Local authorisation schemes for Airbnb hosts cleared by the Court of Justice (kind of)

Earlier this week the Court of Justice delivered its judgment in joined cases C-724/18 and C-727/18 Cali Apartments concerning the requirements imposed on Airbnb hosts by the French authorities. The judgment largely follows the opinion of Advocate General Bobek, on which we reported several months ago. Like the AG, the Court seems ready to accept a variety of restrictions, including the most controversial "offset requirement", as compatible with EU law - with certain caveats. The judgment is both detailed and technical, and comes out in favour of evidence-based decision-making, which may pose a challenge to the national courts. Meanwhile, legislative works on the so-called Digital Services Act are ongoing, in which the sharing of platform data with the local authorities is one of the contentious topics. 

 Background of the case

The case revolves around a number of restrictions imposed by the French law on the property owners wishing to let apartments for short periods to a transient clientele  which does not take up residence there (hereafter simply 'tourists'). Most notably, in municipalities with more than 200 000 inhabitants, in order to change the use of residential premises to the one set out above, prior authorisation is required. Detailed conditions for obtaining such an authorisation are laid down at the local level and may include offset requirements in the form of a conversion of non-residential premises into housing. The appellants, who were sanctioned for letting their Parisian properties to tourists in violation of national and local rules, argued that the relevant requirements were contrary to Directive 2006/123/EC on services in the internal market.

Judgment of the Court

Scope of Directive 2006/123 and the notion of 'authorisation schemes'

Before moving to the key questions concerning the compatibility of contested national rules with the harmonised liberalisation framework, the Court first analysed whether they are subject to the Services Directive at all and if so, to which of its provisions. This part of the judgment is rather brief and essentially confirms the act's broad scope and recalls the distinction between authorisations and other requirements.

• Not surprisingly, according to the Court, an activity consisting in the repeated short-term letting, for remuneration, of furnished accommodation to tourists is covered by the concept of 'service' within the meaning of Article 4(1) of Directive 2006/123 (paras. 32-34). 
• The Court further found that national norms targeting such an activity are not excluded from the scope of the Services Directive; in particular, they do not fall under the "rules concerning the development or use of land [and] town and country planning" referred to in recital 9 of Directive 2006/123 (see paras. 40-44).
  
• Finally, the Court confirmed that legislation requiring persons wishing to provide services mentioned above to obtain a formal decision from a competent authority, enabling them to access and to exercise service activity, constitutes an 'authorisation scheme' within the meaning of Article 4(6) of Directive 2006/123 (paras. 51-52).
  

In the subsequent part of the judgment the Court analysed whether, in the case at issue, the use of an authorisation scheme as well as more its specific criteria and their effective implementation were in line with requirements set out, respectively, in Articles 9 and 10 of the Services Directive. In both respects, the Court appeared to largely sympathize with the French authorities. This sympathy, however, is not as unconditional as it may seem at first sight.

 

Proportionality in Articles 9 and 10 of Directive 2006/123

As for the case for establishing an authorisation scheme in the first place, the Court recognized that the objective of "dealing with the worsening conditions for access to housing and the exacerbation of tensions on the property markets [...] to protect owners and tenants, and to increase the supply of housing while maintaining balanced land use" constitutes an overriding reason relating to the public interest referred to in Article 9(1)(b) of the Services Directive (paras. 65-68). The Court further found that a scheme of ex ante authorisations, such as the one considered in the main proceedings, could be both suitable and proportionate to the objective pursued. In reaching this conclusion, the Court underlined the importance of economic data showing the gravity of the problem in the areas covered by relevant legislation (cf. paras. 69, 73).

