Samanta Šereikaitė samanta.sereikaite@gmail.com University of Amsterdam Faculty of Law International and European law: European competition and regulation track
Data portability in digital markets:
a consumer’s perspective
Supervisor: dr. K.J. (Kati) Cseres
Abstract
The EU regulation on the protection of natural persons with regard to the processing of personal data and on the free movement of such data (GDPR)1 will come into force on 25 May 2018. One of the novelties is the right to data portability. Specifically, Article 20 GDPR states that a data subject shall have the right to receive his/her personal data, which he/she has provided to a data controller (e.g., data taken from Facebook can be used in Google+). Thus, as recital 68 GDPR indicates, the right to data portability strengthens the data subject’s control over his or her own data.
This research was inspired by discussions that not only data subjects will be empowered by this right but consumers as well. For instance, according to Article 29 Data Protection group,2 data portability supports consumer empowerment in digital markets.3 However, to what extent we can think that the concepts of consumers and data subjects can be interchangeable or, on the contrary, maybe they even oppose each other? It consequently leads us to another important question: if data subject empowerment means that consumers are empowered as well?
There are numerous discussions on data portability and its interplay with competition, data protection, consumer law. However, none of those discussions have touched upon the importance of the right to data portability to consumer empowerment and how, if at all, it fits along other consumer empowerment tools. Even when in some cases researchers have addressed this question regarding consumer’s situation in connection to data portability, the analysis did not encompass a systemic view from the consumer’s perspective. Therefore, with this research we will conduct an analysis and answer questions regarding who the consumer is in the context of digital markets and how and to what extent the right to data portability can help increase the level or consumer protection or, on the contrary, diminish it.
This research was conducted using a method of legal analysis of relevant EU directives, which form part of EU consumer aquis. Also, a systematic approach was taken in performing analysis of literature, as well as case-law review of various articles on data portability, consumer and data subject empowerment topics. Consequently, by using the mentioned methods first we will discuss the peculiarities of the right to data portability. Then, we will discuss questions related to consumer empowerment and evaluate whether and how the right to data portability fits within the framework of consumer empowerment. Lastly, we will address questions with regards to who the consumer is in digital markets and how she is perceived under the EU law.
Table of contents
1 Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation), L 119, 4 May 2016.
2 An independent European advisory body on data protection and privacy.
3 Article 29 Data Protection Working Party, Guidelines on the right to data portability, 13.12.2016, 16/EN WP 242, p. 3. http://ec.europa.eu/information_society/newsroom/image/document/2016-51/wp242_en_40852.pdf
I. The right to data portability: why and how...4
II. Empowerment: purpose and means...7
2.1. The concept of the average consumer...7
2.2. Data subject...9
2.3. Information obligations as means to empowerment...11
2.4. Choice as means to empowerment...13
2.5. Conclusions...15
III. Consumer: notion and definition...16
3.1. The notion of consumer...16
3.1.1. The question of legal personality...17
3.1.2. Acting outside her professional or commercial capacity...18
3.2. The notion of professional...19
3.2.1. The question of legal personality...19
3.2.2. Acting for purposes which are within the professional’s capacity...19
3.3. Mixed contracts...20
3.4. Conclusions...22
IV. Prosumers: consumer, professional, or both?...23
4.1. Digital markets and their peculiarities...23
4.2. Trying to understand prosumers...25
4.3. Prosumers as average consumers...29
4.4. Conclusions...30
V. Conclusions...32
I. The right to data portability: why and how
One of the novelties introduced by GDPR was the right to data portability which is enshrined in Article 20 (1) GDPR:
‘The data subject shall have the right to receive the personal data concerning him or her, which he
or she has provided to a controller, in a structured, commonly used and machine-readable format and have the right to transmit those data to another controller without hindrance from the controller to which the data have been provided <…>.’
Having regard to Article 20(1), the right to data portability will be available under certain conditions: 1) this right applies to natural persons only; 2) it can only be exercised with regard to his/her personal data; 3) the requested personal data was provided by him/her upon his/her consent or based on a contract; 4) personal data was provided in a structured, commonly used and machine-readable format.
Also, in order to facilitate the process, under the right to data portability, the received data will be presented in structured, commonly used and machine readable format or it can be directly transmitted from one data controller to another. For instance, data taken from Facebook can be used in Google+. Although this right can be exercised regardless of economic activity that the data controller is engaged in, but it is predominantly aimed at enabling data transfer between online services, especially social networks. So why there is such an attention to digital markets and what does the right to data portability have to do with them?
As Podszun and Kreifels indicate, different platform’s sides are connected due to network effects,4 which is a central element that helps us to understand how platforms work. Intermediaries seek to exploit network effect by making their platforms more attractive to new customers. One of the most common examples is social media services. For instance, during the process of building one’s profile on Facebook, Facebook suggests us to allow it to delve into our e-mail contact list to see who of our contacts are already on Facebook and invite those who did not have it by that time. Ultimately, this is how a core list of Facebook ‘friends’ is created.
A common characteristic of these platform business models is that they are all based on exploiting network effects which may be direct or indirect. According to Katz and Shapiro, direct network effect increases with each costumer that joins the platform, making each new customer more valuable than the previous one. At the same time, the platform becomes more attractive for costumers if the total number of costumers grows.
4 Podszun R. and Kreifels S. (2016), Digital Platforms and Competition Law, Journal of European Consumer and Market law, Issue 1, p. 35.
Indirect network effects make online businesses multi-sided5 by making the platform more valuable to one side of the platform’s user if the number of members on the other side of market increases.6 For instance, the more users Facebook has, the more various businesses will have incentives to buy advertising space on Facebook. As a result, ‘network effect’ derive indispensable value for digital platforms by making such platform more attractive for new users and advertisers.
Network effects take place in markets where due to increasing number of users, the utility of service boosts as well. While a particular platform grows, the network effects make it increasingly difficult for competitors to challenge the position of that platform. At the same time, due to network effect entry or expansion to the market can be hindered, making less choice for consumers to choose different platforms. A new entrant will need a ‘critical mass’ of users, otherwise it will not be able to compete with the incumbents.7 Particularly due to indirect network effect, the increase of the platform users brings crucial importance for the advertisers who are than more inclined to buy more ad space on specific platforms. Markets, in which network effects play an important part, tend to high concentration or result in a winner-takes-all outcome.
However, there are many factors which can diminish network effect. In Facebook-Whatsapp merger case, the Commission took into that the sector being investigated was a fast moving one, which resulted in low switching costs and barriers to entry or expand, the possibility for users use different apps at the same time (multi-homing8). On the other hand, if network effect exists, it means that due to high switching costs consumer faces difficulties in being able to choose any other service provider. Consequently, the user becomes locked-in to certain service provider, e.g. user is no longer able to access his/her data on the app if he/she starts using another app.
