The European Court of Justice ruled Wednesday that ride-hailing company Uber should be regulated like a taxi service instead of a technology firm, a decision that limits its business operations in Europe.

The decision was handed down in response to a complaint from a Barcelona taxi drivers association, which tried to prevent Uber from expanding into the Spanish city. The drivers maintained that Uber drivers should be subject to authorizations and license requirements and accused the company of engaging in unfair competition.

The San Francisco-based Uber contends it should be regulated as an information services provider because it is based on a mobile application that links passengers to drivers.

The European Union’s highest court said services provided by Uber and similar companies are “inherently linked to a transport service” and therefore must be classified as “a service in the field of transport” under EU law.

The decision will impact ride-hailing companies in the 28-nation EU, where national governments can now regulate them as transportation services.

Uber attempted to downplay the decision, saying it only affects its operations in four countries and that it will move forward with plans to expand in Europe. But the company was previously forced to abandon its peer-to-peer service in several EU countries that connect freelance drivers with riders.
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