The Court of Justice of the European Union has ruled that Airbnb does not need an estate agent's licence to operate in France.
The ruling came after the French tourism association complained that Airbnb did not comply with French property laws, with the ECJ ruling that the peer-to-peer lodging brand was, instead, a platform.
The ECJ described Airbnb instead as an “information society service” which was “a tool to facilitate the conclusion of contracts”. The ruling said: “In that regard, because of its importance, the compiling of offers using a harmonised format, coupled with tools for searching for, locating and comparing those offers, constitutes a service which cannot be regarded as merely ancillary to an overall service coming under a different legal classification, namely provision of an accommodation service.”
The Association pour un hébergement et un tourisme professionnels, which lodged the complaint against Airbnb Ireland, maintained that that company did not merely connect two parties through its platform of the same name; it also acted as an estate agent without holding a professional licence, in breach of the act known as the ‘Hoguet Law’ which applies to the activities of real estate professionals in France.
The ECJ ruled that France could not require Airbnb to hold an estate agent’s professional licence as it did not notify the Commission of that requirement in accordance with the Directive on electronic commerce.
Airbnb said: “We welcome this judgment and want to move forward and continue working with cities on clear rules that put local families and communities at the heart of sustainable 21st century travel. We want to be good partners to everyone and already we have worked with more than 500 governments and authorities to help hosts share their homes, follow the rules and pay tax.”
Following the ruling, Nathan Blecharczyk, Airbnb co-founder and chief strategy officer, wrote to mayors in major cities across Europe.
He said: “We welcome this ruling and see it as a positive step for our continued collaboration with cities. Indeed this case was always about how our platform should be regulated – not whether it should be regulated. Cities can, should and do have their own clear and modern rules for home sharing, and we have worked with governments across the globe on measures to help hosts share their homes, follow the rules and pay their fair share of tax.
“I and my co-founders remain 100% committed to partnering with you to continue that important work. We want to ensure that our platform works for everyone and continue our close collaboration on innovative solutions to the challenges facing cities, while working together to generate new revenue streams for local families, businesses and communities.”
Insight: Airbnb, lest we not forget, is heading towards an IPO this year and needs to make sure that its house is in order after what has been a period of some horror for any company which can be viewed as even on the borders of technology. Perhaps it wouldn’t have been the worse thing to be described as an estate agent and you don’t hear too many people saying that.
But platform it is and platform which has potential investors skittish, not least because the likes of the French unions are irritated by them. So far, so welcome to President Macron’s world. No, Airbnb has two main issues going into its IPO and those are two which don’t trouble the hotel sector: holding onto its portfolio and holding onto its legality.
The two are, helpfully, linked. The platform has over seven million listings, enough to bring most hoteliers out in the clammies. But it has no control over them. Each and every room, bed, treehouse is on the platform at the whim of the owner. Likewise, as legislators around the world wake up to its presence - and huge potential as a whipping boy - they can also force inventory from the platform.
It is likely that Airbnb has built up a base of supply such that it can rely on a certain volume and it has said that in locations such as San Francisco, which is heavily regulated, it has proven itself. But there is a lot of work yet to be done and, as has been seen in Berlin, regulations can change directions as easily as the wind.
CEO Brian Chesky has been saying in recent weeks that, hey, it doesn’t need an IPO to raise money - in fact a number of shareholders intend to stay with the company long term. Reassuring words indeed. But then why bother with an IPO at all? Why not carry on as they were before and not worry about the added scrutiny?
Because it needs one thing which the likes of WeWork have not been able to attain. It needs credibility. It needs to set itself apart from the unicorns, leave the realms of mythology and prove it’s a real company and a real force to be reckoned with.