One of the Commission’s most far-reaching consultations in late 2015 was its consultation on online platforms, cloud & data, liability of intermediaries, and the so-called “collaborative economy” exemplified by services like Airbnb and Uber. The principal results of this consultation so far are the Online Platform Communication and the Collaborative Economy Consultation.
To the relief of many, the Online Platform Communication does not propose a new general law on online platforms, nor does it suggest to change the liability regime set by the e-Commerce Directive. However, the Communication does propose measures to address concerns relating to the lack of level-playing field in certain sectors; lack of transparency; certain business-to-business practices; and the tackling of illegal content online. Specifically, the Commission plans the following actions:
- a review of EU telecoms legislation and the e-privacy directive to assess the partial deregulation of traditional communication services, where they face competition from platforms and other digital players, and applying communications-specific rules to all comparable services. In the e-Privacy Directive, review, the Commission will consider extending data protection obligations currently applicable only to telecoms companies to platforms.
- a copyright reform package aiming to achieve a fairer allocation of value generated by the online distribution of copyright-protected content by online platforms providing access to such content.
- assessment of the need for guidance on the liability of online platforms when putting in place voluntary measures to fight illegal content online and the need for a formal notice-and-action procedures.
- guidance on interoperability of electronic identifications (eIDs) to encourage platforms to recognise those identified under the regulation on electronic identification and trust services for electronic transactions in the internal market (eIDAS).
- A free-flow-of-data initiative to facilitate switching and portability of data among different online platform and cloud computing services and to address legal uncertainties regarding data ownership and usability or access, including issues related to application programming interfaces.
The Commission has no current plans to introduce legislation to address concerns about allegedly "unfair" practices, in particular for access to important data bases; platforms refusing access to markets or essential business data necessary for suppliers; or platforms promoting their own services to the disadvantage of third-party suppliers. Instead, it will continue to examine these practices and decide in 2017 if action to address fairness in business-to-business relations is necessary. Separately, however, the Commission published updated guidance on the Unfair Commercial Practices Directive, for instance the criteria making an online platform qualify as a "trader" promoting or selling goods, services or digital content to consumers. Platforms must state clearly that rules on unfair commercial practices do not apply to private persons selling goods, and search engines would be required to clearly distinguish paid placements from natural search results.
The Collaborative Economy Communication provides the first comprehensive guidance on how EU law should be applied to participants in the collaborative economy. The Commission distinguishes between service providers, who share assets, resources, time or skills and who can be private individuals offering services on an occasional basis (“peers”) or providers acting in a professional capacity; users of these services; and platforms that connect providers with users and facilitate transactions between them. The Commission defines collaborative economy platforms as Internet-based platforms that enable transactions between people providing and using a service generally without there being a transfer of ownership of an asset.
The Commission notes that under the e-Commerce Directive, Member States cannot impose market access requirements on platforms except in exceptional circumstances and that, when doing so, they need to take into account the specific features of the collaborative economy, without favouring one business model over another. In particular, Member States should seek to differentiate between collaborative platforms providing the underlying service and those only acting as an intermediary; and between private individuals offering services occasionally and services providers acting in a professional capacity.
The Collaborative Economy Communication discusses a number of key areas of legal uncertainty relating to the collaborative economy, including the application of sector-specific rules, liability of collaborative platforms, who qualifies as a worker for labour law purposes, applicable consumer protection and tax rules.
While national liability rules apply to the collaborative economy, for example in relation to the bad execution of contracts or for violation of contractual terms, and services they themselves offer, such as payment services. However, the e-Commerce Directive foresees that online platforms can under certain circumstances be exempted from liability for the information they store if the services provided are of a merely technical, automatic and passive nature, and the platform has no knowledge of illegal information stored on its website or, once it becomes aware of such information, it acts swiftly to remove or disable access. EU countries cannot oblige platforms to generally monitor or to actively seek out illegal activity, but they can carry out voluntary checks, such as on the identity of providers or the quality of the services provided without being seen automatically as playing an active role for purposes of this liability exemption.
As regards consumer protection rules, EU consumer and marketing legislation addresses business-to-consumer transactions between a consumer and a trader, excluding consumer-to-consumer transactions. However, the collaborative economy blurs the lines between consumers and traders. The Commission says Member States should seek a balanced approach to ensure that consumers enjoy a high level of protection from unfair commercial practices, while not imposing disproportionate obligations on private individuals who are not traders but who provide services on an occasional basis.
EU labour law is applicable to people who are in an employment relationship. The collaborative economy also blurs the lines between employees entitled to such protection. The EU Court of Justice applies three essential criteria to determine the existence of an employment relationship: whether they act under the direction of the platform (i.e., the platform determines the choice of activity, remuneration and working conditions), the nature of the work (e.g., is it genuine, effective and regular), and whether the work is remunerated. The Communication provides orientation that Member States may wish to consider when deciding when people providing services through collaborative platforms are to be considered employees of a platform (e.g., relation of subordination to the platform, nature of the work, remuneration). The Commission encourages EU Member States to assess whether their national employment rules are adequate for the different needs of workers and self-employed persons in the collaborative economy, as well as the innovative nature of collaborative business models and to provide guidance on the national employment rules that apply to the collaborative economy providers.
Relevant taxes for collaborative economy service providers and platforms include taxes on personal income, corporate income tax and value-added tax. The Commission considers that EU countries should apply functionally similar tax obligations to businesses providing comparable services and establish close cooperation between national authorities and collaborative platforms (e.g., to improve tax compliance and collection). In the case of VAT, there may be difficulties in assessing the obligations of participants in the collaborative economy, and many collaborative economy service providers will be below the registration threshold.
The Commission encourages Member States to follow so-called “good practices” on the collaborative economy, including:
- Establishing thresholds to differentiate between individual citizens providing services on an occasional basis and providers acting in a professional capacity;
- Cooperating with collaborative economy platforms to record economic activity to facilitate and improve tax collection, while respecting data protection legislation;
- Issuing guidance on the application of employment rules and market access requirements to new business models;
- Not demanding prior authorisations for the short-term rental of primary residences; and
- Reviewing quantitative restrictions in transport sectors and facilitating market access for all operators.
Amendments to the Audiovisual Media Services Directive
The Commission presented proposed amendments to the Audiovisual Media Services Directive to update the rules applicable to traditional broadcasters to video-on-demand providers to cover video-sharing platforms. A video-sharing platform is defined as a commercial service addressed to the public which:
- Stores a large amount of programmes or user-generated videos, for which the video-sharing platform provider does not have editorial responsibility;
- Where the content is organised in a way determined by the provider of the service, in particular by hosting, displaying, tagging and sequencing;
- Where the principal purpose of the service (or a dissociable section thereof) is devoted to providing programmes and user-generated videos to the general public, in order to inform, entertain or educate; and
- Is made available by electronic communications networks.
Social media, such as Facebook would not be covered by the proposed rules, because they do not have as a principal purpose the provision of programmes or user-generated videos to the public, but YouTube would be. Newspaper websites would remain outside the directive, but standalone parts of newspaper websites featuring audiovisual programmes or user-generated videos will be considered as video-sharing platforms.
Controversially, the proposed amendments would extend requirements on advertising and European content that have long applied to television stations to video-sharing platforms, although there would be significant differences in the specific obligations applicable to the two categories.