Antitrust Law Daily Wrap Up, AGENCY NEWS: FTC to host sharing economy workshop in June, (Apr 17, 2015)

By Michael Menzhuber, J.D., LL.M.

The FTC will host a sharing economy workshop on June 9 to examine competition, consumer protection, and economic issues raised by the proliferation of online and mobile peer-to peer business platforms in certain sectors of the economy. The workshop, which is free and open to the public, will be held at the FTC’s Constitution Center offices, located at 400 7th Street, SW, Washington, DC. The workshop was announced today by FTC Chairwoman Edith Ramirez at the Spring meeting of the ABA Section on Antitrust in Washington, D.C.

Sharing economy platforms create virtual marketplaces for buyers and sellers. They take advantage of increasing network connections and computing power, including the proliferation of mobile internet-enabled devices, to reduce the time and costs of matching buyers and sellers that have not previously done business with each other, based primarily on the product or service being offered or demanded.

New business models in industries that have been subject to regulation have emerged as a result of peer-to-peer platforms and, according to Ramirez, “the resulting business models have a great potential to benefit our economy and consumers.” The sharing economy workshop will explore how regulatory frameworks can accommodate new sharing economy business models while maintaining appropriate consumer protections and a competitive marketplace.

In recent years, sharing economy transactions have increased rapidly, reaching an estimated value of $26 billion globally in 2013. Some estimates predict that as much as $110 billion annually will be generated by the sharing economy in the near future.

There is concern that the rapid expansion of commercial activity involving smaller suppliers on these platforms, may tax the abilities and resources of regulators who are confronted with the challenge of applying regulations that were written with conventional suppliers in mind. The FTC is seeking, through this workshop, to gain a systematic understanding of these virtual marketplaces and to reflect on the competition, consumer protection, and regulatory issues that they raise.

The FTC staff is seeking public comment on a number of questions, both in advance of and following the workshop, which include:

• How can state and local regulators meet legitimate regulatory goals (such as protecting consumers, and promoting public health and safety) in connection with their oversight of sharing economy platforms and business models, without also restraining competition or hindering innovation?

• How have sharing economy platforms affected competition, innovation, consumer choice, and platform participants in the sectors in which they operate? How might they in the future?

• What consumer protection issues—including privacy and data security, online reviews and disclosures, and claims about earnings and costs—do these platforms raise, and who is responsible for addressing these issues?

• What particular concerns or issues do sharing economy transactions raise regarding the protection of platform participants? What responsibility does a sharing economy platform bear for consumer injury arising from transactions undertaken through the platform?

• How effective are reputation systems and other trust mechanisms, such as the vetting of sellers, insurance coverage, or complaint procedures, in encouraging consumers and suppliers to do business on sharing economy platforms?

Comments can be submitted online here. Comments intended for discussion at the workshop will be accepted through May 26, 2015, but the record will be held open to receive comments until August 4, 2015.

News: Antitrust ConsumerProtection FederalTradeCommissionNews