Airbnb will be breathing a sigh of relief today: Europe's top court has judged it to be an online platform, which merely connects people looking for short-term accommodation, rather than a full-blown estate agent.
The ruling may make it harder for the "home sharing" platform to be forced to comply with local property regulations -- at least under current regional rules governing e-commerce platforms.
The judgement by the Court of Justice of the European Union (CJEU) today follows a complaint made by a French tourism association, AHTOP, which had argued Airbnb should hold a professional estate agent licence. And, that by not having one, the platform giant was in breach of a piece of French legislation known as the "Hoguet Law."
However, the court disagreed -- siding with Airbnb's argument that its business must be classified as an "information society service" under EU Directive 2000/31 on electronic commerce.
Commenting on the ruling in a statement, Luca Tosoni, a research fellow at the Norwegian Research Center for Computers and Law at the University of Oslo, told us: "The Court’s finding that online platforms that facilitate the provision of short-term accommodation services, such as Airbnb, qualify as providers of ‘information society services’ entails strict limitations on the ability to introduce or enforce restrictive measures on similar services by a Member State other than that in whose territory the relevant service provider is established."
"The Court’s judgment suggests that the enforcement of restrictive measures against a provider of 'information society services' may only occur on a very exceptional basis, subject to strict substantive and procedural conditions, including prior specific notification to the European Commission," he added.
It's a ruling that Uber may well look enviously at -- given, in the case of its ride-hailing platform, the CJEU reached a very different conclusion a couple of years ago, finding Uber to be a transportation service not merely a tech platform.
In the Airbnb case, the court points to differences versus the Uber ruling, noting that an online intermediation service may be classed otherwise if the intermediation service forms an integral part of an overall service whose main component is a service coming under another legal classification.
"In the present case, the Court found that an intermediation service such as that provided by Airbnb Ireland satisfied those conditions, and the nature of the links between the intermediation service and the provision of accommodation did not justify departing from the classification of that intermediation service as an ‘information society service’ and thus the application of Directive 2000/31 to that service," it writes in a press release on the judgement.
Factors which informed that judgement include that Airbnb's service is "not aimed only at providing immediate accommodation services, but rather it consists essentially of providing a tool for presenting and finding accommodation for rent, thereby facilitating the conclusion of future rental agreements"; that the platform is "in no way indispensable to the provision of accommodation services, since the guests and hosts have a number of other channels in that respect, some of which are long-standing"; and it found nothing indicate Airbnb sets or caps the amount of the rents charged by the hosts using its platform.
"[U]nlike the intermediation services at issue in the judgments in Asociación Profesional Elite Taxi and Uber France, neither that intermediation service nor the ancillary services offered by Airbnb Ireland make it possible to establish the existence of a decisive influence exercised by that company over the accommodation services to which its activity relates, with regard both to determining the rental price charged and selecting the hosts or accommodation for rent on its platform," the CJEU adds in its press release.
The court also found fault with France for failing to notify the European Commission of the licensing requirement it was placing on Airbnb.
Reached for comment on the CJEU judgement Airbnb suggested the outcome does not mean governments in Europe are unable to apply regulations to its platform -- saying that it wants to keep working with the European Commission to ensure there are fair and proportionate rules for how Member States can apply local regulations to online platforms.
“We welcome this judgment and want to move forward and continue working with cities on clear rules that put local families and communities at the heart of sustainable 21st century travel," the company said in a statement. "We want to be good partners to everyone and already we have worked with more than 500 governments and authorities to help hosts share their homes, follow the rules and pay tax."
The new European Commission has signaled it intends to upgrade safety and liability rules around online platforms -- via a forthcoming Digital Services Act, which looks set to amend the current e-commerce rules. So it's possible tighter regulations could be coming for platforms in the next few years. Hence Airbnb being keen to work with the Commission on any resetting of the rules.