tag:blogger.com,1999:blog-224982202024-03-23T18:49:07.857+01:00MartinnedA blog about (EU) law, economics, and everything in between.martinnedhttp://www.blogger.com/profile/15282998467090268537noreply@blogger.comBlogger398125tag:blogger.com,1999:blog-22498220.post-58668256892374550642014-05-13T20:09:00.001+02:002016-07-15T09:16:01.021+02:00Salomons II<div class="MsoNormal">
<a href="https://martinned.blogspot.com/2013/07/salomons.html">Last
July</a>, I got quite miffed about the Competition Appeals Tribunal’s judgement
in <a href="http://www.catribunal.org.uk/files/1204_Akzo_Nobel_Judgment_CAT_13_210613.pdf">Akzo
Nobel v. Competition Commission</a>. I argued that the CAT had bent the rule of
<a href="http://en.wikipedia.org/wiki/Salomon_v_A_Salomon_%26_Co_Ltd">Salomon
v. Salomon</a>, which says that shareholders and the company they own are
legally treated as distinct entities, past the point of breaking. For this
reason, I recommended an appeal.<o:p></o:p></div>
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Apparently, so did Akzo’s solicitors, because in April the
Court of Appeal ruled in its version of <a href="http://www.catribunal.org.uk/files/1204_Akzo_Nobel_CofA_Judgment_140414.pdf">Akzo
Nobel v. Competition Commission</a>, deciding unanimously to dismiss the
appeal.<o:p></o:p></div>
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While the Briggs, LJ.’s judgement for the Court is clearly
better than the CAT’s, I’m not quite sure that I’m entirely convinced. While he
stays light years away from the Single Economic Unit case law invoked by the
CAT, when you get right down to it the result isn't so easily distinguished.<o:p></o:p></div>
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The logic of the Court of Appeal is quite straightforward:</div>
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<o:p></o:p><br /></div>
<div class="MsoListParagraphCxSpFirst" style="text-indent: -18pt;">
</div>
<ol>
<li><span style="text-indent: -18pt;">The legally relevant criterion, from </span><a href="http://www.legislation.gov.uk/ukpga/2002/40/section/86" style="text-indent: -18pt;">s. 86(1)(c)
Enterprise Act 2002</a><span style="text-indent: -18pt;"> is that Akzo Nobel must be “a person carrying on
business in the United Kingdom”.</span></li>
<li><span style="text-indent: -18pt;">Firstly, it is important to note that that
doesn’t have to be the same business as the business that is seeking to merge
or acquire. All that is needed in order to establish jurisdiction is that Akzo
Nobel carries on any kind of business in the UK.</span></li>
<li><span style="text-indent: -18pt;">The Akzo Nobel group “may fairly be described as
carrying on business in the Netherlands and in the UK.” (par. 33)</span></li>
<li><span style="text-indent: -18pt;">The only question is </span><b style="text-indent: -18pt;">by whom</b><span style="text-indent: -18pt;">, i.e. by which legal person, this business is carried on.</span></li>
<li><span style="text-indent: -18pt;">Akzo Nobel NV, the Dutch parent company, is held
to be managing the business “both strategically and operationally” (par. 36)</span></li>
<li><span style="text-indent: -18pt;">For this reason, Akzo Nobel NV is carrying on
business in the UK, meaning that the Competition Commission is entitled to make
an enforcement order against it.</span></li>
</ol>
In order to distinguish Salomon v. Salomon, Briggs, LJ. makes
a distinction between a parent who does nothing more than “to exercise its
rights as shareholder in the traditional fashion, leaving the entire management
of the business to the subsidiary’s directors” (par. 37) and “the exercise of
the strategic and operational management and control of a manufacturing and
sales business” (par. 34).<br />
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<o:p></o:p><br /></div>
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Even on its face, this strikes a huge blow against the rule
of Salomon v. Salomon, given that something akin to Akzo’s management structure
is used by “most modern corporate groups” (par. 12). Are we really to believe
that the parents of all those groups have a sufficient presence in the UK for
the Competition Commission to go after them? <o:p></o:p></div>
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While the judge contrasts his test with the presence test
advocated by Akzo, which Parliament could have but did not enact (par. 30),
where he seems to have landed is that almost any international group that
trades in the UK is “carrying on business” there, which is also not what
Parliament enacted. Parliament could have easily extended the jurisdiction of
the CC to all companies that trade in the UK, i.e. that buy or sell goods or
services there, but it did not. To do so would have made the CC’s jurisdiction
to make enforcement orders essentially equivalent to its jurisdiction to
investigate. That would have been convenient for the CC, but it is not the law.
(As the Judge admitted in par. 25.) <o:p></o:p></div>
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A potential tie-breaker is the purpose of s. 86(1), which is
to establish possible connecting factors between the addressee of an
enforcement order and the UK, so that the UK does not violate international
comity in seeking to regulate behaviour outside its borders (par. 26). This is
certainly true, as far as it goes, but in order to apply this tie-breaker the
judge would have had to survey the general international understanding of
comity, which he did not do. <o:p></o:p></div>
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Briggs, LJ. might have referred to internet regulation cases
in the European Court of Justice, like the <a href="http://curia.europa.eu/juris/liste.jsf?num=C-236/08">Google Adwords case</a>
or today’s <a href="http://curia.europa.eu/juris/liste.jsf?language=en&td=ALL&num=C-131/12">Google
Spain</a>, or to the US Supreme Court’s case on the Alien Tort Statute last
year in <a href="http://www.supremecourt.gov/opinions/12pdf/10-1491_l6gn.pdf">Kiobel
v. Royal Dutch Petroleum</a>, where the Supreme Court sharply limited the
jurisdiction of US courts over torts outside its borders. In competition law
specifically, there seems to be quite a bit of patience with extraterritorial
decisions, but there are limits. The € 1.06 bn fine against Intel, for example,
drew <a href="http://www.nytimes.com/2009/05/14/business/global/14compete.html?pagewanted=all&_r=0">criticism</a>
from the US on comity grounds. (The judgement from the General Court is
expected on <a href="http://chillingcompetition.com/2014/04/23/intel-judgment-coming-out-soon/">12
June</a>.) </div>
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The same goes for the Commission’s decision to block <a href="http://money.cnn.com/2001/07/03/europe/ge_eu/">the proposed merger
between Honeywell and GE in 2001</a>. (See also <a href="http://ec.europa.eu/dgs/competition/economist/honeywell.pdf">this
research paper</a> commissioned by the Commission.) If comity does not prevent
the EU from blocking a merger between Honeywell and GE, presumably it does not
prevent the UK from blocking the Azko/Metlac takeover either. But the Court of
Appeals made no findings in this regard.<o:p></o:p></div>
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Returning to the rule of <a href="http://en.wikipedia.org/wiki/Salomon_v_A_Salomon_%26_Co_Ltd">Salomon v.
Salomon</a>, there is one final question that troubles me: If Akzo Nobel N.V.
is carrying on business in the UK because it “exercise[s] the strategic and
operational management and control of a manufacturing and sales business” in
the UK, where does that leave Mr. Salomon? As a shareholder/director, he surely
did the same thing. So was he, as a private person, carrying on a business in
the sense of s. 86 EA2002? To be sure, the criterion enacted there is
particular to competition law, but that doesn’t mean the question isn’t
important. If the shoemaker Mr. Salomon had lived in France while selling his
shoes through his shop in the UK, would that have meant that Mr. Salomon
himself – as opposed to his company – was carrying on business in the UK? Could
the Competition Commission have prevented him from merging his business with
the business of Mr. X, also resident in France with a shop in the UK? Given the
Court of Appeal’s judgement, it seems clear that the CC could have. But I’m not
sure where that leaves corporate legal personality.</div>
martinnedhttp://www.blogger.com/profile/15282998467090268537noreply@blogger.com1tag:blogger.com,1999:blog-22498220.post-43718764767613252242014-01-30T23:14:00.002+01:002014-01-30T23:14:49.718+01:00Ferries & Competition - AppendixGood news: In the <a href="http://martinned.blogspot.co.uk/2014/01/ferries-competition.html" target="_blank">Terschelling Ferries case</a> that I blogged about on Monday, <a href="http://uitspraken.rechtspraak.nl/inziendocument?id=ECLI:NL:GHDHA:2014:149" target="_blank">EVT won on appeal</a>! The Court of Appeals in The Hague ruled today that EVT gets to continue to operate between Harlingen and Terschelling for the time being. (A new regulatory scheme is currently the subject of parallel litigation. Don't ask.)
<br />
<br />
<em>Competition Law</em><br />
As I predicted, the Court of Appeals did not go near the competition law aspects of the case, other than to discuss a letter sent by the Dutch Competition Authority ACM in November last year, where the ACM expressed grave concerns about the Minister's proposed solution. In this letter, it confirmed that competition law probably applied, because the government would probably qualify as an undertaking in this matter, given the <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:61990CJ0041:EN:HTML" target="_blank">Höfner</a> precedent I mentioned.<br />
<br />
The only difference between the ACM's tentative analysis and mine is that they approached this as a possible case of abuse of dominance by the State, while I preferred - and continue to prefer - to think of it as collusion between the State and TSM. In the end, that does not affect the analysis very much, except that the collusion frame would open the door to a fine for TSM. It is true that the State is almost certainly dominant in the market for Waddenzee port facilities, assuming the Harlingen port isn't an outright essential facility. Either way, the State's decision to terminate the contract with EVT clearly implicates one or more examples of abuse listed in the Treaty:
<br />
<blockquote>
<a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12008E101:EN:HTML" target="_blank">Article 101 TFEU</a>
(ex Article 81 TEC)
1. The following shall be prohibited as incompatible with the internal market: all agreements between undertakings (...) which have as their object or effect the prevention, restriction or distortion of competition within the internal market, and in particular those which:
(b) limit or control production, markets, technical development, or investment;
(c) share markets or sources of supply;</blockquote>
and
<br />
<blockquote>
<a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12008E102:EN:HTML" target="_blank">Article 102 TFEU</a>
(ex Article 82 TEC)
Any abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it shall be prohibited as incompatible with the internal market in so far as it may affect trade between Member States.
Such abuse may, in particular, consist in:
(b) limiting production, markets or technical development to the prejudice of consumers;</blockquote>
(Obviously these provisions don't directly apply, since the required impact on trade between Member States is missing, but the Dutch Competition Act contains identical language for strictly domestic situations.)
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<br />
<em>Contract Law</em><br />
The reason why I got my prediction wrong - <a href="http://martinned.blogspot.co.uk/2014/01/ferries-competition.html" target="_blank">I predicted that EVT would lose</a> - is that I underestimated how much the Court of Appeals would be willing to second-guess the government's decision about what the public interest required, and how much the Court would be willing to do so in an expedited procedure. (Note the timeline: The District Court in The Hague heard this case on December 17 and ruled on December 31. EVT submitted its grievances with the Court of Appeals on January 10. There was an oral hearing on January 21, and the Court of Appeals ruled today.)<br />
<br />
The <a href="http://uitspraken.rechtspraak.nl/inziendocument?id=ECLI:NL:RBDHA:2013:18370" target="_blank">District Court</a> used a fairly deferential standard, holding essentially that the State could reasonably come to the conclusion that the public interest required termination. The <a href="http://uitspraken.rechtspraak.nl/inziendocument?id=ECLI:NL:GHDHA:2014:149" target="_blank">Court of Appeals</a>, on the other hand, relied on <a href="http://uitspraken.rechtspraak.nl/inziendocument?id=ECLI:NL:HR:2012:BW1280" target="_blank">a Supreme Court decision from 2012</a> about a rental contract between a small business owner and a foundation specialising in playgrounds where the subject of the lease was a small recreational area. In that case the Supreme Court held that for long term leases a decision to terminate the contract must not necessarily be judged only against a deferential abuse of right standard, but that reasonableness ("<a href="http://nl.wikipedia.org/wiki/Redelijkheid_en_billijkheid" target="_blank">redelijkheid en billijkheid</a>") under art. 6:248 Civil Could <span style="text-decoration: underline;">could</span> require that the court take a more general view of the circumstances of the case and the interests of each party.<br />
<br />
I think that the Court of Appeals put too much weight on that precedent. The reasonableness standard of art. 6:248 Civil Code is particularly important to protect a weak party against a stronger one. While parties don't get any stronger than the State, and while EVT was faced with being put out of business, I don't think the circumstances of the case were analogous to those of the Supreme Court's case. EVT knew what it was getting into when it first started the service, just like it knew what it was getting into when it asked and received permission to start using a larger ship. It was trying to enter a previously monopolised market, and it knew that the State (and the municipalities of Vlieland and Terschelling) would side with the incumbent in case of trouble. Hence the parallel litigation about the new concessions regime, aforementioned; EVT needs for this entire market to be organised differently if it is to have a fair chance. Making a competition law argument could have forced the State's hand, but this contract law approach is just too forgiving.<br />
<br />
So why did the Court of Appeals go there? Well, I can only speculate, but it feels suspiciously like it was trying to hold the State to a public law standard even though this was a private law case. In administrative law, the standard would have been somewhere in between the District Court's abuse of right standard and the Court of Appeals' reasonableness approach. While the administrative law standard officially asks whether the government entity could have reasonably done as it did, in practice this allows for quite a bit of second-guessing. But this was not an administrative law case.<br />
<br />
Finally, it should be mentioned that the Court of Appeals flagged up a much better contract law argument, without however relying on it. After holding that the State acted unreasonably in terminating the lease without sufficient cause and without consulting with EVT, the Court discussed EVT's chances in a full trial, i.e. a non-expedited one. It said that it is "not impossible" that EVT would win on its competition law argument (par 12), and then it noted that there may well be an issue with the contractual provision that the State relied on to terminate the contract. The provision in question requires, simply put, that continuing on with the contract should "prevent" a proper service with the islands. The District Court had interpreted that provision broadly, but the Court of Appeals proposed a more narrow reading. In par. 13-14 of its judgement, the Court argued that in a full trial EVT may well succeed in proving that its service is not actually preventing the service in any way, shape or form.<br />
<br />
It may seem like a technicality, but I much prefer this argument to the one the Court actually relied on. Too bad it will probably never see the light of day, because while theoretically an expedited hearing is meant as a temporary measure until a full trial can be held, it is exceedingly rare for an expedited judgement to be followed by a proper trial. So unless the State takes this case to the Supreme Court, this litigation is now over.martinnedhttp://www.blogger.com/profile/15282998467090268537noreply@blogger.com0tag:blogger.com,1999:blog-22498220.post-59996469731267831662014-01-28T23:15:00.000+01:002014-01-28T23:15:11.410+01:00Competition Law, Sustainability, and GeographyThe <a href="http://martinned.blogspot.co.uk/2014/01/ferries-competition.html" target="_blank">Ferry post</a> raised an interesting issue that I'd only casually discussed <a href="http://europeanlawblog.eu/?p=1974" target="_blank">elsewhere</a>: if we are going to weigh the damage done by collusion against one or more associated benefits, which benefits for which consumers do we get to include? Inconveniently, it seems like the answer is benefits for the same set of individuals who are the (ultimate) consumers of the product or service. <br />
<br />
<em>The Energy Pact Case</em>
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<div style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;">
On 6 September 2013, the Dutch energy industry made <a href="http://www.rijksoverheid.nl/documenten-en-publicaties/convenanten/2013/09/06/energieakkoord-voor-duurzame-groei.html" target="_blank">a pact</a> with the government and a variety of other stakeholders about the future of energy supply in the Netherlands, under the auspices of the allmighty SER, <a href="http://en.wikipedia.org/wiki/Social-Economic_Council" target="_blank">the Social-Economic Council</a>. As part of this pact, the industry promised to close five coal-fired power plants that were particularly unsustainable in their output of SO<sub>2,</sub> NO<sub>x</sub> and particulates.</div>
<div class="separator" style="clear: both; text-align: center;">
<a href="http://upload.wikimedia.org/wikipedia/commons/a/a4/Dave_Johnson_coal-fired_power_plant,_central_Wyoming.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="http://upload.wikimedia.org/wikipedia/commons/a/a4/Dave_Johnson_coal-fired_power_plant,_central_Wyoming.jpg" height="192" width="320" /></a></div>
Given that such an agreement to reduce supply is arguably problematic under competition law, the industry body Energy Netherlands asked the competition authority ACM for its opinion. In a non-binding "<a href="https://www.acm.nl/nl/publicaties/publicatie/12033/Notitie-ACM-over-sluiting-5-kolencentrales-in-SER-Energieakkoord/" target="_blank">note</a>" just 20 days later, the ACM tentatively concluded that this part of the pact was unlawful as contrary to the <a href="http://wetten.overheid.nl/BWBR0008691/geldigheidsdatum_28-01-2014" target="_blank">Competition Act</a>. Evaluating the social costs and benefits over the duration of the pact (2016-21), the Authority found an estimated negative price effect for consumers of € 450 million and a benefit - in the form of avoided carbon abatement costs - of € 180 million. Given the imbalance between costs and benefits, the conclusion inevitably followed, <a href="http://www.rijksoverheid.nl/documenten-en-publicaties/kamerstukken/2013/10/01/kamerbrief-over-zienswijze-acm-inzake-het-sluiten-van-oude-kolencentrales.html" target="_blank">much to the chagrin of the government</a>.<br />
<br />
The question of "which consumers" was actually relatively easy in this case: Given that for SO<sub>2,</sub> and NO<sub>x</sub> there are nationwide emissions limits, the ACM simply assumed that a given reduction in NO<sub>x</sub> output would save Dutch society the € 9.40 per kg that it would otherwise have had to spend on other kinds of abatement. Similarly, for SO<sub>2 </sub>it assumed a the "shadow price" of € 5.40. Both these values were taken from <a href="http://www.cpb.nl/sites/default/files/publicaties/download/cpb-notitie-14jun2013-kba-structuurvisie-6000-mw-windenergie-op-land.pdf" target="_blank">a study by the CPB</a>. For particulates, where no emissions limit exists, the CPB study estimated a benefit to society from reduced output of € 44.30 per kg. While the shadow prices methodology makes perfect sense, the story on particulates raises an important question: Why count only benefits enjoyed by Dutch citizens? Is this even OK under the ECJ's precedents on the Temelin nuclear power plant (see <a href="http://www.germanlawjournal.com/pdfs/Vol12-No8/PDF_Vol_12_No_08_1637-1658_Wolf.pdf" target="_blank">this article</a>) and on environmental impact assessments?