Therefore, it is expected that with the right to data portability it will be easier for new competitors to enter the market. As it was mentioned, the right to data portability will allow to increase control over his/her data by facilitating one’s personal data transfer from one data controller to another, as it is indicated in recital 68 GDPR. Thus, empowerment is seen through the possibility to switch to other platforms by exercising the right to data portability, which makes the switching costs lower.9 As it was mentioned before, at the same time, according to Article 29 Data Protection group,10 data
5 Evans D. S. (2003), The Antitrust Economics of Multi-Sided Platform Markets, Yale J. Regulation, pp. 325, 331-333; Filistrucchi L., Geradin D. and van Damme E. (2013), Identifying Two-Sided Markets, World Competition 36 , no 1, pp. 33, 37-39.
6 Katz M. L. and Shapiro C. (1985), Network Externalities, Competition, and Compatibility, American Economic Review, 75(3), pp. 424–440.
7 Grunes, A. P. (2013), Another Look at Privacy, George Mason Law Review, Vol. 20, No. 4, p. 1120.
8 The use of one consumer communications app (for example, of the merged entity) does not exclude the use of competing consumer communications apps by the same user. Case No COMP/M.7217 - FACEBOOK/ WHATSAPP, p. 133.
9 Engels B. (2016), Data portability among online platforms, Internet Policy Review, 5(2), p. 7. 10 An independent European advisory body on data protection and privacy.
portability, among other things, supports consumer empowerment as well.11 However, the word ‘consumer’ is not mentioned anywhere in GDPR leaving us to question how one can be empowered if she is not mentioned in the document in the first place.12 Therefore, to what extent consumers will be empowered under the new right to data portability will be discussed in other chapters of this research.
11 Article 29 Data Protection Working Party, Guidelines on the right to data portability, 2016, 16/EN WP 242, p. 3, Available at: http://ec.europa.eu/information_society/newsroom/image/document/2016-51/wp242_en_40852.pdf. 12 For data processing purposes, the data controller needs to get consent from the data subject (recital 42) in accordance with the Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts (OJ L 95, 1993, p. 29. It is fair to say that this is the only time when the GDPR makes any reference to consumer legislation.
II. Empowerment: purpose and means
With the regulation on a multiannual consumer programme for the years 2014-2020 various objectives related to ensuring a high level of protection for consumers were introduced along with propositions to help reaching them.13 Consumer information and education, development and reinforcement of consumer rights are just a few objectives set out in this agenda for consumer protection. According to the Commission, ‘consumer empowerment is both a function of the skills, knowledge and assertiveness of consumers themselves, and the protection, rules and institutions designed to support them as they play their part.’ Thus, empowering consumer means providing her with tools to become a mature and responsible consumer and ‘making choices and decisions in relation to their needs and risk profiles.’14
The GDPR introduced not only the right to the data portability but also the right to be forgotten. These are the two core rights that shift a new way forward for data protection rules. As a result, we will look into how data protection and consumer protection concerns are accommodated in the framework of the right to data portability. In both cases, the government intervenes when there is a failure in information symmetry. However, as we will see the goal of such intervention under data and consumer protection rules is different. Therefore, in order to determine how data subject and consumer are empowered with regard to the right to data portability, we will analyse what empowerment is meant for data subjects and consumers as well.
2.1. The concept of the average consumer
There are various categories that define consumer through different lens, e.g. consumer can be confident, influential, vulnerable, etc. However, in this research we will focus on the concept of the average consumer, a normative construct that was developed in the ECJ’s case-law. Also, we will focus on only one of functions of the concept of the average consumer – a set of limitations with regard to the parties’ duties and responsibilities that play part in B2C transactions.15
The ECJ in the Gut Springenheide case16 came with the concept of the average consumer as we have it today. Later, such interpretation was introduced in the Unfair B2C commercial practises directive defining the average consumer as someone who is ‘reasonably well informed and
13 Regulation (EU) No 254/2014 of the European Parliament and of the Council of 26 February 2014 on a multiannual consumer programme for the years 2014-20 and repealing Decision No 1926/2006/EC L 84/42, 20.3.2014.
14 Ducoulombier E., Consumer policy: from protection to empowerment, (DG internal market).
15 Mak, V. (2013), The “Average Consumer” of EU Law in Domestic and European Litigation, in: Leczykiewicz, D., Weatherill, S. (eds) (2013), The Involvement of EU Law in Private Law Relationships, Hart, Oxford, pp. 333-56. 16 Case C-210/96 Gut Springenheide and Rudolf Tusky v. Oberkreisdirektor des Kreises Steinfurt, ECR I-4657, 1998.
reasonably observant and circumspect, taking into account social, cultural and linguistic factors <...>’.17 Thus, if the consumer is supplied with information, he is sufficiently protected.18
On the other hand, there are voices who urge to reconsider the notion of average consumer because it does not give a firm grasp of who the average consumer is. This concept sets a very high benchmark for the Member States to deviate from, and national legislation often is set aside by the ECJ for creating barriers to trade.The image that we see being created in the ECJ’s case practise and subsequently in the EU’s law, depicts consumer as someone who is active and seeks for information. Consequently, with such level of protection it is almost impossible for a person to argue that he should be covered by consumer aquis if he does not put enough effort to even look at the contract details.
The level of protection that should be afforded to the consumer encompasses a battle between a normative and an empirical approach. The assumption that the average consumer is reasonable, circumspect and seeks for information is wrong. Contrary to the way the average consumer is depicted, Mak,19 Incardona and Poncibò20 point out that a more realistic approach should be adopted, because the existing standard pays little attention to the way consumers actually act in practise. Also, the European Consumer Consultative Group, a consultative group set up by the European Commission and entrusted to represent the interests of consumers in it, is in favour of changing the standard of the average consumer.21 The group expressed its support for the Highest Canadian Court’s findings that ‘an average consumer [is a person] who is credulous and inexperienced and takes no more than ordinary care to observe that which is staring him or her in the face upon first entering into contact with an entire advertisement.’22 The Canadian court’s findings is in line with the previous approach employed by Germany, where the empirical standard prevailed over the normative one,23 before the ECJ’s standard of average consumer was introduced. In addition to the concept of the average consumer already being disputed, the level of average consumer protection can vary across different member states. For instance, in the Nordic countries 17 Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) No 2006/2004 of the European Parliament and of the Council, recital 18.
18 Duivenvoorde B. (2013), The protection of vulnerable consumers under the unfair commercial practises directive, Journal of European Consumer and Market Law, p. 70.
