Fair Private Governance for the Platform Economy: EU Competition and Contract Law Applied to Standard Terms

Abstract

In recent years a platform economy has emerged that is dominated by undertakings such as Google, Amazon, Facebook, Apple and Microsoft. They have established a form of private governance vis-a-vis their consumers and customers by means of standard terms that create a risk of exploitation. This trend clashes with the internal market effort of the EU that is predicated on consumer rights and fair competition to address market failures such as market power, information asymmetry and asymmetrical contractual dependency. In this article we examine how the resulting tensions can be addressed by means of EU competition and contract law. This is based on enforcing fairness by requiring (i) the implementation of proportionality – balancing interests – and (ii) respect of the duty of care, in the sense of compliance by design. Jointly this can be seen as an expression of accountability that needs to be made explicit. Apart from pre-existing case law and legislation we take into account the December 2020 Commission proposals for platform regulation, as well as behavioral insights into consumer behavior.