1. Introduction
1. Over the last couple of decades
digital technologies have become a major feature of our lives. They
have profoundly transformed both society and economy, leading to
the blurring of boundaries between private and professional life,
and new challenges to public policies in several domains, notably
for provision and use of services. In fact, digital platforms have
enabled new business models and created an open marketplace where goods,
services and information are exchanged between individuals (peer-to-peer)
and business actors (professionals and firms) — the so-called platform
economy
—
both for profit and on a cost-sharing basis, or even for free. The
sprawl of this phenomenon is such that estimated revenues from collaborative
platforms across European Union countries were close to €28 billion
in 2015 alone, twice the amount of the previous year, and are set
to expand further in an exponential manner.
2. Many traditional sectors of national economies have been taken
by surprise by the apparent success of these new competitors. The
actors of the platform economy have been accused of breaching existing regulations
and laws in terms of consumer protection, social rights of workers
and taxation at both national and European level. States are therefore
compelled to assess the new challenges and provide adequate responses.
As the motion for a resolution on the societal impact of the platform
economy (
Doc. 14355) calls for, this Parliamentary Assembly “should take
stock of developments in this field in order to promote good practices”
and put forward ideas for a co-ordinated European approach to the
platform economy.
3. To this end, our work does not start from scratch: experts,
the European Commission and the European Parliament, the OECD (Organisation
for Economic Cooperation and Development), consumer and research organisations,
trade unions, as well as national governments and parliaments have
all studied the phenomenon. However, their views do not concord
in assessing the potential of digital platforms to create or preserve
quality jobs, optimise the use of existing resources and increase
overall wellbeing in society.
Many questions
are also raised about the role of the platform economy in the context
of artificial intelligence applications in real life, as smart robots
can replace humans for more and more jobs.
4. This report will therefore seek to help policy makers better
understand risks and opportunities inherent in the development of
the platform economy by looking at the situation in the main sectors
concerned, the existing attempts to regulate the phenomenon, and
priority areas that require regulatory action. As a committee, we
have looked together at positive examples of latest developments
in the platform economy with the help of experts
and
institutional representatives; as rapporteur, I have also carried
out my own research and fact-finding, building on the committee’s
deliberations. In this context, I should single out my visit to
the European Commission in Brussels on 20-21 March 2019 where I
had discussions with officials dealing with regulatory issues, taxation
challenges, consumer protection and the “platformisation” of work.
My findings have been integrated into the present report.
2. Dynamic business platforms transforming
the world of work
5. With smart technologies penetrating
our lives, the market economy reveals its new facets and opportunities
for us all to not only access new services but also become active
and creative users or even free-lance entrepreneurs at minimal cost.
One in six Europeans is already using these sharing platforms regularly, and
nearly a third of them have provided a service themselves at least
once. Thus over 5% of the EU population already provides services
and assets through such platforms. According to the European Commission,
the platform economy is “sowing the seeds of growth”
and could add up to €572 billion
to the EU economy.
6. Whilst in early days digital markets mainly channelled data
and services online, modern platforms have stepped into the local
delivery of physical services. Companies such as Airbnb, Uber, BlaBlaCar
and TaskRabbit have usually hit the headlines for their disruptive
effects on established markets and services: while many observers
say that such actors of the sharing economy create more choice for
consumers, critics see them as unfairly undermining competition.
Even a new term has been coined: the “uberisation” of economies. If
a few years ago the platform economy concerned mainly five sectors
(short-term accommodation rentals, passenger transport, household
services, professional services and collaborative finance), the
number of areas covered now has nearly tripled with the expansion
into healthcare, learning, logistics, energy, municipalities, self-making
of goods, etc.
7. For policy reasons, we should distinguish three key actors:
providers (platform workers), users and platforms inter-connecting
users with providers in real time and facilitating transactions.
France and the United Kingdom appear to be leading countries in
Europe in creating collaborative platforms; they are closely followed by
Germany, Spain and the Netherlands.
In 2016, the European Commission
issued (through its Communication) non-binding guidance on the application
of EU law to the platform economy for market actors and national
public authorities towards increased clarity of obligations, rights,
liability regimes and applicable taxation whilst recognising that
the picture was constantly changing.
