Uber ruling means that electronically provided legal services will also remain a national regulatory competence.
The long-awaited European Court of Justice decision on Uber’s regulatory status under European law was announced in the week before Christmas: C‑434/1. The court disposed of 11 cases on the same day, clearing out a backlog before the holidays. This particular judgment closed Uber’s unlucky year with another loss.
The question before the court was whether Uber is a transport service, and so subject to national rules on transportation, in particular on taxis (which is what the Barcelona taxi drivers who brought the case argued), or whether it is an information society service regulated much more loosely at European level through, for instance, e-commerce directives (which was Uber’s case) – or indeed a combination of the two. Focusing only on its peer-to-peer offer, the court decided that Uber is a transport service. This is not what Uber wanted to hear, although Barcelona taxi drivers doubtless drank to the judgment over Christmas.
After all the column inches speculating in advance on the outcome, and a lengthy advocate general’s opinion, the court gave its views in 17 brief paragraphs. Interestingly, it began its judgment by saying that if Uber were a pure intermediation service, then it would be an information society service, and so escape national taxi regulations. But, in a crucial paragraph, it added the following: ‘The intermediation service provided by Uber is based on the selection of non-professional drivers using their own vehicle, to whom the company provides an application without which (i) those drivers would not be led to provide transport services and (ii) persons who wish to make an urban journey would not use the services provided by those drivers. In addition, Uber exercises decisive influence over the conditions under which that service is provided by those drivers. On the latter point, it appears, inter alia, that Uber determines at least the maximum fare by means of the eponymous application, that the company receives that amount from the client before paying part of it to the non-professional driver of the vehicle, and that it exercises a certain control over the quality of the vehicles, the drivers and their conduct, which can, in some circumstances, result in their exclusion.’
These criteria presumably form the crucial principles against which the categorisation of other platforms should be judged. The ramifications could be widespread, both for electronic platforms in general, and for those which provide legal services in particular.
Regarding the general consequences, one commentator wondered whether this is ‘the official beginning of the end of the tech industry’s deceitful attempt to present its innovation as something outside previous human experience and therefore outside the scope of previous regulation’ Can competitors now safely argue that Facebook, Twitter and YouTube are media companies subject to the same rules as other media companies? And that Airbnb is a hotel industry subject to hotel regulations, at least in Europe?
In addition, governments try hard to hold the social media giants to account for spreading hate speech and aiding terrorism. The giants keep wriggling, arguing their exceptional nature. But I suspect that no one will be persuaded any longer by the assertion of their special status, making them subject to the same publishing rules as the rest of us.
The judgment holds great interest for the future regulation of legal services. Lawyers and bars had been awaiting the outcome, to see how it would impact the regulation of currently unregulated electronic platforms delivering legal services in ways similar to Uber’s driver-hailing app. Although the regulation of transport is treated differently under European law to that of legal services, nevertheless the judgment will be a relief to lawyers. It will doubtless mean that electronically provided legal services will also remain a national regulatory competence.mean that electronically provided legal services will also remain a national regulatory competence.
There is one difference, though, in the application of the criteria to our sector. The lawyers who make themselves available to clients through unregulated platforms will in the main provide such legal services anyway; this is just an additional source of income. They are not non-professionals, like the Uber drivers, and so not dependent – at any rate in most cases – on the Uber equivalent. However, I assume that the platforms exercise a similarly decisive influence over the conditions under which the lawyers’ services are provided in terms of fees and quality. The question, then, is whether one of the criteria is enough on its own, which was not decided in this case.
I expect that all the major platforms, whether in the transport sector or not, have understood the message, and will begin to order their affairs in such a way that they will comply in principle with the court’s decision. At the moment, they are being hammered for their taxes, they are facing great pressure over their publishing policies – and now this arrives on regulation. The tide is turning.
Jonathan Goldsmith is Law Society Council member for EU matters and a former secretary general of the Council of Bars and Law Societies of Europe. All views expressed are personal and do not necessarily reflect the views of the Law Society Council