Market Access in the Collaborative Economy – by Vassilis Hatzopoulos

The problem

The collaborative or peer-to-peer economy has this very characteristic which distinguishes it from traditional economy: it allows for transactions between peers. This in turn, raises the question of whether such ‘prosumers’ need be authorized for the activities in question and, more fundamentally, whether the platforms themselves should also do so. Τhe question of ‘market access’ in the collaborative economy is being put in different terms for collaborative platforms and for prosumers, depending on whether they are/are not established in some EU member State.

Market access for platforms

The question brought to the Court in Uber Spain[1] specifically concerned the conditions under which Uber may lawfully exercise its activity in Spain. Indeed, this is a core issue for all platforms as the E-commerce Directive [2] could be offering privileged access both in the home and in the host Member States.

The E-commerce Directive

Platforms coming within its scope need no prior authorization in their home State (Article 4(1)) and benefit from the ‘internal market clause’ (Article 3(2)), according to which all other (host) Member States are precluded from raising any obstacles. The E-commerce Directive is lex specialis in relation to the Services Directive and other horizontal EU rules, such as eg Directive 2005/36 on the professional qualifications,[3] and only applies to information society services, ie ‘any service normally provided for remuneration, at a distance, by electronic means and at the individual request of a recipient of services’.[4] Going back to the scenarios discussed in our previous post, platforms could claim market access under the E-commerce Directive under scenario a) and scenario c), ie in the cases where they only act as e-intermediaries and have no involvement in the provision of the underlying service. On the other hand, as soon as a platform is found to be directly involved in the provision of the underlying service, it would cease being a provider of digital services and would qualify as an ‘offline’ service provider, thus ‘losing’ the privileged status of the E-commerce Directive. This is clearly the case of Uber according to the Court.

The Services Directive

‘Plan b’ for any platform which needs to get authorized for the underlying activity is to try to bring its case under the Services Directive. Thus, it would benefit from a liberal and transparent framework for the delivery of authorizations (Articles 9-15), and from enhanced trans-border provision of such services (Article 16). That is, of course, provided the activity in question does not fall in one of the numerous exclusions and exceptions of the Directive. The question of the precise scope of the Services Directive is an oft-discussed one and need not be replicated here. It needs to be noted, however, that the Court itself has not been always coherent, as on the one hand it has considerably restricted the scope of the healthcare and social services exception,[6] while it has interpreted the transport exception to cover hot air balloon rides[7] but excluding short cruises in the canals of Amsterdam.[8] In Grupo Itevelesa,[9] quoted by the Court in Uber Spain, the Court held that the activity of technical control of vehicles, although not a transportation service in itself, comes within the Directive’s exception covering the larger category of ‘services in the field of transport’. Hence, in a more general way, it may be that ancillary activities offered by collaborative platforms to facilitate the provision of the underlying services, such as logistical support etc, transforms platforms themselves into providers of the underlying services and, hence, subjects them to the relevant, stricter, rules.

Primary EU Law

‘Plan c’, for platforms which do not come within the scope of the Services Directive, is to claim all the substantial rights recognized by the Court as directly stemming from Articles 56 and 57 TFEU. At the procedural level, those platforms and/or suppliers who do not come under the Services Directive may claim the application of the principle of transparency and non-discrimination developed by the Court these last years – a case law which, as explained elsewhere, may be source of important safeguards and (even) rights.[11]

No EU law at all

In the rare occasions where the services offered by the platform and/or the underlying service providers are not covered by any rule of EU law, then the providers remain subject to the divergent regulations of the various Member States and have no euro-claim to raise. To the dismay of Uber and Uber-like platforms, urban transportation services fall within this latter category.

A further question, in relation to the very applicability of EU rules, looms in relation to genuine ‘sharing’ platforms, such as house-swapping where no remuneration is involved (eg HouseSwapping), ride-sharing where the passenger only pays a fraction of the petrol consumed (eg BlaBlaCar) and other similar activities, where not only there is no apparent remuneration but, moreover, the intent of engaging in any economic activity at all seems to be lacking.

Market access for prosumers

The suppliers of the underlying service may be professionals or prosumers. In the former case, all the developments concerning platforms, above, also apply to them. With the proviso that the E-commerce Directive will only be available to them if the underlying service is provided at a distance, by electronic means, at the request of the recipient: while underlying services requiring physical contact won’t fulfill the above requirements, services such as coding, designing, translating and editing could still be brought under the E-commerce Directive.

