Today in Luxembourg

Today, the ECJ issued its last stack of judgements before it starts its Christmas vacation. Unfortunately, they don't fall into groups as neatly as last week's environment and state aid cases, so I'll bold the area of law in each case, while sorting them by importance as
always.

In Intellectual Property Law, the Bayerischer Brauerbund ("Bavarian Union of Breweries") lost its case against Bavaria again. Following last year's Bavaria and Bavaria Italy, the 3rd Chamber now further clarifies the clash between trademark and PGI, where the latter was obtained through a simplified procedure. The prior claim wins, but which date counts? The date of the initial simplified procedure or the date of the Council Regulation affirming? The ECJ disagrees somewhat with the AG, but the Dutch still win. Bavaria v. Bayerische Brauerbund (Cf. fd.nl)

Also in Intellectual Property Law, the 3rd Chamber agrees with AG Bot that Graphical User Interfaces are not protected under Directive 91/250, the software patent directive, but that they are capable of being copyrighted under Directive 2001/29. Bezpeènostní softwarová asociace – Svaz softwarové ochrany v. Ministerstvo kultury

In access to documents law, the 4th Chamber agrees with AG Kokott that the Caisse des dépôts et consignations was justified in rejecting the request by the City of Lyon for information about the sale of emission rights by certain district heating companies until after the five year confidentiality period of art. 10 of Commission Regulation 2216/2004 was over. The lex specialis wins. Ville de Lyon

In the glorious free movement case of Sayn-Wittgenstein, the 2nd Chamber followed AG Sharpston's opinion. Yes, there is a free movement issue, but the Austrian rule banning all displays of noble rank is probably justified. The Court's explanation of this point includes some interesting observations on public policy and general principles of law (here: equal treatment) as a justification for restrictions of fundamental freedoms. Curiously, the Court does not seem to have touched on the issue of surnames and titles that vary depending on the sex of the person, which got all the Slavic countries so excited about this case. Cf. ECJBlog.com (about the AG's opinion)

In fundamental rights law, the 2nd Chamber gave a not-very-helpful judgment concerning the question whether Germany may refuse access to free legal aid to legal persons if there is no "public interest". In a particular case, this may be in violation of art. 47 Charter, but the Court leaves a lot of work still to do for the national court. Cf. Directive 2003/8, which establishes minimum common rules relating to legal aid in cross-border disputes. DEB Deutsche Energiehandels- und Beratungsgesellschaft mbH

UPDATE: AdjudicatingEurope has a post about the DEB case, noting also the remark about separation of powers and the rule of law in par. 58.

In the Bozkurt case, the 1st Chamber follows AG Sharpston to hold that divorce does not cause a Turkish worker to lose his rights, despite the fact that those rights were originally linked to his being married to a lawfully immigrated Turkish worker. The fact that he was subsequently convicted of assaulting and raping her does not make his reliance on Decision 1/80 (p. 155/168 here) an abuse of right.

The Third Chamber slapped down a quite obvious case of government protection for incumbents and - to a lesser extent - potential entrants already established in Austria. That would be a free movement problem. Yellow Cab Verkehrsbetrieb v. Wien

In RTL Belgium, the 6th Chamber declined to answer the prejudicial question posed because it found that the Belgian Licensing and Control Authority of the Broadcasting Authority was not a "court or tribunal" within the meaning of art. 267 TFEU. That makes this case about EU Procedural Law.

In state aid and environment law, there is the appeal against Case T-233/04, an extended composition CFI judgement about the Dutch setup of its NOx emissions trading system. AG Mengozzi proposes overruling the CFI and restoring the Commission's decision declaring the design state aid, albeit lawful aid. The fact that intangible assets were provided for free is sufficient, the AG argues, to make this the transfer if a valuable resource out of state means. Commission v.
Netherlands (NL, DE, FR)

Finally, there are two urgent procedure child custody cases (cf. art. 104b of the Rules of Procedure). The Mercredi case concerns the notion of the child's "habitual residence" under art. 8 and 10 of Regulation 2201/2203. In Aguirre Zarraga (DE, FR), the question is one of enforcement of a ruling from another MS: May the German court decline to enforce the Spanish custody ruling because it judges that the Spanish judgement has violated the rights of the child (cf. art. 24 Charter)? The 1st chamber holds that it may not. Protecting the rights of the child is the responsibility of the Spanish court only.

