Crafting a safe space for the small-seller online prosumer – a task for contract law creativity? Image by Freepik

Crafting a safe space for the small-seller online prosumer – a task for contract law creativity?

Prosumers, once declared professionals, are caught between a rock and a hard place. Can contract law offer some refuge? It will be exciting to see Laura’s PhD project about the prosumer puzzle take shape over the coming years.

Who is the prosumer? Laura Bakola asks the question in her first post on this blog, but wisely stops short of attempting to answer it in her PhD project. In contrast to the programmatically expansive and all-inclusive idea of consumers (“by definition, all of us”, at least by aspiration one may add), prosumers immediately bring with them a sense of differentiation: the dawn of the “prosumer movement” exhorted marketers to find ways to address a sort of consumer “who produce many of their own goods and services”. This idea was connected to the expectation that more and more consumers would want to personalise their possessions to bring them in line with their identities and lifestyles. While the prediction of a post-industrial society of makers does not seem to have obviously come true, the idea of authenticity has been fully embraced by scores of market(ing) phenomena. In this sense, the contemporary prosumer is much less of an artisan producing their own goods in an attempt at self-actuation and much more a self-commodifying subject like the ones imagined by Zygmunt Bauman at the beginning of the current century. 

Laura’s project, however, tries to stay as close as possible to the image of curation and craftmanship that the prosumer evokes. In the platform era the traditionally local reach and informal nature of subsistence or “gig” entrepreneurship are transformed: some activities have moved to a completely different scale, some monopolies have been undermined, and new business models have emerged (think of content creators) or re-emerged (delivery services, which were common in pre-industrial, pre-automotive societies). Like imagined in the “prosumer wave” narratives, online small sellers, that Laura’s research concentrates on, sometimes craft more or less sophisticated products and sometimes select and present them, projecting an image of authenticity in direct association with their lifestyles. Through platforms, they reach broader audiences – but can also become more visible for the legal (and tax!) system. From the perspective of EU consumer law, it is easiest to see how these actors, once declared professionals, are caught between a rock (the platforms’ terms and conditions) and a hard place (consumer protection). The other obvious example in this respect, that of content creators, is indeed at the core of the Humans Ads project that I am sure Laura will be following closely.

Article 31 of the Digital Services Act (DSA) requires platforms that allow traders to conclude contracts with consumers to “design and organise their online interface in a way that enables traders to comply with their obligations under relevant Union law, in particular the requirements set out in Articles 6 and 8 of Directive 2011/83/EU, Article 7 of Directive 2005/29/EC, Articles 5 and 6 of Directive 2000/31/EC and Article 3 of Directive 98/6/EC of the European Parliament and of the Council (1)” (see Regulation (EU) 2022/2065, recital 74). This ‘compliance by design’, in other words, should help traders reaching consumers through platforms (rather than through their own websites) to provide consumers pre-contractual information in line with the obligations imposed by EU consumer law. In a case like Fuhrmann, for instance, where the button was considered to be likely in violation of the Consumer Rights Directive, the applicability of Article 31 DSA would make it clear that the platform has not fully complied with its duties. What remains uncertain, also after this provision will enter into force, is whether such a violation implies that the platform is required to relieve the hotel from ensuing consumer claims. If that were the case, Article 31 DSA would ‘bite’. Even without such effect, however, the provision may quickly be noticed by small traders and have significant effects on the market. How? Conceivably, through the platforms themselves. The DSA also specifies in Article 30 that platforms have a duty to identify traders, adding to the Modernisation Directive’s demand (see new Article 6a Directive 2011/83) that they investigate whether the sellers are professionals, and make sure that the information concerning the trader’s identity is clear to consumers (otherwise, at least under some national laws, they may perhaps be considered as the consumer’s counterparty to the purposes of compliance with the contractual obligations). The scope of the provision is limited to platforms that enable traders to offer goods and services to consumers – which makes it crucial for platforms aiming to be exempted and those that need to comply to know when the service provider should be qualified as a trader (and, a contrario, when this would not be the case). Could this help solve part of the puzzle around small sellers? 

Paradoxically, the move could contribute to further centralising prosumer-to-consumer offer around the few platforms that will provide ‘compliance by design’ if this means small businesses are less exposed to compliance problems when selling via intermediaries. There is in this way a small paradox running throughout the DSA: small and micro enterprises are exempted from many of the most stringent DSA obligations – while no such exemption exists for compliance with consumer law. This fact can lead to strident consequences in offline settings already. Think of a case that has made many eyebrows rise over the past year: a consumer contracted for the renovation of some electrical installations at their house – an off-premise contract – and was not informed of their right of withdrawal. Once the work was fully performed, the consumer claimed that they were entitled to withdraw from the contract without paying for the services received or any damages caused – a claim that the CJEU essentially affirmed in view of the fundamental importance of consumers being correctly informed about their rights. Did the trader in this case even realise that they were expected to observe a withdrawal period, let alone inform the consumer about it? And if not, why are we imposing such harsh consequences on a small entrepreneur who is unlikely to have a legal department at their disposal and deep pockets to compensate for the missed income? Thus, effectively, if platforms help (small) professionals avoid this kind of pitfall – which they could in fact do for providers of offline services as well! – small traders could see selling or advertising independently as an unnecessary risk. 

Meanwhile, the position of small businesses vis à vis substantive consumer protection – in particular conformity requirements, guarantees and liability for defective products – remains unaffected and complicated (not to mention the fragmentation of regimes for defective services, which continuously get pushed in the area of unfair commercial practices to find some harmonised regime). Looking at national contract laws, as Laura intends to do, could in this respect provide interesting insights on avenues to think of alternative ways to conceptualise the apportionment of rights and duties in different triangular relations. Many of the information duties now explicitly imposed on platforms, for instance, could be already derived under several national systems if the model rules in the Draft Common Frame of Reference are at all representative (see DCFR IV. C. – 2:102). EU law (see again Article 6a Directive 2011/83) leaves space for national experimentation on this front. According to some views, it may even offer a model: why can’t we do with (some) platforms what we did with package travel organizers? Maybe the substantive liability provisions included in the Package Travel Directive would not be in their place in the context of high-volume, low-value transactions, but other mechanisms should be conceived and comparative law can offer a way out of the stifling “online intermediary” model that has so far been at the centre of most thinking in Brussels. Leveraging the triangular relationship could maybe make the question of crossing or not crossing the “professionalism threshold” much less consequential from a private law perspective. While contract law may be only one piece of the online-small-trader puzzle, and the small trader is only a small piece of the prosumer puzzle, it will be exciting to see Laura’s piece take shape over the coming years.