complaint-handling mechanism. The functioning of such internal complaint handling systems would be monitored for effectiveness, and subject to further recommendations or industry codes-of-conducts.

1.Encouragement for platform operators to set up external organisations that can provide industry-specific mediators independent mediators, which should – if industry does in fact set them up – comply with certain effectiveness principles to be spelled out in law. These mediators would provide an additional pool of mediators in addition to those that already exist.

Redress possibilities for business users will be improved by a combination of measures, listed below. The resulting structural redress and some of the legal obligations tackling individual harmful trading practices will be directly mutually reinforcing.

The preferred Option 2c adds a targeted transparency obligation for providers of online general search engines to the above transparency obligations for providers of online intermediation services. Providers of online general search engines would under this option be obliged to make a description of the main ranking parameters used to operate their search ranking mechanism available to the general public. The obligation would build on real-life examples of meaningful transparency (cf. Annex 7.3), and defines a legal standard on the basis of industry best practice. The transparency obligations shall be without prejudice to the protection of trade secrets under Directive (EU) 2016/943 and, therefore, the required description will be at a general level, while accurately reflecting the norm for the relevant online general search engines, based on historic data.

6.Legal obligation to unequivocally state as part of platforms' general commercial proposition to business users whether they demand – contractually or otherwise – best prices and/or product selections to be offered to their market places. This will be combined with a legal obligation for online platforms to make easily available to the general public unambiguous explanations as to the relevant commercial, legal or any other considerations underpinning the use of such most-favoured-nation clauses. For this to be proportionate, it will be limited to a targeted and understandable description of key elements such as the need to prevent free-riding in light of the size of the platform.

4.Legal obligation to clearly explain to business users whether platforms' competing services or goods (e.g. own apps, owned retailer operations or other services of the same type as the business users') enjoy any preferential treatment (e.g. pre-installation of apps) as compared to that reserved to business users. The description would be at the general level rather than at the level of individual products or goods offered through those services in order to ensure proportionality. This will include any specific measures or behaviour concerning access to personal or non-personal data, ranking, remuneration for the use of the platform or ancillary services (e.g. the provision of delivery services or payment facilities).

3.Legal obligation to state in contractual terms and conditions the general criteria of the ranking mechanism on the platforms, as well as conditions for use of any mechanism that allows business users to influence their prominence against remuneration. It will be explained that all these obligations shall be without prejudice to the protection of trade secrets under Directive (EU) 2016/943 and that, therefore, the required description will be at a general level, while accurately reflecting the norm for the relevant online intermediation service, based on historic data. In addition, the Commission could work with the relevant online platform and online general search engine providers to explore practical tools for meaningful transparency, to improve the verifiability of this paid-for prominence within the specific e-commerce area, to potentially develop industry standards and proactively run audits; and it could monitor the functioning of the wider digital advertising space.

2.Legal obligation to provide relevant business users with an actionable statement of reasons upon delisting of their accounts or of individual products and services.

1.Legal obligation to inform business users of significant changes to contractual terms and conditions, and to provide a reasonable notice period to allow business users to adequately prepare for the anticipated changes. Online platforms would remain free to legally design solutions that effectively result in business users being provided with a period during which they can continue to trade subject to the existing terms and conditions.

Targeted EU-wide transparency measures are both the most proportionate way to effectively tackling established potentially harmful trading practices, as well as a precondition to effective monitoring (cf. Section 8.1.1 below on transparency and Section 8.1.3 on monitoring). Such transparency measures also have the potential to improve competition – and indirectly the quality and redress available to business users – by pushing reputational levers. This is also critical to developing a more trusted business environment. EU-wide measures to ensure effective out-of-court redress possibilities for business users are in addition required to minimise inadvertent economic damage arising out of any P2B issues. Such redress measures underpin the effectiveness of the proposed transparency measures. Transparency measures such as an obligation to state objective reasons for delisting in turn constitute an absolute precondition to enabling effective redress. This increased clarity develops trust and helps businesses overcome the fear of retaliation. The high-level nature of the transparency and redress rules would allow industry, if it chose to do so, to additionally develop codes of conducts, which could spell out legal and technical details of their practical implementation sensitive to the fast changing technological and economic environment in which they operate. The transparency and redress actions will also be flanked by the separate establishment of an EU Observatory of the Online Platform Economy to ensure effective monitoring in close collaboration with Member States. The harmonised transparency and redress measures combined with collaborative monitoring will help prevent further fragmentation by avoiding direct economic harm to EU business users and by allowing the preparation of well-informed responses at EU-level – which may be justified to regulate emerging potentially harmful trading practices in a second step.

The Preferred Option is a co-regulatory set of measures combining obligations imposed in a legal instrument, self-regulatory measures by platforms to set up an independent mediator, and the establishment of an EU Observatory of the Online Platform Economy to monitor the problems identified. It is informed by and builds on the on best practices such as the Audio-visual Media Services Directive (AVMSD) and the experience in the Supply Chain Initiative (SCI).

Option 2c is the most effective of the retained options in reaching the specific objectives of the intervention, most notably in terms of ensuring fair, transparent and predictable treatment of business users. Option 2c allows expanding the expected positive effects of the transparency obligation and of the legal standing provision to online general search. It allows the inclusion of online general search engines in the initiative thus simultaneously covering the two most important ranking-based originators of Internet traffic. Businesses would be able to develop better informed search optimisation strategies, which would be particularly beneficial for SMEs and enterprises with no or emerging online presence. This option is of comparable efficiency as option 2b, which represents the closest regulatory alternative to option 2c. In addition, option 2c provides for equal treatment between online platforms and general online search engines, as regards dependency-induced potentially harmful ranking practices. Consequently, to maximise the effectiveness of the policy intervention and to ensure a level playing field, Option 2c is selected as the preferred option.

Option 2d - Option 2d is particularly effective in fulfilling specific objectives 1 and 2 since it allows for an exhaustive set of measures to address all issues identified. Option 2d appears however less effective in reaching specific objective 3 of creating a predictable and innovation–friendly legal environment for platforms. The extended data-related obligation for platforms to share customers' email addresses may have an impact on platforms' business models thus possibly reducing innovation incentives. This option is thus disproportionate and not fully coherent with the objectives pursued by the DSM strategy.

Option 2c has a higher overall effectiveness compared to Option 2b, but also achieved at a higher cost. It allows expanding the expected positive effects of the transparency obligation and of the legal standing provision to online general search as appropriate and proportionate. Online search engines also exhibit dependency-enabled unilateral behaviour targeted by the initiative, as ranking practices directly influence websites' visibility and internet traffic received. The limited extension of the scope to the transparency obligation for ranking and to the enforcement provision on legal standing for representative bodies is a proportionate and effective way to ensure clarity as regards the complementarity of the initiative with competition law while option 2c implies higher costs as compared to option 2b - since it creates costs for online general search engines - it also creates additional benefits. The inclusion of online general search engines in the initiative allows simultaneously covering the two most important ranking-based originators of Internet traffic (online platforms and online general search engines). Option 2c would help introducing more transparency and predictability for business users across the board thus addressing the issues identified around ranking transparency more comprehensively. Option 2c would ultimately create positive impacts in terms of online visibility for business users, increased pro-competitive effect (between comparison sites and search engines), and preserved quality of search results for end-users. In addition, associations or representative bodies that have a legitimate interest in representing businesses whose websites are indexed by online general search engines would have the right to seek action in court to enforce – exclusively – the legal transparency obligation on ranking in online general search. Option 2c is proportionate since the measures it proposes are targeted to the sole ranking-related issue identified in online general search. Option 2c foresees therefore a scoped transparency obligation (limited to the single issue of ranking), and a minimal redress measure limited to granting representative associations with legal standing to act on behalf of their business members in relation to the ranking transparency issue. Finally, option 2c is coherent with other EU policies and fundamental rights.

