Caring for sharing?

Collaborative economy under EU law

Vassilis Hatzopoulos and Sofia Roma

Abstract
The advent of the collaborative economy is what economists call “disruptive innovation” while
some even talk of “the fourth industrial revolution”. Such revolution has started in the US and is
now making its way into the EU. The objective of the present article is to outline, explore and
analyse the way that EU regulation applies/may apply to the collaborative economy. In the first
part we rehearse the reasons for, and the ways of, the development of the collaborative
economy. We also discuss the various regulatory reactions it has (or has not) triggered, so far,
in the US and the EU. In the second part we examine the way the various EU rules may apply to
those participating in the collaborative economy, i.e. the platforms, “prosumers” and
consumers. We conclude on the way regulation could/should evolve in this area.


Professor at the Democritus University of Thrace (Greece), the College of Europe, Bruges (Belgium) and
(Honourary) the University of Nottingham (UK). Attorney-at-Law.

LL.B. University of Athens, Attorney-at-Law.

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 Table of Contents
1. Introduction.......................................................................................................................................2
1.1. The rise of the collaborative economy.........................................................................................3
1.2. Definitions and main characteristics............................................................................................4
1.3. Main business models..................................................................................................................5
1.4. Main market sectors.....................................................................................................................5
1.4.1. Accommodation...................................................................................................................6
1.4.2. Transportation......................................................................................................................6
1.4.3. Tasks....................................................................................................................................7
2. Regulatory challenges........................................................................................................................7
2.1. Accommodation sector................................................................................................................7
2.2. Transportation sector...................................................................................................................8
2.3. The role of the ECJ....................................................................................................................10
3. Collaborative economy under the EU rules – a first assessment..................................................11
4. The collaborative platforms............................................................................................................12
4.1. Rights that collaborative platforms may claim...........................................................................13
4.1.1. The E-commerce Directive................................................................................................13
4.1.2. The Services Directive.......................................................................................................16
4.1.3. Public procurement..................................................................................................................17
4.2. Obligations arising for collaborative platforms..........................................................................18
4.2.1. Liability under the E-commerce Directive.........................................................................18
4.2.2. Consumer protection..........................................................................................................20
4.2.3. Data protection...................................................................................................................21
4.2.4. Anti-trust............................................................................................................................23
4.2.5. State aids............................................................................................................................25
5. The providers of the underlying service.........................................................................................26
5.1. Rights that service providers may claim....................................................................................27
5.1.1. Regulated professions - Professional qualifications...........................................................28
5.1.2. Labour law rights for the participants of the collaborative economy.................................29
5.2. Obligations arising for service providers...................................................................................30
5.2.1. Liability.............................................................................................................................30
5.2.2. Consumer protection..........................................................................................................31
5.2.3. Anti-trust............................................................................................................................31
6. The service recipient........................................................................................................................32
7. Horizontal issues..............................................................................................................................32
7.1. Reasons justifying restrictions on collaborative economy activities..........................................32
7.2. Taxation.....................................................................................................................................34
7.3. Collaborative services of general economic interest (SGEI)?....................................................34
8. Conclusion........................................................................................................................................35

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1. Introduction

The concept of sharing goods and services is far from novel. Neighbours have been borrowing
tools, family has been lending money to each other and friends have been hosted in friends’
houses long before the emergence of the sharing/collaborative 1 economy model. What is truly
innovative about the collaborative economy is the expansion of “sharing” beyond an individual’s
social network or even region. The collaborative economy facilitates the connection between
peers, while bypassing the traditional economic intermediaries. Hence, the sharing/collaborative
model “has progressed from a community practise into a profitable business model”.2
That seemingly simple concept of sharing among everyone who is willing to share has an
inherent dynamism that is currently changing the global economic landscape as we know it.
Within that context, “[t]he advent of the collaborative economy, in combination with artificial
intelligence, big data and 3D printing, makes something like a fourth industrial revolution”. 3 The
objective of the present article is, modestly, to discuss the tentative content and outer limits of
this new phenomenon (parts 1 and 2) in order to subjugate it to EU law and trace, in a somehow
speculative way, the tensions and lacunae thus arising (parts 3-7). We conclude that the non-
regulatory approach currently followed by the EU relies on many pre-existing legal concepts,
often ill-adapted to this new mode of doing business, thus bearing the risk of extreme
fragmentation along national lines (part 8).

1.1. The rise of the collaborative economy

The appearance and growth of the collaborative economy models has roots in numerous social,
cultural and economic factors.

1
Herein forth “collaborative economy”, which is the term used by the European Commission. For a discussion of
the various terms and the nuances thereby introduced see below under 1.2.
2
Böckmann, “The Shared Economy: It is time to start caring about sharing; value creating factors in the shared
economy”, (2013) available at <http://thelovettcenter.com/wp-content/uploads/2014/11/bockmann-shared-
economy.pdf> (all websites last accessed 26 September 2016), at 2.1; for general background reading about the
collaborative economy see, inter alia, Botsman and Rogers, What’s mine is yours: The rise of collaborative
consumption, (Harper Collins Publishers, 2010); Cohen and Kietzmann, “Ride on! Mobility Business Models for the
Sharing Economy”, (2014) Organization & Environment, Vol. 27(3) 279 –296; Belk, “You are what you can access:
Sharing and collaborative consumption online”, (2014) 67 Journal of Business Research, 1595–1600; Fraiberger
and Sundararajan, “Peer-to-Peer Rental Markets in the Sharing Economy”, (2015) available at
<http://ssrn.com/abstract=2574337>; Kassan and Orsi, “The LEGAL Landscape of the Sharing Economy”, (2012) J.
Envtl. Law and Litigation, Vol. 27(1); Rauch and Schleicher, “Like Uber, But for Local Governmental Policy: The
Future of Local Regulation of the “Sharing Economy”, (2014) George Mason University Law and Economics
Research Paper Series No 15-01, available at <http://ssrn.com/abstract=2549919>; Schor, “Debating the Sharing
Economy”, (2014) A Great Transition Initiative, available at <http://www.greattransition.org/publication/debating-
the-sharing-economy>; Koopman, Mitchell and Thierer, “The Sharing Economy and Consumer Protection
Regulation: The Case for Policy Change”, (2015) The Journal of Business, Entrepreneurship & the Law, Vol. 8(2),
Article 4; Cohen and Sundararajan, “Regulation and Innovation in the Peer-to-Peer Sharing Economy”, (2015) 82
UChiLRev Dialogue 116, available at
<https://lawreview.uchicago.edu/sites/lawreview.uchicago.edu/files/uploads/Dialogue/Sundararajan_Cohen_Dialog
ue.pdf>; Katz, “Regulating the Sharing Economy”, (2015) Berkley Technology Law Journal, Vol. 30(385), 1068-
1125.
3
Schwab, “The Fourth Industrial Revolution: What it Means and How to Respond”, (2015) Foreign Affairs,
available at <http://www.foreignaffairs.com/articles/2015-12-12/fourth-industrial-revolution>.

3
Firstly, technological evolution has been a key ingredient of this innovative model. 4 The
extensive use of mobile devices, equipped with elaborate apps and GPS-mapping in real time
facilitates the direct, efficient and quick match of goods/services supplied in any place and any
time with someone’s needs. Intelligent, secure and user-friendly payment systems available
increase trust of users and efficiency of the transaction online. Moreover, the massive spread of
social media has established the culture of sharing (information, photos, position etc.) to the
general public and has played a connecting role between peers.
Secondly, the growth of the collaborative economy model draws on societal parameters.
Urbanization and high population concentration creates a “critical mass” of supply and demand
and facilitates better match. The collaborative economy also capacitates bypassing of traditional
middlemen and taking control for meeting one’s own needs. Indeed, usually platforms exercise
no or little control and act rather as “economical – technological coordination providers”. 5
Furthermore, as a social reaction to materialism, overconsumption and an increasingly
“marketized” society,6 the collaborative economy - based on sharing access and recycling - is
characterized by an environmental consciousness and awareness of the need for sustainability.
Last but not least, the growth of collaborative economy reflects the society’s desire for
communication and connection,7 since the idea behind this economic scheme is the facilitation of
connection between strangers. An example of strengthening communities by sharing is the
collaborative platform Share Some Sugar, a website where “you can find someone in your
neighbourhood or social network who is willing to lend you something that you need”.8
Thirdly, the “fall” of the conventional economic model, the global financial crisis and the rise of
unemployment have fuelled the rise of the collaborative economy.
The collaborative economy model started in 1999 with the creation of Couchsurfing; an
originally non-profit organization aiming to match people who were looking for cheap travel
with people who had an empty couch. Since then, it has evolved into a highly profitable multi-
national corporation, has inspired the creation of AirΒnΒ and has spread the “sharing”
phenomenon worldwide. While the trend started in the United States, where there are already
well-established companies in many domains, it is now quickly spreading around Europe as well,
where increasingly more European collaborative platforms make their appearance. Lastly, it is
worth noting that the phenomenon of the collaborative economy may be seen as a strong
component of the more general trend of servitization of modern economies, whereby added value
is being created by combining services to products and branding them altogether as “new” or
“advanced” services.9
4
See, inter alia, Sundararajan, “Peer-to-Peer Businesses and the Sharing (Collaborative) Economy: Overview,
Economic Effects and Regulatory Issues”, (2014) available at <http://smallbusiness.house.gov/uploadedfiles/1-15-
2014_revised_sundararajan_testimony.pdf>; Hamari, Sjöklint and Ukkonen, “The Sharing Economy: Why People
Participate in Collaborative Consumption”, (2015) Journal of the Association for Information Science and
Technology, published online in Wiley Online Library (wileyonlinelibrary.com), DOI:10.1002/asi.23552.
5
Hamari e.a., op. cit. supra note Error: Reference source not found.
6
Teubner, “Thoughts on the Sharing Economy” in Kommers, Isaías, Gauzente, Nunes, Peng and Macedo (Eds.),
Proceedings of the International Conferences ICT, Society and Human Beings 2014, Web based Communities and
Social Media 2014, e-Commerce 2014, Information Systems Post-Implementation and Change Management 2014
and e-Health 2014, (2014) available at
<https://www.researchgate.net/publication/285356329_Thoughts_on_the_Sharing_Economy>.
7
Böckmann, op. cit. supra note Error: Reference source not found.
8
<http://www.collaborativeconsumption.com/2010/09/01/keara_schwartz_founder_of_share_some_sugar/>.
9
For an overview of servitization and its correlation with online platforms, see Hojnik, “The servitization of
manufacturing: EU law implications and challenges”, 53 CML Rev. (2016) 1-50.

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 1.2. Definitions and main characteristics

Even though in 2011, the TIME magazine nominated Sharing Economy as one of “10 ideas that
will change the world”10 there is great ambiguity as to what exactly this idea entails.11 There is no
universally accepted terminology, let alone definition. While the terms collaborative economy,
sharing economy, peer (P2P) economy, access economy, collaborative consumption and demand
economy - among others - are mostly used interchangeably, it is arguable whether these notions
reflect the same economic model,12 especially given the plurality and diversity of the activities
and the various forms that the “sharing” scheme may take.13 The lack of definition is especially
problematic within the European context since a coordinated approach between the European
Commission and the Member States is essential in order to avoid fragmentation of regulation
across EU borders.
Indeed, the definitions suggested by academia and the Institutions range from extremely broad, 14
which fail to offer sufficient delineation, to extremely narrow, 15 which exclude any business-to-
peer transaction,16 such as ZipCar and Toys4rent, or any transaction regarding non-physical
assets.17 While a universally accepted definition for a novel, dynamic and evolving phenomenon
is nearly impossible, there seems to be common understanding as to certain key elements of this
economic model: a) digital platforms,18 b) shift from ownership to accessibility,19 c) peer-to-peer
transactions, d) profits from monetization of idle capacity, and e) self-regulation20.
On the above basis, the European Commission opted for a rather pragmatic, if large, approach to
the definition of the term “collaborative economy”:21 the term “refers to business models where
activities are facilitated by collaborative platforms that create an open marketplace for the
temporary usage of goods or 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; and (iii) intermediaries that connect — via an online platform —

10
<content.time.com/time/specials/packages/article/0,28804,2059521_2059717_2059710,00.html>.
11
For the linguistic history of the term “sharing” see Teubner, op. cit. supra note Error: Reference source not found,
p. 323.
12
Botsman, “Defining the Sharing Economy: What is Collaborative Consumption – And What Isn’t?”, (2015)
available at <https://www.fastcoexist.com/3046119/defining-the-sharing-economy-what-is-collaborative-
consumption-and-what-isnt>.
13
For which see below under 1.3.
14
See e.g. the activities included under the “sharing” umbrella according to the pro-sharing organisation “People
who Share” at <http://www.thepeoplewhoshare.com/blog/what-is-the-sharing-economy/>.
15
Frenken, Meelen, Arets and Van de Glind, “Smarter regulation for the sharing economy”, (2015) The Guardian,
available at <https://www.theguardian.com/science/political-science/2015/may/20/smarter-regulation-for-the-
sharing-economy>.
16
For which see below under 1.3.
17
Frenken e.a., op. cit. supra note Error: Reference source not found.
18
For which see above under 1.1.
19
It is worth noting that it is argued by a small part of academia that transactions transferring ownership, such as on
Ebay and Etsy, may still be included in the definition of collaborative economy.
20
See below under 7.1.
21
In 2015 the Commission had defined the collaborative economy as “a complex ecosystem of on-demand services
and temporary use of assets based on exchanges via online platforms”. See Commission Communication
“Upgrading the Single Market: more opportunities for people and business”, COM(2015)550 final, at 2.1.

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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.”22
For the purposes of the present article, we shall follow herein forth the above definition. In view
of the above, collaborative platforms such as Ebay or Etsy do not fall within the scope of the
present article, since they promote transfer of material ownership. Further, content provider
platforms, such as ResearchGate, Spotify, Netflix, Youtube, Wikipedia, Limewire, BitTorrent,
newsroom platforms etc. may or may not qualify as collaborative platforms, but will not be dealt
with at the present article, since they raise complex intellectual property rights issues that surpass
the scope of the present.