8. Moreover, the Court of Justice of the European Union was asked
by courts in Belgium, Spain and Germany to rule on Uber’s compliance
with EU law. Recently, Uber, Blablacar and Airbnb filed complaints
with the European Commission against France, Germany, Spain and
Hungary referring to the transport sector, and against Spain, Germany,
Belgium and France, regarding the accommodation sector. In May 2017,
the Court of Justice advocate general issued an opinion stating
that Uber could not benefit from lax rules under the EU services
directive which is considered by the European Commission as the
legal basis for the platform economy. The Court of Justice ruling
for Spain of December 2017 said that Uber should accept stricter regulation
and licensing in EU countries as a taxi operator, even though Uber
argues that it is a computer services business and intermediary.
9. Various studies note that the platform economy has been growing
on the fringes of regulation. Some experts affirm that the whole
purpose of digital platforms is to avoid regulations applicable
to the traditional model, while others suggest that the sharing
economy stirs trouble in the existing regulatory regimes because its
business model is effectively new. In many European countries, for
instance, platform workers are considered as self-employed, yet
questions arise over qualifications, competences and social protection
of such workers, as well as in what concerns consumer protection
when using platform services. Uber’s main critics have complained
over its treatment of drivers as commodities and regarding its exploitation
of workers through long hours on low wages, thus putting both passenger
and public safety at risk.
3. Digital
platforms in Europe: from marginal to significant
10. Whether they are “made in Europe”
or outside, digital platforms are gaining ground across Europe in various
sectors, notably transport and accommodation. Questions arise at
local, regional, national and European levels about the regulatory
approach to take as peer-to-peer and business-to-peer transactions involve
participants in high legal uncertainty off the beaten path. Public
authorities are looking for adapted solutions to labour rights and
social issues, taxation and consumer protection as a matter of priority.
A series of national and sectoral case studies provide a useful
insight on how regulators search for and test pragmatic options.
3.1. The
case of transport service platforms
11. Most digital transport platforms
operate via internet portals or smartphone applications that enable
data transfer to book a transport service between a passenger and
a non-professional driver who uses his or her own vehicle. The platform
operator mediates each contact and oversees each transaction, setting
the terms of the service to be provided. Those platforms hold lists
of available drivers, define the service, ensure the reference quality
standards (for drivers and vehicles) and impose the pricing structure;
they also filter the participation of parties (service providers
and users), cater the e-payment system and charge a fee for each transaction.
The reputation of the platform is a crucial element facilitating
the potential users’ decisions and involving the potential drivers.
A genuinely tripartite relation is thus created, which hardly fits
into the conventional legal concept of bilateral relations (provider
versus client, employer versus workers).
12. The Court of Justice decision on the Uber case paved the way
for EU countries to articulate the legal framework of such services
in line with specific requirements in the field of transport. Bearing
in mind the highest public interest, national regulators must weigh
and balance the needs of improved mobility, public safety and user
convenience with the imperative to preserve the sustainability of
all economic actors in the individual passenger transport market.
If a transport platform acts as an active and decisive intermediary,
it should bear the greater weight of regulatory obligations vis-à-vis
drivers, vehicles and passengers.
13. Unharmonised regulatory frameworks across the international
field hinder the work of transport platforms by complicating compliance
procedures and increasing transaction costs. National regulatory approaches
vary significantly. Thus, some countries, such as the United States,
Austria and the United Kingdom, have chosen to regulate locally,
practically at city level, which renders managing the nationwide operation
of transport platforms highly complex. Other countries try to facilitate
the transport platforms’ work by establishing specific legal frameworks
for licensing, or on the contrary resist the new business model per se, by insisting on the strict
enforcement of standard legal frameworks already in place for hiring
and taxi transport services.
14. A heterogenous legal landscape is a weak basis for legislators
to rely upon in order to assess the impact of their policies. Legislators
should look for the reduction of the overall legal burden by aligning
national solutions as far as possible with those of neighbouring
jurisdictions and seeking new rules for a new service. They should
investigate the specifics of transport platforms’ operations and
lay out adapted rules (relating to insurance requirements, vehicles,
inspections, performance limitations and indicators, driver background checks
and possibly on surge pricing), mainly for platform operators as
the preeminent party of the tripartite relationship. At the same
time, administrative controls should be reduced to a strict minimum,
so as not to burden public and private entities with bureaucratic
tasks that do not offer additional guarantees to users or the market.