19 Mak, V. (2013), The “Average Consumer” of EU Law in Domestic and European Litigation, in: Leczykiewicz, D., Weatherill, S. (eds) (2013), The Involvement of EU Law in Private Law Relationships, Hart, Oxford, pp. 333-56. 20 Incardona R., Poncibò C. (2007), The average consumer, the unfair commercial practices directive, and the cognitive revolution, 30 Journal of Consumer Policy, p. 21.
21 The European Consumer Consultative Group, European Consumer Consultative Group Opinion on consumers and vulnerability, adopted on 7th February 2013 by ECCG Plenary, Available at: http://ec.europa.eu/consumers/archive/empowerment/docs/eccg_opinion_consumers_vulnerability_022013_en.pdf. 22 Richard v. Time Inc., 2012 SCC 8. The decision was important due to the fact that the court rejected the average consumer standard, very similar to the EU’s one, and adopted a completely different approach.
23 Wiebe A. (2015), How much nature for the consumer? Misleading advertising, trademark law and the European average consumer standard in the food sector, Corporate Governance eJournal, Paper 32, p. 3.
it is presumed that consumers reach their decisions based on the overall impression and not after the investigation of the relevant facts,24 but such perception is in conflict with the Unfair B2C Directive which does not look at contract terms as such.
It is crucial to note that the average consumer test cannot be applied in a statistical manner.25 Therefore, after having taken into account the case-law of the ECJ, cultural, linguistic and other factors pertaining in that specific country, national courts and authorities will determine how the average consumer would have conducted himself in a specific situation. Consequently, it is impossible to talk of a ‘unique ‘average consumer’ or a ‘European consumer’, as every Member State can have a different standard. Thus, it is particularly important to note that the level of information, circumspection, and observance can vary to a great degree between the Member States. Accordingly, the level of protection is subject to change depending on a member country and a specific situation that we might have in mind.
To sum, the EU faces a discussion whether to keep a mythical normative concept, endorsed by the ECJ and which was later picked up by the EU legislation, or choose to protect the vulnerable consumers. At the moment, the normative concept is the predominant one both in the legislation and case-law. However, in the following paragraphs, we will see that, following the analysis with regards to how the data subject and consumer in digital markets is perceived, the normative concept will probably be challenged further in the future.
2.2. Data subject
When the Treaty of Lisbon came into force in 2009, it marked a new standing with regard to personal data protection.26 Later came the proposal for GDPR, according to which, the future legislative measures should focus ‘in particular <...> the right to the protection of personal data’, instead of safeguarding the right to privacy.27
Under Article 2(a) of the Data Protection Directive, data subject is an identified or identifiable natural person. Under the same provision, personal data is ‘any information relating to (‘data subject’)’, e.g. names, person’s email addresses, or any other piece of information that allows to identify data subject.28 The GDPR did not introduce any new definition of data subject either.
24 Wilhelmsson Th. (2000), Is There a European Consumer Law – and Should There Be One? Saggi, Conferenze E Seminari, p. 19, Available at: http://w3.uniroma1.it/idc/centro/publications/41wilhelmsson.pdf.
25 Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) No 2006/2004 of the European Parliament and of the Council, recital 18.
26 González Fuster G. (2014), Fighting For Your Right to What Exactly? The Convoluted Case Law of the EU Court of Justice on Privacy and/or Personal Data Protection, Birkbeck Law Review, Volume 2(2), p. 266.
27 European Commission, Proposal for a Regulation of the European Parliament and of the Council on the protection of individuals with regard to the processing of personal data and on the free movement of such data (General Data Protection Regulation), COM (2012) 11 final.
28 The Data Protection Directive. Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995.
Compared to EU consumer aquis, under EU data protection rules, there is no normative standard or benchmark for the data subject. Instead, recital 75 GDPR addresses vulnerable natural persons, in particular children, whose personal data processing could result in risk of their rights and freedoms. To be fair, GDPR mentions the word ‘vulnerable’ only once but it has important implications in the context of our research.
First of all, the word ‘vulnerable’ has special significance in EU consumer protection legislation. The concept of ‘vulnerable consumers’ can be found in many EU consumer protection directives. For instance, under Recital 34 of the Consumer rights directive, the trader should take into account the specific consumer needs like mental, physical or psychological infirmity, age, etc., while providing information to her.29 Thus, vulnerability is understood as an obstacle that can hinder the way consumer perceives information provided by trader.
Vulnerable consumers form a group based on objective criterion like age or specific condition that consumers have. However, under Recital 75 GDPR, no specific objective criterion is mentioned with regard to data subject, except for children. Does this imply that all data subjects can be regarded as being vulnerable regardless of any objective criterion? According to Gonzalez, data subjects ‘appear to be originally and generally deprived of a satisfactory level of information.’30 This could be substantiated by the fact that some data subjects simply can’t grasp that their personal data is the fuel for free services on the internet.31 At the same time, in the case of free online services they are also not in a position to (re)negotiate the conditions and use of the contract that they have concluded with the platform, which shows the significant lack of balance between the two parties.32 In the end, such data subjects can easily become the targets of unfair trading practises. Consequently, if data protection law leans to vulnerability as data subject protection standard, it can be subject to discussion how this can influence current EU consumer protection law benchmark, i.e. the concept of the average consumer. As it was mentioned before, the concept of the average consumer prevails over any other possible benchmark. However, using the same word ‘vulnerability’ both in data protection and consumer protection law can lead us to confusion, because all data subjects can be vulnerable, whereas, under consumer protection law, only consumers who, due to their circumstances, are susceptible to detriment are referred to as vulnerable.
29 Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) No 2006/2004 of the European Parliament and of the Council
30 González Fuster G. (2014). How Uninformed is the Average Data Subject? A Quest for Benchmarks in EU Personal Data Protection. Revista de Internet, Derecho y Política, (19), p. 101.
31 Impact assessment for the proposed General Data Protection Regulation SEC(2012), 72 final, p. 22, Available at: http://ec.europa.eu/justice/data-protection/document/review2012/sec_2012_72_en.pdf.
32 Preliminary Opinion of the European Data Protection Supervisor (2014), para 76, Available at: https://edps.europa.eu/sites/edp/files/publication/14-03-26_competitition_law_big_data_en.pdf.
2.3. Information obligations as means to empowerment
If consumers lack knowledge in order to exercise their rights (e.g. computer illiteracy), they become vulnerable.33 Since the benchmark of the average consumer relies on the image of someone who is a well-informed, reasonable and circumspect, the ability to process and use information is a priority when considering means to empower consumer. Probably that is why the EU’s legislature and the ECJ’s show preference for information rules as means to empower consumers.34 As Malinowska rightly summarizes, protected consumer is the one who is well informed.35 Although at the moment there is information overload, which can also put limitations on exercising one’s rights, but information disclosure is the number one choice for consumer empowerment.
