Table of contents 1.Introduction 1.1.Political and legal context 1.2.Interplay with the Commission proposal for a Directive on improving the working conditions in platform work (Platform Work Directive) 2.Problem definition 2.1.What is the problem? 2.2.What are the problem drivers? 2.2.1. Driver 1: Some solo self-employed people have little influence over their working conditions 2.2.2. Driver 2: Self-employed people are in principle undertakings 2.2.3. Driver 3: Lack of guidance at EU level on the application of EU competition law on collective agreements 2.2.4. What is the extent of the problem 2.3.Consequences of the problem 2.4.How will the problem evolve? 3.Why should the EU act? 4.Objectives: What is to be achieved? 4.1.General objectives 4.2.Specific objectives 4.2.1. Identify those solo self-employed people who have little influence over their working conditions 4.2.2. Clarify the application of EU competition law to collective agreements on the working conditions of self-employed people

4.3.Margin of discretion of the Commission for the achievement of objectives 5.What are the available policy options? 5.1.What is the baseline from which options are assessed? 5.2.Description of the policy options 5.2.1. Options discarded at an early stage 5.2.2. The options assessed 6.What are the impacts of the policy options? 6.1.Direct impacts 6.2.Indirect impacts 6.2.1. Better pay and working conditions for solo self-employed people concerned: 6.2.2. Decreased poverty 6.2.3. Correspondingly higher costs for undertakings relying on services by these solo self-employed 6.2.4. Further indirect economic impacts 6.2.5. Further indirect social impacts 7.How do the options compare? 7.1.Comparison of the number of solo self-employed people covered under each option and of the quantifiable indirect benefits and costs 7.2.Comparison of the policy options from a qualitative perspective 7.3.Comparison between instruments 8.Preferred option 8.1.The preferred policy option

8.2.Impacts of the preferred policy option 8.3.Application of the “one in, one out” approach 9.How will actual impacts be monitored and evaluated? 10.Annex 1: procedural information 10.1.Lead DG, Decide Planning/CWP references 10.2.Organisation and timing 10.3.Consultation of the RSB 10.4.Evidence, sources and quality 11.Annex 2: stakeholder consultation (synopsis report) 11.1.Participation in the “Have your say” website 11.1.1. Answers to Section V of the DSA public consultation 11.1.2. Feedback to the IIA 11.1.3. Answers to the OPC 11.2.Synopsis of consultation results 11.2.1. Questions relating to the existence of the problem 11.2.2. Questions relating to support for the initiative 11.2.3. Questions relating to the options 11.2.4. Questions relating to possible impacts 11.3.Dedicated meeting with social partners 11.4.Public consultation on the draft Guidelines

11.5.Second dedicated meeting with social partners on 9 February 2022 12.Annex 3: who is affected and how? 12.1.Practical implications of the initiative 12.2.Summary of costs and benefits 12.3.Relevant sustainable development goals 13.Annex 4: analytical methods 14.ANNEX 5: THE COMMISSION PROPOSAL FOR A PLATFORM WORK DIRECTIVE



Glossary Term Meaning or definition collective bargaining refers broadly to collective negotiations and/or agreements aiming at improving working conditions and not to its narrower sense under labour law. collective agreement refers to agreements negotiated and concluded collectively between solo self-employed people and their counterparty/-ies to the extent that they, by their nature and purpose, concern the working conditions of such solo self-employed people. digital (labour) platform refers to 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 a 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. people working through platforms refers to any individual offering services through platforms, irrespective of the contractual designation of the relationship between that individual and the digital labour platform. solo self-employed people refers to people who do not have an employment contract or employment relationship and who rely primarily on their own personal labour for the provision of the services concerned. false self-employed people refers to people declared to be self-employed while fulfilling the characteristics of an employment relationship. economically dependent solo self-employed people refers to solo self-employed people who provide their services exclusively or predominantly to one counterparty. solo self-employed people working “side-by-side” Refers to solo self-employed people who perform the same or similar tasks “side-by-side” with workers for the same counterparty. 1.Introduction 1.1. Political and legal context In 2020, approximately 19.5 million people in the EU, amounting to 6.1 % of the EU population aged 18-74, earned their living in the off-line economy as self-employed people working on their own, that is to say as self-employed people without worker(s). In addition to these self-employed people in the off-line economy, the number of people working through platforms has grown very rapidly. Between December 2020 and May 2021, in total 28.3 million people in the EU worked via digital platforms more than sporadically. The relatively high level of self-employment in the EU is influenced by the global process of subcontracting and outsourcing of business and personal service activities as well as, more recently, by the digitalisation of the production processes including the rise of the platform economy. While this development has increased the flexibility and accessibility of the labour market, it has also, in some cases, led to difficult working conditions in the platform economy and beyond. The Commission is committed to ensure dignified and proper working conditions for everyone in Europe, in line with the European Pillar of Social Rights. With regard to new forms of work and platform work in particular, the Commission stated in the New Industrial Strategy for Europe, that these must come with modern and improved forms of protections. On 9 December 2021, the Commission put forward a proposal for a Directive on improving working conditions in platform work (“Platform Work Directive”). Collective negotiations and bargaining is an important tool to improve working conditions. However, under the competition rules, only workers or false self-employed people can collectively bargain without risking an infringement of Article 101(1) of the Treaty on the Functioning of the European Union (“the Treaty”) which prohibits anticompetitive agreements between undertakings. Against this backdrop, the European Parliament has called for a broader collective bargaining coverage. In a 2019 Resolution, it called for a coordinated EU initiative to ensure labour and social rights and collective agreement coverage for service providers through digital platforms. Further, in its Recommendation of 17 December 2020 on a strong social Europe for Just Transitions, the European Parliament called on the Commission to, among others, clarify platform-based workers’ right to organise themselves, to be represented by trade unions and to negotiate collective agreements, including for the self-employed people. The Parliament also urged the Commission to come up with a targeted revision of EU competition law so as to allow collective price-setting for the precarious self-employed people, in order to ensure a better balance in bargaining power and a fairer internal market. Moreover, in its Resolution of 16 September 2021, the Parliament expressed its concerns about the asymmetrical relationships between digital labour platforms and workers and regretted the legal difficulties in collective representation faced by service providers through digital platforms. It is convinced that EU competition law must not hinder the improvement of the working conditions and social protection of solo self-employed people providing their services through digital platforms through collective bargaining. In its Recommendation of 8 November 2019, the Council of the EU recommended to Member States to provide access to adequate social protection to all workers and self-employed individuals in respect of a number of benefits. One of the tools to achieve social protection coverage is collective bargaining.

