The European Commission recently presented guidance aimed at supporting consumers, businesses and public authorities to engage confidently in the collaborative economy.
These new business models can make an important contribution to jobs and growth in the European Union, if encouraged and developed in a responsible manner.
The collaborative economy is growing rapidly. As it takes root in the EU, national and local authorities are responding with a patchwork of different regulatory actions. This fragmented approach to new business models creates uncertainty for traditional operators, new services providers and consumers alike and may hamper innovation, job creation and growth.
As announced in its Single Market Strategy, the Commission has today issued guidance to Member States to help ensure the balanced development of the collaborative economy.
Commission Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness, said: “A competitive European economy requires innovation, be it in the area of products or services. Europe’s next unicorn could stem from the collaborative economy. Our role is to encourage a regulatory environment that allows new business models to develop while protecting consumers and ensuring fair taxation and employment conditions.”
Commissioner Elżbieta Bieńkowska, responsible for Internal Market, Industry, Entrepreneurship and SMEs, said: “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.”
The Communication “A European agenda for the collaborative economy” provides guidance on how existing EU law should be applied to this dynamic and fast evolving sector, clarifying key issues faced by market operators and public authorities alike:
What type of market access requirements can be imposed? 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.
Who is liable if a problem arises? Collaborative 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 collaborative platforms to continue taking voluntary action to fight illegal content online and to increase trust.
How does EU consumer law protect users? 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.
When does an employment relationship exist? 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.
Which tax rules apply? Collaborative 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 Value Added Tax. Member States are encouraged to continue simplifying and clarifying the application of tax rules to the collaborative economy. Collaborative economy platforms should fully cooperate with national authorities to record economic activity and facilitate tax collection.
The Communication invites EU Member States to review and where appropriate revise existing legislation according to this guidance. The Commission will monitor the rapidly changing regulatory environment as well as economic and business developments. It will follow trends on prices and quality of services, and identify possible obstacles and problems arising from divergent national regulations or regulatory gaps.
Even though the latest definition of collaborative economy by the European Commission does not include crowdfunding in it, it is acknowledged by the academia as well as by Wikipedia that crowdfunding is part of it. Therefore the guidelines above, although they cannot apply to the crowdfunding sector, might influence in the future how the phenomenon should be treated.