Option 2b is effective since it would lead to a more predictable, transparent and innovation-friendly environment for business users. The new rules together with the EU observatory will help allow building a common EU understanding of what issues are, thus also allowing for more consistent regulatory approaches when such are deemed necessary at national level. Increased trust in the platform environment will impact in a positive way both platforms and business users, contributing to mitigating possible compliance costs. In terms of efficiency, the regulatory costs are expected to be outweighed by the increased growth opportunities for platforms created by positive indirect network effects which would support in growth in sales through online platforms. Option 2b appears as an effective, efficient and proportionate option coherent with other EU policies.

Option 2b - Foresees legal principles on all issues; excludes issues encountered in online general search as well as the data-related obligation for platforms to share email addresses with their business users

Option 2a is of limited effectiveness. While it would increase legal certainty through legal transparency and redress measures, the risk of direct harm to businesses and of fragmentation remains important since some high-impact trading practices (ranking, data, discrimination, MFNs) may not be sufficiently tackled through self-regulation. Reputational levers of EU monitoring would also be underexploited in the absence of legal transparency obligations on all high-impact trading practices. In terms of efficiency, this option while achieved at a lower cost may underperform with regard to the achievement of the objectives set by the initiative thus leading to limited benefits. The limited effectiveness of Option 2a has been taken into consideration in the scoring of proportionality. Option 2a is in principle proportionate since it provides, at limited costs, a comprehensive set of measures that could allow all three specific objectives to be achieved. However, by leaving issues around internal discrimination, data, ranking and MFNs to self-regulation, policy options 2a incorporates the risk of increased fragmentation. The proportionality of option 2a should thus be assessed in light of the extent to which the option contributes to achieving the objectives of the initiative.

Option 2a - Foresees self-regulation on ranking, discrimination, data & MFNs and legal principles on the issues related to terms and conditions and delisting; excludes issues encountered in online general search as well as the data-related obligation for platforms to share email addresses with their business users

It is important to stress that the definitions covered by all four options are coherent with definitions used in EU existing legislation and currently ongoing Commission initiatives. For the purpose of exhaustiveness, Section 8.3 of the Annex contains a detailed overview of all current and proposed definitions for comparison purposes.

The following table summarises the comparison of the retained policy options 2a, 2b, 2c and 2d in terms of effectiveness, efficiency, coherence, and proportionality.

Options 2b and 2c appear both as proportionate since they allow meeting the objectives of the initiative while imposing relatively reasonable level of burden.

In addition to a targeted exemption, the proportionality of the retained policy options could be further ensured by horizontally exempting very small online platform firms from the overall P2B initiative. Depending on the threshold that may be used, a significant number of smaller online platform companies in the EU would not, in that case, face any additional burden, while being able to benefit from the enhanced user trust that the Initiative should yield . At the same time, the cost-benefit ratio of such an exemption can be estimated to be relatively neutral, as the additional burden on very small platforms to provide for transparency obligations in their terms of reference can be expected to be minimal.

The targeted exemption will guarantee that where an administrative burden resulting from the Initiative cannot be fully excluded, only companies that are sufficiently mature to absorb this burden are covered. The internal redress – related obligation will at the same time extend to all platforms that have a very large number of business users and which are therefore most likely to face capacity constraints in complaint-handling in the absence of proper procedures.

Finally, all retained options foresee the inclusion of a targeted exemption of online platforms constituting a "small enterprise" from the obligation to provide effective internal complaint-handling mechanisms, in line with the "Think Small First" principle. It should be noted that the obligation to provide effective internal complaint-handling mechanisms sets only high-level effectiveness and accessibility criteria, which will leave online platforms free to implement cost-effective technical solutions resulting in lower than average costs. For example, platforms would be free to reuse consumer-facing support mechanisms also to provide complaint handling for the business side of their operations.

If platforms fail to put in place the voluntary approach recommended by the Commission, stricter and more intrusive rules could be put in place if justified in light of observed developments. In addition to constituting a pre-condition to effective monitoring, the legal transparency obligations also have an important potential to increase peer competition as they provide new competitive parameters.

The proportionality of the co-regulatory options also lies in their two-step approach which is tailored to platforms' fast changing technological and economic environment. The EU Observatory will follow both the general evolution of the platform economy and the specific issues described in this Impact Assessment, informed amongst other by the legal transparency obligations. Requiring platforms to report in a non-detailed manner , capable of being performed using automated data collection and reporting techniques, is a proportionate way to encourage the use of the internal complaint-handling system to show how effectively it functions. The value of such increased transparency, particularly as the statistics shall be available to the general public, reflects the objective of transparency rules in other sectors, for example, in investor-state arbitration with the aim of, inter alia, increasing accountability and promoting good governance. Options 2b and 2c will thus ensure that the approach put in place remains proportionate to the issues encountered in P2B relations. Policy option 2c will likely increase the effectiveness of the intervention as opposed to policy option 2b. While this would imply additional costs as compared to option 2b, the measures of option 2c are proportionate to what is strictly needed to contribute to achieving the objectives; i.e. the measures foreseen with regard to online general search engines are limited to the only issue of ranking transparency and to the legal standing for representative organisations to act on behalf of their business members.

Option 2d does not appear to be a proportionate solution since it goes beyond what is necessary to achieve the objectives defined. A sufficient level of transparency and predictability for business users could be achieved without risking interfering in the platforms' business strategy. While the technical costs associated with sharing consumers' email addresses are limited, it is difficult to qualify and quantify the further effects this option may have on the platform economy.

Option 2c implies obligations also for online general search engines. Due to their somewhat different nature , online general search engines (regardless of their size) have to index the largest possible number of websites, while also competing on the quality of their algorithms, which are therefore subject to, in some cases, thousands of changes every year. The scope for complaints against online general search engines could thus be higher and potentially concern a broader range of issues; the related litigation costs could thus also be important. In order to ensure the proportionality of the measure and avoid burdensome costs for online general search engines, option 2c foresees an issue-specific extension of the intervention to ranking in online general search. In addition to a targeted legal transparency obligation, option 2c exclusively provides that online general search engine providers will be called upon to voluntarily explore developing codes of conducts. Option 2c ensures the proportionality of costs by the light-touch nature of the legal transparency obligation, which does not provide for any algorithms' disclosure and which builds on existing practices in terms of transparency (Search Engine Optimisation). In addition, the redress measures that could be invoked against providers of online general search engines would be limited to the light-touch enforcement mechanism foreseen for the initiative , and concern a more limited legal transparency obligation (limited to ranking) than that envisaged for business users of online platforms.

