IEIM901100 - Platforms
A Platform is defined in the Model Rules as “any software, including a website or part thereof and applications, including mobile applications, accessible by users and allowing Sellers to be connected to other users for the provision of Relevant Services or the sale of Goods, directly or indirectly, to such users.”
The Model Rules state that the ‘operations of the Platform may also include the collection and payment of Consideration in respect of Relevant Activities’. This means that if a Platform facilitates the collection of payments from users (‘Consideration’) and then pays them out to Sellers, either before or after they have provided goods or services, it can meet the definition of a Platform for the purposes of the Model Rules. However, a Platform does not have to facilitate payments between buyer and Seller to meet the definition.
In summary, software will qualify as a Platform if:
- It is accessible by users and allows Sellers to be connected to other users (customers), and
- It facilitates the provision of goods or services by Sellers to their customers, and
- The amount of payment made to the Seller for the provision of goods or services is known or reasonably knowable by the Platform Operator
An integral part of the Platform definition is that registered, third party Sellers need to be connected to users via the Platform to complete the transaction.
Where software facilitates the provision of goods or services, the degree of facilitation is not important. Software will be treated as a Platform if it enables any connection between Sellers and their customers and therefore facilitates the provision of goods or services.
The software does not have to allow users to communicate directly with each other (for example, via chat or email) although this may be a feature of some Platforms. Additional software such as a chat function, which by itself does not meet the qualifying conditions, will not affect whether the main software qualifies as a Platform.
Where a business uses a website or other software to purchase goods or services from a Seller to fulfil the existing request of another user (i.e. the business ‘matches’ the purchase with a user request), the software is still facilitating the provision of Relevant Activities. The transaction would be an indirect provision of goods or service and the software would be a Platform.
Similarly, a Platform operated by an auction house would likely be in scope of the rules if it matches potential Sellers and buyers, even if the two parties never directly communicate, because the Platform is facilitating the connection.