Individual Private Rights of Action under the Platform-to-Business Regulation

The EU is eager to see itself as a pioneer in fostering business confidence in the online platform economy through regulation aimed at fairness through transparency. Whether the business users of online intermediation services can enforce these rules themselves, however, remains uncertain. My new research project started with an analysis of five German court cases, each of which involved a business user applying for an interim injunction against its ban from an online platform identifiable as Amazon Marketplace. The plaintiffs in each case invoked, among other things, an infringement of the Regulation (EU) 2019/1150 of the European Parliament and of the Council of 20 June 2019 on promoting fairness and transparency for business users of online intermediation services (the ‘P2B Regulation’). Ultimately, in all but one case the courts denied the request for an interim injunction. What stands out is that no court assumed that the P2B Regulation either directly provided or required that the Member States provide an individual private right of action for aggrieved business users. Indeed, in two judgments this was explicitly rejected.

When I presented these findings at a seminar in Brussels, representatives of the EU Directorate-General for Communications Networks, Content and Technology (‘DG Connect’) were quite surprised. However, whether or not the P2B Regulation prescribes individual private rights of action may in fact be less obvious than one might think at first glance. It is true that the P2B Regulation imposes obligations on providers of intermediation services or search services that are designed to protect the interests of their business users or corporate website users. But, unlike other measures of secondary legislation, the P2B Regulation does not explicitly foresee private rights of action in the event of breach. And, from the ECJ’s perspective, it is not a ‘no-brainer’ that implicit individual rights can be read into secondary legislation obligations. In fact, for example in Genil (C-604/11), when faced with a thoroughly comparable scenario, the court effectively left it to the Member States to decide whether a breach of conduct of business obligations under Article 19(4) and (5) of the MiFID would entail contract law remedies, provided that an effective overall enforcement is ensured.

Nevertheless, in a recent paper, accepted for publication by the European Business Law Review, I argue that the P2B Regulation does indeed require Member States to foresee private rights of action for parties aggrieved by a violation of the regulation’s obligations. Two lines of reasoning independently substantiate this conclusion.

First, effective overall enforcement under Article 15 of the P2B Regulation requires that individual private rights of action be available. The regulation prescribes collective private enforcement, but this comes with apparent weaknesses. As the P2B Regulation does not (generally, at least) require the availability of public enforcement—hence, for example, the German legislature refrained from implementing mechanisms of public enforcement—it is necessary for national courts to allow for individual private rights of action to reach the minimum threshold of effective overall enforcement. Individual rights of action are burdened with some weaknesses (fear factor, limited financial resources), owing to which they arguably cannot achieve a sufficient enforcement level on their own. But they may provide crucial added value for effective overall enforcement. In particular, they allow for the direct harnessing of private information about infringements and for using individuals’ incentives to bring suit in the interest of overall enforcement.

Second, there is much to suggest that the P2B Regulation’s obligations implicitly confer individual rights on the platforms’ business users, whose interests they are meant to protect. Looking at the obligations embodied in Articles 3 to 12 of the P2B Regulation, one may see a clearly defined protective scope. Moreover, given their enactment by regulation, they are directly effective, and their combination with private rights of action promises significant added value for enforcement. Therefore, notwithstanding the rather sparse reasoning in the relevant case law of the ECJ— considering cases where implicit individual rights were affirmed (eg Schulte (C-350/03), Courage (C-453/99), Van Gend en Loos (C-26/62)) but also cases where they were denied (eg Genil (C-604/11), Schmitt (C-219/15), Peter Paul (C-222/02)) —taking the aforementioned factors together, a good case can be made that the obligations imposed by the P2B Regulation go hand in hand with implicit rights for business users and corporate website users. Consequently, to effectuate those implicit (substantive) rights, individual private rights of actions must be granted under national law.

It is up to the courts of the Member States and, where necessary, national legislatures to guarantee these individual rights of action. Breach of statutory duty and similar tort law doctrines may be a basis for both actions for injunctive relief and damages. Moreover, where a platform operator infringes the obligations owed under the regulation, this may be considered a breach of a contractual or pre-contractual duty that may result in remedies in contract or under the doctrine of culpa in contrahendo. In addition, private rights of action under unfair competition law or antitrust law may be considered as an available basis for injunctive relief and damages claims. However, as such they cannot guarantee an adequate implementation of the P2B Regulation because their availability will typically depend on further preconditions owed to the respective legal field.

Jens-Uwe Franck is a Professor of Private Law, Commercial Law and Competition Law at the University of Mannheim and Director of the Mannheim Center for Competition and Innovation (MaCCI).