The Internet of Platforms

An empirical study on private ordering and consumer protection in the sharing economy

April 2017-2020

Nowadays, we can share a ride, buy homemade food from our neighbors, rent a house in the hearth of a city, all just a click away. Online platforms (OP) are a key player of the current digital economy and their role as intermediaries is blossoming. They are creating new markets and business opportunities for data-driven innovation, by putting in connection suppliers (professional or not) to users within the same network infrastructure and enhancing new forms of consumers’ interaction. At the same time, OP are disrupting existing markets and raising contractual and consumer protection issues. The traditional relationship between the provider of the service, the recipient, and the intermediary agent is taking on a new dimension, where the role and the responsibility of the OP are often unclear.

As highlighted by the European Commission in its Communication on online platforms and the digital single market (2016), main concerns relate to the transparency of the platforms, the way these exploit personal data, their tariffs, as well as the logic used in algorithms to select and present information to the consumer. In particular, the lack of transparency and fairness of OPs can be perceived in the tangled skein of terms and conditions, annexes, privacy policies, licenses, etc. (the “legals”) imposed by platforms. Users often find it difficult to retrieve the relevant information before entering into contracts: the information is scattered among several documents and supplied in lengthy mandatory disclosures written in highly technical language. Therefore, it is often quite hard for the average consumer to read and fully comprehend both the basic conditions of the contract and its corresponding effects (i.e., the identity of the counterparty, the rights and remedies available, the allocation of responsibilities, the fairness of some terms, etc.). In this context, online trust is likely to be undermined and consumers harmed.

The project “The Internet of Platforms (IoP), an empirical research on private ordering and consumer protection in the sharing economy” aims to address the issue of the lack of transparency in the IoP’s transactions and improve the information users receive from and about the platform. The research will conduct an empirical analysis of the legals of a representative set of platforms operating in Belgium, France, Italy and the UK in three main sectors: housing, food, and mobility.

The goal is to provide legal and practical responses to protect and empower consumers in the sharing economy ecosystem. On the one hand, the research, in dialogue with the current literature examining the different regulatory approaches to online platforms (regulation, co-regulation, no regulation), will formulate policy recommendations (de lege ferenda) and suggestions for changes and implementation (de lege lata). On the other hand, the project aims to raise users’ awareness about the content of the legals, their rights and remedies (thus, increasing their bargaining power). To this end, the research will propose the innovative concept of “awareness by design”, which implies the use of technology, design methodology and behavioral insights to empower the users and make them aware of rights, risks, and obligations.

Within this framework, two practical tools will be developed: the “Awareness by design app” and the “Platform on Platforms” (PoP).

The first will be an application that informs the user about the key conditions of the platform’s legals (a sort of Rosetta Stone for ToS and privacy policies). The app will provide also a score system to rate the quality of the terms.

Meanwhile, the PoP will be an online space where consumers will be able to interact, share their experience with platforms, and create critical mass.

The goal is to promote a virtuous cycle of competition among online platforms, encouraging them to consider and offer better and fair legal terms as a part of their market strategy.

Through these practical outcomes, the project aims to verify whether technology (the app and its algorithm), design and behavioural sciences can improve (or help to revise) the information paradigm of consumer and data protection laws.

Related publications

Ducato, Rossana (2018) House of Terms: Fixing the Information Paradigm with Legal Design. Poster presentation at BILETA Conference 2018 “Digital Futures: places and people, technology and data”, University of Aberdeen, 10-11 April 2018. *Winner of the BILETA Poster Prize

Noto La Diega, Guido (2016) Uber law and awareness by design. An empirical study on online platforms and dehumanised negotiations. Revue européenne de droit de la consommation/ European Journal of Consumer Law, 2016 (II). pp. 383-413. ISSN 0775- 3209. Available at following URL: http://nrl.northumbria.ac.uk/27866/1/Guido-REDC.pdf

Other resources

Ducato, Marique (15 June 2018), The Internet of Platforms. Presentation for the Consumer Protection Cooperation network e-enforcement expert group. Download the slides

Noto La Diega, Ducato (23 June 2017), The Internet of Platforms. Presentation at the Geneva Internet L@w Research Colloquium. Download the slides