The European Court of Justice (ECJ) ruled Thursday that under an EU directive governing electronic commerce, Airbnb must be classified as an “information society service,” not a real estate agent.

Following a complaint by a hotel and tourism trade group, French authorities had tried to classify Airbnb so that it would be subject to real estate licensing rules.

The court’s ruling casts the tech company as an “intermediation service” rather than a direct rental service, “providing a tool for presenting and finding accommodation for rent” by connecting hosts and guests but not itself transacting in real estate. “Although it is true that the purpose of the intermediation service provided by Airbnb Ireland is to enable the renting of accommodation,” the court wrote, “the nature of the links between those services does not justify departing from the classification” as falling under the electronic commerce directive.

Municipalities and communities in many parts of the world have been critical of the effects that Airbnb’s presence has on neighborhoods, rental markets and the traditional hotel accommodation industry. The controversy in France, where Airbnb has tens of thousands of listings, is emblematic of efforts to regulate the platform. The ECJ’s classification clarifies the legal framework that Airbnb will fall under as it conducts business in Europe and will ease the company’s continued growth there.

Nathan Blecharczyk, a co-founder of Airbnb, issued a response in praise of the decision on Thursday. “We welcome this ruling and see it as a positive step for our continued collaboration with cities,” he wrote. “Indeed this case was always about how our platform should be regulated—not whether it should be regulated.”