Nihil novi from the CJEU in Uber France

In a judgment delivered yesterday the Court of Justice once again looked at the legal environment of Uber’s business model. Similarly to its earlier ruling (see our post CJEU gives Member States a green light to regulate Uber), the Court classified the services provided by Uber not as information society services, but rather as services in the field of transport and denied the applicability of the European framework on services liberalisation to the analysed context. 

Setting the scene

The background of Uber France was analogous to Uber Spain. Both cases referred to the UberPOP business model, i.e. the one in which the smartphone app provided by Uber Technologies Inc. is used to connect passengers with non-professional drivers (the situation is different in a yet another pending case concerning Uber Black). The differences were subtle: in Uber Spain, the case referred to the civil proceedings brought against Uber by a taxi drivers’ association based on general rules on unfair competition. By contrast, Uber France dealt with a private prosecution and a civil action brought against Uber by a specific taxi driver based on a newly introduced provision of French criminal law. On both occassions the provider of the contested smarthphone app sought to rely on EU law to protect its freedom to provide information society services across EU. Both times - in vain.

The legal dilemma in Uber France

The more specific question in the commented case was whether the aforesaid provision of French law - which 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 - constituted "technical regulation" within the meaning of Directive 98/34/EC as amended by Directive 98/48/EC (later replaced by Directive 2015/1535). Relying on such an interpretation, Uber argued that the provision could not be enforced against it because it had not been notified to the European Commission.

Indeed, Article 8(1) of Directive 98/34/EC, as amended, required Member States to immediately communicate to the Commission any draft technical regulation including any "rules on services". Article 1(5) defined a rule on services as "requirement of a general nature relating to the taking-up and pursuit of [information society] service activities ..., in particular provisions concerning the service provider, the services and the recipient of services, excluding any rules which are not specifically aimed at [information society] services". The directive did not elaborate on the consequences of a failure to notify; however, according to the settled case law of the Court, such a failure renders the adopted technical regulation inapplicable and therefore unenforceable against individuals (see paras. 35-39 of Advocate-General's opinion).

Against this background the national court decided to stay the proceedings and ask the Court of Justice for an interpretation of Directive 98/34/EC, as amended.

Judgment of the Court

The judgment in Uber France does not come as a big surprise - indeed, the Court decided to follow its earlier line of reasoning as well as the argumentation of AG Szpunar (see also our post The Uber saga continues) and refused to provide the defendant with a helpful hand. The Court, once again, focused on the classification od services provided by Uber and found them to fall outside the scope of Directive 98/34/EC, as amended, and Directive 2006/123 on services in the internal market. Consequently, to the extent the national provision applied to services of this kind, the provision itself fell outside the scope of both liberalisation directives.

In this short entry I will not argue either in favour or against the classification made by the Court - the issue is by no means black-and-white and continues to divide the academic community. Instead, I will focus on the quality of legal reasoning in Uber France, of which, I believe, one could have expected more.

Comment

The questions referred by the national court in the commented case revolve around the nuanced terminology used in Directive 98/34/EC, as amended, particulary the notion of a "rule on services". One problematic element of this term - the quality of not being "specifically aimed" at information society services - was already highlighted before. In the subsequent paragraph Article 1(5) provides for further interpretative elements, which the referring court seemed to consider relevant.

The Court of Justice, however, did not elaborate on any of these elements. It limited itself to rejecting the qualification of services provided by Uber as information society services, holding that the intermediation service provided by that company was "inherently linked" to the offer transport services and thus constituted a service in the field of transport. In doing so, it relied on two criteria: the fact that the drivers and passengers would not have been led to provide or use the transport services without the Uber app and - the criterion which I personally find more convincing - the fact that Uber exercised "decisive influence" over the conditions under which the relevant transport services were provided (para. 21). The Court went on to recall that services provided by Uber also fell outside the scope of Directive 2006/123 on services in the internal market, which does not apply to transport. Because the judgment is essentially limited to these insights it does not bring anything new beyond what we already know from Uber Spain.

The Court's self-restraint may be frustrating to the reader, who may be tempted to look for more clues that the judgment actually provides. What, in my view, does not follow from Uber France is that an existence of a business model which falls under the national provision while not qualifying as an information society service automatically disqualifies such a provision as being "specifically aimed" at information society services. Assessment of the detailed wording of Article 1(5) of Directive 98/34/EC, as amended, including references to the statement of reasons of national provisions as well as to an implicit or incidental effect of such provisions on information society services can still be relevant. But does this make any difference for the procedural situation of Uber? The judgment in Uber France does not really tell.

* 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.

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.

* 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.