In this context, the present initiative was launched on 30 June 2020 to ensure that EU competition law does not stand in the way of collective negotiations and agreements of certain self-employed people who may have little influence over their working conditions. This competition law initiative does not alter the collective bargaining modalities in force in each Member State. Nevertheless, by bringing more clarity as to the scope of the application of EU competition law with regard to collective agreements by self-employed people, this initiative complements the above-mentioned EU actions in this field. 1.2.Interplay with the Commission proposal for a Directive on improving the working conditions in platform work (Platform Work Directive) The present intiative concerns the application of EU competition law to the collective negotiations and agreements of certain self-employed persons who face difficulties in influencing their working conditions. As explained further in Section 2, self-employed persons, even when working on their own, are considered undertakings and therefore risk infringing Article 101 TFEU if they negotiate collectively their working conditions. All persons who do not have an employment contract or who are not in an employment relationship are considered self-employed. However, pursuant to the judgment of the Court of Justice in Case C-413/13 FNV Kunsten, a self-employed person may be considered misclassified (“false self-employed”), if: (i) he/she acts under the direction of his/her employer as regards, in particular, his/her freedom to choose the time, place and content of his/her work; (ii) does not share the employer’s commercial risks; and (iii) for the duration of the relationship, forms an integral part of the employer’s undertaking and thus, an economic unit with that undertaking. The Court has clarified that similarly to a worker, a false self-employed person does not infringe Article 101 TFEU when participating in collective bargaining negotiations. Nevertheless, until the self-employed person has been reclassified as a worker, this person does not have the legal certainty about how competition law may apply to his/her collective negotiations and agreements. Therefore, the present intiative may benefit both genuine self-employed persons (i.e. self-employed persons who would not fulfil the criteria set out by the Court’s case law to be considered misclassified) and false self-employed persons, insofar as they have not yet been reclassified as workers. In the area of platform economy, the Commission proposal for a Platform Work Directive includes measures to correctly determine the employment status of people working through digital labour platforms. It seeks to ensure that digital labour platforms, which control the performance of work, are presumed as employers, and therefore, the people working through them can enjoy the labour and social rights that come with the status of worker (including access to collective bargaining). By contrast, as explained above, the Commission’s present initiative does not concern people already classified as workers. A person requalified as a worker, will not anymore benefit from the present initiative because workers have statutory access to collective bargaining.Therefore, following the adoption and implementation of the Platform Work Directive, it can be expected that false self employed persons working through digital labour platforms will not benefit anymore from the present initiative, but from the Platform Work Directive as on that basis they will be qualified as workers. Genuine solo self-employed people will benefit from the present initiative as long as they fulfil the conditions set in it. 2.Problem definition 2.1.What is the problem? From an EU competition law standpoint, workers are considered as incorporated into the undertaking with which they have an employment relationship. Therefore, Article 101 of the Treaty does not apply to them, but only to the undertaking that employs them. When undertakings, as employers, jointly enter into collective agreements with trade unions representing workers to improve working conditions (including salaries), these specific agreements fall outside the scope of Article 101 of the Treaty. Indeed, the social policy objective pursued by these agreements would otherwise be seriously undermined. The situation of self-employed people is different, as they are in principle considered “undertakings” carrying out their activity on the market as independent economic operators in relation to their principal. The binary distinction between workers and self-employed people on which the application of competition rules relies, means that self-employed people may infringe EU competition rules, if they negotiate collectively their working conditionsThis problem of legal uncertainty affects particularly some self-employed working on their own, i.e. without workers, who rely on their personal labour for making a living (hereafter “solo self-employed”). They have most difficulties in influencing their working conditions (see section 2.2.1). 2.2.What are the problem drivers? There are three main drivers of the problem set out in Section 2.1: The fact that some solo self-employed people have little influence over their working conditions (driver 1), the fact that self-employed people are in principle considered as “undertakings” under EU competition law (driver 2) and the fact that there is no EU-wide guidance as to when self-employed people may enter into collective agreements with their counterparties on their working conditions (driver 3). 2.2.1.Driver 1: Some solo self-employed people have little influence over their working conditions As mentioned in section 2.1, some solo self-employed people may have difficulties to influence their working conditions. This is either because: i) they are not sufficiently independent from their counterparty and are ultimately in a position comparable to that of workers; or ii) although independent from their counterparty, they are nevertheless in an imbalanced negotiating position. Eurofound estimates that around 8 million self-employed people in the EU (roughly the size of Austria’s population), are generally more dependent and have less autonomy over their work. The OECD also finds that some solo self-employed people might be in a situation of unbalanced negotiating power towards certain firms/buyers of labour with monopsony power, leading them to be price-takers and have little say over their working conditions. The situation has been exacerbated with the evolution of labour markets, in particular the increase in the number of people working through platforms and other atypical forms of work. Indeed, studies show that most people working through platforms lack sufficient negotiating power and as a result, do not earn sufficient income through their platform activities to make a living. Nevertheless, the lack of negotiating power affects solo self-employed across sectors. This was confirmed during the Open Public Consultation launched in March 2021 (“the Open Public Consultation” or “the OPC”). 61.6% of the respondents replied that solo self-employed people do lack such power across all sectors, 25.8% replied that they only do in specific sectors, and only 12.5% of respondents replied that solo self-employed people do not lack the power to negotiate. 2.2.2.Driver 2: Self-employed people are in principle undertakings

From a competition law perspective, self-employed people are in principle considered undertakings as they carry out their activity on the market as independent economic operators in relation to their principal. Therefore, agreements among self-employed people fall in principle within the scope of Article 101 of the Treaty. However, as indicated in Sections 2.1 and 2.2.1, some self-employed people may have little bargaining power to influence their working conditions. They may not satisfy the conditions to be considered workers (which would give them access to collective bargaining rights), while they may not be entirely independent from their principal either, or have sufficient bargaining power to influence their working conditions. “False” self-employed should have the right to enter into collective bargaining agreements. In the case FNV Kunsten Informatie en Media v Staat der Nederlanden, the Court of Justice of the European Union (CJEU) recognized that in “today’s economy it [was] not always easy to establish the status of some self-employed contractors as ‘undertakings’ and ruled that self-employed people are "false" self-employed people if in reality they amount to workers. In such a case, a collective labour agreement that sets minimum fees for these workers is not within the scope of Article 101 of the Treaty. However, it is always for the national court to determine whether a self-employed person is a “false” self-employed person. Therefore, without a court ruling in each individual case, even solo self-employed people that qualify as “false” self-employed may still refrain from participating in collective negotiations and/or agreements due to the risk of a competition law infringement. 2.2.3.Driver 3: Lack of guidance at EU level on the application of EU competition law on collective agreements There is currently no guidance at EU level on whether self-employed people may engage in collective negotiations on their working conditions without infringing EU competition rules. In Ireland, national competition law provides an exception to the application of the national equivalent to Article 101 of the Treaty so that some self-employed people can bargain collectively if the agreements are not found to have an appreciable effect on intra EU trade. In the Netherlands, the national competition authority has adopted guidelines according to which they will not enforce the national equivalent to Article 101 of the Treaty against (some) self-employed people under certain conditions. However, since EU competition policy falls under the European Union’s exclusive competence, Member States are unable to give sufficient certainty for the application of EU competition law on collective agreements by solo self-employed people that may affect intra EU trade. At EU level, as noted under sections 2.1 and 2.2.2, the CJEU’s case law on the application of EU competition law on collective bargaining is limited to the collective agreements made by workers and people who have been found by a national court to be “false” self-employed people. Against this background, solo self-employed people who may have little bargaining power over their working conditions, face legal uncertainty and are in need of guidance on when they can bargain collectively without infringing EU competition law. 2.2.4.What is the extent of the problem As mentioned in Section 1.1, there were around 19.5 million solo self-employed people in 2020. As service providers through digital platforms typically do not report themselves in surveys as being self-employed people, this figure should be understood as not including solo self-employed people working through platforms in the EU. After deducting the number of solo self-employed people who are farmers, shop owners and food sellers and thus not offering labour services the number of solo self-employed people concerned by the initiative, not including people working through platforms, would be around 13 million. Between December 2020 and May 2021, 28.3 million people in total in the EU worked via digital platforms more than sporadically. However, many people only rely on the services they offer through platforms for a fraction of their income. The number of people in the EU that rely on platform work as their main or secondary job was 21.3 million in 2021. These are the people working through platforms that are more likely to be concerned by the problem and the present initiative. After weighting to reflect that around two thirds of these people rely on these activities only as a secondary job, the number of “full time equivalent” people working through platforms would correspond to 14.1 million. According to a CEPS study based on interviews and desk research, 92% of the people working through platforms are self-employed people. Other research also confirms that most platforms do not work with employment contracts. Therefore, the above-mentioned estimates for the number of people working through platforms is likely to be a good approximation for the number of self-employed people working through platforms. The problem of legal uncertainty may affect self-employed people in different Member States in different degrees/ways as some Member States allow certain self-employed people to collectively bargain, while others do not or do so only partially. However, as explained in Section 2.2.3, national regimes with respect to collective bargaining by self-employed people do not entirely remove the legal uncertainty surrounding the application of EU competition law to such agreements. Actually, the differences in the national regimes can be seen as even increasing the legal uncertainty. 2.3.Consequences of the problem Some Member States have extended the right to collectively bargain to certain self-employed people in order to improve their working conditions. However, due to the legal uncertainty on the application of competition law to their collective agreements, self-employed people and their counterparties may nevertheless refrain from entering into collective negotiations and agreements that could help the self-employed people to achieve better working conditions. In other words, the legal uncertainty may have a chilling effect and discourage collective initiatives, even in Member States that explicitly allow certain self-employed people to collectively bargain. Many respondents to the Open Public Consultation have also pointed to this chilling effect, either because counterparties refuse to enter in negotiations arguing that they are contrary to competition rules, or because self-employed people do not attempt to undertake such negotiations fearing prosecution. Indeed, 49% (63) of the respondents answered that they were aware of such instances. Even though some employers and employers’ associations do not agree that competition law may be an obstacle, several associations and unions explained that their members in different Member States had reported several instances where the members themselves or their counterparties refrained from engaging in collective negotiations for fear of infringing competition rules. Trade unions have highlighted that this fear of a competition law infringement exists, even when specific provisions are in place at national level. This uncertainty may therefore discourage self-employed people from collective negotiations and may affect the effectiveness of national rules foreseeing access to collective bargaining for some self-employed people. Uncertain about whether they may infringe EU competition law, solo self-employed people and their counterparties may be reluctant to make use of the existing national regimes and engage in collective negotiations. This may in turn have an impact on the pay and working conditions of solo self-employed. It may also affect national legislators’ decision-making with regard to collective bargaining rights for some self-employed people who may face difficulties in influencing their working conditions. In addition, the lack of legal certainty may undermine a coherent and effective implementation of EU law. For example, the Copyright Directive recognises that collective bargaining of authors and performers (“creators”), close to half of which are self-employed people, is one of the possible mechanisms available to the Member States to implement the principle of appropriate and proportionate remuneration for creators where they license or transfer their exclusive rights as well as to support the related contractual protection measures, which aim at solving specific issues that creators may face with contractual counterparties in connection with the exploitation of their works. However, Member States as well as stakeholders may be uncertain whether collective bargaining mechanism would be in compliance with EU competition rules. Ultimately, the result is that solo self-employed people who may have little influence over their working conditions cannot improve their bargaining power.

