Much debate arose regarding the role that private law is supposed to serve in the digital environment: the widespread of new technologies is almost unanimously understood as posing significant challenges to traditional concepts of law, introducing questions regarding the adequacy of the legal framework to encompass new disruptive technologies as well as the need to modify the ius conditum. In such a context, the persisting effort carried out by international organizations and European Institutions – considering Member States’ initiatives as well – to address the challenges presented by modern digital technologies is sound and clear.
Still, and despite the promises regarding the removal of power disparities and the promotion of social welfare as main goals to be pursued in the development of a common digital policy, the current European trend seems still to be hindered by a strong option in favor of a functional approach, defining specific tasks to be addressed employing a different regulation (e.g. hypothesizing separate bodies of law addressing to regulate crypto assets, smart-contract, blockchain, online payment services, business practices, data protection, and so on).
Such a phenomenon can be traced back to the early days of European law: moving from the acknowledgment of the existence of different – and separated – markets, structured on a national basis, the European institutions formerly attempted to promote the creation of the single market through a modular regulatory strategy. A clear example of this tendency can be found in competition law, in the Unfair Commercial Practices Directive (UCPD) and in the Digital Content Directive (DCD).
Against this bedrock, the very own characteristics of the digital market seems to liquefy the traditional distinction amongst areas of regulation, and therefore might foster a reconsideration of the role and scope of private law in the European dimension, considering the radical changes that interactions experience in such an environment.
This opportunity emerges with peculiar force when e-commerce activities are considered: in recent years, online commerce experienced a technological revolution, shifting towards automated, data-driven technologies for the allocation and display of offers and advertisements.
The introduction of tracking and targeting technologies that leverage consumer data to personalize marketing catalyzed the impressive growth of the online markets. Tailored and targeted commercial techniques constitute nowadays a heterogeneous and diffused phenomenon, incorporating ex multis semantics and data mining stemming from artificial intelligence, auction, social network and neuroscience analyses; they rely on self-tuning algorithms, intent data and immersive multimedia to reach different degrees of personalization. These innovations provide companies with new modes to gain market advantage – e.g. the use of Information and Communication Technologies (ICT), Internet of Things (IoT) technologies and Big Data – and to offer their products (reverse segmentation, narrowcasting and use of the semantic Web): they have the possibility to widely study consumers and to personalize every aspect of their consumption experience.
Furthermore, ICTs enabled the provision of new services (e.g. crowd-funding investments, smart contracts), the creations of new means of value and providing alternative forms of payments (e.g. crypto-currencies). Lastly, digital resources fostered the birth of new, original figures on the global market.
In light of these innovations, scholars began to witness the transition from the multi-channel market to a new, “omni-channel” one, where consumers are not only informed and accustomed to e-commercial interaction and consumption, but are always connected to the web. This has a major influence over their behavior: for instance, it was observed how, nowadays, the current consumption process begins well before (the traditional benchmark of) their entrance in the “territory of retail”, since their major contact with brands happens before the purchase activity, and usually includes multimodal communication, challenging the traditional notion of ‘consumer gates’ and individuating specific phases of the consumption process where regulation should focus.
These aspects affect the foundations of traditional economic relations and the role that governments must perform in the provision of social services, as well as in regulating the day-by-day interaction amongst citizens, and between customers and business operators. In particular, they revealed how addressing the functioning of various segments of the digital economy separately might prove itself, though, unsatisfactory.
Commercial practices based on consumers’ profiling and personalization, for example, have been under the scrutiny or privacy advocates until now: the topic has been also recently addressed by the General Data Protection Regulation (GDPR), and various proposals have been offered to restrict these activities. Yet, a privacy-only perspective proves itself incomplete to regulate such a phenomenon, since relevant values other than consumers’ privacy are present and significant: consumers exposed to such potential situations could end up not being able to recognize the artificial reduction of their set of choices, and eventually, to oppose to it, being unaware of the way through which product offers and advertisements utilize their habits, mental models and bias to influence their behaviors. Despite these aspects being partially addressed in other bodies of law (e.g. UCPD, DCD and the antitrust regulation), the lack of a holistic approach considering the interactions amongst different corpora significantly hinders the overall efficacy of the overall framework.
To overcome this problem, private law rules and in particular general clauses (with a major focus, inter alia, on the good faith and abuse of right principles) are likely to emerge in the future as essential tools to address any intolerable effects of the exploitation of new bargaining disparities in the digital environment.
In order to properly appreciate this phenomenon, it though pivotal to acknowledge that in digital markets power disparity is not an episodic exception anymore; on the contrary, it constitutes an ontological effect of technological exploitation by business operators: if asymmetry in the integrated market stands as a general mode of interaction, then the new dynamics characterizing B2C interplay (with a specific focus on the relationships arising in electronic and informatics exchanges) promote a re-reading of the general clauses of private law in terms of tools for diffused control – operating alternatively in their substantial, formal, or institutional dimension – with a subsequent definition of general remedies to address these situations when they are not tolerable.
In such a framework, in particular, the general clauses of good faith and abuse of rights may play a central role not to react to the contractual imbalance per se (which is accepted as an ontological, and plausibly non-amendable aspects of B2C transactions) but rather to respond to an abusive conduct as the source of an epiphenomenal excess in that disparity, which would be otherwise physiologically unattainable by the current legal framework due to its operativity in-between specific bodies of law.
This possibility is backed up by the implicit and explicit elements emerging from the general clauses in the codification projects, suggesting that a progressive transformation of private law is occurring at the European level: blurring the boundaries between private and public law, as well as between private law and ‘regulation’ general clauses are increasingly exploited in European private law to promote social justice, operating as tools to reach a synthesis between the distributive instrumental concerns of the regulatory measures (that inspired the first – market-oriented – strands of European law) and underlying, corrective justice oriented, principles that cannot be achieved by means of sectorial regulation. The potential of this narrative is well represented by the debate over the opportunity to embrace the Drittwirkung theory, directly subjecting private bodies (and not exclusively Member States) to the respect of constitutional fundamental rights in front of European courts. Within this major interpretative paradigm-shift in the role of private law, legal scholars have an upfront role in fostering the transformative function of private law in the digital environment, promoting the overcome of the still dominant top-down interpretation, qualifying it in terms of an essentially national law, even when shaped and invested by European normative acts.
In contrast with this view, a new understanding of the characteristics of private law in the digital environment – with a major focus on the transnational dimension of platforms and commercial practices – proves itself necessary to promote the achievement of an effective common European framework. In this emerging system, private law is supposed to operate as the synthesis of the heterogenous experiences coming from national bodies and supervisory authorities filtered through the lens of the fundamental principles animating the whole European framework, which play a central role in determining the content of the harmonization measures.
Against the (inevitable) shortcomings that the traditional approach faces due to the evolution of technological dynamics, European private law is apt to introduce – whether by means of a true codifications or (for now) through judicial syndicate and scholar debate –solutions to attenuate, integrate or correct the consequences of unfair conducts, and promoting a paradigm shift in the modes of interaction in the digital environment. And, even if the path might seem challenging, promising elements are already present and further investigation is much needed.
(Photo: Ilya Pavlov)