LUXEMBOURG (CN) – Airbnb is an information service, not a real estate company, Europe’s highest court ruled Thursday in France’s attempt to regulate the home-sharing platform with licensing rules meant for real estate agents.
In a major win for the home-sharing site, the European Court of Justice held that France cannot require the California-based company to hold a real estate license since it is only connecting people, not providing accommodations.
“An intermediation service which, by means of an electronic platform, is intended to connect, for remuneration, potential guests with professional or non-professional hosts offering short-term accommodation…must be classified as an ‘information society service,” the Luxembourg-based ECJ said in its ruling.
Paris prosecutors brought the case against Airbnb after the Association for Professional Tourism and Accommodation, a hotel lobbying organization, filed a complaint in France arguing Airbnb should be considered a real estate agent.
Traditional real estate agents have to follow strict insurance and financial regulations in France.
“We want to be good partners to everyone and already we have worked with more than 500 governments to help hosts share their homes, follow the rules and pay tax,” Airbnb said in a statement following Thursday’s ruling.
Airbnb has faced substantial backlash in European cities, blamed for rising home prices and overcrowding. Paris Mayor Anne Hidalgo wrote a letter to the International Olympic Committee last month expressing concerns over its partnership with Airbnb ahead of the 2024 Paris Olympics. Hidalgo campaigned on a platform of regulating the tech company.
The ECJ ruled in 2017 that ride-hailing service Uber is a transportation services company and must accept the stricter regulations applied to taxi companies in Europe.
In the Uber case, the court found that the company “exercised decisive influence over the conditions under which transport services were provided,” including setting rates and working conditions. The judges held that without the app, passengers and drivers would be unlikely to connect.
By contrast, property owners on the Airbnb platform set their own rates and terms, and renters and owners have many other ways of finding one another, the court ruled.
The ruling follows a nonbinding opinion in April from an EU magistrate who also found that Airbnb is a platform, not a real estate agency.
Thursday’s decision is final and cannot be appealed.
The win comes at a good time for the home-sharing site. It announced earlier this year that it plans to become a publicly traded company in 2020.