Table 1– Problem tree There is legal uncertainty about the application of EU competition law to collective agreements on the working conditions of certain solo self-employed, who may have little influence over their working conditions. 2.4.How will the problem evolve? In the absence of policy intervention from the EU clarifying when collective agreements by solo self-employed people and their counterparties are compatible with EU competition rules, the legal uncertainty and the chilling effect would persist (see also Section 5.1). Moreover, the scale of the problem is likely to increase. The share of solo self-employed people in total employment (other than those working through platforms) has remained relatively stable over the last decade and is likely to remain stable going forward at around 10%. The number of people working through platforms on the other hand is likely to continue to grow significantly as the transformation of the work place and the increasing trend of digitalization that have enabled the rise can be expected to continue. Platform work was virtually non-existent in 2011 and, by 2017/18 had increased very rapidly with around 2% of the adult population relying on platforms as their main activity and a further 4% relying on platforms as their secondary activity. It has grown further by 2021. Assuming that the current trend would continue until 2025 and that the number of people working through platforms would stabilise thereafter, by 2030 around 4% of the adult population in the EU are expected to rely on platforms as main activity and a further 8% will offer services through platforms as a secondary activity. There seems to be a correlation across countries, between many forms of non-standard work and poorer job quality, in the form of lower wages, less employment protection, reduced access to employer and social benefits, greater exposure to occupational safety and health risks, lower investments in lifelong learning, and low bargaining power of people working. Therefore, absent any intervention at EU level, it is likely that an increase in the number of people working through platforms would also translate in an overall decrease in job quality.

3.Why should the EU act? European competition rules fall under the exclusive competence of the Union pursuant to Article 3(1)(b) of the Treaty. EU action is essential, to address the legal uncertainty surrounding the application of EU competition rules to collective agreements regarding the working conditions of solo self-employed people. 4.Objectives: What is to be achieved? 4.1.General objectives The general objective of the initiative is to avoid that EU competition law stands in the way of collective negotiations and agreements about working conditions for the solo self-employed people who may have little influence over their working conditions. This competition law initiative does not have as an objective to directly improve the working conditions of solo self-employed people. According to Article 3 of the Treaty on European Union, the application of EU competition rules is founded on the goal of the Union to safeguard that the internal market encompasses a system which ensures that competition is not distorted, promoting in parallel “a highly competitive social market economy, aiming at full employment and social progress”. Hence, the pursuance of this general objective shall strike the right balance between economic development and social progress, guaranteeing consumers’ protection and a level playing field. 4.2.Specific objectives In order to achieve the general objective, this initiative pursues the following specific objectives: 4.2.1.Identify those solo self-employed people who have little influence over their working conditions As indicated above, the first driver to the problem lies in the fact that some solo self-employed people, both in the on line and the offline economy, face difficulties in negotiating and influencing their working conditions when providing their services to their counterparties. In order to address this problem, the initiative needs to identify which solo self-employed people may be in this situation, so that the application of competition rules does not stand in their way when they negotiate collectively their working conditions. This exercise must also keep in mind the objective of competition rules to provide consumers with high quality products and services and competitive prices, and ensure the optimal functioning of the single market. 4.2.2.Clarify the application of EU competition law to collective agreements on the working conditions of self-employed people The second driver refers to the fact that self-employed people are in principle considered undertakings in terms of competition rules, and therefore Article 101 applies to them, when they collectively negotiate to improve their working conditions (including their income). At the same time, the third driver of the problem is that there is no clarity at EU level on how collective agreements on the working conditions of self-employed people are assessed under EU competition law. Therefore, in order to tackle these drivers, the initiative should clarify the instances and conditions under which certain solo self-employed people may negotiate and conclude collective agreements with their counterparties for the improvement of their working conditions without risking an infringement of Article 101 of the Treaty. Intervention logic diagram Problem / Driver Objective Problem There is legal uncertainty about the application of EU competition law to collective agreements on the working conditions of solo self-employed people who may have little influence over their working conditions General objective Ensure that EU competition law does not stand in the way of collective negotiations and agreements about working conditions for solo self-employed people having little influence over their working conditions Driver 1 Some solo self-employed people may have little influence over their working conditions Specific objective 1 Identify those solo self-employed people having little influence over their working conditions who should not be hindered to negotiate and agree collectively their working conditions Driver 2 Self-employed people are undertakings Specific objective 2 Provide clarity as to the application of EU competition law on collective agreements regarding the working conditions of self-employed people Driver 3 Lack of EU guidance as to the application of EU competition law on collective agreements of self-employed people 4.3.Margin of discretion of the Commission for the achievement of objectives Policy options, adequate to address the problem identified by this initiative, have to be developed within the limits of the Commission’s procedural and substantive powers to achieve the objectives set out under section 4.2. The Commission, as any other EU institution, shall act within the limits of the powers conferred by the Treaties (Article 13(2) TEU). It has to ensure, in line with Article 101 of the Treaty, that agreements between undertakings do not unduly harm competition and consumers. When applying or interpreting Article 101 of the Treaty, the Commission is also bound by the relevant case law of the CJEU. However, the Commission can, in addition, set priorities in order to make more effective use of its limited resources and focus its efforts on deterring the most harmful practices. When setting priorities, the Commission does not interpret Articles 101 and 102 of the Treaty but only identifies instances, which may not merit the Commission’s intervention. The Commission has a wide, but not unlimited margin of discretion to set priorities. Priority setting must be premised on criteria that do not go beyond what is proportionate and do not encompass behaviours that might raise serious concerns for competition and consumers. In line with the above, the judgments in Albany and FNV Kunsten, mentioned under sections 2.1 and 2.2 of the Report, set the framework for interpreting the scope of application of Article 101 of the Treaty when it comes to collective agreements concerning the working conditions of self-employed people. These two judgments make clear that Article 101 of the Treaty shall not apply to collective bargaining agreements concerning the working conditions of “workers” and “false self-employed people” in light of the social policy objectives pursued by such agreements. Based on a teleological interpretation of these judgments, the Commission could consider as equally included under this “social policy exemption” also certain self-employed that are in a situation comparable, or very close, to that of workers. As the case law currently stands, collective agreements of self-employed people who cannot be seen as comparable to workers cannot be entirely excluded from the scope of Article 101 of the Treaty. However, insofar as proportionate, the Commission could exercise its priority-setting powers and commit in certain situations not to intervene against them.

