ABSTRACT
The emergence of the platform economy represents a significant development in early 21st-century capitalism and is leading to a concentration of various forms of power within a small number of market entities. This concentration, accompanied by limited oversight, includes the unique ability of platforms to unilaterally establish and enforce rules governing horizontal contracts among users. These rules serve as a parallel to state-made contract regulations, creating a form of shadow law that is increasingly evident in online marketplaces such as Amazon and eBay, as well as in service intermediaries like Uber and Airbnb. By facilitating online interactions, platforms reduce contracting costs and provide an infrastructure that allows diverse participants to engage in agreements across cultural and geographic boundaries. Platforms function as market regulators, supplying a variety of rules through terms of service and user interface designs that govern both platform-participant relationships and horizontal agreements among users, thereby creating community-oriented regulatory microsystems.
Despite the increasing focus on the platform economy within legal scholarship, the issue of private regulation remains relatively underexplored. The paper aims to address this gap by examining platforms as architects of alternative contractual rule systems. The analysis maps common theoretical frameworks for these contractual rules and outlines their structural characteristics, exploring the specific concerns and risks associated with this parallel regulation, and it considers potential regulatory responses. In this way, the paper attempts to portray a regulatory structure in being, one which is developing bottom-up under the pressure of market dynamics and the immense concentration of power in the platform economy.
Grochowski, Mateusz, Shadow Contract Law in the Platform Economy (January 31, 2025) in F Casarosa and M Grochowski (eds), Enforcing Private Regulation in the Platform Economy (Tübingen 2025).
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