The government intervenes when there is information asymmetry between the parties, making the weaker side subject to consumer protection. As it will be analysed later in chapter IV, consumers in digital markets are seen as rational and active, implying that they are capable of collecting, analysing and sharing information. Since consumers have access to internet and tools to get information, at first sight it can be doubtful to what extent they need more empowerment. However, as we have seen from various examples (lack of bargaining power, lack of full disclosure between the parties) and also as it was pointed out by Malinowska, in distance contract the consumer always suffer from the lack of information and his abilities to acknowledge the contract’s content are limited.36
Also, we cannot ignore that consumers are data subjects at the same time. Even though they could have all possible means to access information on the internet that does not change the fact that in exchange for free services consumers share their personal information with data controllers. Again, under data protection laws, data subjects are considered to be disempowered with regards to control over their personal data. In fact, due to computerization, concerns regarding personal data protection grew immensely. The growing problem of the data subject being disempowered lead to privacy and data protection as becoming means that enable to take back control over one’s personal data.37
So, in the end, the obligation to disclose information both under the consumer and data protection law is a primary tool for consumer’s or person’s empowerment. However, the purpose of getting
33 Commission staff working document (2012), SWD(2012)235 final, Available at:
http://ec.europa.eu/consumers/eu_consumer_policy/our-strategy/documents/swd_know-enhan_cons-empwrmnt_2012_en. pdf.
34 A classic example is the Case 178/84 German beer purity case, Commission v. Germany [1987] ECR 1227. 35 Malinowska K. (2014), Consumer protection in e-insurance in European Union law, Insurance review. 36 Ibid.
37 González Fuster G. (2014). How Uninformed is the Average Data Subject? A Quest for Benchmarks in EU Personal Data Protection. Revista de Internet, Derecho y Política, (19).
access to information for data subject and consumers differs.38 For consumers information enables them to make well-informed choices, but for data subjects information helps them understand how the processing of their personal information goes.
The requirements on data information obligations set in the data protection directive were commonly known as the transparency measures.39 For instance, the mentioned directive’s preamble stresses the importance for ‘the data subject to be in a position to learn of the existence of a processing operation’; also, data processing can only be carried out following the data subject’s consent.40 As a result, fair processing of personal data was tied to the data controller’s obligation to inform the data subject about the process that the person’s data is being involved. Following this line of reasoning, this is why the GDPR again is meant to reinforce the information obligations towards the data controllers.41 Thus, data protection rules have been putting a great emphasis on information disclosure duties that can help the data subject to be more informed and allow him to know how his data is being processed.
To sum up, the concept of empowerment is used both under EU consumer and data protection legislation. Even though the means are the same, i.e. information disclosure as primary means for empowerment, but content and purpose of such empowerment has different meanings. As a result, the information obligations from trader towards consumer and from data controller towards data subject are not interchangeable. So by saying that through information disclosure obligations consumers and data subjects would be equally empowered we would make a false statement. Therefore, if there is a problem in the market due to information asymmetry, it wouldn’t make sense to introduce information transparency rules, because it wouldn’t enable consumer to access information relevant for him to make a choice between different traders. At the same time, it is unlikely that data subject would need information that helps him make the choice between different practices of his personal information processing, because it wouldn’t allow him to understand how this processing practise works in the first place. Consequently, it is obvious that information disclosure obligations might not work out to such an extent as to empower both consumer and data subject.
In addition to this, the result that the legislator seeks with information disclosure can be limited. There can be various limitations that hinder the use of this right like the lack of time, education, or
38 González Fuster G. (2014). How Uninformed is the Average Data Subject? A Quest for Benchmarks in EU Personal Data Protection. Revista de Internet, Derecho y Política, (19).
39 ICO (2009). The Information Commissioner’s response to the European Commission’s consultation on the legal framework for the fundamental right to protection of personal data. On transparency as an element of fairness, see: A. Kuczerawy and F. Coudert (2011) and Bygrave, pp. 58-59.
40 The Data Protection Directive. Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995, recital 30 and 38.
41 González Fuster G. (2014). How Uninformed is the Average Data Subject? A Quest for Benchmarks in EU Personal Data Protection. Revista de Internet, Derecho y Política, (19), p. 98.
other reasons related to the findings of behavioural economics, e.g. limited understanding and information process, over-optimism, ignorance towards warnings.42 Such reasoning goes well in line with the portraits of how data subject and prosumer are perceived mostly because they both disregard the value that their personal data has for the online businesses. Consequently, the role of information in the process of empowering either the data subject or consumer might be limited. 2.4. Choice as means to empowerment
It is not the first time when the legislator has introduced a specific right that enables the consumer to make a choice between different service providers. Probably one of the best known examples is the right to number portability, which nowadays is very often compared with the right to data portability. The right to number portability was introduced by the Utilities directive.43 Under this right, a customer can keep his phone number but switch to another telecom operator. However, there are some differences between the right to data portability and the right number portability. As it is indicated in Recital 47 of the directive, the purpose of the right to number portability is to enable the consumer to switch, whereas, the right to data portability only partially pursues this goal. The introduction of number portability lead to increased competition and lower switching costs, but the environment in online social networks is more complicated than that.44 Therefore, the experience that can be drawn from the right to number portability during its implementation process could only be relevant to a limited extent.
Next, the right to data portability might also be introduced by the Directive of digital content proposal as to avoid the consumer’s lock-in.45 To some, this proposal is clearer when compared to the right to data portability under the GDPR.46 It is explained that the right to data portability would be exercised under strict conditions, e.g. the contract has been terminated by the consumer, while the right to data portability under the DGPR does not elaborate how in practise it should be implemented. Although the right to data portability might be exercised under two different documents, it is unclear what will be the outcome of such interplay between the two.
Coming back to the right to data portability under the DGPR, as it was mentioned before, network effects should be taken into account when analysing digital markets, especially social networks. In other words, every new member joining the network becomes more and more valuable to other members and to the network itself. If switching costs are low, then it is easier for the consumer to
42 Howells G. (2005), The Potential and Limits of Consumer Empowerment by Information, Journal of law and society, Vol. (32), Number 3, pp. 349-70.
43 Directive 2014/25/EU of the European Parliament and of the Council of 26 February 2014 on procurement by entities operating in the water, energy, transport and postal services sectors and repealing Directive 2004/17/EC. 44 Janal R. (2017), Data Portability - A Tale of Two Concepts, 8 JIPITEC 59 para 1.