Both in the case of exclusion from the scope of Article 101 of the Treaty and in the case of priority setting, Commission action needs to respect the proportionality safeguards deriving from the case law of the CJEU. That means that even though it is possible to cover also collective agreements of self-employed people that may not be comparable to workers with priority-setting, the Commission can do so only to the extent this is driven by the same social policy considerations and the commitment is of such a scope that it is not likely to harm consumers. Since self-employed people are undertakings according to the case law, any priority setting regarding their collective agreements would need to safeguard sufficient scope for the Commission to intervene in possibly harmful situations. Therefore, also under priority setting, it would not be possible to give a blank check to the collective agreements of all self-employed people. In order to respect these principles, the Commission would need to focus on those that similarly to workers, may be in an unbalanced negotiating position. This is likely the case for solo self-employed people who rely primarily on their own personal labour for the accomplishment of the services concerned (i.e. a characteristic shared also by workers and false self-employed people). For the same reasons, this initiative could cover only collective negotiations and agreements between the self-employed people and their professional customers that by their nature and purpose relate to the working conditions of the former (i.e. not to the terms and conditions charged to consumers). The Commission also has, to a certain extent, discretion as regards the policy instrument that can be used for this initiative. Under Article 103(2)(c) of the Treaty a Council Regulation can be adopted to define the scope of application of Article 101 of the Treaty excluding collective agreements of certain self-employed people from the application of Article 101of the Treaty, in line with the Court’s case law and depending on the agreement of the legislator. An alternative policy instrument is to issue Commission Guidelines, i.e. a Commission Communication conveying the Commission’s interpretation for the application of EU competition rules on collective agreements of self-employed people. In case the Commission would consider appropriate to exercise its priority setting powers, which could also be done in the form of Guidelines. 5.What are the available policy options? 5.1.What is the baseline from which options are assessed? The baseline for the assessment of the impact of the policy options proposed below is the situation absent the current initiative, i.e. the “no policy change” scenario. In the absence of EU intervention, the legal uncertainty as to the application of EU competition rules on collective agreements of self-employed people, the infringement risks and the associated chilling effect will remain. Self-employed people having little influence over their working conditions will continue to be without certainty on whether they may negotiate their working conditions with their counterparties. Considering the estimated growth of the number of people working through platforms and the pervasiveness of self-employment in the offline economy, it is likely that the problem will grow in scale. The uncertainty and the chilling effect will remain in full for the offline economy. It will continue to discourage self-employed people (and their counterparties) to use certain rights provided under EU or national legislation. In particular, even if national measures explicitly grant certain self-employed people the right to bargain collectively, these people will be reluctant to exercise their rights in fear of infringing EU competition law. In addition, the chilling effect will further affect future legislative initiatives by national legislators to improve the working conditions of certain solo self-employed people by granting them collective bargaining rights. In the context of EU law, the Copyright Directive sets out the framework to ensure authors and performers receive fair remuneration when they license or transfer their exclusive rights for the exploitation of their works or other subject matter, inter alia through collective bargaining. However, the application of EU competition law to self-employed authors and performers may cause uncertainty (and ultimately have a dissuasive effect) for such possibility. Therefore, whilst aiming at improving the working conditions of certain self-employed people, the effectiveness of national measures, including in the context of the implementation of EU law (like in the case of the Copyright Directive) may potentially be reduced because of the chilling effect of EU competition law. Platforms’ business models are likely to flourish and expand in new sectors. Whilst this evolution may lead to the creation of new jobs and business opportunities, such positive developments are unlikely to reflect on the quality of working conditions of people working through platforms. In a scenario of no EU intervention, the number of self-employed people working through platforms who may have little influence over their working conditions is expected to increase, in parallel with the growth of the number of people working through platforms as an overall trend. For these people, the uncertainty and the chilling effect will also remain in full. However, the consequences of the lack of EU intervention may to some extent be mitigated by future developments in that field. In particular, once adopted and implemented the Platform Work Directive may partly address this issue by bringing greater clarity on who should be considered as a worker (see section 1.2). Around 5.5 million are estimated to be at risk of misclassification. As set out above, the proposal for a Platform Work Directive aims to address the misclassification issue in the context of platform work, whilst the present initiative will cover a broader range of people providing their services to digital labour platforms, who may not be misclassified workers, but may nevertheless have little influence over their working conditions. 5.2.Description of the policy options 5.2.1.Options discarded at an early stage The policy options should be initially assessed in light of: (i) their adequacy to address the overarching problem of the present initiative and (ii) the Commission’s powers to materialize them. Options that from the outset cannot adequately address the problem or which cannot fit within the Commission’s remit should be discarded at this stage. As noted in section 2, the problem that the present initiative aims to address is the legal uncertainty regarding collective agreements for the self-employed people having little influence over their working conditions in the online and the offline economy. Additionally, section 4.3 of this report illustrates the margin of discretion of the Commission to address this problem and the underlying limitations stemming from the case law of the CJEU as to the collective agreements that can be excluded from the scope of Article 101 of the Treaty and for those that could be covered by the enforcement priorities of the Commission. Against this background, the following potential policy options are discarded: First, one option initially considered was to cover collective agreements by solo self-employed people providing their own labour only when they have digital labour platforms as their counterparty. However, this option presents the disadvantage of not covering solo self-employed people in the offline economy who cannot significantly influence their working conditions. As such, it cannot therefore adequately address the overarching problem, which is to address the legal uncertainty for all solo self-employed people, who may have little influence over their working conditions, irrespectively of whether they provide their services online or offline. The consultation of stakeholders also firmly confirmed that the problem goes beyond the platform economy. Second, another option initially considered was to cover collective negotiations/agreements by all solo self-employed people providing their own labour through digital labour platforms or to professional customers of any size. However, as noted, the Commission’s power to exclude collective agreements from the scope of Article 101 of the Treaty or not to initiate enforcement actions against such agreements is not unlimited. Not all solo self-employed people can be seen as having difficulties to influence their working conditions. Eurofound has estimated that roughly half of the self-employed people without workers, who are not small traders and farmers, may have little influence over their working conditions. A contrario, this implies that a relatively large proportion of solo self-employed people may not need to have access to collective bargaining to improve their working conditions. Including them in the scope of this initiative would be disproportionate and risk leading to unjustified higher costs for businesses and consumers. Hence, the over-encompassing scope of that policy option would have gone beyond the Commission’s margin of discretion to achieve these objectives. Another possibility was to limit this option by excluding regulated (and liberal) professions, which are often perceived as being in a position to influence their working conditions. However, also this option would have been inadequate to address the problem. Although the term “regulated profession” is defined at EU level by a Directive, it lies upon the Member States to decide whether certain professions should be regulated or not and the list of the regulated professions therefore differs from one Member State to another. In the same vein, there is no EU definition for “liberal professions”, which are generally understood to cover professions such as architects, lawyers, veterinaries or accountants. Additionally, even if there would have been EU wide definitions of regulated and liberal professions, that limitation equally entails the risk of covering solo self-employed people who may not have difficulties in influencing their working conditions. Therefore, also this option would risk exceeding the objectives of the initiative and the Commission’s powers to achieve these objectives. 5.2.2. The options assessed In light of the objectives of this initiative and the Commission’s margin of discretion to address these objectives, the following two policy options are impact assessed.

Option 1 covers collective negotiations/agreements by solo self-employed people who can be considered to lack bargaining power because they are not sufficiently independent from their counterparty and thus, are in a position comparable to that of workers. As noted under section 4.3, based on a teleological interpretation of existing case law of the Court of Justice, the Commission can consider agreements of people in a position comparable to that of workers excluded from the scope of Article 101 of the Treaty. On this basis, the collective agreements of the following groups of solo self-employed people can be covered by this option: ·Economically dependent solo self-employed people who earn at least 50% of their total annual work-related income from a single counterparty: These are solo self-employed people who do not determine independently their conduct on the market because they are largely income dependent on the undertaking to or through which they provide their services. The situation of such self-employed people has been recognized in a number of Member States, such as Spain and Germany , where, based on certain conditions, the national legislator grants to these people the right to bargain collectively, in a similar way to workers. ·Solo self-employed people working side-by-side with workers: These are solo self-employed people who perform the same or similar tasks “side-by-side” with workers for the same counterparty. They provide their services under the direction of their counterparty and do not bear the commercial risks of the counterparty’s activity or enjoy independence as regards the performance of the economic activity concerned. Several Member States cover workers and self-employed people active in the same sectors. ·Solo self-employed people working through digital labour platforms: The emergence of the online platform economy and the provision of labour through digital labour platforms has created a new reality for certain solo self-employed people. Many of them can find themselves in a situation comparable to that of workers due to their dependence on digital platforms, especially in terms of their customer outreach. Digital labour platforms are usually able to unilaterally impose the terms and conditions of their relationship, without prior information or consultation of the solo self-employed people. The latter often face “take it or leave it” work offers, with little or no scope to negotiate their working conditions, including their remuneration. Additionally, the use by these platforms of automated systems to match supply and demand for work (“algorithmic management”) is inherent to their business model. Such systems, despite the efficiencies that they create, also have a significant impact on working conditions of people working through platforms and may conceal the existence of subordination and control by the digital labour platform on the persons performing the work. Case law and legislative developments at national level, illustrate the comparability between solo self-employed people working through digital labour platforms and workers. In Member States and beyond, there have been more than 100 court decisions and 15 administrative decisions on cases of alleged misclassification in platform work. Option 2: In addition to including solo self-employed people who are in a position comparable to that of workers as in Option 1, this second option also covers collective agreements of other solo self-employed in an imbalanced negotiating position by using the priority setting powers of the Commission. As explained under section 4.3, the Commission has in principle the power not only to exclude certain agreements from the scope of Article 101 of the Treaty, but also to commit, where the legal limits of exclusion are exceeded, not to intervene in cases where this is proportionate, in light of the objective they pursue and the harm they could cause. Provided that certain safeguards are met, it may be proportionate for the Commission to commit not to intervene against solo self-employed people who face an imbalanced negotiating position even if they are not overall in a situation “comparable to that of workers” when they collectively negotiate to improve their working conditions. Therefore, in addition to the categories of solo self-employed people covered under Option 1, this second option covers collective agreements of solo self-employed people who are also facing an imbalance in their negotiating position. For the sake of clarity, this option provides examples of situations where solo self-employed people are facing such an imbalance. Namely, when they are: ·dealing with counterparties of a certain economic strength. Indeed, solo self-employed people who deal with counterparties that have a certain level of economic strength, and hence buyer power, may have insufficient bargaining power to influence their working conditions on their own. The Commission could commit not to intervene against collective agreements between solo self-employed people and their counterparties in at least in two instances: owhere the annual aggregate turnover of the counterparties, individually or jointly, exceeds EUR 2 million or their workforce headcount is equal or more than 10 workers: These thresholds are premised on the relevant Commission Recommendation on the notion of SME and they cover all companies excluding the micro enterprises, as defined under the Commission Recommendation. These thresholds take stock of the fact that SMEs rely on solo self-employed people more than bigger enterprises. In particular, this option would take into account that 91% of solo self-employed people in EU are estimated to work for microenterprises and that an imbalance of negotiating power cannot be assumed from the outset in all cases and sectors when a microenterprise negotiates with self-employed people. a.the counterparties represent the whole sector or industry. As mentioned above, some studies have highlighted the fact that in certain labour markets, some self-employed people may face the monopsony power of their counterparty/ies. That is to say, because of the lack of alternatives available for the solo self-employed people to sell their services, the counterparty/ies can dictate the price at which they would buy these services. They have also highlighted that collective bargaining could help remedy the situation, which is particularly acute when the counterparty/ies cover(s) a whole sector. This monopsony situation has also been described by certain stakeholders’ contributions. ·entitled to collectively bargain under national or EU legislation: As mentioned in section 2, situations of imbalanced negotiating positions have been subject to national or EU measures aiming to ensure that people in that situation have recourse to collective bargaining. Several of the people covered by these measures may be comparable to workers while others may not. Therefore, this second option covers all self-employed people to which these national measures apply. National legislators are clearly well placed to assess the particularities of Member States’ economies and the challenges self-employed people may face in negotiating their working conditions. oSimilarly, the EU legislator has also acted in order to ensure fair remuneration for authors and performers for the exploitation of their works or other subject matter in the framework of the EU Copyright Directive, where collective bargaining is recognised as one of the available mechanisms that can be relied on for this purpose. The Copyright Directive recognizes that “[a]uthors and performers tend to be in the weaker contractual position when they grant a licence or transfer their rights, including through their own companies, for the purposes of exploitation in return for remuneration, and those natural persons need the protection provided for by this Directive to be able to fully benefit from the rights harmonised under Union law”. Some of the people covered by the EU Copyright Directive may be in a position comparable to workers, while some others will be in an imbalanced bargaining position. Therefore, this option extends to all solo self-employed people covered by the Copyright Directive. As mentioned above, these are only examples of situations where an unbalanced position is likely to occur. However, this list is not exhaustive. Depending on the individual underlying circumstances, self-employed persons might face an imbalance in bargaining power, even if they do not fall into any of the previous examples. In line with its prioritiy setting, the Commission would not intervene in such cases either. 6.What are the impacts of the policy options? Both policy options aim at ensuring that EU competition law does not stand in the way of collective negotiations over pay and other working conditions by solo self-employed having little influence over their working conditions. Both options will increase legal certainty for solo self-employed that can be seen as comparable to workers. Option 2 may in addition re-assure other solo self-employed people that are in an imbalanced negotiating position. Therefore, both options will ultimately address – albeit to a different extent –the chilling effect for self-employed people and their counterparties falling within the scope of the chosen option. Publicly available guidance by the Commission on this issue may encourage the National Competition Authorities (“NCAs”) to take a common approach in relation to competition law and collective bargaining, especially since, under certain circumstances, they have to apply both EU and national competition law. In addition, it may help Member State authorities and legislators to better understand the remit of EU competition law in relation to collective negotiations/agreements by solo self-employed people and incorporate it in their decision making process. While the policy options differ with respect to the personal scope, i.e. with respect to which solo self-employed people would potentially be concerned, the categories of main impacts are the same across both options. The quantification of how many individuals would be concerned by those impacts under each options will be presented in Section 7.1. 6.1.Direct impacts The direct impact of both policy options is to dissipate the legal uncertainty for solo self-employed people and their counterparties by increasing clarity about the application of EU competition rules to collective agreements on the working conditions of solo self-employed people. As set out in Section 2.1, many participants to the Open Public Consultation claimed that the reason why solo self-employed people cannot benefit from collective bargaining is uncertainty around the application of EU competition law. Both options have in common that infringement risks in relation to such agreements would be reduced for the solo self-employed people and their counterparties, as they would be able to rely on guidance at EU level. The increased legal certainty is in turn expected to support the effectiveness of national measures foreseeing collective bargaining for certain solo self-employed people. However, overall, the effect of increased legal certainty is as such not precisely quantifiable.