Options 2b and 2c offer EU business users trading on platforms an improved and more predictable business environment. At the same time, platforms remain free to set the general policies for their market places and are offered the opportunity to shape their voluntary commitments by way of industry codes of conducts within a principles-based legal framework. These options thus avoid intrusive full-fledged legislation, providing instead an adequate response to these specific problems, whilst safeguarding the innovation capacity of platform firms. In addition, the important harmonising effect of the options will facilitate the scaling-up of online platforms to the benefit of all actors in online intermediated trade as harmonised EU rules will inherently lower compliance costs and enhance legal certainty in particular for cross-border operations.

Option 2a is in principle proportionate since it provides, at limited costs, a comprehensive set of measures that could allow all three specific objectives to be achieved. However, by leaving issues around internal discrimination, data, ranking and MFNs to self-regulation, policy options 2a incorporates the risk of increased fragmentation. The proportionality of option 2a should thus be assessed in light of the extent to which the option contributes to achieving the objectives of the initiative.

EU level action is appropriate due to the intrinsically cross-border nature of online platforms. EU level action is the only way to provide the necessary high-level and harmonised legal framework for platforms to scale up, which is an indispensable condition for their business strategies and overall economic growth. From that perspective, all four retained policy options are appropriate since they provide for an action at EU level.

Options 2a, 2b and 2c are all three coherent with other EU policies and with fundamental rights. Option 2d appears not fully aligned with the objectives of the DSM strategy, as the straight circumvention might impact the platform ecosystem and slow down innovation.

Finally, the definitions covered by all four options are coherent with definitions used in EU existing legislation and currently ongoing Commission initiatives. For the purpose of exhaustiveness, Section 8.3 of the Annex contains an exhaustive overview of all current and proposed definitions for comparison purposes. The Table in Annex 1.3 is an extract focusing on comparison/compatibility with major initiatives in the field of taxation and consumer protection.

In addition, all four options are coherent with competition law. The Commission would continue using its competition law enforcement tools under all four co-regulatory options retained.

All options are have been verified to be coherent with current proposals in the area of copyright (including the aspects related to press publishers rights), consumer law, and upcoming proposals in the field of taxation.

All four retained options are in addition consistent with the Trade Secrets Directive and any information or data lawfully acquired in a P2B2C relationship will continue to enjoy trade secret protection, if it falls under the definition in the Directive. Consistency with the GDPR is also ensured in both options, because the access to personal data remains subject to the full compliance with the GDPR, in particular on the further processing of e-mail addresses in option 3 requiring a valid and informed consent by the data subject as stipulated in Art. 6 of the GDPR.

All retained co-regulatory policy options are also consistent with the Communication on Illegal Content, as measures providing greater clarity reasons for delisting will also support intermediary liability actions. Finally, the measures on redress included in both options are consistent with the New York Convention on Arbitration given that this Convention does not preclude the creation of platform-internal or external dispute settlement mechanisms.

In their objectives, all retained co-regulatory options 2a, 2b, 2c and 2d are coherent with the Digital Single Market Strategy, because they aim at ensuring a fair, open and secure digital environment such as announced in the Commission's DSM mid-term review. It needs to be noted however that the implementation of option 2d may not de facto lead to a strengthened Digital Single Market, as certain consequence of circumventing the platform's intermediation role are not fully understood. Given the importance of platform innovation and the importance of the platform economy for digital transformation and growth, option 2d may, by intervening in online platforms' business model, have a detrimental impact on platforms' incentives and opportunities to innovate and thus negatively impacting the growth potential of the Digital Single Market.

All three Options 2a, 2b and 2c are efficient. Option 2a implies limited costs but its benefits would also be limited. Compared to Option 2b, Option 2c would create larger benefits even though these would also be achieved at a somewhat higher marginal cost. Option 2d appears inefficient; it would entail important costs while there is uncertainty as to the benefits it could bring.

The implementation costs of 2d stem from the additional measure (as compared to 2c) to allow consumers to express their consent to share some data with business users requires only a technical adjustment on the side of platforms, as the data itself can be shared through existing communication channels. Importantly, such a possibility for business users will be linked to the completion of a transaction on the respective platform and to the payment of the platform's commission. Nonetheless, if the sellers have their own sales channels, it may also allow them to circumvent the platform for future transactions and disrupt a core aspect of the platform business model. The increase in free-riding behaviour by business users could endanger online platforms' business models, resulting in decreases in sales through online platforms, limited innovation, and an increase in prices, including for consumers. As a result, despite its limited implementation costs, the negative impacts of option 2d are not negligible and it is not considered efficient in comparison with the baseline scenario.

At the same time, by covering also ranking issues in online general search, Option 2c would create additional benefits. Businesses would be able to develop better informed search optimisation strategies, greater insight in which could lead businesses to access new markets and embrace innovation opportunities offered online, thus also enhancing their competitiveness. Option 2c could also be expected to have a pro-competitive effect between search engines and comparison sites through enhanced transparency, as public ranking policies can provide a greater scope for differentiation by start-ups, new entrants as well as existing players. Competition on quality of products and services among business users dependent on search engines for their marketing strategies could potentially also increase due to greater insight in ranking policies – to the extent such business users' website design are currently sub-optimal for achieving visibility. It is not excluded that Option 2c therefore equally contributes to a more impartial outcome for consumers in the form of higher relevance results being more easily identifiable. A transparency obligation set in EU law would strengthen businesses' ability to use such a provision in court proceedings. Finally, it would also be a helpful complement to enforcement tools under competition law since it would allow greater insight in possible discriminatory behaviours. The additional trust for search engines which would result from the initiative could be expected to counterbalance the limited costs.

Option 2c would extend the compliance requirements to online general search engines. As explained in Section 6, these costs would be related to (i) the implementation of the ranking transparency obligations and (ii) the legal standing obligation from which some limited litigation costs could stem. The additional compliance costs are expected to be rather limited both for bigger search engines (which have provided SEO guidelines that could be usefully re-purposed for business users, or serve in some cases as inspiration for ways to provide meaningful transparency), and for smaller ones (since they would be able to equally draw from existing best practices). Assuming that meaningful transparency requirements are implemented, additional litigation costs would be limited to non-compliance cases. It is important to stress that this option does not generate costs due to loss of business or trade secrets related to disclosure of algorithms, as the requirements would be limited to providing necessary and sufficient information to provide businesses with an understanding of the link between ranking and features of their products and services, as well as the necessary predictability.

The legal redress obligations also build on the out-of-court dispute settlement with a strong track record in solving P2B issues (online mediation) and open these for all business users, regardless of their size. The provision giving legal standing to representative organisations to bring injunctive actions to enforce the effectiveness of internal complaint-handling mechanisms and platforms' mediation efforts will in this regard help nudge even very small business users past their fear of retaliation, as they could anonymously report structural deficiencies. This effect will be further reinforced by the foreseen enhanced monitoring of the online platform economy. Research has also shown that collective redress measures are beneficial to SMEs . Finally, the foreseen monitoring measures would create limited costs for public authorities, which would mostly be covered by running administrative budgets. And although the monitoring measures are light-touch, they have an immediate reputational effect and are important in informing the review of the intervention. Overall, option 2b is an efficient measure that effectively reaches the objectives of the action while limiting costs. While online platforms may face increased public scrutiny in areas of commercial relevance (like data access policies or the use of MFN clauses), increased transparency together with continuous EU monitoring of the platform economy and public scrutiny should yield increased trust and improved competition to the benefit of all market participants.

