By Owen Bennett
Since the onset of the Great Recession in 2008, the sharing economy has grown exponentially. With advancing technology allowing demand and supply to interact in a frictionless manner online, consumers are now monetising idle assets like never before. But with individuals cashing in on their spare rooms, car passenger space and even their dubious DIY skills on a mass scale, it is unsurprising that regulation is quickly becoming the overarching narrative in policy discussions surrounding the sector.
A sharing economy underpinned by the notion of collaborative consumption – sharing, trading, or renting as asset instead of buying it – is hardly a 21st century phenomenon. Collaborative consumption is normalised behaviour in the offline world – think of bed and breakfasts, employee carpools, and leisure equipment rental. But with advances in e-payment mechanisms, social networking and smartphone technology, collaborative consumption has taken on a whole new standing in the digital age.
And as a consequence, the sector is now coming under increasing regulatory attention. Owing to its increasing scale, the revenues at play, and questions over consumer protection, policymakers are seeking to take a more proactive role in the sharing economy. Not least at EU level.
Indeed, at a European Economic and Social Committee event in July 2014, the European Commission’s DG JUST pledged to launch studies on matters such as E-privacy, insurance, liability and consumer rights in the context of the sharing economy, Moreover, in a recent European Parliament report on competition, lawmakers pressed the Commission to explore proactive regulatory action in the sector. And allied to this pressure from within policy fields, calls are coming from both market actors and interest groups representing disrupted industries (e.g. taxi industry, hoteliers) for more legislative clarity.
A Commission report on the sharing economy is due to be published before the summer. This report is likely to outline what, if any, regulatory action may be taken at EU level. With regulatory concerns on everything from employment relationships to intermediary liability, the report promises to propel the sharing economy to the fore of legislative agenda.
To learn more about the regulatory challenges facing the sharing economy at EU level, please contact the Political Intelligence Brussels office.