As neither of the options imposes any obligation, nor requires any action by stakeholders, a direct quantifiable economic impact is not expected. The increased legal certainty, which any of the two options will provide, could facilitate the conclusion of collective agreements by solo self-employed people, but does not in any way oblige the counterparties to enter into such collective agreements. Therefore, any impacts derived from the conclusion of collective agreements facilitated by any of the options would only be indirectly attributable to them. 6.2.Indirect impacts Both options would likely produce several indirect impacts that would be derived from actions by stakeholders (Member States, solo self-employed people or companies). To the extent that solo self-employed will take up collective bargaining and conclude collective agreements as a result of the legal certainty provided by the policy options, the main positive impacts are better pay and working conditions and, linked to that, less poverty for the solo self-employed people concerned. Correspondingly, this may imply higher costs for digital platforms and undertakings relying on services by these solo self-employed people, which may partially be passed on to consumers. Further indirect economic impacts cannot be excluded, notably on (i) prices for consumers and households (due to the possible pass-on of costs); (ii) jobs and employment; (iii) SMEs; (iv) the competitiveness, productivity, and the internal market, as well as on (v) public budgets. In addition, further indirect social impacts may also arise in terms of (i) social dialogue, and (ii) fundamental rights. Indirect impacts on (iii) the environment appear unlikely. The above categories of indirect impacts are expected to be the same across both options, although the magnitude of the impacts will vary with the scope of the option. Moreover, the categories of impacts, as well as the trade-offs involved, are not expected to be fundamentally different from those of collective agreements reached by workers with their employers via the social dialogue. The remainder of this Section will elaborate on the different categories of indirect impacts. 6.2.1.Better pay and working conditions for solo self-employed people concerned: If the increase in legal certainty leads to more collective negotiations and agreements between the groups of solo self-employed people concerned and their counterparties, this is likely to result in better working conditions, especially in terms of remuneration. Better pay would increase the economic well-being of the solo self-employed people concerned and increase their purchasing power. As mentioned in the IA Support Study, the most common topics covered in collective agreements for “atypical workers” include securing regular employment, equal pay (as compared to workers), addressing the scheduling of hours, extending maternity protection, and ensuring the workplace is safe. By analogy, it can be expected that solo self-employed people entering collective agreements would focus on similar topics. Better pay is expected to be the main element of collective bargaining agreements by solo self-employed people. Indeed, in the feedback received by stakeholders to the Inception Impact Assessment, around 190 (out of 309) replies expressly mentioned that rates would be the main element to be discussed in collective negotiations by solo self-employed people. Other topics such as better insurance protection (e.g. health or accident), pension rights, better working hours, access to training schemes are also expected to be topics that could be negotiated collectively and thus, improve the situation of the solo self-employed people concerned. In the context of platforms, issues related to the particularities of the online economy, such as the use of algorithmic management can also be subject to collective negotiations. Therefore, overall both options (albeit to a different magnitude) are expected to indirectly enable some parts of the workforce to improve their working conditions. That said, there is very limited experience with collective agreements by solo self-employed people to date (which is consistent with the existence of a chilling effect absent policy intervention). Moreover, as the situation, including type of pay etc., of solo self-employed differs widely by profession and possibly country, it is not possible to provide a precise estimate of the effect of collective agreements on remuneration. However, by way of example, in the (few) cases where collective agreements have been reached between service providers through digital platforms and their counterparties and which are summarised in the table below, collective agreements have led, on average, to pay increases for these people of around 16%. Source: IA Support Study, Section 3.4.10, Table 33 based on internet sources. For solo self-employed people not working through platforms, even fewer collective agreements could be identified (only for journalists in Austria and Germany and for architects in the Netherlands) with wide differences in outcomes. However, taking the example of Germany, the figure of 15% also appears approximately in line with the difference in pay between workers who are members of trade unions and those who are not as collective agreements only apply to trade union members. By analogy, collective agreements between solo self-employed people covered by the present initiative and their counterparties could result in an increase in the formers remuneration of up to 15% on average. Noticeably, that increase has tended to be higher (up to 40%) when the self-employed people concerned were initially earning very low equivalent hourly rates. Increasing legal certainty could possibly lead to a higher coverage from collective agreements for the solo self-employed people concerned by the policy options and thus potentially increase remuneration and improve working conditions. This could mitigate the relatively poor pay or working conditions of certain solo self-employed people. 6.2.2.Decreased poverty A significant number of self-employed (around 30% of all self-employed, according to the IA Support Study) are at risk of poverty. When it comes to people working through platforms, 55% earn less than the net hourly minimum wage of their country.