1.3. Main business models

While there are three business types that platforms use, i.e. peer-to-peer (P2P), business-to-peer
(B2P)23 and business-to-business (B2B)24, the market structure mostly linked with collaborative
economy is the former. Hence, the present article will concentrate on P2P collaborative
platforms.
P2P platforms do not own any shared assets themselves, but rather act merely as connectors for
peers that exchange products or services with each other. In the P2P model, normally the person
offering a good or a service is a non-professional person, i.e. a peer among peers (prosumer).
Most of the popular collaborative platforms, such as Airbnb, Uber, Taskrabbit, Indiegogo,
Blablacar, Turo etc. fall into this category. It is worth noting that in conventional P2P models,
the boundaries between the roles of the participants are often vague, since both the provider and
the user are “peers”. Hence, the lines are blurred between the terms consumer and provider,
employee and self-employed, or the professional and non-professional provision of services.

1.4. Main market sectors

From renting out tools that have been living in the toolbox, or books that have been already read,
the possibilities of sharing are endless, since one man’s trash is another man’s treasure. Through
sharing individuals may gain access to expensive and luxury goods, such as a yacht or a couture
dress, that suddenly become affordable.25 Collaborative platforms may even provide financial
services, such as crowdfunding and fundraising, money lending, investing, virtual currencies,
etc., the most popular among which is crowdfunding.26 Even though “sharing” is confidently
expanding in nearly all aspects of our lives, the present article will focus on the most important
market sectors where collaborative economy flourishes.27

22
Commission Communication “A European agenda for the collaborative economy”, COM(2016)356 final, at 1.
23
A popular B2P platform is Zipcar, a business which rents to peers (consumers) cars it owns.
24
Even though the B2B model is not yet as popular, it is definitely up-and-coming. For example, renting office
space by a company or by public/municipal bodies through a collaborative platform would be considered as B2B
transaction. See e.g. Kwipped, an online B2B platform, where businesses can find and rent equipment from a
network of rental suppliers.
25
The above may be achieved through platforms such as 1000tools, Bookshare (a P2P book lending platform based
in Brazil), Get My Boat and Girl Meets Dress respectively.
26
See e.g. Kickstarter and Indiegogo.
27
For a collaborative economy sector-based graphic see <http://www.web-
strategist.com/blog/2014/12/07/collaborative-economy-honeycomb-2-watch-it-grow/>.

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 1.4.1. Accommodation

AirBnB is undoubtedly one of the most popular collaborative businesses. It is currently operating
in 191 countries, and counting more than 60 million users.28AirBnB allows individuals to become
entrepreneurs by offering part or all of their living space to their peers as short-term
accommodation. Hence, visitors (consumers), instead of participating in the traditional hotel
industry – or in regions with no hotel presence - 29, may choose to pay to be hosted at an
individual’s home. Rates are determined by hosts (providers of the underlying service) and
AirBnB withholds a charging fee per transaction. 30AirBnB allows peers to list on the platform a
spare room in their home, an empty apartment, a house they don’t use, or even a tree-house. So
far it exercises minimal regulatory control,31 depending mostly on some identification procedures
and online reputation system (rating stars).32
Similarly, collaborative businesses such as Couchsurfing33 or home swap platforms (e.g.
HomeExchange)34 promote short-term accommodation at private individuals’ homes (or just
couches), but without payment for the accommodation per se. These platforms usually charge a
membership fee35 to the platform and connect those interested.

1.4.2. Transportation

Urban transportation through collaborative businesses could take various forms, namely car
rental, ride sharing, driving services and bicycle sharing. Platforms such as Zipcar, Turo
(formerly RelayRides) and Getaround support car rental services, not very different from a
traditional car rental company. On the contrary, Turo and Getaround allow individuals-car
owners to become entrepreneurs who offer their own vehicles to their peers as short-term car
rentals.
Zimride, connects people from the same school, university, company, etc. who can share a ride
to/from the same location. Zimride sells rideshare networks to organizations, such as universities
and companies and offers free membership for passengers/users.
Platforms such as Uber, Lyft, Blablacar or Sidecar allow individuals who own a car (outside the
taxi industry) to provide driving services in point-to-point chauffeured urban transportation, for a
fee.

28
<https://www.airbnb.com/about/about-us?locale=en>.
29
Interestingly enough “76% of Airbnb properties are outside the main hotel districts”, suggesting complementarity
of collaborative and incumbent businesses. See Zervas, Proserpio and Byers, “The Rise of the Sharing Economy:
Estimating the Impact of Airbnb on the Hotel Industry”, (2016) Boston University Questrom School of Business
Research Paper Series, available at <http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2366898>, p. 2.
30
Ibid, p. 8.
31
For the legal battles that AirBnB is dealing with see below under 2.
32
It is worth mentioning, though, that upon complaints about racism and discrimination against potential visitors,
AirBnB will soon be enforcing a new anti-discrimination policy; see <http://www.bbc.com/news/business-
37314230>.
33
<http://www.couchsurfing.com/about/how-it-works/>.
34
<https://www.homeexchange.com/en/how-it-works/>.
35
While registration at Couchsurfing is free, verification of users comes upon payment of an annual fee. See
<https://support.couchsurfing.org/hc/en-us/articles/214633027-Verification-Payment-Questions>.

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 1.4.3. Tasks

Collaborative platforms operating as “time banks” 36 facilitate the provision of services between
peers in a non-monetary relation, through exchange of services. Individuals can pool and trade
time and skills, bypassing money as a measure of value. Everyone’s time and work is valued
equally, and one hour of work equals one time dollar. Hence, an individual could clean a garden
in exchange for a massage, or teach a yoga class in exchange for learning Portuguese. Almost
any skill is an asset and could be traded for another skill in this time-based model.
Moreover, numerous freelance platforms offer the opportunity to millions of unemployed or
underemployed individuals to trade labour for pay. Individuals may engage in a myriad of tasks
and errands in exchange for pay, from translating a document or designing a website on Fiverr,
to watering the neighbour’s lawn on Taskrabbit, to dog sitting on DogVacay, to running an
errand on Job-runners, etc.

2. Regulatory challenges
“The sharing economy evokes three kinds of response: regulate it out of existence, don’t regulate
it at all, and …“wait-and-see.”’1 Different sectors, in different jurisdictions have provoked
different regulatory reactions.

2.1. Accommodation sector

In the accommodation sector, Airbnb has faced legal actions in numerous states and for various
reasons. The main legal issue arises from potential violations of short-term rental laws. In that
regard, EU Member States and US states have a) imposed regulatory restrictions and
requirements and/or b) fined both AirBnB and hosts for non-compliance with existing regulation.
For example, New York has imposed fines to Airbnb hosts for not complying with local
regulations. According to New York short-rental laws, which were last updated in 2010, most
apartments cannot be legally rented out for short periods (less than 30 days), unless the renter is
present throughout the visitor’s stay.2 This means that most New York rooms and apartments
listed on AirBnB can be qualified as illegal hotels. To make matters worse for AirBnB, New York
state introduced a new law in June 2016 imposing even heavier fines to AirBnB hosts,3 despite
AirBnB’s aggressive pro-sharing campaign.4
As opposed to New York, which put pressure on AirBnB hosts, San Francisco turned directly to
AirBnB. In June 2016, San Francisco passed a law imposing fines to AirBnB itself and similar
short-rental websites for every host on their platforms not registered with the city’s Office of
Short-Term Rentals.5 However, this approach seems to be backfiring for San Francisco, since
36
See e.g. Skillharbour.
1
Quote taken from Das Acevedo, “Regulating Employment Relationships in the Sharing Economy”, (2016)
Employee Rights and Employment Policy Journal 20(1),1-35, p. 9, note omitted.
2
Coldwell, “Airbnb's legal troubles: what are the issues?”, (2014) The Guardian, available at
<https://www.theguardian.com/travel/2014/jul/08/airbnb-legal-troubles-what-are-the-issues>.
3
Clampet, “Airbnb Loses a Fight in New York as Legislature Passes Strict Advertising Law”, (2016) Skift,
available at<https://skift.com/2016/06/17/airbnb-loses-political-battle-in-new-york-as-legislature-passes-advertising-
law/>.
4
See <https://www.airbnbaction.com/neighbors-move-forward-new-york-leaves-money-on-the-table/>.
5
Ting, “Measuring the Impact of New York’s New Short-Term Rental Law on Airbnb”, (2016) Skift, available at
<https://skift.com/2016/07/18/measuring-the-impact-of-new-yorks-new-short-term-rental-law-on-airbnb/>.

8
AirBnB is currently suing the city, claiming that “websites can’t be held responsible for the
actions of the people who use those sites”.6
Even though the collaborative economy is still in its infancy in Europe, it already appears that
AirBnB has been treated in a somewhat friendlier way than in the US. In 2014, Amsterdam
became the first city to pass an “Airbnb friendly” law: a law allowing short-term rentals by
permanent residents, with certain restrictions 7 and subject to the obligation to pay the relevant
taxes, including a tourist tax. Similarly, AirBnB was endorsed by France, with the adoption of
“loi ALUR”,8 a law legalising short term rentals of primary residences, 9 and has begun collecting
tourist tax in Paris.10 Accordingly, London housing legislation was amended in order to clarify
that short-term rentals are legal. 11 The UK has even launched an initiative to become the “global
centre for sharing economy”.12 On the other hand, Barcelona has fined AirBnB for breaching
local tourism laws13 and Berlin has restricted rentals of entire apartments on AirBnB, allowing
owners to rent only individual rooms14.

2.2. Transportation sector

In the transportation sector, Uber has been fighting legal battles concerning mostly a) labour law,
b) public safety concerns and c) unfair competition allegations in relation to the traditional taxi
industry.
In regards with the former, Uber has been facing class-action lawsuits across the US by
thousands of Uber drivers. The main objective of those is to “force Uber to grant “Employee”
status to its drivers rather than hiring them as “Contractors””. 15Uber has already settled with
thousands of its drivers by acknowledging that Uber drivers are entitled to sick leave, overtime,
social security, health insurance and minimum wage, and by agreeing that it is unable to fire
Uber drivers at-will. So far, Uber has avoided classifying its drivers as “employees”. 16 However,
in a landmark judgment ruled by a UK employment court, Uber drivers were recognized to be
providing their skilled labour for Uber which “runs a transportations business” and “earns its
profits” through that labour.17 Hence, the court ruled that Uber drivers were entitled to be paid
the national living wage.

6
See “Airbnb challenges San Francisco over rental law”, (2016) available at
<http://www.bbc.com/news/technology-36650101>.
7
Namely to rent out their homes for up to two months of the year to up to four people at a time.
8
Acronyme standing for accès au logement et un urbanisme rénové.
9
See <https://www.airbnbaction.com/major-step-forward-paris-france/>.
10
Lomas, “Airbnb Gets Tourist Tax D’ Accord In Paris, Its Largest Market”, (2015) TechChurch, available at
<https://techcrunch.com/2015/08/25/airbnb-daccord/>.
11
Coldwell, “Airbnb to be legalised in London”, (2015) The Guardian, available at
<https://www.theguardian.com/travel/2015/feb/10/airbnb-to-be-legalised-in-london>.
12
See <https://www.gov.uk/government/news/move-to-make-uk-global-centre-for-sharing-economy>.
13
Coldwell, op. cit. supra note Error: Reference source not found.
14
Oltermann, “Berlin ban on Airbnb short-term rentals upheld by city court”, (2016) The Guardian, available at
<https://www.theguardian.com/technology/2016/jun/08/berlin-ban-airbnb-short-term-rentals-upheld-city-court>.
15
Elliott, “Class-action lawsuit against Uber threatens to force sharing economy platforms to regress”, (2016)
Inquisitr, available at <http://www.inquisitr.com/3057848/class-action-lawsuit-against-uber-threatens-to-force-
sharing-economy-platforms-to-regress/#1TdzhozyWBOkGApV.99>.
16
Ibid.
17
Aslam, Farrar and Others v. Uber [2016], 2202551/2015 & Others (EC), available at
<https://www.judiciary.gov.uk/judgments/mr-y-aslam-mr-j-farrar-and-others-v-uber/>, para 92.

9
In regards with public safety reasons, Uber (as well as Lyft and other similar companies) has
either been obliged to conform with various regulatory restrictions and requirements (such as
drivers’ age requirements, no criminal record, adequate insurance, yearly inspected vehicles
etc.18) or has been faced with full ban or suspended operations in numerous cities across the
world.19 It was even ruled that Uber should be subject to “the same regulations imposed on other
for-hire vehicle services in the state since it was “a common carrier””. 20 Further, Uber has been
heavily fined by regulators for operating illegally in the state of Pennsylvania in 2014 21 and
posing “a risk to public safety by offering rides without proof its drivers, vehicles and insurance
provisions met state standards”.22
Lastly, Uber has been facing legal challenges in regards with its relation to the taxi industry. It
has been banned from numerous cities in various jurisdictions, namely France, Germany,
Belgium, Italy, Portugal and Spain. Accordingly, it has suspended all or some of its services in
these countries. The lack of taxi licenses and registration of drivers and the non-satisfaction of
“the requirements for the establishment of public transportation enterprises”23 have been found to
constitute breaches of existing regulations.
The Brussels Commercial Tribunal in a case brought by a taxi operator, declared Uber illegal
and banned its UberPop services, on the basis that Uber and its drivers do not comply with
existing rules regulating taxi services (license, registration etc.). 24 Similarly, the Dutch courts
imposed a ban on Uber firstly in Amsterdam and subsequently in The Hague and Rotterdam, on
the factual grounds of lack of license. 25 The court ruled, however, that licensed taxi drivers, and
drivers who don’t seek payment, can still drive for the service. In Spain, Uber was ordered to
cease all activities by a court decision ruling that the collaborative platform was performing
unfair competition.26 Further, in Germany, the Berlin’s District Court qualified Uber as a “rental
car service” that was violating German passenger transport laws, according to which, rental cars
are required to return to home basis after completing a ride. Subsequently, the Frankfurt District
Court found that Uber failed to have the necessary licenses and insurance and posed unfair
competition to the local taxi industry. It also found that the company did not carry sufficient
insurance. It therefore imposed a nationwide ban. 27 France has also followed a rather hostile
18
See e.g. the “Vehicle for the Innovation Amendment Act of 2014”, enacted in October 2014 by the District of
Columbia Council. Some regulation has also been put in place in several US cities. See a map of pro-Uber
regulation and anti-Uber regulation US states at <http://qz.com/589041/uber-pulled-off-a-spectacular-political-coup-
and-hardly-anyone-noticed/>.
19
For a global map of all the cities that Uber is banned from see < http://www.businessinsider.com/heres-
everywhere-uber-is-banned-around-the-world-2015-4>.
20
Ranchordás, “Does Sharing Mean Caring? Regulating Innovation in the Sharing Economy”, (2015) Minnesota
Journal of Law, Science & Technology, Vol. 16(1), Article 9, p. 462.
21
Stempel, “Uber hit with record $11.4 million fine in Pennsylvania”, (2016) Reuters, available at
<http://www.reuters.com/article/us-uber-tech-pennsylvania-idUSKCN0XI2EM>.
22
Stempel, “Pennsylvania reinstates Uber's record $11.4 million fine”, (2016) Reuters, available at
<http://www.reuters.com/article/us-uber-tech-pennsylvania-idUSKCN1175ZQ>.
23
See <https://m.tempo.co/read/news/2016/04/12/056761969/many-countries-ban-uber>.
24
A decision characterized as “crazy” by the Vice-President of the European Commission, Mrs. NeelieKroes. See
the reaction published at <http://ec.europa.eu/archives/commission_2010-2014/kroes/en/content/crazy-court-
decision-ban-uber-brussels-show-your-anger.html>. See the Tribunal’s decision at
<http://www.lcii.eu/2015/10/16/uber-the-decision-of-the-brussels-commercial-tribunal/>.
25
See “Dutch judges ban taxi service UberPOP (Update)”, (2016) available at <http://phys.org/news/2014-12-uber-
preliminary-netherlands.html>.
26
See “Uber taxi app suspended in Spain”, (2014) available at <http://www.bbc.com/news/business-30395093>.
27
See <https://blogs.loc.gov/law/2016/03/legal-challenges-for-uber-in-the-european-union-and-in-germany/>.

