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IMPALA welcomes EC proposals close the online ‘power gap’

By | Published on Friday 27 April 2018


Bored of the ‘value gap’? Well, let’s talk about the ‘power gap’ instead. Indie label repping IMPALA has welcomed proposed new rules from the European Commission that seek to “create a fair, transparent and predictable business environment for smaller businesses and traders when using online platforms”.

Explaining the rationale for the new rules, the EC’s VP for the Digital Single Market, Andrus Ansip, said yesterday: “Millions of mostly small traders in the EU now depend on online platforms to reach their customers across the ‘digital single market’. These new online marketplaces drive growth and innovation in the EU, but we need a set of clear and basic rules to ensure a sustainable and predictable business environment”.

This basically means ensuring that the big online platforms – which might include online marketplaces, social networks and search engines – don’t abuse their market dominance to the detriment of the smaller businesses who now rely on these platforms to reach their customers.

“Today’s proposal brings more transparency to the online economy, gives businesses the predictability they need, and will ultimately benefit European consumers”, Ansip added.

Announcing the proposed new rules, the EC cited a Eurobarometer survey that reckoned 42% of small and medium sized companies now use online marketplaces to sell their products and services. Meanwhile, another study reported that nearly 50% of European businesses operating on platforms of this kind say they have experienced problems.

The EC’s statement added that that second study “also shows that 38% of problems regarding contractual relations remain unsolved, and 26% are solved but with difficulties”. It concluded: “It is estimated that €1.27-2.35 billion is lost directly in sales as a result”.

Although these new rules are not specific to the cultural or copyright industries, IMPALA says that they would benefit smaller independent music companies operating in Europe, which are also frequently dependent on big online platforms to reach consumers.

The trade group said yesterday: “In the music sector, independents account for 80% of music released today. They are often presented with ‘take it or leave it’ terms which do not meet acceptable standards. Censorship-style negotiating tactics, such as threats to remove content or block access are also common, as they are in other sectors”.

It went on: “Some of IMPALA’s smaller members have even experienced unilateral termination of access to essential tools such as partner programmes which allow monetisation of content on user-upload platforms”.

Commenting on the EC’s new proposals to close what IMPALA calls the ‘power gap’, the trade group’s boss Helen Smith said yesterday: “This is a welcome move, underlining how the EU is taking the lead in making sure online services behave reasonably”.

She went on: “To be fully effective, the legislation should also clarify that there is a general obligation upon services to behave in a fair, reasonable, objective and non-discriminatory manner, as well as to provide better access to data”.