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Lords EU Committee to investigate internet platforms

The House of Lords EU Committee has today launched an inquiry into online platforms, which will look at issues such as data use, market dominance, and relations between platforms and their suppliers, including SMEs.

Online platforms range from marketplaces such as Amazon and Ebay, to sharing economy platforms such as Airbnb and Uber, to social media platforms such as Facebook and Twitter. With Facebook recently notching up a billion users in a single day, the extent of our use of these sites continues to hit new heights.

However, in its recent Digital Single Market Strategy the European Commission raised concerns about the growing influence of internet platforms in certain online markets, leading it to ask whether new regulation is needed. This inquiry has been launched by the Lords EU Internal Market Sub-Committee in order to feed into this important debate.

The inquiry will seek evidence about the benefits and problems caused by online platforms for consumers and businesses, and ask if online platforms are sufficiently transparent about how they work.

In addition, the Committee will consider the wider social and political issues raised by online platforms and ask if the EU online marketplace is good for innovative start-ups to scale up and for new platforms to emerge.

Issues the Committee will explore include:

  • How should online platforms be defined?
  • What benefits have online platforms brought consumers, businesses that rely on platforms to sell their goods and services, and the wider economy?
  • Do online platforms cause problems and, if so, how they can be addressed?
  • Are the current tools, such as competition, consumer protection and data protection laws, effective for online platforms?
  • What role do data play in the business model of online platforms? Is current understanding and oversight of the collection and use of data sufficient?
  • Are these issues best dealt with at EU or member state level?

Chair of the Committee, Lord Whitty, said:

“Online platforms are playing an ever more central role in society and the economy, and the question of whether regulatory change is needed is one of the most important aspects of the Commission's Digital Single Market Strategy.

“At present there is a wide divergence of views on this subject. Some argue that regulation is needed because the big platforms are too dominant and can impose unfair terms and conditions on SMEs. They also contend that there is a lack of transparency about how consumer data are collected and used.

“However, others argue that specific platform regulation could have a harmful effect on innovation, and there are doubts about how feasible it is to regulate such a diverse and rapidly changing group of businesses.

“Confronted with these differences, the House of Lords EU Internal Market Committee decided that a careful analysis of the evidence was required. Our inquiry will accordingly take stock of the benefits and the problems that platforms bring, before trying to establish whether EU level regulation could solve them.

“The inquiry is a timely one, taking place against the background of a new EU Commission drive to stimulate e-commerce and its own consultation on online platforms, and we look forward to receiving contributions to our inquiry. We particularly want to hear the views of small businesses and consumers.”

The Committee is inviting written evidence on the issue, to be received by 16 October 2015.

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