The legal situation is more delicate in relation to non-professional service providers, or else prosumers. The question when/how a prosumer is transformed into a professional will be discussed in our next post, concerning consumer protection and the qualification of ‘traders’. At present, it need be noted that prosumers who are not ‘traders’ are still likely to qualify as service providers under Articles 56 and 57 TFEU and the Services Directive, unless they are only occasionally involved in some non-economic, social or communitarian activity. A further question is whether the fact that they are able to claim market access under the above rules also means that they should be fully subject to the corresponding obligations? In other words, should the extensive disclosure obligations contained in (Article 22 of) the Services Directive, the rules on professional liability (Article 23), or the rules on registration contained in (Article 7 of) Directive 2005/36, fully apply to the occasional, or even one off, prosumer engaged in a collaborative activity? More fundamentally, should the occasional or one-off service provider, be subject to any authorization requirement at all? Are the above requirements, even if in principle justified, not likely to fail the proportionality test developed by the Court, codified in the Services Directive and further developed in the draft directive on proportionality?[12]

It is worth noting that the idea of having lighter standards for operators in the collaborative economy has been muted by several parties, not only in relation to the suppliers, but also in relation to the platforms themselves. Hence, for instance, the Italian Competition Authority in a position paper published in September 2015 in relation to the review of the competition legislation, suggested that Uber and its drivers should be seen as a tertius genus (in relation to traditional taxis and to chauffeured cars), and be subject to a regulation ‘as light as possible’.[13]

Market access under the GATS

All the above rules and principles concern collaborative platforms and service suppliers who have some kind of establishment in the EU. The vast majority of collaborative actors, however, are based in the US and, to a lesser extent, Asia. Unless some other free trade agreement (such as the CETA between the EU and Canada) is entered into force, these actors have to claim market access under Article XVI of the GATS. In this effort, they are faced with a formidable legal riddle.

Under the GATS there are four modes of service delivery: transborder provision of services, where only the service crosses the border; consumption abroad, where only the recipient moves; establishment of foreign companies and their subsidiaries; and provisional posting of service providers. For each one of these four modes, GATS signatories have scheduled liberalisation commitments on the basis of a detailed classification of services inspired by the Common Product Classification (CPC) comprising twelve main categories, over 60 sub-categories and few hundreds sub-sub categories of services. On each one of those, signatory States have offered different levels of engagements concerning Market Access (GATS Article XVI) and National Treatment (GATS Article XVII). In view of the fact that States have offered different engagements for the different modes and the different categories/sub-categories of services, the collaborative platform, for each of the services it offers, may be subject to different access conditions. These, multiplied by the number of service categories and the uncertainties connected to the scheduling of commitments under the GATS, make market access of foreign collaborative platforms precarious, to say the least. Hence the interest for collaborative platforms to be established in the EU – and the correlative regulatory competition and fiscal war between i.a. Ireland (seat i.a. of AirBnB) and the Netherlands (seat i.a. of Uber), to attract such platforms.

[1] C-434/15, Asociacion Profesional Elite Taxi v Uber Systems Spain, SL, EU:C:2017:981.

[2] European Parliament and Council Directive 2000/31/EC of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (Directive on electronic commerce) [2000] OJ L 178/1.

[3] European Parliament and Council Directive 2005/36/EC on the recognition of professional qualifications [2005] OJ L 255/22.

[4] Article 2(a) of the Directive refers to the definition given in the ‘notification’ Directive 98/34/EC, nowadays replaced by Directive 2015/1535/EU [2015] OJ L241/1.

[5] V. Hatzopoulos, ‘Assessing the Services Directive’ in C. Barnard (ed.), Cambridge Yearbook of European Law 2007-2008, Vol 10 (Oxford and Portland, Oregon, Hart Publishing, 2008).

[6] Case C-57/12, Fédération des maisons de repos privées de Belgique (Femarbel) ASBL v Commission communautaire commune de Brussels-Capitale, EU:2013:517.

[7] Case C-382/08, Neukirchinger, EU:C:2011:27.

[8] Joined Cases C-340/14 and C-341/14, Trijber, EU:C:2015:641.

[9] Case C-168/14, Grupo Itevelesa and Others, EU:C:2015:685, paras 48-50.

[10] See V. Hatzopoulos, ‘The allocation of limited authorisations under EU internal market rules’ in P. Adriaanse, F. van Ommeren, W. den Ouden (eds) Scarcity and the State I: The Allocation of Limited Rights by the AdministrationCambridge, Intersentia (2016) 163-186.

[11] See in particular joined Cases C-72/10 and C-77/10, Costa and Cifone, EU:C:2011: 699.

[12] COM(2016)822.

[13] For a discussion of this document and other developments under Italian law see A de Franceschi, ‘The Adequacy of Italian Law for the Platform Economy’ (2016) 5 EuCML 56.

Next week: consumer protection and the notion of « professional ».

ΧΑΤΖΟΠΟΥΛΟΣ ΒΑΣΙΛΗΣ

Vassilis HATZOPOULOS is full Professor of EU Law and Policies at the Panteion University, Athens (Greece), visiting Professor at the College of Europe, Bruges (Belgium), honourary Asst. Professor at the University of Nottingham (UK), Attorney at law – member of the Athens Bar. A leading expert in EU law, he notably wrote the first reference book on collaborative economy, The Collaborative Economy and EU Law, Oxford, Hart, 2018

 

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