“Information Society Services” The eCommerce Directive and Brexit

8 Feb 2021

1. Information Society Services under the eCommerce Directive
Pursuant to Article 2(a) of the eCommerce Directive, Information Society Services (“ISS”) are those defined by Article (1)(1)(b) of Directive 2015/1535, namely “any service provided for remuneration, at a distance, by electronic means and at the individual request of a recipient of services”.
The key aim of the eCommerce Directive is to ensure free movement of ISSs within the European Union. The Directive provides significant advantages to service providers to whom it applies, in particular in terms of rules of establishment and the “country of origin” rule (Articles 3 and 4) on the one hand, and Internet intermediary liability rules (Articles 12 to 15), on the other. Regarding this second aspect, the providers covered, as intermediaries, are exempted from liability for the content they manage, provided they fulfil certain conditions. Moreover, the application of the Directive to a given provider implies that the latter cannot be subject to prior authorizations or other specific requirements.

2. Condition of separation of services
Considerable developments have emerged with the notion of “separability of services”, referring to those ISS providers which operate technology services linked to “offline” underlying services. Whether the two are inextricably linked, or not, is crucial to assess whether those different services relate and whether the ISS provider might be responsible for the underlying services. To the extent that the online and offline services fall within the scope of a different legal classification, they may be subject to different legal requirements and sector-specific regulation.

Recent case law of the ECJ has detailed the assessment of whether a platform should be considered as also providing an underlying service, in particular in its Uber and Airbnb rulings. In the first case, Uber was ultimately found not to qualify as an ISS, but rather as a transport service provider. In the second, the Court recognized Airbnb was an ISS, instead of an accommodation provider.

In order to reach its conclusions, in the Uber judgement, the Court assessed whether the platform operates as a “market maker” and whether it exercises “decisive influence” over the terms and conditions of the underlying service’s provision. Two years later, in the Airbnb judgment, the Court based its reasoning on a revised version of the “Uber test”, focusing mainly on “decisive influence”, leaving the “market maker” criterion as a general indicator.

From these findings, a number of criteria can be identified as relevant for determining whether a platform can be regarded as an ISS, such as for instance:
Independence of the underlying service from the platform:
– Possibility of an independent communication and negotiation channel between the provider of the service and the end-customer
– Existence of a contractual relationship between the platform and end-customer
Indispensability of the service provided by the platform for the provision of the underlying service
Role of the provider of the service regarding price setting and conditions
Provision of ancillary services by the platform
Influence of the platform over the T&Cs of the underlying service
– Employment relationship (degree of control) with regards to the provider of the service
– Allocation of liability between platform and provider of the service
– Allocation of costs and risks with regards to the underlying service
– Possibility of the provider of the service to choose among different options (for ex. cancellation policies regarding end-customer)

– Ownership, quality checks and maintenance of key assets used by the underlying service

In light of the above, if, as a result of the assessment, it can be concluded that the platform acts independently from the underlying service and does not exercise any decisive influence on the latter, the platform may be considered as an ISS in the sense of the eCommerce Directive and benefit from the rules provided therein.

3. UK ISSs and Brexit

On 31 December 2020, Brexit’s transition period has ended, which means that the eCommerce Directive ceases to apply to the UK.

As a result, service providers established in the UK (in the sense of Article 2(c)), no longer enjoy the internal market status and protection (Articles 3 and 4). With regards to the “coordinated fields” of the Directive, UK-based operators must comply with local law requirements of each Member State where their services are accessible. Moreover, the providers concerned may become subject to licensing requirements or any other type of “prior authorization” schemes, which are prohibited under Article 4 of the eCommerce Directive for EU-based cross-border operators.

4. Conclusion

Taking these changes into account, UK-based ISSs providing their services within the territory of the EEA are required to take the necessary measures to comply with the national laws of each EEA country they operate in. The same applies to ISSs established in the EEA whose services are accessible in the UK, which will have to comply with any specific laws applicable in the UK.

Do not hesitate to contact us should you require further information and assistance on the issues discussed in this note, or any other data protection related matter.

Patrice Vanderbeeken
Partner E: patrice.vanderbeeken@pierstone.com

Laura Somaini
Associate E: laura.somaini@pierstone.com

Alain Strowel
Senior Partner E: alain.strowel@pierstone.com

Hélène van Rijckevorsel
Junior Associate E: van.rijckevorsel@pierstone.com