European court rules: Airbnb should be considered an “information society service” (not a real estate service)

The Advocate General of the European Court of Justice said that Airbnb Ireland should not be restricted by French law for providing accommodation services. As it involves the use of the internet to connect potential guests with hosts, it must be considered an “information society service” according to the E-Commerce Directive.

This was in response to two cases and allegations on Airbnb Ireland from the French Public Prosecutor’s Office. According to the E-Commerce Directive, a member state cannot prevent or restrict the free movement of “information society service” of another member state.

The French law “Loi Houguet” states that an agent involving in real estate brokerage activity must meet a set of professional standards and have liability insurance. As the French Public Prosecutor’s Office believes that Airbnb Ireland is acting as a real estate agent, they were expected to adhere to the regulations of “Loi Houguet.”

However, Airbnb argued saying that matching a potential host with a property owner for a temporary basis does not account to real estate brokerage activity. Also, Airbnb expressed that the French law was restricting it from providing services under the EU law. After the French Public Prosecutor’s Office took up a criminal case against Airbnb for breaching the law twice in March 2017, the case was referred to a Paris court. Another civil case was taken up by the French Tourism Association.

The Paris court, French Tribunal de Grande Instance further referred the case to the European Court of Justice in Luxembourg. The Advocate General spoke about his opinion on the case and declared that Airbnb Ireland was purely taking part in information society service. As all of this service is happening through an electric portal, the service provider doesn’t exercise control on all the procedures while providing hosting service.

Many experts found this case to be much similar to the recent case involving Uber, a ride-sharing platform. In Uber’s case, ECJ declared that it was not a pure “information society service” but a transport service provider and must, therefore, adhere to the restrictions imposed by member states. There is a high likelihood for the judgment to be in favor of Airbnb as Advocate General’s opinions and the final ruling coincide in 80% of the cases. The final verdict is expected later this year.