Lancer de Nains

Since I don't have anything else to write about (there's not much going on in the world, even in Luxembourg they're only doing a few boring cases, like this balloon flight case, which for some reason was considered worthy of the Grand Chamber), I thought I'd take a moment to fix a shortcoming of my post on the Conseil Constitutionnel's decision on the burqa ban last year. One of the precedents they relied on to find that the burqa ban was in compliance with the French constitution (though not necessarily with the ECHR, which is a question that was not before them), was the dwarf tossing case of the Conseil d'État from 1995.

In real-world terms, it suffices to quote wikipedia in order to establish the epic awesomeness of the concept of tossing dwarves:

Dwarf tossing is a bar attraction in which dwarfs wearing special padded clothing or Velcro costumes are thrown onto mattresses or at Velcro-coated walls. Participants compete to throw the dwarf the farthest.

For more details see this blog post, or skip straight to this Youtube video.

It is obvious how all of this can lead to headaches for the participants (faulty landings, too much beer, etc). But it has been causing problems for lawyers as well, at least for those lawyers looking to ban the practice. After all, there is such a thing as freedom of contract, even if it isn't always easy to find an explicit legal basis for it.

US Constitution, Amendment XIV:
nor shall any State deprive any person of life, liberty, or property, without due process of law (cf. Lochner, of course)

EU Charter of Fundamental Rights, article 15(1):
Everyone has the right to engage in work and to pursue a freely chosen or accepted occupation.

Déclaration des Droits de l'Homme et du citoyen de 1789, art. 4:
La liberté consiste à pouvoir faire tout ce qui ne nuit pas à autrui.

Art. 5:
La Loi n'a le droit de défendre que les actions nuisibles à la Société. Tout ce qui n'est pas défendu par la Loi ne peut être empêché, et nul ne peut être contraint à faire ce qu'elle n'ordonne pas.

Preamble of the Constitution of 1946, art. 5:
Chacun a le devoir de travailler et le droit d'obtenir un emploi.

German Basic Law, art. 2(1):
Jeder hat das Recht auf die freie Entfaltung seiner Persönlichkeit, soweit er nicht die Rechte anderer verletzt und nicht gegen die verfassungsmäßige Ordnung oder das Sittengesetz verstößt.

Art. 12(1):
Alle Deutschen haben das Recht, Beruf, Arbeitsplatz und Ausbildungsstätte frei zu wählen. Die Berufsausübung kann durch Gesetz oder auf Grund eines Gesetzes geregelt werden.

Obviously, all of these provisions allow for certain contracts and certain kinds of employment to be forbidden. Even in the most libertarian society, some contracts are forbidden. However, these are usually contracts that do some kind of clearly discernible harm to third parties, such as the contract to assault a third which was the subject of my (also) beloved Allen v. Rescous (1676). This is obviously the situation contemplated by art. 4 of the Declaration of 1789. Art. 2(1) of the German basic law, on the other hand, contemplates limitations based on the Sittengesetz as well, which is potetially much wider. In general, though, it is safe to say that the idea of forbidding a certain practice because people think it is yuckie makes most jurists distinctly uneasy.

In the US, we see this debate in the two main cases on discriminatory laws against gays: Romer v. Evans (1996) and Lawrence v. Texas (2003). The Jackpot phrase is in the former:

[The] sheer breadth [of the law in question] is so discontinuous with the reasons offered for it that the amendment seems inexplicable by anything but animus toward the class it affects; it lacks a rational relationship to legitimate state interests. (per Kennedy J, for the majority)

As Justice Scalia notes in his dissent, this seems to suggest that:

Coloradans have been guilty of “animus” or “animosity” toward homosexuality, as though that has been established as un-American.

Even though the later case of Lawrence wasn't so straightfoward in its rejection of anti-gay "animus", lower courts have generally required some rational basis beyond moral disapproval for anti-gay laws to be upheld. (Eg. the best US ruling on same-sex marriage to date, the Iowa Supreme Court case of Varnum v. Brien.) Mere animus is not a legitimate state interest.

