Explanatory Memorandum to COM(2022)571 - Data collection and sharing relating to short-term accommodation rental services - Main contents

Please note

This page contains a limited version of this dossier in the EU Monitor.

dossier	COM(2022)571 - Data collection and sharing relating to short-term accommodation rental services.
source	COM(2022)571
date	07-11-2022

1. CONTEXT OF THE PROPOSAL

• Reasons for and objectives of the proposal

This explanatory memorandum accompanies the proposal for a regulation on data collection and sharing relating to short-term accommodation rental services (the ‘Proposal’).

Short-term accommodation rentals (STRs) are an increasingly important part of the tourism sector. They represent nearly one quarter of the total EU supply of tourist accommodation, and this has been boosted by the emergence of online platforms ¹ . STRs create benefits and opportunities for guests, hosts and the overall tourism ecosystem, but they are also a source of concern (notably for local communities dealing with excessive tourism flows and a lack of affordable long-term housing). STRs are therefore increasingly regulated at national, regional and local level. Public authorities have also taken action to enhance the transparency of STRs by, for instance, introducing registration requirements for hosts (thus enabling public authorities to know which hosts offer what rentals) and by requesting online platforms to share data on hosts and their activities.

Numerous and differing data requests by public authorities impose a heavy burden, notably on platforms which operate across borders. This impairs their ability to offer STR services across the single market. Public authorities are also struggling to obtain reliable data in an efficient manner – which in turn hampers their efforts to develop appropriate and proportionate policy responses to the increase in the number of STRs. Difficulties in data sharing are driven by:

–inefficient and diverging registration schemes managed by public authorities (which therefore cannot efficiently obtain identification data for hosts and listings);

–a lack of effective and enforceable legal frameworks, standards and tools to share data among platforms and public authorities;

–the lack of a proper legal framework governing transparency and data sharing.

To address these issues the Proposal’s main objectives are to harmonise and improve the framework for data generation and data sharing on STRs across the European Union, and to enhance transparency in the STR sector. More specifically, the Proposal offers:

–a harmonised approach to registration schemes for hosts, with an obligation for public authorities to maintain appropriately designed registration schemes if they want to obtain data for policymaking and enforcement purposes;

–obligations for online platforms to enable hosts to display registration numbers (which will ensure hosts’ compliance with registration requirements) and to share specific data about hosts’ activities and their listings with public authorities;

–specific tools and procedures to ensure that data sharing is safe, compliant with the General Data Protection Regulation, and cost-effective for all parties involved.

• Consistency with existing policy provisions in the policy area

The Proposal seeks to harmonise and streamline the framework for data generation and data sharing on STRs across the EU. It builds on and is consistent with several other legal instruments that exist at EU level:

–The Digital Services Act (DSA) ² imposes a common set of responsibilities on online businesses providing services in the EU, including on online platforms intermediating STR services. The DSA establishes ‘compliance by design’ obligations that require platforms to design and organise their online interfaces in a way that enables certain information to be displayed (but only as regards service providers that qualify as ‘traders’) and illegal listings to be taken down. It does not require data sets to be reported in a systematic manner.

–The Services Directive ³ stipulates that service providers can only be made subject to market access requirements if they are non-discriminatory, justified by an overriding reason relating to the public interest and proportionate. In this context, the Court of Justice of the European Union has emphasised the importance of available data and analysis for proportionate policymaking ⁴ . The Services Directive also requires Member States to ensure that procedures and formalities applicable to the access to a service activity (e.g. registration schemes) are simple and that they can be easily completed at a distance and by electronic means through the relevant point of single contact and with the relevant authorities.

–The e-Commerce Directive ⁵ contains provisions regulating the cross-border provision of information society services. In relevant part, it provides that Member States must not restrict the freedom to provide information society services from another Member State, unless where necessary for public policy objectives, public security, the protection of public health, or the protection of consumers, including investors, and provided that any such restriction is proportionate to those objectives and that certain procedural requirement are complied with.

–The Platform to Business Regulation (P2B) ⁶ grants business users of online intermediation services appropriate transparency rights including minimum notice periods prior to removing offers from their services and the means to resolve disputes.

