This Week in Luxembourg

In the area of Access to Documents law, the Grand Chamber disagreed this week with both AG Kokott and the Court of First Instance. In Technische Glaswerke Ilmenau it held that there is "a general presumption that disclosure of documents in the administrative file (...) undermines protection of the objectives of investigation activities" because it would undermine the ability and willingness of various parties involved to "express themselves freely". The applicant at first instance was a recipient of unlawful state aid.

Also in Access to Documents, the Grand Chamber overruled the CFI's decision to give the applicant, Bavarian Lager, access to the unredacted minutes of a Commission meeting, where the Commission was only prepared to provide the document with the names of certain individuals removed. (Again disagreeing with the AG.) The main problem here is the resolution of a clash between the Access to Documents Regulation and the Data Protection Reglation 45/2001. The ECJ notes that art. 4(1)(b) of the former explicitly refers to the latter, and deduces that privacy must win here.

Continuing the Commission's winning streak to an unprecedented 3/3, it also upheld the Commission's appeal inCommission v. Alrosa (CFI ruling here, AG Kokott's opinion favouring the appellant here), a merger case from the diamonds market, restoring the Commission's original decision. The CFI erred by applying the proportionality analysis of the Commission's refusal to accept Alrosa's commitments (art. 9 of Regulation 1/2003) with the wrong standard: the Commission's decision must be upheld unless it is manifestly erroneous. (par. 63-69).

In E and F, finally, the Grand Chamber considers yet another terrorism case, concluding that the organisation DHKP-C's inclusion on the terrorism list was unlawful prior to 29 June 2007, for failure to give reasons, meaning that such inclusion "can form no part of the basis for a criminal conviction linked to an alleged infringement of Regulation 2580/2001" (par. 62). The ECJ also considers whether certain financial transactions by and for the organisation fall within the ambit of the Regulation, finding that they do.

ECJ judgements:

In Sbarigia, the First Chamber declared the prejudicial question inadmissible on the grounds that the articles of the Treaty the Italian court was asking about were manifestly inapplicable to the case before it. AG Jääskinen had observed (par. 29) that the Court had used four types of solutions when it was presented with a purely internal matter. He preferred the kinder approach of simply replying that EU law did not forbid the national regulation (door no. 2, par. 31). The other two solutions are to leave it to the national court to decide whether the case is purely internal (par. 30) and to ignore the problem (par. 33).

Following the opinion of AG Mazák, the Second Chamber ruled that the General Court erred in law when it decided that the onus was on the applicant/appellant, Knauf Gips, to make clear to the Commission that it was not responsible for/answerable for the entire Knauf Group, or be estopped from making this argument before the Community Courts. (par. 87-92). In the words of Judge Arabadjiev, "such a restriction is contrary to the fundamental principles of the rule of law and of respect for the rights of the defence" (par. 91). Knauf Gips v. Commission.

The Fourth Chamber ruled in the Polish number portability case, holding that the telecoms regulator has to take into account the actual costs incurred by the operator when setting the charge for portability. Cf. art. 30(2) of Directive 2002/22. However, the regulator is allowed to set the charge for number portability below costs "when a charge calculated only on the basis of those costs is liable to dissuade users from making use of the portability facility".Polska Telefonia Cyfrowa.

General Court:

The Sixth Chamber (extended) of the General Court tackled a difficult competition case in the area of pharmaceuticals and patents. The Commission had a problem with the way AstraZeneca handled the possibility of competition from generic products and parallel imports in Scandinavia. (Cf. Commission Decision.) Most of the Commission's Decision has now been upheld, but not all of it. The fines have been reduced from € 46 million to € € 40,25 million and from € 14 million to € 12,25 million. AstraZeneca v. Commission.

Italy lost an Altmark (= compensation for universal service obligations, etc.) case before the General Court. The preferential electricity rates it gave to steel manufacturer Terni were not justified by the nationalisation, in 1962, of Terni's hydoelectric plant. Compensation for such a "one-off" expropriation of assets has to be similarly "one-off". Italy v. Commission and ThyssenKrupp v. Commission.

In what I think is the first ruling on the bank bailouts, the Fifth Chamber upheld the Commission's finding that an Italian system of special "tax incentives" for restructured banks constituted unlawful state aid. (Cf. Commission Decision 2008/711.) BNP Paribas and BNL v. Commission.

