Documents considered by the Committee on 20 July 2016 Contents

2Digital Single Market: Collaborative Economy

Committee’s assessment

Politically important

Committee’s decision

Not cleared from scrutiny; drawn to the attention of the Business, Innovation and Skills Committee

Document details

Commission Communication on A European agenda for a collaborative economy

Legal base

Department

Business, Innovation and Skills

Document Numbers

(37829), 9911/16 + ADD 1, COM(16) 356

Summary and Committee’s conclusions

2.1Are taxi drivers in London subject to unfair competition from Uber? Does Airbnb undermine traditional hotel businesses by circumventing local regulations? These are just a couple of examples which have been at the core of the debate about whether the collaborative (or sharing) economy platforms or services should be more regulated.

2.2On 6 June 2016, as part of implementing its wider Digital Single Market Strategy and Single Market Strategy, the Commission published a strategy setting out opportunities and obligations for EU consumers and businesses in the sharing economy and providing non-binding guidance to Member States on how to approach the regulation of collaborative online platforms and services.

2.3The then Minister of State for Culture and the Digital Economy (Mr Edward Vaizey) infers that the Government is generally supportive of the guidance, but notes that it is assessing its detail and will update the Committee on the Government’s position in due course.

2.4The Commission provides guidance on how existing EU law should be applied to this fast-evolving sector, clarifying issues arising in five areas:

2.5It encourages Member States to review, and if appropriate, amend existing legislation for it to comply with the guidance.

2.6The Committee notes that policies to regulate the collaborative economy are often developed at local and regional levels, and remain areas of national competence.

2.7The Committee further notes that the Government is still considering its position on the detail of the Communication. We look forward to receiving a full assessment of the strategy, in particular in light of the UK’s vote to leave the EU, by the end of September. This should address:

2.8In the meantime, we retain this document under scrutiny and draw our conclusions to the attention of the Business, Innovation and Skills Committee.

Full details of the documents

Commission Communication on A European agenda for a collaborative economy: (37829), 9911/16 + ADD 1, COM(16) 356.

Background

2.9The Commission announced that it would develop an EU agenda for the collaborative economy (including guidance on how existing EU law applies to collaborative economy business models) in both its Digital Single Market Strategy of May 2015 and its Single Market Strategy of October 2015.

2.10The Commission ran a public consultation on the Regulatory environment for Platforms, Online Intermediaries and the Collaborative Economy12 between September 2015 and January 2016.

The Commission Communication of 6 June 2016

2.11The Commission reviews the opportunities for EU consumers and entrepreneurs created by the collaborative economy, and provides non-binding guidance on the rights and obligations of interested parties.

2.12The Commission acknowledges the important contribution that the collaborative economy can make to jobs and growth. It stresses that the collaborative economy can provide benefits to consumers through new services and lower prices, and that it can encourage asset-sharing and sustainable use of resources. The Commission also considers that it can benefit workers outside the conventional labour market.

2.13The Commission underlines that any regulation must be justified and necessary to attain a clearly identified public interest objective.

Guidance

2.14The Commission provides guidance on five key issues, which are summarised below. It invites EU Member States to review and where appropriate revise existing legislation according to this guidance. The Commission also states that it will monitor the regulatory, economic and business developments and identify possible obstacles and problems arising from divergent national regulations or regulatory gaps.

Market access requirements

2.15The Commission urges Member States to take into account the specific features of collaborative economy business models when determining market access requirements, so that operators are not burdened by unnecessary, unjustified or disproportionate regulation. It suggests that:

Liability regimes

2.16The Commission considers that:

Protection of users

2.17The Commission recognises that the line between businesses and consumers is blurred in collaborative economy transactions. It also considers that 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.

2.18The Commission establishes that EU consumer protection law applies if the collaborative platform and/or user qualify as a ‘trader’ (i.e. not for consumer to consumer transactions). It considers the following factors relevant in assessing when, in peer-to-peer transactions, the provider of the underlying service qualifies as a trader: the frequency of the service; the provider’s motive (is it profit-seeking?); and level of turnover. It further notes that increased consumer confidence could also be achieved through improved online trust mechanisms, such as rating systems and quality labels.

The self-employed and workers in the collaborative economy

2.19Labour law is predominantly Member State (national) competence, complemented by minimum EU social standards and jurisprudence.

2.20The Commission considers that 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.

Taxation

2.21The Commission considers that similar tax obligations should apply to businesses in the collaborative economy providing similar services in order to create a level playing field. It encourages Member States to raise awareness of tax obligations, simplify and clarify the application of tax rules to the collaborative economy, issue guidance to facilitate tax collection, and reduce the administrative burden on individuals and businesses to support economic growth.

The Minister’s Explanatory Memorandum of 21 June 2016

2.22The then Minister’s Explanatory Memorandum pre-dates the outcome of the referendum on 23 June.

2.23He notes that the former Prime Minister (Mr David Cameron) called on the EU to “take bold steps to create an open, flexible market with a regulatory framework that reflects the dynamic nature of the digital economy” and “welcomed the Commission’s Digital Single Market Strategy, but urged a focus on reducing the burdens of regulation on business, and a continued focus on better regulation and evidence based policy making”.

2.24The then Minister also notes that the Government responded to the Commission public consultation on the sharing economy,13 which in summary “states that the government would like to see proposals that support a competitive environment in the sharing economy; make it easier for sharing economy businesses to understand and comply with rules; and approach the sharing economy with better regulation principles”.

2.25The then Minister notes that the Government “will be considering the detail of this Communication in light of this” and present a “more detailed assessment of the initiative” to Parliament in due course.

Previous Committee Reports

None.





© Parliamentary copyright 2015

25 July 2016