One of the main goals of the Crowdfunding Regulation 2020/1503 (hereinafter: CR) is the protection of non-professional investors. In a similar vein, EU Consumer Law strives to achieve a high level of consumer protection in the EU Digital Single Market. This chapter delineates the ‘boundaries’ of the CR and its potential interactions with EU Consumer Law. The interplay between these legal regimes is particularly relevant to this discussion, not only because some forms of crowdfunding fall outside of the scope of the Regulation (eg when the project owner is a consumer), but also because EU Consumer Law may meaningfully complement the provisions of the CR in cases where the latter applies.
In crowdfunding, consumers can be involved in two ways. On the one hand, consumers can act as borrowers of capital, or, in the wording of Art 2(h) CR, as ‘project owners’. On the other hand, consumers can be investors (Art. 2(i) CR). Accordingly, this chapter is structured as follows: The next section gives an overview of the crowdfunding market, its business models and the various ways in which consumers can be involved in crowdfunding (II.). Subsequently, we address the extent to which the CR and EU Consumer law apply to the field of financial services when consumers act as project owners (III.) or investors (IV.). Thereafter, we analyze whether general EU consumer law can protect consumers as project owners or investors in crowdfunding situations (V.). The concluding section summarizes the results and gives an outlook on further legislative activities at the European level (VI.).
Ebers, Martin and Quarch, Benedikt M, EU Consumer Law and the Boundaries of the Crowdfunding Regulation (April 8, 2021). Pietro Ortolani and Marije Louisse (eds), Crowdfunding and the Law, pending for publication, Oxford University Press, Oxford 2022.