–The Data Act proposal ⁷ addresses business-to-business and business-to-government data sharing but does not include new reporting obligations for online platforms.

–The General Data Protection Regulation (GDPR) ⁸ applies to the processing of personal data by public authorities and by online platforms (including when it is necessary for providing registration numbers and maintaining a registry for them); and to the exchange of personal data between online platforms (which hold significant amounts of data about STR activity) and public authorities. The GDPR states that personal data can only be processed if a legal ground for such processing exists (e.g. the processing is necessary in order to comply with a legal obligation or to perform a task carried out in the public interest). The Proposal lays down the grounds for lawful processing of personal data that is necessary in order to increase the transparency of the STR sector, and provides for data protection safeguards to ensure full compliance with the GDPR.

–The Single Digital Gateway Regulation ⁹ facilitates online access to information and e-government procedures. To reduce administrative burden and to ensure that the administrative procedures governed by the Proposal comply with the Single Digital Gateway Regulation, the Proposal will add these administrative procedures to Annexes I and II of that Regulation.

–The new rules under the DAC7 Directive ¹⁰ , which will be applied from 1 January 2023, will require online platforms to report certain information on income earned by those selling through them. This information will be shared only with the tax authorities of the relevant Member States, unless as otherwise required by other legislation, and on an annual basis.

• Consistency with other EU policies

The Proposal is in line with the Commission’s priorities to make the EU fit for the digital age and to build a future-ready economy that works for people ¹¹ . It is also part of the EU’s SME strategy ¹² - given the needs of the many SME players in the STR segment, including platforms. The Proposal will also address calls in the Transition Pathway for Tourism ¹³ and the Urban Agenda ¹⁴ for the adoption of an EU framework bringing more transparency to the STR segment.

Any action under the Proposal will seek to fill gaps and overcome remaining uncertainties in a targeted manner, in order to facilitate the balanced development of STRs. It will be consistent with, and contribute to, the fulfilment of the Sustainable Development Goals ¹⁵ (particularly Sustainable Development Goal 11 - sustainable cities and communities) by giving public authorities the tools and the data to regulate the STR sector proportionately and sustainably. It will also support the proposal by the Conference on the Future of Europe to ‘invest in an economy based on tourism and culture, including the many small destinations in Europe’ ¹⁶ . It will complement and build on all existing legal instruments and will be in line with EU competition law, international trade commitments ¹⁷ and the proposed European Declaration on Digital Rights and Principles for the Digital Decade ¹⁸ .

2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

• Legal basis

The legal basis of the Proposal is Article 114 of the Treaty on the Functioning of the European Union (TFEU), which allows the adoption of measures necessary for the approximation of the provisions laid down by law, regulation or administrative action in Member States that have as their object the establishment and functioning of the internal market.

The Proposal aims to establish a harmonised EU framework for data generation and data sharing on STR services. The approximation of rules applicable to intermediary services is necessary in order to avoid a proliferation of diverging data requirements and requests in the single market, which would hamper the cross-border provision of online intermediation and STR services. The data-sharing framework established under the Proposal is expected to have a positive effect on market access for hosts, because it will help reduce administrative burdens related to registration requirements for hosts. The data-sharing framework will provide authorities with the data that they need in order to develop and maintain STR rules (e.g. rules to limit STR offers in some geographical areas or to ensure compliance with health and safety requirements) that are appropriate and are not more restrictive than necessary to achieve a public interest objective. Article 114 TFEU is therefore the appropriate legal basis for a legislative intervention that covers online platforms in the internal market and addresses divergences between Member States’ regulations and requirements, which affect the functioning of the internal market for online platforms.

• Subsidiarity (for non-exclusive competence)

According to the subsidiarity principle, the EU should only act when the objectives of a proposed action cannot be achieved sufficiently by Member States alone and can therefore, by reason of the scale or effects of the proposed action, be better achieved by the EU.