P.S. The archive of these emails is here.

This Week in Luxembourg

This week, there were a large number of rulings in cases where I had already flagged the opinions in the previous months. As usual, the order is roughly in order of interest and/or importance, not to mention subject matter, with Grand Chamber rulings first, followed by ordinary ECJ rulings and AG opinions.

Easily the most fun of this week's judgements is Josemans v. Maastricht, the coffee shop case.Maastricht sought to restrict the access of non-Dutch citizens to their coffee shops. When this led to the applicant's establishment being closed, he raised an issue of discrimination under art. 12 and 18 EC (now art. 18 and 21 TFEU). AG Bot was quite outraged and defended the mayor's decision (NL, DE, FR). Taking a much calmer tone, the 2nd Chamber now holds that drugs, be they soft or not, are not subject to any of the free movement rules. The national rule at issue is discriminatory insofar as it restricts the freedom of non-Dutch EU citizens to go to Josemans' coffee shop to consume non-alcoholic beverages and food, but that restriction is justified and in any event relatively unimportant. Cf. NOS.nl and NRC Handelsblad.

NB. Earlier Dutch cofffee shop cases include theVAT Cases Case 269/86 Mol, Case 289/86 Vereniging Happy Family Rustenburgerstraat and Case C-158/98 Coffeeshop 'Siberië', all of which agree that you can't levy VAT on an illegal drug.

UPDATE: EU Law Blog has a post about the Josemans case.

In Commission v. France, the 2nd Chamber agrees with AG Mengozzi(NL, FR, DE) that a French rule forbidding biologists from holding shares in more than two companies formed in order to operate jointly one or more biomedical analysis laboratories is in violation of the freedom of establishment. A rule forbidding non-biologists from owning more than 25% of the shares, however, is justified.

In Environmental law,a number of Dutch NGOs asked for access to all the documents regarding the decision to set the Maximum Residu Limit of propamocarb on and in lettuce as it was set. The Trade and Industry Appeals Tribunal (one of the Netherlands' four supreme courts) asked whether this is "environmental information", and, if so, how Directive 2003/4 applies to this situation. In line with AG Kokott's opinion (NL, DE, FR), the 4th Chamber answered "yes" to the first question, while rejecting the possibility of a blanket denial under "commercial secrets". Stichting Natuur en Milieu

Also in Dutch Environmental law, one of the other Supreme Courts, the Council of State, had some questions about Directive 2008/1, concerning integrated pollution prevention and control. The case concerns emission limit values for three new power plants in Eemshaven and Rotterdam. AG Kokott argues that these limit values already carry significant weight during the transposition period. If this argument is followed by the Court, the Dutch government will be very unhappy... Stichting Natuur en Milieu v. Gedeputeerde Staten van Groningen en Zuid-Holland (NL, DE, FR)

In Non-Dutch Environmental law, AG Mengozzi has an opinion suggesting that the ECJ should reject Luxembourg's action for annullment of art. 1(2) of Directive 2009/12, which says that the directive applies to two kinds of airports: airports with more than 5 million passenger movements, and the largest airport in each MS. Luxembourg argues that that discriminates against its national airport Findel, which has fewer than 5 million passenger movements and which competes against German and Belgian airports which are of similar size, but which are not their country's biggest airport.Luxembourg v. Parliament and Council (DE, FR)

