E- COMMERCE: NO ADDITIONAL OBLIGATIONS FOR SERVICE PROVIDERS ESTABLISHED IN ANOTHER EU MEMBER STATE
The Court of Justice of the European Union ruled that a Member State may not impose additional obligations for the provision of services on its territory on suppliers established in other EU Member States which are not required in the Member State in which the suppliers are established.
The dispute concerned the compliance of Italian legislation imposing additional requirements on e-commerce companies based in other EU Member States with the freedom to provide services enshrined in Article 56 of the Treaty on the Functioning of the European Union.
In this case, e-commerce sales companies and online search engines, such as Amazon, Airbnb, Google, etc., were obliged under Italian law to join a register held by an administrative authority (AGCOM), send it information and documents and pay a contribution, on pain of penalties.
The companies concerned challenged the application of this legislation before the Italian courts on the grounds that, in their view, it hindered free access to a service activity on Italian territory.
The Italian Administrative Court decided to stay proceedings and refer the following question to the Court of Justice of the EU for a preliminary ruling: does the principle of freedom to provide services (as well as European Regulation 2019/1150 on the relationship between platforms and undertakings and Directives 2000/31 and 2015/1535 on information society services) preclude national measures imposing additional formalities and financial compensation on undertakings providing online intermediation services, on pain of penalties, in order to promote fairness and transparency?
In its response, the Court of Justice of the EU answered in the negative, holding that such legislation was not permitted on the grounds that each EU Member State, as the recipient State of such information society services, must ensure that it does not restrict the free movement of those services by requiring compliance with additional obligations. The ECJ justifies its decision on the basis of the principle of mutual recognition, which implies that Member States must each put in place a system to regulate information services and ensure proper compliance with European legislation on the free movement of such services and the communication between Member States and EU institutions of any draft national regulations on information society products and services. Therefore, according to the ECJ, the Italian legislation imposing additional constraints on service providers established in other EU Member States is not justified.
