How often haven't we heard that "the Internet is disruptive" or "are social networks here to stay"? The Internet revolution, the birth of 2.0, spared no one. It is difficult to think of a business or an economic sector that has not been directly affected by the surge of social networks and by the new communication channels used by clients and companies.

The so-called "peer-to-peer culture" has allowed "users" to directly exchange services and products without the need for an intermediary, with the subsequent relief for consumers' wallets.

Traditional business, which are usually subject to strict and extensive regulation and which must bear some considerable operational costs, have witnessed - with some degree of frustration - how the rise of multiple online platforms have introduced them to a new type of competitors, which are increasingly threatening their market share.

This phenomenon occurred in many sectors: Airbnb or Housetrip are challenging the traditional hospitality and tourism industry, the taxi sector has reacted fiercely to the uprise of Uber and even such a traditional sector as the banking industry is closely following the evolution of online crowdfunding and other peer-to-peer finance platforms.

Disruptive, nonetheless, does not equal to negative. Cost reductions, optimisation of resources, greater competence and cooperation between consumers are effects that clearly benefit the overall of the economy and society. It is only fair to recognise such attributes to the so-called "collaborative economy".

We often hear that Uber or Airbnb are "alegal" business models that benefit from a "legal limbo" but, usually, this is not the case. The fact that, currently, in many jurisdictions there is no rule specifically drafted for these new business models, it does not imply automatically that there is no piece of legislation or regulation applicable to them.

Inexistence of specific regulation does not equal a "free rein" where operators can do and undo as they wish without any restrictions. There are rules and provisions that regulate those activities they are competing with and that may apply to them, even though - most likely - their business model had never crossed the mind of the regulator that enacted the provision that may apply to them also.

In this perspective, the necessity to adapt the current legislation seems unavoidable in order to guarantee the protection of the rights and obligations of all parties: users, "traditional businesses" but also of the new "collaborative economy" operators. Regulation, nonetheless, should refrain from seeking strong restriction as trying to stem the tide would most likely become a hopeless exercise in a globalised world.

In this regard, the task faced by the regulator, although pressing, is not an easy one. The regulator must carry out her chore with surgical precision in order to protect consumer rights before potential scams and abuses by ensuring that certain thresholds of security and quality are met on online peer-to-peer transactions and, at the same time, rejecting the temptation of over-regulating or "de facto" banning the new models of collaborative economy. The ability to create this fragile equilibrium is crucial in order to provide all economic operators with the legal certainty that is needed.

Author: Xavier Costa, Asociado sénior departamento de Mercantil – Mercado de Capitales de Roca Junyent Barcelona y Vice-Presidente de la Comisión de Bancario, Financiero y Mercado de Capitales de la AIJA (Asociación Internacional de Jóvenes Abogados).

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