Last Tuesday Advocate-General Szpunar delivered his opinion in case C-390/18 Airbnb Ireland. The case does not directly relate to consumer law, but remains highly relevant to consumer protection. Most notably, it provides an opportunity for the AG and the Court to refine the criteria for distinguishing different types of services provided in the platform economy and, consequently, the scope of Member States' regulatory discretion.
Airbnb Ireland is a direct follow-up to the two earlier Uber cases, both of which we have reported on extensively on this blog (see eg CJEU gives Member States a green light to regulate Uber, Nihil novi from the CJEU in Uber France). To recall, the Court of Justice found, back then, that services provided by Uber – an operator of a popular ride-hailing app – did not qualify as information society services, but rather constituted services in the field of transport. This meant, among others, that Uber could not rely on the freedom of movement established in Directive 2000/31/EC on electronic commerce. Or, in other words, that Member States enjoyed a wider margin of discretion when it comes to regulating Uber and similar service providers.
Setting the scene
The questions asked in C-390/18 Airbnb Ireland were very similar to those asked in C-434/15 Uber Spain. Essentially, the controversy was whether the provisions of French law, requiring a person who engages in the mediation and management of real property to hold a professional license (among other requirements), could be applied to a service provider, established in another Member State, who enables hosts to be connected with guests via an online platform. To reply to this question it needed to be established, as a first step, whether services provided by Airbnb qualified as information society services within the meaning of Directive 2000/31/EC. Contrary to the Uber case, Advocate-General Szpunar responded to this question in the affirmative.
It is worth highlighting that it was also AG Szpunar who advised the Court in Uber cases. Szpunar’s finding that the business model of Airbnb falls within the scope of the E-Commerce Directive does not contradict his earlier argumentation (which was largely followed by the Court). Rather he elaborates on the previously established framework and applies it to a new factual setting.
Key points of the opinion
What I particularly like about AG's opinion is the attempt to structure the assessment of composite services under free movement law. Services of this kind – provided partially by electronic means and partially not – without doubt form an intrinsic part of the platform economy. In particular, the Advocate-General tries to elaborate on the criteria set forth in the previous cases: C-108/09 Ker Optika and the aforementioned Uber cases (C-434/15 Uber Spain and C-320/16 Uber France).
Essentially, the AG argues, there is one major question to be asked with respect to composite services: whether or not services provided by electronic means are inseparably linked with services 'having material content'. Both types of services are not inseparably linked when the former do not lose their economic interest and continue to be independent of the latter (and, so it seems, vice versa, cf. paras. 46 and 59). If it is clear that services are not inseparably linked, then the component provided by electronic means falls under Directive 2000/31/EC, while the other component does not. When both services are inseparably linked Directive 2000/31/EC does not apply. However, some services may prima facie appear to be separable, but still require an additional assessment to make sure this is indeed the case.
It is in this second group of cases when the Uber case law kicks in. As the AG recalls in para. 49 of the opinion, the Court concluded in Uber that the company, in addition to an intermediation service consisting in connecting drivers with passengers through an app, simultaneously offered urban transport services, which it rendered accessible, in particular, through software tools … and whose general operation it organised. According to the Advocate-General, in doing so, the Court developed two criteria for establishing inseparability of composite services. These relate to the fact that the service provider, firstly, offers services having material content (eg transport services) and, secondly, exercises decisive influence on the conditions under which such services are provided.
Expressed in this way, the two criteria may not seem logically connected. First, it is required that the platform provider himself offers services 'having material content' and then, additionally, that he exerts a decisive influence on the conditions under which such services are provided (by himself?). Further parts of the Airbnb opinion, however, explain this in a more convincing way. Here are some of the most relevant takeaways:
Following a more detailed examination, the Advocate-General concluded that Airbnb did not exert decisive influence over the conditions of the supply of short-term accommodation services. Consequently, these services could be separated from services provided electronically by Airbnb. A similar conclusion was reached with respect to additional services provided by Airbnb, such as photography, insurance and guarantee, which – according to the AG – were only ancillary to the intermediation service provided by electronic means (para. 82).
Concluding thought
All in all, in view of the AG, a service consisting in connecting, via an electronic platform, potential guests with hosts offering short-term accommodation, in a situation where the provider of that service does not exercise control over the essential procedures of the provision of those services, constitutes an information society service within the meaning of Directive 2000/31/EC. This does not mean that no additional requirements, related in particular to consumer protection, can be imposed on a provider of such services by the Member State other than the Member State of service provider's establishment. The relevant restrictions, however, must comply with substantive and procedural criteria laid down in Article 3(4) of E-Commerce Directive. So, at least, the Advocate-General – the judgment of the Court still lies ahead.
Airbnb Ireland is a direct follow-up to the two earlier Uber cases, both of which we have reported on extensively on this blog (see eg CJEU gives Member States a green light to regulate Uber, Nihil novi from the CJEU in Uber France). To recall, the Court of Justice found, back then, that services provided by Uber – an operator of a popular ride-hailing app – did not qualify as information society services, but rather constituted services in the field of transport. This meant, among others, that Uber could not rely on the freedom of movement established in Directive 2000/31/EC on electronic commerce. Or, in other words, that Member States enjoyed a wider margin of discretion when it comes to regulating Uber and similar service providers.
