A ruling by the Court of Justice of the European Union (ECJ) has stripped Uber of its protections against undue national regulation that digital services enjoy in the Eurozone, under EU law.
On Tuesday, in yet another setback to Silicon Valley startup, Uber Technologies Inc, a top EU court ruled that France is entitled to proceed with criminal proceedings against Uber’s local managers for running an illegal taxi service.
The lawsuit revolves around Uber’s use of unlicensed drivers as part of its UberPOP service in France; since the service has been suspended in France as well as in oher cities, the ruling is unlikely to materially affect Uber’s operations in France.
“Member states may prohibit and punish, as a matter of criminal law, the illegal exercise of transport activities in the context of the UberPOP service, without notifying the Commission in advance of the draft legislation,” said the Court of Justice of the European Union (ECJ) in a statement.
Uber’s argument centered around the notion that France should have sought permission from the European Commission for a new taxi law, which ought to contain measures on taxis and mobility apps, including one that said only official taxis could use geo-location technology to show available cars. Since France did not seek the Commission’s approval, the criminal charges brought against two of the company’s French managers were invalid, argued Uber.
“This case is about whether a French law from 2014 should have been pre-notified to the European Commission and related to peer-to-peer services which we stopped in 2015,” said a spokeswoman for Uber. “As our new CEO has said, it is appropriate to regulate services such as Uber and so we will continue the dialogue with cities across Europe.”
Since its launch in 2011, Uber, which allows consumers to summon a ride through an app from a smartphone, has roiled the traditional taxi industry which has clashed and protested with local authorities.
Recently, it has taken a more conciliatory approach, by voluntarily suspending its services in some cities in order to comply with legacy local legislation.
Uber has also been forced to quit in some countries including Denmark and Hungary.
Under EU law, national legislation affecting digital services needs to be pre-notified to Brussels to ensure it is not distorting the single market.
According to the ECJ, since Uber was offering a transport service under EU law, the obligation to notify the Commission in advance did not apply.