New Ranking Guidelines for Online Platforms and Search Engines - The P2B Regulation

The European Commission (the “Commission”) has published new ranking guidelines (the “Guidelines”) (here) for online intermediary service providers (“OIPs”) and search engines to increase the transparency of online search results.

The guidelines, which complement the ranking transparency requirements under the EU P2B Regulation (here) and are the first of their kind, require online platforms such as Google and Amazon to identify the algorithmic parameters that determine ranking and make them available to business users availing of their services. The aim of the guidelines is to improve transparency of algorithmic ranking parameters, which are critical to determining online visibility and by extension, the survival of many businesses. While these guidelines are not legally binding, they will provide OIPs and search engines with a useful framework within which to improve the transparency of their ranking practices and fulfil their obligations under the P2B Regulation.

Online Ranking

Online ranking has emerged as a determinative factor in the commercial success of many businesses in the EU, and has become even more influential during the COVID-19 pandemic with many businesses forced to trade exclusively online. In recognition of this fact, the Commission has published these guidelines to clarify the main obligations of OIPs and search engines outlined under the P2B Regulation, from the need to identify and describe key algorithmic parameters behind ranking to the effect that remuneration has on the ranking process. It is hoped that by facilitating the transfer of ranking criteria from OIPs and search engines, these guidelines will allow business users to manage and increase their online visibility, and ultimately, enable consumers to access the highest quality goods and services available on the market. In addition, the guidelines will likely provide valuable support to the CCPC (the public body responsible for enforcing the P2B Regulation in Ireland) in determining whether a OIPs or search engine has breached their transparency obligations under the P2B Regulation.

Main Provisions

1. Identifying and Selecting Main Parameters

The main ranking parameters identified should be an accurate reflection of what determines ranking under the mechanism in question. In identifying the main parameters and their relative importance, OIPs and search engines ought to consider the general rationale behind their ranking algorithm (eg a desire to ensure that consumers found goods that were of high quality). In addition, OIPs and search engines are encouraged to consider a number of more specific factors including personalisation, consumer search behaviour and intent, user history, default settings, and user reviews.

Note: Annex A of the guidelines outlines examples of ranking parameters.

2. Describing the Main Parameters

In describing the main ranking parameters, OIPs and search engines should include as much detail as is necessary and appropriate for their business users without overburdening or confusing them. Descriptions of the main ranking parameters should be drafted in plain and intelligible language and should be tailored to meet the needs of each platform’s users. It is recommended that OIPs and search engines incorporate a mechanism to receive feedback from users on whether the description provided is useful and contains the appropriate level of detail.

3. Changing the Main Parameters

OIPs and search engines should keep descriptions of their main ranking parameters up to date and are free to devise their own procedures to determine whether descriptions need to be updated. The guidelines state that even temporary changes made to parameters, weighting or other features of ranking may necessitate a change in the description of the main parameters. For example, when OIPs alter their ‘standard’ ranking methods for a one off event such as ‘Black Friday’ sales, for example, by giving more weight to certain parameters (eg ‘delivery speed’ or ‘price’) adding new ones or removing some, and these modifications affect the main parameters, OIPs should adapt the description thereof. If it is determined that the description of the main ranking parameters needs to be updated, then OIPs must notify business users of those changes in advance.

4. Effects of Remuneration

When assessing the effects of direct and/or indirect remuneration, OIPs and search engines should consider what opportunities are offered to users to pay for improving their ranking and how any such opportunities operate. Any description of the effects of remuneration should include: (i) an explanation of any possibility for business users to actively influence ranking against remuneration, and (ii) an explanation of the relative effects of such remuneration on ranking.

Note: Annex B of the guidelines outlines examples of both direct and indirect remuneration.

5. Commercially Sensitive Information

OIPs and search engines are not required to disclose commercially sensitive algorithms, the detailed functioning of their ranking mechanisms or trade secrets. However, the guidelines state that a balance needs to be struck between protecting legitimate business interests and transparency. As a result, OIPs and search engines cannot refuse to disclose the main parameters based on the “sole argument” that it has never revealed any of its parameters in the past or that the information in question is commercially sensitive.

Concluding Remarks

While these guidelines are not legally binding, the more strictly OIPs and search engines adhere to them the less likely it is that they will be found to have breached their obligations under the P2B Regulation. As a result, OIPs and search engines should seek to familiarise themselves with the main provisions and, at the very least, reassess their procedures for identifying and disclosing the main ranking parameters to their business users.

For further information on the P2B Regulation, please find a briefing prepared by McCann Fitzgerald (here).

Also contributed to by Sean Kehoe.

This document has been prepared by McCann FitzGerald LLP for general guidance only and should not be regarded as a substitute for professional advice. Such advice should always be taken before acting on any of the matters discussed.