CJ, 20-12-2017, nr. C-434/15

Article 1(2) of Directive 98/34/EC 2. provides:

Article 2(a) and (h) of Directive 2000/31/EC 3. provides:

Article 3(1), (2) and (4) of Directive 2000/31 provides:

Under Article 2(2)(d) of Directive 2006/123/EC: 4.

The first sentence of Article 3(1) of that directive provides:

There is some confusion surrounding the description provided by the referring court, the parties to the main proceedings and the Spanish Government of the applicable national legal framework. I will set out the key features below, as they result from both the order for reference and the various written observations submitted in the course of these proceedings.

First, so far as concerns national rules on transport, Article 99(1) of Ley 16/1987 de Ordenación de los Transportes Terrestres (Law 16/1987 on the organisation of land transport) of 30 July 1987 provides that an authorisation for public passenger transport must be obtained in order to carry out transport of that nature as well as any intermediary activity in the conclusion of such contracts. Nonetheless, the defendant in the main proceedings states that Ley 9/2013 por la que se modifica la Ley 16/1987 y la Ley 21/2003, de 7 de julio, de Seguridad Aérea (Law 9/2013 amending Law 16/1987 and Law 21/2003 of 7 July 2003 on air safety) of 4 July 2013 abolished the requirement to hold a specific licence in order to provide intermediary passenger transport services. However, it is not clear whether this reform was implemented across Spain as a whole.

At regional and local level, domestic legislation is supplemented, as regards taxi services, by various regulations adopted by the autonomous community of Catalonia and the metropolitan area of Barcelona, including the Reglamento Metropolitano del Taxi (Regulation on taxi services in the metropolitan area of Barcelona), adopted by the Consell Metropolitá de l'Entitat Metropolitana de Transport de Barcelona (Governing Board of the transport management body for the metropolitan area of Barcelona), of 22 July 2004, which requires platforms such as that at issue in the main proceedings to have the necessary licences and administrative authorisations in order to pursue their activity.

Lastly, Ley 3/1991 de Competencia Desleal (Law 3/1991 on unfair competition) of 10 January 1991 defines as unfair competition, in Article 4, professional conduct contrary to the rules of good faith, in Article 5, misleading practices and, in Article 15, infringements of the rules governing competitive activity conferring a competitive advantage in the market.

Uber is the name of an electronic platform 5. developed by Uber Technologies Inc., a company having its principal place of business in San Francisco (United States). In the European Union, the Uber platform is managed by Uber BV, a company governed by Netherlands law and a subsidiary of Uber Technologies.

With the aid of a smartphone equipped with the Uber application, the platform allows users to order urban transport services in the cities covered by it. The application recognises the location of the user and finds available drivers who are nearby. When a driver accepts a trip, the application notifies the user of such acceptance and displays the driver's profile together with an estimated fare to the destination indicated by the user. Once the trip has been completed, the fare is automatically charged to the bank card which the user is required to enter when signing up to the application. The application also contains a ratings function, enabling drivers to be rated by passengers and passengers to be rated by drivers. Average scores falling below a given threshold may result in exclusion from the platform.

The transport services offered by the Uber platform are divided into different categories depending on the quality of the drivers and the type of vehicle. According to information supplied by the defendant in the main proceedings, at issue in those proceedings is a service by the name of UberPop, whereby non-professional private drivers transport passengers using their own vehicles.

The fare scale is drawn up by the operator of the platform based on the distance and duration of the trip. It varies according to the level of demand at any given time, so that the fare may, during peak times, exceed the basic fare several times over. The fare is calculated by the application and charged automatically by the platform operator, who withholds a proportion in respect of its fee, usually between 20% and 25%, and pays the remainder to the driver.

Asociación Profesional Elite Taxi (‘Elite Taxi’) is a professional organisation representing taxi drivers in the city of Barcelona (Spain). On 29 October 2014, Elite Taxi brought an action before the Juzgado de lo Mercantil No 3 de Barcelona (Commercial Court No 3 of Barcelona, Spain) asking the court, inter alia, to make an order against Uber Systems Spain SL (‘Uber Spain’), a company governed by Spanish law; to declare that its activities, which allegedly infringe the legislation in force and amount to misleading practices, are acts of unfair competition; to order it to cease its unfair conduct consisting of supporting other companies in the group by providing on-demand booking services by means of mobile devices and the internet, when that is directly or indirectly linked to use of the digital platform Uber in Spain; and to prohibit it from engaging in such activities in the future. According to the referring Court's findings, neither Uber Spain nor the owners or drivers of the vehicles concerned have the licences and authorisations required under the Regulation on taxi services in the metropolitan area of Barcelona.