Diverging and overly burdensome frameworks concerning data generation and data sharing put in place by Member States are hindering the ability of online platforms to operate across borders. At the same time, the current interventions at national, regional and local level are often excessive and ineffective because authorities generally find it difficult to obtain data from platforms and hosts. Action at the European level will enable data sharing by online platforms operating across the EU and ensure that the exchanged data is standardised and interoperable. Common EU standards for registration schemes will ensure that the procedure for registration is simple, thus contributing to reduced fragmentation and administrative burdens for online platforms and hosts. The common EU framework will offer national and local authorities the level of transparency they need to enforce rules and adopt informed policy responses in line with existing EU law.

The cross-border nature of online STR services offered by platforms and the fragmentation of data-sharing requirements means that the objectives of the Proposal cannot be effectively achieved by the Member States alone. EU action is therefore the only way to ensure that a harmonised framework for data generation (through registration) and data sharing is established. This will also enable public authorities to design appropriate and proportionate rules based on reliable data on STRs, and enable online platforms to operate and grow in the single market without having to respond to numerous and diverging data-sharing requests.

• Proportionality

The Proposal primarily aims at streamlining data requests across the EU in order to make it easier for short-term rental platforms to respond to them. An EU legal basis and framework for data sharing by online short-term rental platforms with public authorities will increase legal certainty and ensure that the exchanged data is standardised and interoperable. Member States will not be required to put in place registration procedures for hosts, unless they wish to obtain data from platforms. When a registration system is in place, EU obligations for authorities to issue registration numbers, and for online platforms to enable all hosts to display listings with these registration numbers will ensure that this requirement for hosts is easily enforceable. A registration system will also facilitate data exchanges based on these registration numbers. The common EU framework will therefore provide national and local authorities with the information they need to enforce rules and implement informed policy responses in line with EU law.

The Proposal is also proportionate because it allows Member States and public authorities a certain degree of flexibility not only with regard to registration schemes (i.e. whether or not to introduce them and at which level), but also with regard to additional information that each Member State and public authority may request from hosts (subject to compliance with the principles of non-discrimination and proportionality established by the TFEU and the Services Directive). This ensures that the needs of Member States and local authorities are respected and taken into account.

• Choice of the instrument

Limiting EU action to promoting voluntary action by the industry and certain accompanying measures is possible. It would probably not be effective, however, because it would rely on the industry’s own willingness to change the status quo. Previous soft approaches like the Communication on the collaborative economy of 2016 and the policy principles of 2018 have not led to significant improvements in terms of transparency in the STR sector ¹⁹ and were considered by a number of stakeholders to be insufficient. This was also demonstrated by calls from the Council ²⁰ and the Parliament ²¹ for more legal certainty and transparency; and by the consultation and impact assessment process, which revealed the limits and ineffectiveness of the soft tools such as voluntary agreements that have been used at EU and national level to date. In addition, GDPR rules require a legal basis and safeguards for the Proposal’s aims to promote the sharing of personal data.

These reasons mean that only a legislative instrument can effectively address the problems that have been identified. A regulation is also preferable, because it is directly applicable in Member States, sets the same level of obligations for private parties, and enables the consistent application of rules in the inherently cross-border STR sector. This will also address and prevent fragmentation of the single market.

3. RESULTS OF EX POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS

• Ex post evaluations/fitness checks of existing legislation

Not applicable.

• Stakeholder consultations

In preparing this proposal, the Commission consulted a broad range of stakeholders, including public authorities (at national, regional and local level), online platforms (and their organisations), hosts and other service providers (such as management companies and hotels) and local associations. The consultation activities included an inception impact assessment, a 12-week dedicated public consultation to which 5692 responses were submitted, stakeholder workshops, two targeted surveys with public authorities and with platforms and targeted consultations with stakeholders.

Public authorities confirmed that they need personal and non-personal data for policy making and enforcement purposes. They highlighted that they currently struggle to obtain this data from hosts and online platforms, for various technical and legal reasons. Hosts stressed the need to increase the responsibility of online platforms for ensuring that only legal listings are displayed. They warned against the multiplication of restrictive rules for hosts at local level. Property managers (mainly SMEs) suggested that simple registration procedures should be in place for STRs and that a national database should be available to map STR operators. Online platforms called for data-sharing requests to be proportionate and in compliance with EU law, notably GDPR. Smaller platforms stressed the need for the new data-sharing obligation to build on existing obligations (e.g. under DAC7 and the DSA) and fill remaining gaps. The hospitality sector (mainly hotels) supported registration schemes for hosts and increasing data sharing by online platforms. It called for a level playing field between STRs and traditional accommodation providers.

