The sharing economy and new models for providing services via the Internet
The functions assigned to the National Commission on Markets and Competition under Law 3/2013 of 4 June, on creation of the CNMC, include that of promoting and performing studies and research projects on the subject of competition, as well as producing general reports on the various economic sectors. Based upon this function, it has been decided at a Plenary Session of the CNMC to produce a study on new models of service provision via information technologies, and especially on what is known as the sharing economy.
Why is the CNMC performing a study of this type?
The advancement of information technologies within the context of digitalization of the economy, the spread of mobile devices, and new platforms and applications, has during recent years given rise to the development of new models of consumption. A good example of this is the development of e-commerce for goods and services (books, music, travel, clothing, etc.), which in just a few years has become something habitual in the day-to-day lives of millions of consumers.
One area where this disruptive technology is having a strong impact is in relation to what is known as the sharing economy (or collaborative consumption). This model of consumption is based on exchanges between individuals of goods and services that are otherwise unused or underused; for example, a parking space that lies empty when the owners take their car on a road trip, or an apartment that remains empty while its owners go on holiday, or tools that are only used once or twice after being purchased, etc. In this model, use of such assets is provided in exchange for some sort of compensation agreed upon between the two parties. The decreases in income and available credit experienced by consumers in Spain because of the recent economic crisis there, and the cultural change that has led to “use” being increasingly preferred over “ownership”, are also key elements for understanding the emergence of this model.
In parallel with the phenomenon of the sharing economy, technological development has also made it possible for new professional platforms to appear, which take advantage of the Internet to provide consumers with more attractive services under certain circumstances, such as search engines, aggregators and buyers of consumer services, transport, food, lodging, etc.
It is undeniable that this increase in goods and services offered, and the variety of products now available, represents an opportunity from the perspective of competition, and therefore an increase in the well-being of consumers. To all of this we must also add the opportunity to take advantage of more information about products, with lower transaction costs and environmental impacts, which are positive elements derived from the growth of an economy based more on usage than on ownership. However, at the same time there are many unknowns about how current regulations should be adapted to the effects being generated by these new economic models. These circumstances make it advisable for authorities on the subject of competition to analyse the phenomenon represented by the sharing economy.
Why is the CNMC performing a study of this type?
The ultimate purpose of the Study is to produce a series of recommendations so that efficient regulatory development can take place for the new economic models, in a manner that allows maximum advantage to be taken of the possible benefits for consumers, while at the same time ensuring that effective competition exists among new companies and those from the traditional sectors.
In order to bring this analysis as close as possible to the current economic reality, in addition to containing a general overview on these new economic phenomena the Study will begin by focusing on two specific sectors: transport and vacation lodging. In both of these cases the new models for services have recently presented significant challenges for public regulators:
- The urban and interurban transport sector for those who travel by motorway, where platforms that connect drivers with passengers have now become a direct potential alternative to use of a taxi or bus.
- Similarly, in the vacation lodging industry, new platforms for renting vacation rooms and apartments have introduced a significant offer onto the market, which is now being added to the services of the traditional hotel industry.
How does the CNMC carry out the study?
The Study begins with the public consultation phase, where the positions and opinions of all stakeholders involved are gathered, along with those of any other persons who want to contribute their point of view to the present debate. In order to obtain these contributions in the most quick and efficient manner possible, this website has been made available to the public, and it can be used to create an open space to receive information about the issues being considered.
This consultation will take place in three stages, which will begin one after another:
a) In the first stage the theoretical foundations that can justify the current regulations will be analysed, in order to determine which public interests this regulation is attempting to protect;
b) Next, the effects of the new service provision models on the market will be analysed;
c) Finally, study will take place of the need for and proportionality of these regulations according to the new circumstances of the market.
Each part will first consist of a layout of the context, so that next a series of specific questions can be formulated and presented to the stakeholders in order to obtain their opinions. The contributions of the participating stakeholders, and those of others who respond to the questions proposed, will be published by the CNMC in order to keep the debate focused within some constructive limits.
All of the opinions will be taken into account and will serve as the basis for producing the final document, which will contain the conclusions from the study, as well as a summary of the main contributions received during the public consultation phase.
Consultation with the public on new service provision models and the shared economy, November 2014.
STAGE 1. Public-interest objectives pursued by the regulations
Analysis of the principles of need and proportionality upon which regulation of the economic sectors should be founded; and consideration of the possible justification for existing regulations in the two selected reference sectors.
Deadline to submit responses: 27 November 2014
STAGE 2. The effects of new economic models on the market and regulation
Analysis of the main effects being generated by the new service provision models, for the consumer and for the public interest. Effects of these new models on the two reference sectors selected.
Deadline to submit responses: 13 January 2015
STAGE 3. New models and regulation
Analysis of the fit between the regulations and the new market circumstances, as a result of the effects generated by the new models and the regulatory changes necessary in order to provide adequate competitive space for inclusion of the new economic activities. Suitability of the regulations for the new models in the two reference sectors selected.
PDeadline to submit responses: 13 January 2015
Responses from the consultation
Do you think that the existing regulations are applicable to the new service provision models? For the two sectors being focused on, which regulations do you think should be applied to these new models and which should not?
For the same two sectors, do you think that the new models are the ones that the current regulations should be adapted to (for specific sectors and in general), or do you think these regulations must be modified in order to take the models of business activity into account? What do you think this modification should consist of?
The next document compiles the contributions received by email, in cases where consent for publication has been given.