New Policies And Rules Are Being Implemented To Address The Superior Bargaining Power Of Large IT Firms.

In a report by Reuters, European Commission is implementing new policies that would require commerce websites, search engines, and other online platforms to reveal their ranking mechanism. In addition, such companies would require explaining reasons behind penalizing or removing a company from their listings.

EU plans to bring transparency in the system and promote competition between small and large companies. The new rules will allow smaller companies to understand what is required to increase their search engine rankings. The policy will mitigate the superiority of large internet brands, which was quoted as “superior bargaining power” by Reuters.

According to Reuters, EU will not force companies to reveal their algorithms for ranking a website. However, search engine companies would need to offer explanations and descriptions of “how and to what extent the relevant ranking mechanism takes account of the quality of the products and services offered.”

While it is unclear as to what it actually means, it does seem that EU is intended to compel internet giants to reveal their ranking signals. Google already has its metrics publically available, which limits the scope of new regulations by EU and its impact on the digital market.

In addition, internet companies would require giving a 15-day prior notice before changing their terms and conditions instead of prevailing retroactive practices where companies inform that their terms have changed. Moreover, any delisting or rejection from the internet, play store, etc. would require specific explanations to the concerned company rather than a list of potential issues that may or may not be applicable.

According to Reuters, if a platform offers services that also compete in the market “terms and conditions will have to include a description of any preferential treatment they give to their own service including access to consumer data and ranking.”

According to Reuters, these rules are proposed by the European Commission and would be made public in April. In order for the rules to come into effect, they would need to be accepted by the European Parliament and other member states.