The possible risk of any negative impact on legal certainty for online platforms is also limited, given the important scope for industry action in implementing the details, and the generally aligned incentives (as described in more detail in chapter 6). Exempting certain categories of online platforms (e.g. smaller ones) from the potentially more burdensome legal obligation to provide effective internal complaint-handling mechanisms, while enabling these firms to opt-in, would at the same time ensure that the cascade of legal obligations to provide redress is cost-efficient, in particular also in light of the co-regulatory design of the measure (building on existing best practices) and the largely aligned incentives of platforms and business users to minimize frictions.

Option 2b is a cost-efficient solution to ensure increased transparency, effective redress and, as under the other co-regulatory policy options retained, an appropriate monitoring of the platform economy. As described in Chapter 6 and Annex 4.1.2, the measures on transparency will require relatively small adjustments to be made by online platforms (one-off costs to adjust their terms and conditions, including legal and communication costs, and limited running costs when their terms and conditions change, which would be similar to the baseline scenario), and would provide greater legal certainty to business users.

Option 2a is expected to lead to rather limited implementation costs. The broader range of issues left to self-regulation by industry suggest that option 2a would be less burdensome for platforms since they would be essentially free to respond to the call for transparency on a number of more complex and important commercial issues. At the same time, the benefits brought by this policy option could also be more limited by leaving four out of the six harmful trading practices out of the scope of the regulation. The limited costs should thus be compared with the more likely limited benefits.

Option 2d appears effective in achieving the first and second specific objectives, but significantly less effective on objective 3, by potentially circumventing the business model of online platforms.

Option 2c is more effective still since its expanded scope also covers online general search the expected positive effects of the transparency obligation and of the legal standing provision as appropriate and proportionate. Increased trust and legal certainty would extend also to the online general search environment. The extension of the scope to online general search engines would help optimising businesses' online visibility across the board. Greater transparency would also increase trust in online general search engines.

Option 2b is effective as regards all three objectives: it provides a holistic set of transparency measures for a predictable business environment in areas that matter for businesses, while allowing redress for these issues, and at the same time providing an innovation-friendly business environment for online platforms.

Option 2a incorporates - relative to the other co-regulatory policy options - the greatest degree of uncertainty in terms of its effectiveness to achieve specific objectives 1 and 2. It will nonetheless provide a legal framework for platform-to-business relations incorporating important redress provisions to help minimize frictions in platform-to-business relations. This framework will also leverage the foreseen enhanced monitoring of the online platform economy, including on those potentially harmful trading practices left to self-regulation. In absolute terms, policy option 2a can therefore be expected to contribute to achieving specific objectives 1 and 2 as compared to the baseline with moderate effectiveness. As regards specific objective 3 however, policy option 2a would have more limited effectiveness since it leaves a relatively large scope for fragmentation to increase.

This effect is not as clear under option 2d which risks running counter to platforms' innovation incentives. The obligation for platforms to allow business users to ask for customers' consent for further processing of their e-mail addresses impacts data which is a core element of platforms' business models. More information would be needed to assess the effects on competition and innovation as well as on any potential free-riding phenomenon. Option 2d thus risks being relatively ineffective in reaching specific objective 3.

Options 2b and 2c, through a comprehensive set of measures could be expected to contribute to a general legal framework and EU level and increase platforms' innovation capacity. The option is therefore more effective than the baseline in ensuring an innovation–friendly legal environment for platforms as foreseen in specific objective 3.

Option 2a cannot meet the third specific objective of ensuring regulatory predictability for online platforms and general search engines since this option would not sufficiently contribute to addressing the emerging issue of legal fragmentation. This relatively weak effect would result, on the one hand, from less effective and patchier industry-led action on complex issues such as ranking in the absence of a principles-based harmonised legal backstop. On the other hand, leaving the four most controversial commercial issues observed (ranking, discrimination, data and MFNs) fully to self-regulation, while nonetheless introducing a legal framework for the overall P2B relationship within which these occur, risks increasing political pressure on national regulators to take more far-reaching action on these topics.

None of the options aims to harmonise national B2B fairness legislations. Nonetheless, the legal framework the co-regulatory options propose, combined with (i) the increased industry involvement through voluntary commitments, and (ii) the collaborative monitoring with Member States would limit the legal fragmentation of the internal market and ensure a more harmonised EU approach to P2B practices across the EU, thereby supporting a more predictable regulatory environment at EU level and increasing businesses' trust thus benefitting the growth of the entire platform sector through amplified network effects.

In addition, all three options 2b, 2c and 2d would set a harmonised legal framework for P2B relations on all core potentially harmful trading practices that have been observed, contributing to creating a predictable and innovation–friendly legal environment for platforms (specific objective 3). The platform economy would thus benefit from more consistent regulatory approaches across the EU.

The issue of ranking is nonetheless the most business-critical issue that has arisen in this context, hence its inclusion in the retained policy options policy (namely 2c and 2d) in the first place. The apparent reduced scope of issues that may be brought before the out-of-court redress mechanisms in relation to issues encountered with online general search engines (i.e. limited to ranking) as compared to the three categories of online platforms therefore does not negatively affect the effectiveness of policy options 2c and 2d. The latter options actually imply a higher degree of effectiveness in achieving specific objective 2, relative to options 2a and 2b, by virtue of the range of issues which can be challenged in a redress process.

As explained in Table 1, options 2c and 2d involve an issue-specific extension of the intervention to ranking in online general search. To ensure proportionality in light of the fundamental differences between online platforms and online general search engines (cf. section 2.1.1.3), the improved redress for issues with online general search engine providers will be limited to legal standing for business users' representative organisations.

Option 2a, can be expected to contribute to a more limited extent to offering effective redress for the four harmful trading practices of ranking, MFNs, discrimination and data left to self-regulation. In the absence of a regulatory backstop in the form of legal transparency principles and standing to enforce these transparency principles by business associations, business users could reasonably be expected to feel less empowered for these four specific practices to confront online platform providers in light of the very significant fear of retaliation.

All retained policy options offer solutions to the lack of redress issue identified (thus contributing to achieving specific objective 2) through the proposed set of enforcement measures. The latter consists of (i) the obligation to provide for effective internal complaint-handling, (ii) the obligation to identify mediators and to engage with them in good faith, and (iii) the provision on standing for business associations (collective injunctive redress). In addition, the redress-related measures include the dual call on industry to voluntarily (a) explore developing codes of conducts for the internal complaint-handling, and (b) set up an external independent redress mechanism at EU level responding to an effectiveness legal requirement. Whereas standing for business associations is meant exclusively to enforce the light-touch transparency & redress obligations in the P2B Regulation, the obligations on internal complaint-handling and mediation are intended to allow business users to bring complaints on any substantial issues arising out of their contractual relationship with online platforms (including any alleged act in breach of any legal obligation).

Options 2c and 2d foresee the inclusion of online general search engines in the initiative. These two options thus allow the initiative to simultaneously cover the two most important ranking-based originators of Internet traffic (online platforms and online general search engines). Options 2c and 2d appear therefore highly effective in achieving the objective of more transparent and predictable environment for businesses dependent on both online platforms and online general search engines. The effectiveness of Option 2b as regards Objective 1 is between that of Option 2a and 2c and 2d, and therefore intermediate.

