EU Court Rules Airbnb Doesn’t Need Estate License

Europe’s highest court ruled that Airbnb is an “information society service” rather than a property broker or estate agent, TechCrunch reported on Thursday (Dec. 19).

The Court of Justice of the European Union (CJEU) decided that Airbnb is an online platform that connects rooms and people — an “information society service” — not a professional estate agent. The classification as an information society service falls under eCommerce in the EU Directive 2000/31.

eCommerce platforms have to abide by regional rules and that could make it harder for Airbnb to do business.

“We welcome this judgment and want to move forward and continue working with cities on clear rules that put local families and communities at the heart of sustainable 21st-century travel,” Airbnb said. “We want to be good partners to everyone and already we have worked with more than 500 governments and authorities to help hosts share their homes, follow the rules and pay tax.”

The suit was brought by AHTOP , a tourist association in France. It maintained that Airbnb should hold a professional estate agent license and that by not having one, the platform broke Hoguet Law, a piece of legislation in France.

Luca Tosoni, a research fellow at the Norwegian Research Center for Computers and Law at the University of Oslo, told the news outlet, “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.”

“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,” he added.

The CJEU in 2016 designated Uber as a transportation service, not a tech platform. Uber has butted heads with taxi services and labor unions, which accused Uber of ignoring working standards and transportation rules.

“In the present case, the Court found that an intermediation service such as that provided by Airbnb Ireland satisfied those conditions, and the nature of the links between the intermediation service and the provision of accommodation did not justify departing from the classification of that intermediation service as an ‘information society service’ and thus the application of Directive 2000/31 to that service,” the court said a press release .

The issue highlights how new industries can upend traditional norms, and not be subject to the same regulations that legacy industries, like hotels, must face. Airbnb has been accused of affecting housing shortages, forcing out lower-income residents and not playing by the same rules by which others must abide.