The European Court of Justice sides with tech giants in an Italian regulatory dispute

The EU’s Supreme Court on Thursday ruled in favor of Google, Amazon and Alphabet’s Airbnb, invalidating an Italian regulation requiring these Big Tech companies to disclose information about their operations in the country. This decision is a key step in the ongoing battle between national rules and overarching European Union legislation.

The conflict began when Italian authorities introduced measures in 2020 and 2021 requiring internet service providers operating in Italy to register and provide extensive information about their activities. These rules also included a financial contribution requirement, failure to comply with which resulted in high financial penalties. Google, Amazon and Airbnb challenged the regulation, arguing that it conflicted with EU rules stipulating that internet service providers are subject only to the laws of the country in which they are based.

Reuters reported that the Court of Justice of the European Union (CJEU), based in Luxembourg, upheld the position of technology companies. “A Member State cannot impose additional obligations on an internet service provider established in another Member State,” the judges said. They stressed that Italy cannot impose these additional requirements on service providers based in other EU countries.

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The ruling highlights a key aspect of EU legislation: the “country of origin principle”, which allows companies to operate across the EU in accordance with the rules in force in their country of origin. Google and Airbnb have their European headquarters in Ireland, and Amazon in Luxembourg. Additionally, US online travel service provider Expedia, which operates out of Spain, has also backed the opposition to the Italian rules.

This CJEU decision highlights the challenges national governments face when trying to enforce local rules on multinational companies operating within the wider EU framework. It reinforces the need for harmonized rules across the EU to ensure a consistent legal environment for Big Tech and other companies operating in multiple Member States, including Italy.

The ruling is a significant victory for Google, Amazon, Airbnb and other similar companies, reaffirming their stance against what they saw as burdensome and contradictory national rules. It also sets a precedent for future disputes over the balance of power between national authorities and EU-wide legislation.

Source: Reuters