Regulation of digital platforms
Recently there has been increased focus on regulation of digital platforms such as Airbnb and Uber. Whether there is a possibility of placing these new business models into existing legal categories or whether a new regulatory framework should be created specifically for these activities remains to be seen. The opinion of the Advocate General of the CJEU in this case may have implications as what sort of regulation can be placed on these platforms.
Background to the case
In January of 2017, a complaint was lodged in the French courts by the French hotel association (“AHTOP”) alleging that the short term services provided in France by Airbnb Ireland, operated from Ireland, were contrary to French national law – Hoguet Law2 which governs the activities of real estate agents in France. A criminal action was taken against Airbnb Ireland for these alleged violations.
Airbnb Ireland contends that its activities do not qualify as real estate activities; instead, it asserts that the E-Commerce Directive3 is applicable to its services, and as such, the Hoguet Law does not apply.
AHTOP argue that the commercial activities of Airbnb Ireland do not fall within the E-Commerce Directive as additional services, characteristic of carrying on a real estate business, are provided.
Preliminary reference to the CJEU
In considering the case, two questions were referred from the French court to the CJEU:
- Do the services provided in France by the company Airbnb Ireland UC, operating from Ireland, benefit from the freedom to provide services contemplated in Article 3 of the E-Commerce Directive? ; and
- Are the restrictive rules relating to the exercise of the profession of real estate agent in France, laid down by Law No 70-9 of 2 January 1970 on intermediaries in real-estate transactions (‘the Hoguet Law’), enforceable against Airbnb Ireland UC?
Advocate General’s Opinion
The Advocate General, Maciej Szupunar, delivered his opinion on 30 April, finding that the services carried out by Airbnb Ireland do fall within the scope of the E-Commerce Directive and therefore should benefit from the freedom for the provision of services granted pursuant to European Union law. In addition, the Advocate General is of the opinion that the services provided cannot, at this stage, be subject to the requirements of Hoguet’s Law.
Should the service provided by Airbnb Ireland be regarded as an information society service?
The Advocate General has said that a service consisting of connecting potential guests with hosts offering short-term accommodation, via an electronic portal, in a situation in which the provider of that service does not exercise control over the essential procedures for the provision of those services, constitutes an information society service.
Are the Hoguet Laws applicable and enforceable against Airbnb Ireland?
As the Airbnb Ireland services fall within the scope of the E-Commerce Directive, it follows that any restriction of the free movement of information society services imposed pursuant to national law will be enforceable only if it satisfies the substantive and procedural conditions laid down by the directive.
Essentially, France may derogate from the E-Commerce Directive and enforce the requirements of the Hoguet Law only if, having regard to all the factors brought to its attention, the national court is satisfied that these measures are necessary and proportionate to protect consumers.
Further, as a matter or procedure, if France intend to adopt measures to restrict the free movement of information society services, the Commission should be notified and Ireland asked to take measures in respect of information society services.
There is no indication that either of these steps have been taken and so, the Advocate General is of the view that failure by France to make any of the necessary notifications will deem any such measures against Airbnb Ireland unenforceable.
The Advocate General opinion is indicative only and (often followed) is not binding on the EU Court of Justice. The Court of Justice will hand down its judgment in due course.
For further information, please contact any member of the William Fry Technology Group or your usual William Fry contact.
1 YA and AIRBNB IRELAND UC v Hotelière Turenne SAS, Pour un hébergement et tourisme professionnel (AHTOP), Valhotel Case C-390/18
2 Specifically, it is alleged that Airbnb Ireland are in breach of Articles 3 (requirement to have an official card from the chamber of industry and commerce) & Article 5 (requirement to keep a register of payment received from clients).
3 Directive 200/31/EC, specifically Article (3), which protects free movement of information society services.
Contributed by: David Cullen & Nicole Fitzpatrick