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Classification of the Platforms for Services along the Uber – Airbnb Axis based on the Two Seminal Decisions of the ECJ

The Court of European Union ("ECJ") issued two landmark decisions in the period 2017 – 2019) which laid down the criteria to distinguish between two common kinds of platforms are active across the EU.

The decisions refer to, respectively a p2p application for urban passenger transportation (Uber) and a peer-to-peer application for short-term leases of real estate, very popular in the field of tourist and economy business trips – AirBNB, on the other hand. They are the litmus test for the ECJ/the national courts' approach respectively to the qualification and regulation of services offered in a similar manner by other applications.
I have chosen to review several platforms which are active on the Bulgarian market and test their features against the test set by the ECJ. These are: 1. domestina.bg (a platform providing cleaning service to end users), 2. goodknight.bg (part-time nanny services), 3. advokatami.bg (a platform for extending legal, accounting, and administrative services and generating of personalized documents), 4. auxionize.com (a platform organising (mini) auctions for business services) and 5. ucha.se (educational platform for digital content).
During the expose, I will try to outline the main characteristics along the Uber/AirBNB classification axis. I will specify the practical weight of this test to determine the regulatory approach to the respective platform. I will position the five platforms while measuring them up against the ECJ test, which will serve as a basis for the applicable legal framework. I will supplement the test with any follow-up developments and specific manifestations of the acquis depending on each case.
Firstly, some basic concepts present in the discussed decisions need to be clarified to provide some insight. What is "an information society service" in the EU law?
"Information Society Service" is defined in Directive 2015/1535, laying down a procedure for the provision of information in the field of technical regulations and of rules on Information Society services (the definition was coined more than 20 years ago, but the regulation has been brought up to date). This is a vast and very diverse group of services whose characteristics and manner of presentation call for a separate regulatory framework harmonised across the EU: I will call them analogue services by contrast to the ISS. Some ISS may fall in the realm of other sectoral regulations which will lead to a partial derogation from the default legal framework for ISS (digital financial services are a typical example).
So: an ISS will normally be offered (i) for remuneration (but not necessarily for money, personal data will do too), (ii) from a distance – the parties are not simultaneously present at the same place and at the same time, (iii) through electronic means (in the broadest possible sense – by wire, cable, optic fibre, radio waves, etc.) through transfer of data (iv) at the individual request of the parties.
If a service fits in the above description and in the absence of special sectoral legislation, the eCommerce Directive shall be applicable.
Normally when the ISS is provided to consumers (natural persons who are not acting in connection with their business or profession), the consumer protection for distance contracts is fully applicable. This topic is beyond the scope of this article and must be reviewed separately.

  1. What are the criteria which the ECJ uses to distinguish the Uber-like platforms from the AirBNB-like platforms?

Is the intermediation service (with its auxiliary services) offered by the Platform separable from the service it aims to facilitate?

Uber No
AirBnb Yes
Conclusion: If the intermediation service forms an "integral part of an overall service", whose main component is a service with a different legal qualification, then the former is not an ISS service [40, Uber]. Both services are "inherently linked", id.

Could the service being facilitated be performed on its own, albeit in a different manner? Is the platform essential to that service's performance?

Uber Yes
AirBnb No

Conclusion: If "the analogue" (e.g., transportation) service cannot be provided in an alternative manner in the absence of the platform (e.g., the random passengers cannot connect and use the services of the random drivers in the Uber's case), then the application's service has "material content" [51, AirBNB] and the platform cannot be deemed to be offering an ISS.

Does the platform determine the price or set a maximum price?

Uber Yes
AirBnb No
Conclusion: if the platform participates in the price determination for the end user, then it may be deemed to have a decisive influence, which underscores the integrity of the intermediation and "the analogue service".

Does the platform have a decisive influence [52, 53 AirBnb]? For example, does the platform define the quality standards and the behaviour of the actors taking part in the provision of the service, the tools used to provide it?

Uber Yes
AirBnb No

Conclusion: the platform's ability to influence the behaviour, the quality and the standards of the service in a manner that is binding on the participants underscores the merging on the intermediation and the "analogue" service.

