The present contribution discusses the impact of the COVID-19 pandemic on the platform economy and in particular on the triangular contractual relationships between online platforms, suppliers and customers. It places this discussion in the context of the ongoing debate about the future of platform regulation, including the Model Rules for Online Platforms which were recently adopted by the European Law Institute. Particular attention is given to “price gauging” for products such as face masks or sanitisers, policies to prioritise essential products on platforms selling goods, and measures undertaken by accommodation platforms to regulate pandemic-related frustration and non-performance of supplier-customer contracts. The contribution explores the legality of adopted measures. It furthermore argues that imposing a general duty of transparency and fairness on platform operators as market-shapers could help platform operators, platform users and courts as guidelines when they have to adapt to unforeseen future developments.

The COVID-19 pandemic is not only a public health emergency, but also a source of unprecedented economic disruption. Digital platforms have been affected by the pandemic in different ways. Some platforms have seen their operations disrupted, as is the case for accommodation platforms such as Airbnb, Homeaway or Booking which suffered from COVID-19 related prohibitions of travel and of providing accommodation. Others have seen a sharp upturn in business, in particular retail platforms such as Amazon and eBay which took over some of the business of high street vendors who ran out of supplies or whose shops were closed due to the pandemic.

Against this background, this contribution explores how platforms have reacted to the current crisis and what this means for the ongoing debate about the future of platform regulation. This also provides an opportunity to test the Model Rules for Online Platforms which were recently adopted by the European Law Institute. The pandemic has triggered a wide range of reactions and policy changes among platforms from measures against price gouging and misleading health claims to the prioritisation of “essential products” and adjustments to cancellation policies for travellers.

This contribution has six sections. In section 1 we will look at how online marketplaces address the widespread problem of price gouging regarding products such as face masks or hand sanitisers.

In his main work of social and political philosophy, Elements of the Philosophy of Right, it is Hegel's declared intention to show that a form of the state is being established in Europe that realizes what he calls ‘the Concept’ and which is therefore ‘rational’. States exhibiting this type of rationality are, both in their character and in their functioning, not only fully comprehensible but also entities which allow citizens to be ‘at one with themselves’ (bei sich selbst) (PR § 7A; see also § 268) in their everyday and political lives. In Hegel's view, they therefore enable citizens to lead an ethical life (ein sittliches Leben) in which freedom is realized and reconciliation with the social and political world achieved.

More precisely, Hegel explicitly claims that states must have a specific basic structure in order to realize this type of rationality. This structure is comprised of two ethical ‘spheres’ (PR § 261), the ‘family’ and ‘civil society’, wherein people have a legally secured space to cultivate and maintain private relations and to pursue economic activities of their own free will. Hegel likewise understands the political state as an ethical sphere, one which functions to give citizens the possibility of identifying with the polity as a ‘whole’ (PR § 253) and to obtain thereby a ‘consciousness’ (PR § 268) of freedom and reconciliation.

Did Hegel successfully realize the philosophical project outlined above? Was he able to adequately explain how the social and political structures emerging in Europe during his lifetime enabled people to lead an ethical life? This has been repeatedly denied. Numerous critics have charged Hegel with having underestimated the tensions and conflicts which civil societies generate and which endanger ethical life, and with having overestimated the prospects that political states could establish institutions fostering ethical life. This assessment was expressed very early on by Hegel's pupils and the Left-Hegelians, and it promoted the alternative theories of state and society found in Marx, Marxism and contemporary critical theory.

INTRODUCTION

The rise of online platforms which facilitate peer-to-peer transactions has dramatically changed the digital economy over the last decade. New platform business models have emerged in various sectors from retail and travel, to transportation and banking. Many of the platforms are essentially ‘matchmakers’ that connect one group of customers with another group of customers. Ride-sharing apps such as Uber, Lyft or BlaBlaCar bring together drivers and riders; websites like Airbnb or Wimdu connect people with spare rooms with those who are looking for a place to stay; and Eat With helps food lovers to find home chefs for private dinners.

The enabling factor that is essential for the functioning of such collaborative economy platforms is trust. A key role in building the necessary trust among strangers using a collaborative economy marketplace is played by so-called reputational feedback systems based on qualitative reviews and numerical ratings tied to the profile of a platform user. In order to promote trust, it is necessary that the reviews and ratings provided on the platform are trustworthy and free from bias or manipulation. Fake reviews or other forms of manipulation can undermine the trust in the reputation system and the business model of the platform itself. Recently regulators in several Member States have tackled this issue and started drafting rules for online reputation systems. While the establishment of quality criteria for rating and review mechanisms can support the functioning of the platform markets and help to avoid market failures, it is clear that differing national rules for reputation systems may create barriers in the European single market.

The key argument of this contribution is that there is a case for harmonisation of the rules for online rating and review systems at the European level in order to create a level playing field for the collaborative economy. Following the model of the ‘new approach’ which has been efficient and successful in the area of product safety, a fl exible and innovative regulatory strategy could be a combination of an EU Directive, which defines ‘essential requirements’ for trustworthy and fair reputational feedback systems, and a harmonised European service standard which spells out the legal and technical details.