P2p markets in policy and literature

• Author: Pierre Hausemer - Julia Rzepecka - Marius Dragulin - Simone Vitiello - Lison Rabuel - Madalina Nunu - Adriana Rodriguez Diaz - Emma Psaila - Sara Fiorentini - Sara Gysen - Tim Meeusen - Simon Quaschning - Allison Dunne - Vadim Grinevich - Franz Huber - Linda Baines
• Pages: 18-42

Exploratory study of consumer issues in online peer-to-peer platform markets –

Task 1 Report

18

2 P2P markets in policy and literature

This section describes P2P markets based on a review of policy and academic

literature. It revolves around the consumer protection issues that might arise in P2P

markets, in line with the objectives of the overall study.

It is important to note that P2P transactions are not a new phenomenon, as Schor

and Fitzmaurice (2015) suggest.

8 Over time, P2P transactions have been referred

to in different ways in literature and in policy papers.

While this study does not seek to define terms such as “sharing economy” or

“collaborative economy”, it is nevertheless important to be aware of the common

terms that are used in the literature to describe P2P transactions or the platforms

that facilitate them (Box 1). This study, and this section in particular, will refer to

papers using these terms insofar as they focus on P2P transactions.

Box 1: Popular terms to describe P2P transactions and platforms in

literature

In academic literature, researchers have used various terms to describe P2P

transactions and the P2P marketplaces that facilitate them.

Popular terms to describe P2P marketplaces are:

 collaborative consumption (Botsman and Rogers, 2010)9,

 collaborative economy (NESTA, 201610 and European Commission, 2016),

 access-based consumption (Bardhi and Eckhardt, 2012)11,

 access economy (Rifkin, 2001)12,

 on-demand economy (CB Insights, 2015)13,

 the mesh (Gansky, 2010)14, or

 gig economy (Cadman, 2015)15.

Each of these terms aims to stress a certain distinctive characteristic of the P2P

marketplace (e.g. its collaborative nature, enabling role of new digital

technologies, flexibility of arrangements, instant access to assets and services).

The results of this literature review serve as a basis for the empirical analysis of

P2P platform services in the next section.

8 Schor, J. and Fitzmaurice, C. (2015). Collaborating and connecting: The emergence of the sharing economy. In: Handbook on research

on sustainable consumption, eds. L. Reisch and J. Thogersen. Cheltenham, UK: Edward Elgar.

9 Botsman, R. and Rogers, R. (2010). What’s Mine is Yours: The Rise of Collaborative Consumption, New York, NY, Harper Collins

Publishers.

10 Stokes, K., Clarence, E., Anderson, L., Rinne, A. (2014). Making Sense of the UK Collaborative Economy. NESTA. Available at:

http://www.nesta.org.uk/sites/default/files/making_sense_of_the_uk_collaborative_economy_14.pdf

11 Bardhi, F., Eckhardt, G. (2012). Access based consumption: the case of car sharing. Journal of Consumer Research, 39: 881-898.

12 Rifkin, J. (2001). Age of Access: The New Culture of Hypercapitalism, Where All of Life is a Paid-for Experience, Tarcher/Putnam; New

York.

13 CB Insights (2015). An Overview of The On-Demand Landscape: Rise of the On-Demand Economy. Available from

https://www.cbinsights.com/on-demand-overview

14 Gansky, L. (2010) The Mesh: Why the Future of Business is Sharing. New York: Portfolio Penguin.

15 Cadman, E. (2015). Employers tap ‘gig’ economy in search of freelancers, The Financial Times. Available from

http://www.ft.com/cms/s/0/ee293af0-5ab7-11e5-9846-de406ccb37f2.html#axzz3lZ2w2ykU

Exploratory study of consumer issues in online peer-to-peer platform markets –

Task 1 Report

19

2.1 P2P markets from a consumer policy perspective

The aim of EU consumer policy is to maximise consumer participation and trust in

the market. Consumer policy generally governs Business to Consumers (B2C)

interactions, and it perceives the consumer as the weaker party in such

transactions.

16,17 A well-designed and implemented consumer policy can lead to

improved transparency and better informed choices, which result in better solutions

for consumers and greater market efficiency.18

With the emergence of the internet, EU-level consumer protection has focused

among other aspects, on facilitating online purchases. 95% of EU consumers made

at least one purchase online in the past 12 months, while 12% of EU consumers

make such purchases at least every month19. At this stage, the EU-level focus has

shifted towards harmonising consumer rights across Member States, facilitating

cross-border and online purchasing and promoting best practices.20

From a consumer and consumer policy perspective, online P2P transactions via

platforms offer both benefits and challenges. Benefits for consumers include

efficient use of under-utilised resources, improved access to certain goods or lower

prices. At the same time, online P2P platforms also pose challenges for consumers:

it is not always clear who (the platform or the other peer or both parties) is

responsible when something goes wrong and how to obtain redress.

Policy makers need to clarify the applicability and enforcement of existing consumer

protection rules which were designed for offline B2C transactions. Regulatory

uncertainty brought by the rapid development of online P2P markets can create

risks and potential detriment for consumers acting as peers, as well as hinder the

sustainable development of these markets.

The OECD (2016) finds that in peer platform markets, consumers have a role not

only as peer consumers, but also as peer producers/providers and peer reviewers.

This is in line with academic authors like Cohen and Sundararajan21 (2015) or

Fraiberger and Sundararajan22 (2015) who define P2P transactions as digitally

enabled market-based trade between individuals acting as both sellers (providers)

and buyers (consumers) of goods/services like transportation, logistics,

accommodation or personal services. These transactions take place without the

16 Koopman, C., Mitchell, M., Thierer, A. (2015). The Sharing Economy and Consumer Protection Regulation: The Case for Policy Change.

The Journal of Business, Entrepreneurship & the Law, 8(2). Available at: https://www.mercatus.org/system/files/Koopman-Sharing-

Economy.pdf

17 United Nations Conference on Trade and Development (2016). United Nations Guidelines for Consumer Protection. Available at:

http://unctad.org/en/PublicationsLibrary/ditccplpmisc2016d1_en.pdf

18 European Parliament (2014). Study on Consumer protection aspects of financial services. Available at:

http://www.europarl.europa.eu/RegData/etudes/etudes/join/2014/507463/IPOL-IMCO_ET(2014)507463_EN.pdf

19 European Commission (2015). Provision of two online consumer surveys as support and evidence base to a Commission study:

Identifying the main cross border obstacles to the Digital Single Market and where they matter most. Available at:

http://ec.europa.eu/consumers/consumer_evidence/market_studies/obstacles_dsm/docs/21.09_dsm_final_report.pdf

20 European Commission (2012). Staff Working Document Consumer Empowerment in the EU, p. 10. Available at:

http://ec.europa.eu/consumers/archive/strategy/docs/swd_document_2012_en.pdf

21 Cohen, M. and Sundararajan, A. (2015).Self-regulation and Innovation in the peer-to-peer sharing economy. Available from

https://www.heartland.org/sites/default/files/sundararajan_cohen_dialogue.pdf.

22 Fraiberger, S. and Sundararajan, A. (2015). Peer-to-peer markets in the sharing economy. Available at:

http://www.netinst.org/Fraiberger_Sundararajan_15-19.pdf