So where does that leave dwarf tossing? Well, the facts are that this practice occurs with the full consent of all involved, including the dwarves, and that there seems to be no viable argument that it hurts any third party. As far as I am concerned, that should settle the matter; dwarf tossing should be legal. And yet, in a number of jurisdictions, attempts were made to ban it. In France, the matter went all the way up to the highest administrative court, the Conseil d'État, which overruled the lower court and held that the Mayor of Morsang-sur-Orge had not acted ultra vires in banning the practice of dwarf tossing within his commune, since it was within the ambit of art. L131-2 of the Code des Communes:

La police municipale a pour objet d'assurer le bon ordre, la sûreté, la sécurité et la salubrité publique.

The argument was that these dwarf tossing events were a violation of the public order, because apparently that notion includes respect for human dignity as well as the more common goals of public safety, etc. The analyse, provided by the Conseil d'État to help readers make sense of its typically terse judgement, refers to a number of precedents that support this wider interpretation of bon ordre, dealing with such issues as prostitution, bathing attire on the beach and the inscriptions on grave stones, all of which are indeed traditional areas of regulatory concern. In so deciding the Conseil d'État emphasises that human dignity is in fact a value of constitutional concern, citing art. 3 of the ECHR as well as a precedent of the Conseil Constitutionnel to that effect. (This may be so, but it surely doesn't follow that just because the constitution forbids the government from doing something, it also authorises the government to forbid private citizens. There are many things that citizens are allowed to do but governments may not.)

The final paragraph of the Conseil's "analyse" gets to the heart of the matter. It states that under this precedent public order is more than something that is "material and external". However,

Il n’a toutefois pas consacré la moralité publique comme une composante de la notion d’ordre public, se gardant ainsi d’interpréter trop largement les pouvoirs de police de l’autorité administrative.

Concern for human dignity may authorise government intervention, but public morality does not. Whatever that means...

Vreeman rapport on the Dutch Postal Market

For some reason that entirely mystifies me, the State Secretary for Economic Affairs, dr. Henk Bleker (CDA), asked a Labour politician to examine the problems in the postal market. To the surprise of absolutely no one, the answer was that the market needed more regulation.

Dr. Ruud Vreeman is a former chairman of the Labour party, former Labour MP (when he was the only Labour MP to vote against the privatisation of the health insurance system) and former mayor of several cities, including Tilburg. Even his dissertation was about the work of labour unions ("Vakbondswerk en de kwaliteit van de arbeid", "Labour unions and the quality of labour"), so it is not surprising at all that his analysis of the postal market very much supports their position in their conflict with the postal companies.

None of this introductory informations should be taken - of course - as some kind of ad hominem attack on the rapport in question. After all, there is plenty wrong with it without the need to resort to cheap retorical tricks.

A little history: The Dutch government was relatively early in privatising the state postal and telecom company PTT, making it a private enterprise as of 1 January 1989, and floating 30% and 25% of the shares in 1994 and 1995, respectively. This allowed the newly renamed KPN to acquire the Australian express company TNT in 1996, and to split itself in two in 1998. The telecom company is still called KPN, while the postal company became known as TPG, and since 2005 as TNT. (Cf. the company's own history page.) As a result, the Dutch postal market, despite its relatively modest size (5,3 bn pieces of adressed mail in 2008), has an enormous incumbent. (The 2009 Annual Report shows a revenue of € 10,4 bn for a net profit of € 248 million. Market leader DHL/Deutsche Post had € 46,2 in revenue and € 693 in net profit.)

But none of this financial fire power helped TNT to hold on to the Dutch postal market altogether, once it was opened up step-by-step in 2000, 2006 and 2009. (Directive 2008/6 requires full liberalisation as of 1 January this year.) While it is expected that TNT will continue to be the Altmark-style universal service provider for the indefinite future (cf. art. 22 of the Directive), it has already lost 10-20% of the addressed mail market, 20-25% of the Direct Mail market and 40-45% of the market for magazine deliveries.

None of this would appear to be a bad thing, but leave it to the Dutch political system to find the rain cloud next to the silver lining.

The problem is with the mail carriers. Not unexpectedly the new entrants in the mail market have attempted to keep their costs as low as possible. Given that labour represents at least 60% of the costs of mail delivery, that means avoiding as many taxes and social welfare levies as possible. Under Dutch law, the simplest way to do that is to offer the mail carriers a contract of assignment (Title 7 of Book 7 Civil Code) rather than a labour contract (Title 10 of Book 7). That way, all mail carriers become self-employed, uninsured against unemployment, health problems, etc. Cue screams from the labour unions in 3, 2, 1...