45 Ibid. 46 Ibid.
actually move his personal data.47 On the other hand, if switching costs are high, it is more difficult for the consumer to switch. As a result, due to high switching costs, the consumer will face the lock-in effect especially in online social networks. This idea is substantiated by the fact that even when Facebook introduced numerous changes in its privacy policy, there was no direct decline of users due to such behaviour.48
As it was declared in the GDPR and by various other sources, the main goal is to empower data subjects with more control over their personal data,49 make businesses more efficient, and increase competition between businesses.50 Some even go further by saying that this is the data subject that will be empowered to switch from one business to another.51 But as we know it by now, the ultimate goal with regard to data subject empowerment is to shed some light on data processing practises, which is not directly the same as actually enabling the switch from one data controller to another. We have to remember that data subjects were mostly empowered by means of making the whole process of their personal data processing more transparent. In other words, the purpose is to make data subjects aware, recognise and control when and how their personal data is being taken and used.
At the same time, in connection to the right to data portability, consumers should also benefit from it by having more choice, although not everyone agrees with such opinions.52 Even though the data subjects will increase the level of control over their personal data, it is questionable to what extent it will empower consumers. However, we have to remember that the right to data portability not only sets grounds for information transparency rules, but also introduces a very important and interesting element – interoperability requirement which should facilitate the switch from one platform to another. By some in academia, interoperability is seen as means to empower consumers because this element is absolutely alien to data protection rules.
However, we should also not forget that even when the law introduces new rights, it does not ipso
facto mean that either the consumer or the data subject will actively use it. According to the
Commission’s competition expert, ‘the harder it is for an individual to move [his/her] data, the stronger will be the position of the provider that controls that data, and the more difficult it will be for new entrants to succeed.’53 As it was pointed out by Mak, consumers, or data subjects for that
47 Switching costs are negatively correlated with data portability: the easier it is for the consumer to port his data from one platform to another, the lower are his costs to switch to another platform.
48 Waller S. W. (2012), Antitrust and social networking, North Caroline Law review, pp. 1791–1792.
49 Preliminary Opinion of the European Data Protection Supervisor (2014), Available at: https://edps.europa.eu/sites/edp/files/publication/14-03-26_competitition_law_big_data_en.pdf.
50 Preliminary Opinion of the European Data Protection Supervisor (2014), para. 86, Available at: https://edps.europa.eu/sites/edp/files/publication/14-03-26_competitition_law_big_data_en.pdf.
51 Waller S., (2012). Antitrust and social networking. North Carolina Law Review, 90(5). 52 Janal R. (2017), Data Portability - A Tale of Two Concepts, 8 JIPITEC 59 para 1, p. 2. 53 Coates, K., Competition Law and Regulation of Technology Markets, 2011.
matter, might not know how to exercise such rights.54 Therefore, only the introduction of the right to data portability might not be enough to reach the expected results. Consequently, other consumer empowerment strategies will have to be taken into account in order to take the most out of the newly introduced right under Article 18 GDPR.
2.5. Conclusions
In this chapter, we have discussed how empowerment is important for both data subjects and consumers alike. However, data subject is always seen as someone who is in a constant deprivation of information and is almost always ignorant in relation to how his information is being processed. Under data protection law, it is thought that between data subjects on the one side of the contract and the government or industry on another side there is always asymmetry.55 Therefore, data subject is someone who always needs protection and the loss of personal data would be very dangerous. On the other hand, we have consumers who, under the notion of the average consumer, are expected to be reasonably well-informed and circumspect. Even though Weatherill proclaims that ‘[t]he average consumer, a largely fictional and normative construct, should have limits,’56 at the moment consumer laws protect such consumers who are significantly different from data subjects. As a result, it is questionable to what extent the right to data portability can actually empower any of the two.
Information obligations are seen as the primary options for data subject or consumer empowerment. However, the purpose of information obligations in consumer protection and data protection laws are different. In the end, the right to data portability has to serve two different purposes. It sets grounds for transparency in personal data processing, which helps to empower data subjects, and maintains an element of choice as means to empower consumers. Therefore, the right to data portability as means to empower both data subject and consumers challenges the perception of the data subject as consumer and vice versa. It essentially might mean that the data subject will be expected to be as active as prosumers in digital markets are. Also, the benchmark for data subject might be set up as it was done by the ECJ in consumer law when it introduced the notion of average consumer. On the other hand, the most important influence that the perception of data subject can have for consumer law is that the threshold of the average consumer can be questioned in the light that data subjects are seen as vulnerable and always in need of protection.
54 De Hoon M. and Mak V. (2011), Consumer Empowerment Strategies - A Rights-Oriented Approach Versus a Needs-Oriented Approach, TISCO Working Paper Series on Civil Law and Conflict Resolution Systems, p. 7
55 Janal R. (2017), Data Portability - A Tale of Two Concepts, 8 JIPITEC 59 para 1.
56 Leczykiewicz, D., Weatherill S. (2013), The images of the Consumer in EU law, p. 1, in: Leczykiewicz, D., Weatherill, S. (eds) (2013), The images of the ‘consumer’ in EU law: legislation, free movement and competition law, Hart, Oxford.
III. Consumer: notion and definition
As it was mentioned in the previous chapter, the right to data portability is supposed to help increase control over personal data. The primary beneficiary is data subject. The right to data portability applies only to natural persons, or ‘data subjects’ using data protection terminology. It is also highlighted in numerous cases that consumers will benefit from the right to data portability as well. Nevertheless, it is unclear who exactly will take advantage of this new right, because it is very much questionable to what extent data subject and consumer notions can be used as synonyms and therefore being interchangeable. By answering this question, we will be able determine who can we expect to benefit from the right to data portability the most.
3.1. The notion of consumer
In the centre of European integration project are consumers.57 There is a consensus among law practitioners and in academia that consumers are the weaker party when concluding a contract. Consequently, the law interferes into a relationship between the parties, i.e. consumer and trader, of a contract and introduces rules to protect the weaker side. Therefore, it is very important to identify who the consumer is in any given case because she is the one who gets a special treatment. At the same time, the balance between trader and consumer should not be diminished to such an extent that the consumer status could be awarded to anyone who wishes so.
Due to the fact that the right to data portability can be exercised only in cases where personal data was submitted to the data controller following the consumer’s consent or contract to process his/her data, the analysis will further focus on how consumer is perceived and defined in the area of contract law.58 Even though the definition of consumer does not entirely match, but it is rather homogeneous in all EU directives with the same main elements kept in place, which are as follows: 1) a consumer is a natural person; 2) a consumer is acting outside his professional or commercial activities when concluding a contract. Also, other legislative initiatives relevant when discussing the notion of consumer, the draft on the Directive on online intermediary platforms59 and proposal on
57 Leczykiewicz, D., Weatherill S. (2013), The images of the Consumer in EU law, p. 1, in: Leczykiewicz, D., Weatherill, S. (eds) (2013), The images of the ‘consumer’ in EU law: legislation, free movement and competition law, Hart, Oxford.
