The "country of origin" principle pursuant to the E-Commerce Directive precludes the application of French access restrictions for real estate agents.
In its recent ruling the Court of Justice of the European Union (ECJ) qualified the intermediation service offered by Airbnb Ireland as an "information society service" (C-390/18). Airbnb therefore can avail itself of the so-called "country of origin" principle according to the E-Commerce Directive (Directive 2000/31/EC).
The decision contrasts the 2017 ruling on Uber (C-434/15), where the ECJ did not qualify the intermediation service offered by Uber as "information society service" but as "transport service" instead which led to the application of national Spanish law.
The different legal assessment of the two intermediation platforms is particularly due to their ability to influence the respective service provided.
Merits and business model of Airbnb
The French Tourism Board (AHTOP) had filed a complaint against Airbnb alleging that Airbnb lacks an official license as real estate agent. Following the Uber decision AHTOP argued that the service provided by Airbnb should be regarded as an integral part of an overall service whose main component was the provision of an accommodation service and thus not as an information society service.
The ECJ assessed Airbnb's business model the other way: Airbnb offers an electronic platform intended to connect, against payment, potential guests with hosts offering short-term accommodation services. In addition, Airbnb offers further services such as format templates, photo service, liability insurance or a tool for estimating the market rent etc. Hosts and guests conclude a contract with Airbnb for the use of the electronic platform, whereas the accommodation contract is concluded directly between hosts and guests.
Judgement of ECJ
The ECJ confirmed the qualification as "information society service", i.e. a "service normally provided for remuneration, at a distance, by electronic means and at the individual request of a recipient of services".
In contrast to Uber, however, the ECJ denied the existence of a service which was only provided as integral part of an overall service and which could therefore not invoke the E-Commerce Directive. The reasons of the ECJ were:
- The intermediation service provided by Airbnb serves as a tool to facilitate the conclusion of future contracts by providing structured lists of accommodations available on the electronic platform. It is the creation of such a list that constitutes the essential feature of the electronic platform and which cannot be regarded as merely ancillary to an overall service coming under a different legal classification, namely provision of an accommodation service.
- Airbnb's intermediation service is in no way indispensable to the provision of accommodation services. Both, hosts and guests, have other means of contact to enter into an accommodation contract (e.g. real estate agents, classified advertisements in printed or electronic form or even property lettings websites).
- Airbnb has no control over the rental price; the optional tool offered provides only an estimation of the rental price, while the responsibility for setting the rent is left with the host.
- The other services offered by Airbnb (e.g., provision of photo service, format templates) are ancillary in nature and are rather considered as means of making the best use of the intermediation service.
The services provided by Airbnb Ireland are therefore not comparable to the intermediation service provided by Uber. In this respect, the ECJ stated that Uber exercised a decisive influence over the conditions under which transport services are provided (C-434/15; C-320/16). A similarly decisive influence of Airbnb Ireland on the conditions of the accommodation service could not be acknowledge by the ECJ. Airbnb does not directly or indirectly determine the rental price charged, nor does it select the hosts or the accommodation offered on the Airbnb platform.
Practical relevance of the qualification as "information society service"
Information society services are subject to the E-Commerce Directive.
The "country of origin" principle applies to providers of such services established within the EEA. According to this principle, the taking up and pursuit of the service (e.g. requirements concerning qualifications, authorization) is determined by the law of the Member State in which the service provider is established. From the point of view of the service provider, this may argue in favor of a choice of location in Member States with less restrictive market rules.
Other Member States (different from the Member State of establishment) can only take limited restrictive measures. These must be necessary to protect specific legal interests (public policy, public security, health and consumer protection), must relate to a specific information society service and must be proportionate to the protection objectives. Overall, a high hurdle. In addition, such measures must be notified in advance to the European Commission and the state of establishment (which did not happen in the subject case which is why the French access restrictions on real estate agents could not be applied to Airbnb).
Service providers established outside the EEA, on the other hand, have to accept that national law may apply to their services and thus, may be subject to a wide variety of national (access) restrictions.