Consumer protection concerns can be classified into three many categories:
- service quality and liability issues
- damage claims in case of accidents
- data protection and privacy issues
Service quality issues
Service quality concerns can be addressed, at least partly, through self-regulation, for example, via reputational ratings and monitoring mechanisms to ensure service quality (Eurofound, 2018). For example, Uber allows consumers to track the GPS path of rides to check whether the driver is taking the shortest route (Koopman et al, 2015), but no redress mechanism is envisaged for the extra costs incurred in case the driver opts for the longer route. As of mid-2019, there is insufficient evidence that reputational ratings and monitoring mechanisms are by themselves an adequate and reliable means of quality and consumer protection. Data from a 2017 consumer-survey-based study prepared for the European Commission indicate that reviews are unlikely to reflect the experience of all platform users but rather to represent those of a smaller number of more involved peers (European Commission, 2017). In most cases, there are also no redress mechanisms that enable consumers in peer-to-peer transactions to engage in dispute resolution if they are not satisfied with the service provided through platforms, apart from bringing a case in front of the civil courts.
Liability issues
Another related issue concerns the attribution of liabilities for the performance (or underperformance) of the service, as platform’s business model typically blurs the boundaries between a professional and non-professional service provider.
Member States apply different criteria to distinguish between professional services and peer-to-peer services, but there is no unifying approach set out in EU consumer legislation. As a general orientation, the communication A European agenda for the collaborative economy identifies three criteria as important for the classification of the service as professional: the frequency of the service provision, the profit-seeking motive, and the level of turnover or income generated from the transaction. The more frequent, profit-driven the service provision and the higher the level of income generated, the more likely the service can be classified as professional and the provider as a professional trader. Survey data show that, from their end, consumers have limited knowledge about their rights in peer-to-peer transactions (Table 1) (European Commission, 2017). Even if they are aware of their rights, the limited information they might have on the platform worker might hamper their proper assessment of the status of the worker as a professional as opposed to a non-professional service provider. Accordingly, platforms might need to be charged with some responsibility to collect and provide such information.
Table 1: Knowledge of rights among consumers of peer-to-peer services (%)
| Knowledge of rights when something goes wrong |
34.0 |
44.0 |
15.7 |
6.3 |
| Knowledge of who is responsible when something goes wrong |
36.0 |
42.7 |
15.0 |
6.3 |
| Knowledge of the responsibility of the platform in case of a problem with a provider of a service or a product |
30.8 |
43.7 |
18.8 |
6.6 |
| Knowledge of the right to get compensation or be reimbursed if something goes wrong |
33.3 |
40.9 |
18.9 |
6.9 |
Source: European Commission, 2017
Insight from consumers’ opinions also comes from the Special Eurobarometer survey on online platforms. One-third of respondents to this reported that they usually read the terms and conditions of online platforms, but only around one in five (19%) usually take them into account (European Commission, 2016b). More than half of online platforms users (56%) do not usually read them.
The fact that the consumer acquis does not explicitly recognise the role of intermediaries does not prevent platforms from complying with information duties vis-a-vis users about the professional or non-professional capacity of their service providers. However, in practice, platforms may act differently than they describe in their terms and conditions and act as an exclusive contract partner towards the client. In addition, the Consumer Rights Directive does not provide any specific sanction for a breach of the information duty. It is left to the Member States to determine an adequate and proportionate penalty applicable to infringements of national provisions. Furthermore, the Electronic Commerce Directive establishes a European safe harbour regime entailing liability exemptions for online intermediary service providers. For any liability exemptions to apply, the platform must only provide an information society service.
In the European agenda for the collaborative economy, the European Commission establishes that whether a platform can benefit from liability exemptions needs to be assessed on a case-by-case basis. A key criterion is whether a platform intermediates between parties or simply acts as a bulletin board for information over which it has no control. In this regard, the Court of Justice of the European Union (CJEU) has provided some guidance on the interpretation and applicability of current EU provisions with a landmark ruling on the legal status of Uber in Spain (Court of Justice of the European Union, 2017; The Guardian, 2017). As Uber creates a market for urban transport by non-professional drivers, acting as a de facto transport company, the ruling established that the service it offers cannot be classified as an information society service and therefore the liability exemptions granted by the Electronic Commerce Directive do not apply. The CJEU’s ruling has implications for the applicability of the current provisions in other Member States.
The other consumer protection concern regards accidents or damage incurred in the service provision and the lack of clarity with regard to the insurance coverage. In the case of Uber, the company insurance generally applies when a passenger is in the vehicle and the app is on, while the driver’s own insurance applies when his app is off or there is no passenger in the car (Koopman et al, 2015). However, it is not often the case that the platform provides any insurance coverage, and it is unclear which party in the transaction is responsible and liable for damage and accidents. Furthermore, some platform activities do not formally fit into individual or commercial types of insurance. A related issue is that service providers (whether professional or non-professional) are generally not required to provide any certification or qualification to provide the service in a safe way, therefore shifting the risk on to the consumer.
Data protection
With regard to data protection, survey data indicate that transparency about the data that platforms collect and how they are used is an important concern for consumers engaging in peer-to-peer transactions (European Commission, 2017). According to a recent Eurobarometer survey, 67% of Europeans are aware of the new GDPR rules (European Commission, 2019c). A previous Eurobarometer survey on online platforms reported that over 70% of internet and online platform users in the EU were concerned about the data collected about them on the internet (European Commission, 2016b). As of mid-2020, it may be too early to assess to what extent platform businesses abide by the new rules and whether they are effective in protecting the rights of users of online platforms. There are Data Protection Authorities (DPAs) in each Member State responsible for data protection compliance and law enforcement. The DPAs have the power to impose fines of up to 4% of a company’s annual turnover. According to Eurobarometer data, 57% of respondents are aware that such an authority exists in their own country. Some experts argue, however, that this decentralised approach to law enforcement and compliance by means of national authorities may not be the most effective when dealing with global operators (such as Uber), and cross-border collaboration is therefore essential to ensure effective and adequate regulation (see, for example, Strowel and Vergote, 2019).
