The rise of the 'prosumer’
Now that selling via digital platforms is flourishing, we need to take a closer look at the rights and obligations of all the parties involved. This is the subject of the inaugural lecture by Leiden Professor Vanessa Mak on 15 October.
It is happening more and more: a dispute between a client, an online platform where a particular item is sold, and the party known as 'the prosumer'. This is an individual who produces an item at home and offers it for sale via the platform. If the item is faulty, who is responsible - the platform or the producer?
Uncharted territory
Vanessa Mak, Leiden Professor of Civil Law, researches this largely uncharted legal territory. ‘The prosumer,’ she explains ‘hasn't yet been properly defined in legal terms. We have definitions for consumers and enterprises, which are described in law as one another's mirror image; one party sells, the other does not.' But there many different kinds of prosumers. One private individual may produce an item for profit, while another does not. With the rise of this new economy where much of the selling is done via platforms, consumer protection needs to be re-examined in the context of private law, Mak believes.
'With the rise of this new economy where much of the selling is done via platforms, consumer protection needs to be re-examined in the context of private law.'
Platforms are their own legislators
There are two key issues that need to be considered, says Mak. 'First of all, there are three parties in the platform economy: the consumer, the platform and the prosumer. The rights and obligations of all three need to be clearly defined in private law. In addition, the advent of the prosumer and the digital market gives reason to look more broadly at private law. Many platforms, like Facebook and Airbnb, currently make their own rules. That means they are their own legislator in terms of private law. The 'real' legislator has to determine whether this freedom needs to be curtailed. An important question to consider is whether the rules applied by platforms operating in Europe also reflect the values of the European Union in terms of consumer protection.'
'The regulation of the platform economy will increasingly be in the hands of the private parties themselves.'
Predictions for the future
Mak has two predictions for the future on this issue. 'First, the regulation of the platform economy will increasingly be in the hands of the private parties themselves, rather than being prescribed by a central legislator, such as the European Union or a national government. States simply have no grip on the contracts that consumers enter into via online platforms, with one another or with small-scale sellers. As a result, I think that these platforms will increasingly assume this role, and there will be oversight by public legislators and private organisations.'
Second, Mak says, the legal research on the digital economy will change and become more interdisciplinary. 'If we want to protect the people who use these platforms, we have to really understand the platforms. For example, how do they construct the profiles of their customers? To find that out, I believe it will be very useful to work with social sciences that offer different methods for obtaining information about how platforms regard the use of profiles and other technologies to influence customer behaviour.’
Vanessa Mak will continue her research on the platform economy, working with Leiden civil law specialists in the Empirical Legal Studies sector plan project.
Text: Jan Joost Aten