58 Article 2 of the original doorstep selling directive (85/577/EEC) and Article 2 (2) of the distance contracts directive (97/7/ EC); Article 2 (b) of the unfair terms directive (93/13/EEC); Article 1 (2) a) of the consumer sales directive (99/44/EC); Article 2 (e) of the electronic commerce directive (2000/31/EC); Article 2 e) of the price indication directive (98/6/EC); Article 2 (1) f) of the new timeshare directive (2008/122/EC); Article 2 (D) of the distance marketing of consumer fi nancial services directive (2002/65/EC); Article 2 (a) of the unfair commercial practices directive (2005/29); Article 4 (11) of the new payment services directive (2007/64/EC); Article 2 (4) of the package travel directive (90/314/EEC); Article 3 (a) of the original consumer credit directive and Article 3 (a) of the new consumer credit directive (2008/48/EC).
59 Busch, C., Dannemann G. et al (2016), Discussion Draft of a Directive on Online Intermediary Platforms. Research Group on the Law of Digital Services, Discussion Draft of a Directive on Online Intermediary Platforms, Journal of European Consumer and Market Law, pp. 164-169, Available at: https://ssrn.com/abstract=2821590.
certain aspects concerning contracts for the supply of digital content,60 proposes to define consumers maintaining the same core elements already mentioned above.
3.1.1. The question of legal personality
As it was mentioned before, in all of the EU’s directives the consumer is a natural person. However, directives, which aim is minimum harmonisation, allow the Member States to afford a higher degree of consumer protection. For instance, recital 13 of the Consumer rights directive61 indicates that Member States are allowed to extend the application of the rules of the mentioned directive to legal persons like non-governmental organisations, start-ups or small and medium-sized enterprises as well. As a result, some Member States that followed the requirement of minimum harmonization had expanded the scope of the consumer acquis in their jurisdictions. For instance, in some countries, non-governmental organizations, small businesses are considered to be consumers, making them subject to consumer protection rules.
The discussion to extend the level of protection to non-natural persons can also be substantiated by another example. The Belgian Commission for the Reform of Consumer Law proposed to afford protection regardless the consumer’s legal personality: ‘A legal person is not a consumer, unless it establishes that it does not have nor should have professional competence to acquire or utilise goods or services.’62 Nevertheless, at the moment under the EU law, only natural persons can qualify as consumers.
In addition, in the Idealservice case the Court of Justice of the European Union (CJEU) in interpreting the unfair terms directive took the stance that only natural persons are covered by the notion of consumer.63 However, there are dissenting opinions with regard to the notion of consumer developments, especially when it comes to such strict ECJ’s approach in this sense. It is argued that in this way the ECJ forgets that consumer is really weak and illiterate and it also should include small businesses which act outside their field of expertise.64
To sum up, under the EU law, natural person prevails over legal person in the notion of consumer. Although with regard to the notion of consumer there are disparities between the Member States, the EU’s position is rather clear, which is also firmly supported by the ECJ, – only natural persons
60 Article 2(4) Proposal for a Directive of the European Parliament and of the Council on certain aspects concerning contracts for the supply of digital content 'consumer' means any natural person who in contracts covered by this Directive, is acting for purposes which are outside that person's trade, business, craft, or profession. Available at: http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:52015PC0634.
61 Directive 2011/83/EU of the European Parliament and of the Council of 25 October 2011 on consumer rights, amending Council Directive 93/13/EEC and Directive 1999/44/EC of the European Parliament and of the Council and repealing Council Directive 85/577/EEC and Directive 97/7/EC of the European Parliament and of the Council. L 304/64. 2011.
62 Commission d’étude pour la réforme du droit de la consummation. Propositions pour une Loi Générale sur la Protection des Consommateurs (1995).
63 Joined cases C-541/99 and C-542/99, Idealservice, para.17. – ECR 2001, pp. I-09049.
64 Hondius E. (2006), The Notion of Consumer: European Union versus Member States, Sydney law review, VOL 28: 89, p. 98.
should enjoy the protection offered by consumer law. Consequently, there have not been any meaningful changes when it comes to determining the notion of consumer on the EU level.65
3.1.2. Acting outside her professional or commercial capacity
The task to determine when a consumer acts outside her commercial or professional capacity can be rather burdensome. There can be either a positive (acting for purposes for personal, family or household use) or a negative (acting for purposes which are outside his trade, business or profession) description of the consumer’s activities. The use of any of those two descriptions has some significant implications. For example, a member of a non-profit organization buys for it goods. It is clear that is does not fall within the ambit of that person’s business or profession activities but neither it can be described as related to personal, family or household use. Under the positive description, the person could not expect to be protected by consumer law. However, under the negative description, he would. It is important to stress that in all of the EU directives the negative way was chosen to define a natural person’s act. Such choice was made in order to protect a natural person even in borderline cases, because a positive description might not offer the same level of protection as the negative one can.66 Consequently, by choosing in the directives to define a natural person’s act in the negative way, the EU took a stance to afford protection to consumers in as many cases as possible.
Under the negative description, the consumer is defined as a natural person who acts outside his professional capacity.67 However, the exact consumer’s definition varies between different directives. As it was noted in Green Paper on the Review of the Consumer Acquis, the EU directives lack coherence, because inconsistent description of consumer causes confusion.68 For instance, the Directive on doorstep selling defines consumer as a natural person who is acting for purposes ‘which can be regarded as outside his trade or profession’, whereas the Unfair Contract Terms Directive refers to ‘purposes which are outside his trade, business or profession.’ What also looks ambiguously is the fact that some activities, disqualifying a natural person from being treated as a consumer, are omitted and not mentioned in the directives, e.g. the Directive on doorstep selling does not mention the words ‘craft’ and ‘business’, the Unfair contract terms directive leaves 65 Kingisepp M. and Varv A. (2011), The Notion of Consumer in EU Consumer Acquis and the Consumer Rights Directive— a Signifi cant Change of Paradigm?, Juridica International XXVIII, p. 49.
66 Herre, J. , E. Hondius, E. , Alpa, G. (2013), The notions of consumer and professional and some related questions, p. 5, Available at: dostupno na: www. europarl. europa. eu.
67 Article 2 of the original doorstep selling directive (85/577/EEC) and Article 2 (2) of the distance contracts directive (97/7/ EC); Article 2 (b) of the unfair terms directive (93/13/EEC); Article 1 (2) a) of the consumer sales directive (99/44/EC); Article 2 (e) of the electronic commerce directive (2000/31/EC); Article 2 e) of the price indication directive (98/6/EC); Article 2 (1) f) of the new timeshare directive (2008/122/EC); Article 2 (D) of the distance marketing of consumer fi nancial services directive (2002/65/EC); Article 2 (a) of the unfair commercial practices directive (2005/29); Article 4 (11) of the new payment services directive (2007/64/EC); Article 2 (4) of the package travel directive (90/314/EEC); Article 3 (a) of the original consumer credit directive and Article 3 (a) of the new consumer credit directive (2008/48/EC).