10
approach towards Uber. Some of the legal issues that incurred are ban of UberPop’s services in
Paris, prohibition of advertisement of several of Uber’s services and arrest of Uber managers on
charges, including “deceptive commercial practices”, complicity in instigating an illegal taxi-
driving activity, and the illegal stocking of personal information28.
In an attempt to regulate collaborative companies, such as Uber, France introduced Law No.
2014-1104 on Taxis and Chauffeured Transport Vehicles, commonly known as Loi Thévenoud.29
The latter, inter alia, prohibits to chauffeured vehicles other than taxis to charge a per-kilometer
fee, requires chauffeured cars to return to their base or stop in an authorized parking place
between fares, and prohibits their use of software that shows the location of nearby available
vehicles to potential customers in real-time. The Conseil Constitutionnel ruled on the
constitutionality of the above provisions, upon actions brought by Uber.30 It found that the first
of these – the prohibition to charge on a distance basis – unjustifiably violated the freedom of
enterprise and therefore was unconstitutional, while the latter two provisions were constitutional,
considering them to be justified by reasons of public order.
Besides judicial battles, some Member States have attempted to regulate Uber and similar
companies. In Italy, the Consiglio dello Stato in a consultative opinion to the government has
held that the existing framework for transportation services is inadequate to cover collaborative
platforms. France and Hungary have already introduced purpose made regulations, while in the
UK and Ireland collaborative platforms are required to obtain a prior authorization as transport
operators. Lastly, the Netherlands is contemplating a complete liberalization of the taxi and car-
and-driver sector.31
In view of the above, Uber has filed complaints with the European Commission against France,
Germany, Spain and, recently, Hungary, alleging that they are in violation of Article 49 (freedom
of establishment) and Article 56 (freedom to provide services) of the Treaty on the Functioning
of the European Union (TFEU).

2.3. The role of the ECJ

The ECJ has received references for preliminary rulings concerning the activities of Uber in
Belgium, Spain and France. The questions posed by Member States Courts before the ECJ
concern, inter alia, whether Uber can be considered as merely a transport service or as an
electronic intermediary service or as “information society services”, and accordingly what EU
rules apply.32 Further, the question has been put whether the concept of “taxi services” would

28
See “2 Uber executives ordered to stand trial in France”, (2015) Los Angeles Times, available at
<http://www.latimes.com/business/la-fi-tn-uber-france-arrests-20150630-story.html>.
29
Available in French at <https://www.legifrance.gouv.fr/affichTexte.do?
cidTexte=JORFTEXT000029527162&dateTexte=&categorieLien=id>.
30
In Decision n° 2015-468/469/472 QPC of 22 May 2015, Société UBER France SAS et autre, available in French at
<http://www.conseil-constitutionnel.fr/conseil-constitutionnel/francais/les-decisions/acces-par-date/decisions-
depuis-1959/2015/2015-468/469/472-qpc/decision-n-2015-468-469-472-qpc-du-22-mai-2015.143800.html>.
31
For a more detailed discussion of these trends and the references to the relevant documents see the Commission
Staff Working Document accompanying the Commission Communication “A European agenda for the collaborative
economy” COM(2016)356 final, SWD(2016)184, p. 27 et seq.
32
Case C-434/15, Élite Taxi v. Uber Systems Spain, [2015] OJ C 363/21; Case C-320/16, Uber France, [2016] OJ C
296/22; on this very issue see Geradin, “Online Intermediation Platforms and Free Trade Principles – Some
Reflections on the Uber Preliminary Ruling Case” in Ortiz (Ed.), Internet Competition & Regulation of Online
Platforms, e-book available at <https://www.competitionpolicyinternational.com/wp-
content/uploads/2016/05/INTERNET-COMPETITION-LIBRO.pdf>, 119-133.

11
apply equally to unremunerated occasional private carriers who engage in ride-sharing (shared
transport) as a result of accepting journey requests that are offered to them via Uber.33 At the
time of writing the present article the Court has only issued a ruling in the case of Uber Belgium,
in which it found the preliminary request inadmissible and hence did not respond to the questions
raised.

3. Collaborative economy under the EU rules – a first assessment

It has been observed that “[t]hus far, two of the most significant obstacles to the development of
the digital economy both in Europe and overseas have been the existence of outdated national
legislation and regulation which was enacted decades ago to regulate the paradigm of traditional
businesses, and in some cases, protect them directly or indirectly against foreign competitors;
and the regulatory uncertainty regarding the rules, rights and obligations applicable to digital
platforms”.1 The Commission itself recognizes that “[r]egulatory uncertainty and fragmentation
across and within MS complicates (or even impedes) market access and limits investment
opportunities for platforms”.2
The question, then, arises how and to what extent EU rules apply to the collaborative economy
and whether the impact of EU law is to increase or, in the contrary, to decrease legal certainty in
this field. It is certain that the EU could, through harmonization or else, override national
disparities and help create an internal market for collaborative economy. This, however, would
add to the already complex EU legislation in the field of e-commerce and consumer protection,
could stifle innovation in a field under rapid expansion and diversification and could face
legitimate resistance from Member States i.a. on the basis of overriding reasons of general
interest and, more generally, subsidiarity.
In view of the above the Commission, so far, has followed the “wait-and-see” approach: to avoid
proposing new legislation and, instead, to explore the potential hidden in the application of
existing rules. In this direction the Commission, based on several “impulse papers” prepared by
academia and professional consultancies in relation to specific issues, 3 in May 2016 published
the EU Agenda for the Collaborative Economy. 4 In this well drafted document the Commission
gives some guidance on the way the various rules already in place may apply in the collaborative
sector.
The rules the Commission contemplates are those affecting the market access of the platforms
and of the underlying services, their liability, consumer protection, labour law and taxation.
Although the guidance offered by the Commission is indeed sensible and useful in order to
apprehend an area under constant mutation, the Commission itself concludes every single set of
33
Case C-526/15, Uber Belgium v. Taxi Radio Bruxellois, EU:C:2016:830.
1
Ranchordás, Gedeon and Zurek, “Home-Sharing in the Digital Economy: The Cases of Brussels, Stockholm and
Budapest”, (2016) Impulse paper prepared for the European Commission, DG GROW, available at
<http://ec.europa.eu/DocsRoom/documents/16950/attachments/1/translations/en/renditions/pdf>, p. 80, italics in the
original.
2
Commission Staff Working Document “A Single Market Strategy for Europe - Analysis and Evidence”,
accompanying the document “Upgrading the Single Market: more opportunities for people and business”,
SWD(2015)202 final, p. 6.
3
Some highly analytical and rich Impulse Papers have been published on the following topics: market access
requirements, liability issues raised by collaborative economy business models and the economic development of the
collaborative economy, available at <http://ec.europa.eu/growth/single-market/strategy/collaborative-economy_el>.
4
COM(2016)356 final, op. cit. supra note Error: Reference source not found.

12
criteria proposed with the leitmotiv that the results may only be determined on a case by case
basis. What is more, the Commission stays mute on the impact that other EU rules, such as e.g.
the rules on competition, state aids and public procurement may have on the collaborative
economy.
In what follows an attempt is being made to draw an outline of the legal situation, as it stands
today. Rather than adopting a legalistic approach and examining the application of the different
sets of rules to the parties concerned, we follow a more user-oriented approach and examine
successively the position of the different parties, i.e. the collaborative platforms (4), the provider
of the underlying service (5) and the user of the services (6).

4. The collaborative platforms

The legal position of platforms under EU law is subject to many variants and may differ
considerably under the different sets of EU rules. Such legal position may only be assessed on a
case-by-case basis in respect to each set of rules. Their rights and obligations may differ as
between the “recipient” of shared service and the “provider” of such services, as the former will
almost always qualify as a consumer vis-à-vis the platform and their relationship will be a B2P
one, while the latter’s position is more ambivalent and may give rise to both B2P and B2B
relations. In what follows the various possibilities, under the various sets of rules, will be
examined.
Collaborative platforms serve as intermediaries between those who are looking for specific
services and those who may be offering them. They act as brokers. Their very function, of
allowing demand to meet the (by them newly created) offer, 1 clearly brings them within the
traditional definition of a trader. Given that most platforms either charge a subscription fee or
claim a commission for each contract concluded with their intermediation, their activity is
overarchingly economic. Even in the cases where the use of a platform is apparently free, it will
be typically making money either from publicity or from the secondary use of the users’ data. 2 In
view of the extremely large definition of remuneration accepted by the Court3 and the fact that
remuneration may be provided by a party other than the recipient (the so called triangular
situations, typically in the field of advertising and publicity), 4 almost all collaborative platforms
will qualify as service providers in the sense of Article 57 TFEU. 5 This large vision is also
confirmed in the draft “digital economy” Directives, where it is specifically stipulated that
remuneration exists where “a price is to be paid or the consumer actively provides counter-
performance other than money in the form of personal data or any other data”. 6 Only the rare
small-size platforms operating at the local/community level, which only serve social/solidarity
purposes, such as e.g. sharing libraries, will evade this qualification. These will in principle fall
outside the scope of the EU rules, primary and secondary; by the same token they are likely to

1
Given that they actually “create” this new kind of offer.
2
I.e. by compiling such data and making it available to other traders for the promotion of their own goods and
services.
3
Joined Cases C-51/96 and C-191/97, Deliège, EU:C:2000:199.
4
See Deliège as above, but more importantly Case C-353/89, Commission v. The Netherlands, mediawet,
EU:C:1991:325.
5
See Case C-291/13, Papassavas, EU:C:2014:2209, where a free online newspaper paid only by advertisements was
held to be an information society service.
6
See COM(2015) 634 final, Art. 3.1 for the supply of digital content and COM(2015) 635 final, Art. 3.2 for the
distant sale of goods.

13
evade the bulk of locally applicable restrictions and rules, as they will be having a very specific,
not-for-profit object and a very limited geographic coverage. These will not be further
considered here.
In their capacity as service providers, collaborative platforms will be subject to the Treaty rules.
Further, different rules of secondary legislation may be applied, depending on their respective
criteria. In what follows, we shall examine (a) the rights platforms may claim under EU law and
(b) their obligations and prohibitions which they may be subject to.

4.1. Rights that collaborative platforms may claim

Market access is the building block of any economic integration project. While it has always
been in the core of the internal market, it is in this last decade that the Court has expressly
acknowledged its importance, transforming it thus into the “slogan” of the internal market. 7
Given that most collaborative platforms are situated in the USA, it may also be worth discussing
market access from outside the EU; this, however, would require us to analyse the GATS and its
complexities and would not fit in the present analysis.
Collaborative platforms which have their seat or are else connected to one Member State, may
claim market access under the general Treaty rules, the Services Directive and the E-commerce
Directive. In actual fact, platforms are likely to invoke these texts in the inverse order.

4.1.1. The E-commerce Directive

The E-commerce Directive8 is lex specialis in relation to the Services Directive, to the extent that
it only applies to information society services, i.e. “any service normally provided for
remuneration, at a distance, by electronic means and at the individual request of a recipient of
services”.9 The provision of such services in the EU is, in principle, subject to no prior
authorization in the providers’ home state (Art. 4(1)) and benefits from the “internal market
clause” (Art. 3(2)), according to which all other (host) Member States are precluded from raising
any obstacles. Hence, the E-commerce Directive is the ideal “market access opener” both in the
home and in the host Member States, and collaborative platforms may greatly benefit from it.
This is only possible, however, for these platforms the activity of which is limited to the
provision of electronic services, i.e. mere intermediation, and does not extend to
affecting/participating to the provision of the underlying service. From the very definition of the
concept of “sharing economy” it follows that most platforms do not own the assets they put at
the disposition of their clients; in this sense they only offer an information society service, i.e.
intermediation through electronic means.

7
See Snell, “The Notion of Market Access: A Concept or a Slogan?”, (2010) 47 CML Rev., 437–72.
8
European Parliament and Council Directive 2000/31/EC on certain legal aspects of information society services, in
particular electronic commerce, in the Internal Market (Directive on electronic commerce) [2000] OJ L 178/1.
9
Article 2(a) of the Directive refers to the definition given in the “notification” Directive 98/34/EC, nowadays
replaced by Directive 2015/1535/EU [2015] OJ L241/1. This latter text explains the elements of the above definition
as follows: i) “at a distance” means that the service is provided without the parties being simultaneously present; ii)
“by electronic means” means that the service is sent initially and received at its destination by means of electronic
equipment for the processing (including digital compression) and storage of data, and entirely transmitted, conveyed
and received by wire, by radio, by optical means or by other electromagnetic means, iii) “at the individual request of
a recipient of services” means that the service is provided through the transmission of data on individual request.