Also in Non-Dutch Environmental law, AG Sharpston argues in favour of the right of NGOs to sue to force the government to prepare environmental impact studies. Bund für Umwelt und Naturschutz Deutschland (NRW) v. Arnsberg

Finally, AG Trstenjak suggests that the ECJ should disapprove of a Tiroler rule restricting access of trucks weighing more than 7,5 tonnes to the Inntal autobahn if they carry certain goods, on the grounds that it is a non-justified restriction of the free movement of goods. Austrian concerns about NO2 emissions failed to convince her. Commission v. Austria (NL, DE, FR)

In State Aid law, two appeals were dismissed. In Kahla v. Commission(1st chamber), the appellant raised issues of legal certainty and legitimate expectations, and in AceaElectrabel v. Commission (2nd chamber), there was a bit of a messy situation with regards to the relevant "economic unit" that received the aid in question.

Also in State Aid law, but in the 3rd chamber, the appeal in Athinaïki Techniki v. Commission was upheld. The sequence there was that the Commission declined to investigate further, the CFI said that wasn't a decision, the ECJ said that it was, the Commission re-opened the dossier, the CFI said there was nothing to litigate over anymore, and now the ECJ,agreeing with AG Bot, disagrees. The Commission is not allowed to persist in its illegal failure to act while it investigates.

In Seydaland v. BVVG, the 1st chamber approved of a German Federal law setting rules for the valuation of land for privatisation purposes. An earlier version of this law had run into trouble with the Commission in the 1990s. The new rule is now held to sufficiently approximate the fair market value of the land.

In a final piece of State Aid news, the General Court upheld the Commission's decision that certain aspect of the financing of the Dutch NOS were contrary to Community law. The NOS now has to pay back € 76 million. Netherlands and NOS v. Commission (NL, DE, FR) Cf. NOS.nl

In Competition Law, a private litigant (go Courage v. Creehan!) wants access to a leniency application, but AG Mazák says they can't have it. That sounds quite obviouslyright. Pfleiderer v. Bundeskartellamt.

AG Jääskinen has a Lithuanian case on citizenship and non-discrimination, concerning a Lithuanian rule that first and last names must be in Lithuanian. The AG argues that art. 2(2)(b) of Directive 2000/43 does not apply here, but that art. 12(1) and 18(1) EC do limit the freedom of a MS to dictate the spelling of the names of EU citizens. So it looks like Mrs. Runevič-Vardyn will be allowed to have her name registered in the Polish form as Runiewicz-Wardyn, as she requested. Runevič-Vardyn (DE, FR)

AG Mazák proposes that Greece be ordered to pay a fine of € 2 million for failing to comply in time with Commission v. Greece (2007), a case about compensation to crime victims under Directive 2004/80. Since Greece has complied with the ruling by enacting the relevant statute on 18 December 2009, there is no need for penalty payments. (Cf. the Commission's communication on what is now art. 260 TFEU.) Commission v. Greece (NL, DE, FR)

According to AG Trstenjak, a worker habitually carries out his work in the Member State where he carries out most of his work (cf. art. 6(2) of the Rome Convention of 1980 on theInternational Private Law of contracts). I'm sure that will make things much clearer... Koelzsch v. Luxembourg (DE, FR)

The European Schools continue to cause trouble for the ECJ. In September, the ECJ held that it did not have jurisdiction overa dispute between the Commission and Belgium about the financing of the European Schools. Commission v. Belgium. AG Sharpston now proposes to declare admissible a prejudicial question from the Complaints Board of the European Schools about the remuneration system of the School's staff. Miles and others v. European Schools

On Wednesday, there were two competition cases in the General Court:

In CEAHR v. Commisison, the Confédération européenne des associations d'horlogers-réparateurs achieved an important victory in its ongoing struggle to force the Swiss watch producers to supply spare parts to independent watch repairers. The Court found that the Commission had defined the relevant market too broadly. More fun is how the Court examined the Commisison's decision that the matter simply wasn't important enough ("insufficient Community interest"). (par. 157-177)

In E.On v. Commission (DE, FR), the Commission's decision to impose a fine of € 38 million on E.On for breaking a seal (cf. art. 20(2)(d) and 23(1)(e) of Regulation 1/2003). This may seem a little harsh, but I suppose it makes sense under a theory of optimal deterrence. E.On. argued in eight different versions that they didn't do it, all of which were rejected, as was its ninth objection, concerning the proportionality of the fine.

