Regulating Contract Platforms, the Case of Airbnb Prof. Vanessa Mak Secola Conference, Tartu June 2016

Outline I.Platform services – Airbnb’s business model II.Terms, policies and liability III.Dispute resolution, feedback IV.The broader picture – city councils, hotels, landlords and the risk of eviction…. V.Is there a need for regulation of platform services? 2

I. Platform services – Airbnb’s business model Peer-to-peer accommodation service Airbnb: based in California with a subsidiary in Ireland 3

How does it work? 4

Which legal relationships? Between host and guest  contract, potentially tort Between Airbnb and user  contract, potentially tort Airbnb as intermediary? 5 Host Guest

The contract between host and guest Most terms determined by the parties, e.g. price, duration, number of guests, cleaning of the apartment, pet animals Some standard policies available from Airbnb 6

Compared to other platform services Different business models Uber, for example, sets almost all of the terms of the contract, incl. the price – users have no influence on the contractual terms  Examples of case law where Uber has been held to act as an employer in relation to its drivers Degrees of involvement of the platform provider in the legal relationship between the parties can have ramifications for the division of responsibility between the platform and the users  If regulation is introduced, can and should it be tailored to different business models? 7

II. Terms, policies and liability 8

Terms, policies and liability- privacy Information, mobile data, log data, third party social plug-ins IMPORTANT: When you use the Platform, your data may be sent to the United States and possibly other countries Policy changes: We may change how we collect and then use Personal Information at any time and without prior notice, at our sole discretion. We may change this Privacy Policy at any time. If we make material changes to the Privacy Policy, we will notify you either by posting the changed Privacy Policy on the Platform or by sending an to you. 9

Terms, policies and liability - other Guest Refund Policy Host Guarantee Health & Safety Policy 10

Terms, policies and liability Guest Refund Policy ‘Travel issue’: e.g. cancellation, material inaccuracies between description and actual apartment, apartment not clean, safety issues 2. The Guest Refund Policy. If you are a Guest and suffer a Travel Issue, we agree, at our discretion, to either (i) reimburse you up to the amount paid by you through the Site, as determined by Airbnb in our discretion, depending on the nature of the Travel Issue suffered or (ii) use our reasonable efforts to find and book you another Accommodation for any unused nights left in your reservation which in our determination is reasonably comparable to the Accommodation described in your original reservation in terms of size, rooms, features and quality. All determinations of Airbnb with respect to the Guest Refund Policy, including without limitation the size of any refund, shall be final and binding on the Guests and Hosts. 11

Host Guarantee 12

Host Guarantee 13

Health & Safety policy 14

Health & Safety policy 15

III. Dispute resolution & feedback Disputes between hosts and guests: -Airbnb dispute resolution center -Alternatives? Reputational feedback mechanisms Disputes between Airbnb and users -forced arbitration clause  valid under US law (which is applicable law according to terms and conditions of Airbnb)  not applicable to users who reside outside the US, they contract with Airbnb Ireland and different rules apply (in accordance with EU Directive 93/13/EC, Annex sub q) 16

Airbnb dispute resolution center 17

Alternatives? Go to court… First case law emerging -complaints from landlords: BGH judgment 8 January 2014, VIII ZR 210/13 seven reported cases district court Amsterdam one reported case district court Rotterdam -discrimination case British Columbia, Canada -privacy / surveillance case San Francisco, US (German guest) 18

Airbnb’s response… 19

Reputational feedback 20

Reputational feedback Feedback from hosts and guests Challenges: fake reviews or lack of accurate reviews Alternatives? e.g. monitoring by platform operator 21

IV. The broader picture Policy issues: how many days of ‘hosting’ before a host becomes a trader? Hotels and tourism tax Landlords and the risk of eviction Nuisance to neighbours / city Current developments: Berlin ban on short-term rentals, the Zweckentfremdungsverbot effective as of 1 May 2016, upheld in court (The Guardian, 8 June 2016) 22

V. Is there a need for regulation of platform services? Main legal problems concerning Airbnb: -liability questions -unfair terms protection -privacy -dispute resolution in or out of court -local policy: illegal hotels, safety, nuisance Other platform services: Uber, eBay, Amazon, GooglePlay, TaskRabbit...  different business models, but similar issues 23

To regulate or not to regulate? Communication from the European Commission, ‘Online Platforms and the Digital Single Market. Opportunities and Challenges for Europe’ COM(2016) 288/2  ‘Absolute bans and quantitative restrictions should only be used as a measure of last resort’ (press release 2 June) Osnabrück group: project on draft regulation for platform services led by Hans Schulte-Nölke, Fryderyk Zoll, Christoph Busch and Aneta Wiewiórowska-Domagalska Special issue Journal of European Consumer and Market Law (EuCML), 2016, vol. 5, issue 1 24

Conclusion Challenges of platform services: -Balancing innovation and regulation -Relying on self-regulation and co-regulation -Effective redress mechanisms are important 25