In an effort to prevent online platforms such as Amazon, Apple and Google from treating smaller businesses that use their services unfairly, the European Commission (opens in new tab) is drafting a new regulation that will require companies to be more transparent about how they rank search results and why they choose to de-list services.
The proposal aims to address harmful trading practices by online platforms that make it difficult for smaller businesses to reach their customers.
Large tech companies have faced increased scrutiny from the European Commission recently over a number of issues ranging from taxes (opens in new tab) to how they handle extremist content posted on social media (opens in new tab).
Initially the proposal would have excluded search engines such as Google and Bing but instead they have been included due to how a business' ranking on a search engine can negatively affect potential sales.
As it stands now, the companies behind popular search engines, app stores and e-commerce sites will have to indicate the “most important parameters determining ranking.” The companies will not have to disclose the entirety of their algorithms but will have to provide a general description explaining how their ranking mechanism considers the quality of products and services.
Online platforms will also be required to inform users 15 days before making changes to their terms and conditions. Businesses that have been de-listed will also have to be told why they have been suspended from a online platform in a similar way to how Google and Apple notify app makers after removing their apps from their stores (opens in new tab).
The proposal will likely be published in April and then national governments and the European Parliament will have to agree to its terms before it can go into effect.
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