Option 2d is thus particularly effective in achieving specific objective 1 since it provides for a significant increase in transparency offered to business users who would in addition have access to email contacts of their customers. Option 2a differs in that the action it foresees to address four out of the six harmful trading practices is limited to self-regulation. By leaving significant issues in relation to transparency on data access policies, ranking, MFNs and discrimination to industry, option 2a is, however, likely to be less effective as the participation in self-regulatory schemes is less likely to be uniform across the Digital Single Market. Option 2a could thus be expected to lead only to a modest improvement over the baseline.

Options 2b, 2c and 2d are all more effective in reaching the first specific objective as compared to the baseline, as they all provide for greater predictability and transparency on elements of the relationship between platforms and businesses. Given that the scope of the legal measures foreseen increases from policy option 2b to policy option 2d, the effectiveness of each of these three options as compared to the baseline also increases from 2b to 2d.

Options 2b, 2c and 2d address the potentially harmful trading practices identified in the problem statement thus contributing to ensuring a fair and predictable business environment for platforms’ business users. In particular, (i) the transparency requirements on ranking, discrimination, data and MFN clauses, (ii) the obligation on platforms to provide information about substantial changes in terms and conditions, and to grant firms a reasonable notice period to adapt to the changes announced, and (iii) enhanced redress possibilities for platforms' professional users, together with the continuous monitoring of the platform ecosystem contribute to a fairer, more predictable and trusted business environment based on a set of enforceable rules.

All four retained options consist of measures on transparency and redress, and are intended to leverage the foreseen enhanced monitoring of the platform economy . The options are largely similar with respect to the redress (see Section 7.1.1 in this respect) and monitoring tools proposed. The comparison of the options on the basis of their effects against the baseline would hence mainly be influenced by the nature of the transparency obligations in each of the options: option 2a imposes legal transparency obligations on two out of the six most frequently observed, potentially harmful trading practices, option 2b proposes legal transparency obligations also in respect of the four practices left to self-regulation in 2a; option 2c extends the legally binding transparency obligation on ranking also in a targeted manner to the issue of ranking in online general search, while option 2d adds the obligation for platforms to provide any business user with the opportunity to ask, in line with the GDPR, for customers' consent for the business to obtain and process their e-mail addresses after the completion of a transaction and the payment of the commission to the respective platform. The fact that the vast majority of platforms do not allow this has been identified as a crucial problem for business users related to data as described in Section 2.1.1.

This Section discusses the effectiveness, efficiency, coherence and proportionality of the four retained policy options 2a, 2b, 2c and 2d (such as defined in Table 1 and summarised in the introduction to Section 6) in comparison with the baseline scenario. The baseline scenario (option 0) as basis for comparison is described in Section 2.4 and 5.1.

The targeted legal transparency obligation on ranking in online general search strengthens the positive impact of policy options 2a and 2b on business users' right to conduct their business, while leaving the corresponding right of providers of online general search engines unaffected.

Legal measures on technically complex issues such as ranking imply some risk of legal uncertainty for online platforms, which should however be alleviated by the co-regulatory design that uses technologically neutral legal principles to be implemented by industry. These measures combined with the legal redress measures at the same time ensure the appropriate respect for business users' freedom to contract as well as for their right of access to justice.

The legal transparency and redress measures will help safeguard the freedom to contract (to conduct a business), by improving the situation for business users without affecting online platforms' freedom to determine their business concepts implemented in general terms and conditions. These measures will also improve the right of access to justice for business users, by addressing importing barriers to accessing cross-border justice.

Uncertain: sharing of data is a direct burden for consumers. If considered too heavy by them, the email-related obligation may result in reduced purchase on online platforms. This could negatively affect indirect network effects and lead in the long term to reduced consumer choice.

Positive: improved P2B relations will allow maintaining and possibly increasing consumers' choice in terms of quality goods and services offered at a competitive price. Legal transparency obligation on ranking combined with EU monitoring may in addition have particularly important indirect positive effect for consumers that will be able to make more informed purchasing decisions.

Neutral to positive: linked to growth, the limited scope of the legal transparency obligations can undermine some of the trust-building effect of the intervention and thereby limit the positive impact on consumer choice.

Negative to neutral: as for option 2c but the business model of platforms may be impacted by sharing of data, which makes the effect uncertain on inter-platform competition. Uncertainty is also true for business- and end- users – the potential positive effect expected could be counteracted by consumers concluding fewer transactions because of the increased burden to prior respond to email sharing requests.

Positive: the mandatory transparency provides additional competitive parameters for start-up platform companies. Even small increases in user trust will equally support the growth of existing platforms as well as the emergence of startup platforms.

Positive: As in option 2b. In addition, if greater insight in SEO leads businesses to access new markets and embrace innovation (cf. above) this could translate in strengthened positive impact on competitiveness.

Positive: competitiveness would be reinforced through the enhanced incentives for platforms to compete on the basis of greater transparency and increased quality of service. Positive impact on trust and presumably growth of the sector would support international competitiveness through increased innovation opportunities for business users and platforms. Start-up and small platforms could use increased transparency and redress standards (incentivised through the measure) to build a competitive advantage.

Negative: may interfere with platforms' ability to develop new data-driven services and products. This could in turn reduce innovation opportunities offered to business users.

Neutral to positive: any action injecting trust would increase sales, thus creating revenues for innovation. However, as with the foreseen impact on growth, the limited scope of the legal transparency obligations can undermine some of the trust-building effect of the intervention and thereby limit the positive impact on innovation.

Uncertain: impact would depend on whether the immediate effect of possible increase in number of jobs by business users would outweigh possible job cuts. The latter would be due to potential decrease in business opportunities in the platform economy as a result of option 2d – related obligations.

Positive: As option 2b, option 2c could be expected to lead to increased employment opportunities for businesses dependent on online platforms and on general search engines. Should the positive effect be more limited than expected, option 2c would contribute to maintaining existing jobs.

Positive: as in option 2b but the maintaining effect on employment could be expected to be stronger due to the additional incentives provided by the legal character of transparency measures for all six issues. Expected positive social impact.

Limited costs: legal obligations require mostly one-off implementation and are easy to monitor. Moreover, instead of relying on public enforcement that would have to be financed by national or EU administrations, the co-regulatory design of this policy option foresees private litigation by representative associations and therefore implies no additional costs. Finally, the Commission will bear the costs of EU Observatory and portal.

Positive to neutral: In addition to benefits under option 2c, option 2d would allow business users to expand their customer base. Potentially negative effects are however not to be excluded in the longer term if platforms' environment dynamics change as a result of option 2d's impact on platforms' business strategies.

Positive: In addition to benefits identified under option 2a, businesses would be able to develop better informed search optimisation strategies. This would be particularly beneficial for SMEs and enterprises with no or emerging online presence.

Positive: Business users would benefit from greater predictability. Clarity of platforms' policies and improved access to redress would allow businesses to better grasp the innovation and business opportunities offered by online intermediaries. Business users' sales would grow as a result from their increased trust in the platform economy and stemming strengthened network effects.

Negative to neutral: While thresholds may help small platforms to develop new business models, this option may impact platforms' business strategies. It does imply relatively high costs for platforms without creating benefits to compensate for costs.

