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Licensed Unlicensed Requires Authentication Published by De Gruyter December 8, 2019

Public Values, Private Regulators: Between Regulation and Reputation in the Sharing Economy

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In traditional sectors, the intervention of private parties in the regulatory system tends to be justified by their enhanced expertise, government cuts or efficiency gains. In the sharing economy (e.g., home-sharing services offered by Airbnb), quality control and regulatory tasks (e.g., inspections) are to, a great extent, informally delegated to online platforms and peer-to-peer communities that rate and review performance. These communities consist of users that do not have more than their personal experience and the guidance of online platforms to underpin their assessments. Existing literature has extensively criticized the reliability of these online reputational mechanisms, but it has overlooked other far-reaching effects of outsourcing regulatory tasks to private parties. This Article offers a more complete analysis of the regulatory value of online reputation. I argue that reputational mechanisms have the potential of creating democratic spaces where users can provide unique, regular, and first-hand insights that would otherwise be disregarded in a traditional regulatory system. Nevertheless, in their current form, these mechanisms still offer inadequate protection to the public values that typically underlie the regulation of certain services. This Article explains this problem by comparing the protection of public values in the sharing economy to that of traditional regulated sectors.

This Article contributes to the literature by reflecting on whether the sharing economy is inviting us to rethink the broader involvement of citizens in the protection of public values and the challenges thereof. It suggests a framework to improve online reputational mechanisms and a better dialogue between traditional regulation and online reputation.


I would like to thank the insightful comments of the anonymous peer-reviews and the editorial board. I am also grateful to Ayelet Tapiero, Catalina Goanta, Madalena Narciso, and the participants of the workshop “The Sharing Economy: Markets and Human Rights” organized by the College of Law & Business for discussing the first version of this Article.

Published Online: 2019-12-08
Published in Print: 2019-11-18

© 2019 Walter de Gruyter GmbH, Berlin/Boston

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