Their successful rent-seeking caused the government to demand that all postal companies should offer labour contracts to at least 80% of their mail carriers by 1 October 2012, the details to be worked out by Collective Bargaining Agreement. To encourage everyone to play nice, the Postal Services Act of 2008 and the relevant secondary law said that if no CBA were to be agreed, the postal companies would be requried to give labour contracts to all of the mail carriers. As it happens, a CBA was agreed, and it included a trajectory, fixing the percentages to be achieved at various dates. Tragically, the postal companies failed miserably to achieve even the first of these percentages, because only 3,2% of the people they offered a labour contract to, accepted. As it happens, the mail carriers rather liked the flexibility of a contract of assignment. (Which means, for example, that they're allowed to work for several companies at the same time, that they don't have to deliver the mail themselves, etc.) Because this was somehow the postal companies' fault, the labour unions withdrew from the CBA, meaning that technically the mandatory 100% employment contracts rule is in effect as of 1 January 2011.

Unfortunately, actually enforcing this rule would put all of TNT's competitors out of business. Hence the need for dr. Vreeman's rapport. He now suggests a wonderfully complex and almost certainly illegal cartel system, whereby companies that don't employ a high enough percentage of their mail carriers subsidise those of their competitors who do. All of which is apparently necessary in order to make the postal market "a regular sector where ordinary Dutch conditions of employment and employment relationships are dominant, and where there is a level playing field on the market." (p. 9)

Just a quick question: Apparently, the current situation isn't a level playing field. So who is currently holding the short end of the stick? The multi-billion postal giant TNT or its competitors who pay their mail carriers less?

The key word is actually on page 12, where Vreeman describes the goal of these reforms again: "The government can also contribute to a development towards a decent postal market in other ways." Decent... ("fatsoenlijk") Sadly, the "other ways" he suggests involve likely violations of public tendering law and something called "ex ante competition regulation" ("ex ante mededingingstoezicht"). A quick search indicates that what is meant is the kind of supervision the Opta, the Dutch regulator for post and telecom, already exercises in the telecom market, where companies with a dominant position (i.e. KPN) are given extra orders to play nice (cf. art. 6a.6 Telecommunicatiewet). I highly doubt, though, that dr. Vreeman intends to make TNT share its mailboxes, so what exactly he has in mind is unclear to me. Whatever it is, though, it is unlikely to be a good idea. (O, look, here's a motion from three Labour MPs from 2009 talking about the same thing. It was adopted without vote, so I'm not sure whether the VVD supported it. I can tell from the report of the debate that the SP, Groenlinks, the PVV and the CDA did.)

In the end, all of this is based on a faulty premise. A job as a mail carrier is currently a wonderfully flexible way for a student, a housewife or a senior citizen to make an extra buck. They can do it free of detailed instructions from any boss, for however many bosses they like, have someone else do it if they have a prior engagement, etc. (cf. p. 7 of the Vreeman rapport.) No wonder only 1 in 30 of them elected to have an employment contract when one was offered. Given that all of this is the free choice of everyone involved, why mess with it? What is the public interest? There are certainly no externalities that I can see. Instead, my feelings about this matter are best summed up by these lines from Reservoir Dogs. When Mr. Pink explains that he does not believe in tipping, Mr. White replies:

Waitressing is the number one occupation for female non-college graduates in this country. It's the one job basically any woman can get, and make a living on.

How nice it would be if there were at least one such job in the Netherlands as well...

European Communities v. Région de Bruxelles-Capitale

There are only a few ECJ cases this week, and only one that's even remotely interesting. In European Communities v. Région de Bruxelles-Capitale, AG Cruz Villalón discusses who gets to represent the European Communities before a Member State court in a simple procedure where one of the Institutions is involved in an administrative capacity. Specifically, the case deals with the town planning charge that the Council was asked to pay when it was granted planning permission to carry out the work on the Justus Lipsius building that they were doing when I was there in 2006. (Which meant that for the whole 5 months we had to enter the building through an improvised walkway, instead of through the monumental front entrance that they have now.)