68 Green paper on the Review of the Consumer Acquis, p. 15, Available at: http://ec.europa.eu/consumers/archive/cons_int/safe_shop/acquis/green-paper_cons_acquis_en.pdf.
out the word ‘craft’. However, there were no significant changes with regard to the changes in the definition of consumer, although the main difference was that individual directives varied in the range of fields, which are excluded for a natural person to qualify as consumer.
In addition to ambiguous consumer definitions in the EU directives, it is important to note that Member States deviate from the consumer definitions found in the EU directives during the transposition process. For instance, contrary to the EU directives, Member States can choose to describe the person’s act in a positive way. Again, such right is a result of minimum harmonisation which allows the Member States to afford a higher level of consumer protection along their borders. To sum, although there are some discrepancies between the directives and in the practise of Member States when transposing such directives, it is difficult to say to what extent such incoherence can influence the level of consumer protection. However, as we saw it in the case of whom to afford consumer protection, Member States can have different approach when it comes to how to address activities (in a positive or a negative way) that makes one of the elements in consumer definition.
3.2. The notion of professional
3.2.1. The question of legal personality
In the EU directives, the counter party of the consumer was called using various terms. For instance, a person who is considered to be a professional was named as a trader,69 vendor,70 seller,71 creditor,72 or supplier.73 However, the underlying note is the same: it is a person that acts within his professional or commercial capacity. In contrast to the notion of consumer, a professional can be a natural or a legal person. As a result, in order to determine whether a person should be qualified as a professional, the important factor is if a person carries out his activity on a regular basis and for the purpose of earning money.
3.2.2. Acting for purposes which are within the professional’s capacity
A professional activity which a person carries out can be defined either in a positively (as being within his professional capacity) or negatively (as being outside his professional capacity). As it was noted earlier, in all the EU directives a negative way was chosen in defining the consumer’s activities. Consequently, a professional in the same EU directives is described as someone who is acting within his professional capacity, i.e. a positive approach was chosen. Therefore, if a person
69 The Council directive to protect the consumer in respect of contracts negotiated away from business premises, (85/577/EEC).
70 Directive 2008/122/EC of the European Parliament and of the Council of 14 January 2009 on the protection of consumers in respect of certain aspects of timeshare, long-term holiday product, resale and exchange contracts.
71 Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts.
72 Directive 2008/48/EC of the European Parliament and of the Council of 23 April 2008 on credit agreements for consumers and repealing Council Directive 87/102/EEC.
qualifies as a professional, he ought to know that a contract he is entering into with a consumer, the weaker party in this contract, is subject to mandatory rules and carries certain risks.
In practise, there can be various criteria based on which the national legislator determine whether a person is a professional, e.g. the criterion of profit was taken as the decisive, frequency of services, organisational structure, number of sales, turnover, etc.74 The need to have an objective criterion becomes particularly important in borderline cases when, e.g. a person is engaged in amateur activities but it is highly questionable whether it is enough to qualify such person as a professional. This is highly relevant when discussing the notion of consumer in digital markets, which we will further address later in this chapter.
As we have seen in the case with regards to the notion of consumer, in the EU directives the definitions of professional also have some discrepancies between themselves, e.g. under the Door-to-door selling directive and the Distance contracts directive, the person’s activity is qualified as being professional in case it relates to that person’s ‘commercial or professional capacity’, whereas in the Directive for consumer credit and the Unfair contract terms directive when the person’s activities relate to his ‘trade, business or profession’. It’s again uncertain to what extent such differences can actually influence the level of consumer protection, but as long as the wording of the consumer and professional notion are the exact opposites of each other it should bring enough clarity at least in the context of a particular directive.
Under Article 8 of the European Convention on Human Rights, there is a right enshrined to respect one's ‘private and family life, his home and his correspondence,’ whereas Article 8 of the EU Charter of Fundamental Rights protects one’s personal data. However, under Article 114(3) TFEU, a high level of consumer protection is a key for the establishment and functioning of the internal market. Thus, both of those rights and interests protected by them will have to be taken into account when determining the level of protection for consumers who at the same time are data subjects. 3.3. Mixed contracts
Mixed contracts cover situations when a natural person who concludes a contract acts partly for business purposes as well. In order words, a person enters into a contract not entirely for personal, family or household purposes. As it was previously explained in this chapter, a natural person’s activity is a decisive factor whether a person will qualify as a consumer and get all the benefits that come with this status. Hence it is crucial to determine the purpose of the transaction, i.e. whether the object of the transaction is used for business or private purposes.
74 Loos MBM, Helberger N., Guibault L., et al (2011), Digital content contracts for consumers. Analysis of the applicable legal frameworks and suggestions for the contours of a model system of consumer protection in relation to digital content contracts, final report: Comparative analysis, Law & Economics analysis, assessment and development of recommendations for possible future rules on digital content contracts, University of Amsterdam, p. 156. Available at http://ec.europa.eu/justice/consumer-marketing/files/legal_report_final_30_august_2011.pdf.
The EU has chosen a strict approach by narrowly construing the consumer’s definition. In all the EU directives, a consumer is defined as a natural person who is acting outside of his commercial or professional capacity. The ECJ has been consistent in its practise by endorsing the narrow approach over the wider one. In the Di Pinto case, the ECJ held that even if an act is indirectly connected to a person’s trade, then such act cannot qualify as being performed for entirely private purposes.75 A decade later, the strict ECJ’s position that even a person’s slightest connection with his profession, business, craft, or trade disqualifies him from being protected under the EU consumer directives changed. In the Gruber case, the ECJ affirmed that if business purpose is only marginal in the overall context when concluding a contract, the person can qualify as a consumer.76 However, the ECJ’s judgment in the Gruber case concerned the Brussels Convention of 1968 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters,77 which is part of the EU procedural law. In the context of the Gruber judgement, Lazikova and Rumanovska argued that procedural rules are only exceptions to substantive rules prescribed in the EU directives78, implying that there is little to no use from this judgement when it comes to interpreting the notion of consumer prescribed in the substantive EU consumer law. Such approach is questionable, especially taking into account that procedural rules serve the substantial law by giving means to defend one’s rights foreseen under the substantial law. In order words, a court will not have the means to interfere into a relationship that does not exist under the substantial law.79 Thus, in the end, although it can be arguable to what extent the ECJ’s findings in the Gruber case are relevant to all consumer
aquis, it still shows a significant step towards relaxing strict rules with regards to the notion of
consumer under substantive EU law.
