AirBnB provides an Information Society Service, says Advocate General

AirBnB should benefit from the 'country of origin' protection under the eCommerce Directive.

What's the issue?

There has been significant debate as to how to classify services provided via electronic platforms. Uber, by way of example, was found by the CJEU to be providing transport services which were inextricably linked to its intermediation service and to be excluded from the 'country of origin' principle under the eCommerce Directive.

The eCommerce Directive provides "Information Society Service providers" (ISSs) with certain protections, including that they benefit from the 'country of origin principle'. Where this applies they should only be subject to local Member State laws in the country in which they are established.

This protects the freedom of ISSs to provide services across the EEA as they will not be subject to national restrictions in each Member State in which they operate (although there are a number of exceptions).

A service will be an ISS if:

• it is normally provided for remuneration
• at a distance
• by electronic means
• at the individual request of a recipient of services.

What's the development?

The Advocate General has considered this issue again in relation to AirBnB, following a reference from France on the question of whether or not AirBnB should be required to obtain a professional real estate licence in France.

At first glance, AirBnB has many similarities with Uber, both being gig economy app success stories. However, the AG has set out factors in his Opinion which distinguish the service provided by AirBnB from Uber's and recommends that the CJEU find that AirBnB provides an Information Society Service and is subject to the country of origin principle.

The AG said there were two questions to address:

• Do the services provided by AirBnB in France via an electronic platform benefit from the freedom to provide services in the eCommerce Directive?
• Are the restrictive rules around being a real estate agent in France under its Hoguet law enforceable against AirBnB?

Comparing AirBnB with Uber, the AG said the key factors which prevented Uber from being an ISS were:

• The service provider offered services having a material content.
• The service provider exercised decisive influence on the conditions under which the services were supplied.

In AirBnB's case, the AG held that these two elements did not apply. While AirBnB does link to services which have a material content, the AG found these were not inextricably linked to the ISS services. The accommodation available through AirBnB can be (and often is) supplied through other means, for example, the owner's website.

In addition, AirBnB does not exercise a decisive influence on how the accommodation services are supplied, in particular, the rental charge.

While it does provide some parameter for cancellation fees, it is up to the provider of the accommodation to select the cancellation band. The accommodation providers also set out the particular rules which may apply to the rental. Although AirBnB can suspend users from the platform, this is primarily for non-compliance with standards defined or chosen by users.

The AG found that this contrasted with the services provided by Uber which sets fares, has minimum standards for vehicles and sets safety standards which, if not complied with, can result in a driver's exclusion from the app.

The AG went on to consider the scope of the eCommerce Directive and whether or not France might be able to enforce the Hoguet laws against AirBnB. Their connection with consumer protection made it possible but the AG questioned whether the laws were proportionate under these circumstances (a requirement under the Directive).

The AG recommended the CJEU find that AirBnB is an ISS and the French courts cannot enforce national laws applicable to estate agents against it unless France has complied with the relevant pre-conditions under the eCommerce Directive.

What does this mean for you?

This Opinion, and the judgment which will follow, are of interest to platforms providing services seeking to benefit from the eCommerce Directive 'country of origin' protection.

As these services are still relatively new in legal terms, it's worth understanding how classifications are made and the defining features of an ISS. The degree of control exercised over the activities of the individual service providers using the platform, is a critical factor.