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<br />
<em>EU Law</em><br />
Well, it is difficult to get around the clear text of art. 101(3) TFEU, which requires that any agreement, in order to pass muster, must "[allow] consumers a fair share of the resulting benefit". In its decision in <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2000:187:0047:0054:EN:PDF" target="_blank">CECED</a>, an important precedent for the Energy Pact case, the European Commission talked about checking whether "the agreement is likely to deliver both individual and collective benefits for users and consumers" (par. 51) and "allowing users a fair share of the benefits" (par. 57), without explaining the distinction - if any - between users and consumers. (That case dealt with an agreement in the Belgian appliances manufacturing sector aimed at improving energy efficiency.) This interpretation of primary Treaty law seems difficult to square with the idea that benefits enjoyed by consumers in a different (geographical) market, or by non-consumers, should also be included. This is also the conclusion reached by the Commission in its <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2004:101:0097:0118:EN:PDF" target="_blank">Guidelines on the application of Article 81(3)</a>:<br />
<blockquote>
43. The assessment under Article 81(3) of benefits flowing from restrictive agreements is in principle made within the confines of each relevant market to which the agreement relates. The Community competition rules have as their objective the protection of competition on the market and cannot be detached from this objective. Moreover, the condition that consumers must receive a fair share of the benefits implies in general that efficiencies generated by the restrictive agreement within a relevant market must be sufficient to outweigh the anti-competitive effects produced by the agreement within that same relevant market. Negative effects on consumers in one geographic market or product market cannot normally be balanced against and compensated by positive effects for consumers in another unrelated geographic market or product market. However, where two markets are related, efficiencies achieved on separate markets can be taken into account provided that the group of consumers affected by the restriction and benefiting from the efficiency gains are substantially the same.</blockquote>
By way of exception, the Commission quoted <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:61995TJ0086:EN:HTML" target="_blank">Case T-86/95, Compagnie Générale Maritime and others</a>:
<br />
<blockquote>
130 (...) Regard should naturally be had to the advantages arising from the agreement in question, not only for the relevant market, namely that for inland transport services provided as part of intermodal transport, but also, in appropriate cases, for every other market on which the agreement in question might have beneficial effects, and even, in a more general sense, for any service the quality or efficiency of which might be improved by the existence of that agreement. Both Article 5 of Regulation No 1017/68 and Article 85(3) of the Treaty envisage exemption in favour of, amongst others, agreements which contribute to promoting technical or economic progress, without requiring a specific link with the relevant market.</blockquote>
However, the Commission explained away that seeming oddity by pointing out that "importantly, the affected group of consumers was the same" (<a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52004XC0427(07):EN:HTML" target="_blank">Guidelines</a>, op cit, fn 57). That seems right.
<br />
<br />
<em>Product Market</em><br />
Taking the Commission's guidelines at face value, even the ACM's analysis of the Energy Pact is too generous, since it weighs a price increase in the energy market against reduced abatement costs elsewhere in Dutch society, i.e. not necessarily in the energy market. After all, the Commission clearly said that an increase in the deadweight loss "cannot normally be balanced against and compensated by positive effects for consumers in another unrelated (...) product market". Since the ACM made no finding of where the reduction in abatement costs might occur, much less whether that other product market is somehow related to the energy market, the Authority seems to have fallen foul of the Commission's guidelines.<br />
<br />
Fortunately, the Commission itself doesn't seem to go that far either. In <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2000:187:0047:0054:EN:PDF" target="_blank">CECED</a>, it started by estimating the recoupment period for the average consumer, weighing the increased purchase price of the appliances against the resulting reduction in energy costs (par. 52-54). Arguably, that is a weighing of costs and benefits in the same or in related markets. (See p. 14 of the ACM's <a href="https://www.acm.nl/nl/download/publicatie/?id=11634" target="_blank">draft Position Paper on Competition and Sustainability</a>.) But next it looked at "collective environmental benefits", using a methodology much like the ACM's relying on estimates of the Europe-wide (!) social benefits of reduced SO<sub>2</sub> and NO<sub>x</sub> emissions. (For comparison: in 1999 the Commission put the shadow prices at € 4-7 per kg for SO<sub>2</sub> and at € 3-5 per kg for NO<sub>x</sub>.) More generally, throughout the case law of the Commission and the European Courts, I am yet to encounter an example of a justification that is rejected because it concerns the same inviduals but on a different product market, or on no product market at all. (The consumer benefit may come in the form of reduced government spending, for example.)
<br />
<br />
<em>Geographical Market</em><br />
Geography is a different story. The problem with geograpy is that it is often (but not always, see the <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:61995TJ0086:EN:HTML" target="_blank">Compagnie Générale Maritime case</a> above) a proxy for the actual individuals we are talking about. As long as the "fair share of the resulting benefit" is somehow enjoyed by the same individuals, competition law is unlikely to object. But if the beneficiaries are different individuals from the individuals paying the proverbial and literal price for the reduction in competition, we have a problem. As we saw in the <a href="http://martinned.ideasoneurope.eu/2014/01/27/ferries-competition/" target="_blank">Ferries case</a>, competition law does not look kindly on cross-subsidisation. Even if such a scheme is (<a href="http://en.wikipedia.org/wiki/Kaldor%E2%80%93Hicks_efficiency" target="_blank">Kaldor-Hicks</a>) efficient, from an economics point of view, there needs to be some kind of compensation, enough to achieve <a href="http://en.wikipedia.org/wiki/Pareto_efficiency" target="_blank">Pareto efficiency</a>. If it is impossible to achieve this in the context of an agreement between market participants, there is no alternative to government intervention: it will either have to become a party to the pact, offering to take care of the compensation, or it will have to turn the agreement into a statutory scheme with compensation. (Without compensation, the statute would arguably constitute an unlawful infringement of EU law.)
<br />
<br />
<em>Ancillary Restrictions</em><br />
One final possibility that is mentioned in the ACM's <a href="https://www.acm.nl/nl/download/publicatie/?id=11634" target="_blank">draft Position Paper on Competition and Sustainability</a> is the notion of "ancillary restrictions" mentioned by the Court of Justice in a few cases, which are restrictions of competition that are sufficiently "unavoidable" if some other beneficial thing is to be done that they are outside the ambit of art. 101 TFEU. The notion has its roots in the law on concentrations:
<br />
<blockquote>
104 In Community competition law the concept of an `ancillary restriction' covers any restriction which is directly related and necessary to the implementation of a main operation (see, to that effect, the Commission Notice of 14 August 1990 regarding restrictions ancillary to concentrations (<a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:1990:203:0005:0009:EN:PDF" target="_blank">OJ 1990 C 203, p. 5, hereinafter `the notice on ancillary restrictions'</a>, point I.1), the <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:1993:043:0002:0014:EN:PDF" target="_blank">notice on cooperative joint ventures</a> (point 65), and Articles 6(1)(b) and 8(2), second paragraph, of Regulation No 4064/89).
105 In its notice on ancillary restrictions the Commission rightly stated that a restriction `directly related' to implementation of a main operation must be understood to be any restriction which is subordinate to the implementation of that operation and which has an evident link with it (point II.4).</blockquote>
<a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:61999TJ0112:EN:HTML" target="_blank">Case T-112/99, Métropole</a>.
In its <a href="https://www.acm.nl/nl/download/publicatie/?id=11634" target="_blank">draft Position Paper </a>, the ACM cites some more recent case law that concerns associations of undertakings, such as the Dutch Bar Association in <a href="http://www.dkrnet.de/data/curia/jurispr/95-99/numdoc=61999J0309&lg=EN.htm" target="_blank">Wouters</a> and the international swimming association FINA in Meca Medina. In <a href="http://www.dkrnet.de/data/curia/jurispr/95-99/numdoc=61999J0309&lg=EN.htm" target="_blank">the former case</a>, the Court said:
<br />
<blockquote>
97. However, not every agreement between undertakings or every decision of an association of undertakings which restricts the freedom of action of the parties or of one of them necessarily falls within the prohibition laid down in Article 85(1) of the Treaty. For the purposes of application of that provision to a particular case, account must first of all be taken of the overall context in which the decision of the association of undertakings was taken or produces its effects. More particularly, account must be taken of its objectives, which are here connected with the need to make rules relating to organisation, qualifications, professional ethics, supervision and liability, in order to ensure that the ultimate consumers of legal services and the sound administration of justice are provided with the necessary guarantees in relation to integrity and experience (see, to that effect, <a href="http://www.dkrnet.de/data/curia/jurispr/95-99/numdoc=61995J0003&lg=EN.htm" target="_blank">Case C-3/95 Reisebüro Broede [1996] ECR I-6511</a>, paragraph 38). It has then to be considered whether the consequential effects restrictive of competition are inherent in the pursuit of those objectives.</blockquote>
And in the latter:
<br />
<blockquote>
42 Next, the compatibility of rules with the Community rules on competition cannot be assessed in the abstract (see, to this effect, <a href="http://www.dkrnet.de/data/curia/jurispr/89-94/numdoc=61992J0250&lg=EN.htm" target="_blank">Case C-250/92 DLG [1994] ECR I‑5641</a>, paragraph 31). Not every agreement between undertakings or every decision of an association of undertakings which restricts the freedom of action of the parties or of one of them necessarily falls within the prohibition laid down in Article 81(1) EC. For the purposes of application of that provision to a particular case, account must first of all be taken of the overall context in which the decision of the association of undertakings was taken or produces its effects and, more specifically, of its objectives. It has then to be considered whether the consequential effects restrictive of competition are inherent in the pursuit of those objectives (<a href="http://www.dkrnet.de/data/curia/jurispr/95-99/numdoc=61999J0309&lg=EN.htm" target="_blank">Wouters and Others</a>, paragraph 97) and are proportionate to them.
</blockquote>
<blockquote>
43 As regards the overall context in which the rules at issue were adopted, the Commission could rightly take the view that the general objective of the rules was, as none of the parties disputes, to combat doping in order for competitive sport to be conducted fairly and that it included the need to safeguard equal chances for athletes, athletes’ health, the integrity and objectivity of competitive sport and ethical values in sport.
</blockquote>
<blockquote>
44 In addition, given that penalties are necessary to ensure enforcement of the doping ban, their effect on athletes’ freedom of action must be considered to be, in principle, inherent itself in the anti-doping rules.</blockquote>
While this comes dangerously close to adopting some all-purpose rule of reason, it seems like the ACM was right to conclude that this doctrine is insufficiently clear for it to be included in the Position Paper. At least, it is insufficiently matured outside the context of concentrations and associations of undertakings. Moreover, it is clear that the Court will not easily consider a rule to be sufficiently inherent or necessary to qualify. Comparing the <a href="http://www.dkrnet.de/data/curia/jurispr/95-99/numdoc=61999J0309&lg=EN.htm" target="_blank">Wouters precedent</a> with the Commission's <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2000:187:0047:0054:EN:PDF" target="_blank">CECED decision</a>, for example, it is difficult to see how the scheme at issue in the latter case could fall under the doctrine of ancillary restraints.
<br />
<br />
<em>Conclusion</em><br />
Where competition for one group of consumers is reduced for the benefit of another group of individuals, competition law is likely to pose significant problems. In that regard, the ACM's Energy Pact "note" was a useful shot across the bow. Environmental lobby, beware!martinnedhttp://www.blogger.com/profile/15282998467090268537noreply@blogger.com0tag:blogger.com,1999:blog-22498220.post-72542359503951762842014-01-28T01:02:00.001+01:002014-01-28T01:08:51.959+01:00Ferries & CompetitionRecently, the District Court in The Hague tackled an interesting case about competition between ferry companies. While some of the legal details make <a href="http://uitspraken.rechtspraak.nl/inziendocument?id=ECLI:NL:RBDHA:2013:18370&keyword=ECLI%3aNL%3aRBDHA%3a2013%3a18370" target="_blank">the Court’s decision</a> quite obviously right, the economics of the case are worth digging into a little further.<br />
<br />
<a href="https://maps.google.com/maps?saddr=Harlingen,+The+Netherlands&daddr=Willem+Barentszkade,+West-Terschelling,+The+Netherlands&hl=en&ll=53.293952,5.273438&spn=0.473615,1.352692&sll=53.361283,5.22975&sspn=0.014777,0.042272&geocode=FW5hKwMdAMhSACmzlCAE3d3IRzGjZ3BP7p_gXw%3BFZozLgMdI5pPACnvNaKw1SjJRzFLW_l-Ma9q4w&mra=ls&t=m&z=10" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img alt="" class="size-full wp-image-257 alignleft" src="http://martinned.ideasoneurope.eu/files/2014/01/Terschelling.jpg" height="172" width="320" /></a>Starting on 18 November 2008, a company called <a href="http://www.evt.nl/" target="_blank">EVT</a> – <em>Eigen Veerdienst Terschelling</em> – operated a ferry service between the Frisian mainland in Harlingen and the Frisian Wadden Island of <a href="http://en.wikipedia.org/wiki/Terschelling" target="_blank">Terschelling</a>. It did so in competition with the incumbent operator TSM, the <em>Terschellinger Stoomboot Maatschappij</em>. Critically, TSM, and only TSM, also provided a service to the neighbouring island of <a href="http://en.wikipedia.org/wiki/Vlieland" target="_blank">Vlieland</a>. (Although there is a separate service connecting both islands directly.)<br />
<br />
Until the spring of 2012 this arrangement caused few problems for anyone. The docks in Harlingen and Terschellingen, which are the property of the State, had more than enough capacity for both companies. However, from that point onwards EVT rocked the proverbial boat by operating its service with a bigger ship. It had permission from the State to do that, but that didn’t change the fact that EVT’s rental agreement with the State for the docks in Harlingen were subject to the condition that it could be terminated by the State at any time for reasons related to the public interest. (Par. 2.13)<br />
<br />
In October 2013, the State considered that the deteriorating profitability of TSM posed a considerable threat to the continued existence of the main ferry service to Terschelling and Vlieland, and for that reason it terminated EVT’s rental agreement effective 1 February 2014. Starting next month: no more competition.<br />
<br />
Legally, the matter is quite straightforward. The relevant term in the rental contract is cast in quite general terms, and the construction proposed by EVT which would exclude a situation like this from “the public interest” seems unreasonably awkward. EVT’s arguments under the <a href="http://wetten.overheid.nl/BWBR0008691/geldigheidsdatum_20-01-2014" target="_blank">Competition Act</a> and state aid law are likewise either incorrect or at least not suited for consideration in an expedited procedure (“kort geding”). So EVT lost before the District Court, and presumably it will lose before the Court of Appeals as well.<br />
<br />
However, we can wonder whether this is really the result we should prefer from a policy point of view. Is a monopoly service by TSM – or a near-monopoly by TSM constrained by a limited service by EVT – really the economically optimal outcome? The Court’s judgement contains two little doors to arguments to the contrary.<br />
<br />
Firstly, the studies quoted in the Court’s statement of facts provide significant evidence for the proposition that the real problem here is that the ferry service to Vlieland is loss-making, meaning that TSM needs to turn a profit on its service to Terschelling in order to stay afloat. (Sorry.)<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="http://upload.wikimedia.org/wikipedia/commons/6/69/Aankomst_Friesland_op_terschelling.JPG" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="http://upload.wikimedia.org/wikipedia/commons/6/69/Aankomst_Friesland_op_terschelling.JPG" height="240" width="320" /></a></div>
If that is the case, literature from other transport modes – particularly railways – suggests that a cross-subsidy of this kind is an inappropriate tax on the inhabitants and visitors of Terschelling for the benefit of the inhabitants and visitors of Vlieland. If the Dutch government considers that the public interest requires that Vlieland should be reachable at a price lower than the cost of operating the service, it should subsidise that service from general taxation. There is no reason to place the burden only with the inhabitants and visitors of Terschelling. This is the whole logic behind taking different parts of the rail network away from the incumbent and tendering them.<br />
<br />
The second little door is in par. 4.20, where the Court rejects EVT’s competition law argument. The Court does so by bypassing the question of whether the State acted as an undertaker in this case and holding instead that any arguable infringement of the ban on collusive practices was objectively justified by the public interest. However, it is unclear what the analysis behind this conclusion is.<br />
<br />
Whether the State acts as an undertaker in renting out port facilities is an interesting legal question. Presumably, in EU law under <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:61990CJ0041:EN:HTML" target="_blank">Höfner</a>, the answer is that it is. There is nothing inherently sovereign about renting out port facilities. Under Dutch competition law, <a href="http://wetten.overheid.nl/BWBR0008691/geldigheidsdatum_27-01-2014#Hoofdstuk4b" target="_blank">the special section</a> of the competition act that deals with public sector bodies and their behaviour as market participants does not apply to the State or to ministries. (Cf. <a href="http://wetten.overheid.nl/BWBR0008691/geldigheidsdatum_27-01-2014#Hoofdstuk4b_Artikel25h" target="_blank">art. 25h(3) Mw</a>.) The general definition of an undertaking in <a href="http://wetten.overheid.nl/BWBR0008691/geldigheidsdatum_27-01-2014#Hoofdstuk1_Artikel1" target="_blank">art. 1</a>, on the other hand, simply refers to art. 101 TFEU.<br />
<br />
The Court bypasses that question and holds that there is no (tacit) collusion aimed at removing competition, because what collaboration existed (the <em>commissie bootdiensten</em> – ferry services committee) was aimed at achieving the best possible transport infrastructure for the islands instead.<br />
<br />
This misses the point between collaboration that is anticompetitive by object – which arguably did not occur here – and collaboration that is anticompetitive by effect. Given that the ferry services for each island form a separate market, there is no question that the state’s collaboration with TSM in the ferry services committee and elsewhere had the effect of reducing competition on the Terschelling market.<br />
<br />
(The only way the different ferry services could be considered a single market is if a change in the ticket price for one island would cause passengers to choose to go to another island in significant numbers. While this may be remotely plausible for the tourism sub-market – depending on the size of the ferry relative to the total cost of the trip – it is certainly unlikely for residents and other non-tourists.)<br />
<br />
The twist at the end is that the alleged justification – making sure that a ferry service would continue to exist for every island – does not suffice under competition law, because the “beneficiaries” of the collusion are not the customers of TSM and the state on the market in question (Terschelling), but rather their customers on a market where no anti-competitive collusion has been alleged (Vlieland).<br />
<br />
This is the same problem that the Dutch competition authority encountered recently in its <a href="https://www.acm.nl/nl/publicaties/publicatie/12033/Notitie-ACM-over-sluiting-5-kolencentrales-in-SER-Energieakkoord/" target="_blank">opinion on the Energy Accord</a>. Given that the relevant market in that case was defined as the Dutch market, benefits enjoyed by foreign customers could not be taken into account. Even worse, it is doubtful whether reductions in global warming could be taken into account at all, given that these benefits are enjoyed by energy customers in their capacity of home owners, tax payers, etc., but not in their capacity of energy customers. (For more details, see the discussion <a href="http://europeanlawblog.eu/?p=1974" target="_blank">here</a>.)<br />
<br />
However broadly we define “technical and economic progress” under <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12008E101:EN:HTML" target="_blank">art. 101 TFEU</a>, the customers on the Terschelling market are worse off as a result of the State’s decision to terminate its rental agreement with EVT. So under any rule of reason-adjacent test, the State’s plea for justification must fail. Unfortunately, the evidence needed to apply such a test cannot be considered by a court in an expedited procedure. So EVT still loses.martinnedhttp://www.blogger.com/profile/15282998467090268537noreply@blogger.com0tag:blogger.com,1999:blog-22498220.post-47100550773110283222013-10-16T23:13:00.003+02:002013-10-16T23:13:43.743+02:00Prisoner VotingSomething that made me mad in today's <a href="http://www.supremecourt.gov.uk/decided-cases/docs/UKSC_2012_0151_Judgment.pdf" target="_blank">UK Supreme Court prisoner voting judgment</a>. Per Lord Sumption:<br />
<blockquote class="tr_bq">
115. From a prisoner’s point of view the loss of the right to vote is likely to be a
very minor deprivation by comparison with the loss of liberty. There are no doubt
prisoners whose interest in public affairs or strong views on particular issues are
such that their disenfranchisement represents a serious loss, just as there are prisoners (probably more numerous) whose enthusiasm for active sports makes
imprisonment a special hardship. The severity of a sentence of imprisonment for
the convicted person will always vary with a wide variety of factors whose impact
on him or her will inevitably be arbitrary to some degree. It has been said, for
example, that disenfranchisement may bear hardly on someone sentenced to, say, a
short period of imprisonment which happens to coincide with a general election.
