Thursday, 6 July 2017

The Uber saga continues

Roughly two months ago we commented on the opinion of Advocate-General Szpunar in case C-434/15 Uber Spain. His conclusion that the popular ride-hailing platform should not be considered as an information society service, but rather as a transport service was very bad news for Uber. We also wrote that the same AG was currently drafting an opinion in a related case, C-320/16 Uber France, which left the provider of the (in)famous transport app with little grounds for optimism. The opinion was eventually published this Tuesday and, indeed, comes as no surprise.

Background of the case

The case deals with a specific provision of the French transport code, introduced in 2014. It prohibited and penalised the organisation of a system for putting customers in touch with persons who engage in the carriage of passengers in breach of applicable market access requirements. The provision was aimed as a new weapon for national authorities and private parties against providers of services such as UberPOP (part of the ride-hailing business model involving non-licensed private drivers). Soon after it came into force, the provision was put to test in the first proceedings.

Uber naturally fought back. It argued, among others, that the national provision invoked against it constituted a technical regulation within the meaning of Article 1(11) Directive 98/34/EC, as amended, and was therefore covered by the notification requirement laid down in Article 8(1) of that directive. According to the defendant, since no such communication had been made, the provision relied upon in the proceedings should be deemed inapplicable and hence unenforceable.

Two heavy blows from Advocate-General

"UberPOP not an information society service"

Advocate-General Szpunar was not convinced. He began the assessment by recalling his earlier opinion in Uber Spain, in particular the proposed guidelines as to how "composite services" (i.e. services consisting of a component provided by electronic means and a component not provided by such means) should be approached. What is more, he used the opportunity to make two additional points in support of his claim. First, he distinguished the type of activities pursued by Uber from the situation considered by the CJEU in case C-339/15 Vanderborght (see also our earlier blog post on that matter here). Furthermore, he drew a distinction between the case at hand and the legal relationship arising from a franchise contract. The AG concluded by reiterating his earlier view that services provided by Uber should not be classified as information society services, but rather as services in the field of transport.

"Either way, national provision at issue not a technical regulation"

The Advocate-General did not stop here, however. He went on to argue that the question of whether the contested provision of French law constituted a technical regulation could be resolved irrespectively of the classification of the UberPOP service. And, not surprisingly, also that line of reasoning was not very helpful to Uber.

The assessment focused on the wording of Article 1(5) of Directive 98/34/EC, as amended (on a side note, the act was recently repealed and replaced by Directive 2015/1535). The analysed provision defined "rules on services" as requirements of a general nature relating to the taking-up and pursuit of the activities of information society service providers, excluding any rules which are not specifically aimed at those services. It also clarified that "a rule shall not be considered to be specifically aimed at information society services if it affects such services only in an implicit or incidental manner".

The analysis started well for Uber. The Advocate-General agreed with the defendant that the contested national provision was "principally directed at systems for connecting the two parties by electronic means", thus rejecting arguments of the French government to the contrary. However, he went on to argue that - since the prohibition in question was limited to the organisation of a system for putting customers in touch with persons providing transport services illegally - the impact of that prohibition on information society services was merely incidental

In one of the most illustrative parts of the opinion the AG submitted: 

"If every national provision that prohibited or punished intermediation in illegal activities had to be regarded as a technical regulation merely because the intermediation most likely takes place by electronic means, then a great number of internal rules in the Member States, written and unwritten, would have to be notified as technical regulations. That would lead to an unwarranted extension of the obligation to notify without that really contributing to the attainment of the objectives of the notification procedure, the purpose of which is to prevent the adoption by the Member States of measures that are incompatible with the internal market and to enable economic operators to make more of the advantages inherent in the internal market. Instead of that, an excessive notification obligation, with the penalty of regulations that have not been notified being inapplicable, would facilitate circumvention of the law and engender legal uncertainty, including in relationships between individuals." (para. 31)

Concluding remark

The commented opinion deals with a delicate interface of regulation and innovation and is bound to attract mixed responses. One may wonder, for instance, how national provisions like the one at issue should be assessed in the light of Article 15 of Directive 2000/31/EC on electronic commerce and whether some sort of notification mechanism would not be desired to ensure compliance with this norm. The question would, of course, be devoid of meaning if the Court were to follow the AG's understanding of the nature of Uber's activity in the first place. In this respect the Advocate-General appears to share the view that the company, which he classifies as a transport company, should be distinguished from the "genuine sharing economy". Last but not least, it is worth noting that some of the criteria referred to by the AG in support of this claim overlap with the indicative benchmarks formulated by the Commission in its collaborative economy communication (particularly references to the level of control or influence exerted by the platform provider). Quite ironically, however, the Commission itself had reportedly been pleading - at least in Uber Spain - against the proposed line of reasoning. This shows that the matter remains highly controversial and its eventual resolution is far from clear. The doubts should be allayed by the end of this year.

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