15. The above-mentioned Court of Justice ruling should prompt
legislators to consider the introduction of compulsory limits for
better protecting the rights of non-professional drivers as non-conventional
workers. Conversely, drivers’ working conditions (such as duration
of working hours and amount of pay) are occasionally below national
legal thresholds, which can lead to unrestrained exploitation of
drivers’ work, put both driver and passenger safety at risk, and
unbalance the playing field in the transport services market. As
legal experts note, if transport platforms get relief from complying
with laws on the working conditions of their drivers or if these conditions
differ substantially from those applicable to taxis, this might
constitute a mere escape from the existing regulations for taxi
services and is therefore not justified.
Moreover, as
drivers might work for several platforms at the same time, cross-platform
controls of working hours must be put in place.
16. In terms of taxation, two major concerns arise. The first
one is to determine if revenue from the activity is income for the
driver or for the platform, hence ascertaining the drivers’ employment
status in relation to those platforms. The second question is that
of the taxation residence of transport platforms when these are not
based in the country where they provide services. A commonplace
solution would rely on charging ordinary sales taxes whose title
and level may vary from country to country but also locally.
17. My final concerns regarding transport platforms relate to
consumer protection in the broadest sense from monopolistic intentions
of transport service providers, as well as in terms of public safety
needs and personal data protection. I believe it is necessary for
platform operators to respect non-discrimination and transparency requirements
in developing their activity in accordance with the objectives of
public policies. Platform operators should be subject to certain
obligations vis-à-vis drivers and vehicles used, notably in terms
of registration (so that drivers can be identified by a unique number
irrespective of the platforms they work for, thus allowing identity
checks and controls of duration of activity on various platforms),
driver background verifications and minimum training; vehicles should
be safe and fitted for the service, whilst service delivery could
be tracked and monitored in real-time to ensure the continuous protection
of users. Last but not least, sensitive personal information on
passengers and drivers must be securely processed by the platforms,
in accordance with relevant regulations.
3.2. Home-sharing
platforms
18. A major field of activity for
digital platforms extends to the “home away from home” — home-sharing services
for travellers. Whilst many issues raised in respect to transport
platforms also apply to this sector, there are three specific aspects
that need to be singled out.
19. Firstly, although home-sharing platforms argue that they merely
link individuals by enabling those who have excess living space
to share it with those who need it, critics point out that the reality
is different. In fact, most short-term rental providers via such
platforms are commercial actors that bypass urban, tax and administrative
regulations applicable to the traditional hotel business; the very
success of these platforms lies in the bypassing of regulatory constraints.
The challenge for legislators and regulators is, therefore, to ensure that
home-sharing platforms function as an intermediary in the sharing
economy and are not abused as instruments of unfair competition.
Consumer rights must be adequately protected, notably as regards
security, health and fire safety conditions, at all times.
20. Secondly, questions arise about the social costs and effects
caused by the activity generated by these platforms. Indeed, as
more and more apartments are enrolled for short-term rentals, the
availability and affordability of housing for the local population
shrinks and the costs of living increase, notably for locals. This may
lead to a kind of desertification of the most attractive urban areas.
Moreover, life in local neighbourhoods and communities is often
disturbed by nuisances such as noise and increased pressure on public
or private utilities (for water, sewage, waste, parking space) that
were not designed for hotel-type intensity of use. This may entail
extra investment in repair and strengthening of capacity by the
locals who get no compensation from those who reap obvious commercial
benefits by conducting business while paying taxes and fees as common dwellers.
At the same time, peer-to-peer home-sharing services can be a significant
source of supplementary income: average hosts in many countries
where Airbnb operates earn in the order of a monthly salary.
21. Thirdly, signals abound concerning housing platforms’ tendency
to foster racial discrimination. In the USA, for example, a field
experiment has proven that Airbnb users with African American names
were less likely to be accepted as guests than users with identical
guest profiles but with distinctly “white” names.