For some prisoners, this will no doubt be true. But <b>I decline to regard it as any
more significant than the fact that it may coincide with a special anniversary, a
long anticipated holiday or the only period of fine weather all summer.</b></blockquote>
So much for a proper respect for democracy...<br />
<br />
In order to heal the soul, here is a paragraph from Baroness Hale's judgement in the same case:<br />
<blockquote class="tr_bq">
90. To take an obvious example, we would not regard a Parliament elected by an electorate consisting only of white, heterosexual men as uniquely qualified to decide whether women or African-Caribbeans or homosexuals should be allowed to vote. (...) Given that, by definition, Parliamentarians do not represent the disenfranchised, the usual respect which the courts accord to a recent and carefully considered balancing of individual rights and community interests (...) may not be appropriate.</blockquote>
martinnedhttp://www.blogger.com/profile/15282998467090268537noreply@blogger.com0tag:blogger.com,1999:blog-22498220.post-8917026078812235832013-07-04T20:06:00.004+02:002013-07-08T01:23:25.570+02:00Phoebe Putney<div class="MsoNormal">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">An increasing problem in the competition
law world is the relationship between competition law and varying degrees of
state action in other realms. In Europe, this problem is artificially easy
because of the hierarchy of laws involved. In <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62008J0280:EN:HTML">Deutsche
Telekom</a> and <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1860167">the other
margin squeeze cases</a>, the European Court of Justice relied on the principle
of <a href="http://eur-lex.europa.eu/en/treaties/dat/12007L/htm/C2007306EN.01025602.htm">primacy</a>
to hold that competition law, which is written in the main body of the
Treaties, trumps sectoral regulation, which isn’t. When there is no Community
dimension, and outside the EU, the answer isn’t quite that straightforward.</span></span></span></div>
<div class="MsoListParagraphCxSpFirst">
<br /></div>
<div class="MsoListParagraphCxSpFirst">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">To begin with the easy one: When EU
competition law applies, i.e. when someone is naughty in a way that “may affect
trade between Member States”, the only question is who’s to blame:</span></span></span></div>
<ul>
<li><span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">If the offending behaviour is
mandated by EU sectoral legislation, the secondary legislation in question is
null and void, something that can be established through <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12008E267:EN:HTML">the
prejudicial question procedure</a> or through <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12008E263:EN:HTML">an
action for annulment</a>, as the case may be.</span></span></span><span style="font-family: inherit;"><span style="font-size: small;"><span style="-moz-font-feature-settings: normal; -moz-font-language-override: normal; font-size-adjust: none; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> </span></span></span></li>
<li><span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">If the offending behaviour is
mandated by Member State sectoral legislation, the Member State is the culprit
and it is up to the Commission to start an <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12008E258:EN:HTML">infringement
procedure</a>. In an appropriate case, the Member State legislation in question
can also be slapped down by a national court, with or without a <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12008E267:EN:HTML">prejudicial
question</a>.</span></span></span><span style="font-family: inherit;"><span style="font-size: small;"><span style="-moz-font-feature-settings: normal; -moz-font-language-override: normal; font-size-adjust: none; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> </span></span></span></li>
<li><span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">If, on the other hand, the
relevant sectoral law merely permits the offending behaviour without mandating
it, the onus is on the company to make sure it obeys both competition law and
sectoral law, meaning that it can be punished for failing with regard to the
former. This is what happened in <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1860167">the margin
squeeze cases</a>.</span></span></span></li>
</ul>
<br />
<div class="MsoNormal">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">At the Member State level, when there is no
Community dimension, saying that your naughtiness is expressly permitted by
sectoral legislation is fundamentally a sound argument. Of course, in a given
case the question remains whether this is a correct interpretation of the law, which
will depend on which statute was enacted first, whether there is express saving
language somewhere, the way the US Telecommunications Act expressly says that
it is without prejudice to competition law, and it will depend on the various
canons of interpretation. </span></span></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">In the British Albion Water competition law
case, for example, Ofwat, which under the UK system is both the sectoral
regulator and one of the possible competition authorities, argued that Welsh
Water’s pricing structure (the so-called “costs principle”) was expressly
permitted by <a href="http://www.legislation.gov.uk/ukpga/1991/56/section/66E">section
66E WIA 1991</a>, an argument that was obviously gratefully echoed by Welsh
Water itself. The Competition Appeal Tribunal went along with that approach to
some extent, but concluded that it was not enough to save Welsh Water from
competition law liability under a margin squeeze theory. (<a href="http://www.catribunal.org.uk/files/Judge1046Albion061006.pdf">Albion
Water v. Water Services Regulation Authority, [2006] CAT 23</a>, par. 920-980.
Cf. also <a href="http://oft.gov.uk/shared_oft/ca98_public_register/decisions/shotton.pdf">Ofwat’s
decision</a>, par. 324-331.)</span></span></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">The reason why all of this is interesting
now is that the problem has cropped up in the US again. There, the situation is
a mixture of the previous one. On the one hand, the relationship between
competition law and sectoral regulation has a clear hierarchical dimension,
because American competition law is enacted at the Federal level in the Sherman
and Clayton Acts (<a href="http://www.law.cornell.edu/uscode/text/15/chapter-1">15
USC 1-38</a>), on the other hand, the Federal authorities are much more
reluctant to have this law displace State law, the <a href="http://en.wikipedia.org/wiki/Supremacy_Clause">Supremacy Clause</a>
notwithstanding. The result is something of a half-way system, as summed up in
the 1943 Supreme Court case of <a href="http://supreme.justia.com/cases/federal/us/317/341/case.html">Parker v.
Brown</a>.</span></span></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">In Parker, the Court held that the
competition laws don’t displace state law. The Court argued that the Federal
legislator would not do something so drastic without explicitly saying so, and
in this case it didn’t. (Nor did the sponsors of the Sherman Act.) If the
states want to create a monopoly or a cartel somewhere, they are allowed to. At
the same time, however, the Court didn’t take back its earlier holding that the
States can’t shield private actors from antitrust liability. (Cf. <a href="http://supreme.justia.com/cases/federal/us/193/197/case.html">Northern
Securities Co. v. United States</a> from 1904.) So all sectoral legislation
that does not create an outright statutory monopoly or cartel winds up
somewhere in the middle.</span></span></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">This can produce some pretty unsatisfying
results in either direction. Earlier this year, in <a href="http://www.supremecourt.gov/opinions/12pdf/11-1160_1824.pdf">FTC v.
Phoebe Putney Health System</a>, the Court held unanimously (Justice Sotomayor
writing for the Court) that some hospital shenanigans in rural Georgia were not
shielded by Georgia’s health care legislation, because the naughtiness in
question was not “clearly envisaged” by the legislator. This is odd because, as
the Court summarises it, </span></span></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal" style="margin-left: 36pt;">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">the Law
authorizes each county and municipality, and certain combinations of counties
or municipalities, to create “a public body corporate and politic” called a
“hospital authority.” §§31–7–72(a), (d).Hospital authorities are governed by 5-
to 9-member boards that are appointed by the governing body of the county or
municipality in their area of operation. §31–7–72(a).</span></span></span></div>
<div class="MsoNormal" style="margin-left: 36pt;">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">Under the Law, a
hospital authority “exercise[s] publicand essential governmental functions” and
is delegated “all the powers necessary or convenient to carry out and
effectuate” the Law’s purposes. §31–7–75. Giving morecontent to that general
delegation, the Law enumerates 27powers conferred upon hospital authorities,
including the power “[t]o acquire by purchase, lease, or otherwise and
tooperate projects,” §31–7–75(4), which are defined to include hospitals and
other public health facilities, §31–7–71(5); “[t]o construct, reconstruct,
improve, alter, andrepair projects,” §31–7–75(5); “[t]o lease . . . for
operationby others any project” provided certain conditions are satisfied,
§31–7–75(7); and “[t]o establish rates and chargesfor the services and use of
the facilities of the authority,”§31–7–75(10).</span></span></span></div>
<div class="MsoNormal" style="margin-left: 36pt;">
<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">I find it difficult to see how that does
not include the right to authorise a private actor to monopolise hospital
services in a given county. In that regard, the standard applied by <a href="http://www.ca11.uscourts.gov/opinions/ops/201112906.pdf">the 11th Circuit</a>,
who asked whether the hospital authority’s actions were “foreseeable” in the
sense of “reasonably anticipated” by the legislator, makes more sense to me:</span></span></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal" style="margin-left: 36pt;">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">[I]t is not necessary,
the court reasoned, for an anticompetitive effect to “be ‘one that ordinarily
occurs, routinely occurs, or is inherently likely to occur as a result of the
empowering legislation.’” (…) [Applying that standard], the court reasoned that
the Georgia Legislature must have anticipated that the grant of power to
hospital authorities to acquire and lease projects would produce
anticompetitive effects because “[f]oreseeably, acquisitions could consolidate
ownership of competing hospitals, eliminating competition between them.”</span></span></span></div>
<div class="MsoNormal" style="margin-left: 36pt;">
<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">If you are going to protect the States’
right to organise regulated sectors in whatever way they please, you have to
give a fair reading to their statutes. By applying the “presumption against
state immunity” (p. 7) as drastically as it did, without properly considering
what the Georgia legislature most likely intended, the Supreme Court made the
state immunity doctrine a sham. </span></span></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">Even more recently, the <a href="http://www.ca4.uscourts.gov/Opinions/Published/121172.P.pdf">4th Circuit</a>
backed the FTC’s decision against the North Carolina State Board of Dental
Examiners, who had set out to prevent non-dentists from offering
teeth-whitening services. Here, the basic legal approach is eminently sensible;
being a private body consisting predominantly of dentists, the state board is
asked to show that their behaviour was “actively supervised by the State
itself”. (Cf. the 1980 Supreme Court ruling of <a href="http://supreme.justia.com/cases/federal/us/445/97/case.html">California
Retail Liquor Dealers Association v. Midcal Aluminum</a>.) Since it wasn’t, the
state board was nailed to the wall by the FTC and the court.</span></span></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">But again I’m not completely convinced by
how it goes on. The problem is what the 4th circuit and the FTC are doing with
regular competition law. After all, just because the state immunity doctrine of
<a href="http://supreme.justia.com/cases/federal/us/317/341/case.html">Parker</a>
does not apply, does not mean that the state board is automatically at fault.
You still have to tick all the usual competition law boxes. And the box that
trips them up, I think, is the one that we Europeans would call
“justification”, and which in the US goes to the question of whether the
“restraint of trade” in question is “unreasonable”, I requirement that is read
into the Sherman Act in order to keep it from invalidating every contract ever
(<a href="http://www.law.cornell.edu/uscode/text/15/1">15 USC 1</a>).</span></span></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">In the US, in order to decide that
question, the courts first consider whether a “per se rule” applies – or as it
is called now: a quick-look test – or whether the case should be treated under
the rule of reason. Quoting the 1984 Supreme Court case of <a href="http://supreme.justia.com/cases/federal/us/468/85/case.html">NCAA v. Board
of Regents of the University of Oklahoma</a>, the 4th Circuit explained:</span></span></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal" style="margin-left: 36pt;">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">The rule of
reason applies “if the reasonableness of a restraint cannot be determined
without a thorough analysis of its net effects on competition in the relevant
market.”</span></span></span></div>
<div class="MsoNormal" style="margin-left: 36pt;">
<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">The court does some hand waiving to argue
that the distinction doesn’t matter much, before observing that</span></span></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal" style="margin-left: 36pt;">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">the Supreme
Court has cautioned that we should be hesitant to quickly condemn the actions
of professional organizations because “certain practices by members of a
learned profession might survive scrutiny . . . even though they would be
viewed as a violation of the Sherman Act in another context.” <a href="http://supreme.justia.com/cases/federal/us/435/679/case.html">Nat’l Soc’y
of Prof’l Eng’rs v. United States, 435 U.S. 679, 686 (1978)</a>.</span></span></span></div>
<div class="MsoNormal" style="margin-left: 36pt;">
<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">So here’s my question: Where is this
scrutiny? Immediately after this observation, the <a href="http://www.ca4.uscourts.gov/Opinions/Published/121172.P.pdf">4th Circuit</a>
quotes some more language that says the same, and then it “conclude[s] that
substantial evidence supports the FTC’s factual findings regarding the economic
effects of the Board’s actions and that those findings support the conclusion
that the Board’s behavior violates § 1” (p. 31) and tells the state board to
get the North Carolina state legislature to pass some legislation if there are
legitimate public health concerns about non-dentists providing teeth whitening
services (p. 32). </span></span></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">This seems wrong to me. Surely it should be
lawful for a group of companies to form a cartel if the alternative is to allow
a market failure – in this case a threat to public health – to persist? If the
public health threat truly exists, the net economic answer would be that the
restraint of trade is the lesser of two evils, meaning that a rule of reason
approach would conclude that there is no violation of the competition laws. And
so it follows that the state board should be allowed to prove that this public
health threat is real. I appreciate that the court’s role is to “uphold [the
FTC’s] factual findings if supported by substantial evidence” (p. 26), but then
at the very least I’d like for the court to say what that substantial evidence
is. Instead, all I have is <a href="http://www.ftc.gov/os/adjpro/d9343/index.shtm">this</a>, where, in its <a href="http://www.ftc.gov/os/adjpro/d9343/111207ncdentalopinion.pdf">final
opinion</a>, we find the FTC categorically rejecting such a justification
without even examining the facts. Instead, it quotes the <a href="http://supreme.justia.com/cases/federal/us/435/679/case.html">Professional
Engineers</a> case already quoted above by the 4th circuit, where the Supreme
Court said:</span></span></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal" style="margin-left: 36pt;">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">The Sherman Act
reflects a legislative judgment that ultimately competition will produce not
only lower prices, but also better goods and services. (…) The assumption that
competition is the best method of allocating resources in a free market
recognizes that all elements of a bargain—quality, service, safety, and
durability—and not just the immediate cost, are favorably affected by the free
opportunity to select among alternative offers. (…) The fact that engineers are
often involved in large-scale projects significantly affecting the public
safety does not alter our analysis. Exceptions to the Sherman Act for
potentially dangerous goods and services would be tantamount to a repeal of the
statute. In our complex economy, the number of items that may cause serious
harm is almost endless.</span></span></span></div>
<div class="MsoNormal" style="margin-left: 36pt;">
<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">Yeah, that’s just wrong. If you want to
rule out self-regulation in favour of bureaucratic micro-management, that’s
fine, but then you don’t get to call your approach a “rule of reason”.</span></span></span></div>
martinnedhttp://www.blogger.com/profile/15282998467090268537noreply@blogger.com0tag:blogger.com,1999:blog-22498220.post-42700847372246659182013-07-02T16:58:00.001+02:002013-07-02T16:58:19.063+02:00Salomons<!--[if gte mso 9]><xml>
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<div class="separator" style="clear: both; text-align: center;">
<a href="http://www.sulphuric-acid.com/sulphuric-acid-on-the-web/acid%20plants/AKZO-Nobel-Logo.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="114" src="http://www.sulphuric-acid.com/sulphuric-acid-on-the-web/acid%20plants/AKZO-Nobel-Logo.jpg" width="200" /></a></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">In last
month’s </span><a href="http://www.catribunal.org.uk/files/1204_Akzo_Nobel_Judgment_CAT_13_210613.pdf"><span lang="EN-GB">Akzo Nobel v. Competition Commission</span></a><span lang="EN-GB">, the Competition Appeal Tribunal
treaded a number of fine lines to end up with what would have seemed at first
glance to be a no-brainer of a result. Yes, the Competition Commission (“the CC”)
has jurisdiction to forbid Akzo Nobel from acquiring a company called Metlac,
given its finding that the merger would result in a substantial lessening of
competition in the UK.</span></span></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">Judging
from the language of the judgment, the difficulty of this question seems to
have surprised everyone involved. The legal trickery involved is as follows:
While the familiar question is whether the competition authorities have the
right to look at a merger in the first place, here the question is only whether
the CC has the right to impose this particular remedy. After all, parties did not
dispute that the proposed merger might affect market conditions in the UK (par.
21), and that the relevant turnover exceeded the £ 70 million threshold of </span><a href="http://www.legislation.gov.uk/ukpga/2002/40/section/23"><span lang="EN-GB">section 23</span></a><span lang="EN-GB"> of the Enterprise Act 2002 (“the Act”).
