Amazon, Google, but not only them.
The increasingly frequent use by businesses of digital service providers (given the advantages – in terms of expanding business opportunities – that they can achieve) has led to a significant acceleration in the European legislator's plan to regulate the provision of digital services uniformly in all EU Member States.
This represents the backdrop for Regulation (EU) 2019/1150 1 (also known as the Platform to Business Regulation or, more simply, the P2B Regulation) (hereinafter the "Regulation") which introduces new obligations for providers of online brokerage services and search engines in terms of transparency and greater fairness in their relationships with commercial users and those who own business websites.
Hence the stated aim is tackling imbalances and unfair trading practices.
With the approval of Law No. 178/2020 (hereinafter the "2021 Budget Law"), the Italian legislator, when adapting internal legislation to the provisions of the Regulation, also laid down additional and burdensome obligations for providers of online brokerage services and search engines.
But which entities are specifically bound by the new obligations? And what are the additional obligations under the 2021 Budget Law?
- The entities bound by the obligations
To identify the bound by the obligations reference must be made to Article 1 (2) of the Regulation, according to which it "This Regulation shall apply to online brokerage services and online search engines provided, or offered to be provided, to business users and corporate website users, respectively, that have their place of establishment or residence in the Union and that, through those online brokerage services or online search engines, offer goods or services to consumers located in the Union, irrespective of the place of establishment or residence of the providers of those services and irrespective of the law otherwise applicable".
There are therefore two categories of obliged entities: providers of online brokerage services and providers of online search engines.
1.1. Providers of online brokerage services
The online brokerage service provider is the natural or legal person that provides business users (meaning private persons acting in their commercial or professional activity or offering goods and services to consumers via online brokerage services for purposes related to their activity) with online brokerage services or:
- information company services (i.e. any service normally provided for remuneration, remotely, electronically and at the individual request of a recipient of the services) 2;
- enabling commercial users to offer goods or services to consumers, with the aim of facilitating direct transactions between said commercial users and consumers, regardless of where the transactions are concluded; and
- which are provided on the basis of contractual relationships between the provider of such services and commercial users offering goods and services to consumers.
As specified in the same Regulation, the place where the online brokerage service provider is established is indifferent for the purposes of applying the rules, it sufficing for the commercial user to whom the services are provided to be resident or established in the Union or for the goods or services to be offered by the latter to consumers in the Union.
In light of the definition of online brokerage services provider, the obligations described below are binding on all managers of marketplace platforms operating in Italy, whether they are general marketplaces (e.g. Amazon, Ebay, Etsy, Facebook) or sector-specific (Yoox, Farftech, Zalando, Privalia for clothing; Deliveroo, Glovo, Uber Eats, Just Eat for food delivery; IBS for publishing; Eprice for electronics and IT; Booking for travel, etc.). Similarly, platforms offering online brokerage services on the secondary ticketing market (already subject to the supervision of the Italian regulator) should be considered as included.
1.2.Online search engine providers
The online search engine provider is, on the other hand, the natural or legal person that provides online search engines to consumers, meaning digital services that allow the user to formulate questions in order to search, in principle, all websites, even only in one language, on the basis of user requests on any subject and with input that can be keywords, spoken or written requests which then return relevant results in any format.
The same considerations apply to online search engine providers with regard to where the supplier is established: the rules apply in all cases where a user who owns a corporate website (i.e. the private person who uses online interfaces to offer goods and services to consumers for purposes related to their commercial, entrepreneurial, commercial or professional activity) is resident or established in Italy and offers goods or services to consumers in the Union.
Both foreign search engine providers like Google, Yahoo, Pinterest and Bing and, of course, Italian search engine providers like Virgilio and Istella are subject to the requirements introduced by the 2021 Budget Law.
- Obligations for online brokerage and online search engine providers introduced by the 2021 Budget Law
As anticipated above, in order to render application of the Regulation effective, paragraphs 515 to 517 of Article 1 of Law No. 178/2020 (known as the 2021 Budget Law) adapted the provisions of Law No. 249/1997, establishing the Autorità per le garanzie nelle comunicazioni [Authority for guarantees in communications] (hereinafter "AGCOM" or the "Authority") to the contents of the Regulation, providing in particular for:
- the inclusion of "providers of online brokerage services and online search engines, even if not established in but offering services in Italy" among the entities obliged to register with the Communications Operators Register ("ROC") 3;
- the assignment to AGCOM 4 of the task of ensuring adequate and effective application of the Regulation, including by the adoption of guidelines, the promotion of codes of conduct and the collection of relevant information; and
- the power to impose administrative fines of no less than 2% and no more than 5% of the sales revenue achieved by the party in breach in the last financial year ended prior to notification of the dispute 5 (which obviously entails the power to request information and documents from the parties involved and to order inspections) 6.
