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  3. London School Of Economics (LSE)
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  5. LLB
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  7. Information Technology Law

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Platform Power and Digital Consumer Concerns
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The digital environment gives consumers a wider choice of products and services, and lower prices, but it also creates a lot of concerns for them. Platforms are only becoming more powerful, which materially changes the balance of contracting power and influence in online transactions, to the detrim...

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  • May 19, 2020
  • 9
  • 2019/2020
  • Study guide

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Week 9
Contemporary Issues:
Objective:
- This lecture analyses how the EU and national consumer protection framework cater for digital consumer concerns
emerging due to the material changes of the balance of contracting power in the digital environment.
- Todays’ topics:
o Digital consumer concerns
o Jurisdiction and choice of law
o Consumer rights in distance contracts
o Unfair contract terms
o Hidden or misleading advertising, example of influencer marketing
Digital Consumer Concerns:
Impact of Digital Technology on Private Law Relationships
- Technological developments can affect the way existing business models operate
- Two types of technological evolution (Christensen,1997): Sustaining Technology [improving pre-existing technology] vs
Disruptive technology
o Disruptive effects of technology also has important implications for the design of legal rules
 A degree of flexibility and future-proofing (e.g. Unfair Commercial Practices Directive)
 But: there are limits to the adaptability of legal rules to new circumstances
- Identify particular features that require new legal rules  determine how to draft new legal rules dealing with the
particular issues associated with these features  in case of severe disruption; reconsideration of fundamental principles.
Platform Power and Consumer Contractors
- Consumer contractors
o Online transactions: balance of contracting power has materially changed, to the detriment of the consumer
o A new context for consumption: technology and automation reduce consumer contractors to mere consumers
(Brownsword, 2018)
- Today: power imbalance between business suppliers and consumers
Digital consumer concerns
- Usage restrictions
o Contractual restrictions on the ability to play, listen, copy, print or share content
- Fairness of terms and conditions
o Power imbalance between large platforms and consumers
- Access problems
o Implications for consumers’ participation in cultural, political, social, economic life
- Information problems
o Absent, incomplete, incomprehensible, obscured
- Safety and security problems
o Email scams, spam, identity theft, viruses, loss of information, security of online possessions and
communications
- International aspects of buying
- Unable to identify who they are buying from
- Pricing issues
- Hidden costs, delivery charges
- Sneak into basket
- Digital advertising & SPAM
o Distributed through a variety of emerging platforms
o Highly sophisticated, interactive
o Advertising content integrated in the non-promotional content
o Collecting personal data, personalised
Consumer Protection:
- How does the regulatory framework cater for the digital consumer concerns mentioned above?
Jurisdiction and choice of law Brussels I (Recast) and Rome I Regulation
Consumer rights in distance Consumer Contracts Regulations 2013
contracts Consumer Rights Act 2015
Power imbalances, fairness Consumer Rights Act 2015
Digital advertising UK Consumer Protection from Unfair Trading Regulations 2018
CAP-Code

Jurisdiction and choice of law
Basic principles of private international law
- Two questions:
o Which court has jurisdiction?
 Brussels I Regulation (Recast) of 12 December 2012 on jurisdiction and the recognition and
enforcement of judgements in civil an commercial matters.

,  So that individuals don’t have to travel all the way to where the company is based to seek
recourse
o What legal system will be used to solve the dispute?
 Rome I Regulation of 17 June 2008 on the law applicable to contractual obligations
Jurisdiction: Brussels I Regulation:
- Free choice of jurisdiction + enforcement in civil matters
- Unless the agreement is null and void as to its substantive validity under the law of the chosen Member State.
o Lex specialis check: Specific legislation E.g. special jurisdiction, B2C contracts, employment contracts,
transport contracts, insurance contracts, etc.
 If not, general rule (Art. 4 & 7): “Persons domiciled in a Member State shall, whatever their
nationality, be sued in the courts of that Member State” (Art. 4, 1) or where the performance of the
contract takes place (Art. 7).
Jurisdiction- Special Regime for Consumers:
[NB: only B2C]
- Article 18 Brussels I (Recast)
o A consumer may bring proceedings against the other party to a contract either in the courts of the Member State
in which that party is domiciled or, regardless of the domicile of the other party, in the courts for the place
where the consumer is domiciled.
o Proceedings may be brought against a consumer by the other party to the contract only in the courts of the
Member State in which the consumer is domiciled.
- Article 17 (1) Brussels I (Recast)
o A consumer can be considered to be a person who is acting ‘as being outside his trade or profession’.
o The business has to pursue commercial or professional activities in the Member State of the consumer’s
domicile or, by any means, directs such activities to that Member State or to several States including that
Member State, and the contract falls within the scope of such activities.
- The mere fact that an internet page is accessible is not sufficient
Jurisdiction- Special regime for consumers:
- “Directing Activities”
o CJEU Pammer and Hotel Alpenhof:
 “it should be ascertained whether, before the conclusion of any contract with the consumer, it is
apparent from those websites and the trader’s overall activity that the trader was envisaging doing
business with consumers domiciled in one or more Member States, including the Member State of that
consumer’s domicile, in the sense that it was minded to conclude a contract with them.”
 the international nature of the activity;
 the use of a language or a currency other than the language or currency generally used
in the Member State in which the trader is established and the possibility of making and
confirming the reservation in that other language;
 the mention of telephone numbers with an international code;
 the use of a top-level domain name other than that of the country where the business is
established
- Art. 17 (2) Brussels I (Recast)
o Where a consumer enters into a contract with a party who is not domiciled in the Member State but has a
branch, agency or other establishment in one of the Member States, that party shall, in disputes arising out
of the operations of the branch, agency or establishment, be deemed to be domiciled in that Member State.
Applicable Law- Rome I Regulation
- Freedom of choice of law (Art 3): Contractual choice?
o lex specialis check: Specific rules applicable? E.g. B2C contracts, employment contracts, etc.
  If not, lex generalis (Art. 4): Law of the country with the closest connection to the contract (i.e.
the country of the seller) will be the law that is applied.
Applicable Law – Special regime for consumers:
- Art. 6 Rome I Regulation
o 1. Without prejudice to Articles 5 and 7, a contract concluded by a natural person for a purpose which can be
regarded as being outside his trade or profession (the consumer) with another person acting in the exercise of
his trade or profession (the professional) shall be governed by the law of the country where the consumer has his
habitual residence, provided that the professional:
 pursues his commercial or professional activities in the country where the consumer has his habitual
residence, or
 by any means, directs such activities to that country or to several countries including that country, and
the contract falls within the scope of such activities.
- Art 6 (2): parties may choose the applicable law, IF it provides the same level of protection to the consumer as that of his
country of residence.
- Art. 6 Rome I Regulation
o 2. Notwithstanding paragraph 1, the parties may choose the law applicable to a contract which fulfils the
requirements of paragraph 1, in accordance with Article 3. Such a choice may not, however, have the result of
depriving the consumer of the protection afforded to him by provisions that cannot be derogated from by

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