Limited costs: the extension of the ranking transparency requirement and parts of redress would create some limited costs for online general search engines. The additional trust for search engines which would result from the initiative is expected to counterbalance the limited costs.

Limited costs: the impacts of 2a are also valid here. The extension of the legally binding nature of the requirements to all areas of issues would create some additional one-off and running costs as compared to 2a. These costs remain limited to ensure the effectiveness of the obligations and exempt small platforms from disproportionate burden (possibility for thresholds to be reviewed in a second step). The limited regulatory costs are expected to be outweighed by the increased growth opportunities for platforms (more sales would also translate in increased commissions for platforms) created by positive indirect network effects. Small platforms can benefit from appropriate thresholds to grow. A clear and predictable regulatory environment would also support emergence of new players.

Smaller platforms are exempted from the most burdensome internal redress mechanism obligation. The two-step approach will ensure that thresholds are adapted if needed to respond to the evolution of the fast-changing platform economy. Threshold for small platforms will support emergence of new players.

Minimal costs: The legal transparency obligations on terms and conditions and delisting imply only limited costs for platforms while allowing them to benefit from increased trust.

Uncertain: risk of free-riding by business users limits positive impact on sales realised on online platforms. While growth in the online intermediation could be suboptimal, it could possibly be compensated to some extent by growth in online sales on business users' own websites.

Positive: increase in trust in the platform environment will support growth in sales realised on online platforms. This impact, positive both for platforms and business users would contribute to mitigating possible impact of compliance costs. The expected growth of the platform economy in conjunction with foreseen growth of online activities could be expected to contribute to digital growth within the internal market.

Neutral to positive: increase in trust in the platform environment will support growth in sales, while limited legal obligations represent minimal compliance costs. Leaving high-profile issues such as ranking, data, discrimination and MFNs to self-regulation can however undermine some of the trust-building effect of the legal measures on terms & conditions, delisting and redress, following increasing awareness and concern among businesses.

As in previous options 2b and 2c: transparency and redress measures will increase legal certainty, and monitoring tools will help limit further fragmentation.

Positive: reduced need to intervene at national level to resolve them. The new rules together with the EU observatory will help allow building a common EU understanding of what issues are, thus also allowing for more consistent regulatory approaches when such are deemed necessary at national level.

Neutral to positive: legal transparency and redress measures will increase legal certainty. However, with various high-impact trading practices being left to self-regulation (ranking, data, discrimination, MFNs), this options may not prevent direct harm to businesses. The effect of EU monitoring / pushing reputational levers will also be less pronounced in the absence of legal transparency obligations on all high-impact trading practices. The risk of fragmentation thus remains large since national authorities would continue intervening to solve existing imbalances.

All co-regulatory options fully comply with the Charter of Fundamental Rights ("CFR"), in particular with Articles 8, 16 and 47 CFR. The rationale behind this initiative is to establish a more balanced commercial relationship, while ensuring that platforms maintain full discretion over their business concepts. The underlying analysis showing this compliance is available in annex 12.8.

Business-oriented fair practices would also complement consumer protection rules, thus enhancing end-users trust in the platform economy, giving them confidence in buying online thus benefitting from larger cross-border offer. This could support the existing trend of growing consumer trust in e-commerce. More than one in two Europeans now buy online (55% of consumers in 2016). Since 2014, consumers' levels of trust have increased by 12 percentage points for purchases from retailers located in the same country (72.4% of consumers are confident buying online in their own country) and by 21 % for purchases from other EU Member States (57.8%).

When analysing impacts on consumers under option 2c, it is important to underline the value added that online general search engines have brought for them – in one-click consumers have access to a huge variety of information, businesses, goods and services. While the ranking transparency obligation does not target "consumer users" (i.e. searchers), a transparency obligation would indirectly contribute to safeguarding and possibly strengthening this positive effect. A transparency obligation would incentivise search engine operators to be more cautious and transparent in those instances where there a conflict of interest could exist between their own services and competitors' services. This would possibly contribute to a more impartial and pro-competitive outcome for consumers.

Option 2d, however, might increase in some consumer costs as platforms may be partially deprived of one of their key assets, i.e. consumer data. As the exact share of consumers who would agree to this measure is difficult to estimate, it is equally difficult to determine whether platforms would pass on possible losses from this measure to consumers.

In terms of costs for consumer, the nature of the platform economy business-model (focused on consumer acquisition even at a loss, attention economy, generally low switching costs in many markets), combined with the proportionate nature of the obligations in all the retained options indicates that costs for consumers would not increase. On the contrary, the expected increase in the number of platforms and businesses active on these platforms would likely lead to increased choice for consumers on online platforms and increased competition among business users for these consumers, thus better prices and quality.

The impacts on consumers in terms of costs, choice and trust can be estimated as follows.

In addition, while the primary impacts of the initiative are of an economic nature, some beneficial social impact in particular for self-employed individuals is conceivable. A large part of sellers on e-commerce market places are self-employed individuals, with 89% of all sellers achieving a turnover of less than € 50,000. In addition, both options will cover collaborative economy platforms to the extent these host professional users. Whether a user of a platform is considered professional or not depends on national rules in the EU. However, the proposed obligations would lead to greater transparency, predictability, and certainty for all users. Overall, although difficult to quantify, it is therefore reasonable to assume that the proposed options will provide more predictability also to the benefit of a large number of particularly vulnerable economic actors. The net benefit of the initiative – improved businesses' access to innovation and business opportunities created by inline platforms, increased competition leading to lower prices, higher quality and broader choice for consumers of goods and services offered on online platforms - should outweigh the costs.

The overall impact of the co-regulatory options on social welfare including in particular employment and related social impact are likely to be positive, building further on the 4.7 million jobs which can be roughly attributed as being generated by business users in the platform economy. As described above the measures aiming to full potential of the online platform economy will lead to an increase in turnover for both business users and platforms. The increase of business users' turnover may be expected to lead to increased employment opportunities. This expectation would probably be less valid for online platforms despite the fact that they will see their revenues from commissions increasing (as a result of the increase in sales over platforms). Given that platforms are innovation-driven, it would be difficult to predict whether they would use increased revenues to create additional jobs instead of investing in research and development.

The positive effect on online platforms will be more limited in option 2d, where the risk of free-riding by business users is greater; the number of business users active on platforms may not increase as much, if platforms are faced with the need to redesign their business strategies. The dynamics behind each of the four options are explained more in detail in Annex 12.4.3.

Option 2c would extend these above effects to online general search engines and the business users who use them as a gateway to customers. This option may be expected to have an indirect positive effect through enhanced transparency as a complementary tool to competition law.

In option 2b, the increased trust resulting from the resolution of disputes with online platforms will expand the business user base of existing platforms. This will feed into the existing network effects laid out in the problem statement. The resulting renewed dynamism of the platform economy would a priori allow the emergence of new, small platforms. Legally binding transparency rules on all six issues identified and appropriate redress tools could also be expected to contribute to more competition among business users.

Under option 2a, the mandatory transparency provides additional competitive parameters for start-up platform companies. Even small increases in user trust will equally support the growth of existing platforms as well as the emergence of start-up platforms. Increased transparency though non-binding for some of the issues would possibly give the right signal to more businesses to use online intermediation; this could in return lead to more competition.