The IA Support Study of the present initiative estimates that a pay increase of 40% (which is in line with average observed increases in cases where the initial earnings were very low) may elevate around one third of these solo self-employed people with particularly low incomes out of poverty. In addition to the self-employed people concerned, on average also three additional household members would be lifted out of poverty at the same time. Collective agreements resulting from any of the options may therefore also have the positive indirect effect of reducing the risk of poverty for those household members. 6.2.3.Correspondingly higher costs for undertakings relying on services by these solo self-employed Due to the increased remuneration and improved working conditions for the solo self-employed people concerned, businesses relying on services by these solo self-employed people may face higher cost. The primary effect of collective bargaining would hence be of a redistributive nature. However, the costs are unlikely to be borne by businesses alone. Just as with wage increases for workers, some of the costs are likely to be passed on to consumers, which would mitigate the effect on the businesses’ profits (see Section 6.2.4.1). Moreover, better pay and working conditions may also increase the productivity of solo self-employed people to the benefit of firms. Theories of “efficiency wages” suggest that increased pay can increase engagement and productivity of individual workers. Moreover, as noted in the Commission Impact Assessment on adequate minimum wages in the European Union: “[e]vidence in specific countries suggests that minimum wage increases can indeed increase productivity in the low-paid sector” and “[s]trong collective bargaining leads to better wage conditions, which may induce employees to work more productively and companies to adapt faster and more smoothly to changed market conditions, thus fostering productivity growth.” Besides, it should be underlined that this initiative will not require any party to take a certain action (e.g. it is fully voluntary to engage or not in collective negotiations). 6.2.4.Further indirect economic impacts In the context of the Open Public Consultation, EU citizens and stakeholders were asked if “an initiative ensuring that EU competition law does not stand in the way of collective bargaining by solo self-employed [would] lead to economic impacts?”. 192 respondents (71.91%) answered positively. Of those, 145 indicated that the economic impacts would be positive or very positive. Only 13 indicated that the economic impacts would be negative or very negative. Among the most positive effects, the respondents mentioned a general improvement in platform service providers’ reputation (45.69%); higher consumers’ trust in platform services providers (44.94%); better functioning of the single market and competition (43.07%); impact for national competition authorities (31.46%), and impact for national courts (21.35%). 6.2.4.1. Price increases for consumers and households Consumers may bear part of the costs of the solo self-employed people’s increased remuneration, as it may be partially passed-on into consumer prices. Pass-on of part of the increase in costs of hiring solo self-employed people into prices of the final product or service is likely, if the services provided by the solo self-employed affect the variable costs associated with the final product or service. This would be the case, for example, for an increase of the fees of riders for food delivery platforms. Conversely, when increased remuneration of solo self-employed people only affects the overhead costs of a business, pass-on into prices of the business’ product or service is economically unlikely. . The degree of pass-on also depends on many other factors, including the structure of the market and whether one single company faces increased costs, or whether all companies in a sector face increased costs. When only one company is affected by the increase in labour cost, the magnitude of the pass-on is more likely to be limited than if all the companies in a sector face that increase. Therefore, pass-on is more likely to occur if the concluded collective agreement were to be extended to a whole sector. This would depend on the modalities of collective bargaining in each Member States. The degree of pass on also depends on the degree of competition in the market and on the precise shape (in particular the curvature) of demand. It is therefore not possible to quantify the extent of pass-on precisely. Nevertheless, it can be expected that at least some of the increase in fees by solo self-employed will be reflected in higher prices to consumers and that the effect will be closer to industry wide rather than firm specific cost increases. Based on a review of the empirical literature on cost pass-through prepared for the UK Office of Fair Trading, the IA Support Study assumes that, on average, 85% of the increase in cost for businesses will be passed on into higher prices for consumers. This is likely a conservatively high estimate of the degree of pass-on, and hence on the effect on consumers, as it does not take account of the fact that costs of services of solo self-employed do not always represent a variable cost of the business. 6.2.4.2. Jobs/Employment Both options are likely to lead to collective agreements, which would lead to levels of remuneration for the solo self-employed concerned that are closer to that of workers. Higher remuneration for solo self-employed implies increased costs of the services provided by solo self-employed for businesses, which may reduce the demand for such services (or slower growth in the demand for such services). For example, costs of cleaning services by solo self-employed may increase overhead costs, prompting businesses to rely less on such services. Similarly, pass-on of increased costs into prices of final consumers (which seems likely, for example, for delivery or taxi services) may reduce consumer demand and hence the number of jobs for solo self-employed. On the other hand, where low levels of remuneration are the result of an imbalance in bargaining power, redressing this imbalance may not have a significant impact on the jobs for solo self-employed. Moreover, where low levels of remuneration are the result of an employer exercising monopsony power, the setting of a minimum wage may even lead to increases in the demand for labour. In this respect, minimum wages, at levels observed in the EU, do not appear to significantly reduce employment and can even increase it in some cases. The possibility to improve working conditions through collective bargaining may also influence work incentives and attract more people to the labour market. Moreover, the rapid growth of the number people working through platforms over the past decade appears to have been driven by new business models of digital platforms that are generally based on a flexible workforce mostly composed of solo self-employed. The flexibility of the workforce therefore seems to have been a key ingredient of that success. This flexibility is not affected by either option (at least not directly) which should mitigate any negative impact on the success of digital platforms. The same consideration regarding flexibility also applies to other businesses relying on services by solo self-employed.

Furthermore, digital platforms and other businesses that would be counterparties to the collective agreements would also be entitled to bargain collectively, and all parties to the negotiations have an interest to limit the effect on jobs. In addition, the policy options may contribute to the fight against false self-employment, as an increase in costs for hiring solo self-employed may make digital platforms or businesses more inclined to recruit workers – especially if there is little difference between the labour costs of a worker and of a solo self-employed. Collective agreements that lead to higher remuneration for solo self-employed might also result in job substitution. Indeed, some digital platforms already recruit workers instead of solo self-employed, be it voluntarily, by following a requalification of the contract by national courts, or to comply with recently adopted legislations. Overall, the impact of the present initiative on jobs for solo self-employed is likely limited and ambiguous; and any negative effects of the initiative are unlikely to go beyond what is necessary and proportionate to ensure fair remuneration and working conditions for the solo self-employed concerned. 6.2.4.3.Impact on SMEs According to a recent study, there may be more than 500 active digital platforms – a majority of which are on-location – mostly concentrated in larger Western Member States (DE, ES, FR, IT) and some Eastern Member States (CZ, PL, RO). Approximately 361 (or between 70% and 92%) of them are SMEs, against 155 larger enterprises. However, as all digital platforms tend to mostly rely on solo self-employed rather than on workers, digital platforms that are SMEs are unlikely to be disproportionately affected compared to larger digital platforms. In the off-line economy, SMEs – while less dependent on solo self-employed than digital platforms – are relatively more reliant on services by solo self-employed (in terms of solo self-employed hired per worker) than larger businesses. Indeed, the IA Support Study estimates that 91% of all solo self-employed not working through digital platforms are working for businesses with less than 10 workers, and 94% of solo self-employed not working through digital platforms are hired by businesses with less than 20 workers. SMEs therefore account for the vast majority of jobs for solo self-employed not working for digital platforms. However, there is no data available that would allow reliably quantifying or estimating the (relative) impact of collective bargaining by solo self-employed on costs of SMEs. From the responses to the Open Public Consultation, it seems that the business side is generally concerned about a potential increase in the “labour cost” of hiring solo self–employed people, and that the problem may be more acute for SMEs. In addition, representatives of SMEs question the need to distinguish between entrepreneurs i.e. between those who are solo self-employed and those who are running an SME. In principle, the proposed policy options apply horizontally to solo self-employed who fulfil certain criteria, indistinctively of the counterparties’ economic size. The case law of the CJEU, has never conditioned the application of the “social policy exemption” upon economic criteria relevant to the counterparty. Instead, the Court looked at the relationship between the counterparty and the person working, and assessed whether such relationship presents characteristics similar to the ones of an employment relationship. Therefore, option 1, covering only solo self-employed who are in a situation comparable to that of workers, applies to all SMEs, in line with the Court’s case law. Option 2, also covers solo self-employed providing their services to SMEs, save for the instances where the priority setting mechanism is triggered based on the economic strength of the counterparty. Only in that context, Option 2 provides an exception for micro-enterprises, since their economic power, is not such to assume from the outset that they have in all cases a superior bargaining power vis-à-vis the solo self-employed service providers. Option 2 would use the concept of microenterprise because it is the smallest possible, clearly defined size at European level (see section 5.2.2). Even if it could be argued that a smaller or bigger size could be more adequate in order to foresee the potential imbalance between companies and solo self-employed, it was not possible, despite ample consultations with experts and stakeholders, to identify more adequate criteria. The limited quantitative data available relating to the situation of solo self-employed with respect to the size of their counterparties also use this category (see section 7). Nevertheless, since these criteria simply reflect EU case law (in the case of the “comparable to workers” criterion) or other legislative initiatives (at national or EU level; and the Copyright Directive), the effect of not overall excluding SMEs from the present initiative cannot be regarded as disproportionate. 6.2.4.4. Competitiveness, productivity and internal market At present, one of the reasons for businesses and digital platforms to rely on services by solo self-employed is the competitive advantage of relying on solo self-employed that provide services under poor pay/working conditions. While this imbalance represents a competitive advantage for firms relying on such solo self-employed, it is a competitive disadvantage for firms relying on an employment model. Both options would, to some extent, redress this imbalance between businesses relying on solo self-employed and those relying on employment. At the same time, the two policy options would preserve other advantages and disadvantages that each model brings (such as, for example, the greater flexibility under a solo self-employed model). In this sense, the policy options would contribute to levelling the playing field in terms of competitiveness between the different models. Moreover, as explained in Section 6.2.3, better pay and working conditions for solo self-employed not only represent a cost for businesses, but may also increase the productivity of solo self-employed, which would benefit firms and foster productivity growth overall. Regarding international competitiveness, the increase in “labour” cost for solo self-employed in the EU could lead to certain activities becoming more attractive outside the EU. This might particularly be the case for some services offered by solo self-employed people through digital platforms or activities that can be fully carried out online and thus does not depend on a physical presence within the EU for the activities to be carried out. In this respect, however, the trade-off is similar to that regarding relocation of work by workers to countries outside the EU. Moreover, for types of services where such relocation is possible, it is likely that the provision of such services is already significantly cheaper in some countries outside the EU than within the EU. As such, the additional impact of any of the options on international competitiveness of EU labour markets is likely to be limited. Services by solo self-employed that are provided locally (including, for example, cleaning or delivery services) may see their (local) competitiveness affected to some extent. However, beyond the likely limited effects discussed above, no appreciable effects on the internal market and competitiveness overall are to be expected. In any event, any impact on competitiveness will also be partially offset by increased productivity. Finally, the increased clarity regarding the application of EU competition law on collective agreements by solo self-employed which any of the options will provide will likely have a positive effect on the internal market as it will provide more certainty to solo self-employed and businesses and in turn, may facilitate the provision of services across borders. 6.2.4.5.Public Budgets The increased pay of solo self-employed working for professional customers may have a positive effect on the Members States budgets. The most pertinent impacts are likely savings in expenditure on minimum income support and on in-work benefits and increased tax revenues. 6.2.4.6. Possible other limited economic impacts Neither of the two options is expected to lead to other significant economic impacts. Nevertheless further non-significant indirect impacts cannot be excluded. In particular: ·Regulatory charges, compliance costs, administrative costs, and enforcement costs: The clarification that EU competition law will not stand in the way of collective agreements by well-defined groups of solo self-employed will not lead to significant costs by public administration. If anything, clarity on when competition law enforcement may not be triggered is likely to eliminate costs. Administrative costs associated with collective bargaining for businesses and solo self-employed are also likely to be limited: many businesses with workers will, where relevant, already be members of the relevant business associations. As for solo self-employed, who stand to gain from collective bargaining, cost of participation in bodies involved in such negotiations are likely to be substantially outweighed by increased pay. In any event, the present initiative only aims at removing the legal uncertainty that EU competition law may have on collective negotiations/agreements by solo self-employed people or provide comfort that they will not face an intervention on the basis of Article 101 of the Treaty. It does not oblige solo self-employed people nor their counterparties to enter into collective negotiations and agreements.