2.1. The obligation to register with the ROC
Of the changes introduced by the 2021 Budget Act, the most significant (and it must be said costly) is certainly the inclusion in the ROC of online brokerage providers and online search engines.
As is well known, the ROC is the tool by which AGCOM performs the task, assigned to it by law, of (i) ensuring the transparency and publicising of the ownership structure of the entities obliged to register, (ii) allowing the application of the rules concerning anti-concentration rules 7, (iii) protecting the multiplicity of information sources, (iv) ensuring compliance with the limits for holdings of foreign companies.
The procedures for registration with the ROC and the subsequent reporting requirements incumbent on obliged entities are governed by the Regulations for the organisation and keeping of the Register of Communications Operators (hereinafter the "ROC Regulations").
The application for registration, together with the additional documents provided for in the ROC Regulations (e.g. declarations relating to the company structure and the activity performed), must be prepared using the forms attached to the Regulations and submitted to AGCOM, within sixty days of the date of commencement of the activities, through the portal impresainungiorno.gov.it, accessible via the Carta Nazionale dei Servizi (CNS).
As a rule, AGCOM will make the registration within thirty days of the date of submission of the application, without prejudice to any requests for rectifications or additional information. At the same time, the register will be updated with the name and the main information relating to the registered person.
For providers of online brokerage services and search engines, it is worth noting that the 2021 Budget Law did not impose a final deadline for compliance with the registration obligation (as was previously the case for call centre operators). The obligation should therefore be regarded as already binding (subject to any future clarifications from AGCOM).
2.1.2. Requirements subsequent to registration
As a member of the ROC, providers of online brokerage services and search engines will also be subject to a number of reporting requirements.
An annual declaration that there has been no change to information in the ROC is required of all members 8 within thirty days of the date of filing of the financial statements with the Chamber of Commerce, updated as of the date of the shareholders' meeting approving the financial statements (or by 31 July of each year for those who are not required to prepare financial statements); otherwise, they must provide supplementary information pursuant to Annex B of the ROC Regulation.
Further notifications are provided in the event of certain circumstances, such as (i) a change in information declared on registration with the ROC 9, (ii) the presence of controlling entities pursuant to Article 2359 of the Italian Civil Code, (iii) the presence of shareholders among whom agreements have been concluded for the exercise of voting rights or the management of the company of the companies for which the application was made 10 and (iv) a transfer of ownership and subscriptions 11. Mandatory forms can also be found on the impresainungiorno.gov.it platform for such communications.
Like other entities supervised by AGCOM, providers of online brokerage services and search engines will be required to pay AGCOM an annual contribution to cover the costs that the Authority will incur for the new responsibilities entrusted to it.
For 2021, the contribution rate was set by the 2021 Budget Law as 1.5 per thousand of revenues achieved within Italy – even if booked in the financial statements of companies based abroad – relating to the value of production shown in the financial statements for the previous year, or, for persons not obliged to prepare financial statements, by equivalent items of other accounting records attesting to the total value of production.
For subsequent years, AGCOM will, on the other hand, recalculate the rate by its own resolution, within the limit of 2 per thousand on revenues.
1. Regulation (EU) 2019/1150 of the European Parliament and of the Council of 20 June 2019 promoting fairness and transparency for commercial users of online brokerage services
2. The definition given by Directive (EU) 2015/1535 also specifies that "remotely" means a service provided without the simultaneous presence of the parties, "electronically" must refer to a service sent from the source and received at the destination through electronic data processing and storage equipment, which is fully processed, transmitted and received through wires, radio, optical or other electromagnetic means, and that "at the individual request of a service recipient" refers to a service provided through data transmitted in response to an individual request. The Directive in question provides in Annex 1 a guideline list of services not covered by the definition.
3. Although paragraph 515 of Article 1 of the 2021 Budget Law does not make explicit reference to the definitions of providers of online brokerage services and providers of online search engines referred to in the Regulation, it seems reasonable to refer - pending any clarifications from AGCOM - to such definitions.
4. Notably, Recital 46 provides: "Member States should be required to ensure the proper and effective application of this Regulation. Different enforcement systems already exist in Member States and Member States should not be obliged to establish new national enforcement bodies. Member States should have the possibility to entrust existing authorities, including courts, with the implementation of this Regulation. This Regulation should not oblige Member States to provide for ex officio enforcement or impose fines".
5. In any case, as provided for in paragraph 516 of Article 1 of Law No. 178/2020, the exclusive competence of the Competition and Market Authority ("AGCM") with regard to unfair commercial practices remains unaffected.
7. This is a matter of particular interest to the AGCM, as per Articles 5 and 7 of Law No. 287/1990 (see also https://www.agcm.it/competenze/tutela-della-concorrenza/operazioni-di-concentrazione/).
8. Article 11 of the ROC Regulation.
9. Article 10 of the ROC Regulation.
10. Article 8 of the ROC Regulation.
11. Article 9 of the ROC Regulation.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.