We will focus on consumers in digital transaction networks from three different angles: consumers as consumers, consumers as products, and consumers as simultaneously consumers and products in digital transaction networks. We will study the multi-contractual and multi-dimensional contractual bundle in which consumers enter within digital networks in terms of (a) contracts regulating transactions in the networks, and (b) data contracts encapsulated in ToS and privacy agreements. Linked to these data contracts is (c) the role of consumer data in the personalization of choices and contracts in subsequent digital transactions. The project will tie together these issues by offering a regulatory agenda to connect the role and duties of digital transaction networks with consumers in consumers’ transactions and the use of algorithmic contracts based on consumers’ data.

Digital transaction networks present a challenging environment for consumers for a variety of reasons. First, existing legal instruments do not respond to the morphology of the phenomenon. Rather, they are like square pegs being forced into round holes. Policies regulating digital transaction networks need to reach a difficult equilibrium, creating a framework where innovation is possible while ensuring that market participants adjust their practices to protect consumers. Second, machine learning and other forms of artificial intelligence enable market practices in digital networks that challenge the fundamentals of European consumer protection from the perspective of privacy and fairness. Third, the information necessary to regulate market practices and contractual relationships and to ensure enforcement are in many cases not in the hands of the regulators but in the hands of private companies, often with significant market power, which have obvious interests in continuing the practices in which they engage. Fourth, policies for regulating consumer protection in digital networks involve multiple regulatory levels – local, regional, national and European. Effective regulation across these levels requires collaboration and a comprehensive regulatory agenda that today has proven particularly challenging.

One of the missing elements in the analysis of consumer transactions in digital networks is a global perspective that would offer a better understanding of the status of the digital network with which consumers transact, the personal data that consumers provide through their digital activity and the use of this data by professional market participants when contracting with consumers. These three elements have profound legal implications not only for market dynamics but for consumers’ rights and welfare in a broad sense, including economic and social rights.

    Broadening the scope of my research and building on the state of the art, this project will develop a comprehensive, multidimensional, interdisciplinary, and empirically grounded analytical framework for analysing consumers’ interlocking contractual bundles in digital transaction networks in order to protect consumer rights and welfare from 3 different perspectives: (1) consumers as consumers within digital transaction networks (WP1), (2) consumers as products in data contracts encapsulated by ToS and privacy agreements (WP2) and (3) consumers as simultaneously consumers and products through algorithms that personalize their choices and standard terms based on consumers’ datasets formed from multiple sources (WP3). We will use my findings to propose normative strategies for consumer protection that embrace the multidimensional and multilevel contractual bundles that consumers enter in these networks (WP4).

This project has the following goals:

1. Develop a normative business-adjusted analytical standard of contractual “control” for classifying the role of digital transaction networks in consumer transactions.

2. Map the dynamics of data markets and the role of consumers’ consent in shaping them.

3. Analyse spillovers between the data contracts and transaction contracts in consumers’ contractual bundles within digital transaction networks.

4. Assess the consumer welfare implications of algorithmic and personalized contracts from theoretical and empirical perspectives.

5. Use the results to produce a set of policy proposals for addressing the challenge of consumer protection in digital transaction networks.

    The outcome of this research will make it possible to better understand and differentiate digital networks and business’s obligations towards consumers, to design policies for data markets compatible with consumers’ rights, and to establish the data sources, contract content and effects of algorithmic contract personalization that will ensure the high level of protection that European consumers are entitled to have. This project’s innovative and comprehensive research agenda will make it possible to address the challenges these digital network structures present for consumers.