The legal relationships and implications that arise within the context of a ‘platform economy’ with a focus on DLT-based platforms operating in the financial services industry

Abstract

The interpretation of established legal principles may be challenging when attempted in connection with innovative technology arrangements. Legislators seek to establish norms that are flexible and that will stand the test of time. Initiatives such as the EU Electronic Commerce Directive have been instrumental in order to provide for the adaptability of traditional civil and commercial norms given the new paradigm presented by the internet which was the means enabling the flourishing of platform economies. Distributed ledger technologies allow platform economies to adopt characteristics, such as decentralisation and automation, that pose further legal challenges. Within a decentralised environment, it may be difficult to determine who are the different parties to an obligation. Every platform presents different rights and obligations that arise between participants given the unique economy model underpinning each platform. Following a description of the aim, scope, terminology and methodology adopted in this research, a first chapter will expand upon the literature review undertaken in order to complement the discussion that ensues in the second and third chapters. The latter two chapters examine a use-case hailing from two different pillars of the financial services industry. The different relationships and other legal implications of the selected platform economies are analysed in detail. By way of conclusion, it is determined that the element of decentralisation within DLT platform economies is the one that poses the major challenge in order to establish the nature of the contractual relationships that arise. Given the complexity of the smart contracts utilised to operate the platform, it is difficult to determine who the counterparty of certain participants would be. This notwithstanding, this research attempts an answer to such complex questions.