The rules of the game of “platform cooperativism”

Guido SMORTO

Professor of comparative law, University of Palermo and Open University of Catalonia

«Platform cooperativism» has recently become the most successful expression to describe the ongoing debate on shared governance and property in the platform economy and the attempt to define new organizational structures and an entire ecosystem truly alternative to large-scale, for-profit corporations that are exploiting the online cooperation among «peers».

The rules of the game of “platform cooperativism”

Such a discussion is enriched almost every day by initiatives whose objective is developing new instruments, both theoretical and practical, on how to come up with collaborative platforms that are truly expression of a social and solidarity economy. Investigations and analysis are more animated than ever, dealing with organizational models, decision-making tools and funding schemes. Software that facilitate collaborative decisions (Loomio, Enspiral) and new legal solutions for tax and labour law (FreedomCoop) are generated.

New instruments are conceived to foster selfgovernment capacity and the creation of online communities (Fairshares), and innovative tools are invented to find innovative ways to coordinate capital and labor (Mastly, Timefounder). Based on blockchain, original instruments are engineered for creating decentralized organizations (Backfeed, Comakery) and local currencies in accordance with social economy values (Colu).

These experiments also invest funding schemes other than venture capital (Purpose Capital, The working world, Transform Finance, Community Shares) and payment systems (Fairpay). And thought-provoking solutions are created in the field of intellectual property and privacy in opposition to traditional copyright law (copyleft, copyfair) and the intrusive arrogance of capitalistic platforms.

The resulting picture is extremely vital, even if these experiments face enormous difficulties in conceiving utterly new solutions in order to coordinate risks, ownership, control and profits. However, what is mostly missing is a full and engaged debate on market regulation and on the effects of legal rules on the competitiveness. Using the recognised distinction drawn by Lawrence Lessig, the discourse on platform cooperativism is mostly focused on the architecture but very little on legal rules. On the contrary, an adequate reflection on «competitive legal strategies» would be highly desirable, especially in Europe where the process of creation of EU rules is taking place. Moving on to the substance, what does debating the European rules for platform cooperativism means?

The first response concerns the distributional effects of these new economic environment. Thus examining its impact on different social groups, geographical areas and gender equality, and investigating how it affects the relationship between labour and capital. Secondly, it requires a deeper analysis on how the digital economy affects those principles and values that guide our societies, from the “commodification” of new goods and services to the economic and political consequences of big data.

But it is not just a question of justice and fairness. The current debate too often points only to the potential and actual injustices of this new economy, thus ignoring the more technical analysis on market failures, just when the Services Directive, the e-Commerce Directive and the acquis communautaire on consumer protection are called into question. Due to this indifference, the debate on platform cooperativism too often ignore the profound readjustment of the rules of the game that is taking place especially on the role and the limits of self-regulation, thus fuelling the risk that these changes may result in a massive deregulation.

Searching for solutions to the many challenges of cooperative platforms, the sole reliance on self-government abilities is clearly not enough. And rules in tune with cooperative values are essential both for the creation of public policies and for the development of solutions designed around the principles of co-creation and comanagement. Only then, social enterprises may compete on equal terms in the emerging online markets.