The challenge
in this area is to find ways of conciliating non-discrimination
safeguards with the need for detailed information for a contract.
If the introduction of “blind customer” policies might help, it
may also increase the asymmetry of information and reduce business
opportunities.
22. As with transport platforms, authorities worldwide take very
different approaches to regulating home-sharing platforms. Some
cities oppose radically this type of activity, while others extend
an almost unrestrained acceptance. The first regulatory reaction
of local authorities often comes in the form of taxation to answer
the contention that platforms are “free riders”. Such a tax is usually
paid by the guests staying in properly registered accommodations.
Yet some observers argue that these taxes may work as disincentives
for legal housing offers and promote illegal offers instead. Some
cities are testing different formulas of property taxes as a means to
prevent desertification of central areas. This may include increased
rates for short-term rental hosts or reclassification of properties
from housing to commercial use. Amsterdam, for instance, has opted
for quantitative limitations (such as quotas per district) to correct
distortions caused by the growth of short-term rentals.
23. From the survey on the national “regulation of short-term
lease and rental of apartments” via the European Centre for Parliamentary
Research and Documentation (ECPRD)
it appears that Denmark, France,
Greece
and Iceland already have a rather comprehensive legal basis for
the use of home sharing arrangements via platforms on a commercial
basis. Ireland, Norway and Poland are working on new draft bills, whilst
many countries are using the existing laws to regulate short-term
rentals, for example on the legal status of accommodation and on
the “local housing allowance” (Portugal) or via the Fiscal Code
(Romania). There have also been specific legislative initiatives
(Slovenia) and multi-stakeholder consultations (Lithuania) that have
not yet produced tangible regulatory results.
24. A rather heterogeneous legal framework exists in Spain on
the so-called “housing for tourist use” and “tourist apartments”
based on laws at local level, with the recent regulatory proposals
having been challenged by the National Competition Authority. In
Switzerland, amendments to the federal legislation were introduced and
some local authorities (notably the canton of Geneva) have adopted
specific new laws. The British Government opted for a “non-regulatory
approach by encouraging the Short-Term Accommodation Association
(STAA) to improve standards and promote best practice” in this sector,
although specific limitations (“planning permissions”)
apply
in London, and certain certification requirements (fire safety,
environmental health clearance) are in place in Northern Ireland.
3.3. Selected
national experiences of platform work
25. France is one of the leading
countries in Europe when it comes to creating or hosting platforms, discussing
their impacts in the national context and regulating their operation
well ahead of other European countries. The French Government’s
involvement has led to the adoption of important changes in labour
law and legislation on the transport of passengers, with a series
of platform-related issues being debated with a view to adapting
“rules of the game”. The country is also home to new forms of representation
of platform workers aimed at direct negotiation with large platforms.
For instance, an information network (Sharers & Workers) serves
both stakeholders and researchers in producing shared cross-sector
knowledge, and various social networks facilitate communication
among platform workers.
26. Thus, the labour law —
Loi El Khomri –
adopted in 2016 sets requirements for platforms to provide work-accident
insurance and on-the-job training. It provides a legal basis for
platform workers to undertake collective action and to create a
trade union, as is the case for ordinary employees. In terms of
social dialogue, it was in France that the first organisation for
representing platform workers was created: called SCP VTC (
Syndicat des Chauffeurs Privés),
it mainly defends the interests of drivers working for the transport
platform Uber and has enabled negotiations, with the support of
government-appointed mediator, on price setting and working conditions
vis-à-vis that platform. Moreover, new forms of workers’ organisations
(
collectives) have emerged, such
as CLAP (
Collectif des Livreurs Autonomes
de Paris) which groups independent workers of delivery platforms,
or one which is just being developed for grouping cleaning workers
dealing with platforms.
27. Further legislative initiatives or amendments to existing
laws will still be necessary when specific regulatory needs become
more apparent. In particular, this concerns areas such as employment
status and social protection of platform workers, working conditions,
contractual relationships and minimum standards. At the same time,
the established traditional channels of social dialogue could better
integrate the new reality of platform workers in France by following
the example of Germany, where ordinary trade unions also represent independent
workers.
