Elite Taxi vs UBER – Opinion of the Advocate General on UBER’s Activity in Spain
By Maria E. Sturm
On 11 May 2017, the Advocate General Szpunar, issued his opinion on the case “Asociación Profesional Elite Taxi vs Uber Systems Spain SL” (C – 434/15) which gives some interesting insights in UBER’s business activity in Spain and the EU.
The role of the Advocate General
According to Art. 252 TFEU, eight Advocate-Generals assist the Court of Justice. They are impartial and independent. In cases which require their involvement according to the statute of the Court of Justice, they issue a reasoned submission. Their arguments prepare the Court’s decision. And while the Court is not bound, it still often follows them.
UBER and its completely new business model raise a lot of legal questions. Case C – 434/15 offers the ECJ the possibility, to answer a least a few of them for the European Union. As the case is a preliminary ruling according to Art. 267 TFEU, the ECJ can only answer the questions posed by the Commercial Court No 3 of Barcelona, Spain. Therefore, the advocate-general does not reason e.g. on antitrust or labor law issues.
The questions were (summarized):
- What kind of service does UBER offer: a transport service, an electronic intermediary service or an information society service as defined in Art. 1(2) of Directive 98/34?
- If it is an information society service, does it profit from the freedom of services according to Art. 56 TFEU and Directives 2006/123 and 2000/31?
- Does the Spanish Law on Unfair competition infringe the freedom of establishment?
- Are the requirements of authorization or license valid measures to regulate the freedom to provide electronic intermediary services?
First, the Advocate-General explains which kind of service UBER offers. This is important as the type of service affects the Member State’s competences to regulate it. Szpunar starts with the definition of the term “information society service” which requires three criteria: it must be provided for remuneration, upon individual request and by electronic means. While the first two do not pose any problems, the third one needs further clarification in this case. Of course, UBER as a smartphone application works electronically. However, the actual ride the customer receives, is not electronic. The service does not have to be completely electronic to fulfill the criterion of Art. 1(2) of Directive 98/34 but if it is a composite service, one needs to examine where the emphasis lies. Szpunar bases his argument on the unity of the electronic and the non-electronic part. If both can be offered independently, an information society service can be confirmed for the electronic part. As example, he mentions online platforms for booking hotels: the consumer can use the platform to compare prices and book the hotel. However, she could also book the hotel directly without using the platform. Thus, the electronic service of the platform and the analog product of the hotel room are independent and the service the platform offers is an information society service. With UBER, in contrary, no independent service exists. UBER only acts as intermediary for a service which itself creates. It is not a platform that just combines driving services offered by different companies, but the platform makes the service. Furthermore, according to Szpunar, UBER exercises decisive influence over the conditions under which the service is provided. It decides who can be a driver, how drivers must behave, and conducts quality control via its rating function. This means, it offers not mainly an electronic, but a transport service.
The result of Szpunar’s argument is:
- UBER is no information society service. Therefore, Art. 56 TFEU and Directives 2006/123 and 2000/31 are not applicable.
- Questions three and four of the Commercial Court No 3 of Barcelona do not need to be answered as they only refer to the freedoms of service and establishment which do not protect UBER.
- UBER offers a transport service according to Art. 90-100 TFEU. This means, it can be submitted to authorization or license requirements by the Member States as any other transport service, too.
Now we have to wait, if the ECJ follows Szpunar’s arguments which seems quite probable. However, the next question is: does the current legal framework – on the local, state and European level – fit to the sharing economy? The European Commission already addressed the problem in its 2015 communication “A Digital Single Market Strategy for Europe” where it announced a comprehensive assessment of the role of platforms, including the sharing economy. In 2016, the EU Commission issued a communication on the European agenda for the collaborative economy. This communication provides legal guidance to public authorities, market operators and citizens on how to apply existing EU law on legal problems emerging form the sharing economy. However, these guidelines are not binding and the Commission announces further investigation and legal action in this field.