‘David vs Goliath’ power imbalance between small  businesses and platform giants

‘David vs Goliath’ power imbalance between small  businesses and platform giants

Small businesses that use big platforms such as the Apple App Store and Amazon to get their products to consumers can find themselves in a “David vs Goliath situation”, the competition watchdog has said.

The Competition and Consumer Protection Commission (CCPC) launched a survey to find out how small businesses are being treated by platform giants as concerns around fairness and transparency grow.

“There certainly is a significant power imbalance between the scale of some of the platform companies and then the size of some of the small businesses which engage with them,” said Grainne Griffin, CCPC’s director of communications.

The CCPC expects the survey, which is aimed at small firms, to highlight issues such as a lack of clarity around how to lodge complaints against these platforms, as well as lack of transparency around why an account is terminated or suspended without reason and notice.

“Businesses have rights in this area and it’s important that they know what they are,” said Ms Griffin.

The survey is being carried out two years after Ireland adopted the EU’s P2B (platform to business) Regulation. Its aim is to provide a set of rules which create a fair, transparent, and predictable environment for business users of online platforms.

Online marketplaces

This includes online marketplaces, social media and creative content outlets, app stores, price comparison websites, and platforms for the collaborative economy, as well as online general search engines.

The watchdog contacted some platforms after the regulation was introduced to see if any measures had been taken to make it easier for businesses to use their services.

“We saw complaints processes clarified and we did see really tangible outcomes from the platforms,” said Ms Griffin.

However, the CCPC suggested that many businesses are still unaware of this regulation, which can lead to exploitation.

“We want to deepen our understanding of how small businesses and businesses in general experience the platforms. And that’s where we’re going with the survey,” said Ms Griffin.

“We’re talking about the biggest social media platforms out there like Amazon and Ebay.

These platforms have a huge amount of power and that’s why it’s so important that you have these regulatory frameworks to balance that.

The CCPC does not usually investigate relationships between businesses, normally focusing on the relationships between businesses and consumers.

The watchdog decided to start monitoring this space to ensure a fair competitive environment between these huge platforms and the businesses using the services they offer.

The P2B Regulation is expected to complement two other pieces of legislation proposed by the EU earlier this year. These are the Digital Services Act and the Digital Markets Act. These aim to create a safer digital space that protects the rights of all users of digital services, and to establish a level playing field to allow for growth and competitiveness.

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