No-brainer.</span></span></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">Things went
horribly awry, however, when the CC decided to forbid the merger, relying on </span><a href="http://www.legislation.gov.uk/ukpga/2002/40/section/41"><span lang="EN-GB">section 41</span></a><span lang="EN-GB"> and </span><a href="http://www.legislation.gov.uk/ukpga/2002/40/section/84"><span lang="EN-GB">section 84</span></a><span lang="EN-GB"> of the Act. Forbidding, per se, was not the
problem. Forbidding an anticompetitive merger is the most obvious remedy
imaginable, which is why it is listed first in </span><a href="http://www.legislation.gov.uk/ukpga/2002/40/schedule/8"><span lang="EN-GB">Schedule 8</span></a><span lang="EN-GB"> of the Act. No, the problem was whether the CC
had the power to forbid Akzo Nobel from performing an agreement, given that
arguably neither that company nor the agreement was located in the UK. The key
language is in </span><a href="http://www.legislation.gov.uk/ukpga/2002/40/section/86"><span lang="EN-GB">section 86</span></a><span lang="EN-GB"> of the Act:</span></span></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal" style="margin: 0cm 0cm 0.0001pt 35.4pt;">
<span style="font-family: inherit;"><span style="font-size: small;"><b><span lang="EN-GB">86 Enforcement orders: general provisions</span></b></span></span></div>
<div class="MsoNormal" style="margin: 0cm 0cm 0.0001pt 35.4pt;">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">(1) An enforcement order may extend to a person’s conduct outside the
United Kingdom if (and only if) he is—</span></span></span></div>
<div class="MsoNormal" style="margin: 0cm 0cm 0.0001pt 70.8pt;">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">(a) a United Kingdom national;</span></span></span></div>
<div class="MsoNormal" style="margin: 0cm 0cm 0.0001pt 70.8pt;">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">(b) a body incorporated under the law of the United Kingdom or of any
part of the United Kingdom; or</span></span></span></div>
<div class="MsoNormal" style="margin: 0cm 0cm 0.0001pt 70.8pt;">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">(c) a person carrying on business in the United Kingdom.</span></span></span></div>
<div class="MsoNormal" style="margin: 0cm 0cm 0.0001pt 35.4pt;">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">(…)</span></span></span></div>
<div class="MsoNormal" style="margin: 0cm 0cm 0.0001pt 35.4pt;">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">(3) An enforcement order may prohibit the performance of an agreement
already in existence when the order is made.</span></span></span></div>
<div class="MsoNormal" style="margin: 0cm 0cm 0.0001pt 35.4pt;">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">(4) Schedule 8 (which provides for the contents of certain enforcement
orders) shall have effect.</span></span></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">Given that
the parent company Akzo Nobel Holding, the legal entity that would perform the
offending agreement, is incorporated in the Netherlands and has its
headquarters there, the only possible way for the CC to get at it is to show
that Akzo Nobel Holding is carrying on business in the United Kingdom,
something it didn’t have to show in order to get jurisdiction over the merger
as such, and something it wouldn’t have to show if its remedy had instead
focused only on Akzo Nobel’s conduct within the UK. (In other words, if they’d
chosen a behavioural remedy instead of a structural one.) And that is a
problem, because – as one would expect given the name – Akzo Nobel Holding NV
doesn’t really carry on any real business whatsoever. (Although given the
definition of </span><a href="http://www.legislation.gov.uk/ukpga/2002/40/section/129"><span lang="EN-GB">section 129</span></a><span lang="EN-GB"> of the Act, it carries on business
in the Netherlands. Cf. par. 111.) The holding company just owns shares,
directly or indirectly, in about 450 subsidiaries, several of which do carry on
business in the UK.</span></span></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">Which
brings us, much to everyone’s great surprise, to </span><a href="http://en.wikipedia.org/wiki/Salomon_v._Salomon"><span lang="EN-GB">Salomon v. Salomon</span></a><span lang="EN-GB">, an 1897 case so fundamental that every
British and Irish law student – and probably many more in the rest of the world
– has to study it on the first day of Introduction to Company Law. In that
case, the House of Lords was asked to say that Salomon the majority shareholder
was liable for the debts of Salomon Ltd, given that the company in question was
nothing more than a sole proprietor shoe maker doing business as a company with
the six other shareholders being nothing more than placeholders. (Under the
Companies Act 1862 a company had to have at least seven shareholders.) The
Lords, however, declined to “pierce the corporate veil” and held that plaintiff
person and the defendant (bankrupt) company were distinct entities, meaning
that the liquidator of the company could not recover the company’s debts from
Mr. Salomon.</span></span></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">And now,
116 years later, the CC needed some way around that doctrine in order to be
able to say that Akzo Nobel Holding NV – as opposed to its subsidiaries – was
carrying on business in the UK. The solution was to take refuge in an idea that
suggests that no piercing of veils is in fact happening, the idea of the “Single
Economic Unit”. Like so many bits of creativity in English law, this one comes
to us ultimately courtesy of </span><a href="http://en.wikipedia.org/wiki/DHN_Food_Distributors_v_Tower_Hamlets"><span lang="EN-GB">Lord Denning</span></a><span lang="EN-GB">, although the CAT does not cite
him. The CC itself seems to have been reluctant to go there explicitly (cf.
par. 99), but the CAT seizes on it with abandon. It lists several pages of
authorities to the effect that the rule that a Single Economic Unit can be
treated at law as such does not exist because the whole story amounts to
nothing more than piercing the corporate veil in a way that is forbidden by
Salomon (par. 100-107) before concluding that, in this case, none of those
concerns matter. </span></span></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">It must be
said that if ever there was a case where the Single Economic Unit argument fit
like a glove, it was this one. Akzo’s <i>de
facto</i> organisational structure involved an Executive Committee and a slew
of Business Areas, Business Units and Sub-Business Units, none of which
corresponded even remotely to the legal structure of the group (par. 49-50).
Individual corporations tended not to have individual strategies, or even
natural persons as directors or secretaries. But then again, much the same
could be said for A. Salomon & Sons Ltd; while it at least had human beings
for shareholders, its corporate strategy was determined entirely by its
majority shareholder. By checking against the Salomon case, it becomes clear
that the CAT comes dangerously close to distinguishing the Salomon precedent –
and the many other precedents that build on it – on no firmer basis than that
the Akzo case involves shareholders who are themselves corporations. And even
though from an economics point of view, that might be sensible, legally it is
extremely dicey. As the CAT itself said:</span></span></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal" style="margin-left: 35.4pt;">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">82. In our judgment, the appeal to the economic
purposes of the Act and the apparent irony in that context of allowing
technical legal concepts to limit the achievement of those purposes is, in the
present context, misconceived. It is, of course, true that the subject-matter
of the Act comprises the assessment and regulation of economic issues but that
subject-matter is realised through a legally constituted framework of procedure
and enforcement. (…) There can be no special dispensation from those general
principles, in the absence of any statutory provision to the contrary, simply
because the substance of the issues under consideration is economic.</span></span></span></div>
<div class="MsoNormal" style="margin-left: 35.4pt;">
<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">There is
another reason why the CAT’s reasoning might be considered weak. The quoted
language comes from a discussion of why the jurisdictional basis for
considering a merger in the first place should be different from the
jurisdiction to forbid it. Essentially the Tribunal’s reply is that the
different language used in the two provisions is quite deliberate, that
Parliament had clearly made the distinction on purpose, and that therefore
Parliament’s will should be respected: Not all mergers that are within the
jurisdiction of the CC can be forbidden by the CC.</span></span></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">And yet,
looking at this Single Economic Unit approach, it is not obvious that there are
in fact many cases left that fit that description. As the CC itself concluded,
Akzo’s governance structure is typical for large multinationals (cf. par. 66).
And small multinationals that operate in a UK market will normally have a more
direct presence there. So, realistically, does the CAT’s interpretation of
section 86(1)(c) really preserve the difference with section 23? A
disinterested reader may well conclude that the CAT in fact did the opposite of
what it said it would do in par. 82: it put the economic logic of the case, and
of merger review in general, before the law.</span></span></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><span style="font-size: small;"><span lang="EN-GB">For this
reason, if I were advising Akzo Nobel, I would suggest taking this case to the
Court of Appeals. Given that this case touches on important issues of
jurisdiction over mergers and company law, with the former being tackled in
this case for the first time (par. 74), there is no reason why the CAT or the
Court of Appeals should not give leave to appeal.</span></span></span></div>
martinnedhttp://www.blogger.com/profile/15282998467090268537noreply@blogger.com0tag:blogger.com,1999:blog-22498220.post-70442979680742732872013-06-27T21:05:00.003+02:002013-07-03T19:44:30.682+02:00This Week and Last Week in Luxembourg<!--[if gte mso 9]><xml>
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<div class="MsoNormal">
<span style="font-family: inherit;"><span style="font-size: small;">The Grand Chamber (Judge Juhász) reaffirmed that in competition
law the actual facts on the ground are all that matter, regardless of anyone’s
intentions. In this case, both the lawyers and the Austrian <i>Kartellgericht</i>
said that the cartel in question was permitted, but that does not prevent the
Austrian authorities from fining them anyway 15 years later. <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0681:EN:HTML">Bundeswettbewerbsbehörde and Bundeskartellanwalt v.
Schenker et al.</a></span> Cf. <a href="http://europeanlawblog.eu/?p=1797"><span lang="NL">European Law Blog</span></a></span></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><span style="font-size: small;">The Grand Chamber (Judge Ó Caoimh) also gave the Czech Republic a
€ 250.000 lump sum fine for failure to comply with an – otherwise boring –
infringement judgment. <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0241:EN:HTML">Commission
v. Czech Republic</a></span></span></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><span style="font-size: small;">Guillermo Cañas’s attempt to marshal the forces of EU competition
law against the world anti-doping agency WADA and against the ATP failed before
the Court of Justice (Judge Bay Larsen) as it had before <span lang="EN-GB"><a href="http://ec.europa.eu/competition/antitrust/cases/dec_docs/39471/39471_146_5.pdf">the
Commission</a></span> and <span lang="EN-GB"><a href="http://curia.europa.eu/juris/document/document.jsf;jsessionid=9ea7d2dc30db9dc830e49dfb4f05a81af5b3da7b7b47.e34KaxiLc3qMb40Rch0SaxuLbhr0?text=&docid=121487&pageIndex=0&doclang=FR&mode=lst&dir=&occ=first&part=1&cid=425442">the
General Court</a></span>. The problem continues to be that
the applicant, having retired, no longer has an interest in fact in the
dispute. Cañas v. Commission (<span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CJ0269:FR:HTML">FR</a></span>)</span></span></div>
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<span style="font-family: inherit;"><span style="font-size: small;">In <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CJ0186:EN:HTML">Impacto
Azul Lda v. BPSA 9 et al.</a></span>, the Court
(Judge Lõhmus) held that art. 49 TFEU allows national legislation that
“excludes the application of the principle of the joint and several liability
of parent companies vis-à-vis the creditors of their subsidiaries to parent
companies having their seat in the territory of another Member State”, because
the parent can easily contract around this.</span></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><span style="font-size: small;">The Court (Judge Rosas) agreed with <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0020:EN:HTML">AG
Mengozzi</a></span> that Luxembourg had discriminated
impermissibly against foreign students in its system for financial aid.
However, the way it got there was quite different. <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CJ0020:EN:HTML">Giersch
et al. v. Luxembourg</a></span> Cf. <span lang="EN-GB"><a href="http://eutopialaw.com/2013/06/25/case-comment-giersch-and-others-c-2012/">Eutopia
Law blog</a></span></span></span></div>
<div class="MsoNormal">
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<div class="MsoNormal">
<span style="font-family: inherit;"><span style="font-size: small;">Now that all the easy cases on mutual recognition of professional
qualifications are dealt with, it’s time to move on to more difficult
situations. In <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0575:EN:HTML">Nasiopoulos
v. Ipourgos Igias kai Pronoias</a></span>
we have a German-trained Greek medical masseur-hydrotherapist (‘Masseur und
medizinischer Bademeister’) who wants to work as a physiotherapist in Greece.
While the Court (Judge Levits) agrees that that is a bit of a stretch, it
thinks he should at least be allowed to practice that part of the profession
that he is actually qualified for.</span></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><span style="font-size: small;">In the joined cases <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0457:EN:HTML">VG
Wort v. Kyocera et al. and Fujitsu and HP v. VG Wort</a></span>,
the Court (Judge Malenovský) gave some guidance on art. 5(2)(b) and 6 of <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2001:167:0010:0019:EN:PDF">Directive
2001/29</a></span>, the copyrights directive. As it
turns out, printer manufacturers can be sued for some of the total “fair
compensation” owed for all those naughty internet users printing off books in
their attics, but not all of it. </span></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><span style="font-size: small;">The Court (Judge Jarašiūnas) signed off on a Maltese excise duty on
mobile telephone use, concluding that neither art. 12 nor art. 13 of the <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2002:108:0021:0021:EN:PDF">Authorisation
Directive</a></span> applied to such a “consumption
tax”. <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CJ0071:EN:HTML">Vodafone
Malta et al. v. Avukat Ġenerali et al.</a></span></span></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><span style="font-size: small;">AG Jääskinen, quoting pre-Supreme Court Louis Brandeis, argued
that there is no general “right to be forgotten” under existing EU data
protection law. The defendants wanted an allegedly incorrect search result
deleted from Google. <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0131:EN:HTML">Google
v. Agencia Española de Protección de Datos (AEPD) and Mario Costeja González</a></span></span></span> Cf. <a href="http://ukhumanrightsblog.com/2013/07/01/there-is-no-right-to-be-forgotten-by-internet-search-engines/" target="_blank">UK Human Rights Blog</a> and <a href="http://europeanlawblog.eu/?p=1818" target="_blank">European Law Blog</a></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><span style="font-size: small;">AG Mengozzi has a state aid case in national court, where Deutsche
Lufthansa complained about alleged state aid from Frankfurt-Hahn airport to
Ryanair. As a result of this litigation, the Commission decided to get
interested, with the result that the standstill clause of <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12008E108:EN:HTML">art.
108(3) TFEU</a></span> came into effect. Given that the
German court doesn’t necessarily agree that there is unlawful state aid here –
the case was initially rejected by the Landgericht – the question is what the
distribution of responsibilities and obligations is between the Commission, the
national court and, potentially, the ECJ. Deutsche Lufthansa v. Flughafen
Frankfurt-Hahn (<span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0284:NL:HTML">NL</a></span>,
<span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0284:DE:HTML">DE</a></span>,
<span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0284:FR:HTML">FR</a></span>)</span></span></div>
<div class="MsoNormal">
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<div class="MsoNormal">
<span style="font-family: inherit;"><span style="font-size: small;">For whatever reason, they let AG Kokott near one of those classic
legal basis & common commercial policy cases. (Cf. my LL.M. thesis, long
ago, <span lang="EN-GB"><a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1008251">here</a></span>.)
The case is about <span lang="EN-GB"><a href="http://www.conventions.coe.int/Treaty/en/Treaties/Html/178.htm">this
Council of Europe convention</a></span>.
The Commission wants the EU to ratify it based on the normal rules of the
common commercial policy under <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12008E207:EN:HTML">art.
207 TFEU</a></span>, while the Council prefers a
mixed agreement based on <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12008E114:EN:HTML">art.
114 TFEU</a></span>. Curiously, the AG argues –
correctly – that <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12008E003:EN:HTML">art.
3(2) TFEU</a></span> codifies the ERTA doctrine, but
then uses that to conclude that the EU’s competence in this area is not only
exclusive, but also based on art. 207 TFEU. <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0137:EN:HTML">Commission
v. Council</a></span></span></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><span style="font-size: small;">The General Court rejected two action for annulment in the <span lang="EN-GB"><a href="http://ec.europa.eu/competition/antitrust/cases/dec_docs/39180/39180_1315_4.pdf">Aluminium
Fluoride cartel</a></span> case. Most creatively, one of the
applicants – ICF from Tunisia – tried to plead art. 36 of the <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:1998:097:0002:0174:EN:PDF">Euro-Mediterranean
agreement between the EU and Tunisia</a></span>
from 1998 as a grounds of invalidity. Unsurprisingly, the Court did not go for
that one. ICF v. Commission (<span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62008TJ0406:FR:HTML">FR</a></span>)
and <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62008TJ0404:EN:HTML">Fluorsid
SpA and Minmet Financing v. Commission</a></span></span></span></div>
martinnedhttp://www.blogger.com/profile/15282998467090268537noreply@blogger.com0tag:blogger.com,1999:blog-22498220.post-26747803272640748112013-06-13T22:40:00.001+02:002013-06-23T04:22:13.097+02:00This Week and Last Week in Luxembourg<div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: inherit;"><span lang="EN-GB">The
British system of special advocates for national security immigration cases
survived a challenge under the </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2004:158:0077:0123:en:PDF">free movement
directive</a></span><span lang="EN-GB"> this week. While the Grand Chamber (Judge Von Danwitz)
set some limits, those are the same as the limits already set by the </span><span lang="EN-GB"><a href="http://www.bailii.org/eu/cases/ECHR/2009/301.html">ECtHR</a></span><span lang="EN-GB"> and the
UK Supreme Court: Only when it is strictly necessary, and in any event the
“essence” of the case must be disclosed. </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0300:EN:HTML">ZZ v. Secretary of
State for the Home Department</a> </span></span></span><span style="font-family: inherit;">Cf. </span><a href="http://ukhumanrightsblog.com/2013/06/14/european-court-of-justice-grapples-with-secret-evidence-in-uk-immigration-case-dr-cian-murphy/" style="font-family: inherit;" target="_blank">UK Human Rights Blog</a><span style="font-size: small;"><span style="font-family: inherit;"> and <a href="http://eutopialaw.com/2013/06/20/case-comment-zz-v-secretary-of-state-for-the-home-department-c-30011/" target="_blank">Eutopia Law Blog</a></span></span>
<span style="font-size: small;"><span style="font-family: inherit;"></span></span><br />
<span style="font-size: small;"><span style="font-family: inherit;"><br /></span></span>
<span style="font-size: small;"><span style="font-family: inherit;"><br /></span></span></div>
<div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: inherit;"><span lang="EN-GB">The
big competition case last week was </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0536:EN:HTML">Bundeswettbewerbsbehörde
v. Donau Chemie et al.</a></span><span lang="EN-GB">, where the Court (Judge Tizzano) held that
access to a competition case file cannot be made subject to a right of veto of
the parties. Even in cases of leniency submissions, the national court has to
assess the balance of interests. Note that the new Commission proposal for a
Directive on private damages suits in competition law forbids access to
statements made in leniency submissions and settlement negotiations
categorically. </span><span lang="EN-GB"><a href="http://ec.europa.eu/competition/antitrust/actionsdamages/proposal_directive_en.pdf">COM(2013) 404</a></span><span lang="EN-GB"> Cf. </span><span lang="EN-GB"><a href="http://kartellblog.de/2013/06/06/gastbeitrag-lars-maritzen-vollstaendiger-ausschluss-der-akteneinsicht-auch-gegenueber-dem-kronzeugen-verstoesst-gegen-eu-recht/">Kartellblog</a></span><span lang="EN-GB"><o:p></o:p></span> and, on the Proposal, <a href="http://recent-ecl.blogspot.co.uk/2013/06/collective-justice.html" target="_blank">Recent Developments in European Consumer Law Blog</a></span></span></div>
<div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: inherit;"><br /></span></span></div>
<div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: inherit;"><span lang="EN-GB">In
January 2012, </span><span lang="EN-GB"><a href="http://curia.europa.eu/juris/document/document.jsf?text=&docid=119781&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=222007">the General Court</a></span><span lang="EN-GB"> (Judge
Forwood, of course) held that there was no longer any need to adjudicate the
asset freeze case of Ayadi v. Commission, because Mr. Ayadi had since been
removed from the asset freeze list. The Court (Judge Rosas) affirmed last
month’s Grand Chamber judgement in </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CJ0239:EN:HTML">Abdulbasit Abdulrahim
v. Council</a></span><span lang="EN-GB"> (also by Judge Rosas) to hold that that was
wrong. </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CJ0183:EN:HTML">Ayadi v. Commission</a></span><span lang="EN-GB"><o:p></o:p></span></span></span></div>
<div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: inherit;"><br /></span></span></div>
<div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: inherit;"><span lang="EN-GB">In
the Sardinian Hotel Aid case of </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0630:EN:HTML">HGA et al. v.