• Collection and use of expertise

The Commission and external contractors carried out several surveys, a public consultation and many studies. In-house economic research as well as policy-design support and market analysis by the Joint Research Centre further informed the impact assessment for this initiative.

• Impact assessment

The Proposal is supported by an impact assessment report SWD(2022) 350, which has been prepared in line with the Commission’s ‘ Better Regulation’ guidelines . The impact assessment report was reviewed by the Regulatory Scrutiny Board and was then further revised to take into account the Board’s comments and suggestions for improvements, in particular by better explaining the problem of how diverging data requests create barriers for online short-term rental platforms to operate, grow and expand in the single market. The need for, and value added of, EU action is now also better explained by showing that rules at local, regional or national level make online platforms reluctant to share data – thus making it difficult for public authorities to obtain reliable data on STRs. The revised impact assessment report subsequently received a positive opinion from the Board.

In addition to the baseline scenario which entails a ‘no policy change’ approach, three alternative policy options were identified and assessed. These contain comparable measures, but differ considerably in terms of the intensity of the intervention.

–Option 1 would take the form of a Recommendation. The proposal would encourage public authorities to put registration schemes in place for hosts. This would involve gathering data to identify the host and the unit, and then the automatic grant of a registration number. Public authorities would also be encouraged to require online platforms to display the registration numbers for each unit, and to share pre-agreed activity data with public authorities. This Recommendation would be based on examples of good practice, and could be complemented by a code of conduct to facilitate data sharing between public authorities and online platforms by specifying the scope of data sharing as well as the technical means.

–Option 2 would require public authorities wanting to obtain data from online platforms for policymaking and enforcement purposes to maintain, as a first step, a registration scheme for hosts and their units, which would need to comply with certain requirements. Once hosts had submitted a pre-defined set of data and information, public authorities would have to grant them a registration number per unit. Online platforms would be obliged to require hosts to provide this registration number and to periodically share a pre-defined set of data with public authorities (e.g. the number of expected and actual bookings, and the number of guests that stayed in a unit per booking). Member States would have to establish a Single Digital Entry Point to permit the transfer of data, and would have to clearly state which obligations apply to hosts and online platforms on their territory.

–Option 3 would include the measures foreseen under option 2, but would extend the registration obligation to all hosts and units in the EU. All Member States would be required to put in place a registration scheme at national level for all hosts and their units.

1. The impact assessment identified option 2 as the preferred option, because:

–Option 1 would not fully ensure that the burden on platforms and access to data would be adequately addressed. Its voluntary nature means that it would only lead to improvements in some areas and only between a limited number of online platforms and public authorities;

–Option 2 would meet the objectives in a flexible and proportionate way. It would increase transparency in the STR segment, while reducing the burden on online platforms and leaving flexibility to public authorities;

–Option 3 would meet the objectives by providing an effective data-sharing framework across the EU; however, it would also entail high administrative costs for public authorities and limit their freedom of action.

In terms of economic impact, option 2 would provide benefits, but also create compliance costs for online platforms, public authorities and hosts. Online platforms would benefit from the replacement of uncoordinated data requests with more streamlined and proportionate requests - which would reduce costs in the long term. In terms of costs, online platforms would mainly incur ‘one-off’ administrative costs linked with the adaptation of their IT infrastructure and connection to the Single Digital Entry Point. Public authorities would benefit from higher certainty on data traceability and the optimisation of data-sharing processes, which should in turn reduce the costs of enforcing STR rules. Public authorities that put the system in place would incur the one-off costs of adapting to the new registration system and the Single Digital Entry Point, as well as the costs of setting up the IT infrastructure to receive the data (mainly hosting and maintenance costs). Hosts should on average benefit from saving time when completing registration procedures and, in the long term, from more proportionate STR rules. Registration will also entail administrative costs.