The Fifth Chamber also upheld the Commission's Decision that there were no serious difficulties with the French Government's Decision to add € 150 million to the capital of France Télévisions. Joined Cases M6 v. Commission and TF1 v. Commission.

Opinions:

AG Kokott concluded that Framework Decision 2001/220/JHA on the standing of victims in criminal proceedings covered only victims who were natural persons, i.e. not corporations. Eredics (DE, FR)

Also of possible interest is the WTO DSB's finding in the Airbus state aid case, which is here. They found that the aid given to Airbus was mostly against WTO rules.

Also, the European Commission has handed down a second massive cartel fine in as many weeks, following last weeks bathroom equipment manufacturers cartel. This week, the culprits are 17 steel manufacturers, who are fined for € 518 million. (Press Release) More than half of that sum is for ArcelorMittal, because this was their third offense, while the German company DWK Saarstahl gets away with no fine at all because it was the one that snitched. The total for Almunia now stands at about € 1,5 billion.

Julien Frisch

Julien Frisch, the internet's second-best EU blogger (after Jean Quatremer, at least on most issues that matter), is saying goodbye:

Dear readers,…

... this is the last real post of this blog, and the day after tomorrow at midnight, quite exactly two years after he came into existence, the blogger "Julien Frisch" will cease to exist.

(...)

This Week in Luxembourg

The Grand Chamber ruled in the French "question prioritaire de constitutionallité" case, i.e. the new French procedure (art. 61-1 Constitution and Title II Chapter IIbis of Ordonnance 58-1067) that allows French courts to ask a prejudicial question to the Conseil constitutionnel. The ECJ rules that such a procedure is not OK if it forces French courts to ask the domestic prejudicial question first. The fact that the French procedure comes with a strict deadline does not change that. (par. 56) Melki (FR). Cf. AdjudicatingEurope and last week's Elchinov opinion.

ECJ judgements:

The third chamber found that Italy's system of minimum prices for tobacco products was in violation of art. 9(1) ofDirective 95/59 on taxes other than turnover taxes which affect the consumption of manufactured tobacco. Commission v. Italy (FR)

General Court:

In Imperial Chemical Industries, the General Court examined the Commission's new competition decision, following the annulment of its earlier decision. This litigation started with a Commission Decision dated 19 December 1990, which was annulled by the CFI in case T-37/91 (29 June 1995) based on a procedural defect, a judgement that was upheld on appeal in case C-286/95 P (6 April 2000). The Commission then took a new decision (13 December 2000), which was anulled today as to the year 1983, and upheld for the remainder, meaning that the fine is now € 8 million instead of € 10 million. To be continued...

Opinions:

AG Cruz Villalón had two Belgian mobile telecom cases, where there were problems regarding the way the companies were compensated for their universal service obligation under Directive 2002/22. In Base et al. (NL, FR, DE) he concluded that the Belgians were not allowed to let the former monopolist do all the calculations regarding the "unfair burden" of art. 13 of the Directive, whereas in Commisison v. Belgium (NL, FR, DE) he argues that the rest of the Commission's arguments are not well founded.

AG Mengozzi concluded that the UK was wrong to complain about Council Decision 2008/633/JHA. It was - he argued - legitimately a Schengen matter rather than a visa matter, meaning that the UK could lawfully be excluded from direct access to the Visa Information System. UK v. Council.

Also of possible interest is the fine that the Commission imposed on 17 bathroom equipment manufacturers, the biggest since Commissioner Almunia took over from mrs. Kroes. The fine would have been higher, but here, too, the poor economy had its influence. Several companies had their fines reduced to avoid bankrupting them. Cf. BBC.

This Week in Luxembourg

The Grand Chamber upheld Commissioner Reading's famous roaminig charges regulation. Following AG Maduro, they concluded that there was no problem regarding legal basis, proportionality or subsidiarity. R. (Vodafone et al.) v. Secretary of State for Business, Enterprise and Regulatory Reform. (Cf. EU Law Blog)

It also considered the obligations of the Member States to reimburse, under their national health insurance systems, medical costs incurred in another Member State when they were unforeseen but not covered by art. 22 of Regulation 1408/71. The Court concluded that the Spanish system generally denying coverage for such claims was in compliance with the free movement of services. Commission v. Spain.

On Thursday, the Grand Chamber followed AG Sharpston and ruled that a Palestinian refugee is still eligible for refugee status even though there is UN refugee assistance in the country of origin, unless he has actually availed himself of such assistance. (Cf. art. 12 of Directive 2004/83). Bolbol.