28. In a similar vein, countries like Austria use the existing
general regulatory framework with respect to platform workers. These
for instance, irrespective of their employment status, have access
to mandatory social insurance schemes and must pay their contributions
directly, depending on the type of work they do and sources of earnings.
Legal safeguards are in place against discrimination, on personal
data protection and ethical principles. Interestingly, various contractual
relations can co-exist between platforms and their workers, with
self-employment being the most common among Austrian platform workers.
Both workers and employers are represented through statutory bodies
(the Federal Economic Chambers (WKÖ) and the Chamber of Labour (AK))
with mandatory membership.
29. Comparative studies show that there is a great variation in
the importance attached to the platform economy in different European
countries.
Some
countries (such as Belgium, Denmark, France and Germany) view the
platform work as a phenomenon that requires special regulatory attention;
others follow the development of the platform economy from a technological
viewpoint and are in a “wait and see” position before considering
any major adjustments in the existing regulatory frameworks. Some
are effectively testing new regulatory approaches at local level
(the Netherlands), or seek to improve their current regulatory frameworks, based
on trends and needs observed (such as Norway, Spain, Switzerland)
due to new business models.
4. Platformisation
of work: implications for social rights and their protection
30. The emergence of digital platforms
opened a new chapter of digital work. Although still relatively
modest in scale, this form of employment has been rapidly developing
over the last decade. Experts estimate that in countries such as
the United States the so-called contingent workers will count for
nearly half of the country’s workforce by 2020, with 11% of these
expected to be working for online platforms. Europe is increasingly concerned
too. In discussing work enabled by digital platforms, we should
distinguish between “work on-demand via internet applications” for
delivering physical services locally, and “crowdwork online” for outsourcing
tasks (such as accounting, designing or translation) to a worldwide
pool of virtual workers.
31. Currently, the employment status of platform workers — as
well as the rights and obligations that go with it — is not quite
clear across Europe as Eurofound
studies
note. The existing regulatory frameworks are applied to digital
platform workers, thus distinguishing between employees and self-employed
workers (“free-lancers”). Some countries have additional sub-categories
of these two statuses, for example the “auto-entrepreneur” category
in France, the “employee-like” status in Austria, a “quasi-subordinate
worker” in Italy, a “student-worker” in Belgium and Slovenia, and
a “contract-worker for services” in Croatia. There is an on-going debate
on the need of introducing a third type of status specifically for
platform workers. In reality, platforms determine the terms and
conditions in using platforms workers and this typically means that
workers are considered as self-employed.
32. Whilst a positive argument is that the “platformisation” of
work is an opportunity to formalise informal work of semi-professional
service providers and to integrate informal exchanges into the mainstream
economy, the negative side is that it also contributes to the spread
of non-standard work and increased precariousness. In many countries,
labour law does not apply or applies only partially to those considered
as self-employed, and such a worker is not entitled to minimum wage,
annual leave or sickness allowance. Besides, platform workers have
to maintain their own equipment and pay social security contributions,
yet they often lack cover in case of sickness or work accident,
cannot access national unemployment insurance schemes and are subject
to unpredictable working time schedules with excessive working hours
(conversely for crowd-workers the problem is the lack of minimum
hours to earn decent income).
Income level of platform workers
often determines the level of social protection they can afford.
33. As platforms exert increasing control over their workers in
keeping costs as low as possible, thus putting platform workers’
status in doubt, this legal uncertainty has already given rise to
multiple cases of litigation. Court judgements vary from country
to country, with courts arriving at different conclusions with regard
to workers involved with the same platform (such as Uber), or in
the same sector. Thus, for example, the British Employment Appeal
Tribunal judged in 2017 that Uber drivers are workers/employees
and should enjoy statutory employment rights (Uber’s appeal of this
decision is pending); the Spanish labour inspectorate of Valencia
community ruled in late 2017 classifying Deliveroo riders as employees
and not self-employed as the platform claimed, whereas in April
2018, the Italian Labour Tribunal of Turin rejected the claim by
delivery service couriers of Foodora that they should be treated
as employees. Finally, California’s lawmakers ruled, in September
2019, that Uber and Lyft drivers should be considered as employees.