P.S. The archive of these emails is here.

This Week in Luxembourg

This week, the Grand Chamber ruled in a nice internet/Brussels I case: Which country has jurisdiction over a consumer contract agreed over the internet? It follows from art. 15(1)(c) of the Regulation that the key question is whether the defendant "directed" his activities to the consumer/plaintiff's Member State. If that is the case, the consumer can sue in his home MS. The answer is, obviously, highly fact-specific, but at the very least it is insufficient that the website is accessible in the consumer's MS, or that it is written in the consumer's native language. Joined cases Pammer and Hotel Alpenhof

In Competition Law & Procedure, the Grand Chamber held this week that National Competition Authorities (NCAs) have to be able to participate as defendants in judicial review proceedings against their decisions. Cf. art. 35 of Regulation 1/2003. In Belgium, where things are never that simple, only the Federal Minister for the Economy was entitled to act in that capacity. VEBIC v. Raad voor de Mededinging and Minister van Economie

In the same field, AG Mazák discussed the limits of the power of NCAs to find an infringement - or lack thereof - of the EU Competition rules. The Polish NCA in this case found no infringement of the Polish rules on abuse of dominance, but it was argued that it should have held that there was no infringement of art. 102 TFEU. The AG now agrees with the Polish NCA that this is not possible. Cf. art. 5 of Regulation 1/2003. Prezes Urzędu Ochrony Konkurencji i Konsumentów v. Tele2 Polska sp. zoo, now Netia SA w Warszawie

Following the Google AdWords ruling earlier this year, it is now eBay who are feeling the wrath of the trademark owners. For them, the issues are somewhat more complex, but AG Jääskinen's opinion seems to let them off the hook most of the time, in some cases because their use of the trademark in question is not "in relation to" the infringing goods, cf. art. 9(1)(a) of Regulation 40/94, and at other times because their use of the trademark in relation to the infringing goods does not have an adverse effect on the functions of the trade mark. L'Oréal et al. v. eBay.

The Dutch concept of a "kort geding"/expedited trial survived a challenge under Directive 89/665, the public works contracts directive. The idea was that a kort geding combined with a later full procedure did not conform with the directive's requirement that there should be an effective system of judicial review for awards of public contracts. This argument was now rejected by the Second Chamber. (In case the later procedure finds an infringement, the disadvantaged party has to be compensated somehow, of course, but that's not a fundamental problem for the entire system.) Combinatie Spijker Infrabouw (NL, DE, FR)

In a decision that is sure to please the PVV, the Second Chamber also held that - under the famous standstill rule of art. 13 of Decision 1/80 of the EU-Turkey Association Council (p. 155/168 here) - the Netherlands may not tighten a rule that they had earlier relaxed, even when the net result is a rule that is still more relaxed than it was in 1980. Staatssecretaris van Justitie v. Toprak and Oguz

An Austrian rule forbidding the importation of blood products that have been paid for, even if the payment was only for costs incurred, was found to be in violation of the free movement of goods. Humanplasma

Apparently, the EU has a directive on zoos. (Not on the trading of zoo animals, but on the actual running and licensing of zoos.) Spain now received a slap on the wrist because some of its autonomous regions did not obey the rules of said directive. I'm sure the zoo animals in Aragon, Asturias, the Baleares, the Canary Islands, Cantabria, Castilia y Léon, Extremadura and Galicia feel much better now that the European Commission is looking after their welfare. Commission v. Spain (FR)