ECJ judgements:

Lafarge lost its appeal in the plasterboard cartel litigation.

In Terre wallonne the 4^th chamber found that the action programmes Member States have to create under art. 5(1) ofDirective 91/676 concerning the protection of waters against pollution caused by nitrates from agricultural sources is in principle a plan or programme covered by Article 3(2)(a) of Directive 2001/42 on the assessment of the effects of certain plans and programmes on the environment, meaning that an environmental assessment will have to be carried out for a programme that is meant to improve the environment.

General Court:

The General Court ruled against the Commission in an access to documents case, where a party to an abuse of market power case wanted access to the case file so as to better pursue its appeal before the ECJ. (Cf. the OJ announcementhere, which, incidentally, is from October 2004.) In its decision, the Commission had essentially thrown the book at the plaintiff's request, but now all its defenses were rejected, except part if its "legal advice" claim. Éditions Odile Jacob (FR)

Opinions:

The replacement of the late AG Ruiz-Jarabo Colomer, AG Cruz Villalón, used his third opinion to tell the ECJ that one of its long-standing lines of cases, the Rheinmühlen and Cartesio rule that governs the situation when a national court gets a case back from its national supreme court in a way that it thinks violates EU law. In those circumstances, the ECJ’s case law says that the national court must still ask a prejudicial question. The AG now argues that that rule should be reconsidered. AdjudicatingEurope approve. The AG also argues that the Bulgarian health care law at issue is lawful. Elchinov.

AG Bot discussed the question of what to do with a Greek citizen who had the greatest possible residence rights in Germany (grew up there, worked there, held a residence permit for unlimited duration), who had comitted a number of felonies. Is Germany allowed, under art. 28(3) of Directive 2004/38, to expel him? The AG argues for a broad reading of "imperative grounds of public security", i.e. as possibly including the case of the defendant. Baden-Württemberg v. Tsakouridis.

AG Mengozzi wrote about Belgium’s obligations vis-à-vis the European Schools under the Establishment Agreement. He concludes that the Court has no jurisdiction over obligations allegedly arising out of that Agreement, except for cases concerning the period after 1 October 2002, when the 1994 Convention defining the Statute of the European Schools entered into force. He also concludes that the Commission has no case under art. 10 EC. Commission v. Belgium.

AG Mengozzi also concluded that a Hungarian law that forbids the selling of contact lenses over the internet is an unlawful restriction of the free movement of goods since the stated goals of the Hungarian law could have been achieved by less restrictive means. (The law did not distinguish between hard and soft lenses, nor between those lenses and lenses that are purely decorative.) The AG declined to apply Keck. (par. 62-69) Ker-Optika (NL, DE, FR)

AG Trstenjak wrote an opinion about art. 3(1)(b) of Regulation 1610/96 concerning the creation of a supplementary protection certificate for plant protection products, which is much too technical for me to be able to say anything sensible about it. All I can say is that it has something to do with biopatents, and how their European recognition depends on certain national permits. (Cf. Directive 91/414) The AG concludes against the would-be rights holder. Rechtsanwaltssozietät Lovells v. Bayer CropScience (DE, FR, IT)

AG Sharpston considered the privacy rights of the recipients of aid under the European Agricultural Guarantee Fund. She concludes that some of the transparency provisions go too far and infringe on the recipients’ privacy rights. Volker und Markus Schecke

This Week in Luxembourg

The Grand Chamber ruled in the Spanish pharmacies case, holding that the Spanish system of requiring them to be at least 250 m. away from each other and requiring them to service at least 2800 inhabitants each is generally acceptable, as long as adequate pharmaceutical services are guaranteed. The professional qualifications aspect of the licensing system, however, is not OK, since it discriminates against pharmacists who have not previously worked in Asturias.Blanco Pérez. (Cf. the opinion of AG Maduro, who was much more critical, and last years cases regarding Germanyand Italy.)

ECJ judgements:

The 2nd chamber ruled in the gloriously creative REIFEN case: Knowing how trademarks are turned into domain names under Council Regulation 733/2002, establishing the .eu top level domain, and under art. 11 of Commission Regulation 874/2004, the claimant got the Swedish authorities to accept &R&E&I&F&E&N& as a trademark, which he then used as a "prior right" in order to register www.reifen.eu. The ECJ now fixes the problem in a way that the AG had not considered, by extending the reasons for finding bad faith beyond the grounds listed in art. 21(3) of Regulation 874/2004. Internetportal und Marketing.