In terms of competition, the co-regulatory options retained would set a standard for higher quality of service thus creating the opportunity for start-up platforms to compete on the basis of the better business environment they would offer to professional users. Options 2a, 2b and 2c would thus likely create the right regulatory environment for increased competition as compared to the baseline scenario on both sides of the market - among platforms and among businesses present on these platforms. Increased competition could be expected to lead to higher quality products/services provided to business- and end-users.

In terms of competitiveness, EU-based online platforms will not be undermined by the proposed measures, irrespective of the policy option chosen. On the contrary, the platform ecosystem may be expected to become more competitive as a result of this initiative aiming at greater predictability for the platform ecosystem. Policy options 2a, 2b and 2c will, although to a different extent, have a positive or neutral impact on the three components of competitiveness as defined in the Better Regulation toolbox, i.e. price- , innovation- and international competitiveness. Notwithstanding their broader scope, policy options 2b and 2c are light-touch and do not imply significant costs for online platforms. Also, since all platforms intermediating between EU-based business users and consumers will have to comply with the measure, any risk of European platforms being undercut by platforms not complying with the proposed measure is minimal. Rather than driving operators of online platforms out of Europe, the proposed measure is estimated to increase trust and lead to an increase in the number of businesses present on online platforms. The impact of option 2d on competitiveness is more difficult to predict: its immediate impact on business users would be increased revenues due to improved customer base but it may affect negatively platforms. If it leads to their reduced ability to innovate and compete, this effect could be passed on business users in the longer term (cf. annex 12.4.2).

All co-regulatory options that aim at releasing the full potential of the online platform economy can thus positively impact innovation both on the side of the platforms and of the business users. It is legitimate to expect an increase in platforms' innovation expenses under options 2a, 2b and 2c. Different from them, policy option 2d may have a negative impact on innovation, as data lies at the centre of platforms' business models. The innovation-related considerations for each policy options 2a, 2b, 2c and 2d are detailed in Annex 12.4.1.

Online platforms are important drivers and enablers of innovation (Section 2.3.5), thus contributing to digital transformation of the economy and enhancing businesses' competitiveness. Business users, in turn, are important innovators, using the innovation-enabling software "building blocks" and market access provided to them by online platforms. The millions of sellers active on e-commerce market places provide constant feedback to online platform operators on logistical, software and commercial problems encountered and on possible innovative ways to address them. App developers provide a constantly improving richness of content that no single platform could have imagined or engineered. Research confirms this key role played by communities, networks and user involvement in platform innovation. Regulatory action on P2B relations could hamper the innovation capacity of online platform ecosystems only if it were too interventionist, as it would divert resources from innovation activities to regulatory compliance activities. All retained options are designed to be proportionate and do not interfere with platforms' business models. The coherence with innovation is indeed also a specific criterion against which each content option has been checked (see table 2 in Annex 10). Conversely, the impact in terms of innovation on the side of business users can be similarly expected to be positive, as business users trading via platforms can benefit from a more predictable and contestable business environment and focus even more on product and service improvements and innovation.

National authorities will not be directly impacted by any of the co-regulatory options. Over time, the obligation on platforms to list national mediators in their terms and conditions and to engage with them in good faith might lead to more P2B cases being brought before such mediators. Mediation is a private activity which will not impact public authorities. Member States will moreover not be required to adapt their existing certification schemes for mediators; those that already have such schemes in place will simply provide this existing service also for any new mediators that may enter the specialised area of P2B relations. Any possible burden on national court systems is also expected to remain limited as a result of the layered design of the legal redress provisions. All co-regulatory options rely on out-of-court, alternative dispute settlement mechanisms to solve substantive issues arising between business users and online platforms. The legal provision granting standing to business associations is a tool to encourage online platforms to actually engage in these out-of-court mechanisms to effectively resolve disputes without having to resort to national courts. In Member States, the mere threat of possible collective interest litigation is a sufficient deterrent to encourage industry compliance with obligations. It will not be possible for these associations, as representatives of the business users, to rely on the foreseen legal instrument to instigate court cases concerning substantive issues relevant to individual business users. Rather such cases shall be limited to the prevention or termination of non-compliance with the obligations in the foreseen legal instrument, which will be limited to those that do not make the necessary adaptations.

Businesses' turnover is in addition directly impacted by the visibility they get on online general search engines. A transparency obligation on ranking in general search, such as foreseen under policy option 2c, would allow more predictability for business users. As explained in section 2.1.1.3, the legal transparency obligation on ranking would thereby additionally cover 20%-30% of total Internet traffic received by online platforms and respectively >50% and >70% of Internet traffic received by retailers' and hotels' own websites. Given the regular and high rate of algorithms changes done by online general search engines, such obligation would help businesses to develop better informed search optimisation strategies. This would be particularly beneficial for enterprises with little or no online presence.

None of the options will create significant costs for SME business users. On the contrary, SME users of platforms stand to gain from measures that will provide them with greater ease of doing business and enhanced legal certainty. This includes in particular the measures on transparency and minimum notice periods for changes to terms and conditions, transparency on the reasons for suspension or delisting, and transparency on the criteria for paid ranking results. These measures would lead to savings for smaller business users, as they would be spared the costs linked to reinstating accounts or products that have been blocked. In the case of paid-for ranking results, the increased transparency around the auctions oftentimes used to award increased visibility would be beneficial to smaller business users, as they could either choose not to participate where the resulting ranking is unlikely to be satisfactory, thus saving them the cost of participation, or choose to participate, and gain increased exposure. This was confirmed in the replies to the Commission's consultation of SMEs through the Small Business Act Follow-up Group.

As regards potential retaliatory actions from platforms towards the businesses active on them, neither of the options retained is estimated likely to trigger them. The fear of retaliation expressed in parts of the stakeholder consultation process concerned measures taken by certain platforms against individual businesses, or groups of businesses, as payback for specific actions. The co-regulatory options retained do not, however, single out particular businesses or specific actions that might single out a particular business to a platform. They rather increase clarity on the grounds for suspension or termination on the use of a platform, how ranking operates including mechanisms that allow business users to influence their prominence etc. and give more time to react to changes in terms and conditions or understand why a decision has been taken to delist or suspend them. Furthermore, the specific measures put forward in the proposal (redress mechanisms, observatory, etc.) contain safeguards against businesses being endangered for making use of the new functions: the use of external mediators must fit the criteria of anonymity and independence, the internal redress mechanisms would be open for use to all the businesses on a platform, therefore making it hard for the platform to reasonably single out and punish against one single business, etc. In addition, a platform choosing not to adopt the new features designed to enhance trust and increase the quality of the experience for a business would find itself at a disadvantage compared to other platforms that choose to attract businesses by improving the quality of the seller's experience, and therefore, risk losing its market share among sellers.

