Exploratory study of consumer issues in online peer-to-peer platform markets Final Report Authors VVA: Pierre Hausemer, Julia Rzepecka, Marius Dragulin, Simone Vitiello, Lison Rabuel, Madalina Nunu, Adriana Rodriguez Diaz Milieu: Emma Psaila, Sara Fiorentini GfK: Sara Gysen, Tim Meeusen, Simon Quaschning, Allison Dunne Vadim Grinevich with Franz Huber and Linda Baines Contract 2015 86 02; Project 2017.4058 May 2017 Justice and Consumers EUROPEAN COMMISSION EUROPEAN COMMISSION Produced by Consumers, Health, Agriculture and Food Executive Agency (Chafea) on behalf of Directorate-General for Justice and Consumers Directorate E — Consumers Unit E.1 — Consumer policy Contact: Antonia Fokkema E-mail: [email protected] European Commission B-1049 Brussels EUROPEAN COMMISSION Exploratory study of consumer issues in online peer-to-peer platform markets Final Report Directorate-General for Justice and Consumers EU Consumer Programme 2017 EUR 2017.4058 EN Exploratory study of consumer issues in online peer-to-peer platform markets – Final Report Europe Direct is a service to help you find answers to your questions about the European Union. 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More information on the European Union is available on the Internet (http://europa.eu). Luxembourg: Publications Office of the European Union, 2017 EN – ISBN: 978-92- Final PDF/Volume_01 DS-01-17-528-EN-N DOI: 10.2838/779064 79-69183-6 Report © European Union, 2017 Reproduction is authorised provided the source is acknowledged. Exploratory study of consumer issues in online peer-to-peer platform markets – Final Report TABLE OF CONTENTS ABSTRACT ................................................................................................... 10 EXECUTIVE SUMMARY ................................................................................... 12 1 INTRODUCTION ..................................................................................... 20 1.1 Peer to Peer online platform markets: a consumer policy perspective .... 20 1.2 Aims and objectives of this study ..................................................... 22 1.3 The scope of the study ................................................................... 23 2 METHODOLOGICAL APPROACH ................................................................ 25 2.1 Task 1 - Desk research and literature review ..................................... 25 2.2 Task 2 – Survey ............................................................................ 26 2.3 Task 3 – Focus groups .................................................................... 28 2.4 Task 4 – Case studies ..................................................................... 28 2.5 Task 5 – Legal Analysis .................................................................. 29 2.6 Task 6 – Workshops ....................................................................... 30 2.7 Data availability and data gaps ........................................................ 31 3 STATE OF PLAY OF ONLINE P2P PLATFORM MARKETS ................................. 32 3.1 Size of P2P platforms ..................................................................... 32 3.2 Overview of services offered by P2P platforms ................................... 32 3.3 Peer usage of P2P platforms ............................................................ 39 3.4 Economic significance of P2P online platform markets ......................... 43 3.4.1 Methodology ...................................................................... 43 3.4.2 Peer consumer expenditure ................................................. 44 3.4.3 Peer provider revenue ......................................................... 49 3.4.4 Estimate of platform and other non-peer revenue ................... 51 4 BUSINESS MODELS OF P2P PLATFORMS ................................................... 54 4.1 Monetisation models of P2P platforms ............................................... 54 4.2 Core features in P2P business models ............................................... 55 4.3 Model 1: Hosting of Listings ............................................................ 58 4.4 Model 2: Actively managed transactions............................................ 58 4.5 Model 3: Platform governed peer transactions ................................... 59 4.6 The business model typology and the case study platforms .................. 59 5 PEER EXPERIENCE, PERCEPTIONS, EXPECTATIONS AND PROBLEMS IN P2P MARKETS ............................................................................................. 66 5.1 Levels of peer satisfaction ............................................................... 66 5.2 Peer consumer problems and personal detriment ............................... 69 5.2.1 Problems experienced by peer consumers .............................. 69 5.2.2 Comparing problems experienced using P2P platforms versus using conventional businesses .................................... 72 5.2.3 Consumer detriment ........................................................... 73 5.3 Problems of peer providers ............................................................. 74 6 CLARITY AND TRANSPARENCY OF INFORMATION ON P2P PLATFORMS ........... 76 6.1 Peer perceptions of clarity and transparency on P2P platforms ............. 76 6.2 Platform practices and approaches to clarity and transparency of information ................................................................................... 78 6.2.1 The contractual nature of the transaction ............................... 78 6.2.2 Pricing .............................................................................. 80 6.2.3 Terms and conditions .......................................................... 81 6.2.4 Data and data protection ..................................................... 83 7 TRUST BUILDING & VERIFICATION OF INFORMATION ON P2P PLATFORMS .... 86 7.1 Peer perceptions of peer reviews, ratings and reputation systems ......... 87 7.2 Platform practices regarding peer review, ratings and reputation systems ....................................................................................... 89 7.3 Platform practices regarding pre-screening and identity verification ...... 91 7.4 Cross-platform portability of reputations and identity verification .......... 94 8 ACCESS TO COMPLAINTS, REDRESS AND INSURANCE ON P2P PLATFORMS.... 96 8.1 Peer experiences in addressing problems on P2P platforms .................. 96 6 Exploratory study of consumer issues in online peer-to-peer platform markets – Final Report 8.2 Platform practices regarding complaints, redress and insurance ............ 97 8.2.1 Complaints and redress ....................................................... 97 8.2.2 Access to insurance ............................................................ 99 9 REGULATORY ELEMENTS IN P2P PLATFORM PRACTICE ............................... 101 9.1 The nature of the transaction ......................................................... 101 9.1.1 EU legal framework ........................................................... 101 9.1.2 National regulatory approach .............................................. 101 9.2 Overview of the national legislation applicable in the context of online peer-to peer platforms ......................................................... 102 9.2.1 Legislation applicable to C2C transactions ............................. 102 9.2.2 Legislation applicable to online platforms facilitating P2P transactions ..................................................................... 104 9.2.3 Specific issues in platform-peer transactions as identified in the national context ........................................................... 105 9.3 Practical application and current enforcement challenges .................... 107 9.3.1 Challenges to enforcement of the national horizontal legislation applicable to C2C transactions .............................. 107 9.3.2 Challenges to enforcement of the national sector-specific legislation applicable to C2C transactions .............................. 108 10 POTENTIAL FUTURE MARKET DEVELOPMENTS IN ONLINE P2P PLATFORM MARKETS ............................................................................................ 110 11 OVERVIEW OF KEY CONCLUSIONS .......................................................... 113 KEY FINDINGS AND CONCLUSIONS ......................................................... 113 A. Economic analysis of P2P markets ................................................... 113 B. Peer experiences in online P2P markets ..........................................