Airbnb and Expedia amongst other well known online booking platforms have achieved a court victory against the Italian government who were trying to enforce unilateral changes to legislations being promoted by European member states.
After months of battling, the final decision taken by the Court of Justice of the European Union declared that Italy as a member state cannot impose additional obligations to online service providers established in another member state.
In Italy, providers of online intermediation services and search engines such as Airbnb, Expedia, Google, Amazon and Vacation Rentals are subject to certain obligations under Italian national provisions.
These obligations were imposed between 2020 and 2021 to ensure appropriate and effective implementation of certain regulations. The aim being to promote fairness and transparency for business users and online intermediation services.
As well as paying a cash contribution, companies are obliged to be registered with the administrative authority AGCOM, registration must be maintained and includes periodic financial audits amongst other requirements, non-compliance results in a penalty being served.
So whilst Airbnb, Google, Vacation Rentals Ltd, Expedia and Amazon all have their corporate headquarters outside of Italy (Ireland, Spain and Luxembourg), the Italian authorities still wanted the platforms to make the financial contributions and comply with the obligations, even though these companies are outside of Italian financial jurisdiction.
Before reaching the Luxembourg based Court of Justice, which is the highest court in the European Union in matters of Union law, Airbnb and the other companies challenged the law first in an Italian court. The platforms argued that the law was contrary to EU law which states that online service providers are only subject to the rules of the country in which they are established.
The decision
On Thursday May 30th 2024, the Court of Justice of the European Union ruled in favour of the online platforms. The judge declared that “a member state cannot impose additional obligations on an online service provider established in another member state.”
The decision highlighted that the Italian law violated EU market rules on e-commerce.
According to the Court, these obligations do not fall under the exceptions allowed by the E-commerce Directive and the decision issued on May 30th cannot be appealed.
Despite this legal victory, it shouldn´t be overlooked that in December 2023, following an investigation into alleged tax evasion, Airbnb paid €576 million ($621 million) to Italian tax authorities. As part of the investigation Italian prosecutors argued that Airbnb had failed to collect the required 21% VAT on top of landlord’s rental income. The Italian authorities alleged that the total income amounted to approximately €3.7 billion.
A judge in Milan had initially ordered the seizure of €779.5 million euros ($831.6 million) from Airbnb’s Irish headquarters, however Airbnb settled directly with the Italian tax authority Agenzia delle Entrate for a lower amount than previously expected. The alleged breach took place between 2017 and 2021, and three Airbnb employees who served in senior management roles during that period were investigated.
Ακολουθήστε μας στο Google News και μάθετε πρώτοι όλες τις ειδήσεις!
