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27/09/2016

Commission guidance on sharing economy delayed until summer break

Digital

Commission guidance on sharing economy delayed until summer break

The European Commission and member states warned that a fragmented response to Uber-type companies "could unnecessarily limit" the development of the collaborative economy.

[Alper Cugun/Flickr]

The European Commission is expected to publish its guidelines on how to apply existing EU legislation on the sharing economy in mid-2016, while EU countries face pressure to regulate new players such as Uber and Airbnb.

EU officials revised the original announcement made by Commissioner for Internal Market, Elżbieta Bieńkowska in January, who had said they would be issued by March.

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The publication could take place in June, when the Commission will unveil a communication on the role of online platforms in the Digital Single Market.

The executive will provide guidance on how to apply the Services Directive and the E-Commerce Directive, as well as consumer legislation, such as the Unfair Commercial Practices Directive, Unfair Contract Terms Directive and the Consumer Rights Directive.

Meanwhile, in March, the European Commission will publish the definitive results of its consultation on the sharing economy, also known as the collaborative economy.

According to the preliminary results, a large majority of businesses and consumers believe that “uncertainty over the rights and obligations of users and providers could form a major obstacle to the growth of the collaborative economy,” the Commission said in January.

These results are in line with the conclusions of a paper which framed the first ever discussion held in the Council on this issue.

The study, drafted by the rotating Dutch presidency of the EU for the Informal Competitiveness Council in January, pointed out that “a fragmented and hasty response to issues in the collaborative economy on a local and national level could unnecessarily limit the further development of the collaborative economy.”

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The study called for a “balanced and proportionate approach” to maximise the potential benefits of the collaborative economy.

As part of this approach, the Dutch presidency said that the EU could “clarify legislation, introduce additional legislation, remove legislation, or formulate smarter regulation at local, national and European levels.”

The legislative response will be largely influenced by EU judges, as they are currently examining whether to consider these new firms as digital platforms or service providers.

The ruling, expected for late this year, could remove nationwide bans on companies like Uber in Spain, and trigger new rules to better accommodate these new firms.

In parallel, the Commission is currently assessing several complaints from Uber against France, Germany and Spain due to the restrictions imposed on the company. A spokesperson said that the institution is in dialogue with the national authorities “to clarify the merits of the complaints”.

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As part of its preparatory work on the issue, the European Commission launched several studies over the last months to explore the best policy approach.

The Commission is examining consumer aspects in the main online sharing economy markets, and looking at the regulatory and market overview of the European taxi, hire car with driver and ride-sharing services in the EU.

The executive is also looking at the liability insurance options for the collaborative economy firms, the economic impact on the European labour market, the validity of customer ratings and their impact on reputation and trust in the collaborative economy.

In addition, the Commission will also publish a forecast of the collaborative economy for 2030, and an economic analysis of existing platforms.

Background

The sharing economy allows citizens to provide on-demand services to other citizens. This disruptive business model is taking root in a wide range of businesses. However, its irruption has infuriated the market incumbents, such as taxi drivers and hotels.

These traditional service providers consider that Uber, Airbnb, and other firms of this kind, do not play by the same rules affecting the ride-hailing cars or the hotel sector.

In particular, critics point out that these new companies raise doubts in regards to the tax compliance of their self-employees, and social and consumer protections.

They called for a new set of rules to address the shortcomings of this new business model.

Timeline

  • March 2016: Final results of the consultation on sharing economy
  • June 2016:  communication on the role of online platforms in the Digital Single Market.
  • Summer 2016: European Commission will announce a European agenda on collaborative economy, including guidance on how to apply existing EU law.

Further Reading