AG Trstenjak has a fun case in motor vehicle accident litigation. In Portugal, someone's trying to get around the automatic apportionment of risk provided for in the Portuguese Civil Code by pointing at the EU Directives on compulsory insurance, Directives 72/166, 84/5 and 90/232. Since there is no evidence of either driver being at fault, Portuguese law apportions the risk - and the ensuing liability - evenly, and the AG offers the injured driver no help. Carvalho Ferreira Santos v. Companhia Europeia de Seguros (NL, DE, FR)

From the terrorism front, the latest news is that the General Court upheld the inclusion of Sofiane Fahas in the EU's own sanctions list. Quick bit of fun: one of the applicant's forms of order sought was that he asked the court to "order the Council not to refer to him in any of its future [sanctions] decisions (...) for so long as it is not established by a judicial decision (...) that he is a member of 'Al-Takfir' and of 'Al-Hijra' or that he otherwise supports terrorism". (par. 25) Much as all terrorism applicants would like such a remedy, the Court quickly shot it down (par. 28-30) Sofiane Fahas v. Council.

On Friday, Ryanair lost all eight of its attempts to get access to the Commission's state aid dossiers relating to eight different airports. As far as I know, this is one of the first times the General Court has applied Technische Glaswerke Ilmenau. As such, the applicant is asked to rebut the "general presumption" that disclosure would hurt the interests of effective investigation (par. 70-84), which they failed to do. Ryanair v. Commission


Last Week:

Italy is allowed to deny qualified lawyers the right to practice if they are also part-time public employees. Edyta Jakubowska v. Alessandro Maneggia. On the other hand, Hungary is not allowed to limit the sale of contact lenses to specialised medical supply shops, to the detriment of the plaintiff internet site. Ker-Optika v. ÀNTSZ Dél-dunántúli Regionális Intézete.

There are also to state aid appeals. In Holland Malt, an agricultural case where the aid was found to be incompatible, that holding was upheld on appeal. In Belgium v. Deutsche Post et al. (NL, DE, FR), a "serious difficulties" case, AG Jääskinen argued that the CFI should have held the case to be inadmissible, or, in the alternative, that the case should have been denied as being without merit. Subject here was the financial relationship between the state of Belgium and the Belgian Mail.

P.S. The archive of these emails is here.

Google & Competition Law III

In the end, it is probably better to avoid limiting Competition Law to markets, and to define it by reference to competition instead. I was referred today to the definition of competition given by Stigler (1957), 65 JPE 1, who said that competition exists when two or more parties strive for something that they cannot all obtain. Following this definition, we could say that Competition Law deals with promoting competition in certain terms, i.e. with protecting competition where it exists, and promoting it where it does not.

Based on such an approach, it is obvious that Google competes, that its actions are legitimately within the ambit of the Competition Authorities, that it has a dominant position relative to its competitors, and that manipulating its search results to promote its own subsidiaries would constitute an abuse of dominance, being a form of monopoly leveraging.

The only question is whether this approach does not take us too far away from the text of the Treaty, and its orientation on markets involving bargaining between producers and consumers...

Google & Competition Law II

It occurs to me that there is a very good non-Internet analogy in the free newspapers that are given away at train and bus stations all over Europe every day. (Like Metro.) There, too, we have a product that is given away for free, financed by advertising paid for by someone else. The only difference is that these free newspapers compete with ordinary goods, i.e. with paid-for newspapers. As a result, it is not entirely clear that free newspapers form a distinct product market, as opposed to being part of the overall market for daily newspapers. Looking at the Commission's definition, as taken from the relevant secondary law

"A relevant product market comprises all those products and/or services which are regarded as interchangeable or substitutable by the consumer, by reason of the products' characteristics, their prices and their intended use. (Notice on market definition, par. 7.)"

we would conclude that daily newspapers are a single product market, which makes it a less than perfect analogy for search engines, which do not compete with a paid alternative. Nevertheless, it would be interesting to know if there is any case law regarding this "market", possible from a national competition authority.

