Page 99 - Demo

The growth of online marketplaces can largely be attributable to the means of the platform provider, and businesses using such platforms, to reach consumers both locally and globally. This can potentially be a viable and profitable model for the platform provider, which, in exchange for a service fee (often paid by the businesses per transaction made via the platform), drives traffic in the form of users to its website, but doesn’t bear the same risks as the businesses providing the goods/services to customers via the platform. Online marketplace providers are also generally free to contract with users of their platform on their own terms (PaaS terms of use), subject to local regulatory requirements, and governing: • The use of the online marketplace platform by users (being the platform to business relationship (P2B) and the platform to customer relationship (P2C). • The engagement between users themselves, being the business to customer relationship (B2C). Some jurisdictions have introduced regulations specifically aimed at governing operators of online platforms (including online marketplaces). For example, to promote fairness, transparency and disclosure in such dealings, the EU recently adopted a new P2B regulation governing how online platform operators deal with EU based businesses. Unlike the EU, Australia doesn’t currently have a single, regulatory regime specifically aimed at P2B dealings. Instead, this country maintains multiple other rigorous regulatory regimes that can affect how online marketplace providers operate and engage with business users and individuals, including under their PaaS terms of use, which operators should be aware of (and vigilantly comply with) as applicable. These include: 1. Australia’s consumer law (ACL) regimes governed by the Competition and Consumer Act 2010 (CCA). The ACL applies to the supply of goods/ services to consumers, which can include the provision of the PaaS to users (eg, P2B and P2C) falling within the relevant definition of a ‘consumer’ under the CCA. The ACL is rigorously enforced by the ACCC and includes: • Statutory guarantees and warranties. These apply to the provision of goods/services and cannot be excluded, restricted or limited by the terms of a contract with consumers, otherwise such terms will be held void. For example, ensuring goods/services are of acceptable quality, fit for purpose, accurately described, provided with acceptable care and skill, and delivered within a reasonable time. Statutory rights/ remedies will also apply for breach of these, meaning it’s not always possible to contractually limit liability for such breach in the PaaS Terms of Use. • Unfair contracts regime. This requires ensuring terms in a ‘standard form contract’ (as defined in the CCA) don’t cause a significant imbalance between the parties’ rights and obligations, otherwise such terms will be deemed ‘unfair’ and not enforceable. This would include the online marketplace terms of use, with both individuals and small businesses considered a ‘consumer contract’ for the purposes of this regime. • Misleading or deceptive conduct. This is prohibited under the ACL and may include failure by an online marketplace to clearly and prominently disclose important and relevant information, such as terms and conditions, policies governing behaviour, service levels, processes for delisting, how the platform moderates reviews, and the full price of its services and reasons for any changes to its pricing. • Making false or misleading representations about goods/ services. This is prohibited under the ACL, and in the context of online marketplace providers may include making false or misleading representations about the provision and promotion of their PaaS, such as publishing false reviews, mispresenting the effectiveness of the platform’s review system or processes (including making unsupported statements about the safety and trustworthiness of the platform), misrepresenting users’ rights (including limiting/removing rights under the statutory guarantees above), misleading users by manipulating or moderating online review processes, or misrepresenting how the platform’s ranking algorithms work. 2. Australian privacy laws governed by the Privacy Act 1988 This applies to the collection, use, disclosure, storage and transfer of personal information (such as that collected of users of an online marketplace) by entities that have an annual turnover of more than $3 million, or disclose personal information about another individual to anyone else for a benefit, service or advantage, with an Australian link. 3. Other industry specific regulations Depending on the type of goods/ services available via an online marketplace, industry specific regulations may raise other compliance issues – for example, local liquor laws. Although administered across a number of different acts (and by different regulators), Australia’s regulations collectively aim to promote fairness, transparency and disclosure between online marketplaces and the businesses (and individuals) they engage with. Failure by such providers to comply with these laws can result in such consequences as hefty fines/penalties, terms being held void or unenforceable, and other enforcement action available to the relevant regulators. LEGAL About Hamish Fraser Hamish is a leading partner in technology and communications in Australia. He is an expert on commercial issues and regulatory matters across all facets of the information technology and communications industries. About Emma Cameron Emma is a Senior Associate in the Technology Transactions Commercial Group in Sydney. She has a broad range of experience advising clients on various matters in the technology, media and telecommunications sectors. About Bird & Bird Bird & Bird is one of the world’s leading international law firms advising industries where technology, regulation and intellectual property are driving change. With its strong Australian presence, clients enjoy global reach across various practice areas. NOV, 2020 RETAIL WORLD 97