Air-brb: Airbnb resumes services in France, as ECJ say it’s not to be regulated like an estate agent

February 5, 2020

4 min read

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What's going on here?

Airbnb has avoided French regulations applicable to estate agents by successfully arguing before the European Court of Justice (ECJ) that it is merely an “information society service” (ISS).

What does this mean?

Under EU law, France has a duty to not restrict the freedom of a company situated in one Member State (MS) to provide an ISS in another MS (Art 3(2) Directive 2000/31). An ISS is basically defined as an electronic platform that merely transmits or supplies info, like Google’s search tool or eBay’s online marketplace.

The French law in question required companies that assist in property transactions, such as estate agents, to hold a professional licence. A French tourism group argued that Airbnb Ireland breached this law, as it was offering its electronic platform in France without a licence. The ECJ, however, held that Airbnb Ireland was an ISS, so the French law was unenforceable. The license requirement restricted Airbnb’s freedom to provide its service in France, which breached the Directive.

What's the big picture effect?

This is a win for the EU’s “gig economy”, as any laws which restrict a service provider’s activities in another MS is now more likely to be challenged. The success of a challenge under Directive 2000/31 will depend on whether a company is an ISS, i.e. a provider that merely provides info, rather than being an intrinsic part of an actual service; if it is an ISS, any restriction will be unenforceable.

In their reasoning, the ECJ distinguished between whether Airbnb’s platform – basically it’s app and website – is part and parcel of what is essentially an accommodation service (not an ISS), or whether it’s merely acting as a facilitator or middleman for transactions between users and hosts (is an ISS). The ECJ decided that Airbnb’s platform was not integral to its end service but separate, hence it was an ISS. Firstly, the service was not “inherently linked” to accommodation offers, as it primarily just listed accommodation, and ultimately hosts could advertise elsewhere. Secondly, it did not “decisively influence” the conditions of its accommodation services. Hosts had control over their rental price, and users had control over which host they selected. In summary, Airbnb was a broad platform of potential accommodation, rather than an ancillary tool to book a specific type of home rental; basically, it was more like Gumtree than an estate agent.

This distinction is more easily seen when comparing Airbnb to Uber. The ECJ twice said Uber is not an ISS, with respect to its services in Spain (APET v Uber, Case C-434/15) and in France (Uber France v Nabil Bensalem, Case C-329/16). Instead, Uber was classed as a transport services company. The distinction is fine because Uber is similar, in many ways, to Airbnb. Both offer a search tool to find hosts or drivers, and a structured platform to advertise properties or drivers; both collect payments from users before releasing part of it to the host or driver. To an extent, both apps are linked to and have control over their end service. However, unlike Airbnb, the ECJ considered Uber’s app “necessary” for its transport services to be used and provided, so it was “inherently linked” to it; for example, Uber itself, rather than users, selects the driver. Also, unlike Airbnb, Uber not only collects payments, but determines maximum fares, which shows it has a “decisive influence” over the conditions of its transport services.

In truth, only a few factors differentiate Uber from Airbnb, and even these are debatable; for example, to say the app is necessary is to say that drivers cannot advertise their transport services elsewhere – but arguably they can, just not as “Ubers”. Despite the wide crossovers, the position of other “gig economy” companies are easier to identify. Take JustEat’s app: it lists restaurants and takes payments, but doesn’t set price thresholds for food, and restaurants can simultaneously advertise on other apps like Deliveroo. So it’s likely to be classed as an ISS, rather than a takeaway service provider.

Bear in mind, though, that Brexit means UK companies providing services in the EU, and vice versa, will not get this protection from the Directive. The UK is likely to maintain this protection in statute, but private parties will have no recourse to the EC for enforcement, or to the ECJ for interpretation, as no EU law will be applicable.

It will be interesting to see whether other “gig economy” platforms will gain ISS status, and whether any changes to the platforms of Airbnb or Uber will change their ISS status and hence protection – or lack of it – under this Directive.

Report written by Arun Allen

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