The Availability of Life Jackets in Uncharted Waters: CJEU's Consumer Protection in Crowdfunding

Abstract

Crowdfunding is a way of raising money through small contributions from a large number of investors, i.e. "crowd". Crowdfunding constitutes a common denominator for number of financing methods, from donations through lending up to venture capital, while all taking place online. Thus, there is a considerable number of legal challenges, namely use of copyright, distribution of loans and credits or possible sale of securities. In many cases the "crowd" is constituted by large number of consumers, acting outside their trade, business, craft or profession. Yet there are also exceptions. Sometimes, on the other side of the Internet connection sits a professional looking for an investment opportunity instead of an inexperienced consumer. However, which one shall we protect and to what extent? Is there an economic and legal necessity or only an "EU urge" to protect the consumers even if the protection might not be necessary? Hence, this article analyzes and assesses the current regulatory framework through the lens of CJEU's jurisprudence on the consumer protection with the constant focus on balance of needs and protection of the parties involved.

Keywords: AIFMD, Equity, CJEU, Consumer, Crowdfunding, European Union