European Commission reveals agenda for businesses in the sharing economy

Commission has provided guidance on how EU law should be applied to "this dynamic and fast-evolving sector" as it encourages new business models

The European Commission has today published its much awaited agenda on the sharing economy (collaborative economy) with legal guidance for businesses, consumers and public authorities.

See also: Sharing economy among UK’s top 10 business sectors

In the agenda – produced following a year-long consultation – the Commission has presented advice on how EU law can be applied to the sector and has suggested that the sharing economy “can make an important contribution to jobs and growth in the EU, if encouraged and developed in a responsible manner”.

The key guidance includes:

Market access requirements

Service providers should only be obliged to obtain business authorisations or licenses where strictly necessary to meet relevant public interest objectives. Absolute bans of an activity should only be a measure of last resort. Platforms should not be subject to authorisations or licenses where they only act as intermediaries between consumers and those offering the actual service (e.g. transport or accommodation service). Member States should also differentiate between individual citizens providing services on an occasional basis and providers acting in a professional capacity, for example by establishing thresholds based on the level of activity.

Liability

Sharing economy platforms can be exempted from being held liable for information they store on behalf of those offering a service. They should not be exempted from liability for any services they themselves offer, such as payment services. The Commission encourages sharing economy platforms to continue taking voluntary action to fight illegal content online and to increase trust.

Customer protection

Member States should ensure that consumers enjoy a high level of protection from unfair commercial practices, while not imposing disproportionate obligations on private individuals who only provide services on an occasional basis.

Employment relationship

Labour law mostly falls under national competence, complemented by minimum EU social standards and jurisprudence. Member States may wish to consider criteria such as the relation of subordination to the platform, the nature of the work and remuneration when deciding whether someone can be considered as an employee of a platform.

Tax rules

Sharing economy service providers and platforms have to pay taxes, just like other participants in the economy. Relevant taxes include tax on personal income, corporate income and VAT. Member States are encouraged to continue simplifying and clarifying the application of tax rules to the collaborative economy. Sharing economy platforms should fully cooperate with national authorities to record economic activity and facilitate tax collection.

Commissioner Elżbieta Bieńkowska said of the agenda: “The collaborative economy is an opportunity for consumers, entrepreneurs and businesses – provided we get it right. If we allow our single market to be fragmented along national or even local lines, Europe as a whole risks losing out.

“Today we are providing legal guidance for public authorities and market operators for the balanced and sustainable development of these new business models. We invite Member States to review their regulation in the light of this guidance and stand ready to support them in this process.”

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