The European Union’s three lawmaking institutions have agreed on new rules aimed at increasing regulation of online platform operators such as Amazon.com Inc., Facebook Inc. and Google LLC.

The approval, announced today, comes 10 months after the legislation was first submitted. The draft can now advance to a vote before EU member states and the European Parliament, which will decide whether to codify the rules into law. They are set to kick in 12 months after their formal adoption.

One of the legislation’s main objectives to is have platform operators provide more transparency into how they run their services. Several of the key points in the draft seem to be inspired, at least partially, by the EU’s high-profile antitrust investigations of U.S. tech giants.

Two years ago, the European Commission hit Google with a $2.7 billion fine for unfairly favoring its e-commerce service in search results to the detriment of rivals. One of the newly approved rules would require search engines and marketplaces to disclose the “main parameters” they use to rank offerings on their platforms so as to help merchants understand how they can improve their online visibility.

Another section of the legislation takes aim at e-commerce providers that sell their own products on their platforms. The EU is looking to make it mandatory for such companies to disclose any advantage they may give to their own offerings, as well as share what data they collect and how they use it.

The context is that European regulators are currently investigating if Amazon may have used information on third-party merchants to gain an unfair competitive advantage. In parallel, German and Austrian competition authorities are pursuing their own probes into the online retail giant’s treatment of sellers.

The EU’s proposed regulation also focuses on other aspects of tech firms’ operations. It would require affected companies to share their terms and conditions in “plain and intelligible terms,” as well as provide an at least 15-day notice ahead of changes. Platform operators will also have to disclose the reasons behind account suspensions to the affected users.

To simplify situations where a user may wish to challenge a suspension or some other decision, the legislation calls for the implementation of new dispute resolution mechanisms. This part of the proposal is specifically meant to support businesses such as online sellers. It would make it mandatory for platform operators to have complaint handling systems, as well as let businesses group together to launch lawsuits when a dispute can’t be resolved more easily.

The EU is not limiting its focus just to major tech firms. According to the body’s estimates, the legislation will apply to some 7,000 online platforms across categories that include search, e-commerce, app stores, price comparison and social media.

Photo: Pixabay