Narratives of the Digital Economy: How Platforms Are Challenging Consumer Law and Hierarchical Organization

Abstract

Abstract Digital platforms are the essential infrastructures of electronic commerce, online communication, and digital social relationships. They connect two interdependent groups of web users (parties offering goods, services, and digital content; and parties interested in accessing this supply) and enable their transactions. Moreover, they provide additional services such as online payment, collection of reviews and feedback, and internal instant messaging. However, the term “platform” can be misleading, since it seems to denote a virtual space or a technical tool without legal personality. In other words, platforms are masking corporations who hide behind them in order to avoid the legal responsibilities stemming from their status as social institutions. This exploits the dominant theory of the firm as a nexus of contracts and is intended to release the agents involved in the system of production from the restrictions that protect weaker parties in the age of industrial capitalism. Companies who organize production through platforms thus obtain both indirect and direct benefits. In particular, indirect benefits derive from making consumer law more complicated to apply by creating conditions that frustrate the traditional distinction between professionals and consumers. In fact, any user can provide services and sell or share their personal goods (e.g., cars, apartments, clothes, etc.) and other commodities through platforms. However, this does not mean that information asymmetries do not continue to exist, or that weaker parties do not need to be protected. This confusion benefits companies that enable these transactions, since online relationships are not burdened by informative duties. In this case, companies use the platform narrative to facilitate peer-to-peer transactions, where simple, ubiquitous exchanges yield advantages. In addition, platforms provide direct benefits by eliminating the hierarchical organization of their production system in order to adopt the least burdensome and most flexible forms of employment. Companies generally rely on ICT tools to show that the parties offering the service are independent and are not subject to their control. The platform narrative glosses over the labor exploitation issues generally referred to as “uberification”. In addressing the questions outlined in this introduction, the paper will be organized as follows. Part I will discuss how the platform economy is challenging consumer law by short-circuiting its legal grounds in ways that allow companies to benefit. Part II will focus on the direct effects of the platforms’ denial of hierarchical organization: starting from the Italian Supreme Court’s ruling in the Foodora lawsuit, we will explore emergent models for organizing the system of production and their impact on the main categories of private law.