Google & Competition Law

Last week, the Commission announced that it was investigating Google for abusive practices relating to its main search engine. (Cf. Commission Press Release and EUObserver) Here's a question: Can they do that? Specifically, my curiosity is piqued by the idea that Google might be acting anti-competitively in the manner in which it gives its services away for free.

The Commission will investigate whether Google has abused a dominant market position in online search by allegedly lowering the ranking of unpaid search results of competing services which are specialised in providing users with specific online content such as price comparisons (so-called vertical search services) and by according preferential placement to the results of its own vertical search services in order to shut out competing services.

As a matter of general principle it is certainly possible to run afoul of the competition laws by giving things away for free. The most famous case is the Microsoft case, which included charges of unlawful tying by including Windows Media Player and Microsoft Internet Explorer for free with every copy of Windows OS. But that case can be distinguished because, unlike Microsoft, Google doesn't give and sell to the same persons. No tying here...

Similarly, there is no possibility of arguing that Google is engaging in predatory pricing, since no one expects it to start charging for its search engine at some future date. While EU competition law does not require a threat of future recoupement for predatory pricing, it is difficult to see how such a case could be made against a company that plans to keep giving away its service for free indefinitely. (Cf. Brooke Group in the US and Tetra Pak II, par. 44 in the EU, for authority on the issue of recoupement.)

Finally, there's the Google AdWords case from March this year, which offers no direct guidance because it dealt with trademark infringement instead of competition law. (It did deal briefly with the non-AdWords part of the Google Website, but only to remark that Google wasn't "using" the trademarks in question there.)

So which "market" is it exactly that Google is supposed to have a dominant position in? It cannot be the AdWords market, since this case has nothing to do with paid advertising. (Well, there is a simultaneous claim that "Google lowered the 'Quality Score' for sponsored links of competing vertical search services", where "the Quality Score is one of the factors that determine the price paid to Google by advertisers", but that is not the part that I'm interested in now.) So it has to be the market for search engines, meaning that we have to consider whether a market for free services is a market in the meaning of art. 102 TFEU.

Looking at the article itself, it is clear that only services provided for consideration were contemplated when it was written, given that it refers to "trade between Member States", and that three of the four examples given contemplate consideration as well. (Example (a) does so literally, (c) speaks of "transactions" and "trading parties", and (d) speaks of "contracts" and "supplementary obligations".) Of course, the fact that only services for consideration were contemplated does not mean that the article only applies to that category of services...

The Commission's notice on market definition also doesn't explicitly rule out applying competition law in a not-for-consideration context, but again that does seem to be the underlying assumption.

Looking at the case-law, we find quite a bit of language on the distinction between an "undertaking" and a body that carries out a government duty. (Cf. Albany, par. 77-79, for example.) The fact that the ECJ defines that concept by reference to the concept of "economic activity" does not seem to be very helpful, given that it is unquestionably true that Google is an undertaking within the meaning of art. 102 TFEU. Regardless of whether its activities on the "market" for search enginges is "economic", Google's reasons for engaging in those activities certainly is "economic", in that the search engine allows it to make money on the market for advertising. In any event, in Case C-244/94 Fédération Française des Sociétés d'Assurance and Others v. Ministère de l'Agriculture et de la Pêche, the ECJ wrote:

21 Finally, the mere fact that the CCMSA is a non-profit-making body does not deprive the activity which it carries on of its economic character, since, having regard to the features referred to in paragraph 17, that activity may give rise to conduct which the competition rules are intended to penalize.

This is probably the key factor: the "conduct which the competition rules are intended to penalize." If Google really does manipulate its search results to promote its own subsidiaries, the mere fact that the only market on which dominance might exist is a market where the service is given away for free will probably not deter the European Commission or the ECJ. After all, such behaviour would be cheating, and you can't let big companies get away with cheating...