Airbnb class action lawsuit to be settled in Ireland

Lawyer expresses concern at ability of Irish courts to handle collective actions

Trade

Airbnb's Dublin Office. Image: Donal Murphy

The Court of Appeal in The Hague has ruled it does not have jurisdiction to hear a class action case taken by consumer rights foundation Stichting Massaschade & Consument against Airbnb. This leaves in place an earlier judgment of the District Court of The Hague. The case – which was taken in 2021- will have to be settled not in the Netherlands, but in Ireland where Airbnb’s European operation is based.

The court’s ruling leaves the case stuck at the procedural stage, without getting to the substance. This is because the court is not ruling on whether the revenue model that Airbnb used for years – double service charges for both tenant and landlord – is acceptable. More than 50,000 consumers have joined the action.

Lawyer William Schonewille of BarentsKrans, which is assisting the foundation, argued that the court hereby gave a ‘particularly consumer-unfriendly interpretation’ of the Brussels jurisdiction rules: “These rules date from the pre-Internet era and were last updated in 2012. They are not tailored for class actions against tech companies serving millions of European consumers from a single member state. Discussions about these rules are still ongoing at the European level. Yet the court now chooses to apply them strictly – which leaves consumers completely defenseless”.

Schonewille pointed out that this ruling exposed a fundamental problem in the legal protection of Dutch citizens: “Those who complain individually about Airbnb can go to the Dutch courts; but as soon as consumers unite in a collective action, they are referred to Ireland – a country where there is no effective system for collective actions. Large foreign tech companies operating in the European Union therefore remain untouchable, as long as they formally establish themselves in an EU country where collective proceedings cannot get off the ground properly.”

The foundation is using the coming weeks to study the ruling more closely and explore possible follow-up steps. It is quite possible that eventually the European Court of Justice will have to rule on the matter.

Business AM

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