14
This simple assertion, however, should be revisited in view of the fact that several platforms are
more or less involved in the type/quality/conditions of the underlying service provision. Hence,
for example, Uber and many of the transportation platforms 10 impose conditions on the types of
cars (only passenger cars, of a certain age etc.), the facilities that should be offered (bottle of
water, wi-fi connection, bluetooth connection with the passenger’s music etc.) and, most
importantly, fix the price paid by the passenger; some of them, including Uber, pay the drivers
for their services. Hence, they are directly involved in the provision of transportation services
and are unlikely to qualify as mere providers of online services. The position in relation to Uber
has given rise to great controversy and to opposing judicial decisions in the various Member
States, and even more contradictory decisions in the USA. 11 The question has been brought, and
is pending, before the ECJ.12
In our view, it should be assumed that the EU E-commerce Directive, in view of the requirement
that services should be offered “at a distance, by electronic means”, does not cover platforms
which fall in the above category.13 It is a different question still, whether such platforms could
come under the said Directive only in respect of their information society services, while being
subject to other pieces of legislation for the rest. In other words, could a severability test apply
where the electronic services are sufficiently distinguishable from the physical ones, or rather
should the test be that only the principal service (typically the physical one) should be taken into
account?
While for commercial transportation platforms this question seems rhetorical in view of the
overall control they exert over the actual transportation service, the same is not true for home-
sharing platforms. For one thing these platforms do not have any employment relationship with
home-owners, nor do they (typically) exert any control over the facilities put in offer. On the
contrary, they are open to any type of accommodation (from single beds in shared rooms to
entire houses and to luxurious estates; and from barges and sailing-boats to tree-houses) and they
make it clear that it is the responsibility of the home-owners to define and deliver the level of
service they deem appropriate. Price is also determined by the home-owners. In this sense they
are more akin to traditional intermediaries. Several of these platforms, however, are less passive
than the previous passage assumes: they offer advice to home-owners as to how to be good hosts,
put at their disposition professional photographers, propose set-term contracts, withhold a
security deposit, take insurance on behalf of both the parties and even, on the basis of the big
data they dispose, propose the “ideal” price for different locations at different periods of the
year!14 While it is difficult to hold that platforms which do all the above are mere intermediaries,
it may, nonetheless, be said that all the above services are indeed ancillary to the main service
which is that of the intermediation.
The Commission’s recent Communication on a European Agenda for the collaborative
economy15 gives some welcome clarifications in this respect. While acknowledging that the
question whether a collaborative platform also provides the underlying service may only be
resolved on a case-by-case basis, it sets out three criteria: a) whether the platform imposes (as
10
The examples which follow are not necessarily taken from Uber, but rather illustrate the practices of various
transportation platforms.
11
For the different solutions reached in different jurisdictions see above under 2.
12
Elite Taxi v. Uber Systems Spain, cited supra note Error: Reference source not found; Uber Belgium, cited supra
note Error: Reference source not found.
13
See, however, Geradin, op. cit. supra note Error: Reference source not found, for the opposite view.
14
On the issue of price fixing see below under 4.2.4. and 5.2.3.
15
COM(2016)356 final, op. cit. supra note Error: Reference source not found.

15
opposed to proposes) the price, b) whether it decides on other key contractual terms and c)
whether it owns the key assets used to provide the underlying service. When these criteria are
cumulatively met, then there would be a strong indication that the platform also offers the
underlying service. Other, secondary criteria that may be taken into account are, according to the
Commission, whether the platform incurs the costs and assumes all the risks related to the
service and if an employment relationship exists with the person providing the service; mere
assistance, on the other hand, for the performance of ancillary tasks (as the ones described above
for home-renting platforms) does not mean that the platform exerts significant control over either
the choice of the providers or the manner in which the underlying service is being offered.16
From the above it follows that the test set by the Commission makes it quite difficult to reach the
conclusion that a platform actively participates in the underlying service. This is consistent with
the Commission’s pro-sharing attitude, given that platforms which are found to participate in the
underlying service will (also) need to comply with the sector-specific regulations applicable,
both at the national and at the EU level, to the corresponding economic activity. If they need to
comply with national law themselves, it is not clear whether and under what circumstances such
platforms could also be held responsible for those underlying service providers who violate the
relevant legislation.17
The other platforms, which only qualify as information society providers will, in principle, be
free both to take up business in one (the home) Member State and to offer services in all other
(host) Member States without being subject to any prior authorization, declaration or other
restriction.
There are situations, however, under which the host State authorities may legitimately deviate
from the internal market clause enshrined in Article 3 of the E-commerce Directive: when public
policy, public health, public security and consumer protection are at stake. 18 According to the E-
commerce Directive the above reasons only justify measures imposed for services “imported”
from some other Member State, but they do not allow such “home” Member State (or the one in
which e.g. a US-based platform will make its establishment within the EU) to impose any prior
authorization requirement or equivalent restriction. This does not mean that the home Member
State may not supervise information society providers established in its territory; in the contrary,
it is held responsible to supervise them “on behalf” of all other Member States.19

4.1.2. The Services Directive

The Services Directive20 is supposed to have “horizontal” application and to cover most services.
Several activities, however, are excluded. Transportation services, financial services, healthcare
services, temporary work agencies, social services such as social housing and childcare are some
of the activities which, while being excluded from the Directive, are relevant for the
collaborative economy. For each collaborative economy activity it should be evaluated
individually whether and to what extent it falls within the exception. Given that exceptions to the

16
Idem, p. 6-7.
17
See e.g. above under 2.1, the example of AirBnB in the State of San Francisco, where it is suing to recover the
fines imposed to it by that State, arguing that the platform may not be responsible for the actions of the people who
use the site.
18
See Art. 3(4).
19
See recital 22 of the Directive; on the issue of the grounds which may be invoked by the Member States in order
to regulate collaborative economy activities we shall come back, see below under 7.1.
20
European Parliament and Council Directive 2006/123/EC on services in the internal market [2006] OJ L 376/36.

16
Treaty freedoms and to secondary legislation implementing them should be interpreted
restrictively, it does not go without questioning that any activity in the above sectors will be
excluded from the scope of the Services Directive. For instance, given that in Femarbel the
Court held that are excluded from the Directive only those core health-related activities which
are performed by health professionals,21 most health-related services offered over platforms,22
would still come under the Services Directive. On the other hand, the Court has given an
extremely wide interpretation to the concept of transport services, including hot air balloon
rides23 and short cruises in the canals of Amsterdam. 24 Hence, it would need to be ascertained, for
every particular activity, whether it falls within or outside the scope of the Services Directive.
Market access for those collaborative platforms which do fall within the Services Directive will
be facilitated, both at the level of taking up activity (in the home Member State) and at that of
offering services in other (host) Member States. Under the Services Directive the requirement of
a prior authorization is not altogether excluded (as is the case under the E-commerce Directive),
but need be justified, necessary and proportionate.25 Justifications may stem from overriding
reasons of public interest (including, public order, security and health). 26 Further, authorizations
should be delivered according to non-discriminatory, objective and transparent criteria, known in
advance, within reasonable time and be of indeterminate temporal and geographical coverage. 27
They may not contain any of the requirements blacklisted in Article 14 of the Directive and may
only exceptionally contain requirements from the grey list of Article 15. It need not be stressed
that, at present, the above requirements of non-discrimination (between what kinds of
platforms?), objectivity (again, how to compare different collaborative services) and
transparency, are all but served. In view of the above it becomes evident that although the
Services Directive does contain both substantive and procedural guarantees, it is far from
granting the automatic take-up of any activity in the way the E-commerce Directive does.
Cross-border service provision under the Services Directive is supposed to be without obstacles,
unless such obstacles are justified by public policy, public security, public health or the
protection of the environment.28 In this respect collaborative platforms offering services to other
Member States under the Services Directive are in a strongly comparable condition with those
platforms which merely provide information society services and come under the E-commerce
Directive. Finally, those collaborative platforms that are excluded from the scope of the Services
Directive come under the general Treaty rules on services.

21
Case C-57/12, Femarbel v.CoCom, EU:2013:517.
22
Such as e.g. cohealo.com which helps health systems share medical equipment across facilities, or Macmillan
cancer support which brings into contact and supports cancer patients at <http://www.macmillan.org.uk/about-us>.
23
Case C-382/08, Neukirchinger, EU:C:2011:27.
24
Joined Cases C-340/14 and 341/14, Trijber and Harmsen, EU:C:2015:641.
25
Services Directive, Art. 9.
26
For the confusions between overriding reasons of general interest and express treaty provisions see Hatzopoulos,
“Justifications to restrictions to free movement: Towards a single normative framework?” in Andenas, Bekkedal and
Pantaleo (Eds.), The Reach of Free Movement (The Hague 2016) (forthcoming).
27
Services Directive, Arts. 10-13.
28
It is a controversial issue whether Art. 16 of the Directive can legitimately restrict recourse of the Member States
to the vast body of overriding reasons of general interest recognized by the Court without introducing any
harmonization in respect of those; see Hatzopoulos, “Assessing the Services Directive” (2008) Cambridge Yearbook
of European Law 2007-08, Vol. 10, 215-261.

17
4.1.3. Public procurement

Collaborative platforms offer services that are of interest to the State. Indeed, in the UK several
public bodies decommissioned part or all of their fleets of service cars and have, instead, taken
car club memberships for their employees.29 Similarly, hosting civil servants who travel on
mission or official guests on visit from other regions/states in rooms and/or houses found through
platforms may be both cheaper for the public authorities and more enjoyable for the officials
concerned. Further, the provision of accommodation for social tourism is a first-class candidate
for house-sharing platforms. The use of extra working space needed for short periods of time
could also be offered through platforms such as Sharedesk or Liquidspace. And the examples
may be multiplied.
However, under the current public procurement framework, even after its 2014 reshuffle
intended to render it more flexible, it would be difficult for platforms to participate in public
tenders; obstacles would lie both at the level of the selection and of the award criteria.
Given that the second of the three selection criteria foreseen by the general Public Procurement
Directive30 relates to the “economic and financial standing” of the tenderer, it is difficult to
imagine how e.g. a house-sharing platform which owns little more than the software and
employs few employers in rented premises, may compete with a hotel chain which owns
facilities worth millions and employs hundreds of people. Similarly, the third selection criterion,
namely the “technical and professional ability” of a platform, which has no employment
relationship with the people who shall be performing the tasks and where the choice of such
people is not determined in advance, will be very difficult to substantiate. Indeed, although it is
foreseen in the Directive that the tenderer may rely on the capacities of other “entities” the
wording of the relevant provision seems to imply that such entities should be individualized at
the time of the tender and could be made to provide written commitments.31
To take this point further, when the award criterion used is not merely the lowest price, but the
most economically advantageous tender, one of the elements which may be taken into account is
the “organisation, qualification and experience of staff assigned to perform the contract”. 32
Hence, the said staff need be determined in advance. The same conclusion is also drawn from the
provisions of the Directive on subcontracting, where it is foreseen that the tenderer may be asked
to “indicate in its tender any share of the contract it may intend to subcontract to third parties and
any proposed subcontractors”.33
These are few of the points which indicate that the current framework for public procurement is
far from accommodating for tenders from collaborative platforms. This, however, is
disconcerting in at least two ways. From an economic point of view, as stated in the previous
paragraphs, the award authorities could greatly benefit from receiving collaborative services.
From a legal point of view, collaborative platforms, especially where they qualify as more than
29
For example, Croydon Council took this approach in 2010 when it piloted a partnership with Zipcar that gave it
exclusive access to vehicles during working hours and allowed local residents to rent them for the rest of the time; in
this way they reported 42% reduction in travel costs and 36% reduction in CO2 emissions; see Wosskow,
“Unlocking the Sharing Economy: An Independent View”, Report commissioned by the British Government (2014),
available at <https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/378291/bis-14-1227-
unlocking-the-sharing-economy-an-independent-review.pdf>, p. 19.
30
European Parliament and Council Directive 2014/24/EU on public procurement and repealing Directive 2004/18
[2014] OJ L 94/65, Art. 58.
31
Ibid, Art. 63.
32
Ibid, Art. 67.
33
Ibid, Art. 71(2).

18
mere e-providers and are subject to the rules and obligations foreseen for the underlying service
providers (e.g. if Uber is qualified as a transportation undertaking), they should also have the
same rights. Failing which they would be suffering unjustified discrimination.

4.2. Obligations arising for collaborative platforms

Collaborative platforms may be liable both towards the provider and the recipient of the
underlying service. They may be liable both for the electronic services provided online by them
and for the underlying services provided by/with the help of the service providers. For instance,
AirBnB may be liable to a homeowner for damages or other loss caused by the guests; it may
also be liable to the accommodation seeker who was either misled by the information published
on the site (i.e. the electronic service) or who was left without accommodation because the
owner had disposed of their home otherwise (i.e. the underlying service). Further, given that
platforms collect and process data from both parties, they are also bound by the data protection
rules. These need further clarifications.

