
- Some facts and figures
Consequently, both national and European authorities have to provide an answer in order to ensure new business models can flourish. The case, however, is not that simple regarding regulators as in most European countries highly-regulated sectors, such as local transportation, fiercely oppose to the sharing economy.
- Definition of “collaborative economy”
“For the purposes of this Communication, the term “collaborative economy” refers to business models where activities are facilitated by collaborative platforms that create an open marketplace for the temporary usage of goods and services often provided by private individuals. The collaborative economy involves three categories of actors: (i) service providers who share assets, resources, time and/or skills – these can be private individuals offering services on an occasional basis (“peers”) or service providers acting in their professional capacity (“professional services providers”); (ii) users of these; (iii) intermediaries that connect – via an online platform - providers with users and that facilitate transactions between them (“collaborative platforms”). Collaborative economy transactions generally do not involve a change of ownership and can be carried out for profit or not-for-profit”.
- Market access requirements
First of all, the EC makes it very clear that absolute bans and quantitative restrictions of an activity should constitute a measure of last resort. They should only be applied if and where no less restrictive requirements to attain the same legitimate public interest objective can be used. Secondly, the EC reminds that, under the Services Directive (1) and the EU Law, “service providers are not to be subject to market access or other requirements, such as authorization schemes and licensing requirements, unless they are non-discriminatory, necessary to attain a clearly identified public interest objective and proportionate to achieving this interest. This also applies to the regulation of professions”.
Therefore, the EC invites Member States to review whether the objectives pursued in existing legislation remain valid, both in relation to the collaborative economy and to traditionally operating service providers.
- How to regulate “Collaborative Economy”?
Another issue is whether people participating in the platforms on a peer-to-peer and occasional basis are to be deemed professionals and, therefore, whether they have to comply with the relevant obligations applying to professionals. The EC encourages Member States to set certain limits in order to distinguish a professional from a merely private individual offering an occasional service. This should be done by setting thresholds such as, for example, a limit to the rental of private houses (90 days) or a minimum annual turnover for service providers.
- Liability regimes
However, the EC knows that in some cases the platforms organize and offer directly the services or the goods and, therefore, may not always be deemed “intermediaries” but “providers of the service”. In order to decide whether a platform is an intermediary or a provider of the underlying service, an assessment should be made on a case-by-case basis, looking at how much control the platform exercises over the underlying service (e.g. by considering a number of factors such as who sets the price, who owns the key assets, the contractual terms, the employment relationship, amongst other criteria).
- Protection of users
All traders (including collaborative platforms qualifying as traders) must comply with professional diligence duties and not mislead consumers. In addition, collaborative platforms and providers of underlying services may be required to comply with other applicable information obligations under EU law, including transparency requirements of the relevant sector-specific legislation. Moreover, like any other controllers collecting and further processing personal data in the EU, collaborative platforms must comply with the applicable legal framework on the protection of personal data.
In any case, the EC encourages Member States to seek a balanced approach to ensure that consumers enjoy a high level of protection in particular from unfair commercial practices, while not imposing disproportionate information obligations and other administrative burdens on private individuals who are not traders but who provide services on an occasional basis.
- Employment
Whether an employment relationship exists or not has to be established considering three aspects: (i) the subordination link, that exists when the service provider acts under the direction of the collaborative platform, that is to say, he is not free to choose which services provide and/or when; (ii) the nature of the work, meaning the service provider has to perform a truly economic activity that generates value, excluding marginal, small-scale services, and (iii) the remuneration: if the service provider does not receive a salary or it is merely a compensation for the cost there is not a remuneration, according to the EC.
- Taxation
Regarding VAT, the EC announces its purpose of reforming the tax, implementing a VAT one-stop shop for electronic services.
Finally, it calls for the “level playing field” principle for business providing the same service, meaning that any agent performing the same economic activity (whether a collaborative platform or a common company) has to be treated equally regarding tax payment.
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In summary, this Communication provides useful guidance on some of the hottest topics in connection with the collaborative economy and deals with some of the concerns that we (as lawyers) had previously raised and discussed.
Ignacio González Royo is a senior associate at Garrigues in the Intellectual Property practice in the Telecommunications & Media and Sports & Entertainment industries. Member of the Academic Council of Fide
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(1) Articles 9 and 16 of Directive 2006/123/EC (the “Services Directive”)