Uber Spain denies having committed any infringement of transport legislation. It argues that it is the company governed by Netherlands law, Uber BV, which operates the Uber application in the European Union, including in Spain, and that the applicant's claims should therefore be directed at that company. Uber Spain claims that it performs only advertising duties on behalf of Uber BV. It repeated those assertions in its observations in this case.

Since this concerns a question of fact, it is for the referring court to decide which of the two companies mentioned above should be the addressee of a possible injunction. I have nonetheless assumed that the company Uber BV operates the Uber application in the European Union. 6. This is the premiss — which is not without consequences from the perspective of EU law — on which my analysis will be based. In this Opinion, I shall use the term ‘Uber’ to refer to the electronic booking platform as well as its operator.

I should also point out that, as regards the subject matter of the main proceedings, there is no question here of blocking the Uber application on smartphones or otherwise rendering it unusable. No order or any other measure to that effect has been applied for. In the main proceedings, the only point in issue is the possibility of Uber providing the UberPop service in the city of Barcelona by means of that application.

As the Juzgado Mercantil No 3 de Barcelona (Commercial Court No 3 of Barcelona) considered that an interpretation of several provisions of EU law was required in order to enable it to give a decision in the case pending before it, it decided to stay the proceedings and refer the following questions to the Court of Justice for a preliminary ruling:

The request for a preliminary ruling was received at the Court on 7 August 2015. Written observations were lodged by the parties to the main proceedings, the Spanish, Finnish, French and Greek Governments, Ireland, the Netherlands and Polish Governments, the European Commission and the European Free Trade Association (EFTA) Surveillance Authority. With the exception of the Greek Government, those interested parties, together with the Estonian Government, were represented at the hearing held on 29 November 2016.

By its first two questions, the national court essentially enquires whether Uber's activity falls within the scope of Directives 2006/123 and 2000/31 as well as the provisions of the FEU Treaty on the freedom to provide services.

In order to reply to these questions, it is necessary, in the first place, to analyse that activity in the light of the system laid down by Directive 2000/31 and the definition of ‘information society service’ set out in Article 1(2) of Directive 98/34, a definition to which Article 2(a) of Directive 2000/31 refers.

In the second place, it will be necessary to determine whether that activity is a transport service or service in the field of transport for the purposes of Article 58(1) TFEU and Article 2(2)(d) of Directive 2006/123. The free movement of services in the field of transport is achieved within the framework of the common transport policy 7. and those services are therefore excluded from the scope of Directive 2006/123 pursuant to the abovementioned provision.

In order to assess whether Uber's activity falls within the scope of Directive 2000/31, reference should be made to the definition of information society services set out in Article 2(a) of that directive. The definition refers to Article 1(2) of Directive 98/34.

Under that latter provision, an information society service is a service provided for remuneration, at a distance, by electronic means and at the individual request of a recipient. The test as to whether a service is for remuneration and is provided upon individual request does not appear to be problematic. However, the same cannot be said of the test as to whether a service is provided at a distance by electronic means.

As briefly explained in the section dealing with the facts of the main proceedings, Uber essentially makes it possible to locate a driver, with the aid of a smartphone application, and connect him with a potential passenger for the purpose of supplying urban transport on demand. We are therefore dealing with a composite service, since part of it is provided by electronic means while the other part, by definition, is not. The question is whether such a service falls within the scope of Directive 2000/31.

It is not surprising that Uber's activity, as described in the preceding points, namely as a single supply comprising both the identification of an available driver and the trip booking as well as the supply of transport stricto sensu, may be regarded as a service in the field of transport within the meaning of Article 2(2)(d) of Directive 2006/123.

Although the wording of that provision, which excludes ‘services in the field of transport’ from the scope of Directive 2006/123, does not seem to be sufficient in itself to reach such a finding, recital 21 of the directive leaves no doubt as it states that the services in question include ‘urban transport [and] taxis’. It is therefore not necessary to enter into discussions as to whether Uber's services constitute a kind of taxi service: all forms of urban transport are mentioned and Uber is certainly one of them.

Uber's activity will also have to be classified as falling within the scope of the exception to the freedom to provide services laid down in Article 58(1) TFEU and be subject to the rules laid down in Article 90 et seq. TFEU. Article 91(1)(b) TFEU expressly mentions the ‘conditions under which non-resident carriers may operate transport services within a Member State’ as an area in which rules must be laid down within the framework of the common transport policy. If it is accepted, as I have submitted, that Uber provides urban transport services, it must then be regarded, if not as a carrier in the strict sense, then at the very least as an organiser of transport services.

