Sharing Economy Should Flourish, not Be Overly Restricted by Consumer Protection Laws, FTC’s Ramirez Says

Competition and innovation in the form of the new peer-to-peer business models that have been created as part of the sharing economy must be allowed to flourish, but targeted regulatory measures may be needed to ensure appropriate consumer protections, said FTC Chairwoman Edith Ramirez at a Fordham University international antitrust event in New York City Friday. “The sharing economy appears to be responsive to consumer demand, to increase competition, and to promote a more efficient allocation of resources -- providing consumers with more options and, often, lower prices,” Ramirez said, according to prepared remarks. The FTC has “generally cautioned state and local governments not to impose legacy regulations on new business models simply because they happen to fall outside existing regulatory schemes,” she said, noting that the agency studied the sharing economy in a recent workshop (see 1506090046). “The threshold question for policymakers examining new peer-to-peer businesses should be whether there is a public policy justification for regulating the service at all, either through an expansion of existing regulatory schemes or through entirely new regulatory schemes,” she said. “If there is no public policy rationale justifying regulation, policymakers should allow competition to proceed unfettered.” Regulatory boards and other policymakers may have legitimate consumer protection and other public interest objectives, but they must consider the potential competitive effects such regulations may have, she said. For example, the FTC recommended that regulations directed at ride-sharing services focus “primarily on ensuring qualified drivers, safe and clean vehicles, sufficient liability insurance, transparency of fare information, protecting privacy and consumer data, and compliance with other applicable laws,” noted Ramirez.