At a very high level, the shared economy is a socio-economic ecosystem built around the sharing of human and physical resources. It includes a wide range of applications, such as Uber, BlaBlaCar, TaskRabbit, Airbnb, Turo, Getaround, Liquid.
Some of these applications provide an alternative to formal marketplaces, some are becoming businesses in their own right in competition with more established companies. Others act more as socio-economic networks, involving little or no financial transaction. Some are in between the two, with participants not required to pay formal fees but invited to make “donations”.
Whatever the economic model, the shared economy has revived an age old idea (that of pooling resources among like-minded people) but projecting it on a much greater scale, and putting in contact people who do not know each other but have something to share. This is resulting in a mushrooming of applications, with great benefits for consumers and citizens.
From the point of view of public policy, the shared economy throws up different challenges, and the application of competition policy has a prominent place among those. Some of these new business models have reached very quickly considerable size and reach, benefiting from positive network effects. The challenge for competition policy is multi-faceted. First, how to ensure that today’s innovators do not use their newly acquired market power to foreclose future challengers. This will require dealing effectively with network effects that are at the same time highly significant, cannot be easily replicated, but are not linked to physical assets. Finally, how to deal effectively with, in most cases, global organisations, given the national or, at best, regional nature of competition law enforcement.
However, it is important to remember that other areas of public policy are also being challenged by the growth of the sharing economy, and that competition policy can only address some of these. For example, some of the business models within the shared economy are challenging existing licensing regime for a variety of local or national services (for example for taxis and financial services), highlighting the need to adapt old regimes to the digital age. Last but not least, there are the issues of transparency, trust, and data protection which are essential for the shared economy to work. This calls for a thorough analysis of the existing practices, how they fit with existing consumer protection framework, and what, if any, adaptations are required.
Vicky Ford, MEP and EIF Steering Committee Member
Eliana Garces-Tolon, Deputy Chief Economist, European Commission DG GROW
Alexandre de Streel, Professor of EU Law, UNamur and UCLouvain, Director of CRIDS
Stefan Krawczyk, Associate General Counsel & Head Government Relations International, eBay Inc.
Fabienne Weibel, Head of Public Policy, Bla Bla Car
Juliette Langlais, Public Policy Manager for the EU institutions, Airbnb
Guillermo Beltrà, Head of Legal and Economic Affairs, BEUC
Serafino Abate, Director, Competition Economics, GSMA