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For ECJ Advocate General, AIRBNB is not a real estate agent, it is an information society service provider

Cristina Mesa (senior associate at Intellectual Property and Fashion Law Practices).

The Advocate General Szpunar concludes that AIRBNB is not a real estate agent and that it is therefore not subject to the internal laws of the Member States on this subject. The platform does not exercise control over the short-term accommodation services offered, and simply facilitates the transaction between hosts and guests as an intermediary of the information society.

Directive 2000/31 on electronic commerce is an essential piece of legislation for the liberalization of key information society services in the development of the Gig Economy. The conflict arises where the services are of a mixed nature, i.e. services that combine an information society service (e.g. contracts through an app) with a traditional service (e.g. the effective provision of a passenger transport service). The difficulty lies in determining whether the platform is merely an intermediary or if it is also responsible for the underlying service. Only in the second scenario could it be required to comply with the internal laws of the member State in which the services are going to be provided (e.g. obtaining a prior license) since otherwise it is covered by the principle of freedom to provide services that is established in the Directive.

The Court of Justice of the (CJEU) has already ruled on the subject. Indeed, it concluded that the services provided by the US platform UBER were not limited to intermediation between drivers and passengers, but were actually transport services (Case C-434/15 and Case C-320/16). As a result, the platform must comply, in general, with the internal laws of the member states in the passenger transport industry.   

In the case we are dealing with here (Case C-390/2018), the French Tourist Association (AHTOP) considers that the US platform AIRBNB acted unlawfully in failing to comply with the requirements for prior authorization to exercise a business activity envisaged in applicable real estate services legislation (the Hoguet Law). AIRBNB in turn considers that its activity is limited to merely providing intermediation services between hosts and guests and that therefore internal French laws are not applicable to its business (nor those of any other member state).

The Advocate General’s Opinion echoes the criteria established by the CJEU in the UBER saga, in which the following aspects were borne in mind to determine the nature of the services provided: (i) who offers the underlying service and (ii) who controls that offer. However, the Advocate General concludes that the definitive criterion to determine the existence of liability in relation to the underlying service is the latter, i.e., control over the underlying service:

“The two criteria laid down in that regard by the Court in its case-law, namely the criterion relating to the creation of a supply of services and the criterion relating to the exercise of control over the conditions under which those services are provided, make it possible to answer the question whether a service provided by electronic means that, taken separately, prima facie meets the definition of ‘information society service’, is or is not separable from other services having a material content.

However, the criterion relating to the creation of a supply is merely an indication of whether a service provided by electronic means forms an inseparable whole with a service having a material content. It is not sufficient that a provider has created a new supply of services that are not provided by electronic means in the sense explained above. The creation of such a supply should be followed by the maintenance of control, by that provider, over the conditions under which those services are provided.”

That said, since it is a largely factual issue, the Advocate General analyses the nature of the services provided by AIRBNB, and finds that:

  • AIRBNB does not control the price of the accommodation services. The fact that it provides tools to estimate the price does not mean that the platform fixes the price.
  • The fact that AIRBNB bears in mind users’ ratings in order to suspend or even cancel certain offers is merely “administrative control” that does not involve control over the underlying service.
  • Neither does the existence of additional services (e.g. professional photography, insurance, etc.) imply that AIRBMB has control over the underlying service. This is because they are optional services and are ancillary in nature by comparison with the service provided by electronic means.

In light of the facts, in Szpunar’s opinion AIRBNB does not create or control the accommodation that is offered on its platform and is therefore not subject to French real estate law. As we have said, the key lies in the absence of control. However, we must wait and see whether the CJEU judgment confirms, as its Advocate General holds, that the activities performed by the US platform are limited to merely providing information society services.