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Collaborative economy IW News 2. June 2016

Dreaming of Digital Unity

Diverse regulation in the EU member states prevents online platforms such as collaborative platforms like Uber or Airbnb from scaling up. In order to create a consistent framework, the EU Commission has put forward an agenda for the collaborative economy today – without extreme restrictions of business activities. This is appropriate and long overdue.

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The collaborative economy has long become mainstream in Europe. Private citizens are able to offer rides in their cars, tourists easily find accommodation in regular apartments instead of hotels. Users of collaborative platforms extract numerous advantages – a variety of supplied services resulting in strong demand and vice versa.

Until now, the applicable rules for the collaborative economy were often unclear: Should platforms be subject to licenses, who needs to pay which taxes, what does consumer protection look like or what defines employment relationships? To date, the EU member states apply diverse rules and frameworks. For platforms, suppliers and users, this involves significant legal uncertainties, obstructs the collaborative platforms’ growth across countries und limits the availability of digital services.

The EU Commission plans to remove these ambiguities by offering guidance on the application of existing rules to the collaborative economy. Platforms that act as intermediaries between users only and those that provide the actual service are intended to be differentiated in the future. Licenses should only have to be obtained where strictly necessary. This moderate approach is welcome because it lives up to the business model of collaborative platforms.

The Commission’s agenda generally is appropriate and important: The massive fragmentation of the large European Single Market has obstructed online businesses for a long time. However, the suggested policy measures often remain hazy and allow for a great deal of interpretation by the member states. The Commission needs to amend this, otherwise the planned, well-intentioned harmonization could remain a digital dream.

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