Out-Law News 1 min. read

EU review to look at how to classify Uber


A review is to be launched by EU officials in an effort to determine how to classify Uber as a business, Reuters has reported.

The review, which will be opened by the European Commission in September, will aim to identify existing EU laws that can help answer the question of whether Uber is a transport company or a digital service, the report said.

Uber allows people to book and pay for a ride-share, taxi or private driver through a mobile app. The company has established itself in many major cities around the world as a rival to traditional taxi companies. Uber works with "driver partners" who have control over how often they pick up and drop off Uber users.

Whether or not the company is a transport company or a digital service is important because different regulations apply to each type of business.

The Court of Justice of the EU has been asked by a court in Spain to rule on whether Uber should be regulated as a 'digital service' or a transport company. A judgment is expected next year.

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 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.

Competition law experts Guy Lougher and Sammy Kalmanowicz explained how EU competition laws might restrict attempts to regulate innovative new business models that disrupt existing markets.

"Companies can raise a complaint with the European Commission if they believe national regulations being applied to them run contrary to the principles of fair competition enshrined in the EU treaties," they said. "If the Commission, following an investigation, decides the regulations unfairly protect market incumbents and undermine the EU competition rules then it can deem those regulations to be impermissible. The Commission would have the power to require EU countries to amend their national regulatory regimes and could even raise infringement proceedings against member states."

"Equally, if national courts or competition authorities were asked to enforce national regulatory regimes which contradicted EU competition laws, then they should decline to do so and give precedence to the EU laws," Lougher and Kalmanowicz said.

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