A similar reasoning can be observed in the subsequent part of the judgment, concerned with the specific criteria for granting authorisations. To recall, pursuant to Article 10(1) of the Services Directive, authorisation schemes shall be based on criteria which preclude the competent authorities from exercising their power of assessment in an arbitrary manner. Paragraph 2 states, among others, that the criteria shall be non-discriminatory, justified by an overriding reason relating to the public interest and proportionate to that public interest objective, not unlike in the previously discussed Article 9. In this more specific context, however, the role of "studies and other objective analyses" of the local conditions appears to be considered even more important (cf. para. 88). Particular attention is drawn to the proportionality of the offset requirement as a condition of relevant authorisation schemes. Overall, in the case at issue, the Court considered such requirement to be potentially in line with the Services Directive, without, however, giving national authorities a carte blanche in this regard.

• Note, among others, the importance attached by the Court to the fact that the local authorities, chosing to impose an offset requirement in the case at issue, were supposedly required to ensure that, firstly, the requirement was strictly relevant to the specific situation of individual neighbourhoods or districts and that, secondly, the same was true for required quantum of the offsetting (e.g. para. 83).
  

• Another aspect highlighted in the judgment is the compatibility of the offset requirement with the exercise of services activities [of letting apartments to tourists], which appears to be somewhat intransparent way of saying that conditions of the scheme should not discourage such activities entirely (paras. 91-94).
  

The above suggests that establishing compliance of the offset requirements with the principle of proportionality in the Services Directive is all but black-and-white and requires considerable expertise on the part of national courts.

Other criteria for granting authorisations (Article 10 cont'd)

The last part of the judgment engages with the remaining conditions laid down in Article 10(2), namely unambiguity, objectivity, prior publicity, transparency and accessibility. Also in this respect, the Court provides a number of reference points, which national courts use to uphold authorisation schemes before them, without, again, providing them with unlimited discretion. It is highlighted, among others, that:

• the fact that relevant terms (such as 'repeated short-term letting of furnished accommodation to a transient clientele which does not take up residence there') are not defined using numeric thresholds does not, in itself, affect the requirements of clarity, non-ambiguity and objectivity (para. 98) → the terms should nonetheless be clarified in a way that prevents doubt as to the scope of the conditions and obligations, so that the concepts are not applied arbitrarily (para. 99-100);
• the fact the delegation of the power from the national to the local level is focused on the objectives which the local authorities must take into consideration cannot, in principle, lead to a finding that those conditions are insufficiently clear and objective → in so far as reference is also made to the objective factors on the basis of which the granting conditions are to be determined (paras. 102-103);
• the fact that the conditions for granting authorisations and the quantum of the offsets are to be determined by the municipal councils of individual municipalities does not, in itself, affect the transparency, accessibility and prior publicity requirements → what matters is rather whether all owners wishing to let furnished accommodation to tourists are in a position to familiarise themselves with the conditions for granting authorisations, before committing to activities in question. More specifically, the Court found that the publication of the minutes of municipal council meetings in the town hall and on a website is sufficient to meet the prior publicity, transparency and accessibility requirements → in so far as it effectively enables any interested person to be informed immediately of the existence of legislation likely to affect access to, or the exercise of, the activity concerned (paras. 104-107).

Concluding thought

Overall, even though the judgment has reportedly been welcomed by the advocates of a stronger grip on platform-based activities, including by the mayor of Paris, it requires national courts to carry out a complex assessment of multiple criteria and does not give Member States an unconditional license to regulate services provided via platforms. The question remains: will national courts rise to the challenge?

Airbnb as intermediary in civil law? News from the Low Lands

Dear readers, 

it is not too late to report on a recent development in Dutch consumer law whose features make it likely relevant beyond local borders. 

On 9 March, just before the country transitioned to "intelligent lockdown" because of Corona, the Amsterdam district court gave a very consumer-friendly judgment in a case between a Dutch holiday maker and accommodation platform Airbnb. 

The basis for the case is a rule in Dutch law according to which real estate intermediaries cannot charge both the owner and the tenant for their intermediation services. The Amsterdam court agreed with the claimant that this rule should also apply to Airbnb, ordering the company to refund the fee unduly paid by the consumer. 