Setting the scene
The questions asked in C-390/18 Airbnb Ireland were very similar to those asked in C-434/15 Uber Spain. Essentially, the controversy was whether the provisions of French law, requiring a person who engages in the mediation and management of real property to hold a professional license (among other requirements), could be applied to a service provider, established in another Member State, who enables hosts to be connected with guests via an online platform. To reply to this question it needed to be established, as a first step, whether services provided by Airbnb qualified as information society services within the meaning of Directive 2000/31/EC. Contrary to the Uber case, Advocate-General Szpunar responded to this question in the affirmative.
It is worth highlighting that it was also AG Szpunar who advised the Court in Uber cases. Szpunar’s finding that the business model of Airbnb falls within the scope of the E-Commerce Directive does not contradict his earlier argumentation (which was largely followed by the Court). Rather he elaborates on the previously established framework and applies it to a new factual setting.
Key points of the opinion
What I particularly like about AG's opinion is the attempt to structure the assessment of composite services under free movement law. Services of this kind – provided partially by electronic means and partially not – without doubt form an intrinsic part of the platform economy. In particular, the Advocate-General tries to elaborate on the criteria set forth in the previous cases: C-108/09 Ker Optika and the aforementioned Uber cases (C-434/15 Uber Spain and C-320/16 Uber France).
Essentially, the AG argues, there is one major question to be asked with respect to composite services: whether or not services provided by electronic means are inseparably linked with services 'having material content'. Both types of services are not inseparably linked when the former do not lose their economic interest and continue to be independent of the latter (and, so it seems, vice versa, cf. paras. 46 and 59). If it is clear that services are not inseparably linked, then the component provided by electronic means falls under Directive 2000/31/EC, while the other component does not. When both services are inseparably linked Directive 2000/31/EC does not apply. However, some services may prima facie appear to be separable, but still require an additional assessment to make sure this is indeed the case.
It is in this second group of cases when the Uber case law kicks in. As the AG recalls in para. 49 of the opinion, the Court concluded in Uber that the company, in addition to an intermediation service consisting in connecting drivers with passengers through an app, simultaneously offered urban transport services, which it rendered accessible, in particular, through software tools … and whose general operation it organised. According to the Advocate-General, in doing so, the Court developed two criteria for establishing inseparability of composite services. These relate to the fact that the service provider, firstly, offers services having material content (eg transport services) and, secondly, exercises decisive influence on the conditions under which such services are provided.
Expressed in this way, the two criteria may not seem logically connected. First, it is required that the platform provider himself offers services 'having material content' and then, additionally, that he exerts a decisive influence on the conditions under which such services are provided (by himself?). Further parts of the Airbnb opinion, however, explain this in a more convincing way. Here are some of the most relevant takeaways:
- The criterion of 'offering services having material content' essentially means creating a new offer. It was fulfilled in Uber because, arguably, non-professional drivers would not be led to provide transport services and passengers would not use the services provided by those drivers without the relevant application (para. 51).
- The fulfillment of that criterion, in any case, is only an indication that a service provided by electronic means is inseparably linked with a services having material content (being a subject of the new offer; para. 65). Most importantly, the fact that it is not fulfilled (i.e. that no fundamentally new offer is created) does not yet mean that services provided by electronic means are separable from services having material content (and therefore fall under E-Commerce Directive).
- Thus, overall, the second criterion - decisive influence over the conditions of the supply of services having material content - is (nomen omen) decisive for assessing the nature of services provided by an operator of online platform (para. 67). This, in turn, should be assessed by looking at the key parameters of underlying services, which may vary from market to market. In urban transport such parameters included price, availability, quality and safety. In short-term accommodation rental, elements related to location and standard of accommodation appear to be most relevant from AG's perspective. Price can also play a role, although not as important as in the urban transport market (para. 71).
Following a more detailed examination, the Advocate-General concluded that Airbnb did not exert decisive influence over the conditions of the supply of short-term accommodation services. Consequently, these services could be separated from services provided electronically by Airbnb. A similar conclusion was reached with respect to additional services provided by Airbnb, such as photography, insurance and guarantee, which – according to the AG – were only ancillary to the intermediation service provided by electronic means (para. 82).
Concluding thought
All in all, in view of the AG, a service consisting in connecting, via an electronic platform, potential guests with hosts offering short-term accommodation, in a situation where the provider of that service does not exercise control over the essential procedures of the provision of those services, constitutes an information society service within the meaning of Directive 2000/31/EC. This does not mean that no additional requirements, related in particular to consumer protection, can be imposed on a provider of such services by the Member State other than the Member State of service provider's establishment. The relevant restrictions, however, must comply with substantive and procedural criteria laid down in Article 3(4) of E-Commerce Directive. So, at least, the Advocate-General – the judgment of the Court still lies ahead.
* The author carries out a research project on consumer protection in the collaborative economy, financed by the National Science Centre in Poland on the basis of decision no. DEC-2015/19/N/HS5/01557.