In yet another installment of the betting industry's efforts to gain access to new markets via the ECJ, the second chamber has now upheld the Dutch regulatory system. Ladbrokes and Sporting Exchange. Particularly in Ladbrokes, both the questions (from the Hoge Raad) and the answers are highly informative. Cf. the opinion of AG Bot. In an earlier case, the ECJ already upheld the regulatory system for gambling in Portugal (GC), while being farily critical about Italyin a 2003 judgement. Swedish, German and Austrian cases are still pending.

In consumer protection law, specifically Directive 93/13 on unfair terms in consumer contracts, the first chamber ruled that the flexibility clause of art. 8 of the Directive, which states that the MS may adopt a higher level of consumer protection, also extends to art. 4(2) which rules out applying the directive to "the definition of the main subject matter of the contract [or] to the adequacy of the price and remuneration", "in so far as these terms are in plain intelligible language". So the Spanish law that allows even such provisions to be found unfair is compatible with the Directive. Caja de Ahorros y Monte de Piedad de Madrid.

Opinions:

AG Mengozzi had a case concerning refugees who had past ties to Kurdish separatist movements listed on the terrorism lists. How should art. 12(2) of Directive 2004/83 be applied in these circumstances? Do acts of terrorism qualify as "serious non-political crimes" or "acts contrary to the purposes and principles of the United Nations"? The AG argues that generally they do, that it is not necessary that the applicant continues to be dangerous, that the measure of excluding refugee status has to be proportionate and that Germany is entitled to offer them refugee status anyway. Germany v. B and D. (NL, DE, FR)

AG Trstenjak discusses a Greek law that imposes certain fines in the radio and television sectors jointly and severally on the company holding the license and on its shareholders (or at least those who control more than 2,5% of the shares). She finds that such a system is compatible with the relevant company law directive, Directive 68/151, but not with the freedom of establishment and the free movement of capital. While the latter makes sense, I won't claim to understand her argument as to the former. In any event, I think the Greek law is highly problematic from a free speech point of view. Idrima Tipou A.E.

In Commission v. France (NL, FR, DE), AG Mengozzi considers certain French rules regarding the ownership of biomechical laboratories, most importantly the rule that non-biologists may own no more than 25% of the shares in aSELARL active in this area. Drawing on case law regarding pharmacies (see above), he argues that this rule is justified under the law on the freedom of establishment. The rule that forbids an individual from owning shares in more than two such companies is not compatible with the Treaty, however.

Earlier:

On May 21, the enlarged third chamber of the General Court ruled in the France Télécom state aid case. In its decision 2006/621, the Commission had decided that "the shareholder loan granted by France to France Télécom in December 2002 in the form of a EUR 9 billion credit line constitutes state aid incompatible with the common market", though the aid did not have to be paid back. Both France, France Télécom and FT's competitors appealed, and the General Court now ruled that this loan was not a "transfer of resources". France v. Commission (FR)

Also of possible interest is this lengthy blog post on AdjudicatingEurope about the recent General Court standardisation/competition law case EMC Development.

This Week in Luxembourg

ECJ judgements:

In Scott and Kimberly Clark, the 3rd chamber discussed the interplay between a Community law obligation to recover unlawful state aid and the national administrative law proceedings to make this happen. In this case, there was a potential problem caused by a procedural flaw in the assessments issued.

In a Brussels I case regarding insurance, the 4th chamber ruled that when the defendant makes an appearance the court has to rule that it has jurisdiction even when the rules of art. 8-14 of the Regulation (which deal specifically with insurance contracts) have not been complied with. In those circumstances, art. 24 on tacit prorogation still applies.Bilas.

In Zwijnenburg, the 1st chamber ruled that the Dutch tax on the transfer of real property is not the kind of tax covered by art. 11(1)(a) of Directive 90/434, which allows some of the benefits of that directive (which deals with taxes on mergers & acquisitions) to be suspended when someone uses them for tax evasion.

In a banana/Cartagena Agreement/GATT MFN-clause extravaganza, the 3rd chamber followed the logic of Van Parysand declined to recognise an individual cause of action for those wronged by such international trade law. Ioannis Katsivardas & Nikolaos Tsitsikas.