Commission</a></span><span lang="EN-GB">, the Court (Judge Arabadijev) signed off on
the use by the Commission of a “corrective decision” in order to update a state
aid procedure in mid-stream in light of new information provided by the Italian
authorities (don’t ask). In so doing, the Court upheld the General Court’s
decision in Regione autonoma della Sardegna et al. v. Commission (</span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62008TJ0394:NL:HTML">NL</a></span><span lang="EN-GB">, </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62008TJ0394:DE:HTML">DE</a></span><span lang="EN-GB">, </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62008TJ0394:FR:HTML">FR</a></span><span lang="EN-GB">).<o:p></o:p></span></span></span></div>
<div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: inherit;"><br /></span></span></div>
<div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: inherit;"><span lang="EN-GB">If
one public authority hires another to clean its offices without any kind of
(traditional) collaboration being established between them, that constitutes a
public service contract under </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32004L0018:EN:HTML">Directive 2004/18</a></span><span lang="EN-GB">, meaning
that it should have been tendered. </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0386:EN:HTML">Piepenbrock
Dienstleistungen GmbH & Co. KG v. Kreis Düren</a></span><span lang="EN-GB"><o:p></o:p></span></span></span></div>
<div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: inherit;"><br /></span></span></div>
<div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: inherit;"><span lang="EN-GB">Ryanair
lost its appeal in the Alitalia state aid case. The Commission’s decision
finding that the loan provided by the state constituted unlawful state aid
while the state’s other measures did not now stands. </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CJ0287:EN:HTML">Ryanair v. Commission</a></span><span lang="EN-GB"><o:p></o:p></span></span></span></div>
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<span style="font-size: small;"><span style="font-family: inherit;"><span lang="EN-GB">As
it turns out, just because you didn’t mention jurisdiction when opposing a the
European order for payment, doesn’t mean you’ve forfeited the right to do so in
the regular procedure under </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2001:012:0001:0023:EN:PDF">Regulation 44/2001</a></span><span lang="EN-GB">. </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CJ0144:EN:HTML">Goldbet Sportwetten
v. Sperindeo</a></span><span lang="EN-GB"><o:p></o:p></span></span></span></div>
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<span style="font-size: small;"><span style="font-family: inherit;"><span lang="EN-GB">AG
Mengozzi is proposing that, for a change, the Swiss should not end up holding
the short end of the stick in a dispute about the tax-free amount for German
inheritance tax. </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0181:EN:HTML">Welte v. Finanzamt
Velbert</a></span><span lang="EN-GB"><o:p></o:p></span></span></span></div>
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<span style="font-size: small;"><span style="font-family: inherit;"><br /></span></span></div>
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<span style="font-size: small;"><span style="font-family: inherit;"><span lang="EN-GB">AG
Kokott delivered an opinion on the rights of the citizen taxpayer when a Member
State asks another Member State for information. She concluded that, as far as
EU law is concerned, the citizen has no rights in this context. Jiří Sabou v.
Finanční ředitelství pro hlavní město Prahu (</span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0276:NL:HTML">NL</a></span><span lang="EN-GB">, </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0276:DE:HTML">DE</a></span><span lang="EN-GB">, </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0276:FR:HTML">FR</a></span><span lang="EN-GB">)<o:p></o:p></span></span></span></div>
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<span style="font-size: small;"><span style="font-family: inherit;"><span lang="EN-GB">The
facts in the unfair commercial practices case of </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CC0435:EN:HTML">CHS Tour Services v.
Team4 Travel</a></span><span lang="EN-GB"> make for a pretty interesting case, but
tragically the ECJ’s portion of it is pretty straightforward. Defendant
describes its arrangement as “exclusive” based on its contract with the hotel
in question, plaintiff manages to book there anyway, and therefore challenges
the use of “exclusive”. Result, according to AG Wahl: “Where a commercial
practice falls within the scope of art. 5(4) of </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2005:149:0022:0039:en:PDF">Directive 2005/29</a></span><span lang="EN-GB">, it is of
no relevance whether the criteria under art. 5(2)(a) and/or art. 5(2)(b) are
also fulfilled.” So the plaintiff wins. Cf. <a href="http://recent-ecl.blogspot.co.uk/2013/06/opinion-ag-wahl-in-chs-tour-services-on.html" target="_blank">Recent Developments in European Consumer Law Blog<o:p></o:p></a></span></span></span></div>
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<span style="font-size: small;"><span style="font-family: inherit;"><br /></span></span></div>
<div class="MsoNormal">
<span style="font-size: small;"><span style="font-family: inherit;"><span lang="EN-GB">According
to AG Mengozzi, the requirement that you have to provide your fingerprints for
your passport does not violate art. 8 </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2012:326:0391:0407:EN:PDF">Charter</a></span><span lang="EN-GB">. Schwarz
v. Stadt Bochum (</span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0291:DE:HTML">DE</a></span><span lang="EN-GB">, </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0291:FR:HTML">FR</a></span><span lang="EN-GB">)<o:p></o:p></span></span></span></div>
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<span style="font-size: small;"><span style="font-family: inherit;"><span lang="EN-GB">AG
Jääskinen made some pointed remarks about the brevity with which the French
Cour de Cassation formulated its prejudicial question (par 19), before
concluding that the questions posed are irrelevant for the dispute at bar and
therefore inadmissible. The case concerns the <i>locus delicti</i> of a case of
alleged music piracy under </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2001:012:0001:0023:EN:PDF">Regulation 44/2001</a></span><span lang="EN-GB">. Pinckney
v. KDG Mediatech AG (</span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0170:NL:HTML">NL</a></span><span lang="EN-GB">, </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0170:DE:HTML">DE</a></span><span lang="EN-GB">, </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0170:FR:HTML">FR</a></span><span lang="EN-GB">)<o:p></o:p></span></span></span></div>
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<br />
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<span style="font-size: small;"><span style="font-family: inherit;"><span lang="EN-GB">The
General Court (Judge Martins Ribeiro) handed down an interesting access to
documents judgment last week. In </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011TJ0093:EN:HTML">Stichting Corporate
Europe Observatory v. Commission</a></span><span lang="EN-GB">, it held that the
fact that certain documents about the EU-India free trade negotiations had been
provided to trade associations – i.e. potentially to large numbers of people –
did not mean that the Commission had essentially already made those documents
public.</span><span lang="EN-GB"><o:p></o:p></span></span></span></div>
martinnedhttp://www.blogger.com/profile/15282998467090268537noreply@blogger.com0tag:blogger.com,1999:blog-22498220.post-11661712648811811152013-06-09T17:00:00.000+02:002013-06-09T17:00:00.879+02:00Fyra<div class="separator" style="clear: both; text-align: center;">
<a href="http://news.bbcimg.co.uk/media/images/65431000/jpg/_65431784_65431763.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="207" src="http://news.bbcimg.co.uk/media/images/65431000/jpg/_65431784_65431763.jpg" width="320" /></a></div>
In <a href="http://www.nrc.nl/heijne/" target="_blank">his weekly column</a>, which is usually unique among opinion pieces in being both carefully reasoned and highly insightful, Bas Heijne tore into a slew of targets yesterday. The reason why he <a href="http://www.nrc.nl/heijne/2013/06/09/fiasco/" target="_blank">lost his calm like that</a>? Fyra.<br />
<br />
Fyra is - or rather: was - the high-speed train between Amsterdam and Brussels. There is also a high-speed from Amsterdam to Brussels and then on to Paris, the Thalys, but that train works just fine and is not the topic of this story. Fyra, on the other hand, is an unmitigated disaster. It was launched on December 9, last year, and by the time I took the highspeed (Thalys) to Brussels in early January, it already had a reputation for offering at best an even chance of reaching its destination. Later that month, it was taken out of service, as reported by the BBC <a href="http://www.bbc.co.uk/news/world-europe-21141009" target="_blank">here</a>. On May 31, the Belgian railways announced they were cancelling the Fyra service permanently, and a few days later the Dutch followed suit.<br />
<br />
So who's to blame? Bas Heijne mentions a few people, but he seems mostly interested in talking about Parliament. However, let's start at the beginning:<br />
<ul>
<li>The supplier of the train, the Italian company AnsaldoBreda, seems to have supplied a train that was not fit for purpose.</li>
<li>NS and NMBS took delivery of a train that was not fit for purpose.</li>
<li>NS and NMBS contracted with AnsaldoBreda in the first place.</li>
<li>The Dutch and Belgian governments are the only shareholders of NS and NMBS respectively, so clearly they dropped the ball.</li>
<li>Likewise, there are some things wrong with the regulatory system. More on that below, but again it is the governments of the two countries that are responsible for that one.</li>
<li>And finally, Mr. Heijne notes how Parliament (the Dutch one) seems to spend all of its time either screaming at the government about something that was on the front pages of the newspapers the day before, or screaming at the government because of some mess that resulted from the government giving it what it asked for. While that is quite correct, I'm not sure if it is such a relevant consideration in this particular instance. I don't recall any screams from Parliament about how we urgently needed a highspeed connection with Belgium. The government seems to have originated that idea all on its own. </li>
</ul>
So who's really to blame? Well, it may be <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1967094" target="_blank">my professional background</a>, but I think the issue is one of regulation, not politics. Remember the issue of NS: Like Schrödinger's cat, <a href="http://martinned.blogspot.co.uk/2012/07/ns-does-jimmy-carr.html" target="_blank">it is two things at once</a>. It is a state-owned for-profit company that contracts with another state-owned for-profit company for access to the network, which it is entitled to because of a concession it was granted by its owner, the state. All the money it makes running trains and <a href="http://martinned.blogspot.co.uk/2012/09/ns-does-jimmy-carr-2.html" target="_blank">avoiding taxes</a> it pays out to the state in dividends. <br />
<br />
In the 1990s, this schizophrenia infected even the state. The Treasury department viewed NS as a for-profit subsidiary and advocated treating it as such until its privatisation, which was to happen sooner rather than later. The Transport department, on the other hand, viewed it as a state-owned enterprise that should be encouraged to run the trains as wisely as possible based on the government's instructions without being burdened with such nuisances as competition or privatisation. The former was run almost exclusively by the liberal VVD party between 1994 and 2007, mostly through the highly influential Deputy-Prime Minister and occasional party leader Gerrit Zalm, while the latter ministry was traditionally a bastion of Christian-Democrats and Socialists. And so, with the ebbs and flows of power between parties and between ministries, the government's policy goals with regard to the railway sector changed as well. That is how the country ended up with a fully unbundled railway sector with competitive tenders in large parts of the system, but also with a state-owned incumbent who is given the most important concession outright every few years. (The last time until 2025.)<br />
<br />
Highspeed South, which includes both Fyra and Thalys, is a wonderful example of this schizophrenia at work. When the Treasury was powerful, it pushed through a competitive tender for this concession. NS was so paranoid about letting any foreign company onto the Dutch market that they went crazy and overbid massively. As Mr. Heijne's own newspaper, the NRC, <a href="http://www.nrc.nl/nieuws/2011/06/18/nederlandse-staat-nam-bewust-grote-financiele-risicos-met-de-hogesnelheidslijn/" target="_blank">discovered in 2011</a>, the company's internal bid team thought that €120 - 130 million per year would be the maximum realistic bid. The board, however, added to that in a series of meetings until they ended up with € 148 million, a sum € 18 million higher than the € 130 million that the Transport Ministry had estimated as the maximum. The bid was so high that the government went back and encouraged them to re-evaluate, but in the end the bid was accepted. (No other company even came close to bidding € 100 million, much less € 148 million, so NS's concern was entirely unwarranted.)<br />
<br />
When High-Speed Alliance, the NS-KLM joint venture tasked with running the trains, went bankrupt in 2011, the Treasury had long since lost its influence. So the liberal approach to railway regulation was unceremoniously replaced by a conservative approach: The Dutch company gets to keep its concession. Instead of re-tendering, the highspeed service was added to NS's regular concession and granted outright, at a reduced price of € 108 million per year. (Ironically, since 2010 the Transport Minister was a liberal.) Nationalism and bureaucracy instead of competition.<br />
<br />
In my view, that is how we ended up with this Fyra debacle. <a href="http://www.nrc.nl/nieuws/2013/01/26/financiele-overwegingen-gaven-doorslag-bij-aanschaf-fyra/" target="_blank">As NRC wrote in January</a>, the reason why in 2004 NS and NMBS bought the AnsaldoBreda trains instead of rolling stock from another manufacturer was purely a matter of price. They compromised on speed (which you wouldn't need anyway given how close together the stops are) and quality in order to get the cheapest possible train. That decision made sense from the point of view of a company that was in over its head, having bid way too much in a competitive tendering process. The trouble only arrived now, long after all the responsible railway executives and government ministers have retired.<br />
<br />
To review:<br />
<ul>
<li>2001: The government screws up the tender by accepting a bid that was unrealistically high. (<a href="http://martinned.blogspot.co.uk/2012/01/gaming-system-tendering-law.html" target="_blank">Tenders are hard</a>.)</li>
<li>2004: NS and NMBS buy the cheapest trains they can get their hands on.</li>
<li>2011: HSA collapses and is rescued by the Dutch state.</li>
<li>2013: The trains start running and then break down. </li>
</ul>
<br />
This is not a problem that started in Parliament. They wrote <a href="http://wetten.overheid.nl/BWBR0011470/geldigheidsdatum_09-06-2013" target="_blank">a law</a> that is fundamentally sound. It just leaves a little too much room for shenanigans, so shenanigans is what we got. The solution seems to be that NS should be privatised post haste. A company that makes € 300 million profit per year should fetch a handy sum, which should please <a href="http://martinned.blogspot.co.uk/2013/06/lone-voice-of-sanity-successfully.html" target="_blank">the orthodoxy</a>, and theoretically privatisation should remove any further temptation for the Transport Ministry to do anything stupid. Let a private NS run the trains it has contracted to run, and let the Transport Ministry and the Regulator <a href="https://www.acm.nl/en/" target="_blank">ACM</a> fine them up the wahzoo if they screw it up. martinnedhttp://www.blogger.com/profile/15282998467090268537noreply@blogger.com0tag:blogger.com,1999:blog-22498220.post-53556338955256054362013-06-08T18:21:00.000+02:002013-06-08T21:30:35.706+02:00Lone Voice of Sanity Successfully SilencedEver since the beginning of the current economic crisis, the government's orthodoxy that cutting expenditure to match tax receipts is the only option has been echoed by all official voices - the Treasury, <a href="http://martinned.blogspot.com/2012/03/de-nederlandsche-bank.html" target="_blank">the National Bank</a> - except one. The <a href="http://en.wikipedia.org/wiki/CPB_(Netherlands)" target="_blank">CPB</a>, the state agency responsible for analysing the economic impacts of government policy through advanced economic modelling, consistently insisted on pointing out that reducing expenditure doesn't do anyone any good if that reduces GDP more than debt. If contractionary austerity is, well, contractionary - and the CPB's models show it is - maybe it should be left for better economic times. <br />
<br />
Insiders knew, however, that the secret of the CPB's sucess was fickle. After all, like every government agency there is a limit to its independence, and that limit is the term of appointment of its chief. <a href="http://nl.wikipedia.org/wiki/Coen_Teulings" target="_blank">Coen Teulings</a>, the man who was director of the CPB from 2006 until last April, took responsibility for the unpopular findings of his staff, resisting pressure from the government to downplay the results of the agency's modelling. Now that is term is over, however, he has been replaced by Laura van Geest, someone who comes straight from the heart of orthodoxy: the Treasury Ministry. Following the appointment of former top-Treasury civil servant Klaas Knot to the Presidency of the National Bank last year, this is the second time that an independent agency's conformity to orthodoxy is safeguarded by putting a Treasury staffer in charge.<br />
<br />
The most surprising thing is how little time it took for this decision to matter. Teulings left on May 1, but Van Geest's appointment doesn't start until August 1. In the interim, however, the mood has already changed. This week, the CPB released a Policy Brief called "<a href="http://www.cpb.nl/en/publication/prudent-debt-level-a-tentative-calculation" target="_blank">Prudent debt level: a tentative calculation</a>", which magically finds that the prudent (maximum) level of debt is in the 61%-86% range. Above that, the authors claim, "the gains of holding a larger buffer to ward off negative shocks [exceed] the cost of transitioning to a lower debt level", the cost of transitioning being evaluated at a 8-year time horizon.<br />
<br />
While this has the merit of not being <i>prima facie</i> stupid (it doesn't have a <a href="http://krugman.blogs.nytimes.com/2013/05/26/reinhart-and-rogoff-are-not-happy/" target="_blank">Reinhart-Rogoff-style </a>threshold level of debt above which bad things start to happen immediately), it misses one thing: it uses an average/ordinary 8-year time horizon, based on the way the economy has historically worked, which is very much not the same as the current 2013-2021 time horizon. The next 8 years are likely to be decidedly not average, just like the last 6 years weren't. The authors recognise this, to some exent. That is why they make caveats such as this one:<br />
<br />
In <a href="http://www.cpb.nl/en/publication/prudent-debt-level-a-tentative-calculation" target="_blank">the press release</a>:<br />
<br />
<blockquote class="tr_bq">
Caution is advised in using these debt levels as anchors for policy, as the costs of deviating from these numbers are small in this range while the benefits may be significant.</blockquote>
<br />
And in <a href="http://www.cpb.nl/sites/default/files/publicaties/download/cpb-background-document-prudent-debt-level-tentative-calculation.pdf" target="_blank">the brief itself</a>:<br />
<blockquote class="tr_bq">
<br />
Caution is advised in using these prudent debt levels to anchor policy. Note for example that, by Table 1, an increase in debt of a 10% from such a prudent level reduces lifetime earnings by just a few percentage points. This is relatively small if the debt increase averts a financial crisis. Also, adverse economic circumstances may lead to temporarily higher debt levels, which can be prudent.<br />
