An Italian court has issued a significant decision concerning the use of algorithms in worker management, following a legal action initiated by three labor unions. The court in Bologna determined that a reputation-based ranking algorithm employed by the food delivery service Deliveroo created unfair conditions for its delivery personnel, violating established labor regulations.

Reports in the Italian media indicate that the court found Deliveroo’s algorithm to be discriminatory because it failed to differentiate between legitimate reasons for a rider’s unavailability – such as illness or participation in lawful strike action – and less substantial reasons impacting productivity levels.

The Italian General Confederation of Labour (CGIL) released a statement characterizing the Bologna court’s decision as “a momentous shift in the pursuit of trade union rights and freedoms within the digital sphere”.

Deliveroo was asked to provide a response to the court’s ruling. Update: A representative from the company has since provided the following statement:

According to Ansa.it, the court has mandated that Deliveroo compensate the plaintiffs with €50,000 (in addition to covering their legal expenses) and publish the ruling on its website. Matteo Sarzana, Deliveroo Italy’s general manager, stated to the news outlet that the company acknowledges the judge’s decision but disagrees with its conclusions, and also confirmed that the shift-reservation system connected to the algorithmic ranking is no longer operational in the Italian market.

“The fairness of our previous system is supported by the fact that the trial did not reveal a single instance of demonstrable and actual discrimination. The ruling is predicated solely on a theoretical and potential assessment lacking concrete proof,” Sarzana explained in the statement [translated from Italian].

The on-demand delivery company has previously faced legal challenges within its home market – relating to its categorization of workers as independent contractors and its resistance to collective bargaining for riders.

A 2018 investigation spearheaded by U.K. MP Frank Field drew parallels between Deliveroo’s “flexible” labor practices and those of 20th-century dockyards, observing that the dual labor market created by Deliveroo benefits some riders considerably while disadvantaging others.

The Bologna court’s ruling is particularly noteworthy given the increasing number of legal challenges across Europe concerning the use of algorithms by gig economy platforms to oversee substantial “self-employed” workforces.

This includes a group of Uber drivers who lodged a complaint against Uber’s automated decision-making processes in the Netherlands last summer – citing pan-European data protection legislation.

Ride-hailing service Ola is currently confronting a similar challenge regarding its utilization of technological monitoring and data as a management technique for a self-employed workforce.

Decisions in these cases are still forthcoming.

Concurrently, EU legislators have proposed new regulations that would require major online platforms to share information with regulators regarding the operation of their algorithmic ranking systems – with the intention of fostering greater public scrutiny of AI-driven corporations.

This push for oversight and accountability of platforms’ algorithms is a response to concerns about a lack of openness and the potential for automated processes to amplify bias, discrimination, and exploitation.

This article was updated to clarify that the judgement requires Deliveroo to pay €50,000 to the applicants, rather than ‘per affected rider’ as previously reported.