DST18400 - Online Marketplace - Condition B

The second condition in the online marketplace definition is met when a main purpose of the online service is to facilitate the sale by users of particular things.

The condition prevents businesses from inappropriately meeting the condition when providing the ability for users to sell or advertise other things to users is only an incidental or non-essential part of the service. It ensures online services will only fall in scope when facilitating transactions between users is central to the service.

Example X

Website A is an online gardening magazine operated by Business A. The website is free to access and generates income by selling advertising space to businesses and advertisers wishing to advertise things for sale to readers of the magazine.

The website could potentially meet the first marketplace condition. It allows third party advertisers and businesses to advertise things for sale to users. However, the second condition will not be met. The website’s main purpose is to disseminate gardening information and articles to its customers. Facilitating the sale of things by users will clearly be a secondary purpose, if it is a purpose at all. The online service does not actively try to facilitate transactions between users. It does not provide a facility for readers to find or identify particular products or services they are interested in.

Meaning of particular things

Particular things has the same meaning as it does in the first marketplace condition. It includes any goods, services or other property. The inclusion of particular means the condition looks at whether the online service facilitates the exchange of specific and individual things on the platform. This means general brand advertisements not linked to specific products would not be regarded as particular things.

Sale by users

The legislation refers to users in the plural. This is deliberate and ensures the online service cannot meet the condition where there is only one user selling a particular thing on the platform.

This is necessary to ensure the definition is appropriately targeted. An online service with a single user selling or supplying particular things is not a marketplace and not intended to be within the scope of DST.

The reference to a sale by users does not mean the condition is focused only on the supply side. The legislation refers to “by users” to make it explicit that the condition is concerned with whether the online service is facilitating third parties to sell things, and will not be met when the provider of the online service sells things to users itself. Consequently, demand-side marketplaces which facilitate users to buy particular things for the best price are capable of meeting the condition. Whether they are in scope or not depends on whether the main purpose test is satisfied.

The legislation clarifies that the hire or rental of particular things is encompassed within the term sale.

Applying the main purpose test

The main purpose test is explained in more detail in DST18500.