Introduction

European contract law has long sought to balance the unequal bargaining power between consumers and businesses. Consumer protection rules aim to ensure that consumers, considered as the weaker party in transactions, have access to legal safeguards, such as protection against unfair contract terms and exploitative commercial practices. Nonetheless, the digitalisation of consumer markets brings challenges that existing regulations may not address effectively. The rise of online platforms and the shift from physical goods to digital services and experiences have challenged the traditional conception of fairness. Nowadays, contractual relationships between consumers and suppliers of digital services are strongly informed by the terms set by suppliers and practices that, often in non-transparent ways, nudge consumers towards sharing their data and making purchases. Because of these developments in modern consumer markets, Vanessa Mak addresses the question of whether European contract law can sufficiently address inequalities between consumers and businesses arising in digital markets in her recently published article in European Law Open. In this interview with Paulina Mendoza Del Castillo, Vanessa Mak answers some questions about her new publication.

Interview

Why did you think it was necessary to approach digital markets from an equality perspective?

Vanessa Mak: My first thoughts on equality in digital markets were triggered by an editorial written by Mateusz Grochowski, member of the Consumer ID advisory board, and published in the Journal of European Consumer and Market Law (EuCML) on consumer protection in a ‘post-consumer society’. Drawing on literature from the social sciences, he posits that consumer markets have developed from markets focused on the acquisition of goods, to markets dominated by services, and now in its most recent form to markets focused on ‘experiences’. Consumers are looking for experiences that can enrich their lives or provide positive emotions, for example through social media, creating and sharing one’s own creations (pictures, videos), immersing oneself in fun activities (games) or speaking out in public discourse. The law is slow to respond to these developments. As a contract lawyer, it struck me that these new types of services in consumer markets are not easily fit into existing notions of consumer contracts, which are essentially focused on protecting the economic interests of consumers. There appear to be new forms of societal or economic inequality here, as businesses make profits from consumers’ content-creation activities in digital markets, and also benefit from the aggregation of personal data and the exploitation of digital infrastructures. The question that I ask in the paper is whether contract law should rebalance the interests of consumers and businesses in this post-consumer society and, if so, how.

What is the principal aim of the equality principle and how is it linked to autonomy in European Contract Law?

Vanessa Mak: I approach the question through the lens of European contract law, with the idea that regulation will be most effective if it is created at the EU level. Digital markets transcend national borders. To address the new types of inequalities that arise in digital markets, I reduce the question to one of contractual equality. Contract law seeks to address imbalances between consumers and businesses by maintaining rules that aim to put the consumers as the ‘weaker party’ on par with businesses through information rights (helping them assess the quality of goods and services) as well as remedies (aiming to compensate for harm suffered due to defective performance). The principle of equality as such is part of the broader principle of autonomy in contract law, which holds that contracting parties should be facilitated in the pursuit of self-realisation. The pursuit of autonomy, reflected in the freedom of contract, is supplemented by the limitation that one must also respect the autonomy of others and allow them their space for self-realisation. Translated to business-to-consumer relations: consumer law aims to safeguard exactly this space for consumers to live their lives according to their wishes and motivations. 

Can European contract law still ensure fairness in consumer-business relationships given the new inequalities in the digital economy?

Vanessa Mak: Briefly said: no. I believe there is a gap in European contract law’s framework when it comes to protecting consumers in digital markets beyond the safeguarding of their economic interests. We see courts struggle with this as well. At the national level, German and Italian courts have sought solutions through an extensive application of consumer law instruments. The Unfair Contract Terms Directive (UCTD) has been applied to Meta’s terms and conditions, where it was at issue whether the terms placed undue restrictions on the freedom of speech (which is a fundamental right!). The Unfair Commercial Practices Directive (UCPD) has been applied to Meta’s information concerning data processing, which was found to mislead consumers (again: protection of a fundamental right!). In the article, I discuss what other routes could be explored, either through adjudication or through legislation. One question is whether the EU Charter of Fundamental Rights can have a more prominent role in the protection of consumers in digital markets.

What key insights from your paper would you like the European Commission to consider for inclusion in the upcoming Digital Fairness Act?

Vanessa Mak: The idea of a Digital Fairness Act is a good one, but currently seems to lean towards minor amendments of the existing consumer law acquis. One aspect that the European Commission should, to my mind, take up is how to define ‘vulnerability’ in digital markets. In the ConsumerID team, Carolina Lisboa is writing a PhD thesis on this topic.

Do you think exploring the green transition through the lens of equality could also be an interesting angle? 

Vanessa Mak: Absolutely! Inequality also exists between consumers when it comes to making sustainable choices. Not everyone is in a position to assess how ‘green’ the products or services are that they consume, for example due to a lack of information or a lack of understanding. Accessibility of services, such as repair services, is also an issue. Contract law is one part of the puzzle, as we can see in the new EU rules on the ‘right to repair’, but it could be an important one for ensuring that consumers are put in a position where they can make autonomous purchasing decisions. Connecting this to the ‘identity’ question in the ConsumerID project may also lead to new insights. In US scholarship, a notion of ‘identity harm’ has been proposed, meaning ‘the anguish experienced by a consumer who learns that her efforts to consumer in line with her personal values have been undermined by a business’ exaggerated or false promise about its wares.’ An example is the Volkswagen emissions scandal. As we can see, there is plenty more food for thought…