The Court rejected a number of counter arguments raised by Airbnb, ranging from the non-applicability of Dutch law under the platform's T&Cs to the scope of the Dutch rule - which originally was intended for residential leases - to, importantly, the qualification of Airbnb itself as intermediary. 

Readers of this blog may remember that Airbnb brought the French attempt to treat it as a real estate intermediary, which would result in it being subject to licensing requirements, before the CJEU, obtaining a victory against French regulators. The Dutch case at hand poses the interesting question whether the CJEU's ruling would stand in the way of considering Airbnb an intermediary for civil purposes only. A perfunctory look at the Information Society Directive (2000/31 EC) suggests the Dutch rule can be defended as being outside the scope of the harmonisation brought about by the Directive, which does not intend to harmonise rules of contract law other than the ones standing in the way of online contracting as such. 

Meanwhile, the first specialised service has emerged, offering consumers to automatise their claims for redress of Airbnb fees. The possibility of redress is open to consumers who have booked after mid-2016. 

Airbnb hosts can (and should) be regulated locally, AG says

Earlier this month Advocate General Bobek delivered his opinion in joined cases C-724/18 and C-727/18 Cali Apartments. The cases involve two Parisian hosts who were sanctioned for letting their apartments via Airbnb without an authorisation required under national and municipal law. Unlike in the previous cases on the so-called platform economy (see, in particular:  Airbnb scores a victory before the Court of Justice), the questions referred did not revolve around the role of the platform operator. Rather, the Court was asked to define the limits of the freedom to provide services by the peer providers.

Background of the case

Under applicable French law letting apartments for short periods to a transient clientele is only allowed if a number of conditions are fulfilled. Firstly, it is necessary to declare this fact to the mayor of the relevant municipality. Secondly, and most importantly to the dispute, in municipalities with more than 200 000 inhabitants, change of use of residential premises is additionally subject to a prior authorisation. Detailed conditions for obtaining the authorisation are set out at the local level and may include offset requirements in the form of the concurrent conversion of non-residential premises into housing. The appellants, who were sanctioned for letting their Parisian properties to tourists without necessary authorisations, argued that requirements imposed under French law were contrary to Directive 2006/123/EC on services.

Opinion of AG Bobek

The Advocate General considered the answer to the first two questions asked by the referring court to be fairly straightforward. In his view, Services Directive does apply to the activities and rules in question and the national/municipal framework at issue should be qualified as an 'authorisation scheme' under Articles 9 to 13 of Services Directive. While the reasoning in this respect is rather convincing (note especially reference to Visser), it is hard to overlook a similarilty with another recent case, in which AG Bobek gave an opinion: C-393/17 Kirschstein. There as well, the AG argued for a broad reading of the act's scope - in that case Directive 2005/29/EC on unfair commercial practices - and centered his analysis on the substance of the act. As we reported on this blog, however, the Court did not share this opinion and considered the applicability question to be decisive (see: CJEU in Kirschstein...).

Having established the applicability of Service Directive to the Cali case, the AG moved to assessing the compatibility of the relevant authorisation scheme with Services Directive. Here, a distinction was made between the benchmark for evaluating the need for establishing such a scheme in the first place and more specific conditions of such a scheme. Following the opinion, the former should comply with Article 9 of Services Directive, while the more extensive list of Article 10 is relevant for the latter. Crucially, both provisions contain a common core, requiring the applicable measures to be non-discriminatory, justified by an overriding reason relating to the public interest and proportionate to the objective pursued.

As regards the public interest objective, para. 97 of the opinion lists the different reasons put forward by participants to the proceedings: combating a housing shortage; offering affordable and sufficient housing; social housing policy; the protection of the urban environment; resisting pressures on land; the protection of consumers; the efficiency of tax inspections; fair trading; and the protection of the recipients of housing services. The relevant French authorities focused, in particular, on considerations of housing shortage and protection of urban environment, both of which the AG  accepted without hesitation. Other reasons, including the more consumer-oriented ones, thus remained on the sidelines of the analysis, even if their role in other context has not been discounted.