4.2.1. Liability under the E-commerce Directive

Next to automatic market access, the other way in which the E-commerce Directive facilitates
the providers of e-services is by limiting their liability for content over which they have no
control. Hence, in cases where the e-service provider serves as a “mere conduit” for illegal
content (Art. 12), offers “caching” services (Art. 13) or provides hosting (Art. 14), without in any
way participating in the creation, transformation or else the modification and active
dissemination of the illegal information, such provider is exempt from liability. 34 Since “mere
conduit” and “caching” suppose that the information is stored only in a temporary and transient
manner necessary for the electronic process to take place, and given that most platforms store
information for longer and process it in order to perform their matching function, it is essentially
Article 14 on “hosting” which is relevant here.
According to the Court, “in order to establish whether the liability of a referencing service
provider may be limited under Article 14 of Directive 2000/31, it is necessary to examine
whether the role played by that service provider is neutral, in the sense that its conduct is merely
technical, automatic and passive, pointing to a lack of knowledge or control of the data which it
stores”.35 On the other hand, “the operator plays such [an active] role when it provides assistance
which entails, in particular, optimising the presentation of the offers for sale in question or
promoting them”.36

34
For the finding that a social networking platform (which is not very dissimilar from collaborative platforms) offers
hosting services see Case C-360/10, SABAM v. Netlog, EU:C:2012:85.
35
Joined Cases C-236 to 238/08, Google France v. Louis Vuitton, EU:C:2010:159, para 114.
36
Case C-324/09, L’Oreal v. eBay, EU:C:2011:474, para 123; illustrations of the application of the above rules are
provided by the French decision of the Cass. Com., 4 décembre 2012, 11-27729, Publicité Sté Pewterpassion.com c/
Sté Leguide.com, where the Court held that a platform which top ranked products against remuneration was
indirectly promoting such products and could not claim Art. 14 liability exclusion, while the German Federal Court
of Justice, in case I ZR 94/13, of 19 March 2015, held a platform not liable for the demeaning review put up by one
of its users concerning the services received through the intermediation of the said platform; for a thorough
discussion of the liability issues raised by the combination of the E-commerce Directive with the Unfair Commercial
Practices Directive, see the Commission Staff Working Document, “Guidance on the implementation/application of
Directive 2005/29/EC on Unfair Commercial Practices” (revised), SWD(2016)163 final, p. 119 et seq.

19
Hence, it becomes crucial to know whether a platform actively intermediates between the parties
(by drafting terms or clauses of their contract, by deciding on the price etc.) or whether, in the
contrary, it only serves as a passive “bulletin board” for information over which it has no control
whatsoever.37 As the Commission has put it “the exemption from liability applies on the
condition that the collaborative platform does not play an active role which would give it the
knowledge of, control over or awareness of the illegal information”.38
The Dutch Supreme Court has held that an active platform (in the area of accommodation) is
characterized by the fact that the provider and the seeker may not get into direct contact but have
to go through the platform for their transaction to conclude. In the opposite, where the platform
only provides the necessary contact details of the accommodation provider, then it will be
considered a mere bulletin board.39 Further to this criterion, one may say that a platform which is
being paid for the actual conclusion of a contract (by way of a commission) rather than for
making public the service and contact details of its provider (by way of a registration fee,
subscription or advertisement) is more likely to qualify as “active”.40
The appreciation of the neutrality of the platform in view of assessing its liability resembles in
many respects the evaluation, discussed above, of whether it provides merely e-services or, on
the contrary it is also involved into the provision of the underlying service. Indeed, if the
platform is considered to be itself offering the underlying service, then the E-commerce
Directive and its Article 14 are altogether inapplicable (at least to the services exceeding the e-
service). If, on the other hand, it is established that the platform is only an e-provider, then the
applicability of Article 14 may be assessed on the basis of the criteria discussed above. Hence, a
graduation may be established along the following lines: when the platform participates to the
provision of the underlying service, the E-commerce Directive is inapplicable; when the platform
plays an active role in determining the content of the underlying service (which may be offered
by a third party) then the E-commerce Directive may apply but the exclusion of liability foreseen
in Article 14 may not. The exclusion of liability shall apply where the platform does neither of
the above and has a passive or else neutral role both in the definition and in the provision of the
underlying service.
“Neutral” platforms, only benefit from the liability exemption as long as they reasonably ignore
the illegal information. As soon as they get to know of it they need to remove or disable access to
it. According to the Court the platform may no more benefit from the exclusion when it has
“been aware of facts or circumstances on the basis of which a diligent economic operator should
have identified the illegality in question and acted in accordance”. 41 Hence, a diligent platform
provider has not only to respond to notifications from users but should also implement an
effective notice-and-take-down policy.42
37
The term “bulletin board” is taken from Koolhoven, Neppelenbroek, Santamaria Echeverria and Verdi, “Impulse
Paper on specific Liability Issues raised by the collaborative economy in the accommodation sector, Paris-
Amsterdam-Barcelona”, upon request by the Commission (2016), available at<http://ec.europa.eu/growth/single-
market/strategy/collaborative-economy_el>, p. 12.
38
Commission Report “on the adequacy of national expert resources for complying with the regulatory functions
pursuant to Article 27(4) of Directive 2013/30/EU”, COM(2016)318 final, p. 7-8.
39
Hoge Raad 16 October 2015, NL:HR:2015:3099, Prejudiciele beslissing op vraag van NL:RBDHA:2015:1437.
40
In this sense see also Koolhoven e.a. op. cit. supra note Error: Reference source not found, p. 15.
41
Case C-324/09, L’Oreal v. eBay, para 120; it should be noted, however, that no general obligation to monitor the
content of the hosted material may be imposed on the e- service provider, see Art. 15(1) of the E-commerce
Directive.
42
It is yet a different issue whether and to what extent national private law on agency, an issue typically regulated by
the national civil codes, will apply to “passive” platforms.

20
Liability under the E-commerce Directive may exist towards the consumers of e-services as well
as towards third parties.43 In other words, the question whether the subject of the illegal
information (the plaintiff) is or is not a consumer is irrelevant. Hence, the above developments
hold true both in relation to the service recipients (who would typically qualify as consumers)
and to service providers (who occasionally would qualify as traders themselves).44

4.2.2. Consumer protection

Consumer Protection in the EU is essentially secured through (in chronological order of

adoption) the Unfair Contracts Terms Directive,45 the Unfair Commercial Practices Directive,46
the Consumer Rights Directive47 and the Directive on alternative dispute resolution and the
Regulation on online dispute resolution.48 These will be further completed by the forthcoming
“Digital Single Market Directives”, especially the one on digital content. 49 The web of rules set
by these texts is designed to protect consumers against traders.50 In other words all the above
legislation does not apply to either P2P or B2B relations. As already explained, the existence of a
P2P relationship is one of the main characteristics of collaborative activities (while B2B is also
conceivable, but not discussed in this paper). Hence, in order to understand the way consumer
protection law applies on collaborative platforms, it is crucial to assess which of the three parties
typically involved in collaborative economy activities qualifies as a trader, i.e. “acting for
purposes relating to his trade, business, craft or profession” and which is a consumer i.e. acting
outside his trade, business, craft or profession.51 Hence, it is necessary to assess which of the
three parties typically involved in collaborative economy activities qualifies as a trader and
which as a consumer.
The fact that collaborative platforms typically exercise economic activities52 does not necessarily
mean that they qualify as traders. In the former test the focus is on the nature of the activity
while in the latter on the kind of trade, profession etc. exercised by the operator and on whether
they gain some - direct or indirect - revenue from it. What is more, the fact that the definition
followed by the abovementioned Directives uses the term “purpose” brings in an element of
intent and allows for some subjectivity to make it into the definition of a trader – and of a
consumer. “According to a case-by-case assessment, a platform may be acting for purposes
relating to its business, whenever, for example, it charges a commission on the transactions
between suppliers and users, provides additional paid services or draws revenues from targeted

43
See e.g. Case C-131/12, Google Spain v. AEDP and Mario Costeja Gonzales, EU:C:2014:317.
44
For the peers providing the service see below under 5.
45
Council Directive 93/13/EC on unfair terms in consumer contracts [1993] OJ L 95/29.
46
European Parliament and Council Directive 2005/29/EC concerning unfair business-to-consumer commercial
practices [2005] OJ L 149/22.
47
European Parliament and Council Directive 2011/83/EU on consumer rights [2011] OJ L 304/64.
48
European Parliament and Council Directive 2013/11/EU on alternative dispute resolution for consumer disputes
and amending Regulation (EC) No 2006/2004 and Directive 2009/22/EC (Directive on consumer ADR) [2013] OJ L
165/63; European Parliament and Council Regulation (EU) 524/2013 on online dispute resolution for consumer
disputes and amending Regulation (EC) No 2006/2004 and Directive 2009/22/EC (Regulation on consumer ODR)
[2013] OJ L165/1.
49
COM(2015)634 final.
50
Or “suppliers”, defined in the same manner (in Art. 2(3)) of the draft Digital Content Directive, cited in the
previous note.
51
Unfair terms Directive, Art. 2(a) and (b).
52
See above under 4.

21
advertising”.53 It is under the above perspective e.g. that the Italian Consumer and Competition
Authority, upheld by the Administrative Court of Lazio, held that Tripadvisor qualifies as a
“trader” although not directly charging for its services.54
It is, however, perfectly conceivable that a platform carries out some economic activity which is
outside the scope of its trade etc. or that it offers some activity which does qualify as economic
but which is offered for a communitarian, social or other non-commercial purpose. All in all,
however, more often than not, collaborative platforms will qualify as “traders”.
In a similar, but inverse, manner, most users of the platforms’ services will qualify as
“consumers” and will, thus, be able to claim protection. 55 More delicate is the qualification of the
provider of the underlying service.56
On top of the consumer protection obligations stemming from the abovementioned texts
collaborative platforms which are held to directly partake in the provision of the underlying
service, are also subject to any sector-specific regulations, liability regime, codes of conduct etc.
foreseen for the regulated profession which each of them exercises.

4.2.3. Data protection

Personal data has the potential to lower entry barriers, stimulate competition, enable consumers
to receive better quality services and help companies gain insight on market opportunities.
Hence, it has been argued that in the modern, data-driven economy, data is a new form of
currency.57 The “datafication”58 of all aspects of life, and the aggregation of large amounts of
data has led to talks of “big data revolution” 59. Collaborative platforms collect personal data,
concerning the age, gender, residence, employment, professional capacities and qualifications,
dietary or other preferences, health condition, medications, economic details and much more of
both the users and the providers of collaborative services. Indeed, their function is to match the
needs of the former with the goods/services on offer by the latter. In this sense they are data
controllers and, typically also data processors: not only do they do the actual processing (unless
they outsource it), but also, and most importantly, they determine the purpose and the means of

53
See SWD(2016)163 final, op. cit. supra note Error: Reference source not found, p. 124.
54
Autorità Garante della Concorrenza e del Mercato, Decision PS9345 Tripadvisor of 19 December 2014, paras 87-
89. This specific part of the decision by the AGCM was confirmed by the Tribunale Amministrativo Regionale per il
Lazio on 13 July 2015; Sezione I, Sentenza n. 09355. The case is taken from the abovementioned Communication,
which is a sign that the Commission endorses this reasoning.
55
For the qualification of users as “consumers” see below under 6.
56
For the qualification of the underlying service provider see below under 5.
57
See the House of Lords Select Committee on European Union 10th Report of Session 2015–16, “Online Platforms
and the Digital Single Market”, para 203, including the quote of Professor Ezrachi: “Data is the currency—the
commodity—which provides us with ‘free’ access to many online services and products and an advanced Internet
environment.”.
58
See Cukier and Mayer-Schoenberger, “The Rise of Big Data: How It's Changing the Way We Think About the
World”, (2013) Foreign Affairs, Vol. 92(3).
59
“Big data” is characterized by volume, variety and velocity. See Lambrecht and Tucker, “Can Big Data Protect a
Firm from Competition?”, (2015) available at
<http://ec.europa.eu/information_society/newsroom/image/document/2016-
6/computer_and_communications_industry_association_-
_can_big_data_protect_a_firm_from_competition_13846.pdf>.

22
the processing of personal data.60 Hence, they are subject to all the rules and disciplines of the
Data Protection Directive61 and of the e-Privacy Directive.62
These rules have been reviewed with the adoption of the new Data Protection Regulation, which
will have to be implemented by Member States after May 25, 2018. 63 Other than the right to be
forgotten (recognized by the Court in Google Spain)64 the new Regulation introduces the idea of
data protection “by default” or “by design”, meaning that the default settings/characteristics of
any site, service or electronic product should be the ones most protective of privacy.
Correlatively, the conditions leading to a valid consent are being clarified. Further, the new
Regulation expands the definition of “personal data” to include data collected through the use of
cookie IDs, IP addresses, location tracking and other online and device identifiers. Lastly, and
this will be a ground of extra burden for electronic platforms, a new obligation of data portability
from one platform to the other is being enacted as a means to foster competition. 65 This, in turn,
would mean that similar platforms would have to build their applications in similar manners, in
order to make possible such portability. The General Data Protection Regulation also applies to
data controllers and processors outside the EU if their data processing activities relate to EU data
subjects.66 In order to ensure some extra-territorial application of the EU rules in a more effective
manner than it did with the “Safe Harbour” agreement, 67 the EU has adopted the EU-US Privacy
Shield framework. While the updated legal framework offers a stronger data protection scheme
to users of collaborative platforms, irrespective of the place where these are located, certain
issues are still not addressed by regulation but rather are determined solely by the terms and
conditions of the platforms. For instance, cancellation of one’s account on a collaborative
platform does not necessarily lead to the deletion of personal data previously gathered. 68
60
See the definitions in Art. 2(d) and (e) of the Directive. For the fine distinction between the two see Information
Commissioner’s Office, “Data Controllers and Data Processors: what the difference is and what the governance
implications are” (2014), available at <https://ico.org.uk/media/for-organisations/documents/1546/data-controllers-
and-data-processors-dp-guidance.pdf>.
61
European Parliament and Council Directive 95/46/EC on the protection of individuals with regard to the
processing of personal data and on the free movement of such data (Data Protection Directive) [1995] OJ L 281/31.
For a comprehensive and up to date presentation of the obligations stemming from this Directive see Linskey , The
Foundations of EU Data Protection Law (OUP, 2015); for a briefer account see Hustinx, “EU Data Protection Law:
The Review of Directive 95/46/EC and the Proposed General Data Protection Regulation”, (2014) available at
<http://www.statewatch.org/news/2014/sep/eu-2014-09-edps-data-protection-article.pdf>.
62
European Parliament and Council Directive 2002/58/EC concerning the processing of personal data and the
protection of privacy in the electronic communications sector (Directive on privacy and electronic communications)
[2002] OJ L 201/37 (e-Privacy Directive).
63
European Parliament and Council Regulation (EU) 2016/679 on the protection of natural persons with regard to
the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General
Data Protection Regulation) [2016] OJ L 119/1.
64
Case C-131/12, Google Spain.
65
For an assessment of the new Regulation see Hustinx, op. cit. supra note Error: Reference source not found; see
also Reding, “The upcoming data protection reform for the European Union”, (2011) International Data Privacy
Law, Vol. 1(1), 3-5, available at <http://idpl.oxfordjournals.org/content/1/1/3.full.pdf+html>.
66
Article 3.
67
The EU-U.S. Privacy Shield imposes stronger obligations on U.S. companies to protect Europeans’ personal data
and complies with the requirements of the ECJ, which ruled the previous “Safe Harbour” framework invalid with its
judgment in Case C-362/14, Maximillian Schrems v. Data Protection Commissioner, EU:C:2015:650.
68
See for e.g. AirBnB’s Terms of Privacy Policy, point 8: “…any reviews, forum postings and similar materials
posted by you may continue to be publicly available on the Platform in association with your first name, even after
your Airbnb Account is cancelled.”, available at <https://www.airbnb.com/terms/privacy_policy>.

