Wednesday, August 09, 2017
JOTWELL: Kaminiski on Lobel on disruptive platforms
I am honored to read Margot Kaminski's (OSU) new Jotwell essay Disruptive Platforms which reviews my recent article, Orly Lobel, The Law of the Platform, 101 Minn. L. Rev. 87 (2016). In The Law of the Platform I analyze what I refer to as the third generation of the Internet: online apps that disrupt offline services, most iconically represented by Uber and Airbnb. The article unpacks the economic, regulatory, and social drives for the rise of the platform economy and develops a framework for policy makers to consider the vast range of legal challenges that these new companies currently face. Kaminski describes The Law of the Platform as "rich, complicated, and ... well worth reading for anyone following changes to technology and the law." She does however call me a "platform optimist" and is concerned that I romanticize "a lighter regulatory touch in the area of technological development, even while recognizing the legitimacy of a number of consumer concerns." In particular, she raises questions the downsides of lighter enforcement and the risks of exacerbating power disparities through data collection and private digital governance. Here is a taste of this part:
The last third of the article ventures into more dangerous territory. Lobel has previously done important work on the relationship between public regulation and private (or public-private) governance. She closes The Law of the Platform by returning to this topic. Where traditional regulation fails, Lobel argues, platforms themselves can through private “regulation” ensure consumer trust and a certain degree of consumer protection. Platforms do this by obtaining insurance, by voluntarily running background checks, and through rating and recording systems that track all transactions on a platform. It is this last form of governance that most excites Lobel, and most worries me.
I take Kaminski's warning very seriously and it is an area I'd like to research more. The Law of the Platform lays out the initial framework for analyzing and debating this new wave of digital business models and as Kaminski correctly notes, each one of the areas discussed in the article, including tax, consumer protection, occupational licensing, antitrust, employment and labor law, zoning, and discrimination, poses a myriad of challenges and new questions.
I've begun to respond to some of these challenges in several sister articles to the Law of the Platform. I engage with the questions of employment law, including the classification issue of drivers and other workers on the platform, in a talk I delivered when I was honored to give the 12th Annual Pemberton Lecture at the 9th Circuit Court of Appeals last year. The lecture is now published as an article named The Gig Economy and the Future of Employment and Labor Law. In another new article, Platform Market Power, Kenneth Bamberger (Berkeley) and I research the questions of antitrust, market concentration, new entry and the risks of dominance and inequities through data collection (soon on SSRN or email me for a copy). And I continue to analyze whether and how the platform can reduce transaction costs in all three stages of the deal in an essay, Coase & the Platform Economy, forthcoming in the Cambridge University Press Sharing Economy Handbook 2017 (Nestor Davidson, Michele Finck & John Infranca eds.) There is still much more to study and debate and I am very grateful for Kaminski’s excellent review pushing us forward as we grapple with the rise of the platform.
Posted by Orly Lobel on August 9, 2017 at 07:59 PM | Permalink