34. Eurofound surveys show that platform work is not sufficient
to be the main source of income for the workers concerned: earnings
from platform work are unpredictable as there is no guaranteed volume
of work (akin to “zero-hours” contracts). Yet for some persons platform
work is the only source of income. From this perspective, it is
important for regulators to prohibit exclusivity clauses of online
platforms so as to enable employees to also work for other enterprises
and earn a decent revenue. Research shows that high-skilled providers
of physical services locally earn relatively more than those with
low to medium skills and those engaged in crowdwork (for which the
global competition adds a downward pressure and some work may even not
be paid at all).
35. In terms of occupational safety, EU-OSHA (European Agency
for Safety and Health at Work) signals that apart from some known
risks of online work (stress, eye fatigue and musculoskeletal problems)
or delivery of physical services (attacks and harassment by clients,
household accidents, urban traffic accidents), platform work gives
rise to new psychosocial risks due to platforms’ on-demand philosophy
and rating systems. Such risks include the consequences of continuous
real-time monitoring and assessment of worker performance, relative
isolation, double insecurity of employment and income, short notices
and tight deadlines, the continuous standby position to the detriment
of resting time and work-life balance, and gender discrimination, as
well as pressure to deliver despite falling ill.
36. The European Parliament therefore suggested that policy makers
at national level should address the following regulatory aspects
relating to platform work:
- Minimum earning requirements;
- Information exchange with platforms on workers’ income
for tax declaration purposes;
- Arbitration-mediation services needed to better protect
platform workers;
- Extended coverage of collective agreements beyond the
employee category;
- Clarification of employment status of platform workers
and social security provisions;
- Redefinition of liability regimes (for damage to third
parties) and qualification requirements (such as for health care
and electrical services);
- Review of existing labour market legislation, with a view
to identifying areas that need to be updated to improve worker protection
regardless of their employment status;
- Possibility of creating individual professional activity
accounts, so that social benefits would not be tied to specific
employers or the nature of contractual arrangements.
37. This list is not exhaustive and may be further extended in
light of specific national circumstances. In April 2019, the European
Parliament approved a legislative resolution on “Transparent and
predictable working conditions in the European Union”,
setting
out minimum rights for workers in on-demand or platform jobs with “no
guaranteed working time” and “regardless of the number of hours
they actually work”. This text cautions against bogus self-employment
by referring to the case law of the Court of Justice of the European
Union which considers that a worker is a person who performs services
for a certain time under the direction of another person in return
for remuneration. The text, amongst others, also specifies that
platform workers should benefit from a minimum level of predictability
(such as predetermined reference hours and reference days) and full information
on working conditions (including on the procedure for terminating
employment and contesting dismissal), should not be penalised for
refusing assignments outside agreed hours and should receive mandatory
training free of charge.
38. Moreover, to minimise risks and to maximise benefits for all
parties involved, the 2018 study on “Digital labour platforms and
the future of work — towards decent work in the online world” by
the ILO
identified 18 criteria
for ensuring decent work for crowdworkers. These include:
- Tackling employment misclassification;
- Ensuring the freedom of association and collective bargaining
rights for crowdworkers;
- Applying the minimum wage based on the workers’ location
and ensuring transparency in payments and fees determined by the
platform;
- Establishing clear and concise contracts, with fair rules
to govern non-payment, to enable workers to decline tasks, and to
cover costs of lost work in case of technical problems;
- Informing workers about their customers’ identity, the
purpose of the work and, where appropriate, the reasons why they
receive unfavourable ratings;
- Establishing codes of conduct for all platform users and
a system of client review;
- Ensuring that workers can contest non-payment, negative
evaluations, qualification test outcomes, accusations of code of
conduct violations and account closures;
- Presenting clear task instructions that are validated
prior to the posting of any work;
- Enabling workers to view and export their work and reputation
history at any time;
- Allowing workers to keep working for a client outside
the platform arrangement;
- Ensuring that platform operators adequately respond to
worker communications;
- Ensuring that psychologically stressful tasks are clearly
marked.
39. The same study also recommended that national social protection
systems should be adapted to cover “workers in all forms of employment”
regardless of the type of contract, to use “technology to simplify contribution
and benefit payments” and to strengthen tax-financed mechanisms
of social protection.