23
Similarly, personal data concerning one person may be provided to the platform – and made
known to the public - by another user without their consent, especially through the posting of
peer-reviews; regulation of such personal data “spills” is solely up to the platform’s policies.69

4.2.4. Anti-trust

There is no doubt that collaborative platforms offer new services – or a wider variety of pre-
existing ones – in a way that overall is beneficial to consumers. Hence, for instance, tourists
nowadays have a much wider variety of accommodation choices, at a much wider array of
prices. Moreover, the supplementary offer of accommodation makes sure that hotel prices do not
skyrocket even during high-season or peak events and prevents abusive practices; at the same
time it allows for extra demand to be covered when permanent facilities are not enough. 70
Therefore, the overall balance of the collaborative economy towards consumer welfare is clearly
positive. However, the literature has identified several important challenges to the application of
anti-trust law as we know it, raised by the collaborative economy.
As far as concerted practices are concerned, collusion between platforms would be very difficult
to establish, since, collusive “intent” would be altogether absent the same as any “agreement”:
platforms would be reaching comparable prices through processing comparable data with similar
algorithms.71 Hence, some authors propose that the fundamental role played by big data and its
use by “robo-sellers” in determining market prices, should lead the enforcement authorities to
revisit the above two concepts in order to apprehend indirect intent enshrined into the coding of
algorithms and “agreements” which are reached without the parties ever colluding. 72 In the US
such developments have, discretely, seen the day.73 Other commentators suggest even broader
adaptations to legal reasoning by e.g. “reconsidering the relationship [and respective
responsibility] between humans and machines” and looking into “the relevant algorithm to
establish whether any illegal action could have been anticipated or was predetermined”.74
A different issue yet is whether platforms may be held liable for collusion of undertakings
operating in a completely different market segment. In this respect, a recent judgment of the ECJ
has paved the way by holding that a consultant company, operating in a completely distinct
69
AirBnB prohibits reviews that include “content that violates another person or entity’s rights, including intellectual
property rights and privacy rights (ex: publishing another person’s full name, address or other identifying
information without permission).” See <https://www.airbnb.com/help/article/546/what-is-airbnb-s-content-policy?
topic=250>.
70
It has been calculated that approximately 30% of the visitors of the 2014 World Cup in Rio were able to find
accommodation through some collaborative platform.
71
It is reminded that both under the Sherman Act and under EU law, oligopolists that achieve price coordination
interdependently, without communication or facilitating practices, may escape enforcement, even when their actions
yield supra-competitive pricing that harms consumers.
72
See Mehra, “Anti-trust and the Robo-Seller: Competition in the time of Algorithms”, (2015) Temple University
Lelga Studies Research Papers Series, No. 15, available at <http://papers.ssrn.com/sol3/papers.cfm?
abstract_id=2576341>; see also Stucke and Ezrachi, “Artificial Intelligence and Collusion: When Computers Inhibit
Competition”, (2015) The University of Tennessee Legal Studies Research Paper Series No. 267, available at
<http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2591874>.
73
The Department of Justice, in a case involving Amazon and price-fixing in the area of posters, found that the
conspirators “adopted specific pricing algorithms for the sale of certain posters with the goal of coordinating
changes to their respective prices and wrote computer code that instructed algorithm-based software to set prices in
conformity with this agreement”; see <http://www.justice.gov/atr/public/press_releases/2015/313011.docx > and for
a discussion of this and other cases Stucke and Ezrachi above in the previous note.
74
Stucke and Ezrachi, op. cit. supra note Error: Reference source not found, p. 31.

24
market from the one where the collusion took place, but who actively and positively coordinated
and facilitated the collusion to happen, may be held liable together with the participating
undertakings.75
Similarly difficult will be to control the abuse of dominance (Article 102 TFEU) and mergers in
the collaborative economy. On top of the above difficulties, the question of determining the
relevant market risks being a tricky one, for at least five reasons. 76 First, while traditional
markets are one-sided, collaborative markets are two sided: the platform gets money and gathers
market share both in the market of prosumers/providers and in the market of final consumers.
While the two markets are strongly interconnected by means of the externalities produced (i.e.
the larger number of prosumers connected to a platform is likely to attract a larger number of
final consumers), participants in each market segment may have opposing interests (the
prosumer strives for higher income while the consumer for lower prices). Hence, the question:
which market segment and how is it to be taken into account? 77 Second, the above externalities
often lead to a winner-take-all dynamic which allows the first, most active, most efficient player
to attract the biggest number of participants, in both markets, thus marginalizing all other
players: the lower the cost of the service offered, the more unlikely it will be for consumers to
switch from the search habits, history, cookies etc. which link them to their preferred site to one
which offers (insignificantly) lower prices. Big data at the disposal of the “established” platform
exerts an important lock-in effect in this respect. Third, however, in view of the innovative and
“disruptive” character of the collaborative economy, such lead may be extremely short-lived;
therefore the “temporal market” also need be reconsidered. The same “disruptive” nature of the
collaborative economy also commands the further two points: the need to reconsider the
geographical market and, also, the product market, since the technology often leads to
convergence among traditionally separated markets. In view of the above, it has been
convincingly argued that in these businesses market power does not coincide with market share
and that other factors such as the community of reference, reputation and trust play a
fundamental role.78
Once market power has (somehow) been established, it will also be difficult to establish abuse.
Technology and the data gathered by platforms provides them with the capacity to monitor
customers’ activities, accumulate data and react to market changes in real time. Computer
algorithms may be used to optimize behavioural advertisements, individualized promotions and
targeted, discriminatory pricing.79 Would such “market-driven” adjustment qualify as “abuse”?
In other words, if Uber’s surge pricing perfectly reflects the offer and demand conditions of the
market in a given moment,80 is this not what competition law is all about? Similar questions
would rise in the event of dominant platforms performing tying and bundling practices, i.e.
75
Case C-194/14 P, AC-Treuhand v. Commission, EU:C:2015:717; it should be noted however that the test used by
the Court in order to hold the “facilitator’s” liability is quite strict, since it requires that its conduct should be a)
directly connected to the negotiation and implementation of the agreement between the parties and b) have as its
very purpose “the attainment, in full knowledge of the facts, of the anticompetitive objectives”, see para 38.
76
For a more extensive discussion of this issue see Russo and Stasi, “Defining the relevant market in the sharing
economy”, (2016) Internet Policy Review 5(2), 1-14.
77
On two-sided markets under competition law see Fillistruchi e.a. “Market Definition in Two-Sided Markets:
Theory and Practice”, (2014) Journal of Competition Law and Economics 10, 292-393.
78
Russo and Stasi op. cit. supra note Error: Reference source not found, p. 5.
79
Stucke and Ezrachi, op. cit. supra note Error: Reference source not found, p. 4.
80
According to Uber’s Q&A webpage, prices may temporarily increase at the occasion of sports events, bad
weather, public holidays etc., the purpose being to secure adequate offer at all times; see
<https://help.uber.com/h/34212e8b-d69a-4d8a-a923-095d3075b487>.

25
supply a product/service only in a bundle with some other product/service. 81 While competition
law does not prohibit every bundling practice, in view of the Microsoft saga, it may not be
excluded that a violation of Article 102 TFEU could be raised e.g. by Uber’s initiative to become
active in food delivery.82 Further, the big data and/or meta-data owned by a dominant firm, may,
under circumstances, qualify as “essential facilities” and refusal to grant access to newcomers or
other competitors, may qualify as abusive.83

4.2.5. State aids

Collaborative platforms are a new thing in the economy. They lack the links that traditional
entrepreneurs have with the government and state agencies. Their relationship with power is one
of suspicion if not of animosity. The most powerful collaborative platforms, such as AirBnB,
invest human and financial resources to make governments listen (also) to them and not to
combat them. The others are either trying to comply with restrictive regulation pushed through
by the incumbent traditional providers or pursue their activities virtually unnoticed by the
authorities. Hence, for the time being the risk of public money being directly transferred to a
collaborative platform is quite thin.
There are, however, two current realities which may raise concerns under Articles 107 et seq.
TFEU.
Firstly, collaborative economy participants enjoy an economic advantage in the form of a) tax
payment facilities and b) forgiveness of liabilities. In regards to the former, some Member States
have already enacted tax relief measures especially for collaborative economy actors,84 while
other silently allow the non-payment of several taxes. Hence, most Member States are currently
not collecting from collaborative economy participants, i.a., i) VAT by any of the parties
involved, ii) local or sector-specific taxes (e.g. tourist tax), iii) personal income tax from
prosumers, since most of them avoid declaring income they gain from collaborative practices, iv)
corporate income tax,85 etc.86 In regards to the latter, most Member States are currently allowing
the operation of collaborative companies, such as Uber, without claiming any social security
payments for prosumers/workers87 or any licence fees.88 Considering that the concept of aid
embraces not only positive benefits, such as subsidies themselves, but also interventions
81
For an overview of the anti-competitive practices of tying and bundling in regards with servitization, see Hojnik,
op. cit. supra note Error: Reference source not found.
82
See <https://ubereats.com/>.
83
Under the logic of Case C-418/01, IMS Health v. NDC Health, EU:C:2004:257; for a general overview of this
doctrine see Hatzopoulos, “The Evolution of the Essential Facilities Doctrine”, in Amato and Elhermann (Eds.), EC
Competition Law: A Critical View, (Oxford, 2007) 317-358; more specifically on the issue of data as an essential
facility see Graef, EU Competition Law, Data Protection and Online Platforms: Data as Essential Facility, (Wolters
Kluwer, 2016).
84
See SWD (2016)184 final, op. cit. supra note Error: Reference source not found, at 5.2.2, Table 6.
85
The European Commission recently found that Ireland granted undue tax benefits to Apple, which is illegal under
EU state aid rules, because it allowed Apple to pay substantially less tax than other businesses (Case No SA.38373);
see <http://europa.eu/rapid/press-release_IP-16-2923_en.htm>. Similarly, it has opened an investigation on whether
the corporate income tax to be paid by Amazon in Luxembourg complies with the EU rules on state aid (Case No
SA.38944); see <http://europa.eu/rapid/press-release_IP-14-1105_en.htm>. It is worth noting that those two
companies operate under a similar tax model to that of several collaborative platforms, such as AirBnB.
86
For an analysis of the taxation issue see below under 7.2.
87
The ECJ has ruled that tolerance by the responsible public body of late payment of social security contributions
gives the beneficiary a significant commercial advantage by mitigating the burden associated with normal
application of the social security system. See Case C-256/97, DM Transport, EU:C:1999:332, para 19.

26
mitigating the burdens normally included in the budget of the beneficiary, 89 the above economic
privileges, specifically awarded to/allowed for collaborative platforms, grant them a competitive
advantage that could constitute “state aid”.
Secondly, collaborative platforms enjoy a regulatory advantage, since they operate on
preferential terms, thus disrupting equality of treatment between operators. Indeed, collaborative
economy participants face fewer (if any) complex and time-consuming regulatory requirements,
such as undergoing authorization/licensing procedures, being registered with the competent
professional body, passing capacity tests, being subject to professional disciplinary rules, having
to underwrite professional insurance policies etc. Such requirements have a cost for the
professionals and are a source of revenue for the State. The Court has already held that
procedural advantages selectively awarded, which favour the cost structure of an undertaking in
relation to its competitors may constitute state aid. 90 Could that case law expand and also cover
more broadly “regulatory advantages”? Articles 107 et seq. TFEU could, then, assume a function
similar to that played by national rules on “fair competition”.

5. The providers of the underlying service

Τhe providers of the underlying service offer collaborative services occasionally, in their spare
time, on top of their main employment (or unemployment benefit). 1 Hence, in most cases the
collaborative activity does not become the main “trade, business, craft of profession” of the
individuals concerned. This could be otherwise if the collaborative activity comes within the
broader professional activity of the person concerned, in which case it could be said that it
constitutes a diversified expression of the trade etc. already exercised (this would be the case of
hoteliers promoting their rooms through AirBnB). It should be noted, however, that even though
not “traders”, most providers of the underlying services would qualify as “service providers”
under Article 57 TFEU and the Services Directive. This qualification is given to any natural or
legal person who offers any self-employed economic activity, normally provided for
remuneration;2 no requirement of frequency, duration or requirement that the providers act
within their trade etc. is to be found in the Directive. Indeed, the Court has qualified as service
providers anyone from amateur athletes3 to retired university professors.4 In view of the very
88
In fact, Member States have withdrawn or amended existing laws in order to legitimize the lack of licences. See
e.g. in Greece the abolishment of provisions requiring a tourist accommodation licence for short-term rentals (Art. 2,
para 4 of Law 4336/2015, Official Gazette A 94).
89
See, inter alia, Case C-387/92, Banco Exterior de Espana c Ayuntamiento de Valencia, EU:C:1994:100, paras 13-
14; DM Transport, cited supra note Error: Reference source not found, para 19; Case C-276/02, Spain v.
Commission, EU:C:2004:521, para 24; Joined Cases C-128, 129/03, ΑΕΜ, EU:C:2005:224, para 38; Case C-522/13,
Navantia, EU:C:2014:2262, para 22-23.
90
See Case C-690/13, Eurobank EU:C:2015:235.
1
See e.g. the data published in SWD(2016)184, op. cit. supra note Error: Reference source not found, p.37-38,
where it is stated that a) income from collaborative activities account for less than quarter of the household income
for 39% of participants and for less than half of the household income for another 58% and b) many “participants”
never performed a task for the platform they are registered with; even in the USA, where the collaborative economy
is well ahead of that in Europe, only 33% of the participants gain their principal income from the collaborative
economy, see De Groen and Maseli, “The Impact of the Collaborative Economy on the Labour market”, (2016)
CEPS Special Report, available at <http://ec.europa.eu/DocsRoom/documents/16953/attachments/1/translations>,
p.10.
2
Services Directive, Art. 4(2).
3
Deliège, cited supra note Error: Reference source not found.
4
Case C-281/06, Jundt, EU:C:2007:816.