As regards the remaining questions, the AG took the view that establishment of the authorisation scheme at issue can be seen proportionate under Article 9(1) of the Services Directive, but questioned the proportionality and the non-discriminatory nature of its specific requirements under Article 10(2). According to the AG,  offsetting required by the City of Paris can in many instances actually defeat the purpose of asking for an authorisation in the first place (para. 127). This is especially the case for 'non-professional owners' of an extra flat in which they personally do not reside. Hence, the analysed offsetting requirement eventually reserves the access to market for short-term accommodation rental only for the big players, who would typically be legal persons or property developers. Having said that, the AG made clear that offsetting requirements need not always be contrary to EU law. Proportionality of such requirements could potentially be achieved by limiting them to premises above a certain size or to owners with more residential properties. A system of temporary authorisations not subject to offset, which would be periodically reviewed and potentially redistributed, could be another option to consider (para. 134).

Concluding thought

Two elements transpiring from the AG's proportinality analysis are additionally worth highlighting: the role of evidence-based assessment and of local diversity. According to the AG, the conclusion on both Article 9 and 10 requires that account is taken of "specific data" concerning the housing market in the cities where an authorisation scheme is envisaged. Such evidence, collected at the local level, is needed to assess whether the scheme does not go beyond what is necessary to achieve the objectives pursued (paras. 112, 121). The opinion concludes with a thought, towards which - as the AG notes - the Commission showed some "intellectual unease" during the hearing: that local diversity as to the specific authorisation conditions is not only permissible; it is even desirable (para. 136). While this finding might be true for limitations justified by the reasons related to housing shortage and urban environment, this is not necessarily the case for ones related to consumer protection.

* 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.

Airbnb scores a victory before the Court of Justice

Earlier today the Court of Justice delivered a judgment in case C-390/18 Airbnb Irelend. The ruling largely follows the earlier opinion of Advocate General Szpunar, on which we reported in a previous post. Similarly to the widely discussed judgment in Uber Spain and Uber France, the commented case concerned the applicability of E-Commerce Directive to services provided by operators of the so-called collaborative platforms. In the judgment issued today the Court drew upon the criteria developed in Uber, yet the factual context in the case at hand ultimately led it to a very different conclusion. Most importantly, following the judgment, services such as those provided by Airbnb do fall within the scope of Directive 2000/31/EC on electronic commerce. Consequently, free movement of such services from other Member States can only be restricted under national law if substantive and procedural conditions laid down in that Directive are fulfilled. While the judgment, of course, comes in the context of preliminary ruling procedure, the interpretation provided by the Court is clearly favourable to the platform provider - at least with respect to its core market segment (and not eg Airbnb Plus). 

Facts of the case 

The case focused on the activities of Airbnb Ireland, a company established in Dublin under Irish law, offering an electronic platform which allows hosts with accommodation to rent and prospective guests to establish contact with one another. The company also offers host and guests a number of additional services, such as a format for setting out the content of an offer, photography services, civil liability insurance, a guarantee against damages, an optional tool for estimating the rental price and a reputational feedback system. The monetization occurs primarily via commission, collected from guests by Airbnb Payments UK Ltd along with other charges.

The business model of Airbnb has met with criticism of the incumbent players in the travel sector. In the present context, the Association for professional tourism and accommodation in France (AHTOP) argued that activities of Airbnb violated the applicable national rules regulating certain transactions concerning real property and financial goodwill (Hoguet Law). Pursuant to this law, mediation and management of buildings and businesses could only be undertaken after having obtained a professional licence. Airbnb did not have the relevant license, but contested the AHTOP’s claims, arguing that the Hoguet Law was in any case not enforceable against it, as it did not comply with requirements set out in Article 3(4) of the E-Commerce Directive. 