The ECJ’s judgement in the Gruber case has echoed the Green Paper on the Review of the Consumer Acquis.80 Although it only suggests that ‘the widening of the definitions to cover transactions for mixed purposes should be considered’, but it would be a major conceptual change with regards to the definition of a consumer.81 Later, in that sense the Consumer rights directive also brought some constructive changes. Under Article 2(1) of the Consumer rights directive, the definition of consumer is still construed in a narrow way, however, in recital 17 of this directive it is 75 Case C-361/89 Di Pinto Judgment of 14 March 1991.
76 Case C-464/01 Gruber judgment of 20 January 2005.
77 Under Article 15(1) of the Brussels Convention, “in matters relating to a contract concluded by a person, the consumer, for a purpose which can be regarded as being outside his trade or profession, jurisdiction shall be determined by this Section (...)”. Official Journal L 299, 31/12/1972 P. 0032–0042.
78 Lazikova J. and Rumanovska L. (2016), The notion of consumer in the EU law, Agrarne pravo EU, p. 7.
79 Storme M. E., (2012), Harmonisation of civil procedure and its interaction with substantive private law, in Kramer & R. van Rhee, Civil Litigation in a Globalizing World, p. 144, Available at: https://www.law.kuleuven.be/personal/mstorme/harmonisationproceduresubstantivelaw.pdf.
80 Green paper on the Review of the Consumer Acquis, p. 15, Available at: http://ec.europa.eu/consumers/archive/cons_int/safe_shop/acquis/green-paper_cons_acquis_en.pdf.
81 Kingisepp M. and Varv A. (2011), The Notion of Consumer in EU Consumer Acquis and the Consumer Rights Directive— a Significant Change of Paradigm?, Juridica International XXVIII, p. 50.
clearly stated that in case of a dual purpose contract, if trade purpose is not predominant in the overall context of the contract, such person ‘should also be considered as a consumer’. Contrary to the judgment in the Gruber case, the Consumer right directive goes even further and covers contracts which were concluded with the private purpose being the predominant one. Thus, it will be for the court to decide on the nature of transaction and which purpose was the predominant one when a natural person entered into a contract.
Another example indicating a new approach towards the definition of a consumer could be the Draft Common Frame of Reference, which also promoted the adoption of the wider definition of a consumer.82 To this date, however, under the EU law, in mixed transactions a person cannot rely on the consumer protection rules if the transaction is even remotely connected to that person’s commercial or professional activities.
3.4. Conclusions
Our analysis has shown that the notion of consumer and so as the definition of consumer hasn’t changed much in the last years. According to the EU’s various directives, the notion of consumer is pretty much straightforward – it’s a natural person who is acting outside of his commercial or professional capacity. At the same time, the definition of consumer has some differences in terms of wording, but it is in line with the notion of consumer. However, we also have seen that such approach, which is particularly endorsed by the ECJ, has its drawbacks. Although, under the
Gruber case findings, we saw some loosening up with regards to the notion of consumer, but, as
mentioned before, at the moment even if a person’s business purpose is marginal in the overall context when concluding a contract, the person can rarely qualify as a consumer. It is questionable to what extent recital 17 of the Consumer rights directive could be considered to be a huge step forward in seeking to introduce a more rational approach towards mixed contracts.
IV. Prosumers: consumer, professional, or both?
82 ‘Any natural person who is acting primarily for purposes which are not related to his or her trade, business or profession‘. Principles, Definitions and Model Rules of European Private Law Draft Common Frame of Reference (DCFR) ,Annex 1. http://ec.europa.eu/justice/contract/files/european-private-law_en.pdf.
The notion of consumer has been defined in various EU secondary law documents.83 Note that consumer’s definition varies from sector to sector, as it is left for sector-specific laws to determine.84 As we will see, digital markets have features which are distinctive from the static markets. One of the most important characterisations of digital markets it is its two-sidedness, where consumers and advertisers are brought together by online service provider or, in short, platforms. Therefore, first, it is crucial to analyse the market in which consumers act and its peculiarities, as it is important to understand why and how consumers in digital markets are different from the ones that we see in other markets.
Second point to make in this chapter is that consumers in digital markets not only consume but also produce content (e.g. add photos, upload videos or, simply put, create digital content), for which they are called prosumers.85 Consequently, we may run into difficulties with regards to the consumer’s notion and definition in digital markets, because in order to do this we have to take into account the market’s specificities. Obviously, the notion and definition of consumer in digital markets might rightly be influenced by such market’s peculiarities, but it is unclear to what extent. Therefore, the question of who are the consumers in digital markets and how they can be identified will be analysed and examined in order to say who is going to benefit from the right to portability. 4.1. Digital markets and their peculiarities
Each market has its own peculiarities that help identify and define them. In order to understand who is a consumer and who she has to deal with in digital markets, first we will briefly touch upon the main features of such markets and pin-point key elements that make use to our further research. Digital markets are characterised as being multi-sided markets.86 Consequently, when analysing digital markets three different types of relationships should be taken into account: 1) intermediary-consumer; 2) intermediary-advertiser; 3) consumer-advertiser.87 So we are dealing with the so called ‘triangular’ relationship, which is unknown for common contractual relationships involving only
83 The term ‘consumer’ has been defined in the EU producer liability directive (85/374/EC) and, in the area of procedural law, in the regulations Brussels I 5 and Rome I 6. In the area of producer liability (Council Directive 85/374/EEC of 25 July 1985 on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective products. OJ L 210, 1985, p. 29); procedural law (regulations Brussels I and Rome I).
84 Loos MBM, Helberger N., Guibault L., et al (2011), Digital content contracts for consumers. Analysis of the applicable legal frameworks and suggestions for the contours of a model system of consumer protection in relation to digital content contracts, final report: Comparative analysis, Law & Economics analysis, assessment and development of recommendations for possible future rules on digital content contracts, University of Amsterdam, p. 26. Available at http://ec.europa.eu/justice/consumer-marketing/files/legal_report_final_30_august_2011.pdf.
85 The European Parliament, DG for Internal policies (2011), Consumer behaviour in a digital environment, p. 17, Available at: http://www.europarl.europa.eu/RegData/etudes/etudes/join/2011/464441/IPOL-IMCO_ET(2011)464441_EN.pdf.
86 Jean-Charles Rochet and Jean Tirole (2005), Two-sided markets: A Progress Report, Available at: <http://core.ac.uk/download/files/153/6634993.pdf>accessed13January2016.
87 For instance, Facebook operates as an intermediate by connecting users with the providers of ads. As it was explained in the Facebook-Whatsapp merger decision, certain non-personally identifiable data is given to advertisers to help measure the effectiveness of their ads.
