Short-term rentals: EU court advisor reaffirms country of origin principle

A non-binding opinion of Polish advocate general Maciej Szpunar to the Court of Justice of the EU published on Thursday (11 January) suggests reaffirming the country of origin principle on joined cases of the short-term rental industry.

Airbnb, Google Vacation Rentals, Amazon Services and Expedia brought actions against certain decisions by the Italian regulatory authority AGCOM regarding how to enter a register, pay a financial contribution and submit an information request that they considered were inconsistent with EU competition law.

They argued that these decisions were not in line with the country of origin principle, which allows a company based in an EU country to provide its services in any other member state based on the legislation of its home country.

In their view, the Italian rules on short-term rental letting infringed on their rights to fair competition within the EU single market.

According to Szpunar, “the Directive on electronic commerce does preclude” the imposition of further obligations on an online service provider established in another EU member state.

If Szpunar’s opinion is followed by the top EU Court in its judgement, such a decision would impact US companies with EU headquarters, such as Ireland-based Airbnb and Google, as well as Luxembourg-based Amazon.

However, it would not impact Expedia, which is solely established in the United States.

Airbnb welcomed the opinion of the advocate general, while Amazon did not wish to comment, and Google is still reviewing the opinion before delivering a comment.

Expedia did not reply to Euractiv by the time of publication of the article.

Overlapping of Italian and EU laws

US companies specifically consider the Italian obligations as infringing the EU regulation on fairness and transparency and contrary to the country of origin principle set in the eCommerce directive.

Italy argued that the Italian law merely implemented the EU regulation on fairness and transparency.

The advocate general sided with US companies in reading the country of origin principle. Furthermore, he explained that Italian law cannot be considered to implement EU regulations.

An EU regulation is a binding legislative act that must be applied in the entire EU. Contrary to directives, which need to be transposed in the national legal framework, regulations are directly applicable in the national jurisdictions of EU countries and therefore do not need national laws of implementation.

Szpunar’s opinion reads that “the objective of that regulation is to contribute to the proper functioning of the internal market”, therefore “a member state cannot collect more information than is relevant to its obligations under that regulation”.

The country of origin principle has been set in EU law since the year 2000 and has been confirmed in law through multiple acts, such as 2018’s General Data Protection Regulation, or 2022’s Digital Services Act.

The Court of Justice of the EU shall render a final decision in the coming months, likely following the opinion of the advocate general, hence freeing the US companies – except Expedia – from the Italian financial and administrative obligations.

[Edited by Luca Bertuzzi/Nathalie Weatherald]

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