Out-Law News 1 min. read

European court to rule on whether Uber a 'digital service' or transport company

The EU's highest court is to rule on whether ride-sharing application Uber should be regulated as a 'digital service' or a transport company, following a referral by a Spanish judge.

The referral comes as part of a legal challenge by the US company to the Spanish government's decision to ban its services, European head of policy Mark MacGann announced in a online press conference. MacGann "welcomed" the referral, saying that Europe had "invested massively in mobile" and that the regulatory approaches of individual member states were "not fit for purpose", according to the Financial Times.

In his statement, MacGann said that "decisions in the EU rarely have the effect of closing markets".

"We don't want to be exempt from any regulations," he said. "But we think regulations need to be fit for the digital age. Today's patchwork of national rules and regulations is being used by established companies to protect themselves from new and innovative services like Uber, to the detriment of European consumers."

Uber is expecting a decision from the Court of Justice of the European Union (CJEU) by autumn 2016, MacGann said.

Uber has encountered resistance from several national European regulators, in many cases prompted by opposition to the service from traditional taxi companies and other incumbent operators. In Germany, for example, the company has been accused of operating a business without ensuring its drivers have the necessary permits for transporting passengers; while France has banned the budget 'UberPop' app under regulations applicable to chauffeur services.

The company has already filed complaints with the European Commission about bans imposed on their services in France, Spain and Germany, which it has claimed are anti-competitive.

The CJEU has been asked to rule on whether Uber provides a "mere transport activity" or "an electronic intermediation or information society service", according to a copy of the referred questions published by Tech.eu. If the court decides that it is partially an "informational society" service, then the company could benefit from the principle of freedom to provide services guaranteed by the Treaty on the Functioning of the European Union (TFEU).

The Spanish court has also asked the CJEU to rule on the legality of the country's court-ordered ban on the service, which is incorporated in the Netherlands in Europe; and whether Spanish competition laws as applied to "information society" services are contrary to EU law.

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