Digital Single Market & Market Access: a grey area someone should shed some light on

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A few weeks ago, the Italian Communications Authority (AGCOM) fined Amazon for delivering unauthorised postal services[1]. The 300k fine shall probably have no material impact on the web giant’s business, but nonetheless is worth some thoughts from a regulatory perspective, also because the same principles could apply to undertakings with a dramatically different financial stability.

As it is well known, improving access to the market for both consumers and companies is one of the three pillars the European Digital Single Market Strategy (EDSMS) is based on. To this purpose, a public consultation was launched by the EU Commission in 2015 with a view to understand whether EU rules on e-commerce need to be updated. Regardless of the outcome of the consultation, the most recent decisions of courts and administrative authorities across Europe tell us that yes, the EU e-commerce rules need to be updated, since the market has deeply changed.

More in particular, the concept of “information society service provider” needs to be better clarified, also in light of the inputs coming from the most recent case-law (at both an EU and domestic level). Why is it so important? It is important because it impacts materially on market access requirements, which are key factors for the achievement of a level playing field and for the competitiveness of companies.

Pursuant to Article 4 of the e-commerce Directive[2]indeed, Member States shall ensure that the activity of an information society service provider is not subject to prior authorisations. Even though such principle suffers from some exceptions[3], nonetheless it is intuitively a big competitive advantage. So, the first question which arises is: who exactly the information society service providers are? Answer to this question can be found in Article 2 (a) of the e-commerce Directive and Article 1(2) of Directive 98/34/EC[4], pursuant to which an information society service is “any service normally provided for remuneration, at a distance, by electronic means and at the individual request of a recipient of services”. Although apparently uncontroversial, the scope of such definition is not straightforward.

The decisions of the European Court of Justice on Uber France[5]and Uber Spain[6]cases are clear examples of the difficulties one can encounter when trying to apply the definition of information society service to market players offering innovative services in a digital environment. Indeed, even though Uber services can in principle meet the criteria for the classification as an information society service, according to the Court UberPop services are not information society services but must rather be regarded as “forming an integral part of an overall service the main component of which was a transport service”. The consequences of such approach (which is shared by many domestic courts and local regulators) is well known: UberPop’s activity has been shut down in a number of jurisdictions since the drivers are not licensed to operate professionally. Given this milestone decision, it will be interesting to see how the ECJ shall rule the pending Airbnb case[7]: more in particular, it will be interesting to see whether the European Court shall rule the case based on the same “composite service” criterion the Uber decisions were based on and therefore whether Airbnb shall be regarded as an information society service provider. The case is worth being monitored: in the meantime, it is clear that the Court is taking charge of fitting an old-fashioned legal concept to a new business model.

Switching from a case-law to a regulatory perspective, it can be appreciated that the AGCOM fine to Amazon lays on the same principle the Uber decisions are based on: although exclusively operating in a digital environment, Amazon is not a mere marketplace but directly provides postal services, requiring as such a specific authorisation.

In light of the above, it is clear that the definition of “information society service” needs to be updated. It is arguable whether the “composite service” criterion the EUCJ has based its Uber decisions on should be included in the new definition. Nonetheless, a decision shall be made, otherwise market regulation shall substantially be left to courts and administrative authorities. This would mean giving rise to a variegated pattern of regulatory environments, which is the opposite of where the EDSMS is intended to take us.

[1]https://www.agcom.it/documentazione/documento?p_p_auth=fLw7zRht&p_p_id=101_INSTANCE_2fsZcpGr12AO&p_p_lifecycle=0&p_p_col_id=column-1&p_p_col_count=1&_101_INSTANCE_2fsZcpGr12AO_struts_action=%2Fasset_publisher%2Fview_content&_101_INSTANCE_2fsZcpGr12AO_assetEntryId=11535079&_101_INSTANCE_2fsZcpGr12AO_type=document. The document is available in Italian only.

[2]Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (better known as “e-commerce Directive”).

[3]Reference is made to Articles 3 and 4 of the e-commerce Directive.

[4]Now repealed by DIRECTIVE (EU) 2015/1535.

[5]Judgment of 10 April 2018 (Case C‑320/16).

[6]Judgment of 20 December 2017 (Case C‑434/15).

[7]Case C-390/18 – Airbnb Ireland. A very interesting comment on the case by Professor Christoph Busch can be downloaded from here https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3231505.

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