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BOLKESTEIN REVISITED
IN THE ERA OF THE SHARING ECONOMY
SCIENTIFIC SEMINAR ON COMPETITION, REGULATION AND FREEDOM OF
EXPRESSION IN DIGITAL MARKETS, EUROPEAN UNIVERSITY INSTITUTE
Yolanda Martínez Mata
Florence, 24 March 2017
• Introduction• The digital economy bears new challenges for regulators
• Current state of play: How is the EU facing these challenges? • The sharing economy as part of the European Commission’s Digital Agenda
• The crucial role of platforms in the sharing economy
• The freedom to provide services and the sharing economy
• The way forward: some reflections• Need for (new) well-defined legal concepts?
• Broadening the list of public interest objectives?
• Are current market access requirements adequate and proportionate?
Index
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The digital economy bears new challenges for regulators
• Major change in the digital economy: multi-sided markets (service provider + intermediary/platform + user/consumer)
• Multi-sided markets pre-date the Internet (e.g. shopping malls), but the Internet boosted the phenomenon to unprecedented dimensions
• The digital economy may not be a novelty any more but its challenges remain “new” for regulators. No surprise: the Law always lags behind reality
• Major questions:
• Public actors: Is regulation necessary? Which is the authority best placed to regulate?
• Private actors: Should there be clear legal boundaries between traditional businesses and new businesses?
Introduction
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Current state of play:
How is the EU facing these challenges?
• 6 May 2015: Digital Single Market Strategy kick-off
“creating the right conditions and a level playing field for advanced digital networks and innovative services”
• 24 September 2015: public consultation on the regulatory environment for platforms, online intermediaries, data and cloud computing, and the collaborative economy
• 25 May 2016: e-commerce package + Communication on platforms
• 2 June 2016: Communication on the sharing economy
Sharing Economy as part of the European Commission’s Digital Agenda (i)
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Some remarks on European Commission’s 2016 Communications:
• Choice made (for now): soft law
• Existing Regulations/Directives and case-law suffice. No new secondary instrument envisaged
• Digital platforms and on-line intermediaries are key economic actors in the global economy
• EU competitiveness worldwide may depend on how the EU facilitates business opportunities for these actors
• Review process still on-going
Sharing Economy as part of the European Commission’s Digital Agenda (ii)
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• The legal rationale under the Services Directive• Any regulation may be a barrier to the Single Market
• Member States may still regulate provided that there is a mandatory public interest [art. 4(8) Dir. – open list]
• Measures adopted must pass a double test: necessity + proportionality
• The legal rationale under the E-Commerce Directive• In addition to being an ISS, is the platform a pure noticeboard?
• If it is not
• If it is
Sharing Economy as part of the European Commission’s Digital Agenda (iii)
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Limited liabilities regime
• The European Commission’s starting point: “In all, online platforms foster digital value creation that will generate economic growth in the digital single market. Their importance implies that facilitating and supporting the emergence of competitive EU based platforms is both an economic and strategic imperative for Europe”.
• Are all platforms alike? How do we define a ‘platform’?
• Pure marketplaces vs. Intermediary service providers
• The European Commission’s dilemma:
Risk to limit innovation (EU lags behind US and Asia) vs. need to protect traditional EU welfare/social objectives
Crucial role of platforms in the Sharing Economy (i)
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• European Commission’s principles for action:
• A level playing field for comparable digital services
• Responsible behaviour of online platforms to protect core values
• Transparency and fairness for maintaining user trust and safeguarding innovation
• Open and non-discriminatory markets in a data-driven economy
Crucial role of platforms in the Sharing Economy (ii)
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• Platforms provide an information society service within the scope of the E-Commerce Directive. Is it limited to pure intermediation?
• No liability for the underlying service/information (Art. 12 et seq.)
• Relevant case-law specifications: Google and E-bay cases: neutrality is key!
• No obligation to monitor (Art. 15) vs. factual awareness of illegalities (Art. 14)
• The Commission’s proposed distinction criteria: who sets the price?, who decides key contractual terms?, who owns key assets?
• May other criteria be relevant? E.g. intervention in marketing activities, presentation of customers reviews, etc.
Crucial role of platforms in the Sharing Economy (iii)
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• The importance of a “level playing field”
• True
Equal activities deserve equal regulatory treatment; and
providing services through the Internet does not affect the nature of the service (i.e. digital economy and traditional economy to be treated alike)
• False (…or at least, not necessarily true!)
New business models are equal to (have the same effects than) traditional business models; and
they must be subject to the same regulatory requirements.
Freedom to provide services and Sharing Economy (i)
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• The importance of a “level playing field”
• Non-discrimination principle (equal treatment): treating similar situations alike and dissimilar situations differently
• Therefore, if the impact/effects/externalities of the activity are different, different regulatory measures may be justified
• Substitutability analyses from a Competition Law perspective (i.e. covering the same demand) may not be sufficient to assess that impact
Freedom to provide services and Sharing Economy (ii)
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Legislating only by nature of the activity (i.e. lodging, transport, etc.), regardlessof the means of performing that activity (i.e. professional activity, full-time,part-time, type of premises, etc.), may give rise to substantial inequalities andundesirable results.
The way forward: some reflections
• Substantial doubts as regards the role of platforms: • Uber cases (pending): Does Uber provide a transport service excluded from
the Services Directive or an Information Society Service?
• The ECJ may give guidance but it may not be general guidance (i.e. valid for any platform in any sector). Should we redefine the role of intermediaries?
• Is the “sharing economy concept” useful at all in legal terms?• The European Commission’s 2016 concept is incomplete and fragmentary
• Image of efficiency, better use of goods and lack of lucrative purposes. Is it always the case?
• ‘Sharing Economy’ explains a social reality, but it is not a useful legal concept
Need for (new) legal concepts?
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• Are new general public interest goals admissible?
• Open list in Art. 4(8) of the Services Directive
• Silence from the Commission in its 2016 Communications…
• ...therefore, the ECJ will have to provide guidance
E.g. Is addressing the housing shortage / the scarcity of affordable housing a purely economic objective or a social welfare goal?
Does the list of legitimate public interests need an update?
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• National authorities are still competent to adopt and enforce national measures to regulate these new phenomena
• Limitations: • Absolute barriers to entry shall not be accepted
• Tests of necessity and proportionality
• National measures should not discriminate between traditional businesses and new businesses (i.e., preventing intrusiveness shall not be an indirect justification for regulation)
• Dynamic regulatory options may be explored• Frequency of the service / occasional activities (purely marginal and
ancillary)
• Supply and demand changes over a given period of time
Are current market access requirements admissible?
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• Well-known legal concepts have been developing for decades and need not be obliterated just because new business models emerge.
• Substitutability analyses relevant for Competition Law purposes may also be necessary but not sufficient for determining regulatory choices.
• Need for an urgent departure from the collaborative and sharing concepts that explain a sociological reality but provide a turbid image for both stakeholders and regulators.
• Distinguishing different business models in the digital era is imperative for a sound regulation.
Concluding remarks
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