Europe’s top court has ruled regarding the legal status of Airbnb, judging it to be simply a digital platform and not a property manager or estate agent, welcome news for the company.
The ruling comes as Airbnb faces backlash from cities around the globe and could have a major impact on the company’s partnership with the International Olympics Committee ahead of the Paris-based 2024 games.
The court’s decision could impact how European governments regulate Airbnb and how the company responds to these regulations, according to Luca Tosoni, a research fellow at the Norwegian Research Center for Computers and Law at the University of Oslo.
“The Court’s finding that online platforms that facilitate the provision of short-term accommodation services, such as Airbnb, qualify as providers of ‘information society services’ entails strict limitations on the ability to introduce or enforce restrictive measures on similar services by a Member State other than that in whose territory the relevant service provider is established,” he told TechCrunch.
“The Court’s judgment suggests that the enforcement of restrictive measures against a provider of ‘information society services’ may only occur on a very exceptional basis, subject to strict substantive and procedural conditions, including prior specific notification to the European Commission.”
The court’s ruling was based on several factors, such as Airbnb’s service not being “aimed only at providing immediate accommodation services, but rather it consists essentially of providing a tool for presenting and finding accommodation for rent, thereby facilitating the conclusion of future rental agreements”; and that the platform is “in no way indispensable to the provision of accommodation services, since the guests and hosts have a number of other channels in that respect, some of which are long-standing”; and it found no indication that Airbnb sets or caps the amount of the rents charged by the hosts that are using the platform.
The EU began an investigation into Airbnb following a complaint by French tourism association AHTOP, with a Paris prosecutor charging the company of violating the country’s Hoguet Law, which regulates the behavior of property agents.
Back in April, an advisor to the Court of Justice of the European Union (CJEU) said in a non-binding opinion that Airbnb should be treated as a digital services provider and not a property manger, with The New York Times reporting that court judges typically follow the advice of these advisors, which has proven to be true.
However, there is a precedent that could have worked against Airbnb. In a 2017 ruling on Uber, CJEU judges said the taxi app should be classified as a transport service, rejecting the company’s argument that it was just an intermediary.
Airbnb released a statement in June, as the case began working its way through the court, suggesting that the ruling would have no bearing on government regulations regarding home sharing, as reported by CityLab.
“While we cannot comment on a live case, it addresses whether a 50-year-old real estate law should apply to an internet platform like Airbnb,” the company said. “It is absolutely not about whether governments of any shape or size across Europe can regulate home sharing activities; they can, they should, and they do. We embrace that and want to work with more governments.”
Ten European cities, including Paris and Amsterdam, penned an open letter to the CJEU in which they expressed fear that ruling Airbnb as just an online service would curtail their abilities to enact regulations.
“European cities believe that homes should be used first and foremost for living in,” they wrote in the letter. “More nuisances, feelings of insecurity and a ‘touristification’ of their neighbourhoods is not what our residents want. Therefore (local) governments should have the possibility to introduce their own regulations depending on the local situation.”
Many American cities have also taken umbrage with Airbnb, with Santa Monica reaching a deal last week that will allow the city to collect money from the company to fund affordable housing initiatives.