European Commission launches proposals to improve the working conditions in platform work: the application of Competition law in this sector

According to the Commission, the set of measures are designed to ensure that platform workers can enjoy the labour rights and social benefits they are entitled to, as well as providing legal certainty and enabling digital labour platforms to benefit from the economic potential of the Single Market and a level playing field.

The package launched by the Commission is composed of:

• A communication setting out the EU approach and measures on platform work;
• A proposal for a Directive on improving the working conditions in platform work; and
• Draft Guidelines clarifying the application of EU Competition law to collective agreements of solo self-employed people related to the improvement of their working conditions (the “draft Guidelines”).

Digitalisation of the production process and the rise of the online platform economy in recent years have produced fundamental changes in the labour market.

As a result, self-employment in the EU has grown substantially in these sectors. These developments, on the one hand, have increased the flexibility and accessibility of the labour market and, on the other hand, have also led to difficult working conditions in the online platform economy. Attempts to improve the working conditions in this market are at risk of being considered a breach of Article 101 of the Treaty on the Functioning of the EU (“TFEU”).

This article considers the application of Article 101 TFEU to the labour market. After explaining briefly the reasons and conditions for the (non) application of Article 101 TFEU to collective agreements between organisations representing employees and workers for the improvement of working conditions, we shall consider the application of Article 101 TFEU to self-employed persons; for this, we will focus on the third document listed above, the draft Guidelines.

The application of EU Competition law to collective agreements: The Commission’s draft Guidelines

Article 101 TFEU prohibits anticompetitive agreements between undertakings. In principle, collective agreements between employers’ organisations and workers would fall within the scope of Article 101 TFEU because they typically cover issues that have an impact on the conditions of supply of labour and even the price of this labour, etc.

However, the Court of Justice of the European Union has ruled, in the context of collective bargaining between management and labour, that certain restrictions of competition are inherent in collective agreements and necessary for the improvement of working conditions. Accordingly, agreements entered into within the framework of collective bargaining between employers and workers that intend, by their nature and purpose, to improve working conditions (including pay) fall outside the scope of Article 101 TFEU and therefore do not infringe EU competition law.[1]

By contrast, self-employed persons are, in principle, undertakings within the meaning of Article 101 TFEU because they offer their services for remuneration in a given market and perform their activities as independent economic operators.[2] Accordingly, their attempts to try to collectively negotiate an improvement of their conditions at work would, in principle, be subject to Article 101 TFEU. While this statement may be true, we must first distinguish between genuine self-employed persons and those which are not and must be considered workers. Only the latter will escape the application of EU competition law, while the former will be subject to it.

Self-employed persons that are, overall, in a situation comparable to that of workers may be considered as “false” self-employed persons and be reclassified as workers. While certain self-employed persons may not be fully integrated in the business of their principal in the same way as workers, they may still not be entirely independent of their principal or may lack sufficient bargaining power to influence their working conditions. The COVID-19 crisis has made many self-employed persons even more vulnerable.

The purpose of the draft Guidelines is to set out principles for assessing collective negotiations between solo self-employed persons and other undertakings under Article 101 TFEU that concern the working conditions of this specific type of work force.

The term “solo self-employed persons” refers to persons who do not have an employment contract or who are not in an employment relationship, and who rely primarily on their own personal labour for the provision of the services concerned.

The Commission specifies that the draft Guidelines apply to all agreements negotiated and/or concluded collectively between solo self-employed persons, on the one hand, and their counterparty/-ies, on the other hand, “to the extent that by their nature and purpose they concern the working conditions of such solo self-employed persons” (para. 14).

Working conditions of solo self-employed persons include matters such as remuneration, working time and working patterns, holiday, leave, physical spaces where work takes place, health and safety, insurance and social security, as well as conditions under which the self-employed persons are entitled to cease providing their services.

On the contrary, the draft Guidelines do not cover collective agreements which go beyond the regulation of working conditions, by determining the prices under which services are offered by solo self-employed persons or by the counterparty to consumers, or which limit the freedom of employers to hire labour providers that they need.

In addition, the draft Guidelines set out certain categories of solo self-employed persons that are in a situation comparable to that of workers – even if they have not been reclassified as workers by national authorities/courts – and, as a consequence, collective agreements concluded by them fall outside the scope of Article 101 TFEU:

• Solo self-employed persons who provide their services exclusively or predominantly to one counterparty. According to the Commission, such self-employed persons are likely to be in a situation of economic dependence vis-à-vis their counterparty, as in general, they do not determine their conduct independently on the market because they are largely dependent on their counterparty, forming an integral part of its business.[3]
• Solo self-employed persons who perform the same or similar tasks “side-by-side” with workers for the same counterparty. As outlined in the draft Guidelines, these persons are in a situation comparable to that of workers, as they provide their services under the direction of their counterparty and do not bear the commercial risks of the counterparty’s activity or enjoy any independence as regards the performance of the activity concerned.
• Solo self-employed persons working through digital labour platforms.[4] According to the draft Guidelines, in this scenario, solo self-employed persons may be dependent on digital platforms through or to which they provide their services, especially in terms of consumer outreach, and may often receive work offers with little or no scope to negotiate their working conditions. Indeed, these platforms are usually able to unilaterally impose the terms and conditions of their relationship, without prior information from or consultation of the solo self-employed persons.

Lastly, the draft Guidelines also state that the Commission will not intervene against certain other categories of collective agreements, to the extent that those agreements aim to correct the imbalance in the bargaining power of solo self-employed persons relative to their counterparties and are intended to improve working conditions:

• Collective agreements concluded by solo self-employed persons with counterparties of a certain economic strength. The Commission will not intervene against collective agreements where there is a clear imbalance between the solo self-employed persons and the counterparties. [5]
• Collective agreements concluded by self-employed persons pursuant to national or EU legislation. The Guidelines specify that the Commission will not intervene against the collective agreements concluded by solo self-employed persons covered by national measures destined to address the imbalance in bargaining power of such self-employed persons (e.g., by granting such persons the right to collective bargaining, or by excluding collective agreements concluded by self-employed persons in certain professions from the scope of national competition law).

[1] Case C-67/96, Albany, paragraph 22.

[2] Case C-413/13 FNV, paragraph 27.

[3] The draft Guidelines (para. 25) provide that solo self-employed persons who depend on one counterparty for at least 50% of their work-related income shall be considered as economically dependent.

[4] According to para. 30 of the Guidelines, the term digital labour platform means “any natural or legal person providing a commercial service which meets all of the following requirements: (i) it is provided, at least in part, at a distance through electronic means, such as website or a mobile application; (ii) it is provided at the request of a recipient of the service; and (iii) it involves, as a necessary and essential component, the organisation of work performed by individuals, irrespective of whether that work is performed online or in a certain location”.

[5] According to para. 35 of the Guidelines, such imbalance in bargaining power will be considered to exist at least: (i) where solo self-employed persons negotiate or conclude collective agreements with one or more counterparties which represent the whole sector or industry; and (ii) where the collective agreements are negotiated or concluded with a counterparty whose annual aggregate turnover exceeds EUR 2 million or whose staff headcount is equal or more than 10 persons or with several counterparties which jointly exceeds one of these thresholds.