Thus, without there even being any need to examine the judgment in Grupo Itevelesa and Others, 27. which the national court mentioned in its order for reference, it must be concluded that Uber's activity constitutes a service in the field of transport within the meaning of Article 2(2)(d) of Directive 2006/123. It is therefore excluded from the scope of that directive. Furthermore, Uber's activity is covered by the exception to the freedom to provide services contained in Article 58(1) TFEU and is governed by the provisions of Article 90 et seq. TFEU.

To summarise the foregoing considerations, my opinion is that, in the case of composite services, consisting of a component provided by electronic means and another component not provided by such means, the first component must be either economically independent of the second or the main component of the two in order to be classified as an ‘information society service’. Uber's activity must be viewed as a whole encompassing both the service of connecting passengers and drivers with one another by means of the smartphone application and the supply of transport itself, which constitutes, from an economic perspective, the main component. This activity cannot therefore be split into two, for the purpose of classifying a part of the service as an information society service. Consequently, the service must be classified as a ‘service in the field of transport’.

I therefore propose that the Court should answer the first and second questions referred for a preliminary ruling as follows:

It will, of course, be for the referring court to assess, in the light of its own factual findings, whether the activity at issue in the main proceedings meets the test on control set out above. Nonetheless, I note that several courts in different Member States have already ruled to that effect. 28. This could serve as guidance for the referring court, in the spirit of a justice network.

In view of my proposed answers to the first and second questions referred for a preliminary ruling, the third and fourth questions have become irrelevant. In my final remarks, I would like, however, to analyse the legal effects of the possibility of classifying the supplies provided by Uber as a self-standing service, confined to connecting passengers and drivers with one another, which would therefore not cover the supply of transport in the strict sense. Such a service would undoubtedly be treated as an ‘information society service’, but I do not think it would be necessary to address the question whether that service falls within the field of transport.

To recap, Article 1(2) of Directive 98/34 provides that an information society service is a service provided for remuneration, at a distance, by electronic means and at the individual request of a recipient. A service that connects potential passengers and drivers with one another by means of a smartphone application would certainly meet those criteria.

As regards the remunerated nature of the service, under the Uber system, part of the fare paid by the passenger goes to the operator of the platform. The connection service is thus remunerated by the passenger once the supply of transport has been completed.

This service, examined separately from the supply of transport, is also provided at a distance, since the two parties, Uber and the recipient of the service, are not simultaneously present. It is performed with the aid of a smartphone application that operates by means of the internet, which is clearly covered by the notion of provision by electronic means. It is indeed the only way of booking a trip on the Uber platform. Lastly, the service is provided not in a continuous manner, but at the request of the recipient.

Uber's service, as described in point 74 of this Opinion, therefore falls within the scope of the provisions of Directive 2000/31.

Since the Uber application is managed and provided, to both drivers and passengers alike, on the territory of the European Union by the company Uber BV established in the Netherlands, in other Member States, including Spain, such provision is effected within the framework of the freedom to provide services, governed, in particular, by Article 3(2) and (4) of Directive 2000/31.

Pursuant to those provisions, Member States may not, in principle, restrict the freedom to provide services from other Member States, for reasons falling within the coordinated field, by introducing requirements, regardless of whether they are specifically designed for information society services or are of a general nature. The coordinated field covers, inter alia, under the first indent of Article 2(h)(i) of Directive 2000/31, requirements in respect of ‘the taking up of the activity …, such as requirements concerning … authorisation …’. On the other hand, the third indent of Article 2(h)(ii) provides that the coordinated field does not cover ‘requirements applicable to services not provided by electronic means’.

It follows that the requirement to have authorisation in order to provide intermediation services in the conclusion of urban transport contracts on demand, if it is still in force 29. and in so far as it applies to the connection service provided by the Uber platform, would fall within the scope of the coordinated field and would therefore be caught by the prohibition laid down in Article 3(2) of Directive 2000/31. By contrast, all the requirements applying to drivers, as regards both the taking up and pursuit of the transport activity, fall outside the coordinated field and, consequently, the prohibition, since the transport service, by its very nature, is not provided by electronic means.

Under Article 3(4) of Directive 2000/31, Member States may take measures to derogate from the freedom to provide information society services if they are necessary for reasons of public policy, public health, public security or the protection of consumers.

Although the fourth question referred for a preliminary ruling precisely concerns the justification for the domestic measures at issue, the national court does not set out in its request the reasons which might warrant making the intermediary activity in the field of transport subject to an authorisation requirement. In its observations, the Spanish Government puts forward reasons such as traffic management and road safety. However, these seem rather to be reasons which may justify the requirements imposed on drivers providing transport services.

