Thursday, 11 May 2017

Services provided by Uber are services in the field of transport, not information society services - Advocate-General says

Earlier today, the long-awaited opinion of Advocate-General Szpunar in case C‑434/15 Uber Spain was published. The analysis concerns one of the two cases brought before the CJEU in connection with the controversial mobile app. The key question addressed in both cases is whether services provided by Uber should be classified as information society services or as transport services. This categorization is of paramount importance from the point of view of EU law.

The opinion is bad news to Uber Technologies Inc. and its European subsidiaries. The Advocate-General took the view that services provided by Uber do not constitute information society services, but should rather be regarded as services in the field of transport. Consequently, the activity of Uber falls outside the scope of both E-Commerce Directive and Services Directive. Such an interpretation would allow Member States to subject Uber to a number of sectoral requirements.

The opinion is based on several factual assumptions about the practical operation of the analysed business model. Primary focus remains on the service marketed as UberPOP. These factual elements are, of course, for the national court to verify. More importantly, however, the opinion also includes a more abstract interpretation of the legal issues at hand. If followed by the Court of Justice, the framework proposed by the AG could be used in the assessment of other digital business models. 

The essential part of the opinion concerns the notion of an information society service. By way of reminder, the term refers to "any service normally provided for remuneration, at a distance, by electronic means and at the individual request of a recipient of services" (Article 2(a) of Directive 2000/31/EC in connection with Article 1(2) of Directive 98/34/EC). Since the business model at hand involves both electronically and non-electronically supplied services, the following questions have arisen: 1) which services are actually provided by Uber and 2) are these services provided at a distance and by electronic means.

According to the AG, the decisive question in this respect is whether the service which is not supplied by electronic means is economically independent of the service which is provided by that means. The relevant framework of assessment is set out in para. 35, which reads as follows:

"Where the provider of the service supplied by electronic means is also the provider of the service not supplied by such means or where he exercises decisive influence over the conditions under which the latter service is provided, so that the two services form an inseparable whole, it is necessary to identify the main component of the supply envisaged, that is to say, the component which gives it meaning in economic terms. For a service to be classified as an information society service, this main component must be performed by electronic means."

Assessment of the Uber business model led the Advocate-General to believe that, in that factual context, the connection of passengers and drivers is neither self-standing, nor the main supply in relation to the supply of transport. Consequently, the service provided by Uber cannot be classified as an ‘information society service’. The opinion cites the examples of other digital services, such as platforms for the online sale of goods (para. 36) and platforms for the purchase of flights or hotel bookings (paras. 57-60), and draws a distinction between operators of such platforms an Uber. The AG also points to the difference between Uber and ride-sharing platforms, but does not elaborate on that aspect any further (para. 42). He similarly distances himself from competition and labour law issues.

The overall line of argumentation along with the conclusions reached are summarised in paras. 71-72 of the opinion.

71. (...) In the case of composite services, consisting of a component provided by electronic means and another component not provided by such means, the first component must be either economically independent of the second or the main component of the two in order to be classified as an ‘information society service’. Uber’s activity must be viewed as a whole encompassing both the service of connecting passengers and drivers with one another by means of the smartphone application and the supply of transport itself, which constitutes, from an economic perspective, the main component. This activity cannot therefore be split into two, for the purpose of classifying a part of the service as an information society service. Consequently, the service must be classified as a ‘service in the field of transport’.

72. I therefore propose that the Court should answer the first and second questions referred for a preliminary ruling as follows:

– Article 2(a) of Directive 2000/31, read in conjunction with Article 1(2) of Directive 98/34, must be interpreted as meaning that a service that connects, by means of mobile telephone software, potential passengers with drivers offering individual urban transport on demand, where the provider of the service exerts control over the key conditions governing the supply of transport made within that context, in particular the price, does not constitute an information society service within the meaning of those provisions.

– Article 58(1) TFEU and Article 2(2)(d) of Directive 2006/123 must be interpreted as meaning that the service described in the preceding point constitutes a transport service for the purposes of those provisions.

On a final note

The same Advocate-General is drafting the opinion in the second case involving Uber, namely C-320/16 Uber France, which leaves the American company with little grounds for optimism. Publication of the other opinion is scheduled for 4 July. Since opinions of AGs are not binding on the Court, Uber can, however, still hope that the CJEU will not follow the proposed line of argumentation.

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