Court of Justice confirms that taxi apps are in principle to be qualified as information society services
08/01/2021

On 3 December 2020, the Court of Justice of the European Union (“CJEU”) delivered its ruling in the case Star Taxi App (C-62/19). The case concerns the interpretation of the notion of “information society service” within the meaning of EU law and assesses the compatibility with EU law of a national measure that obliges operators of IT applications putting taxi service users directly in touch with taxi drivers to obtain prior authorisation from the authorities.

The facts of the case and the legal context

Star Taxi App SRL, a company established in Bucharest (Romania), operates a smartphone application that puts taxi service users directly in touch with taxi drivers. The application has a search option that displays a list of taxi drivers available for a journey. The customer can then choose a driver from that list. Star Taxi App does not forward bookings to taxi drivers and does not set the fare, which is paid directly to the driver at the end of the journey.

On 19 December 2017, the Consiliul General al Municipiului BucureÈ™ti (Bucharest Municipal Council) adopted Decision No 626/2017, which extended the obligation for obtaining prior authorisation for the activity of “dispatching” to cover operators of IT applications such as Star Taxi App. Star Taxi App was fined 4,500 Romanian lei (approximately EUR 925) for having infringed that legislation.

Taking the view that its activity constituted an information society service to which the principle of the exclusion of prior authorisation provided for in the e-Commerce Directive applies, Star Taxi App brought proceedings before the Tribunalul București (Regional Court, Bucharest, Romania) seeking annulment of Decision No 626/2017.

Against that background, the Tribunalul București asked the CJEU whether a service that puts taxi passengers directly in touch with taxi drivers via an electronic application constitutes an information society service. If so, it asked the Court whether Decision No 626/2017 complied with EU law.

The ruling of the CJEU

First of all, the CJEU notes in its judgment that the service offered by Star Taxi App satisfies the four cumulative conditions to be qualified as an “information society service” – as it is provided (i) for remuneration, (ii) at a distance, (iii) by electronic means and (iv) at the individual request of a recipient of services – so it should in principle be qualified as such.

However, in accordance with its earlier case law in the Uber and Airbnb cases, the CJEU recalls that, although an intermediation service which satisfies all those conditions does in principle constitute a service distinct from the subsequent service to which it relates (i.e. a transport service in this case) and must therefore be qualified as an “information society service”, this does not apply if it appears that the intermediation service forms an integral part of an overall service whose main component constitutes a service coming under another legal qualification.

In that respect, the CJEU considers that, unlike the intermediation service provided by Uber in the Asociación Profesional Elite Taxi case (C-434/15), the service provided by Star Taxi App cannot be regarded as forming an integral part of an overall service whose principal component is the provision of transport, for the following reasons.

First, unlike the Uber platform which created and made accessible the provision of urban transport services operated by non-professional drivers that were previously absent from the market, the intermediation service provided by Star Taxi App is confined to putting taxi service users in touch with authorised taxi drivers whose activity already exists and for whom the said intermediation service is only one of several methods of attracting customers, which, moreover, they are in no way obliged to use. In other words, the service provided by Star Taxi App is a pure add-on to a pre-existing organised taxi transport service.

Second, unlike Uber, Star Taxi App does not select the taxi drivers, nor does it set or collect the fare, nor does it control the quality of the vehicles and their drivers as well as their behaviour.

In the light of these elements, the CJEU thus concludes that the service provided by Star Taxi App cannot be regarded as forming an integral part of an overall service whose principal component is the provision of transport, and must therefore be qualified as an “information society service”.

Despite this important finding, the qualification of the service provided by Star Taxi App as an “information society service” has in the end had no bearing on the answers to be given to the other questions for preliminary ruling regarding the compatibility of the Romanian legislation at issue with EU law, given that the CJEU did not apply the specific EU instruments relating to information society services.

In fact, the CJEU considers first of all that the Technical Standards Directive (Directive 2015/1535) does not apply in this case, given that the Romanian legislation in question cannot be qualified as a “technical regulation”, as it is not specifically aimed at information society services but applies to all types of “dispatching” service, whether provided by telephone or by IT application.

Second, the CJEU considers that the e-Commerce Directive (Directive 2000/31) also does not apply. On the one hand, the provisions relating to the freedom to provide services and the country of origin principle enshrined in Article 3 of the e-Commerce Directive cannot be relied upon in this case since the situation is purely internal to a Member State (i.e. the dispute involves a company under Romanian law established in the territory of Romania and is challenging legislation adopted by Romanian authorities). On the other hand, the prohibition of prior authorisation schemes provided for in Article 4 of the e-Commerce Directive cannot be invoked either, since such prohibition only applies to authorisation schemes that specifically and exclusively target information society services, which is not the case here as already indicated.

For these reasons, the Romanian legislation at issue has therefore only been examined by the CJEU in the light of the provisions of the Services Directive (Directive 2006/123) relating to the freedom of establishment (Chapter III).

Pursuant to Articles 9 and 10 of the Services Directive, Member States are allowed to make access to a service activity subject to an authorisation scheme provided that such a scheme is non-discriminatory, justified by an overriding reason relating to the public interest, and proportionate, but also on condition that the criteria for granting the authorisation provided for by that scheme are non-discriminatory, justified by an overriding reason in the public interest, proportionate to that public interest objective, clear and unambiguous, objective, made public in advance, and are transparent and accessible.

In that regard, the CJEU has decided, given the lack of sufficient factual details, that it is therefore up to the national referring court to assess whether the authorisation scheme for taxi “dispatching services” at issue complies with the above requirements. The CJEU points out, however, that an authorisation scheme is not based on criteria justified by an overriding reason relating to the public interest when the granting of the authorisation is subject to requirements that are technologically unsuited to the service concerned. According to the CJEU, this might be the case – which it is however for the national court to verify – of an obligation imposed on the providers of an intermediation service whose purpose is, by means of a smartphone application, to put taxi service users in touch with authorised taxi drivers to transmit journeys to those drivers by means of a radio transceiver.

Conclusion

In the same vein as the Airbnb judgment (C-390/18), the Star Taxi App judgment confirms that the Uber case law was “a case apart” (Opinion of AG Szpunar in the Asociación Profesional Elite Taxi case).

As a matter of principle, the intermediary services provided by electronic platforms are to be qualified as “information society services” given that they display the characteristics contained in the definition of that notion. It is only in very specific circumstances, where the intermediary service forms an integral part of an overall service whose principal component is a service coming under another legal qualification, that the intermediary service might not be regarded as falling within the notion of “information society service”.

Matthieu van Lierde, Associate, matthieu.vanliede@cms-db.com

Alexis Laes, Associate, alexis.laes@cms-db.com
 

Related : CMS Belgium

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