The expected social impacts of option 2 include increased confidence on the part of consumers and guests; a reduction of the number of illegal listings in places where the Proposal is implemented; better management of tourism flows; and public authorities’ increased ability to assess and mitigate the negative externalities of STRs. It would also provide national statistics offices, Eurostat and researchers with aggregated data on STRs. Option 2 could also be expected to have an impact on fundamental rights, as explained below.

In terms of environmental impacts, option 2 is expected to increase public authorities’ ability to assess and mitigate the ecological footprint of STR activity, and to help public authorities to attract STRs to rural areas where STRs can have a positive impact (e.g. investing in the renovation and greening of buildings). The environmental impacts cannot be quantified, because they would only materialise when public authorities use the collected data to design green policies.

• Regulatory fitness and simplification

REFIT (the European Commission's regulatory fitness and performance programme) is not applicable to the Proposal.

• Fundamental rights

The Proposal will ensure that the fundamental right of the protection of personal data, which is guaranteed under Article 8 of the Charter of Fundamental Rights of the European Union, is safeguarded. The processing of personal data under the Proposal is necessary and proportionate to achieve the objectives described above.

4. BUDGETARY IMPLICATIONS

The Proposal does not have any implications for the EU’s budget.

5. OTHER ELEMENTS

• Implementation plans and monitoring, evaluation and reporting arrangements

After the adoption of this Regulation, Member States would have a transition period of 2 years to map the relevant local authorities, create or adapt local/national existing registration systems (connecting local registration schemes, if any) and set up the IT infrastructure at national level to streamline data sharing with online platforms (through the Single Digital Entry Point). The first evaluation will take place no earlier than five years after the date of application of the Regulation (i.e. five years after the initial two-year transition period).

The Commission will monitor the implementation and application of, and compliance with, the new system in order to assess its effectiveness. The effectiveness of the new rules will be assessed mainly (but not exclusively) on the basis of a set of key performance indicators.

• Explanatory documents (for directives)

Not applicable.

• Detailed explanation of the specific provisions of the Proposal

The first Chapter sets out general provisions. Article 1 establishes the subject matter of the proposed Regulation (i.e. harmonised rules for data collection and data sharing with competent authorities relating to the provision of short-term accommodation rental services offered by hosts through online platforms). Article 2 defines the scope of the Regulation, the entities to which it applies, and the provisions of national and EU law which it does not affect. Article 3 defines the key terms used in the Regulation.

The second Chapter concerns registration of hosts and properties. Article 4 sets out the procedural requirements with which they need to comply in this respect. It provides that only authorities that have registration systems can require online platforms to regularly report activity data, and that all registration systems must comply with the requirements of the Regulation. Article 5 lists the information that hosts must provide in order to receive a registration number. Article 6 lays down the obligations for competent authorities to verify the information submitted by hosts, request additional information from hosts, and suspend the validity of the registration number. Article 7 details the role of online short-term rental platforms in organising their online interface to ensure the validity of registration numbers.

The third Chapter concerns data reporting. Article 8 sets out the condition according to which competent authorities may receive from online short-term rental platforms specific information about hosts’ activities relating to one or more units offered for short-term accommodation rental services. Article 9 introduces an obligation for online short-term rental platforms to transmit the activity data to competent authorities through the Single Digital Entry Point. More lenient reporting obligations are laid down for small and micro online short-term rental platforms. Article 10 sets out the creation and functionalities of the Single Digital Entry Point. Article 11 establishes a coordination group to support the implementation of the Single Digital Entry Points. Article 12 clarifies which authorities can access the data collected and shared by online short-term rental platforms.

The fourth Chapter sets out the rules on information, monitoring and enforcement. Article 13 entails information obligations for Member States. Article 14 requires each Member State to designate an authority that should monitor the correct and consistent implementation of this Regulation. Article 15 requires Member States to ensure the enforcement of this Regulation and lay down the penalties in case of non-compliance with the Regulation.

The fifth and final Chapter sets out the final provisions. Article 16 creates a Committee within the meaning of Regulation (EU) No 182/2011. Article 17 adds the administrative procedures governed by the Regulation to Annexes I and II of Regulation (EU) 2018/1724 through an amendment to that Regulation. Article 18 details the evaluation and review process for the Regulation. Article 19 states the dates of entry into force and application of the Regulation.