EU Court Reaffirms Country of Origin Principle for Digital Services

The Court of Justice of the EU (CJEU) recently ruled in favor of Google, Amazon, and Airbnb in a lawsuit against Italy’s Communications Authority (AGCOM). The case centered on AGCOM’s request for these companies to disclose financial information and contribute financially to the authority. The CJEU reaffirmed the “country of origin” principle, which allows companies based in any EU country to offer services across the bloc while adhering only to the legislation of their home member state.

AGCOM’s requirements, which included sharing company financials and paying contributions, were intended to promote fairness and transparency for consumers. However, the companies argued that these obligations violated EU legislation, specifically the country of origin principle. According to this principle, member states where services are offered must not impose their own laws on companies headquartered in another EU country.

In January, CJEU Advocate General Maciej Szpunar supported the US plaintiffs in a non-binding opinion, stating that AGCOM could not impose general obligations on Google Ireland, Airbnb Ireland, and Amazon Luxembourg, as their EU headquarters were not in Italy. The CJEU’s decision reinforces the country of origin principle, which has been a cornerstone of EU digital legislation since the 2000 eCommerce Directive and reaffirmed in the 2018 General Data Protection Regulation and the 2022 Digital Services Act.

The ruling does not apply to Expedia, which lacks EU headquarters and was also part of the lawsuit. The decision by the Court of Justice of the EU will be enforced by the Regional Administrative Court of Lazio, Italy, where the original dispute was filed.

Source: Tech giants do not have to follow Italian authorities’ provisions, rules EU Court