The prosumer: Towards a new consumer identity in the platform economy? Image by Freepik

The prosumer: Towards a new consumer identity in the platform economy?

Platformisation of the economy has breathed new life into the long-standing tradition of prosumption. But who is the prosumer and why online prosumption of goods deserves a closer look?

‘Producing and consuming’ or ‘professionally consuming’ is certainly not a novel phenomenon, but platformisation of the economy has breathed new life into the long-standing tradition of prosumption. Online platforms enable private individuals to become suppliers of goods, content and services. For goods in particular, platformisation allows selling a great volume of items and reaching broad consumer audiences from the convenience of one’s home. Popular examples include Etsy which enables the sale of homemade and customised items and Vinted, a marketplace for second-hand clothes, offering a means to ‘declutter’ one’s wardrobe – importantly, an activity promoting the circular economy and thus contributing to sustainability goals. Social commerce has amplified the phenomenon because of the ease that comes with marketing and selling through social media platforms (Riefa 2020).

But who exactly is the ‘prosumer’? Coined by Alvin Toffler in 1980 as a contraction of ‘producer’ and ‘consumer’, the term later shifted away from this initial meaning to suggest ‘professionalism’ (Helberger et al. 2012). Similar or neighbouring terms have been used in literature to illustrate the puzzling nature of this actor, who falls under the grey area between a ‘business’ and a ‘consumer’: ‘hybrid consumer’ (Riefa 2009), ‘hybrid seller’ (Morgan-Taylor and Willet 2005), ‘amateur entrepreneur’ (Howells and Weatherill 2005), ‘hobbyist’ (Twigg-Flesner 2015). Irrespective of the term used, a common pattern can be identified: in the platform economy the actor in question is a natural person moving from the demand to the supply side of the market, turning into a seller or a service provider and ‘often unknowingly or unwillingly’, displaying the characteristics of a business (Riefa 2009).

Subsequently, the question arises whether the established binary distinction between consumers and traders in European Consumer Law is fit for the digital age (Twigg-Flesner 2016) or whether there is a demand for greater differentiation between types of consumers or traders (Mak 20202022). It can be argued in this respect that drawing the line between acting privately or for commercial purposes can be a difficult task also in the offline world and that existing classifications are still fit for purpose (Domurath 2017); indeed certain indicative criteria can be considered by national courts to determine whether a natural person falls under the definition of ‘trader’ according to consumer laws, e.g. organisational structure, intent to generate profit, technical expertise, frequency and volume (Case C-105/17 Kamenova [2018], para 38). However, a great degree of uncertainty remains. In the realm of online trade, establishing a ‘business’ or ‘consumer’ classification can be even more challenging because of the variety of market practices and business models, the differences in the activities’ scale and volume and the involvement of ‘consumer expectations’ in the transactions (Helberger et al. 2012). A professionally designed webshop interface or presentation of the goods on an online marketplace may result in the prosumer appearing as a trader in the eyes of a consumer. At the same time, online peer-to-peer marketplaces might enable prosumers to highlight their non-professional image so as not to bear trader duties and liabilities. 

Harmonising the criteria for establishing the relevant classifications and, therefore, identifying a clearer cut-off point between the ‘consumer’ and ‘trader’ status could provide part of the solution; however, the outcomes could still appear unjustifiable because the substantive provisions regarding obligations, rights and remedies related to the sale of goods might not be suitable in light of these new identities and their capacities in digital trade. The obligations associated with professional traders can be burdensome for prosumers and, thus, lead to unfair outcomes. Prosumers might not have the same expertise as professional traders, nor the financial resources to address liability claims of their contracting parties. On the other hand, qualifying them also as consumers in the contractual relationship could deprive the other party of the protection conferred by Consumer Law (Mak 2022). 

This analysis, however, risks turning a blind eye to perhaps the most important actor at play: the online marketplace. The latter controls the transaction between the two parties by setting the standard terms for the contract of sale and might intervene in the contractual relationship in the event of non-performance or defective performance of the seller’s obligation. This role of the marketplace operator in the tripartite relationship has led to calls for a tightened liability regime that would entail assuming a certain degree of responsibility for the underlying transaction (Busch et al. 2016). Hence, if the need for introducing an additional consumer notion is established, namely the need for a ‘prosumer’ or ‘non-professional trader’ identity, the question emerges whether liability rules should be reconstructed. One of the options to consider is whether to shift the balance between the three parties – platform, prosumer and consumer – by establishing partial responsibility of the platform towards the consumer for the prosumer’s activity (Mak 2022).

Undoubtedly, any reconstruction of liability rules requires a thorough consideration (Maultzsch 2017). Curtailing private autonomy for the sake of consumer protection might be warranted under certain circumstances, but requires a careful balancing of interests of the parties. In this respect, it is necessary to examine the contractual relationships in this triangular structure, identify how obligations are shared between the three actors, and explore whether general contract law can already provide us with the balancing solution. It might be after all the case that the prosumer’s activity can be protected and promoted through less interventionist means; identifying obligations that platforms could easily assist prosumers with – without necessarily assuming liability for the underlying transaction – or unburdening the unsophisticated actor from the barrage of information duties imposed by consumer laws to those qualified as traders, can be another starting point for the discussion.

This research project challenges the one-size-fits-all model, addressing ‘a central problem for the contemporary theory of private law […] the staggering degree of heterogeneity within the groups the law traditionally distinguishes between – be it differences in experience, rationality, willpower, economic resources, or else’ (Hacker 2017). Is the prosumer a consumer to protect or a trader to unburden? Are existing classifications and their legal consequences doing justice to the prosumer? It might still be early for these questions to be answered, but one thing is for sure: it’s time we had a closer look at this highly promising actor.