FTC To Examine Competition, Consumer Protection, and Economic Issues Raised by the Sharing Economy at June Workshop

On June 9, 2015, the Federal Trade Commission will host a workshop to examine competition, consumer protection, and economic issues raised by the proliferation of online and mobile peer-to peer business platforms in certain sectors of the economy, often referred to as the “sharing economy.” The workshop will take place in Washington, D.C., at the FTC’s Constitution Center conference space.

Peer-to-peer platforms, which enable suppliers and consumers to connect and do business, have led to the emergence of new business models in industries that have been subject to regulation. The FTC’s sharing economy workshop will explore how regulatory frameworks can accommodate new sharing economy business models while maintaining appropriate consumer protections and a competitive marketplace.

“We are seeing a dramatic growth in products and services that are built on peer-to-peer platforms, such as ride-sharing and property rentals, as more entrepreneurs harness the power of technology to reach more consumers,” said FTC Chairwoman Edith Ramirez. “The resulting business models have great potential to benefit our economy and consumers. Through our workshop, we want to better understand the competitive impact of these new business models, as well as their interactions with existing regulatory frameworks.”

Unlike platforms that link buyers with a single seller of a product or service, sharing economy platforms create virtual marketplaces in which many buyers and sellers, often individuals or small entities, can connect with one another and do business. These platforms take advantage of increasing network connections and computing power, including the proliferation of mobile internet-enabled devices, to reduce the time and costs of matching buyers and sellers that have not previously done business with each other, based primarily on the product or service being demanded or offered. Sharing economy transactions have increased rapidly in recent years, reaching an estimated value of $26 billion globally in 2013, and some estimates predict that the sharing economy will generate as much as $110 billion annually in the near future.

Given these estimates, the development of the sharing economy can stimulate economic growth by encouraging entrepreneurship and promoting more productive and efficient use of assets. However, the rapid expansion of commercial activity involving smaller suppliers on these platforms may tax the abilities and resources of regulators, who are confronted with the challenge of applying regulations that were written with conventional suppliers in mind. Through this workshop, the FTC seeks to gain a systematic understanding of these virtual marketplaces and to reflect on the competition, consumer protection, and regulatory issues that they raise.

To this end, the staff of the Federal Trade Commission are seeking public comment on a number of questions, both in advance of and following the workshop. These questions include:

• How can state and local regulators meet legitimate regulatory goals (such as protecting consumers, and promoting public health and safety) in connection with their oversight of sharing economy platforms and business models, without also restraining competition or hindering innovation?
• How have sharing economy platforms affected competition, innovation, consumer choice, and platform participants in the sectors in which they operate? How might they in the future?
• What consumer protection issues—including privacy and data security, online reviews and disclosures, and claims about earnings and costs—do these platforms raise, and who is responsible for addressing these issues?  
• What particular concerns or issues do sharing economy transactions raise regarding the protection of platform participants? What responsibility does a sharing economy platform bear for consumer injury arising from transactions undertaken through the platform?
• How effective are reputation systems and other trust mechanisms, such as the vetting of sellers, insurance coverage, or complaint procedures, in encouraging consumers and suppliers to do business on sharing economy platforms?

Comments intended for discussion at the workshop will be accepted on or before May 26, 2015, but the record will be held open to receive comments until August 4, 2015. Comments can be submitted online.

The workshop will be held in the FTC’s Constitution Center offices in the A, B and C conference rooms located at 400 7th Street, SW, Washington, DC. The workshop is free and open to the public.

The FTC’s Office of Policy Planning works with the Commission and its staff to develop long-range competition and consumer policy initiatives, consistent with the FTC’s unique mission to conduct research and engage in advocacy on issues that affect competition, consumers, and the U.S. economy. The Office of Policy Planning submits advocacy filings; conducts research and studies; organizes public workshops; issues reports; and advises staff on cases raising new or complex policy and legal issues. To reach the Office of Policy Planning, send an e-mail to opp@ftc.gov. Like the FTC on Facebook, follow us on Twitter, read our blogs, and subscribe to press releases for the latest FTC news and resources.