<br />
[Footnote:] This can be understood by seeing that the cost of debt reduction increase in a recession. Then, the prudent debt level, that at which the gains of debt reduction equal the costs, rises as well.</blockquote>
Result: We end up with a study that is not so much stupid as it is misguided, but that conveniently ends up supporting the orthodox line that the Netherlands should get to work cutting its expenditures in order to reduce its debt down to the 60% of the <a href="http://ec.europa.eu/economy_finance/economic_governance/sgp/index_en.htm" target="_blank">Stability and Growth Pact</a>. So yes, we're still all doomed.martinnedhttp://www.blogger.com/profile/15282998467090268537noreply@blogger.com0tag:blogger.com,1999:blog-22498220.post-55402314991693743572013-05-30T20:34:00.001+02:002013-07-11T22:55:40.223+02:00This Week and Two Weeks Ago in Luxembourg<span style="font-family: inherit;">The Grand Chamber (Judge Rosas) this week again concerned itself with the issue of
asset freezes. In this case, it held that </span><span lang="EN-GB" style="font-family: inherit;"><a href="http://curia.europa.eu/juris/document/document.jsf?text=&docid=120330&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=3733404">the General Court</a></span><span style="font-family: inherit;"> had erred
by holding that Abdulbasit Abdulrahim no longer had standing to sue to have his
name removed from the sanctions list because, since he commenced proceedings,
his name had already been removed from the sanctions list. The Grand Chamber
argued that the applicant had a separate interest in the retroactive effect
that a victory in court would produce, as well as in the support such a
judgment would offer for any damages suit. </span><span lang="EN-GB" style="font-family: inherit;"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CJ0239:EN:HTML">Abdulbasit Abdulrahim
v. Council</a></span><br />
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<span style="font-family: inherit;"><span style="font-size: small;">The
Court (Judge Šváby) upheld a General Court finding that the Commission failed
to act in a state aid case brought by Ryanair against Italy. I must say that
the two years between the initial complaint and the action before the General
Court seems short to me, given how long the Commission usually takes to handle
competition cases. <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0615:EN:HTML">Commission v. Ryanair</a></span></span></span></div>
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<span style="font-family: inherit;"><span style="font-size: small;">In
its 1<sup>st</sup> Railway Package cases, the Commission achieved another
(partial) win, this time against Poland. The Court (Judge Borg Barthet) agreed
that the Polish system for access pricing left somewhat to be desired. <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62010CJ0512:EN:HTML">Commission v. Poland</a></span></span></span></div>
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<span style="font-family: inherit;"><span style="font-size: small;">In
one of the more optimistic trademark actions I’ve ever seen, You-Q BV litigated
all the way up to the Court of Justice in order to win the right to use Beatle
as a trademark. Just like OHIM and the General Court, the Court found for Apple
(the record company, that’s irony right there). In fact, the case was summarily
dismissed as in part manifestly inadmissible and in part manifestly unfounded. <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CO0294:EN:HTML">You-Q v. OHIM</a></span></span></span></div>
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<span style="font-family: inherit;"><span style="font-size: small;">The
Italian public procurement case of Consulta Regionale Ordine Ingegneri della
Lombardia e.a. v. Comune di Pavia (<span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CO0564:FR:HTML">FR</a></span>), where
the city of Pavia gave a contract for the provision of services to the local
university without a public tender, does not seem so obvious to me that it
could be handled in an order, but the court disagreed. The City (probably)
loses.</span></span></div>
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<span style="font-family: inherit;"><span style="font-size: small;">For
people who are amused by the mess that can occur when different Member States
have different rules for deciding where an alleged tort was committed there is
this month’s <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0228:EN:HTML">Melzer v. MF Global</a></span> (Judge
Safjan), which is handled by a court in Berlin even though the most
straightforward <i>locus delicti</i> is London. The Court held that the case
should be moved to the UK. Cf. <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32001R0044:en:HTML">Regulation 44/2001</a></span>.</span></span></div>
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<span style="font-family: inherit;"><span style="font-size: small;">“A
decision by which a national authority extends to all traders in an
agricultural industry an agreement which, (…) introduces the levying of a
contribution in an inter-trade organisation recognised by that national
authority, thus rendering that contribution compulsory, in order to make it
possible to implement publicity activities, promotional activities, external
relations activities, quality assurance activities, research activities and
activities in defence of the sector’s interests, does not constitute State
aid.” (Judge Juhász) <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0677:EN:HTML">Doux Élevage SNC and
Coopérative agricole UKL-ARREE v. Ministère de l’Agriculture and Comité
interprofessionnel de la dinde française (CIDEF)</a></span></span></span></div>
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<span style="font-family: inherit;"><span style="font-size: small;">The
Court (Judge Lõhmus) spent some time on the obligation to assess the
suitability or appropriateness of the service to be provided under art. 19(9)
of the financial instruments <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2004:145:0001:0001:EN:PDF">directive 2004/39</a></span>. <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0604:EN:HTML" target="_blank">Genil 48 et al. v. Bankinter et al.</a></span></span></div>
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<span style="font-family: inherit;"><span style="font-size: small;">The
Court (Judge Ilešič) also considered the issue of detention for illegal aliens
pending their return to their home country. It held the illegal immigrants <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2005:326:0013:0034:EN:PDF">Directive 2005/85</a></span> does not
apply to an alien who has asked for asylum, meaning that detention is precluded
under <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2003:031:0018:0025:EN:PDF">Directive 2003/9</a></span> unless
abuse of right can be shown. <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0534:EN:HTML">Arslan v. Policie ČR,
Krajské ředitelství policie Ústeckého kraje, odbor cizinecké policie</a></span></span></span></div>
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<span style="font-family: inherit;"><span style="font-size: small;">In
more asylum law, the Court (Judge Bay Larsen) held that nothing in <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2003:050:0001:0010:EN:PDF">Regulation 343/2003
(Dublin II)</a></span> forbids a Member State from considering a
given application for asylum. It is not required, however, to ask for the
opinion of the Office of the United Nations High Commissioner for Refugees
about the decision whether or not to consider the application, or whether to
send the asylum seeker back to Greece. <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0528:EN:HTML">Halaf v. Darzhavna
agentsia za bezhantsite pri Ministerskia savet</a></span></span></span></div>
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<span style="font-family: inherit;"><span style="font-size: small;">The
Court (Judge Berger) applied the unfair consumer contract terms <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31993L0013:en:HTML">directive 93/13</a></span> to a
tenancy agreement. It ended up aligning the procedural implications of that
directive with national rules regarding the public policy exception in contract
law. However, when it comes to remedies it rejected the Dutch court’s approach
of reducing the contractual damages owed, requiring instead that no damages
award be imposed at all. <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0488:EN:HTML">Asbeek Brusse and De
Man Garabito v. Jahani BV</a></span> Same directive, same judge: <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0397:EN:HTML">Jőrös v. Aegon
Magyarország</a></span></span></span><span style="font-size: small;"><span style="font-family: inherit;"> </span></span>Cf. <a href="http://recent-ecl.blogspot.co.uk/2013/05/unfair-terms-ecj-reaffirms-important.html" target="_blank">Recent developments in Eurpean Consumer Law Blog</a></div>
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<span style="font-family: inherit;"><span style="font-size: small;">The
Court (Judge Lõhmus) imposed a € 3 million penalty on Sweden for non-compliance
with a previous judgement. The original case was about <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:105:0054:0063:EN:PDF">Directive 2006/24</a></span>. <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0270:EN:HTML">Commission v. Sweden</a></span></span></span> Cf. <a href="http://www.verfassungsblog.de/de/vorratsdatenspeicherung-schweden-ist-nicht-deutschland/" target="_blank">Verfassungsblog</a> and the <a href="http://blog.lehofer.at/2013/05/VDS-Schweden.html" target="_blank">e-comm blog</a></div>
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<span style="font-family: inherit;"><span style="font-size: small;">In
Jeremy F. v. Premier Ministre (<span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62013CJ0168:FR:HTML">FR</a></span>), the
Court (Judge Silva de Lapuerta) did a nice nuts & bolts EAW judgment. Cf. <a href="http://www.kramerlevin.com/files/Publication/9e475a4a-d8fc-417c-b707-27ffc2a38a87/Presentation/PublicationAttachment/749897fb-8539-4b27-b446-01b1e06364df/130613_EU%20Law%20Alert_QPC_va.pdf" target="_blank">this article</a> and <a href="http://www.courthousenews.com/2013/05/30/58075.htm" target="_blank">Courthouse news</a>. </span></span></div>
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<span style="font-family: inherit;"><span style="font-size: small;">AG
Bot proposed holding for the Parliament in its dispute with the Council over
the way budgets should be decided. The problem is that the preamble and section
9 of art. 314 TFEU appear to envisage different ways in which the procedure is
to be concluded. On balance, the AG placed more weight on section 9 and argued
that no single legislative act, signed by the presidents of both institutions,
was necessary. Council v. Parliament (<span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CC0077:NL:HTML">NL</a></span>, <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CC0077:DE:HTML">DE</a></span>, <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CC0077:FR:HTML">FR</a></span>)</span></span></div>
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<span style="font-family: inherit;"><span style="font-size: small;">Commission
v. Portugal (<span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CC0292:NL:HTML">NL</a></span>, <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CC0292:DE:HTML">DE</a></span>, <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CC0292:FR:HTML">FR</a></span>) is the
first ever case about the implementation of a penalty payment imposed under <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12008E260:EN:HTML">art. 260 TFEU</a></span>. The
Commission decided that Portugal should pay 142 days x € 19.392 = € 2.753.664,
but this decision was annulled by <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62009TJ0033:EN:HTML">the General Court</a></span>. AG
Jääskinen agreed, both with the General Court’s interpretation of its authority
under art. 260 TFEU and with its interpretation of <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62006CJ0070:EN:HTML">the original judgment</a></span>.</span></span></div>
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<span style="font-family: inherit;"><span style="font-size: small;">Discussing
the right of the Council to refuse access to certain legislative documents
(things that show which delegations submitted which amendments, as always), AG
Cruz Villalón spent most of his time on the <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62009TJ0233:EN:HTML">General Court</a></span>’s
balancing of interests. In the end, he concluded that the <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62009TJ0233:EN:HTML">General Court</a></span> had been
right to find for the plaintiff. <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CC0280:EN:HTML">Council v. Access
Info Europe</a></span></span></span></div>
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<span style="font-family: inherit;"><span style="font-size: small;">That
AG also gave an opinion on some issues to do with the liquidation of
Landsbanki. <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0085:FR:HTML">Société Landsbanki
Islands HF v. Kepler Capital Markets SA and Frédéric Giraux</a></span></span></span></div>
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<span style="font-family: inherit;"><span style="font-size: small;">AG
Wahl took the concept of a <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32001R0044:en:HTML">Regulation 44/2001</a></span> mess to a
whole new level in a case where the German courts are trying to decide which of
two conflicting Romanian decisions to enforce. Theoretically, art. 34(4) of the
Regulation offers a solution to this kind of situation, but the AG argues – not
implausibly – that this article does not apply to a situation where the two
conflicting judgements are from the same Member State. <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0157:EN:HTML">Salzgitter Mannesmann
Handel GmbH v. SC Laminorul SA</a></span></span></span></div>
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<span style="font-family: inherit;"><span style="font-size: small;">AG
Wahl also gave his opinion in a case that might strike the reader as a bit
unfair: Peter Brey sues the Austrian Pensionsversicherungsanstalt because they
refuse to given him – a German citizen – the compensatory supplement to his
pension that Austrians would receive, and the Pensionsversicherungsanstalt
turns around and argues that, as someone claiming social assistance, Mr. Brey
has no right to live in Austria in the first place. AG Wahl started by citing <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:61991CC0168:EN:HTML">AG Jacobs in
Konstantinidis</a></span> but ended up concluding that the
Pensionsversicherungsanstalt was right to call the supplement “social
assistance”. Fortunately, he also concluded that that doesn’t matter until
Austria actually throws Mr. Brey out. <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0140:EN:HTML">Brey v.
Pensionsversicherungsanstalt</a></span></span></span> Cf. (the end of) <a href="http://openeuropeblog.blogspot.co.uk/2013/05/why-commission-has-grossly-over-stepped.html" target="_blank">this Open Europe Blog post</a></div>
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<span style="font-family: inherit;"><span style="font-size: small;">In
litigation about the German Volkswagen Law, AG Wahl is sufficiently uncertain
about his conclusion that Germany complied with the Court’s judgment in <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62005J0112:EN:HTML">Case C-112/05</a></span> that he
discusses financial penalties as well. That is actually the most interesting
part, because he discusses how the fact that the original judgment is
potentially unclear and the fact that the Commission took its sweet time
brining this action should be taken into account. (Par. 63-88) <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0095:EN:HTML">Commission v. Germany</a></span></span></span></div>
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<span style="font-family: inherit;"><span style="font-size: small;">Italy,
because it’s Italy, has a stricter limit for the amount of advertising allowed
to pay-tv than for free-to-air. AG Kokott concluded that that is (probably) in
violation of art. 4(1) of <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2010:095:0001:0024:EN:PDF">Directive 2010/13</a></span>, but not
a violation of free market law in general. <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0234:EN:HTML">Sky Italia</a></span></span></span></div>
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<span style="font-family: inherit;"><span style="font-size: small;">AG
Mengozzi concluded that the Swedish rule for punishing people who are tardy
surrendering their ETS credits is overly harsh. Billerud v. Naturvårdsverket (<span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0203:NL:HTML">NL</a></span>, <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0203:DE:HTML">DE</a></span>, <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0203:FR:HTML">FR</a></span>)</span></span></div>
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<span style="font-family: inherit;"><span style="font-size: small;">In
a stack of litigation involving state aid to Dutch “woningcorporaties”, AG
Wathelet argued that the General Court was wrong to hold that some of them were
inadmissible, especially given that that court had not examined the possibility
of applying the new standing rule of <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12008E263:EN:HTML">art. 263(4) TFEU</a></span>. For the
cases that had been examined substantively by the General Court, the AG
generally proposed upholding the judgment. Stichting Woonlinie et
al. v. Commission (<a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0133:NL:HTML">NL</a>,
<span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0133:DE:HTML">DE</a></span>, <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0133:FR:HTML">FR</a></span>) and Stichting Woonpunt et al. v. Commission (<a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0132:NL:HTML">NL</a>,
<span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0132:DE:HTML">DE</a></span>, <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0132:FR:HTML">FR</a></span>)</span></span></div>
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<span style="font-family: inherit;"><span style="font-size: small;">AG
Sharpston proposed holding that the General Court took too much time for the
industrial bags cartel case, without however proposing any immediate
consequences for that fact. Rather than reducing the fine, she argues that the
better approach is to have the applicants bring a separate action for damages. <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0058:EN:HTML">Groupe Gascogne SA v.
Commission</a></span>, <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0040:EN:HTML">Gascogne Sack
Deutschland v. Commission</a></span> and <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0050:EN:HTML">Kendrion v.
Commission</a></span></span></span></div>
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<span style="font-family: inherit;"><span style="font-size: small;">According
to AG Kokott, it is perfectly fine for Finland to regulate a given product as a
medicinal product under <span lang="EN-GB"><a href="http://www.edctp.org/fileadmin/documents/ethics/DIRECTIVE_200183EC_OF_THE_EUROPEAN_PARLIAMENT.pdf">Directive 2001/83</a></span> while
every other Member State considers it a medical device under <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31993L0042:en:HTML">Directive 93/42</a></span>. <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0109:EN:HTML">Laboratoires
Lyocentre</a></span></span></span></div>
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<span style="font-family: inherit;"><span style="font-size: small;">The
General Court again annulled a set of asset freezes in <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011TJ0187:EN:HTML">Trabelsi et al. v.
Council</a></span>. In <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62009TJ0146:EN:HTML">Parker v. Commisison</a></span>, MRI v.
Commission (<span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62009TJ0154:NL:HTML">NL</a></span>, <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62009TJ0154:DE:HTML">DE</a></span>, <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62009TJ0154:FR:HTML">FR</a></span>) and <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62009TJ0147:EN:HTML">Trelleborg v.