27
large concept of remuneration followed by the Court any activity which has a broadly economic
character, even if pursued on a one-off basis by a non-professional, will qualify as a service –
and the person providing it a “service provider”. Hence, the concept of “service provider” is
much larger than that of “trader” under the Consumer Rights and the Unfair Commercial
Practices Directives. As the Commission acknowledges “EU legislation does not establish at
what point a peer becomes a professional services provider in the collaborative economy”.5
This, however, is a core issue, given that the provider’s qualification as a trader or as a consumer
is crucial for the application of the rules mentioned above. Indeed, if the provider of the
underlying service is a trader then the collaborative platform will be in a B2B relation with them
and it won’t have to comply with any of the above obligations, which only apply to B2P
situations.
Inspired from the practice followed in several Member States, the Commission suggests that
“thresholds, established in a reasonable way, can be a useful proxy and can help create a clear
regulatory framework to the benefit of non-professional providers”. 6 The Commission proposes
that a combination of the following would be determinant: a) the frequency of the services, i.e.
whether the services are offered regularly or on a purely marginal and accessory basis, b) the
profit seeking motive, as opposed to the aim of exchanging assets or skills, and even (in a more
questionable manner) the fact that they simply obtain cost compensation, c) the level of turnover
from the activity concerned, and whether such turnover is higher/lower from that obtained from
other activities pursued by the same person (in the sense that if some other activity is more
lucrative this other activity is likely to qualify as the trade etc. of the provider).7

5.1. Rights that service providers may claim

Service providers will be able to claim market access under the Services Directive along the
same terms as platforms. Three points may differ, however, depending on whether the service
provider qualifies as a “non-professional” (to use the Commission’s terms) or prosumer, or in the
contrary as a “professional” (presumably a ”trader”).
First, service providers who only act occasionally – and not on a professional basis according to
the thresholds discussed above – should not be subject to any requirement of authorization; or if
an authorization were required it should be subject to lighter requirements than the equivalent for
“professionals” in order to satisfy the requirement of proportionality. 8 Hence, for instance,
people active in the short-term accommodation sector may be subject to the same rules as
hoteliers if they rent out their premises in a repeated and systematic manner, subject to lighter
regulation (concerning e.g. health, safety and security) or no regulation at all if they are
occasional flat/couch swappers.
The extensive information obligation (second)9 as well as the professional liability insurance
(third)10 foreseen by the Services Directive may also prove to be disproportionate where the
provider is only a prosumer occasionally offering sharing services.

5
COM(2016)356, op. cit. supra note Error: Reference source not found, p. 5.
6
Ibid, it should be assumed that the term “non professional” provider is to be opposed to a “professional” service
provider, i.e. a “trader” or, in the most recent texts a “supplier”.
7
COM(2016)356, op. cit. supra note Error: Reference source not found, p. 9.
8
See in that sense also SWD(2015)202 final, op. cit. supra note Error: Reference source not found, p. 5.
9
Services Directive above n. Error: Reference source not found, Art. 22.
10
Ibid, Art. 23.

28
 5.1.1. Regulated professions - Professional qualifications

Collaborative economy activities may sometimes fall within a regulated profession. Hence, for
instance, tourist guides is an activity regulated in several countries. Similarly, the provision of
financial services and, under circumstances, financial advice, is also regulated, both at the
Member States and the EU level. Other collaborative activities may not directly correspond to a
regulated profession as such, but may be in its periphery, such as in the field of healthcare and
social assistance. An issue yet unexplored is whether, to what extent and how service providers
should comply with the national requirements on regulated professions.
The starting point should be that regulated professions remain regulated no matter how/how
often they are carried out. Hence, collaborative service providers offering some regulated activity
should do so in accordance with the rules applicable within the (host) Member State where the
service is provided.
Typically even the occasional (or even the one-off) exercise of such a regulated profession is
prohibited and may give rise to criminal and/or administrative action against the “counterfeiter”.
Therefore, in principle, the obligation to comply with the relevant regulations should apply to all
those who qualify as service providers, even if they do not qualify as traders or, else,
professionals.
This, however, may be counter-intuitive for people who are willing to give up some of their time,
skills and expertise in order to help their fellow men and women, especially when they do for no
immediate return.11 Therefore, a question may be raised whether a different, more relaxed,
approach should be taken in relation to collaborative services which are offered for free (even if
the platform makes money from advertising or else).
For those who act “professionally”, a different issue is raised as to how they may make use of
their qualifications in order to lawfully offer services in other Member States. Directive 2005/36
contains a Title II on (non-established) occasional service providers who may, in principle, rely
on their home qualifications and title, without having to go through the recognition procedure.
Such service providers may not be required to get any authorization or to register with any
professional body of the host state. They may be required, however, to inform the competent
authority of their presence on the territory. At this occasion they may be required to prove their
nationality, the fact that they are legally established in another Member State, their qualifications
and other more case-specific issues; exceptionally their qualifications may be checked by the
host Member State when they are to exercise an activity with public health or safety
implications.12
It is clear that these obligations may not apply, as such, to a service provider who does not move
to the host Member State but only offers services over the net. A good practice, however, could
be identified whereby the above information be made public by means of the collaborative
platform.

5.1.2. Labour law rights for the participants of the collaborative economy

The collaborative economy has developed out of private initiative and entrepreneurship. It is
appealing because it allows for the use of “spare” capacity in a flexible manner. Hence, “most of
11
In that regard see JustAnswer, a collaborative platform connecting experts such as doctors, lawyers, vets,
mechanics etc. with people with questions/problems, available at <http://www.justanswer.com/>.
12
European Parliament and Council Directive 2005/36/EC on the recognition of professional qualifications, [2005]
OJ L 255/22, as amended by Directive 2013/55, Art. 7.

29
the workers in the digital labour market should be considered freelancers, since they make
money from labour outside an employee-employer relation”. 13 What is more, most of them do
not earn the major part of their income from the collaborative economy, and some indeed, do not
consider it to be work at all. 14 Attribute of the extreme flexibility, however, is that some
collaborative activities do take the shape of an employment relationship. When this is the case,
three questions, one directly and two indirectly relevant for EU law, may be raised.
First, it is important to set the criteria which characterise an employment relationship within the
collaborative economy in order to know when EU “labour law” rules come into play; 15 indeed
this will only happen when a “worker” may be said to exist. 16 The Commission has tried to
illustrate the way in which the three criteria set out by the case law and the doctrine, i.e. the
existence of subordination, the pursuance of genuine work and the existence of remuneration,
apply in the collaborative economy.17 In respect of the first criterion the Commission opposes
situations where the platform determines the choice of the activity, remuneration and working
conditions to those where it merely processes the payment deposited by the receiver and passes it
on to the provider. In relation to the second criterion the Commission opposes effective and
genuine work to work which is purely marginal and accessory. Lastly, remuneration is used in
order to distinguish work from volunteering.
While the added value of the above criteria is open to discussion, it would seem that from the
areas currently developed, that of urban transport (e.g. Uber) is the one which is more likely to
qualify as being based on an employment relationship. Indeed, such platforms not only
determine the remuneration of their drivers, but they also tend to propose/impose territorial focus
on the services provided (towards the more densely populated areas), use dynamic pricing and
impose other kinds of obligations to the drivers. It is worth noting that in the landmark case of
the UK employment court mentioned above,18 some of the contributing factors which led the
national jurisdiction to qualify Uber drivers as employees were a) the fact that Uber is not
merely a software company, but rather it “sells rides”, b) the fact that Uber drivers generally do
not and cannot negotiate with passengers but instead must strictly follow Uber’s terms and c) the
fact that Uber earns its profits through the skilled labour of the drivers. 19 A survey conducted at
the end of 2015 showed that out of a total of 600.000 collaborative workers in the USA (0,4% of
all US employees) more than 400.000 worked for Uber. The numbers for the EU would be much
lower, as the number of collaborative workers is estimated to be 100.000 (0,05% of all EU
employees) out of which 65.000 work for Uber.20

13
De Groen and Maseli, op. cit. supra note Error: Reference source not found, p 12.
14
Ibid, p. 4.
15
The fact that labour law remains essentially a matter of national regulation should not overshadow the fact that
there are EU rules i.a. on working time (Directive 2003/88/EC), information on individual working conditions
(Directive 91/533/EC), posted workers (Directives 96/71/EC, 2014/67/EU and Regulation 883/2004/EC), anti-
discrimination for non-standard forms of employment (e.g. part time, fixed term or workers employed under
temporary agencies, Directives97/81/EC, 1990/70/EC and 2008/104/EC respectively), anti-discrimination on
grounds of gender, ethnicity, sexual orientation (Directive 2000/78/EC), protection in case of insolvency of
employers (Directive2008/94/EC), protection in case of collective redundancies (Directive 98/59/EC), in case of
transfer of undertakings (Directive 2001/23/EC) or in case of cross-border mergers (Directive 2005/56/EC).
16
On working time see Case C-428/09, Isère, EU:C:2010:612; on collective redundancies see Case C-229/14,
Balkaya, EU:C:2015:455; and employment equality see Case C-432/14, ‘O’, EU:C:2015:643.
17
COM(2016)356 final, op. cit. supra note Error: Reference source not found, p 13.
18
See above under 2.2.
19
Aslam, Farrar and Others v. Uber, cited supra note Error: Reference source not found, paras 87-97.
20
De Groen and Maseli, op. cit. supra note Error: Reference source not found, p. 20.

30
A second issue is whether and to what extent nationally negotiated collective agreements and/or
statutory minimal wages should/could be applied in collaborative activities. In this respect
surveys show that overall providers in the collaborative economy receive more per hour for their
activities than the average “offline” worker, but work less and, overall, make less money. 21 These
surveys, however, draw a neat distinction between activities which consist in the virtual (i.e. at a
distance) delivery of a service (such as consultation, design etc.) and activities which require
physical contact: the former are part of the truly global market and are, thus, subject to fierce
price competition from developing countries. Hence, in these areas, EU-level minimum wages
would be extremely difficult, if counter-productive, to enforce. Moreover, national authorities
trying to enforce minimum wages, where such wages are fixed by the platform and not by the
service providers, will face the extra difficulty of locating such platforms, typically established in
some other Member State or, all so very often, outside the EU.
The above raise the further question, third, whether action is needed to protect the traditional
economy from similar activities of the collaborative economy. 22 In view of the tiny proportion
that workers in the collaborative economy represent as part of the total of European employees
(0,05%, see in the preceding paragraphs) and the fact that collaborative economy in Europe goes
through its first infancy and needs be encouraged rather than controlled, the answer should, in
our view, be in the negative.

5.2. Obligations arising for service providers

5.2.1. Liability

Providers of underlying services who qualify as “traders” are subject to the same consumer
protection obligations as collaborative platforms who are themselves “traders”; with the
difference that they may not claim the applicability of the E-commerce Directive and the
exclusion of liability contained therein. Hence, reference is made to the developments above,
under 4.2.
Those providers who do not qualify as “traders” but as mere prosumers are not subject to any
specific liability regime; they may be held liable on the basis of the general provisions of
contractual (or indeed, extra-contractual) liability under the rules of civil law applicable in each
Member State.

5.2.2. Consumer protection

Again here the question to be answered is whether the provider of the underlying service
qualifies as a “trader”. In the affirmative their relationship with the platform is (typically) a B2B
and, thus, not subject to any consumer protection legislation; Their relationship with the end
users of the service is a B2P and all the considerations discussed above under 4.2.2 (concerning
the collaborative platforms) are also applicable to them.
If, on the other hand, they do not qualify as traders, then their relationship with the collaborative
platform is a B2P one and they can claim full protection under the rules. Their relation to the

21
Ibid, p. 12-14.
22
For a detailed discussion of the questions raised by regulating labour in the sharing economy see Das Acevedo,
“Regulating Employment Relationships in the Sharing Economy”, (2016) Employee Rights and Employment Policy
Journal 20(1), 1-35.

31
users is then a P2P one and subject to the general obligations of diligence stemming from civil
law in the Member State concerned.

5.2.3. Anti-trust

The general issues raised by the collaborative economy for the application of anti-trust rules,
especially in relation to platforms, have been briefly sketched above. 23 Here, we shall briefly
focus on the specific questions relating to the providers of the underlying services who act
professionally (i.e. are not prosumers) and qualify, thus, as undertakings.
The collaborative platform through which they get to promote their services in a harmonized
manner, under uniform terms and conditions, and through which they compare and fix their
prices, may raise suspicions under anti-trust law. For instance, if Uber drivers were to qualify as
independent contractors (and not workers),24 would the “Uber pricing algorithm” responsible for
the “price surges” for which Uber has been criticized, not be the instrument of collusion between
those?25
The platform, however, may not qualify as an association of undertakings, since it is connected
only contractually with the service providers, it does not promote their interests but its own, and
the providers have no say whatsoever in determining the platform’s policies and decisions. The
recent ECJ judgment in Treuhand, however, may be opening up new means by virtue of which
platforms may be held accountable for facilitating collusion between individual undertakings.26
It would also be difficult to take on individual service providers, since it can hardly be said that
they partake in a concerted practice: a) they do not get into horizontal contacts with any
competitor but into a vertical one with a (and occasionally several) platform(s) and b) their
agreement with the platform is individual and not directly or explicitly connected with those of
the other providers. Here, again, the ECJ may be breaking new ground with its recent judgment
in Eturas: it held that the clients of a platform who learned of and did not act against the
application of a uniform discount decided unilaterally by the platform, could be held liable of
collusion.27
On a different note, the complete absence of any commonality of interests and any real means of
directly coordinating among themselves, would mean that the providers could not possibly be
found collectively dominant under Article 102 TFEU.
6. The service recipient
Being at the receiving end, both of the electronic service offered by the platform and of the
underlying service offered by the service provider (alone or jointly with the platform), 1 these
users will typically qualify as “consumers”, although it may not be excluded that some of them
make use of the platform’s services within (i.e. not outside) their own trade etc. For instance,
most users of business, financial and work-space collaborative services would probably not
qualify as consumers since they are likely to be using those in the course of their own trade. The
23
See under section 4.2.4.
24
For this dilemma see above under 5.1.2.
25
See, on this issue, Gata, “The Sharing Economy, Competition and Regulation”, (2015) Competition Policy
International paper, available at <https://www.competitionpolicyinternational.com/assets/Europe-Column-
November-Full.pdf>, p. 4.
26
See above note Error: Reference source not found and the corresponding text.
27
Case C-74/14, Eturas e.a., EU:C:2016:42.
1
See above under 4.