  1. Practical Value of the Uber/AirBnb Test to Determine the Regulatory Approach to a Platform

The principle of free provision of services is enshrined in art.56 of the Treaty of the Functioning of the EU ("TFEU"). Hence the member states may not, as a rule of thumb, impose restrictions on national level of services offered by business actors established in other member states. The transportation services are regulated under a different article – art.58 of the TFEU; to this end the national member states' approach in the Uber case differs.

To the extent the information society services are concerned, should a platform's service fall into this category, then the country-of-origin (as per the platform's domicile) laws control this service (see art.3 of the eCommerce Directive). In the same vein the eCommerce Act transposing the eCommerce Directive is the main law applicable to the Bulgarian platforms.

With Uber-like platforms, where the intermediation service cannot be separated from the facilitated one and the platform has a decisive influence with respect to the latter service, the Services Act (transposing Services in the Internal Market Directive) would be the leading law to control that platform's activity.

  1. How are the five platforms positioned along the Uber/AirBnb axis?

5 platforms – 5 criteria

Domestina.bg

Is the intermediary service separable from the analogue one?
Rather not.
Can "the analogue service" be realised without the intermediary one, albeit in a different manner? Again – rather not. The organisation, administration, accounting and the distribution of payment, control, and training, and the unified standards make the service what it is. Internet ads cannot match the interests of those seeking and offering the service in such an efficient manner and to provide a replacement in case of someone's absence for example.

Does the platform determine the price?

Is the influence of the platform decisive for the quality of service, standards, participants' (service providers) behaviour? Yes (The booking of slots, selection of a worker, communication with him, the confirmation of vistis, the terms on which the service is extended – everything is done via the platform. The latter administers and organizes the underlying service and its function is not limited to intermediation (by contrast to e.g. another platform for small chores and larger repair works - maistorplus.com) and hires subcontractors – see e.g. items.7, 10, 13, 14 of the General Terms. In this meaning it would be curious to see the waiver of liability contained in domestina's General Terms tested in court. Source: https://www.domestina.bg/usloviya-za-polzvane

Yes, the platform offers a rating and a detailed standartised feedback form which regulates the standard of execution and which has an effect on the payment of the service providers
Conclusion: the platform shall be "Uber"-labeled according to ECJ's criteria and its activity shall be ruled by the Services Act as opposed to the eCommerce Act; respectively, upon its entry of any EU market outside Bulgaria, Domestina will need to abide by the local law of the targeted member state. In this case it is unlikely that any member state has special sectoral legislation.
Note: Alongside its core service, the platform offers separate auxiliary services which are performed by subcontractors – legal entities whose offers are ranked according to separate criteria. These services are not considered for the above conclusion; it is of note that further requirements may apply to them, for example those of the Platform to Business Regulation 2019/1150.

GoodKnight.bg

Is the intermediary service separable from the analogue one?
Yes, this is rather the case.

Can "the analogue service" be realised without the intermediary one, albeit in a different manner? Yes, probably it is in this case, by means of ads for per-the-hour childcare but not as fast and efficient compared to the platform
Does the platform determine the price?

Is the influence of the platform decisive for the quality of service, standards, participants' (service providers) behaviour?

Yes, it appears so (The separation of the prices for the intermediation service and the underlying service and the separation of the relationships nanny – parent, platform – parent and platform – nanny is distinctly made in the platform's General Terms.)

Yes, the platform selects the nannies (as per its General Terms), controls the quality standards for the service and provides training

Conclusion: although there is a formal separation between the intermediary and the analogous service, the strict selection and control with respect to the participants (nannies), the control over the prices and the cancellation policy build up to make the platform a decisive factor with respect to the analogue service. Apparently, the conclusions regarding controlling law for Domestina apply to Goodknight as well.

Advokatami.bg

The platform offers two main types of services – specialised end-user software to generate personalised documents (based on templates), on the one side and connecting users with lawyers for certain cases, on the other hand. The two services are quite different. Any hired subcontractors (who are checking the prepared document templates) notwithstanding, the first type of services is obviously offered directly by the platform as a software solution.
The below analysis refers to the intermediary service which is aimed to establish a connection with a lawyer who has a contractual relationship with the platform.