Judgment of the Court 

Qualification of services provided by Airbnb 

The judgment issued today appears to be a big win for Airbnb. Most importantly, according to the Court, its business model is to be distinguished from activities of Uber, which were qualified not as information society services, but rather as services in the field of transport. Importantly, in reaching that conclusion the Court did not distance itself from the Uber judgments. On the contrary, the test to be undertaken in order to establish whether an intermediation service, which prima facie qualifies as an information society service, forms an integral part of an overall service whose main component is a service of a different kind (transport service, accommodation service), has also been applied in the present case. In this regard, particular attention is to be paid to the ‘market maker’ and ‘decisive influence’ criteria. According to the Court, neither of these criteria has been fulfilled with respect to Airbnb.

In Airbnb Ireland, the Court found that the essential feature of the analysed platform was the creation of a list of offers for the benefit of hosts and guests. Services of this kind, provided by the operator, were not considered indispensable to the provision of accommodation services. The Court further found that Airbnb did not exercise decisive influence over the conditions under which accommodation services were provided, in particular it did not determine (directly or indirectly) the rental price charged. Also the provision of ancillary services did not call into question the separate nature of the intermediation service provided by that company and therefore its classification as an ‘information society service’. Consequently, services provided by Airbnb assessed in the present judgment qualified as ‘information society services’ and could benefit from the liberalisation framework laid down in the E-Commerce Directive. 

Unenforceability of free movement restrictions 

In the second part of the judgment the Court analysed whether an individual, such as Airbnb, may oppose the application to him or her of measures of a Member State restricting the freedom to provide an information society service which that individual provides from another Member State, where those measures do not satisfy all the conditions laid down in Article 3(4) of Directive 2000/31. Also in this regard, the Court responded in the affirmative, finding that free movement restrictions which, among others, have not been duty notified to the Commission are to be considered unenforceable against the provider in question. A similar conclusion had previously been reached by the Court with respect to the notification of technical rules under Directive 2015/1535. This line of case law is now explicitly extended to the E-Commerce Directive.

The conclusion reached by the Court in the commented part of the judgment was supported by a number of arguments. Firstly, the notification requirement set out in Article 3(4)(b) of Directive 2000/31 was considered to be sufficiently clear, precise and unconditional to confer on it direct effect and, therefore, it may be invoked by individuals before the national courts. What is more, despite certain differences between Directives 2015/1535 and 2000/31, in both cases the notification obligation was characterised not as a mere requirement to provide information, but rather an essential procedural requirement, which in turn justified the unenforceability of non-notified measures restricting the freedom to provide an information society service against individuals. Importantly, the fact that contested national law predated the entry into force of Directive 2000/31 had no bearing on this assessment. 

Concluding thought 

The commented judgment is another major building block to the EU legal framework in the so-called collaborative economy. The Court attempts to draw a line between particular business models of platform operators, following the previously developed ‘market maker’ and ‘decisive influence’ criteria. In the case at hand the effects of that reasoning have been clearly favourable to the platform provider. Accordingly, Member States’ freedom to regulate services of this kind, provided from other Member States, is limited by substantive and procedural conditions laid down in Article 3(4) of the E-Commerce Directive. This, however, does not mean that no independent national regulation of services like the ones provided by Airbnb is possible. One can well imagine national rules, which fulfil both sets of criteria, including the substantive ones related to consumer protection. Whether or not Member States will further attempt to regulate services provided by collaborative platforms – or particular components thereof, like rating or insurance – is still an open question. Further regulatory tendencies in that direction may ultimately strengthen a case for a targeted harmonisation at the EU level.

* 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.

Unlike Uber, Airbnb provides information society services, AG says

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:

• 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.

