E-Commerce Directive : Airbnb Court decision

The CJUE concluded in the referenced case that:

1. 1)    The services provided by Airbnb, qualify as ‘information society services’ under Directive 2000/31/CE.

Information society services are defined in Directive 2000/31 by reference to Art 1(1)b of Directive (EU) 2015/1535 as follows:

“‘service’ means any Information Society service, that is to say, any service normally provided for remuneration, at a distance, by electronic means and at the individual request of a recipient of services.

For the purposes of this definition:

1. (i)    ‘at a distance’ means that the service is provided without the parties being simultaneously present;
2. (ii)    ‘by electronic means’ means that the service is sent initially and received at its destination by means of electronic equipment for the processing (including digital compression) and storage of data, and entirely transmitted, conveyed and received by wire, by radio, by optical means or by other electromagnetic means;
3. (iii)    ‘at the individual request of a recipient of services’ means that the service is provided through the transmission of data on individual request.”

A service fulfilling those four cumulative conditions falls, in principle, within the scope of  Directive 2000/31 except if said service forms an integral part of another service which, taken together, would be qualified differently. This exception stems from the Asociación Profesional Elite Taxi, C-434/15 Case.

In the Uber France Case, C-320/16, the Court found that Uber exercised such tight control over the transportation services that it could not qualify as providing Information society services.

Throughout the cited cases, the court has given guidance on how to distinguish between services subject to Directive 2000/31 and services subject to sector specific legislation. The line is drawn by a factual analysis of the amount of control exercised by the platform and the freedom left to its users when determining the conditions for their services. An essential factor is the ability for the users to set their own prices.

Airbnb offers, besides its intermediation service, a number of ancillary services such as a guarantee against damage, civil liability insurance, pricing analysis of similar objects in the same area, optional photography services, a rating system, payment collection, etc.

Therefore, the court had to analyse whether or not the intermediation service was an integral part of an accommodation service. 

In fact, both guests and hosts have a plethora of other options to connect without Airbnb’s intermediation service and, most importantly, hosts are free to set the rent as they please.

The court thus concluded that “an intermediation service which, by means of an electronic platform, is intended to connect, for remuneration, potential guests with professional or non-professional hosts offering short-term accommodation, while also providing a certain number of services ancillary to that intermediation service, must be classified as an ‘information society service’ under Directive 2000/31”.

1. 2)    Measures limiting the freedom to provide information society services are unenforceable if they do not fulfil all of the conditions laid out in Directive 2000/31.

Article 3 of Directive 2000/31 provides for the freedom to provide information society services and it also sets out the conditions for restrictive measures. Notably, any restrictive measure must be notified to the European Commission and to the country of the registered office of the concerned company. Restrictive measures predating the Directive 2000/31 must also be notified.

The obligation under Art 3(4)(b) setting out the obligation to notify is clear, precise and unconditional and can therefore be directly applied in National Courts. 

The French law called the “Hoguet Law”, prohibits the provision of certain real estate related services without a professional licence, violations are criminally sanctioned. It predates Directive 2000/31 and neither the European Commission or Ireland, had been notified of its existence.

As such, the restrictions stemming from the Hoguet Law do not comply with the conditions as set out in Directive 2000/31 and are therefore unenforceable.

In the present case, Airbnb was sued for not having a professional licence as provided for under the Hoguet Law. Airbnb argued that the Hoguet law was not applicable, as it was not notified of its existence as required by Directive 2000/31.

The court concurred and concluded that “an individual 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 were not notified in accordance with that provision.”