·Macro-economic environment: Any of the two options are likely to only have a very limited impact on the other elements of the EU macro-economic environment, such as economic growth or the general conditions relating to investment. First, no obligations are introduced for businesses that could in turn lead to impediments for growth. Second, the solo self-employed people that would fall within the scope of any of the options account only for a fraction of the workforce – and the expected increase in pay for the group of solo self-employed people that will likely be affected are estimated to amount to only a fraction of one percent at the EU level under any of the options. Even absent any positive effects discussed above (on public budgets and on productivity, increased purchasing power and consumption of solo self-employed, and participation in the labour market by solo self-employed people) it is unlikely that there would be appreciable negative effects of any of the options on the wider macro-economic environment. 6.2.5.Further indirect social impacts Beyond the key issues of better pay and working conditions set out in Section 6.2.1, either option is likely to have further indirect social impacts of a certain importance. The wider the personal scope of the initiative, the more important are also the expected social impacts. In the context of the Open Public Consultation, the Commission asked EU citizens and stakeholder if an initiative ensuring that EU competition law does not stand in the way of collective bargaining by solo self-employed people will lead to social impacts. 229 respondents (85.77%) answered positively. 173 of them indicated that the economic impacts would be positive or very positive, and 14 indicated that the economic impacts would be negative or very negative. Among the most positive effects mentioned by the respondents, were improved working conditions for solo self-employed people (77.53%); increased level of payments for solo self-employed (70.41%); better social protection for solo self-employed people (67.04%); higher quality jobs for solo self-employed (52.43%), and reduction of false self-employed people (52.06%). 6.2.5.1. Social dialogue Both options may have an indirect impact on how Member States shape social dialogue in the future. In particular, it cannot be excluded that by gaining certainty about the application of EU competition law on collective agreements for the working conditions of solo self-employed, Member States which currently do not foresee collective bargaining for self-employed may decide in the future that social dialogue and collective bargaining would, on top of workers, cover certain solo self-employed. 6.2.5.2. Fundamental rights According to Article 51(1) of the Charter of Fundamental Rights of the European Union, the Charter applies to Member States only when they are implementing European Union law. Moreover, according to Article 6(1) of the Treaty of the European Union “[t]he provisions of the Charter shall not extend in any way the competences of the Union as defined in the Treaties.” In the present case, there are no direct effects on fundamental rights, as the initiative aims merely to clarify the application of Union law, but indirect effects may include a positive impact on e.g. the right of collective bargaining (Article 28 of the Charter). In the context of the Open Public Consultation, the Commission asked EU citizens and stakeholders if an initiative ensuring that EU competition law does not stand in the way of collective bargaining by self-employed people would lead to any impact on fundamental rights and freedoms. 180 respondents (67.42%) answered positively. 151 of them indicated that the impacts would be positive or very positive, and 7 indicated that the impacts would be negative or very negative. Among the most positive effects mentioned by the respondents, were fair and decent working conditions (62.55%); reinforced right to bargain collectively (59.18%); reinforced freedom of association (54.68%); reinforced freedom to choose an occupation and right to engage in work (44.94%) and reinforced freedom to provide services (42.32%). 6.2.5.3.Environment None of the options is expected to lead to appreciable (indirect) environmental effects. 7.How do the options compare? The policy options assessed differ with respect to the groups of solo self-employed people covered, mirroring different degrees of bargaining power vis-à-vis their counterparties. Option 1 covers self-employed people in a position comparable to that of workers. For these self-employed people, due to the nature of their position, the imbalance in bargaining power is manifest, in the same way as for workers. Option 2 is broader in scope than Option 1 as in addition to the solo self-employed people who are in a situation comparable to that of workers, it covers those who may be considered to be in an imbalanced negotiating position on the basis of the size of their counterparty or on the basis of the assessments made by the national or EU legislator. The effectiveness of each option depends on its ability to: i) provide legal certainty about the application of EU competition law; and ii) preserve the coherence and effectiveness of EU and national measures. As described in Section 5.1, under the baseline, the legal uncertainty and chilling effect would largely remain for all self-employed people having little influence over their working conditions. Therefore, any of the two options would be more effective than the baseline. Both options aim to provide clarifications about the application of EU competition law on collective agreements. However, whilst option 1 and option 2 provide legal certainty for solo self-employed people in “a situation comparable to that of workers” through the Commission’s interpretation of the case-law on Article 101 of the Treaty, only option 2 provides additional comfort, through a priority setting mechanism, to solo self-employed people who are not necessarily in “a situation comparable to that of workers”, but who would still benefit from access to collective agreements. At the same time, that priority setting mechanism may be seen as less efficient than an exclusion from the scope of Article 101 of the Treaty through a purpose driven interpretation of the case-law, given that the priority setting only binds the Commission. Concerning the coherence of the options, as explained in Section 1.1, the present initiative is in line with EU Parliament’s and Council recommendations to ensure adequate social protection for citizens and enhance collective bargaining. Furthermore, as explained in Section 5.2, both options would be seen as complementary to the proposal for a Platform Work Directive, since both of them include self-employed people working through digital platforms in their scope.