Can "the analogue service" be realised without the intermediary one, albeit in a different manner? Yes, this is rather the case

Does the platform determine the price?
Yes

Is the influence of the platform decisive for the quality of service, standards, participants' (service providers) behaviour? No, it does not appear so. As specified on the Platform the tariff for the services is determined by the attorney and not by the platform.

Although the platform initially selects the associated lawyers (through a law firm which is affiliate with the platform), the provision of the service content-wise and liability-wise is done by each lawyer separately. Hence – rather not, and it would not be legal if it were organised differently.

Conclusion: The platform resembles the Airbnb model as the ECJ's test. The Bar Act is applicable as sectoral legislation. The matter of any sectoral compliance issues is beyond the scope of this article.

Auxionize.com

Can "the analogue service" be realised without the intermediary one, albeit in a different manner?
Yes
The platform is a safe-defined "virtual marketplace for transparent business". It organises minitenders for business services.

Does the platform determine the price?
No.
As per the information on axionize's website, precisely the determination of the price within a mini-tender organised by the platform lies its intrinsic value for its clients,

Is the influence of the platform decisive for the quality of service, standards, participants' (service providers) behaviour?
No, the platform connects buyers and sellers – classic intermediation.

Conclusion: The platform is a classic type of intermediary offering information society services, strongly resembling AirBNB's business model from the ECJ's test. Upon its entry on another EU market, the country-of-origin (Bulgarian) law should be applicable.

Ucha.se

Ucha.se is a streaming educational platform, whose activity is yet to be regulated with a national sectoral law, transposing Directive 2019/770 on certain aspects concerning contracts for the supply of digital content and digital services. The platform is a classic example of an information society service and its activity is presently governed by the eCommerce act the Consumer Protection Act (whenever the offering is b2c). How will ucha.se pass the Uber/AirBnb test?

Can "the analogue service" be realised without the intermediary one, albeit in a different manner? No. The access to streaming content is possible from anywhere anytime, by multiple people simultaneously. This cannot happen in an analogous manner (offline).

Does the platform determine the price?
Yes. See the pricing section.

Is the influence of the platform decisive for the quality of service, standards, participants' (service providers) behaviour?
Yes, the contents is entirely controlled by the platform and directly accessible through it
Apparently the platform is also the supplier of the service irrespective whether it hires subcontractors and employees. It goes beyond the Uber test and can never be considered intermediary and as a result undertake less than full liability for the digital content which is provided to end clients.

  1. In conclusion

The analysis of 5 random platforms, active on the Bulgarian market, comes to show that the catch-all "platform" concept combines a range of different actors, whose legal framework, liability thresholds and relationships with their subcontractors/users may vary considerably. Regulation 2019/1150 which came into force in July 2020 provides terms for the activity of online intermediating platforms which connect business users with consumers; furthermore, the proposal for a Digital Service Act, published last December regulates more precisely the activity of the platforms, which are hosts of digital content in the meaning of the Ecommerce Directive. Both documents are indicative of a trend which will put an end to the non-negotiable pro-platform General Terms and Conditions that have become the rule over the last 10 years by invalidating and providing mandatory norms instead for most of the provisions which used to result in a sharp disbalance of power. If we consider the enhanced protection offered to consumers by the Omnibus Directive (not to mention GDPR), and the cybersecurity regulations applicable to the digital services providers and the online marketplaces it appears that the platforms economy will need to get used to the idea that their activity is quite strictly regulated. One of the first things they may have to do (whose relevance is also enforced by the DSA proposal) is to establish for sure how they align along the Uber/Airbnb axis and what their range of maneuver may be with respect to liability and responsibilities vis-à-vis third parties – trying to waive those in their own general terms is unlikely to hold in court.

Published on Feb 04, 2020

Filled under Publications

About the author

Zhulieta Mandazhieva

I am passionate about technology law, data protection, and financial and payment services. I advise software developers and their clients (not at the same time) on IP, data protection, and commercial matters when negotiating a contract. My typical projects are in IT outsourcing, technology services, and the law of the platforms (including consumer, business, and competition law).

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