LUXEMBOURG (Reuters) - France is entitled to bring criminal proceedings against local managers of ride-hailing app Uber [UBER.UL] for running an illegal taxi service, the EU top court ruled on Tuesday, dealing the Silicon Valley start-up another legal setback.
Uber’s loss follows an earlier one last year where the Luxembourg-based Court of Justice of the European Union (ECJ) classified the company as a transport service rather than a digital one, which stripped it of protections against undue national regulation that digital services enjoy under EU law.
The latest case concerned Uber’s use of unlicensed drivers as part of its UberPOP service in France, which has since been suspended there and in several other cities. Uber still uses its service with professional licensed drivers in France, which is not affected by the ruling.
“Member states may prohibit and punish, as a matter of criminal law, the illegal exercise of transport activities in the context of the UberPOP service, without notifying the Commission in advance of the draft legislation,” the ECJ said in a statement.
Uber had argued that France should have sought the European Commission’s approval for a new taxi law, which contained measures on taxis and mobility apps, including one that said only official taxis could use geolocation technology to show available cars.
As France did not seek the Commission’s approval Uber argued that criminal charges brought against two of the company’s French managers were not valid.
“This case is about whether a French law from 2014 should have been pre-notified to the European Commission and related to peer-to-peer services which we stopped in 2015,” a spokeswoman for Uber said. “As our new CEO has said, it is appropriate to regulate services such as Uber and so we will continue the dialogue with cities