Don't ban the "sharing economy", EU tells member states

Support for businesses such as Uber and Airbnb has come from the European Commission, in a document aimed at supporting the "sharing" or "collaborative" economy.

Recognising the rapid growth of such businesses, which provide an online platform for ordinary individuals to offer services outwith the regulatory framework applying to traditional providers, the Commission said that these new business models could make an important contribution to jobs and growth in the European Union, if encouraged and developed in a responsible manner.

Uber, which allows people to use their own cars to offer taxi rides, has been the subject of strong protests from licensed taxi drivers in parts of Europe, while the city of Berlin has imposed restrictions on online private property rentals due to alleged pressure on rentals for local people.

However, launching the Commission's Communication on a European agenda for the collaborative economy, Commission Vice President Jyrki Katainen said: “A competitive European economy requires innovation, be it in the area of products or services. Europe's next unicorn could stem from the collaborative economy. Our role is to encourage a regulatory environment that allows new business models to develop while protecting consumers and ensuring fair taxation and employment conditions.”

Under ther document, service providers should only be obliged to obtain business authorisations or licenses "where strictly necessary to meet relevant public interest objectives". Absolute bans of an activity should only be "a measure of last resort", and platforms that only act as intermediaries between service providers and consumers should not be subject to authorisations or licences.

Member states should also differentiate between "individual citizens providing services on an occasional basis and providers acting in a professional capacity, for example by establishing thresholds based on the level of activity". They should ensure that consumers enjoy a high level of protection from unfair commercial practices.

Regarding liability, platforms can be exempted from being held liable for "information they store on behalf of those offering a service", but should not be exempted from "liability for any services they themselves offer, such as payment services". The Commission encourages collaborative platforms "to continue taking voluntary action to fight illegal content online and to increase trust".

The communication avoids laying down when an employment relationship exists, as labour law "mostly falls under national competence, complemented by minimum EU social standards and jurisprudence", while suggesting criteria that member states may wish to consider when deciding whether someone can be considered as an employee of a platform.

Commissioner Elżbieta Bieńkowska, responsible for Internal Market, Industry, Entrepreneurship and SMEs, commented: “The collaborative economy is an opportunity for consumers, entrepreneurs and businesses – provided we get it right. If we allow our single market to be fragmented along national or even local lines, Europe as a whole risks losing out. Today we are providing legal guidance for public authorities and market operators for the balanced and sustainable development of these new business models. We invite member states to review their regulation in the light of this guidance and stand ready to support them in this process."