In the news

Some of the interesting reads we found in the news from last week:

Five misleading pricing tactics to avoid in sales (V. Crowe in Which?) - warns which pricing offers may be misleading considering the rulings of the UK's Advertising Standards Agency from last year

How Airbnb's Tech Is Impacting People's Fundamental Human Rights (L. Coulman in Forbes) - more specifically the right to housing

Blue Planet has "huge impact" on shopper behaviour, finds report (L. Wells in Talking Retail) - Waitrose study shows more sustainable behaviour patterns of consumers and what impacts them

Airbnb to unroll the transparency carpet for its users

Whilst the Court of Justice was keeping us busy this month, it is worth it to mention that Airbnb finally committed to adjusting its T&Cs in accordance with EU law (Airbnb commits to complying with European Commission and EU consumer authorities' demands). This follows the earlier action of the CPC Network and of the Commission against Airbnb that we reported on previously (EU Commission cracks down on Airbnb to comply with EU consumer protection). Apparently, they will change its policies by the end of this year ensuring, among other things, price transparency. This should follow from Airbnb presenting consumers with the total price of bookings, including extra fees (cleaning charges e.g.) or warning them explicitly that extra fees may apply, when it is impossible to calculate these in advance. Other terms that shall be amended refer to clearly informing consumers about the remedies available to them both against hosts and Airbnb, and that they may sue Airbnb in courts of their country of residence. In case of a contract's termination or Airbnb removing content from its website, they will inform consumers about this and allow them to appeal this decision as well as claim appropriate compensation.

 

An interesting commitment is for Airbnb to clearly identify whether the accommodation is offered by a consumer or a professional party. Considering that different rules apply in B2C and B2B cases, it is important for consumers to know who their counterpart is. However, it may not always be easy to determine the professional character of the host, as this will depend on the applicable national laws, as well as transparency in dealings between the server and the hosts. It will be interesting to observe what solutions Airbnb adopts in this respect. Whether e.g. they will rely on the self-declared private/professional party character of the host. 

 

If any of our readers are hosts with Airbnb, we would appreciate being informed about any notifications you may receive in the coming months as to the changes in the new policies and new obligations placed on you.

EU Commission cracks down on Airbnb to comply with EU consumer protection

On 16th July, the EU Commission published a press release calling on Airbnb to comply with EU consumer law, especially with regard to price transparency.

Airbnb's innovative sharing economy model has been very successful and has won a large part of the short term rental market; yet, that has not been without its share of controversy.

The press release focuses on the following issues:

1) Price transparency

The EU Commission points out that current Airbnb practices contravene the Unfair Commercial Practices Directive. More specifically, Airbnb should clarify on its platform whether the renter is a private person or a professional. As more and more traditional businesses, such as hotels, apartments and bed and breakfasts, are listed on Airbnb, consumers must be aware in a clear manner as to whether they are renting from a professional. If they do rent from a professional, the increased protection of EU consumer law applies.

Furthermore, Airbnb should present the total price for a rental on the initial search of the consumer, as at the moment, obligatory charges such as cleaning and service are added on in later steps, thus making it more difficult for consumers to compare offers.

2) Clarification or removal of unfair contract terms 

The terms and conditions of Airbnb should be amended in order not to create a significant imbalance between the parties. Also, the terms should be more transparent, presented in a clear and intelligible language in order to allow consumers to be better informed. However, even if the terms are presented in a more transparent manner, as they should, it does not ensure that consumers will be more likely to actually read them.

Some of the problematic terms highlighted in the press release include:

• that the company should not mislead consumers by going to a court in a country different from the one in their Member State of residence;
• Airbnb cannot decide unilaterally and without justification which terms may remain in effect in case of termination of a contract;
• Airbnb cannot deprive consumers from their basic legal rights to sue a host in case of personal harm or other damages;
• Airbnb cannot unilaterally change the terms and conditions without clearly informing consumers in advance and without giving them the possibility to cancel the contract.

Finally, in terms of redress, Airbnb should comply with art. 14(1) of  Regulation 524/2013 (the ODR Regulation) to display the link to the ODR platform. However, traders are not obliged to participate in the ODR platform scheme.

Now the ball is in the court of Airbnb, who has a deadline until the end of August to submit solutions to the Commission on how they intend to comply with EU consumer law. These suggestions will be discussed in a meeting between the Commission and the national authorities in September, and should they be found to be unsatisfactory, national authorities will use their enforcement powers.

It will be interesting to see how this story develops and whether this is the start of a new more consumer-friendly sharing economy.