Commission</a></span> it partially (a small part) annulled two
Commission decisions in the <span lang="EN-GB"><a href="http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=1_39406">marine hoses cartel
case</a></span>.</span></span></div>
martinnedhttp://www.blogger.com/profile/15282998467090268537noreply@blogger.com0tag:blogger.com,1999:blog-22498220.post-62160113315550272382013-05-09T19:44:00.001+02:002013-06-01T14:21:43.947+02:00This Week and Last Week in LuxembourgThe biggest case this week is probably <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0197:EN:HTML">Joined Cases Libert et al. v. Flemish Government and All Projects & Developments NV et al. v. Flemish Government</a>, where the Court (Judge Tizzano) answered a number of questions coming from the Belgian Constitutional Court. (There's 12 of them, and I honestly don't know what the common thread is supposed to be.) Most notably, it declared the Flemish system for controlling who gets to buy immovable property incompatible with the Common Market.<br />
<br />
A Nigerian student studying for his doctorate in Edinburgh may still have the right to have his Nigerian mother in the country with him – his own right of
residence rests on art. 12 of <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31968R1612:EN:HTML">Regulation 1612/68</a>, given that his father is an EU citizen – but only if he can convince the national court that he “remains in need of the presence and care of [his mother] in order to be able
to continue and to complete his (…) education”. <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0529:EN:HTML">Alarape and Tijani v. Secretary of State for the Home Department</a><br />
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In a related case, the Court (also by Judge Silva de Lapuerta) paid lip service to the genuine enjoyment doctrine while reiterating the holding of <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0256:EN:HTML">Dereci</a> and <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62009CJ0434:EN:HTML">McCarthy</a> that Member States can all but do as they like to their own citizens who have never exercised their
right to free movement. <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CJ0087:EN:HTML">Ymeraga et al. v. Ministre du Travail, de l’Emploi et de l’Immigration</a><br />
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On the day that the Netherlands traded in its formidable Queen for a lightweight King, AG Cruz-Villalón opined that the City of Hilversum was not allowed to
include a price regulation term in the contract of sale it concluded with UPC for the city’s cable television network. He argued that the 2002 telecoms
package applies to this kind of regulation, and that the contract term in question is contrary to art. 13 of the <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2002:108:0007:0020:EN:PDF">Access Directive</a>. Only <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12008E106:EN:HTML">art. 106(2) TFEU</a> might save the city’s regulations. UPC v. Municipality of Hilversum (<a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CC0518:NL:HTML">NL</a>, <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CC0518:DE:HTML">DE</a>, <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CC0518:FR:HTML">FR</a>) Cf. <a href="http://blog.lehofer.at/2013/04/UPC-Nederland.html">e-comm blog</a><br />
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On the same day, AG Bot concluded that International Jet Management, which carries out flights from Russia and Turkey to, amongst others, Germany, can do so using its Austrian license without needing a German license as well. The German rule to the contrary is contrary to <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12008E018:EN:HTML">art. 18 TFEU</a>. International Jet
Management (<span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CC0628:NL:HTML">NL</a></span><span lang="EN-GB">, </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CC0628:DE:HTML">DE</a></span><span lang="EN-GB">, </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CC0628:FR:HTML">FR</a></span><span lang="EN-GB">)</span>
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<span style="font-family: inherit;"><span lang="EN-GB">A
week later that same AG proposed slapping down a plainly discriminatory rule
regarding which kinds of certificates of origin (cf. art. 5 of </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2001:283:0033:0033:EN:PDF">Directive 2001/77</a></span><span lang="EN-GB">) are accepted for the
purposes of a renewables quota in Flanders. More through inaction than anything
else, the Flemish wound up accepting only Flemish certificates, which is
obviously not OK. </span><span style="font-family: "Calibri","sans-serif"; mso-ansi-language: NL;">Essent Belgium v. Vlaamse Reguleringsinstantie voor de
Elektriciteits</span><span style="font-family: "MS Gothic"; mso-ansi-language: NL;">‑</span><span style="font-family: "Calibri","sans-serif"; mso-ansi-language: NL;"> en Gasmarkt (<a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0204:NL:HTML">NL</a>,
</span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0204:DE:HTML"><span lang="NL" style="font-family: "Calibri","sans-serif"; mso-ansi-language: NL;">DE</span></a></span><span style="font-family: "Calibri","sans-serif"; mso-ansi-language: NL;">, </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0204:FR:HTML"><span lang="NL" style="font-family: "Calibri","sans-serif"; mso-ansi-language: NL;">FR</span></a></span><span style="font-family: "Calibri","sans-serif"; mso-ansi-language: NL;">) Cf. <a href="http://gavclaw.com/2013/05/14/preussen-elektra-confirmed-bot-ag-in-essent/" target="_blank">GAVC Law Blog</a></span> and <a href="http://europeanlawblog.eu/?p=1788" target="_blank">European Law Blog</a></span></div>
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<span style="font-family: inherit;"><span lang="EN-GB">AG
Bot was more supportive, however, of the Walloon system for promoting biomass
energy, even though it might be considered as discriminating between generation
from wood and generation from other biomass. </span><span style="font-family: "Calibri","sans-serif"; mso-ansi-language: NL;">Industrie du bois de Vielsalm
& Cie (IBV) SA v. Walloon Region (<a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0195:DE:HTML">DE</a>,
</span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0195:FR:HTML"><span lang="NL" style="font-family: "Calibri","sans-serif"; mso-ansi-language: NL;">FR</span></a></span><span style="font-family: "Calibri","sans-serif"; mso-ansi-language: NL;">) </span></span></div>
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<span style="font-family: inherit;"><span lang="EN-GB">AG
Kokott did a bit of insolvency law, arguing that honouring an obligation “for
the benefit of a debtor” in art. 24 of </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2000:160:0001:001:EN:PDF">Regulation 1346/2000</a></span><span lang="EN-GB"> includes a case where a
bank pays a debt on behalf of a bankrupt account holder. </span><span style="font-family: "Calibri","sans-serif"; mso-ansi-language: NL;">Christian van
Buggenhout en Ilse van de Mierop (liquidators of Grontimmo SA) v. Banque
Internationale à Luxembourg (</span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0251:NL:HTML"><span lang="NL" style="font-family: "Calibri","sans-serif"; mso-ansi-language: NL;">NL</span></a></span><span style="font-family: "Calibri","sans-serif"; mso-ansi-language: NL;">, </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0251:DE:HTML"><span lang="NL" style="font-family: "Calibri","sans-serif"; mso-ansi-language: NL;">DE</span></a></span><span style="font-family: "Calibri","sans-serif"; mso-ansi-language: NL;">, </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0251:FR:HTML"><span lang="NL" style="font-family: "Calibri","sans-serif"; mso-ansi-language: NL;">FR</span></a></span><span style="font-family: "Calibri","sans-serif"; mso-ansi-language: NL;">) Cf. <a href="http://gavclaw.com/2013/05/08/insolvency-regulation-protects-bona-fide-third-parties-even-when-they-are-being-used-by-male-fide-debtor-kokott-ag-in-van-buggenhout-van-de-mierop/" target="_blank">GAVC Law Blog</a></span></span></div>
martinnedhttp://www.blogger.com/profile/15282998467090268537noreply@blogger.com0tag:blogger.com,1999:blog-22498220.post-21515140044430630442013-04-25T20:46:00.001+02:002013-05-08T00:46:32.813+02:00This Week in LuxembourgThe
Grand Chamber (Judge Ilešič) slapped down the appeal by Laurent Gbagbo and his
friends against the General Court’s order dismissing their action for annulment
of their asset freeze as manifestly unfounded. The problem was that the
applicants were out of time. The Court discussed the general theory of binding
time limits before concluding that Gbagbo c.s. hadn’t argued anything specific
to substantiate their appeal to <i>force majeure</i>. <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0478:EN:HTML">Gbagbo et al. v. Council</a>
<br />
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<span style="font-family: inherit;">The
Romanian gay rights NGO Accept decided to go for broke. They brought an
employment discrimination case under <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32000L0078:en:HTML">Directive 2000/78</a></span> against Steaua
Bucharest. If that wasn’t ambitious enough, the factual basis of the claim was
an interview given by Gigi Becali, the main shareholder and “patron” of the
club, which may or may not be enough to consider his statements as representing
the club. All three answers of the court favour the applicant. <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CJ0081:EN:HTML">Asociaţia ACCEPT v. Consiliul
Naţional pentru Combaterea Discriminării</a></span></span> Cf. <a href="http://jmieurope.typepad.com/jmi/2013/04/d%C3%A9clarations-homophobes-et-politique-de-recrutement-sportif.html" target="_blank">Journal du Marché Intérieur Blog</a></div>
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<span style="font-family: inherit;">In
<span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0212:EN:HTML">Jyske Bank Gibraltar v.
Administración del Estado</a></span>, Gibraltar banking secrecy clashed with Spanish and EU
legislation to combat money laundering (specifically, <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2005:309:0015:0036:en:PDF">Directive 2005/60</a></span>) and the war on money
laundering won. </span></div>
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<span style="font-family: inherit;">Because
Galileo is organised, under <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2002:138:0001:0008:EN:PDF">Regulation 876/2002</a></span> as a Joint Undertaking,
i.e. an EU-level PPE, the EU’s staff regulations do not apply. <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CJ0089:EN:HTML">Bark v. Galileo Joint Undertaking</a></span></span></div>
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<span style="font-family: inherit;">(There
was also a whole stack of boring and easy infringement cases.)</span></div>
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<span style="font-family: inherit;">In
the General Court, the baby seals won in the suit brought by the Canadian fur
producers. The ban on seal products was lawfully enacted on the basis of art.
95 EC. The General Court rejected art. 133 EC as an additional legal basis by
relying on the <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:61989CJ0300:EN:HTML">titanium dioxide case</a></span>. The Court also spent
some time on proportionality & subsidiarity, on art. 1 P1 and on the United
Nations Declaration on the Rights of Indigenous Peoples, but to no avail. <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62010TJ0526:EN:HTML">Inuit Tapiriit Kanatami v.
Commission</a></span></span> Cf. <a href="http://europeanlawblog.eu/?p=173" target="_blank">European Law Blog</a></div>
martinnedhttp://www.blogger.com/profile/15282998467090268537noreply@blogger.com0tag:blogger.com,1999:blog-22498220.post-86727566062341518492013-04-21T23:48:00.001+02:002013-04-21T23:51:37.796+02:00Wifi (2)Last month, those b*stards at the Dutch Supreme Court <a href="http://zoeken.rechtspraak.nl/detailpage.aspx?ljn=BY9718" target="_blank">ruined</a> one of my favourite legal stories - the one I discussed in <a href="http://martinned.blogspot.co.uk/2011/03/wifi.html" target="_blank">this blog post from 2011</a>. What had happened is that the Court of Appeals in The Hague had decided that you couldn't - legally - hack a router, because a router was not sufficiently similar to a computer to qualify under the relevant provision of the Penal Code. The fact that the router at issue in the case was protected with a password was irrelevant. <a href="http://zoeken.rechtspraak.nl/resultpage.aspx?snelzoeken=true&searchtype=ljn&ljn=BP7080&u_ljn=BP7080" target="_blank">The defendant was (partially) acquitted</a>.<br />
<br />
Obviously, this is awesome on countlessly many levels, which is why I've used this case from time to time <i>pour encourager les autres. </i>Especially in criminal law, where the principle of <i>nulla poena sine lege </i>reigns surpreme, the law must be interpreted carefully, based first and foremost on the (plain) meaning of the words used by the legislator. Just because something is, in the words of the Court of Appeals, "socially undesireable", that doesn't mean the Court should therefore stretch the meaning of the law beyond its plain meaning.<br />
<br />
For what follows, however, it should be noted that the statute in question is not exactly a paragon of clarity. For the Dutch readers, it says the following:<br />
<blockquote class="tr_bq">
Art. 138a lid 1 (oud) Sr<br />
Met gevangenisstraf van ten hoogste een jaar of geldboete van de vierde categorie wordt, als schuldig aan computervredebreuk, gestraft hij die opzettelijk en wederrechtelijk binnendringt in een geautomatiseerd werk of in een deel daarvan. Van binnendringen is in ieder geval sprake indien de toegang tot het werk wordt verworven:<br />
a. door het doorbreken van een beveiliging,<br />
b. door een technische ingreep,<br />
c. met behulp van valse signalen of een valse sleutel, of<br />
d. door het aannemen van een valse hoedanigheid.
</blockquote>
<blockquote class="tr_bq">
Art. 80sexies Sr <br />
Onder geautomatiseerd werk wordt verstaan een inrichting die bestemd is om langs elektronische weg gegevens op te slaan, te verwerken en over te dragen. </blockquote>
I'm not even going to attempt a translation. Suffice it to say that the list in the end is clear enough. It lists four things that at least qualify as hacking. The problem, both generally and for this case, is the term "geautomatiseerd werk", which I've never heard or seen anywhere else before or since, and which is clearly meant to refer to computers and such like without actually using the word computer or any other word that might be meaningful to the average Dutch speaker. Hence the problem of working out whether a router qualifies. Even the definition of art. 80sexies, which says that a "geautomatiseerd werk" is a tool used for storing, processing and transferring data electronically doesn't help as much as one might like.<br />
<br />
Therefore, the Court of Appeals, like a good Continental court, looked at the legislative history and found that the intention of the legislature was particularly to protect "those who, by using security measures, have indicated that they wished to shield their data from nosy intruders". Given that a router doesn't hold data, the court argued that the legislative history supported the view that they don't count.<br />
<br />
Last December, Advocate-General Vellinga had fairly little difficulty supporting this view. After summing up the history of the case and the law, he simply noted that courts are allowed to base their interpretation of the law on statements made in parliament at the time the law was enacted and, citing the same passage from the parliamentary transcripts as the Court of Appeals, he concluded that that court had been correct.<br />
<br />
(Interesting side-note: the Attorney-General's appeal brief and the Advocate-General's opinion on this point were both formulated in terms of the <i><a href="http://de.wikipedia.org/wiki/Rechtsgut" target="_blank">Rechtsgut</a></i> that was allegedly protected by art. 138a Sr. That's a topic I encountered only a few days ago talking about the possibility of a criminal prosecution of Thilo Sarrazin in Germany on <a href="http://www.volokh.com/2013/04/19/u-n-committee-says-this-speech-must-lead-to-a-criminal-prosecution-of-the-speaker/#comment-870062344" target="_blank">the Volokh Conspiracy</a>.)<br />
<br />
<a href="http://zoeken.rechtspraak.nl/detailpage.aspx?ljn=BY9718" target="_blank">The High Council (= Supreme Court)</a>, however, quoted more generously from the legislative history, focusing particularly on the word "inrichting", which I translated loosly as "tool" earlier. The Court deduced from the transcripts it quoted that the law was intended to protect not only separate devices, but also networks and parts of networks. In other words, while the three activities of storing, processing and transferring data are cumulative, they do not have to be met by each and every single potentially hackable device, only by the totality of the network or group of devices that the device in question belongs to. It follows that routers, too, can be hacked.<br />
<br />
While this is a plausible reading, I still think that the Court of Appeals' approach is less forced. After all, the High Council did not address the <i>Rechtsgut</i> problem: Which interests, exactly, was art. 138a Sr enacted to defend? Just because the High Council quoted legislative history does not mean that they engaged in teleological interpretation. They didn't, because they didn't say a word about the intentions of the lawmaker. In fact, if I had to categorise their approach with one of the classic models of legislative interpretation, the only thing I can think of is plain textualist interpretation, except that they used the legislative history instead of a dictionary to discover the meaning of "inrichting". That, I would think, is not something we would want to encourage. If we are going to focus on the meaning of the words in the statute, we should rely on the meaning that ordinary Dutch speakers give those words, or the meaning that can be found in a dictionary. If the legislature wants to deviate from the normal meaning of words, they should write a definition into the law. The fact that they did so here, but not very well, should be no concern of the courts.<br />
<br />
Moreover, I think this result violates the principle of <i>in dubio pro reo</i>. Given that there were two plausible interpretations of the statute, the Court should have preferred the one that favoured the defendant. When in doubt, no one goes to jail.<br />
<br />
P.S. To clarify: Given that using your neighbour's unsecured wifi does not involve doing any of the four things specifically listed in art. 138a (oud) Sr, nor anything comparable, I would imagine it is still legal. That said, you should consult your lawyer before engaging in anything that is potentially a crime, just to be sure.martinnedhttp://www.blogger.com/profile/15282998467090268537noreply@blogger.com0tag:blogger.com,1999:blog-22498220.post-45735002245139951652013-04-18T17:09:00.004+02:002013-05-13T22:32:20.512+02:00This Week in LuxembourgThe Grand Chamber handed down two big cases this week:
<br />
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<span style="font-family: inherit;">On
the one hand, it decided not to shoot down the European Patent Court a second
time. (Cf. <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62009CV0001:EN:HTML">Opinion 1/09</a></span>) Curiously, Spain and Italy tried to use <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12008E003:EN:HTML">art. 3(1)(b) TFEU</a></span> to argue that the EPC deals with an exclusive Union competence and that the EPC somehow didn’t promote integration because it excluded two Member States. More sensibly, but also unsuccessfully, they relied on the last resort requirement and the reasoning of <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62009CV0001:EN:HTML">Opinion 1/09</a></span> (par. 89-94). <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0274:EN:HTML">Joined Cases Spain and Italy v.
Council</a></span>
Cf. IPKat (<span lang="EN-GB"><a href="http://ipkitten.blogspot.co.uk/2013/04/surprise-surprise-cjeu-dismisses.html">1</a></span>, <a href="http://ipkitten.blogspot.co.uk/2013/04/one-down-two-three-or-more-to-go-closer.html" target="_blank">2</a>) and <span lang="EN-GB"><a href="http://www.verfassungsblog.de/de/gemeinschaftspatent-eugh-italien-spanien-sprachen/">Verfassungsblog</a></span></span></div>
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<span style="font-family: inherit;">On
the other hand, it crushed the tentative Belgian language peace by forbidding a
Flemish rule that required all employment contracts to be drafted in Dutch. <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0202:EN:HTML">Las v. PSA Antwerp</a></span> Cf. <span lang="EN-GB"><a href="http://jmieurope.typepad.com/jmi/2013/04/politique-linguistique-flamande-et-droit-europ%C3%A9en.html">the blog Journal du marché intérieur</a></span> and <span lang="EN-GB"><a href="http://www.euractiv.com/culture/eu-high-court-condemns-flanders-news-519178">Euractiv</a></span> </span>Cf. <a href="http://eutopialaw.com/2013/04/29/case-comment-las-v-psa-antwerp-nv-c-20211/" target="_blank">Eutopia Law Blog</a> and <a href="http://www.aussenwirtschaftslupe.de/recht/auslaendisches-recht/flaemische-grundstuecks-und-immobilienpolitik-5850" target="_blank">Außenwirtschaftslupe</a></div>
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<span style="font-family: inherit;">Following
their fairly poor results in the first batch of railway infringement judgements
in February (cf. Commission v. Germany <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62010CJ0556:EN:HTML">here</a></span>), the Commission will be
pleased with its (partial) win against France. The Court (Judge Borg Barthet,
of course) found against France with regard to capacity allocation and the
absence of mandatory performance elements in the access charges. <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62010CJ0625:EN:HTML">Commission v. France</a></span></span></div>
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<span style="font-family: inherit;">Two
appearances of the principle of effectiveness this week: In <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0565:EN:HTML">Irimie v. Administraţia Finanţelor
Publice Sibiu</a></span>
the Court (Judge Ilešič) insisted that Romania should not let procedure get in
the way of recovering all of an unlawfully levied tax, and in <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0463:EN:HTML">L v. M</a></span> the Court (Judge Bay
Larsen) protected the <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32001L0042:EN:HTML">Environmental Impact Assessment
Directive 2001/42</a></span>
against some German procedural problems.</span></div>
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<span style="font-family: inherit;">The
Court (Judge Tizzano) followed <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CC0103:EN:HTML">AG Cruz Villalón</a></span> and held that the
dispute between Systran and the Commission is contractual, rather than tort. As
such, it belongs in Luxembourg court. <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0103:EN:HTML">Commission v. Systran</a></span></span></div>
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<span style="font-family: inherit;">Levi’s
is trying to prevent another jeans manufacturer from attaching red labels to
its jeans by using a number of its trademarks. As far as I can tell, they won. <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CJ0012:EN:HTML">Colloseum Holding v. Levi Strauss
& Co</a></span>
(Judge Juhász) Cf. <a href="http://ipkitten.blogspot.co.uk/2013/04/colloseum-and-composite-marks-genuine.html" target="_blank">IPKat</a></span></div>
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<span style="font-family: inherit;">The
somewhat creative Dutch Essent privatisation litigation has, predictably, ended
up in Luxembourg. AG Jääskinen argued that the ban on privatisation is shielded
under <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12008E345:EN:HTML">art. 345 TFEU</a></span> and therefore OK. As to
the ban on TSOs being part of wider energy conglomerates, the AG concluded that
this was a justified limitation of the free movement of capital. The
Netherlands v. Essent, Eneco and Delta (<span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0105:NL:HTML">NL</a></span>, <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0105:DE:HTML">DE</a></span>, <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0105:FR:HTML">FR</a></span>)</span></div>
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<span style="font-family: inherit;">AG
Wahl has a nice case where the place where the place where the work is
habitually carried out is not the place most closely connected to the contract.
(Cf. art. 2 and 6 <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:1980:266:0001:0010:EN:PDF">Rome Convention</a></span>) <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0064:EN:HTML">Schlecker v. Boedeker</a></span></span></div>
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<span style="font-family: inherit;">In
<span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CC0661:EN:HTML">Martin y Paz Diffusion v. Depuydt
and Fabriek van Maroquinerie Gauquie</a></span> AG Cruz Villalón discussed the case
of a trademark owner who was naughty in a way that may or may not have been
illegal. The plaintiff withdrew his consent for the defendants to use his
trademark in a way that the AG concluded was (probably) OK; consent cannot be
irrevocable and abuse of right law cannot provide a permanent remedy here. Cf.
art. 5(1) of <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31989L0104:en:HTML">Directive 89/104</a></span>.</span></div>
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<span style="font-family: inherit;">Even
though the Commission is already <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0199:EN:HTML">litigating as a victim in Belgian
court</a></span>,
the appeal of one of the elevator cartel cases is still pending. AG Kokott
recommended this week that Schindler should lose its appeal. (Its complaint was
about the way the Commission and the General Court had treated it like a single
entity for competition law purposes.) Schindler Holding v. Commission (<span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CC0501:DE:HTML">DE</a></span>, <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CC0501:FR:HTML">FR</a></span>)</span></div>
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<span style="font-family: inherit;">AG
Kokott is also potentially saying something interesting about public
procurement law & structural funds in a case about a Club Med village on
Martinique. The Commission had taken the tough approach, and the AG now
proposes annulling the General Court’s decision that sided with the Commission.
