Digital platforms in the EU: Airbnb’s Legal Status Explained

The classification of digital platforms has become a cornerstone legal issue in the twenties, particularly in sectors where traditional regulatory frameworks intersect with technological innovation. One of the most debated questions is whether platforms like Airbnb should be considered merely as “information society services” under Directive 2015/1535 or whether they should be subject to the national regulations governing real estate and hospitality services so to say they are end service providers. This distinction influences the obligations imposed on such platforms and the extent to which national authorities can regulate their operations.

EU regulatory framework

Directive 2015/1535 defines an “information society service” as one that is:

1. Provided for remuneration,
2. At a distance,
3. By electronic means,
4. At the individual request of a recipient.

Generally, EU Member States cannot impose arbitrary restrictions on such services, including requiring prior authorization or licensing of providers, except in exceptional cases following a special procedure that involves notifying the European Commission.

Conversely, services that fall outside this classification, such as real estate rental or hospitality services, may be subject to national regulations, including licensing, taxation, and compliance with local laws governing property use. These requirements vary from country to country within the EU.

The Airbnb case: legal examination (C-390/18)

In December 2019, the Court of Justice of the European Union (CJEU) addressed this issue in Airbnb Ireland UC v. AHTOP (Case C-390/18). The case arose from a challenge by a French tourism association, AHTOP, which argued that Airbnb should be subject to the national regulations applicable to real estate agents.

The CJEU ruled in favor of Airbnb, concluding that its primary service is to provide an “information society service” rather than a real estate service. The Court reached this conclusion based on several key factors:

1. Airbnb acts as an intermediary between hosts and guests through a digital platform.
2. It does not set rental prices or mandate specific terms for rental agreements. It is not involved in end product composition. 
3. It does not own or manage the properties listed on its platform.
4. It does not directly provide hospitality services, such as cleaning, maintenance, or reception.
5. It does not require hosts to obtain specific authorization or qualifications beyond compliance with local laws.

Based on these factors, the Court ruled that Airbnb’s primary service is intermediation and it is distinct from the actual provision of rental accommodation and should be classified as an information society service. As a result, Airbnb benefits from the protections offered under Directive 2000/31 (e-Commerce Directive), which limits the ability of Member States to impose restrictive regulations without adhering to EU notification procedures.

Implications for digital platforms

The CJEU’s ruling has significant implications for digital platforms operating in the accommodation and service sectors. Unlike Uber, which was classified as a transportation service, not recognised as ISS due to its involvement in price and product formation and its control over drivers and fares, Airbnb does not exert similar control over property owners and rental conditions nor Airbnb does not control prices. Therefore, it was recognized as an intermediary rather than a provider of real estate services.

However, this ruling does not apply universally to all platforms. The classification depends on specific criteria, including:

1. Whether the platform exerts control over service providers (e.g., setting prices, dictating conditions, or managing operations).
2. Whether the platform directly provides core services beyond matchmaking (e.g., owning assets, offering transportation, or maintaining rental properties).
3. Whether service providers (e.g., hosts or drivers) can operate independently outside the platform.
4. Whether the service provider is attempting to circumvent the applicable legislation (on licensing, registration, etc.).

The Court has ruled differently in other cases, such as Uber, where the company was found to play an essential role in organizing and delivering transport services. Similarly, in the Star Taxi App case, the CJEU examined a ride-hailing app’s role and determined that it constitutes an information service or a transportation provider.

Thus, the legal classification of digital platforms is highly dependent on their operational model and level of control over service providers. The Airbnb case demonstrates that platforms functioning primarily as intermediaries, without setting prices or dictating key service conditions, can qualify as information society services under EU law. However, platforms that exert significant control over service provision – such as Uber – may be classified as service providers subject to stricter national regulations.