40. From the OECD perspective,
the regulatory policies debate
should focus on sector-specific issues (such as in the case of transport
and accommodation platforms) and on cross-cutting issues relating
to labour rights and social protection, taxation, consumer protection
(including privacy) and competition. My fact-finding as rapporteur
concurs with these pointers and also confirms the analysis which
shows that cross-cutting issues have so far received too little
attention. This may be explained by the fact that there is still
a lack of data on the specific aspects and trends in the development
of the platform economy to inform evidence-based policy making.
I understand, however, that both the OECD and the European Commission
are brainstorming on ways to obtain more accurate data and hence
a more comprehensive picture of this evolving phenomenon.
41. Whilst the regulatory challenges are increasing at variable
speed in national contexts across Europe, our benchmarks for social
rights — as enshrined in the European Social Charter — remain the
same and should guide national policy makers’ efforts to adapt domestic
legislation as necessary. It would be useful though if the European
Committee of Social Rights could look more closely at the emerging
policy and practice issues in relation to the platform economy and
how it affects labour rights, social security systems and related protection.
As more and more people are concerned as platform workers across
the Council and Europe member States, there is a need to review
the application of existing social standards in the context of new economic
realities.
42. At this stage, it would be premature to talk about the harmonisation
of legal frameworks with respect to the platform economy in Europe,
but it is important that national legal frameworks leave no platform
worker behind and ensure that the public interests prevail over
commercial interests. However, it is important to assess how existing
European legal standards can be applied in the global context with
cross-border issues arising from the operation of multinational
platforms (notably with regard to taxation and tax collection, consumer protection,
and the applicability of foreign legislation in crowdwork).
43. Moreover, we should be vigilant about the risks of possible
exploitation online, in particular involving child labour in the
third countries: this danger has been signalled by the OECD, and
I should stress the collective responsibility of European actors
to devise specific safeguards and checks in this respect. There
have also been signals of exploitation of non-registered migrants
through illegal sub-contracting of work via platforms in France,
the United Kingdom, Spain and probably several other European countries.
This points to a risk of growth
of the “shadow economy” and the fragmentation of the EU Single Market
if law-makers fail to provide adequate co-ordinated regulatory responses
to the platform economy at national level in the absence of guidance
from the European Union.
5. Embracing
flexibility and opportunities with the new economic reality
44. The fluidity in platform markets
holds a huge potential for more flexible work and thus the inclusion
of more people in formal employment — provided that there are digital
or institutional structures and procedures in place to register
such work officially. Lawmakers at national level should bear this
in mind because the absence of registration channels or too complex
procedures could have the opposite effect and encourage the informal
sector via platform work. The cost of compliance with national tax
and social protection obligations for both platforms and platform
workers should be lower than the “penalty” for non-compliance. I
believe we should therefore encourage national authorities to clarify
these obligations for all actors of the platform economy and to
facilitate compliance by using digital tools and, if necessary,
legislative measures (adaptation of existing regulations or adoption
of specific frameworks in response to national circumstances and
policy priorities).
45. We should refer to the past work of this Assembly
and the ongoing efforts
of the OECD and the European Union to ensure adequate taxation of
multinational enterprises — including platforms — by securing that
taxes are paid where the economic activity takes place and the shifting
of the tax base is prevented in the area of corporate taxation.
Tax authorities could also put in place the obligation for platforms
to file information on their service providers (platform workers)
and their earnings so as to facilitate income tax declaration and collection.
In March 2018, the European Commission made several proposals to
help empower member States in terms of digital taxation for online
corporate actors (including platforms and companies “that are global, virtual
or have little or no physical presence”) and the value created through
digital services (such as for online intermediation activity, or
the sale of data generated by users of digital services).
At the same time, the OECD launched
its “Interim report on the tax challenges arising from digitalisation”
seeking to identify long-term solutions by 2020. Discussions on
proposals continue (in the European Union and the OECD) as stakeholders cannot
yet agree on the optimal formulas.
46. With regard to privacy, we should remind national authorities
of their responsibilities to “ensure good use of safeguards for
personal data protection, notably the Convention for the Protection
of Individuals with regard to Automatic Processing of Personal Data
(ETS No. 108) and its Additional Protocol regarding supervisory authorities
and transborder data flows (ETS No. 181), including with their international
economic partners”, such as platforms.