So far as specifically concerns intermediary services, the only reason put forward by the Spanish Government which could apply to Uber is that relating to transparency in fixing prices, which falls within the scope of consumer protection. I recall that, under the Uber system, the fare is set not by the driver but by the platform. Nevertheless, it seems to me that such transparency could be ensured by means which are less restrictive than the requirement to have authorisation for the intermediary activity, such as a passenger information obligation. Such a requirement would thus not meet the criterion of proportionality, expressly provided for in Article 3(4)(a)(iii) of Directive 2000/31.

The complexity of the action in the main proceedings arises, however, from the fact that its aim is to have penalties imposed on Uber for allegedly engaging in acts of unfair competition towards the applicant's members. 30. Those acts are said to be the result not only of the fact that Uber pursued the intermediary activity in the conclusion of transport contracts without having the necessary authorisation, but also of the fact that drivers who provide transport services within the framework of the Uber platform do not satisfy the conditions laid down in Spanish law applicable to such services. Those conditions are not covered by Directive 2000/31 or by Directive 2006/123, since they undoubtedly fall within the field of transport.

Do the provisions of Directive 2000/31 therefore prevent the imposition of penalties on Uber on account of unfair competition resulting from the activity of drivers providing transport services on that platform? As explained above, 31. Uber is not, in my view, a mere intermediary between passengers and drivers. It organises and manages a comprehensive system for on-demand urban transport. Accordingly, it is responsible not only for the supply whereby passengers and drivers are connected with one another, but also for the activity of those drivers. The same would be true even if the connection supply were to be regarded as independent of the supply of transport in the strict sense, since these two supplies would ultimately be performed by Uber or on its behalf.

The interpretation to the effect that, in order to ensure the effectiveness of Directive 2000/31, Uber's activity as a whole should benefit from the liberalisation provided for in that directive must, in my view, be rejected. Such an interpretation would be at odds with the express provisions of Directive 2000/31, under which only requirements concerning services provided by electronic means are covered by the prohibition laid down in Article 3(2) of the directive. 32. In accordance with that interpretation, any economic activity could theoretically fall within the scope of Directive 2000/31, because all traders are currently in a position to offer services by electronic means, such as information on goods or services, bookings, appointments or payment.

Directive 2000/31 thus does not preclude requirements relating to the activity of transport in the strict sense being established in national law or the imposition of penalties on Uber for failing to comply with those requirements, including by means of an injunction ordering it to discontinue the service. Uber's activity, at least as far as the UberPop service is concerned, in issue in the main proceedings, is organised in such a way that Uber cannot, as matters stand, comply with the requirements. Uber relies on non-professional drivers who, as they do not have an urban transport licence, by definition, do not satisfy the requirements concerned. Treating the connection activity as an information society service would not alter that finding, since the services of drivers fall outside the scope of Directive 2000/31. This demonstrates the artificiality of distinguishing between a service that is provided by electronic means and one that is not, where the two supplies are so closely linked to each other and are provided by the same person.

However, I do not think that the need to ensure the effectiveness of the rules on the provision of transport services stricto sensu can warrant the establishment, as a preventive measure, of the requirement to have authorisation for intermediation services in general. Unlawful activities in that field can be countered only with a system of enforcement.

In conclusion, I take the view that, if the service of connecting potential passengers and drivers with one another were to be regarded as independent of the supply of transport in the strict sense and, therefore, as an information society service, Article 3(2) of Directive 2000/31 would preclude the requirement to have authorisation in order to provide such a service, unless that requirement was justified on one of the grounds listed in Article 3(4) and was proportionate to the aim pursued, which seems to me to be unlikely. However, this would have no real legal effect, since the connection service has no economic meaning without the supplies of transport which, by contrast, the national legislature may make subject to numerous requirements.

As regards the applicability of Directive 2006/123, I do not consider it necessary to examine the question whether a service that connects, by means of a smartphone application, potential passengers with drivers offering urban transport on demand is covered by the concept of service in the field of transport within the meaning of Article 2(2)(d) of that directive.

Article 3(1) of Directive 2006/123 provides that precedence is to be given to provisions of other acts of EU law governing the access to and exercise of a service activity in specific sectors if those provisions conflict with the directive. Even though Directive 2000/31 is not one of the acts listed in that provision, the wording ‘these [acts] include’ clearly suggests, in my view, that the list is not exhaustive and is confined to acts the inclusion of which is not self-evident per se. Directive 2000/31 is a lex specialis in relation to Directive 2006/123 to the extent that, even in the absence of Article 3(1) of Directive 2006/123, it would have to be given precedence in keeping with the adage lex posterior generali non derogat legi priori speciali.

Therefore, if the connection activity were to be regarded as being covered by Directive 2000/31, it would fall outside the scope of Directive 2006/123.