“Special purpose sovereigns”: online platforms and the new contract law of the digital age

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General information

Today’s market is increasingly based on online transactions. This phenomenon extends beyond business-to-business transactions to everyday contracts, especially consumer transactions. This market is becoming more and more transnational, with contracts between economically and culturally distant counterparties, who would have little chance of meeting in a common economic space in conventional trade situations. The emerging e-market has a strong tendency to form structures that connect contractors and facilitate contracting within an economic “micro-environment” (“micro-market”) that groups transactions with certain shared characteristics.

Today, online platforms are becoming an inseparable part of everyday life, and they are more and more often taken for granted as part of the surrounding reality. This applies not only to platforms that mainly mediate in sales contracts (e.g. Amazon, eBay and Allegro), but also to platforms that offer various services: transport (e.g. Uber and Lyft), accommodation (e.g. Airbnb), loans (e.g. Kokos.pl) or mediation in micro-investment activities (especially crowdfunding platforms, such as Patronite). These platforms usually constitute “microworlds” with varying degrees of coherence and diverse structures. The platforms emerge not only in the economic area, but also in the legal and organisational area. By joining a platform, its members accept its internal rules, such as “bylaws”, “rules and principles”, “policies”, etc. They usually define a variety of issues related not only to the platform-participant relationship (e.g. how to manage an individual account on the platform), but also many matters connected to signing “horizontal” agreements between the participants. In this way, platforms create micro-systems of rules whose design and functionality closely resemble general contract law regulations.

Project objectives

The project intends to address four main issues:

  1. To what extent platforms’ self-regulatory activities create a new type of contract law source. In particular, the project attempts to gain a better understanding of the degree to which the modalities of the platforms’ rule-making lead to the emergence of new types of contracts, thereby broadening the actual range of choices available to contractual parties.
  2. The project also seeks to identify the specific values and objectives underlying the rules created by platforms. This concerns in particular the question whether platforms can incorporate elements of common (social) contract law goals, such as consumer protection and non-discrimination, into their regulation.
  3. More specifically , the project also attempts to explore in greater depth the issue of legitimacy of regulatory actions taken by platforms. This study will be based on theoretical concepts of regulation-making by private actors, especially J. Balkin’s concept of “special-purpose sovereigns”. On that basis, the project will inquire into the limits to which platform-generated rules will benefit from legitimacy in a democratic state and what the specific sources of this legitimacy may be within the digital marketplace.
  4. With this in mind, the project will also examine the extent to which self-regulation in the platform market may provide an adequate response to the regulatory problems occurring in this market and the extent to which regulatory intervention by the state or supra-state structures may be advisable in this regard.


The Project hinges on two main elements: firstly, an exhaustive analysis of the rules created by platforms in different market sectors will be carried out. The data will be subjected to both qualitative and quantitative analysis. The study will focus both on learning about the content and objectives of individual rules and their groups, as well as identifying more general trends and regularities (including the evolution of rules created by the platforms over time and pinpointing its causes). Secondly, from this starting point, the project will take a more problem-based approach to the content and mechanism of rule formation by platforms. The analysis conducted will centre on the four fundamental problems mentioned above in an effort to bring about a better understanding of the theoretical and practical implications that arise from self-regulation in the platform market.

Importance of the study for law making and law enforcement

The project will move towards an in-depth theoretical concept of the problems that originate from the self-regulatory operation of platforms. In particular, it will try to answer the question whether and to what degree platforms in fact act as “special purpose sovereigns”, taking over some of the regulatory functions of the state. A key point will be to answer the question of the extent to which platforms can embed objectives beyond the simple desire to maximise the economic efficiency of their transactions (e.g. consumer protection) within their rule systems and consequently, to what extent they can effectively supplement the state in regulating the market. The findings of the project will be included in a book publication and in articles in academic journals and collective publications, as well as in conference presentations.