In Section 2.4, this report raises a coherence issue relating to the effective application of the EU Copyright Directive. This issue is only addressed by option 2 which explicitly covers solo self-employed authors and performers . 7.1.Comparison of the number of solo self-employed people covered under each option and of the quantifiable indirect benefits and costs The following table reports the estimated number of “potentially affected” solo self-employed under each policy option in 2021 and 2030 (in millions of full-time equivalent workers). “Potentially affected” are all solo self-employed people falling within the scope of the respective option. The estimates in the table build on estimates in the IA Support Study for the set of policy options initially considered. These estimates have been adjusted to reflect differences in the personal scope between the options originally considered and the two options assessed in this report. As in the IA Support Study, all estimates are based on combining available data and estimates from different data sources coupled with additional assumptions, where necessary. The estimated number of people working through digital platforms corresponds to the estimates in the IA Support Study which are in turn based on PPMI survey data for 2021 combined with COLLEM data for 2017 and 2018 to derive projections for 2030. The estimates of the number of solo self-employed in the offline economy in 2021 in the different categories are primarily based on data from the Eurostat Labour Force Survey and research conducted in the IA Support Study. Corresponding estimates for 2030 are based on linear projections. See Annex 4 and the footnotes on Table 2 for more detail. The projections for solo self-employed working through digital platforms in 2030 assume that the Commission proposal for a Platform Work Directive will be implemented by then and that, therefore, certain solo self-employed working through digital platforms will have been reclassified as workers and no longer fall within the scope of the present initiative. Solo self-employed people covered by the exclusion from

Art 101(1) Total

option 1 Additional self-employed people covered under (negative) enforcement priorities Total

option 2 Year People working through digital platforms Economi-cally dependent solo SE's in the offline economy Solo SE's in the offline economy working for non-micro-enter-prises Solo SE's in the offline economy covered by MS exemption SE in the offline economy likely covered by the Copyright Directive (adjusted for overlaps) 2021 14.1 4.7 18.8 1.1 3.8 0.8 20.8 2030 17.4 5.1 22.5 1.2 4.1 0.9 24.6

Source: Computed based on data from Eurostat and IA Support Study. See Annex 4. Not all self-employed people that would be “potentially affected” (i.e. covered) by the policy options are likely to conclude or be covered by collective agreements and see an actual change in their working conditions. The IA Support Study therefore also proposed adjustments to reflect the following: (I)Some (groups of) solo self-employed people may not engage in collective bargaining despite the increase in legal certainty. This is estimated by the percentage of workers covered by collective agreements for workers per Member State. (II)Even where collective agreements may be reached, some solo self-employed people would in any event achieve a remuneration above the level specified in the collective agreement and would hence not be interested in/affected by the collective agreement. The percentage of solo self-employed people that may opt out of a collective agreement is estimated based on survey data. The table below reports the effect of these adjustments for the years 2021 and 2030 following the estimation in the IA Support Study. Columns 4 and 7 reflect the cumulative effect of applying adjustments (i) and (ii). Option 1 Option 2 Year Potentially affected Adjustment for national worker coverage of collective agreements Adjustment proxying in addition for opt-out Potentially affected Adjustment for national worker coverage of collective agreements Adjustment proxying in addition for opt-out 2021 18.8 11.0 6.0 20.8 12.1 6.5 2030 22.5 13.3 7.2 24.6 14.4 7.8 Source: Computed based on data from Eurostat LFS and IA Support Study. See Annex 4. The differences between options 1 and 2 in terms of the number of individuals that will likely benefit from collective bargaining agreements (see the estimate of potentially affected individuals after adjustments for the likely uptake and opt-out) translate into corresponding differences in indirect benefits and costs between the two options. In terms of indirect benefits, an expected average pay increase of around 15% for affected individuals would amount to an estimated aggregate indirect benefit in terms of increased pay of approximately EUR 23 billion under option 1 and EUR 25 billion under option 2 in 2030. The estimated pay increases will have the further indirect benefit of lifting approximately 2.8 million individuals (solo self-employed and their family members) out of poverty under option 1, and 3.2 million individuals under option 2 by 2030. A further possible indirect benefit may be savings in State income support which may be of the order of EUR 1 billion. The flipside of the expected increase in aggregate pay is that it may also result in indirect costs for businesses and consumers. Assuming for simplicity, that the entire aggregate pay increase will be borne by either firms or consumers and using a conservatively high average pass-on rate to consumers of 85%, firms may see cost increases on the order EUR 3.4 billion under option 1 and EUR 3.7 billion under option 2, while consumers would face increased costs on the oder of EUR 19 billion under option 1 and EUR 21 billion under option 2. Quantification and estimation of indirect benefits and costs is subject to significant uncertainty and not all categories of indirect benefits and costs can be quantified. 7.2.Comparison of the policy options from a qualitative perspective Option 1 covers instances of solo self-employed people active in the online and the offline economy who from the outset can be considered to be in a “situation comparable to that of workers”. On that basis, these solo self-employed people should not be deprived of the possibility to bargain collectively. As noted under Section 5, indications of strong income-dependence, the existence of a subordination relationship and the integration in a single economic unit constitute solid criteria of comparability to workers. Similar criteria are deployed by national legislation, soft law guidance and courts’ case law in the context of reclassification cases or where the national legislator assimilates self-employed people with workers by granting them the right to bargain collectively. This is the case particularly for people working through digital platforms. However, whilst removing the legal uncertainty about the application of EU competition law for solo self-employed people who fall within one of the three categories where they are in “comparable situation to that of workers”, option 1, has the disadvantage of not covering solo self-employed people who are in an imbalanced negotiating position vis-à-vis their counterparties and who also have little influence over their working conditions. Indeed, in the offline economy, many self-employed people may still be unable to influence their working conditions even if they are not in a situation of economic dependence or working “side-by-side” with workers. This is particularly true in instances where the self-employed people offer their services to counterparties of a certain economic strength. The latter can transpose their economic power into significant bargaining power, limiting the ability of the self-employed people to negotiate better working conditions. Additionally, national measures may provide to self-employed people the right to bargain collectively or may exclude their agreements from national competition law. Such measures, in light of the primacy of the Treaty provisions against national legislation, would remain without effect, to the extent that the self-employed people covered are not in a “situation comparable to that of workers”. Moreover, the coherence issue with respect to the application of the Copyright Directive, would still remain, and therefore solo self-employed authors and performers might not be able to rely on certain mechanisms for the implementation of the provisions of this Directive in order to ensure a fair remuneration for the exploitation of their works protected by copyright or other related rights. This means that a significant number of authors and performers might ultimately not enjoy the benefits of the Copyright Directive provisions, taking into account that close to one half of creative or performing artists, authors, journalists and linguists in the EU-28 was self-employed people in 2018, compared to an average of 14 % for the whole economy. By contrast, option 2 has the advantage of filling in the gaps that Option 1 may leave, by establishing a more effective formula for achieving the initiative’s objectives. On that assumption and within the Commission’s margin of discretion, option 2 expands the scope of option 1 and covers certain solo self-employed people who should already be entitled to bargain collectively because their imbalanced negotiating position has been taken into account by the Copyright Directive or national measures. Option 2 would thus provide the re-assurance that the Commission would not act against collective agreements concluded based on the implementation of the Copyright Directive or national measures that go beyond covering self-employed people in a “situation comparable to that of workers”. Option 2 would also provide the same reassurance when the imbalance in bargaining positions of the solo self-employed people stems from the economic strength of their counterparty/ies. For instance, because their counterparty/ies cover a whole sector or because their annual aggregate turnover exceeds EUR 2 million or their workforce headcount is more than 10 workers. Overall, in terms of expected benefits, Option 2 would thus lead to a larger population being able to improve their working conditions through collective negotiations. This means that Option 2 will provide legal certainty to a wider number of self-employed. Additionally, due to the wider scope of this option, a greater number of solo self-employed people would indirectly be enabled to increase their salaries and ameliorate their working conditions. In terms of expected costs, the impact on SMEs is not considered to be substantially different between the two options, but it is likely that it is somewhat greater under Option 2, as this option covers a greater number of solo self-employed and may thus, indirectly trigger a greater number of collective agreements. It is noted though that in order to keep the impact proportionate, Option 2 excludes microenterprises from the scope of the initiative, where the sole criterion for the imbalanced negotiating position of the self-employed is the economic strength of the counterparty. 7.3.Comparison between instruments Two main instruments could be used to achieve the aims of the present initiative: (i) a Council Regulation or (ii) Commission Guidelines. While creating direct and binding legal effects, a Council Regulation may not be a sufficiently flexible tool for addressing the different situations solo self-employed people may find themselves in. By contrast, the Commission Guidelines are typically a better tool for providing detailed guidance and illustrative examples in a manner more accessible to self-employed people with possibly no access to legal advice. Additionally, the adoption of a Council Regulation is a lengthier legislative process as compared to the adoption of Commission Guidelines and can therefore not provide as quickly a solution for the solo self-employed people concerned. Taking these points into consideration, the adoption of Guidelines is the best way to achieve the aim of this initiative, i.e. to improve legal certainty for the solo self-employed people, in an effective and efficient manner. This is also in line with the views of the majority of social partners (trade unions and employers’ representatives). 8.Preferred option

8.1.The preferred policy option The comparison between the two options reveals that option 2 is the most adequate option in terms of effectiveness and coherence with EU law. The preferred option covers solo self-employed people both in the online and offline economy. It relies on a purpose driven interpretation of existing case law of the CJEU which excludes from the scope of Article 101 of the Treaty collective agreements in light of the social objectives they pursue. In addition, it sets the Commission’s negative enforcement priorities in order to cover situations where the solo self-employed people are in an imbalanced negotiating position even if they may not be comparable to workers (covering among others self-employed people falling under the Copyright Directive and safeguarding its effectiveness). 8.2.Impacts of the preferred policy option The preferred option would have the direct impact of