General Court:

The 8th chamber of the General Court ruled in a stack of competition law cases regarding the copper tubing cartel. InOutokumpu and Luvata, the action for annulment was dismissed. In Boliden AG, as well as in Wieland-Werke and KME Germany, the Commission's counterclaim for an increase in the fine was also rejected. Rather than increase the fines in those cases, the Court elected to reduce them in IMI and in Chalkor, for reasons of the relative seriousness of the infringements of the various companies.

The 8th chamber also upheld the restrictive measures imposed against Pye Phyo Tay Za, an individual associated with the regime in Burma. No unusual arguments were made, except perhaps the applicant's explicit argument that an asset freeze amounted to a criminal sanction. (par. 173-189) Tay Za v. Council.

The 5th chamber rejected an attempt by several Member States to have a Commission "Interpretative Communication" annulled. The manner in which the admissibility of this claim is analysed is curiously (?) detailed, instead of accepting at face value the statement in the opening paragraph that "this communication does not create any new rules". Instead, the Court examined every claim made by the applicants, to see if a "new rule" was adopted. This puts the admissibility analysis dangerously close to the analysis of the merits of the claim. Germany v. Commission.

Opinions:

AG Trstenjak considered two Brussels I cases in the area of consumer protection law: Which country has jurisdiction over a contract agreed over the internet? The AG argues that the mere fact that the website is accessible in the consumer's home country is not enough to give that country's courts jurisdiction over the case. Instead, it depends on a variety of factors that are for the national judge to consider, which may or may not offer sufficient basis for the conclusion that the professional party "direct[ed] his activities to that Member State" (art. 15(1)(c) Regulation). Pammer & Hotel Alpenhof (NL, DE, FR)

Also in consumer protection law, AG Mazák opined on Directive 1999/44: What happens if the product sold to the consumer is not in conformity with the contract through no fault of the seller? Both cases concerned claims by consumers for the costs of removing the defective product where those costs were alleged by the seller to be disproportionate in the sense of art. 3(3) of the Directive. The question is "Disproportionate compared to what?" And what about the fact that in both cases the product was installed by the consumer? The AG's answers generally favour the seller. Gebr Weber and Putz.

Finally, AG Mazák was blessed with a case regarding the Services Directive. Art. 24(1) seems simple enough: "Member States shall remove all total prohibitions on commercial communications by the regulated professions." The Conseil d'État now wants to know whether this means France cannot ban a specific mode of communication for the regulated professions. (In this case: canvassing.) The AG argues that such a ban is still permitted, as long as it is "non-discriminatory, justified by an overriding reason relating to the public interest and proportionate." (art. 24(2) Directive).Société fiduciaire nationale d’expertise comptable

Last Week:

The General Court ruled in an antitrust case about standards setting in the cement industry, an industry not unfamiliar with competition law infringements. In this case, however, the Commission had rejected the applicant's claim that the CEN/TC 51 standard for Portland cement, and the manner in which it had been agreed upon, infringed art. 81 EC. The General Court now holds that, since the procedure was non-discriminator, transparent and open, and since the standard is not even de facto binding, the Commission's decision was correct. EMC Development AB.

AG Trstenjak wrote about the concept of "fair compensation" in the private use exception of the copyright directive, art. 5(2)(b) of Directive 2001/29. After some general discussion of how all aspects of the system used by the MS have to be "fair", and how the system is one of Community Law, but with significant freedom for the MS (i.e. all of it fairly unhelpful), the AG concludes that the Spanish levy system on all storage media is not lawful, "because it cannot be assumed that [they] will [necessarily] be used for private copying". (Cf. the second half of art. 5(2)(b)) SGAE. (Cf. hereand here, in Dutch)

AG Trstenjak also wrote about the right of permanent residence under art. 16 of Directive 2004/38, which a Union citizen obtains after five years of continuous residence in another MS. The case before the UK judge concerned someone who had spent five years in the UK, but prior to the transposition deadline of the directive. Unsuprisingly, the AG argues for the expansive reading of the directive, giving it retroactive force. Only a continuous absence of more than two years can cause the right of permanent residence, once obtained, to vanish again. Cf. art. 16(4) of the Directive. Lassal (NL, FR, DE)

In other news, the Commission handed down € 331 million worth of cartel fines in the computer chip industry (BBC) and France, the Conseil Constitutionnel seems to have disentangled a potentially nasty problem of multilevel governance regarding French constitutional prejudicial questions vs. the European kind. (Adjudicating Europe part 1 and part 2. The decision of the Council is here.)