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CJEU Upholds Country-of-Origin Principle for Online Service Providers in the EU

 |  July 5, 2024

By:   (Inside Global Tech)

On May 30, 2024, the Court of Justice of the EU (CJEU) issued rulings on several cases (C-665/22, Joined Cases C‑664/22 and C‑666/22, C‑663/22, and Joined Cases C‑662/22 and C‑667/22) related to Italian regulations affecting online platform and search engine providers. The CJEU upheld the “country-of-origin” principle from the EU’s e-Commerce Directive, which is based on the EU Treaties principle of free movement of services. This principle grants the Member State where an online service provider is established the exclusive authority to regulate the provider’s services, preventing other Member States from imposing additional requirements.

Overview of Court’s Key Findings:

Background: The cases originated from proceedings initiated by several online intermediation and search engine service providers against the Italian communications regulator, AGCOM. These providers, not established in Italy, contested AGCOM’s measures intended to enforce the EU Platform-to-Business Regulation (P2B Regulation). AGCOM’s measures required the providers to: (1) register their business in a national register, (2) provide detailed information about their economic situation, ownership structure, and organization, and (3) pay a financial contribution to support AGCOM’s supervision activities.

The Country-of-Origin Principle: The CJEU highlighted that the country-of-origin principle in the e-Commerce Directive exempts online service providers from complying with multiple Member State requirements within the “coordinated field” (as defined in Article 2(h)-(i) of the Directive). This includes requirements related to access to and provision of the service. Other Member States cannot restrict the freedom to provide online services unless specific conditions are met, such as public policy, public health, public security, or consumer protection (Article 3(4) of the e-Commerce Directive).