New CJEU ruling on classification of Airbnb services

The Court of Justice of the European Union (CJEU) has rendered a new ruling on the classification of Airbnb Ireland UC (Airbnb) services and the rules on the application of a Member State’s restrictive measures to the freedom to provide information society services. The judgement clarifies that Airbnb services classifies as an ‘information society service’, distinct from the subsequent service to which it relates. Additionally, the ruling specifies that restrictive measures to such services shall be notified to the Commission.

Speed Read

On 19 December 2019, the CJEU delivered its preliminary ruling on Case C-390/18 (Airbnb Ireland) concerning whether the electronic hosting platform Airbnb could be required under national Member State law to hold an estate agent’s professional license. The ruling details how the services provided by Airbnb must be classified as an ‘information society service’ as provided under Directive 2000/31 (the ‘e-Commerce Directive’). Additionally, the CJEU found that a French restriction on Airbnb’s freedom to provide information society services in France should have been notified to the Commission and Ireland in accordance with the second indent of Article 3(4) (b) of the e-Commerce Directive.

Key Items

On 24 January 2017, the French Association for professional tourism and accommodation (‘AHTOP’) lodged a complaint against Airbnb claiming that the company acted as a real estate agent and thus violated the requirement of the French “Hoguet Law” to hold an estate agent’s professional license. Airbnb denied this claim by arguing that the services they provided were covered by the e-Commerce Directive as information society services, and thus that Airbnb was not required to hold a estate agent’s professional license.

In the preliminary ruling, the CJEU referred to the following questions:

• Do the services provided in France by Airbnb, via an electronic platform managed from Ireland, benefit from the freedom to provide services established in Article 3 of the e-Commerce Directive?
• Are the restrictive rules under the Hoguet Law, relating to the exercise of the profession of real estate agents in France enforceable against Airbnb?

The key items of the CJEU ruling are:

Airbnb provides an ‘information society service’:

The CJEU focuses on which conditions must be met in order to classify as an information society service under the e-Commerce Directive. In that regard the CJEU states that the four cumulative conditions as set out in Article 1(1) (b) of Directive 2015/1535 must be met.

Following the requirement that the services must comply with the cumulative conditions the CJEU established that:

• The service is provided for remuneration. The CJEU clarified that even though the remuneration received by Airbnb Payments UK is only collected from the guest and not also from the host, the service is considered to be provided for remuneration.
• The service is provided at a distance and by means of an electronic platform. The CJEU found that when concluding the contract the parties do not come into contact other than by means of the electronic hosting platform provided by Airbnb.
• The service is provided at the individual request of the recipients of the service. This means that the service is provided through the transmission of data on individual request. The CJEU found that Airbnb services involve both the placing online of an advertisement by the host and an individual request from the guest who is interested in that advertisement.

Additionally, the CJEU established that the online Airbnb services does not form an integral part of another overall service, which primarily connects to another legal classification. Thus, the CJEU ruling established that the online services on the Airbnb website are distinct from the subsequent service of the accommodation services to which it relates. Consequently, the CJEU specifies that the Airbnb service is provided when guests are using the Airbnb website and not when the guests actually enjoys the rented property.

This means that Airbnb services are classified as information society services under the e-Commerce Directive and consequently that Airbnb cannot be regarded as an estate agent.

Distinction from the Uber-cases:

The judgement distinguished itself from the Court’s rulings in the Uber-cases (C‑434/15 and C/320/16) by the applicability of the e-Commerce Directive. The CJEU pointed out that unlike the services provided by Uber, the intermediation services and ancillary services provided by Airbnb does not make it possible to establish that Airbnb has decisive influence on:

• the platform-users’ accommodation services,
• rental prices, or
• selection of hosts.

The separate nature of the intermediation service and accommodation services and the fact that Airbnb’s intermediation services in no way are indispensable to provision of accommodation services therefore resulted in an outcome differing from the Uber-cases.

France should have notified to the Commission and Ireland on restrictive measures:

Thirdly, the CJEU examined Article 3(4) of the e-Commerce Directive setting out conditions subject to which Member States are allowed to adopt measure restricting the freedom to provide information society services.

It follows from the ruling that:

• The Member State concerned must notify the Commission and the Member State on whose territory the service provider in question is established of its intention to adopt the restrictive measures concerned. This means that France should notify respectively Ireland and the Commission of its intention to adopt the restrictive measures under the Houget Law.
• The fact that the law of the Member State concerned predated the e-Commerce Directive did not free Member State concerned from its obligation to notify the Commission. This means that although the Houget Law predates the e-Commerce Directive, France would have to give notification.

The CJEU concluded that France’s failure to give notification would have direct effect and an individual could thus invoke it before national courts. The French Houget Law containing restricting measurements was consequently not enforceable against Airbnb and thus Airbnb does not have to hold an estate agent’s professional license.

Next steps

The ruling reflects a broader scope of application for the e-Commerce Directive than previously seen in the Uber-cases consequently giving platform operators extended protection against restricting measurements granted by the Directive.

However, the window for nationally imposed restrictions is not entirely closed as the Member States still have the possibility of enforcing national restricting provisions provided the conditions of Article 3(4) of the e-Commerce Directive is met including the obligation to notify the Commission.

The case will now return to the Paris high court for final adjudication.

Read the CJEU ruling here (in English) and here (in Danish).