32
development of the collaborative economy is likely to take it adrift from its initial “sharing”
culture and give rise to more B2B (rather than P2P) transactions. Inversely, the fact that the users
of a collaborative platform make their living through some trade activity, does not automatically
mean that they enter the specific transaction under this quality. Hence, for instance, a shopkeeper
who enters a loan/fundraising agreement with a platform in order to fund a personal project, such
as an expensive trip or the acquisition of a holiday house, qualifies as a consumer for the specific
transaction.
Those users who do qualify as consumers may claim all the protection offered by the Consumer
Rights Directive and the Unfair Consumer Practices Directive as against any party which
qualifies as a “trader”.

7. Horizontal issues

7.1. Reasons justifying restrictions on collaborative economy activities

The collaborative economy is “disruptive” of the way the traditional economy works, impinges
upon vested interests and raises inedited legal questions. Governments often make the ensuing
insecurity even more acute either through new legislation hastily enacted, or through the
questionable enforcement of existing legislation, wholly inappropriate for the collaborative
economy.
In so doing, governments, claim to pursue the general interest but may, in reality, be pursuing the
interests of “incumbent” real economy operators or other ill-intended interests. Hence, it is
necessary to look more into detail in the reasons put forward by Member States. In this respect
the survey conducted on behalf of the Commission in the area of short-term accommodation is
extremely helpful.1
The reasons invoked by Member States in order to regulate this area include a) the control of
human trafficking and prostitution (Stockholm), b) the protection of privacy and dignity
(Brussels), c) the protection of property value and neighbourhood (zoning regulations,
Stockholm), d) the fight against housing shortage and rising rents to the detriment of locals
(Berlin, Paris, Barcelona), e) the maintenance of a high level of tourist industry and control of
excessive tourism (Brussels), f) taxation and revenue, g) securing a level playing field and
competition with licensed operators. Similar grounds may be invoked in other activity areas,
with personal security of the user, consumer protection, insurance and maintaining a level
playing field being the common denominators.
Translated into “eurospeak” most of these grounds either relate directly to the protection of
public order, security and health (a, b, c and, even, d, above), or to some overriding reason of
general interest (d, e and f, above). Two remarks need be made in this respect.
First, it is not clear whether the maintenance of a level playing field between different categories
of professionals is a valid justification under EU law for imposing restrictions on the economic
freedoms. The express Treaty provisions, i.e. public security, order and health are to be
interpreted in a restrictive manner and it would be difficult to see how the interest of
“incumbents” in an industry, especially when it is not one of strategic importance (e.g. oil

1
See Impulse papers on housing in a) Stockholm, Budapest and Brussels, b) Barcelona, Berlin and Amsterdam, c)
Paris, Rome, Milan and London, available at <http://ec.europa.eu/growth/single-market/strategy/collaborative-
economy_el>.

33
supplies, electronic communications, energy or financial services) could come under this
heading. Moreover, according to mainstream jurisprudence, economic grounds do not qualify as
overriding reasons of general interest.2
Second, Member States may not invoke indistinctively any reason in order to impose any
restrictions to the activity of collaborative platforms: no justification is good for obstructing the
creation of an else lawful e-service provider under the E-commerce Directive; only the express
Treaty provisions may be invoked under the same Directive against e-operators from other
Member States; the three express exceptions plus the protection of the environment may be
invoked under Article 16 of the Services Directive to block service providers from other Member
States;3 all overriding reasons of general interest may be invoked by governments in order to
impose an authorization requirement under this same Directive or, indeed, under the very Treaty
rules.
Any restriction, irrespective of the objective it is supposed to pursue, is lawful only to the extent
that it is proportionate. While it is not the place here to delve into the “mysteries” of the principle
of proportionality and its applications, a particularity specifically applicable in the area of
collaborative platforms should be singled out: most platforms have in place a system of peer-
evaluation and evaluation of the underlying service and, typically, of their own e-services too.
Such evaluations alleviate the information asymmetries existing between the parties and may
also serve other general interest objectives. It is true that these evaluations typically concern the
“visible” parts of the service (e.g. the aesthetic evaluation of an apartment, the utensils put at the
disposition of the users; or the make of the car and the politeness of the driver etc.) and much
less the invisible ones (e.g. fire safety, respect of zoning regulations; or the level of security of
the car and its insurance coverage etc.). It is also true that the accuracy and validity of such
evaluations is strongly disputed.4 When applying the principle of proportionality, however, the
interests already protected through the reviewing system put in place by the platforms should be
taken into account.

7.2. Taxation

The tax treatment of the activities in the collaborative economy is a highly salient issue. Indeed,
as participants do not consider their collaborative economy activities as being “professional”
they do not feel compelled to declare any “additional” income thus made. Others, perfectly
conceive their activity as economic but decide to take advantage of the existing loopholes in
order to tax avoid. Taxation in the collaborative economy is far too technical an issue to be
discussed here and merit separate, specialized, studies. Two remarks may, nonetheless, be made.
First,5 that “taxation” covers at least two, and occasionally more, different kinds of taxes, subject
to completely different calculation and collection modalities. Income tax is always due,
whenever the level of income justifies it, irrespective of the kind and nature of the activity which
gave place to such income; it is a “personal” tax calculated, collected and/or exonerated in
respect of the situation of the tax payer. VAT, on the other hand, is due in respect of the activity:
2
See on this issue the excellent article by Oliver, “When, if Ever, Can Restrictions on Free Movement be Justified
on Economic Grounds?” 2 ELRev. (2016), 147-175; see also Hatzopoulos, op. cit. supra note Error: Reference
source not found.
3
Although this point is contested, see above note Error: Reference source not found.
4
Belk, op. cit. supra note Error: Reference source not found, p. 1598.
5
This point is also clearly made by the Commission in its Agenda for the collaborative economy.

34
whenever an activity is not commercial, a question which in the collaborative economy need be
considered,6 VAT is not due. Further, VAT may cause wonderful problems where different
activities (e.g. e-services and housing) are subject to different VAT levels. Third, some activities,
notably short-term accommodation, may give rise to some kind of local/residence tax, typically
imposed by the commune or the local government. This tax may be due irrespective of the
(economic or not) nature of the collaborative activity, and irrespective of whether such activity
generated any income (e.g. in case of simple house-swapping), and will typically be calculated
on the basis of the nights that the guest spent on the spot.
The second point which need be made is that, while for some collaborative activities, especially
virtual ones, taxation is a technically difficult issue, for others, especially the ones with physical
delivery, and even more so those for which payment is made through the platform, taxation is
just a matter of connecting the platform with the tax authority. 7 Currently the most profitable
collaborative economy activities are of the second category (accommodation, transportation) and
some cities, (such as Amsterdam and Paris), have, indeed, made the move to ask for help from
platforms.

7.3. Collaborative services of general economic interest (SGEI)?

The above title is just as a speculation on “the shape of things to come”. Indeed, it may sound
futuristic at this point in time, but several commentators foresee recourse to collaborative
economy services by the (local) governments in order to accomplish their social mission towards
their populations.8 Several collaborative activities, from their very “sharing” nature, through
being better adapted to the personal needs of both the provider and the recipient and through the
interpersonal exchange they are based on (as opposed to the impersonal contacts with the mean
public service), are ideally suited to serve solidarity-based needs. They may also stand for
considerable cost-saving results.
SGEIs could benefit from sharing in at least four ways. First, municipalities could share among
themselves expensive goods with important idle capacity, such as excavators, paving machines,
road stripping trucks etc.,9 while they could be sharing with private entities office and school
buildings and (sports) facilities outside operating hours. Second, public authorities could have
recourse to sharing companies in order to face their own needs; car-share membership for public
officials is an example already discussed. Third, public authorities could contract out some of the
tasks they should be performing for their populations; in Greece hoteliers and individuals have
been paid to use some of their spare space to host Syrian asylum seekers. 10 In a more organized
manner, “San Francisco’s Department of Emergency Preparedness and BayShare, an advocacy
group funded by sharing economy firms to deploy privately-owned sharing services in response
to citywide crises. For instance, during a natural disaster, the partnership provides AirBnB
listings to house those made homeless, food sharing sites to coordinate charitable food offers,
and Lyft cars to transport people away from affected areas, all at lower cost and higher efficiency
6
See above under 4.
7
This is an oversimplification, but it need be stressed out that collaborative platforms may indeed help, rather than
deter, tax collection.
8
See e.g. Wosskow, op. cit. supra note Error: Reference source not found; and more in detail Rauch and Schleicher,
op. cit. supra note Error: Reference source not found.
9
See e.g. <https://www.munirent.co/>, equipment and service sharing for public agencies.
10
See e.g. <http://www.cnn.gr/news/ellada/story/33267/refugees-welcome-h-protovoylia-filoxenias-ton-prosfygon-
sto-spiti-mas>.

35
than operating the same services through government coffers”.11 Fourth, sharing firms could
provide government with precious data; hence, e.g. Uber could provide “huge amount of
information about where people want to go and leave and when, which could aid everything
from public transportation routing to land use planning”.12
Contrary to the US, where the culture and public debate about services of general economic
interest are limited, the EU has developed over the years a solid intellectual background, an
extensive experience and, even, a legal basis (if need be), in order to help Member States
accomplish their SGEI missions towards their citizens. It could be then, that the EU is the natural
space where the wedding between collaborative economy (still in its early infancy) and SGEI
provision should materialise. In this respect, the thoughts expressed hereabove in relation to
public procurement may constitute a starting point.13

8. Conclusion

The development of the collaborative economy offers incredible chances both in terms of macro-
and micro-economics. It also helps alleviate the effects of high levels of unemployment currently
met in Europe. At the same time it raises concerns about the public order, security and health, the
protection of users, unfair commercial practices, tax evasion and more. The EU is seriously
lagging behind the US in this world-wide “revolution”. Given that the collaborative economy
attracts more high-skilled workers, develops more in densely populated areas and corresponds to
a modern post-ownership state of mind, the EU could be an ideal place for the development of
the collaborative economy. Compared to the US, however, the EU has one clear disadvantage:
regulatory fragmentation.
The EU has, inevitably, been captured in the dilemma “regulation vs innovation”: while some
regulation of the collaborative economy is needed to overcome the “disruption” caused by this
new phenomenon, innovation should not be stifled by either outdated regulation or novel
excessive one. Consistent with its Europe 2020 strategy, the EU has, so far, privileged innovation
over regulation, as a step towards a “more competitive, sustainable and inclusive economy.”1
However, regulation need not necessarily stifle innovation. In particular in relation to the
collaborative economy, it has been convincingly argued that regulation may impact on
innovation in three distinct ways: a) it may hinder innovation by placing excessive burdens on
entrepreneurs (e.g. the requirement of licenses on prosumers who perform very little or scarce
activity in the collaborative economy industries, such as accommodation or urban
transportation); b) it may facilitate the introduction of innovations in the market, notably by
waiving requirements or the observance of standards, granting exemptions, or authorizing
companies to develop novel activities and projects on a temporary or permanent basis; and c) it
may have no direct effect on innovation and only accidentally foster it, since innovation might
simply emerge serendipitously.2
From the developments of the present article it becomes plain that the choice of not adopting
new regulation in order to tackle a phenomenon as new as this, has a regulatory cost on its own.
The EU, so far, has taken a cautious approach and has tried to exploit to the maximum the
11
Rauch and Schleicher, op. cit. supra note Error: Reference source not found, p. 58, note omitted.
12
Ibid.
13
See above under 4.1.3.
1
See <http://ec.europa.eu/europe2020/europe-2020-in-a-nutshell/priorities/smart-growth/index_en.htm>.
2
Ranchordàs, op. cit. supra note Error: Reference source not found, p. 442.

36
existing regulatory arsenal. It has tried to boost the effect of such regulation and to make it work
for the collaborative economy, in two ways. First, it has published a series of documents,
prominently its Agenda on the collaborative economy, where it tries to set the criteria for the
application of the existing “traditional” economy rules to the collaborative economy. Second, it
has announced that it will closely monitor Member States in order “to ensure that national law
does not hinder the development of the collaborative economy in an unjustified manner”.3
This may be a sensible starting point, although the “reactive” nature of the infringement
proceedings only allows for case by case, belated, solutions to problems which arise by the day.
More importantly, the above approach is based on the transposition in the collaborative economy
of legal concepts developed in a different framework. Hence, next to the concept of “trader” and
the, much wider one, of “service provider”, we now come across the concept of “non-
professional provider”; concepts which cut across the newly introduced distinction between
“platforms offering only e-services” and “platforms involved in/offering (also) the underlying
services”. The inefficiency of this approach may be worsened by the fact that national regulators
are easier to capture by local “incumbents” and may be more prone to impose disproportionately
restrictive measures; the experience of recent regulations in the field of short-term
accommodation and transportation, only confirms this point.4
It may be then, that the current approach is just to be taken as the “acknowledgment” from the
Commission that the EU is facing this new economic reality. It is supposed to guide Member
States, first softly through the guidance it has already issued, more aggressively then, through the
infringement procedures. By the same token, this approach offers some reflection time to the
Commission and to national governments. If, however, the EU is to take a lead in the
collaborative economy with a view of reaping all the advantages it may offer, it may be that time
is running over and that some more “hands-on” regulatory approach is needed to alleviate legal
uncertainty and facilitate the “revolution” to happen.

3
COM(2015)550 final, op. cit. supra note Error: Reference source not found, p. 4.
4
See above under 2.

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