What to do with the online platforms – the academics point of view

By EDRi · April 5, 2017

The rise of “platform economy” with rapid growth of online intermediary platforms, such as Airbnb, Uber, Amazon Marketplace, and also dating, gaming and other services is bringing new challenges not only for existing business models, but also for European legislation. In a meeting of Internal Market and Consumer Protection (IMCO) Committee Working Group on the Digital Single Market on 22 March, the question raised was how to adapt the regulatory framework to the digital age. The aim of the meeting was to engage in a discussion with the academic community on the topic.

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Professor Aneta Wiewiórowska presented the work of researchers from the European Legal Studies Institute, who drafted a paper titled Discussion Draft of a Directive on Online Intermediary Platforms. She emphasised the importance of online platforms as a necessary structural part of the economies currently occupying the market, such as sharing economy, collaborative economy, peer-to-peer economy, trust economy and data economy.

Online platforms are a marketplace of exchanges between the supply and demand side. At the EU level, aspects of these exchanges through online platforms are included in several legal frameworks: E-Commerce Directive, Services Directive, Consumer Rights Directive, Unfair Terms in Consumer Contracts Directive, Unfair Commercial Practices Directive, and Comparative Advertising Directive. However, the academics from the European Legal Studies Institute argue that online platforms are not comprehensively covered by European legislation. Regulatory framework should be adjusted in order to move from the chain model (producer – supplier – consumer) to a triangular model, which considers all relationships between platforms, suppliers, and customers. In these relationships, the terms and conditions of the online platforms enable exclusion of liability of the platform for contracts between the supplier and customer.

The aim of the European Legal Studies Institute’s paper was to open a discussion and inspire regulatory solutions on national and European level, which would consider the new triangular model of relations between online platforms, suppliers and customers, the duties of the online intermediary platforms, reputational feedback systems and platforms’ liabilities. The paper proposes a “light touch” regulation, which includes three main points:

  • Firstly, there is a need for the clarification of the function of the platform operator. This means answering the question on whether the platform is a marketplace or just an intermediary – is it just a platform or also providing services, is it taking part in performing the contract or not.
  • Secondly, a differentiation between consumers, traders, professionals, private parties and prosumers (people who are consumers and producers of the content) should be clarified. It has to be made clear whether the service is delivered by non-professionals, examined if the suppliers are in fact traders acting as consumers, and what is the platform’s involvement and liability.
  • Finally, there is a need to establish reputational systems, which enable the evaluation, essential for trust economy. These systems must be objective and transparent and represent real consumers’ experience, and the possibilities for standardisation should be explored.

In response to the presented paper, the representative of the European Commission expressed reservation towards more legislation that deals with online platforms on top of the existing framework. Instead, she stated, what is needed is more clarity and better enforcement. Interpretations of the provision in the E-Commerce Directive and Unfair Commercial Practices Directive, together with judicial decisions, could bring more clarity on the issues of online platforms. This would mean that existing regulation could be sufficient, with some necessary adaptations, to the reality of digital environment. There is a need for interpretation of existing rules, their application and legal guidance, the representative argued.

Faced with the European Commission’s drive-by shooting of the E-Commerce Directive in the proposed Copyright and Audiovisual Media Services (AVMS) Directives, as well as its implausible consumer “redress” proposals in both instruments, the Commission appears to be keen to both uphold and destroy the existing legal framework.

Discussion Draft of a Directive on Online Intermediary Platform

(Contribution by Zarja Protner, EDRi intern)