In the event that platforms consider transferring the additional costs incurred onto the sellers, the additional burden on the business user is foreseen to be highly limited. Using the estimates under 6.2.1, should platforms transfer the entirety of the one-off cost of setting up an internal redress mechanism towards its existing business users, the additional cost increase for each seller is foreseen to be minute. Beyond the increased sales through platforms, the creation of an effective redress mechanism will be particularly positive for business users. In combination with the greater clarity provided by the transparency measures on the reasons for differences with platforms, business users will have a greater chance of quickly and effectively solving disputes with online platforms. This may mean that more business users find grounds under which they can take problematic cases to court, using for instance collective interest litigation. Nonetheless, it will be in the interest of both business users and platforms to make greater use of the possibilities offered by mediation, which both co-regulatory options make more readily available. Mediation has been shown to be a more flexible and cost-effective solution. A European Parliament study on the cost of (non-)mediation has shown that an average cost to litigate in the EU is more than € 10,000, while the average cost to mediate is approx. € 2,500. Therefore when mediation is successful, it could save € 7,500 per dispute .

Compliance costs linked to the co-regulatory options will not have a short term effect on the fees and commissions applied by online platforms. Compliance costs linked to establishing transparent terms and conditions are, as explained in the previous sections, limited and apply to platforms, not their business users. Certain platforms might decide to use the opportunity created by the implementation of a legislative initiative to increase the fees applied to business users, who may in turn pass these on to consumers. If these increases were to be substantial, the effects described above would be limited by a dampening effect on sales. However, it is unlikely that platforms will significantly increase their levels of fees or commissions, as the compliance costs of the co-regulatory options are limited and because business models in the platform economy frequently accept growth at high internal costs in order to acquire users on both sides of the platform, in order to leverage the network effects.

According to data available to the Commission there would currently be approximately 12 500 non-EU platforms active in the market world-wide. The elements presented for the co-regulatory options are applicable to EU platforms and would apply equally to these non-EU platforms, if they intermediate between EU business users and consumers located in the EU. While the measures would not restrict the platforms' freedom to determine the law and forum applicable to contractual issues, these clauses should not prevent the enforcement in (EU) courts of the envisaged P2B rules by business users - obviously in full compliance with private international law, including the Hague Convention or the Rome I, Rome II and Brussels Ibis Regulations. The mediation possibilities which would be offered constitute a considerable change to the current situation in which EU business users do not have any other choice but to revert to the extra-EU court set by a non-EU platform in its terms and conditions. However, it should be noted that submitting to the outcome of mediation proceedings will remain voluntary, both for EU and non-EU platforms.

This option would imply that not only the relevant legal transparency requirements would be applicable to all types of platforms but all proposed obligations. In light of the above explained need to account for the more burdensome nature of the internal redress mechanism, option D does not appear to constitute an effective alternative.

Another option would be to combine the internal-redress related threshold with a general micro-enterprise exemption applicable to the entire measure (C).

This option may be designed to exempt from the entire measure those platforms which qualify either for micro- or for small-enterprises. Excluding exclusively micro-enterprises from the entire measure would risk putting the threshold too low, thus imposing the more burdensome internal redress obligations to platforms which may not be ready yet to absorb such measure as many such companies are still in the seed phase. As explained above, the proportionality principle rather suggests for not only micro- but also small enterprises to be exempted from those measures for which the regulatory burden may be more significant. On the other hand, if a single horizontal threshold is set for all small platforms, this would imply that almost half of all existing online platforms are exempted. This may appear unjustified given the light touch approach of the legal transparency requirements proposed, the exemption of these platforms from the most burdensome obligation and the fact that platforms having between 10 and 50 employees can already fulfil an important gateway function. Thus, a horizontal threshold applicable to the entire initiative, while clear and simple for implementation, does not appear appropriate to the measures proposed. The latter rather call for a targeted threshold taking into consideration in particular the more burdensome nature of the internal redress rule.

Instead of using the staff headcount and/or turnover, an option would be to use different proxies when defining the thresholds, such as number of website visits/month (as in the Loi Lemaire), or number of registered users (as the German NetzDG definition). This would potentially allow targeting the exemption more narrowly to start-up and scale-up platforms that can be guaranteed not (yet) to have significant user bases. These metrics are however disconnected from need to limit the impact of the cost of internal complaint-handling, as even online platforms having significantly less than 50 employees may command relatively large user bases; these firms have frequently been seen not yet to generate any turnover and may precisely be unable to absorb such costs. Also, large variations in user numbers or website visits are possible depending on the date, either seasonal or due to fast growth periods, leading to uncertainty for the business on whether it is concerned or not by the rules. Basing thresholds on number of registered users would also decrease platforms' incentives to increase their user base thus artificially limiting network effects which are at the core of platforms' business models. Although the number of website visits and active users are routinely measured by online platforms themselves, they are not publicly reported. The criteria used in the SME definition seem therefore more appropriate for the purpose of setting a meaningful threshold.

By excluding platforms with < 50 employees from the internal redress measure, 47% of all EU platforms would be exempted from this specific obligation, while a large proportion of all transactions would nonetheless be covered . This option would reflect the light-touch approach behind the transparency requirements which would apply to all companies. The extra burden associated with the initiative would be limited, and the measure may provide a competitive edge to very small platforms who want to build a customer base; they would be able to attract customers by offering them clear and transparent terms and conditions, similarly to bigger platforms.

As to the precise setting of the threshold, the SME definition based on the double criterion of staff headcount and turnover/balance sheet has been considered. The question is whether the threshold should be set at the level of a small or micro-enterprise? Available data does not allow drawing a clear distinction between the impacts of the internal redress on these two types of platforms. In order to avoid any disproportionate burden it seems therefore more appropriate to exempt all online platforms constituting a small enterprise (< 50 employees) from the obligation to provide for an internal complaint-handling mechanism. This would support the scaling up of both start-up and emerging small platforms.

One option would be to exempt smaller platforms from those measures for which an administrative burden cannot be fully excluded, i.e. from the most burdensome measures in relative terms. This approach would mean that the relevant legal transparency obligations foreseen under the various co-regulatory options apply to all online platforms, while the internal redress mechanism which appears more costly (cf. Section 6.2.1.2) is not applicable to a certain category of smaller platforms.

(A): A threshold exempting some categories of online platforms from those measures for which a significant impact cannot be excluded, based on impacts assessed above

The main considerations in relation to thresholds concern the degree to which the underlying problem analysis applies to smaller online platforms and the regulatory burden which would stem from the proposed intervention. Different "threshold" possibilities are considered below while Section 8 dealing with the preferred policy option presents the conclusions of the analysis.

Several questions arise when considering options for thresholds: For which measures are thresholds needed? If they are needed, how should they be set? Which measurements or proxies can be used to determine their level and to verify compliance easily?

This type of considerations raises the question whether specific thresholds are needed to exempt some types of enterprises from the proposed regulation. Irrespective of which of the four retained options would appear as the most appropriate on the basis of the comparative analysis performed in Section 7, the evaluation of the regulatory burden of this Initiative requires an assessment of whether micro-enterprises or other categories of companies should be exempted from its scope in line with the Think Small First and the Better Regulation principles . The following section analyses this question.

Imposing new legislation could in theory lead to increased difficulties for new market entrants. In this case it can rather be expected that the provisions will provide start-ups with greater clarity on the requirements they need to comply with across the EU when entering the market thus benefitting from a more predictable regulatory environment. Such legal transparency requirements could also provide additional competitive parameters that can be leveraged to distinguish the start-up platforms from established players and thereby enhance market entry. At the same time, while an efficient and speedy internal dispute resolution process could be possibly ensured through automated systems - chatbots can be used for a first screening of complaints, with justified claims eventually being dealt with in person - the creation of an internal escalation mech