I. What has the ECJ said about UBER and what it has not (and they are “fake news”)
The Court of Justice of the European Union in Luxembourg (CJEU) or European Court of Justice (ECJ) has handed down a judgement on the preliminary ruling requested by Mercantile Court no. 3 of Barcelona, and on which the Attorney General Mr Maciej Szpunar already offered an opinion, as we already stated in our previous posts:
- UBER Case (I): summary of the essential matters and
- UBER Case (II): support for the collaborative economy.
What the Court said:
- That, pursuant to the first two preliminary rulings requested by Mercantile Court no. 3 of Barcelona, the matter concerns whether the UberPOP services provided by UBER (through non professional drivers, through a business model that is NO LONGER in force):
- Are indeed INFORMATION SOCIETY SERVICES , in which case they are included within the scope of application of Article 56 CJEU and the ISS Directives 98/34 and 2000/31 and Services Directive 2006/123, or
- Or whether they are TRANSPORT SERVICES, for the purposes of Article 58 CJEU, section 1, in which case they are excluded from the scope of application of Article 56 CJEU and Services Directive 2006/123 and the ISS Directives.
- That UBER performs its activity in Spain but it is linked to an international platform, which justifies the action by UBER being analysed at EU level , due to understanding that this involved a finding on matters of fact.
- That the ECJ is competent to analyse the preliminary ruling on classification the juridical nature of the UberPOP service(in spite of the claimant party, Asociación Profesional Élite Taxi (Élite Taxi), having been refused that competence (it is indeed striking how much the press has heralded the matter as a “victory for taxi drivers” precisely due to that “juridical classification” as a transport service by UBER, in spite of it initially not recognising the Court’s competence to hand down judgement thereon).
- That the GENERAL RULE is very clear: collaborative economy platforms provide INFORMATION SOCIETY SERVICES, as is recorded in the following paragraphs of the Judgement:
34. In that regard, it should be noted that an intermediation service consisting of connecting a non-professional driver using his or her own vehicle with a person who wishes to make an urban journey is, in principle, a separate service from a transport service consisting of the physical act of moving persons or goods from one place to another by means of a vehicle. It should be added that each of those services, taken separately, can be linked to different directives or provisions of the FEU Treaty on the freedom to provide services, as contemplated by the referring court.
35. Accordingly, an intermediation service that enables the transfer, by means of a smartphone application, of information concerning the booking of a transport service between the passenger and the non-professional driver who will carry out the transportation using his or her own vehicle, meets, in principle, the criteria for classification as an ‘information society service’ within the meaning of Article 1(2) of Directive 98/34 and Article 2(a) of Directive 2000/31. That intermediation service, according to the definition laid down in Article 1(2) of Directive 98/34, is ‘a service normally provided for remuneration, at a distance, by electronic means and at the individual request of a recipient of services’.
- That, notwithstanding this, an EXCEPTION arises in the case of UBER, (and always with regard to its UberPOP service), for the following reasons:
- That UBER does not only provide intermediation services
36. By contrast, non-public urban transport services, such as a taxi services, must be classified as ‘services in the field of transport’ within the meaning of Article 2(2)(d) of Directive 2006/123, read in the light of recital 21 thereof (see, to that effect, judgment of 1 October 2015, Trijber and Harmsen, C‑340/14 and C‑341/14, EU:C:2015:641, paragraph 49).
37. It is appropriate to observe, however, that a service such as that in the main proceedings is more than an intermediation service consisting of connecting, by means of a smartphone application, a non-professional driver using his or her own vehicle with a person who wishes to make an urban journey.
38. In a situation such as that with which the referring court is concerned, where passengers are transported by non-professional drivers using their own vehicle, the provider of that intermediation service simultaneously offers urban transport services, which it renders accessible, in particular, through software tools such as the application at issue in the main proceedings and whose general operation it organises for the benefit of persons who wish to accept that offer in order to make an urban journey.
- That UBER exercises a decisive influence over provision of the underlying service: 1/ by setting the maximum price and 2/ essential conditions for the drivers and vehicles:
39 In that regard, it follows from the information before the Court that the intermediation service provided by Uber is based on the selection of non-professional drivers using their own vehicle, to whom the company provides an application without which (i) those drivers would not be led to provide transport services and (ii) persons who wish to make an urban journey would not use the services provided by those drivers. In addition, Uber exercises a decisive influence over the conditions under which that service is provided by those drivers. On the latter point, it appears, inter alia, that Uber determines at least the maximum fare by means of the eponymous application, that the company receives that amount from the client before paying part of it to the non-professional driver of the vehicle, and that it exercises a certain control over the quality of the vehicles, the drivers and their conduct, which can, in some circumstances, result in their exclusion.
- That the intermediation service by UBER must be considered covered by (accessory to) the main activity of transport:
40 That intermediation service must thus be regarded as forming an integral part of an overall service whose main component is a transport service and, accordingly, must be classified not as ‘an information society service’ within the meaning of Article 1(2) of Directive 98/34, to which Article 2(a) of Directive 2000/31 refers, but as ‘a service in the field of transport’ within the meaning of Article 2(2)(d) of Directive 2006/123.
42 Consequently, Directive 2000/13 does not apply to an intermediation service such as that at issue in the main proceedings. […]
47 It follows that, as EU law currently stands, it is for the Member States to regulate the conditions under which intermediation services such as that at issue in the main proceedings are to be provided in conformity with the general rules of the FEU Treaty.
- Conclusion: the UberPOP service is included in Article 58.1 CJEU (as a transport service) and excluded from Article 56 CJEU (as an information society service).
48. Accordingly, the answer to the first and second questions is that Article 56 TFEU, read together with Article 58(1) TFEU, as well as Article 2(2)(d) of Directive 2006/123 and Article 1(2) of Directive 98/34, to which Article 2(a) of Directive 2000/31 refers, must be interpreted as meaning that an intermediation service such as that at issue in the main proceedings, the purpose of which is to connect, by means of a smartphone application and for remuneration, non-professional drivers using their own vehicle with persons who wish to make urban journeys, must be regarded as being inherently linked to a transport service and, accordingly, must be classified as ‘a service in the field of transport’ within the meaning of Article 58(1) TFEU. Consequently, such a service must be excluded from the scope of Article 56 TFEU, Directive 2006/123 and Directive 2000/31.
What did the Court NOT say? (and are “fake news”)
- That what was stated in the ruling is binding for Mercantile Court no. 3 of Barcelona.
- That solely due to that, Elite Taxi has won the suit regarding unfair competition lodged before Mercantile Court no. 3 of Barcelona (and for example, that it is therefore entitled to compensation).
- That the taxi sector has “won” anything; that is, none of the claims its protests and strikes concerned (quantitative restrictions on public service () licences, double licenses, etc.).
- That what was stated in this Judgement is in any way contrary to the conclusions and recommendations by the national and regional competition authorities. See commentary by the Spanish Competition commission (CNMC) on this Judgement by the CJEU.
- That this judgement will be applied to collaborative economy platforms, considering that they provide the underlying service (of transport, accommodation, meals, etc.)
- That on the basis of what the CJEU concluded:
- Competitors of collaborative economy platforms have legal grounds to file suits for unfair competition against such platforms (see, for example, this Spanish news article without any legal or economic grounds whatsoever),
- Or political powers wishing to see consumer interest in such platforms being reined in having any legal grounds to limit their feasibility (see, for example, the reply to this tweet without any grounds at all from @BComuGlobal ).
And how should one respond to the “fake news”?
Well: “nice try”…
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