The Council felt that this planning charge was a tax from which it was exempt under the Protocol on Priviliges and Immunities (now Protocol 7), so they litigated. Much ado later, they're arguing before the Belgian Council of State, which now wishes to hear who gets to speak on behalf of the EU/Council.

Art. 282 EC provided the start of an answer:

In each of the Member States, the Community shall enjoy the most extensive legal capacity accorded to legal persons under their laws; it may, in particular, acquire or dispose of movable and immovable property and may be a party to legal proceedings. To this end, the Community shall be represented by the Commission.

However, in practice things aren't actually that simple. As it happens, the Commission is accustomed to let each of the Institutions litigate for itself "in matters relating to their respective operation" (cf. art. 335 TFEU). This practice is now blessed by the AG, in anticipation of art. 335 TFEU which adapts the legal rule to the habits of the institutions:

(...) the Union shall be represented by the Commission. However, the Union shall be represented by each of the institutions, by virtue of their administrative autonomy, in matters relating to their respective operation.

The next problem is whether it matters whether the Commission's decision authorising the Council to represent itself in these proceedings names a specific natural person. Is it mandatory for a natural person to be named? And what are the consequences if subsequently a different person takes over? In this case, the Commission had named the Deputy Secretary-General, De Boissieu, but much of the subsequent litigation had been carried out by the head of the legal service, Piris. The AG argues, quite reasonably, that this is an internal matter of Council administration, that does not concern the Commission or the Belgian authorities. The Council will be represented by whomever it pleases. (par. 52)

Finally, the AG suggests an interesting obiter dictum, an answer to the second question posed even though strictly speaking no answer is necessary. (Since question one was answered in the affirmative.) He argues that it is not for the courts of the Member States to sort out these kinds of delegational issues between the Institutions:

57. (...) any review of an authority granted by the Commission to the Council comes within the exclusive jurisdiction of the Community courts, for any involvement in the matter on the part of national courts would constitute an unlawful encroachment on the autonomy of the European Union institutions.

58. For which reason, even if an authority is manifestly invalid, a national court cannot do other than refer the appropriate question for a preliminary ruling under Article 267 TFEU.

Google AdWords in the Netherlands

The first Dutch AdWords case is in, and it is curiously backwards compared to the ECJ's approach, because it views the problem almost entirely from a comparative advertising point of view. In Google France, the ECJ said:

70 It must be borne in mind, in that regard, that the Court has already held that the use by an advertiser, in a comparative advertisement, of a sign identical with, or similar to, the mark of a competitor for the purposes of identifying the goods and services offered by the latter and to compare its own goods or services therewith, is use ‘in relation to goods or services’ for the purposes of Article 5(1) of Directive 89/104 (see O2 Holdings and O2 (UK), paragraphs 35, 36 and 42, and L’Oréal and Others, paragraphs 52 and 53).

71 Without its being necessary to examine whether or not advertising on the internet on the basis of keywords which are identical with competitors’ trade marks constitutes a form of comparative advertising, it is clear in any event that, as has been held in the case-law cited in the preceding paragraph, the use made by the advertiser of a sign identical with the trade mark of a competitor in order that internet users become aware not only of the goods or services offered by that competitor but also of those of the advertiser constitutes a use in relation to the goods or services of that advertiser.

In the Dutch expedited procedure ruling of Tempur Benelux et al. v. The Energy+ Company of 20 December, however, the Court in the Hague starts by observing that this is certainly a case of comparative advertising under art. 6:194a of the Civil Code. (par. 4.3) It then cites some ECJ comparative advertising case law like O2, Toshiba and Siemens to shut down the plaintiff's argument that the use of its trade mark was unlawful per se (par. 4.4), before examining the details of defendant's use of the trade mark in light of this case law. Only there does the Judge cite the Google France case: to support the idea of confusion regarding origin as undermining the defendant's case for legitimate comparative advertising. In making this argument, the judgement relies more on the L'Oréal precedent that was also cited by the ECJ in Google France (cf. above) than on Google France itself.

Of course, much of the rest of the Tempur case is legitimately about comparative advertising, given that the plaintiff also objected to the manner in which the defendant compared their respective products on its website, but I would have thought that an AdWords case should be dealt with under the specific precedent that we have at our disposal for that situation, rather than under the general comparative advertising framework, even if the latter does arguably apply.

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...