47. Reflecting the need for a better protection of consumers in
the digital environment, the European Commission proposed, in April
2018, a New Deal for Consumers. It aims to provide more transparency
in online market places (notably with regard to the identity of
a digital trader, the level of protection it guarantees and the
criteria for the ranking of search results), eliminate unfair commercial
practices and secure a better balance between platforms’ and users’
interests (via better information of consumers about their rights, enhanced
platform liability in the area of “peer-to-peer” transactions and
stronger redress mechanisms in favour of consumers, including collective
redress through “group action”). On 21 March 2019, the European Parliament
and the Council of the European Union reached a provisional partial
agreement on the European Commission’s proposals, and on 17 April
2019 the European Parliament endorsed this provisional agreement. Moreover,
the Online Dispute Resolution Platform has been put in place by
the EU to help mediation and conflict resolution online without
resorting to a court.
48. As the OECD notes, it is “uncertain how many […] independent
workers have the skills to thrive in platform service markets”.
This
raises questions over the qualifications and skills needed to work
in certain higher-risk sectors via platforms, such as in financial
services and crowdfunding, health and child care, passenger transport
or repairs of electrical circuits and plumbing systems, to mention
just a few. Clearly, competent national authorities must ensure
that certain registration, certification and control mechanisms
exist in order to ensure adequate public protection in the context
of platform-driven transactions. Arguably, the introduction of artificial
intelligence applications in platforms will open a whole new chapter
in the digital marketplace and the world of work; the risks and
benefits of these innovations will have to be studied separately.
49. Flexibility of work via digital platforms (notably crowdwork)
can undoubtedly benefit individuals who cannot or do not want to
work full time or at fixed time slots, such as family carers (both
mothers and fathers), students, pensioners, persons with disabilities
and specialists who find no local outlet for their talents. On a global
scale, this is particularly useful where digital platforms seek
to distribute tasks online across different time zones. By securing
a greater degree of anonymity of worker profiles either through
their business models or technology, the platform companies may
actually help the change that empowers women workers and workers
with special needs. However, greater transparency and additional
regulatory measures — either internal (self-regulation) or external
(imposed by law) — might be needed to offset the bias, barriers
and discrimination which certain users or service providers may
be facing in the digital context, just as they do in the traditional
economy (e.g. gender pay gap, rigid working hours’ constraints).
6. The way
forward
50. The fact that 9 of the world's
top 20 largest companies are now digital ones, compared to 1 in
20 just a decade ago, illustrates well the rise of online business
and work opportunities. The platform economy has emerged as a brand-new
facet of the globalised economy, with increasing numbers of Europeans
being concerned — as entrepreneurs, workers or consumers. However,
the existing rules and practices in our member States are ill-adapted
to deal with this new economic reality. I therefore believe that
our countries need to review their existing regulatory frameworks
with the risks, opportunities and needs of the platform economy in
mind.
51. As the data and measurements of this digital phenomenon are
still too scarce to inform evidence-based policy making, our attention
should focus on areas where regulatory needs are becoming more obvious,
not least in reaction to court judgements that highlight ambiguities
and gaps with regard to the employment status of platform workers,
their social protection and labour rights, cross-border issues (notably
in taxation field and dispute resolution) and consumer protection
in a broad sense. The general public interests should prevail over more
narrow commercial considerations without choking off innovation,
entrepreneurship, new work and consumption patterns, as well as
the development opportunities that go with them.
52. From the Council of Europe perspective, our main concern is
to ensure that member States gradually integrate the platform phenomenon
into mainstream regulation by bearing in mind the requirements of
the European Social Charter and by adding regulation or legislation
to close de facto gaps in
social protection, equal opportunities and labour rights as a result
of new forms of employment. Specific legislative action may be required
at a local level concerning sector-specific issues (such as in the
case of transport and accommodation platforms), so as to eliminate
any distortions in the level-playing field for all actors and possible nuisance
to the public order. The Congress of Local and Regional Authorities
of the Council of Europe is working on the matter and will come
up with specific recommendations in due course.