The Court of Rome stops the Uber Black app for unfair competition

By preliminary order of 7 April 2017, the Court of Rome enjoined the Uber Group – after the Court of Milan’s previous order regarding the Uber Pop app – from continuing to provide and advertise vehicle hire with driver services by means of the Uber Black app in Italy, with the fixation of a € 10,000 penalty for each day of delay in complying with the injunction and with the order to publish the latter on the website www.uber.com. The order at issue, however, is not currently effective, given that the Court, on 14 April 2017, granted Uber’s request to suspend its effectiveness waiting for the preliminary appeal proceedings brought by Uber, which will probably begin in May.

The proceedings from which the decision under review originates were started against Uber by many companies, trade unions and associations of taxi drivers and car rentals. They complained that Uber, by means of Uber Black (and of other similar apps offering different vehicles), was acting in breach of the law in the matter of unscheduled public transport, thus committing unfair competition acts against them pursuant to Article 2598(3) of the Italian civil code.

The Court found that the complaint was grounded because of the following considerations; hence, the preliminary injunction.

Firstly, the Judge stated that Uber – which was considered directly liable, it not being a simple mediator between drivers and customers, but a company group providing unscheduled public transport services for profit – provides its services by means of Uber Black in breach of the Italian law no. 21/1992 in the matter of taxi drivers and vehicle hire with driver services. Such law, in fact, provides that: a) vehicle hire with driver services shall be directed to specific customers at their request to be expressed in the place where drivers’ cars are; b) the drivers providing such services shall have obtained the necessary authorisation from the competent municipal administrations; c) the cars used by drivers providing such services shall be stationed in garages based in the territory of the municipal administration which granted the relevant authorisation – nevertheless, the driver could, upon customers requests, pick up or leave them outside such territory. To the Court, Uber Black drivers, on one hand, are able to reach undifferentiated customers – i.e. all the app users – and not only the customers requesting the services at the authorised garages; on the other hand, they steadily operate in territories of municipal administrations for which they have not been authorised, so interrupting the link with the territory for which they were authorised.

Secondly, after having recalled that not every breach of law affects fair competition per se, the Court stated that in the case at issue, the acknowledged breach in fact gives Uber an undue profit capable of damaging the complainants, considered to be competitors of the latter.

In fact, given that the infringed law regulates the unscheduled public transport services market in order to increase its rationality and efficiency by means of a territorial planning, the fact that Uber Black drivers through their app can reach more customers than those they should benefit of (and which otherwise would not be reachable except by operating as taxi drivers) constitutes an undue profit. In addition, Uber Black drivers are not required to comply with the tariffs pre-determined by municipal administrations for taxi drivers, because they formally provide vehicle hire with driver services, so that they can offer more competitive prices than those offered by taxi drivers. Thus, according to the Court, Uber puts in place a customer diversion damaging the complainants that offer taxi or vehicle hire with driver services in compliance with the applicable law.

The Court did not instead grant the Uber defences, including the alleged conflict between the abovementioned law and, respectively, the Treaty on the functioning of the European Union (TFEU) and Article 41 of the Italian Constitution. In fact, with reference to the first conflict, the contested law was not considered capable of limiting the use of new technologies to the detriment of consumers (see Article 102 TFUE), since it does not prevent such technologies per se; in fact, vehicle hire with driver services apps are allowed if they work in compliance with the law governing such services. With regard to the second conflict, it was noted that Article 41 of the Italian Constitution expressly provides the ability to arrange for appropriate programmes to coordinate and orientate the public and private economic activities in light of social purposes; what the contested law actually would do.