Now let’s see what the Court does. France v. Commission (<span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0115:NL:HTML">NL</a></span>, <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0115:DE:HTML">DE</a></span>, <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0115:FR:HTML">FR</a></span>)</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CC0004:EN:HTML">Germany v. Puid</a></span> is one of those cases
that give lawyers a bad name. According to AG Jääskinen, an asylum seeker does
not have an enforceable claim for a Member State to use its authority under the
first sentence of art. 3(2) of <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2003:050:0001:0010:EN:PDF">Regulation 343/2003</a></span> to examine a claim it
doesn’t have to. However, when “a national court cannot be unaware” of the
deficiencies of the asylum system of the country that is supposed to examine
the claim, it is still required to suspend the transfer of asylum seekers to
that country under <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62010CJ0411:EN:HTML">N.S. and M.E.</a></span> Sounds right to me…</span></div>
martinnedhttp://www.blogger.com/profile/15282998467090268537noreply@blogger.com0tag:blogger.com,1999:blog-22498220.post-8729203374425278802013-04-12T20:18:00.002+02:002013-04-12T20:25:46.831+02:00Anonymity<span style="font-family: inherit;">In a recent <a href="http://www.rechtspraak.nl/ljn.asp?ljn=BZ3450">judgment</a>, the Supreme
Court of the Netherlands held against “The Board of the District Court of [A]”.
I would humbly submit that that was taking anonymisation several steps too far.</span><br />
<div class="MsoNormal">
<span style="font-family: inherit;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: inherit;">Discussing the question of anonymity in
court documents with my friends on the Volokh Conspiracy, I have generally
defended the way the balance is struck in the Netherlands between privacy and
transparency. Free speech is not an issue: there is no law forbidding anyone
from publishing the names of people convicted of a crime. There is merely an
agreed upon custom among the press that people’s surnames are not mentioned. Courts,
in their judgments, also don’t mention the names of the individuals before them
– although they do mention company plaintiffs and defendants by name – but that
is not a free speech problem. Free speech does not require that the government
give you information to talk about.</span></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: inherit;">So that leaves transparency. The logic here
is essentially the same as for Access to Documents legislation. As the EU
legislature put it in recital 2 of <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2001:145:0043:0048:EN:PDF">Regulation
1049/2001</a>:</span></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><br /></span></div>
<div class="MsoNormal" style="margin-left: 36.0pt;">
<span lang="EN-GB" style="font-family: inherit;">Openness enables
citizens to participate more closely in the decision-making process and
guarantees that the administration enjoys greater legitimacy and is more
effective and more accountable to the citizen in a democratic system. Openness
contributes to strengthening the principles of democracy and respect for
fundamental rights as laid down in Article 6 of the EU Treaty and in the
Charter of Fundamental Rights of the European Union.</span></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: inherit;">Specifically in the context of court
judgments, it is claimed that transparency allows citizens to know which of their
fellow citizens have done wrong, and that it allows them to scrutinise the work
of the court better. Against this we put the privacy rights of criminals, and
more generally of parties to litigation. We have abolished <a href="http://en.wikipedia.org/wiki/Pillory">the pillory</a> as a form of
punishment, and it does not do to recreate it in the press.</span></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: inherit;">Based on these considerations, I have
generally argued that the right balance is struck by giving the press and the
general public free access to the court room – absent special considerations
requiring confidentiality of proceedings – and thus allowing them to see and
report trials in a non-anonymous way. If the public interest requires that the
names of litigants are reported, the press will know these names, and will be
free to make that decision, but I can’t just Google my neighbour to see if he’s
ever been convicted of anything just because I’m nosy.</span></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><span lang="EN-GB">The reason why I was thinking of this is
the rather curious case of Karel Knip. (His alleged misconduct is at several
removes from the case I’m interested in, so there’s no reason not to mention
his name.) Karel Knip wrote about <a href="http://en.wikipedia.org/wiki/Trafigura#Waste_dumping_in_C.C3.B4te_d.27Ivoire">the
Trafigura case</a>, and did so in a way that noticeably favoured the company in
the middle of what was generally highly bad press. While this might lead the
neutral observer to question his integrity, the District Court in Amsterdam, in
handing down its <a href="http://www.rechtspraak.nl/ljn.asp?ljn=%20BN2149">judgment</a>
in the Trafigura case, went well beyond that and took the highly unusual step
of mentioning this journalist – who, mind, was not a party to the case – in its
<a href="http://www.rechtspraak.nl/ljn.asp?ljn=%20BN2149">judgment</a>. </span><span style="mso-ansi-language: NL;">They wrote:</span></span></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><br /></span></div>
<div class="MsoNormal" style="margin-left: 36.0pt;">
<i style="mso-bidi-font-style: normal;"><span style="font-family: inherit; mso-ansi-language: NL;">6.10. (...) Trafigura toont daarmee
dat zij geen enkel vertrouwen heeft in de rol van de media en de oprechtheid
van de journalisten, zij het dat zij één uitzondering maakt en dat is voor de
journalist [naam 46]. Hij is de enige die het begrijpt en die - naar de
rechtbank moet aannemen met behulp van informatie van Trafigura - tijdens deze
strafzaak en nà het pleidooi van Trafigura nog eens komt met een artikel waarin
de relatieve onschuld van de slops wordt beschreven.</span></i></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: inherit;">My translation:</span></div>
<div class="MsoNormal" style="margin-left: 36.0pt;">
<span style="font-family: inherit;"><br /></span></div>
<div class="MsoNormal" style="margin-left: 36.0pt;">
<span lang="EN-GB" style="font-family: inherit;">6.10. (…) Trafigura
shows in this way that it has no confidence whatsoever in the role of the media
and the sincerity of journalists, be it that it makes one exception, for the
journalist [name 46]. He is the only one who understands and who – as the court
is supposed to assume with the aid of information provided by Trafigura –
during this criminal trial and after the concluding remarks of Trafigura brings
an article that describes the relative innocence of the slops in question. </span></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: inherit;">(The brackets are the court’s, of course. A
slop is technical jargon for a chemical spill.)</span></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: inherit;">The daily newspaper Trouw noticed this, and
reported about what the court had said. Paraphrasing the judgment, the
newspaper said that the court had questioned Mr. Knip’s integrity. Predictably,
he did not like this characterisation, so he took action against the paper
before the <a href="http://www.rvdj.nl/english">Press Council</a>, an
independent body tasked by the Dutch press with enforcing journalistic best
practice. (Note that it is emphatically not a public law body. Even in the
Netherlands we like to avoid litigating press stories.) </span></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: inherit;">This is where we get to the second unusual
event in this saga. The Council, in examining the complaint, got in touch with
the court, asking it whether the newspaper’s interpretation of the judgment was
correct. The clerk of the court answered that it was a reasonable
interpretation. Upon receiving this answer, Mr. Knip abandoned his case before
the Press Council.</span></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><span lang="EN-GB">He did wonder, as well he might, why on
earth the clerk of the court replied to this question. So he made a complaint
with the President of the District Court, who backed the clerk, and with the <a href="http://www.rechtspraak.nl/english/Pages/default.aspx">Council
for the Judiciary</a>, the governing body of the Dutch court system. The latter replied that this was not a question of judicial misconduct, but one
of alleged misconduct in the management of the courts, and therefore someone else</span><span lang="EN-GB"><span lang="EN-GB">’s</span> problem.
</span></span></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: inherit;">Given that this is not a very satisfactory
answer, Mr. Knip decided to bring out the big guns by bringing a complaint
under art. 13a of the Judiciary Act (<a href="http://wetten.overheid.nl/BWBR0001830/volledig/geldigheidsdatum_12-04-2013#Hoofdstuk2_Afdeling1a_Artikel13a">Wet
op de Rechterlijke Organisatie</a>), a new procedure that was only created in
2011. This involves asking the Procureur-General at the Supreme Court, a
magistrate whose independence is guaranteed in the same way as the independence
of judges, and whose job includes, in theory, bringing prosecutions against
members of the government for abuse of office, to petition the Supreme Court
asking that Court to investigate the matter. (Since there has never been a
prosecution against a Minister, the Procureur-General normally spends his days as
the boss of the <a href="http://en.wikipedia.org/wiki/Attorney_general#Netherlands">Advocates-General
at the Supreme Court</a>, joining them in advising the Supreme Court about the
best resolution of the cases before it.)</span></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: inherit;">The Procureur-General granted the request
and brought his petition, and the Supreme Court heard the Amsterdam court at a
hearing in January. (This being a civil law country, there were no spectacular
Law & Order theatrics. Instead, the Amsterdam court made a statement via
counsel, and Mr. Knip declined to make an appearance.) </span></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><span lang="EN-GB">Last month, the Supreme Court handed down
its <a href="http://www.rechtspraak.nl/ljn.asp?ljn=BZ3450">judgment</a> in this
case, and it was a doozy. The Amsterdam court was reprimanded severely for
having allowed the clerk to respond to the Press Council’s question, and for supporting the clerk</span><span lang="EN-GB"><span lang="EN-GB">’s decision afterwards</span>. Judges
speak through their judgments, and if any commentary is necessary there is a
judge-spokesperson for every court. And the Supreme Court stressed that even
that person, who is himself a judge, should be careful not to create the
impression that his statements are in any way authoritative. The way the
Amsterdam District Court handled this matter could not have been more wrong.</span></span></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: inherit;">There is just one odd thing about the
Supreme Court’s judgment. At the top, it is styled: “<a href="http://www.rechtspraak.nl/ljn.asp?ljn=BZ3450">Judgment in the matter of
the complaint brought by [complainant] against the Board of the District Court of
[A]</a>”, and that same style is maintained throughout. The fact that Mr.
Knip’s name was removed is entirely normal, and in line with Dutch court
practice. The fact that the reference to Amsterdam was also removed is less
normal, and also much less defensible. Not only would the custom with regard to
companies suggest differently, but so would the underlying first principles. If
ever there is a strong case for transparency, it is when the judiciary is
trying to clean its own house. </span></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: inherit;">As it happens, there is only one District
Court that starts with an A, making this case of anonymisation particularly
silly. (There used to be more, but several District Courts were merged in
recent years.) While the board of the court is strictly speaking a group of
individuals, the same goes for the board of a corporation, such as the board of
Trafigura who ended up with their company name printed for all to see in the
jurisprudence. As long as the judges in question don’t end up with their names
printed in the judgment, I don’t see how the normal rules for anonymisation
require that the name of the court be removed from the judgment. </span></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: inherit;">Even if, applying the normal rules, one
were to say that this is a borderline case, surely the public interest in
observing how the judiciary polices itself is greater than the public interest
in transparency normally would be? In other words, the Supreme Court should
have erred on the side of naming the board of the Amsterdam District Court.</span></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: inherit;">In order to remedy that omission, I will
take the liberty of naming the current members of the board. Board members for
courts are appointed for six year terms, so I cannot be sure that these judges
were already on the board at the relevant time, but it will have to do. They
are:</span></div>
<ul>
<li><span style="font-family: inherit;"><span lang="EN-GB" style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;"><span style="font-size: 7pt; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"></span></span></span><span lang="EN-GB"><a href="http://www.refdag.nl/polopoly_fs/anp_1032643_1_571659!image/3141230308.jpg">Mrs.
C.T.E. Eradus</a>, President of the Court and chairwoman of the Board;</span></span></li>
<li><span lang="EN-GB" style="font-family: inherit;">Mrs. E. de Rooij, judge-member.</span></li>
<li><span lang="EN-GB" style="font-family: inherit;">Mr. Hans Janssen, non-judge
member appointed as of 1 April 2013.</span></li>
</ul>
<span style="font-family: inherit;"><br /></span>
<div class="MsoNormal">
<span style="font-family: inherit;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: inherit;">This blog post is based on this
Dutch-language story by Hugo Arlman on <a href="http://njblog.nl/2013/04/11/van-karel-knip-tot-hoge-raad/">NJBlog.nl</a>. The opinions expressed here are, of course, my own.</span></div>
martinnedhttp://www.blogger.com/profile/15282998467090268537noreply@blogger.com0tag:blogger.com,1999:blog-22498220.post-21121641253716035232013-04-11T20:54:00.001+02:002013-06-01T14:17:06.536+02:00Today in Luxembourg<span style="font-family: inherit;">The
case of </span><span lang="EN-GB" style="font-family: inherit;"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0652:EN:HTML">Mindo v. Commission</a></span><span style="font-family: inherit;"> (judge Arabadijev) gave
the Court the opportunity to explore the consequences of joint and several
liability for competition fines when one of the persons liable is bankrupt. It
held that </span><span lang="EN-GB" style="font-family: inherit;"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62006TJ0019:EN:HTML">the General Court</a></span><span style="font-family: inherit;"> was wrong to ask Mindo
to prove that the other creditor, AOI, actually intended to recover part of the
fine from Mindo. More embarrassingly for the General Court, the main focus of
the judgment was the failure of the GC to state adequate reasons.</span><br />
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;">In
the Aarhus case of <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0260:EN:HTML">R. (Edwards and Pallikaropoulos) v.
Environment Agency et al.</a></span>, the Court (judge Bonichot) tried to give some usable
guidance as to the rule that judicial proceedings in this area of the law
should not be “prohibitively expensive”. It concluded that the applicant’s
ability to pay is not the only criterion. It also listed:</span></div>
<ul>
<li><span style="font-family: inherit;"><span style="mso-list: Ignore;"><span style="-moz-font-feature-settings: normal; -moz-font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"></span></span>The
reasonableness of the costs in isolation;</span></li>
<li><span style="font-family: inherit;"><span style="mso-list: Ignore;"><span style="-moz-font-feature-settings: normal; -moz-font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"></span></span>“The
situation of the parties concerned”;</span></li>
<li><span style="font-family: inherit;"><span style="mso-list: Ignore;"><span style="-moz-font-feature-settings: normal; -moz-font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"></span></span>The
claimant’s “prospect of success”;</span></li>
<li><span style="font-family: inherit;"><span style="mso-list: Ignore;"><span style="-moz-font-feature-settings: normal; -moz-font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"></span></span>“The
importance of what is at stake for the claimant and for the protection of the
environment”;</span></li>
<li><span style="font-family: inherit;"><span style="mso-list: Ignore;"><span style="-moz-font-feature-settings: normal; -moz-font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"></span></span>“The
complexity of the relevant law and procedure”;</span></li>
<li><span style="font-family: inherit;"><span style="mso-list: Ignore;"><span style="-moz-font-feature-settings: normal; -moz-font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"></span></span>“The
potentially frivolous nature of the claim at its various stages”; and</span></li>
<li><span style="font-family: inherit;"><span style="mso-list: Ignore;"><span style="-moz-font-feature-settings: normal; -moz-font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"></span></span>“The
existence of a national legal aid scheme or a costs protection regime”.</span></li>
</ul>
<div class="MsoNormal">
<span style="font-family: inherit;">It
turns out that the fact that the claimant has not, in fact, been deterred is
not dispositive. Also, the criteria have be consistently applied regardless of
the stage of proceedings at which the question is considered. Cf. <a href="http://ukhumanrightsblog.com/2013/04/11/the-cjeu-on-prohibitively-expensive-and-the-new-protective-costs-order-regime/" target="_blank">UK Human Rights Blog</a></span> and <a href="http://gavclaw.com/2013/05/31/is-justice-what-you-can-afford-to-be-done-ecj-turns-to-aarhus-convention-to-apply-not-prohibitively-expensive-in-the-eia-directive/" target="_blank">GAVC Law Blog</a></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;">For
prof. Heldeweg, if he still has time for such things, the Court (judge Arestis)
has a case on the precautionary principle and the <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31992L0043:EN:html">Habitats Directive</a></span>. <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0258:EN:HTML">Sweetman et al. v. An Bord Pleanála</a></span></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;">The
Court (judge Toader) held that <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32001R0044:en:HTML">Regulation 44/2001</a></span> is applicable to a claim
for recovery of a sum unduly paid by a public entity in the context of Nazi-era
reparations. The Court also devoted some attention to the question of whether
it is necessary for various co-defendants to live outside Germany. <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0645:EN:HTML">Land Berlin v. Sapir et al.</a></span></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;"><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0636:EN:HTML">Berger v. Bavaria</a></span> dealt with food that was
unfit for human consumption but not a health risk. The Court (judge Bay Larsen)
interpreted art. 10 of <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2002:031:0001:0024:EN:PDF">Regulation 178/2002</a></span> to permit national
legislation that allowed for intervention in these circumstances. Note the –
somewhat hypothetical – question 2 posed by the national court, which the Court
unfortunately ignored.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;">In
<span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0443:EN:HTML">Jeltes, Peeters and Arnold v. UWV</a></span>, the Court (judge
Fernlund) held that its judgement in <span lang="EN-GB"><a href="http://www.dkrnet.de/data/curia/jurispr/84-88/numdoc=61985J0001&lg=EN.htm">Miethe v. Bundestanstalt für Arbeit</a></span> was no longer good law
in light of the enactment of <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2004:166:0001:0123:en:PDF">Regulation 883/2004</a></span>. The plaintiffs
were all atypical frontier workers in the sense of Miethe because they lived in
Belgium or Germany while maintaining a professional and social life almost
entirely in the Netherlands.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;">This
week, the Czech Republic gives us a particularly egregious case of gender
discrimination by having a law that lets women retire younger than men, and
making their retirement age dependent on how many children they’ve raised. <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0401:EN:HTML">Soukupová v. Ministerstvo
zemědělství</a></span></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;">In
his opinion in Commission v. the Netherlands (<span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62010CC0576:NL:HTML">NL</a></span>, <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62010CC0576:DE:HTML">DE</a></span>, <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62010CC0576:FR:HTML">FR</a></span>), AG Wathelet offered
not one but two reasons why the Commission should lose. The boring one is that
the case concerns a purchase of land, not an award of a concession. More
interestingly, he discussed the applicability <i>ratione temporis</i> of <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2004:134:0114:0240:EN:PDF">Directive 2004/18</a></span> to this case, which
concerned decisions taken at various moments before and after the enactment and
the entry into force of that directive.</span></div>
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<span style="font-family: inherit;">While
<span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32001R0044:en:HTML">Regulation 44/2001</a></span> does not apply to
Denmark, there is a parallel <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2005:299:0062:0070:EN:PDF">international agreement</a></span> between the EU and
Denmark that brings it back in through the back door. AG Kokott did some legal
interpretation ninja to explain why the Danish court is allowed to ask a
prejudicial question notwithstanding the text of <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2005:299:0062:0070:EN:PDF">the agreement</a></span> before arguing that the
Regulation applied to the case at bar. <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0049:EN:HTML">Her Majesty’s Revenue & Customs
v. Sunico et al.</a></span></span></div>
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<span style="font-family: inherit;">AG
Cruz Villalón argues that, for once, the Turkish plaintiff should lose in an
EU-Turkey association agreement case. Specifically, he argues that the passive
freedom to provide services is not covered by the Agreement, and in the
alternative he argued that the plaintiff’s reliance on that freedom was too
speculative, given that she only really wanted to get around the visa
requirement in order to visit her family in Germany. <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CC0221:EN:HTML">Demirkan v. Germany</a></span></span> Cf. <a href="http://europeanlawblog.eu/?p=1713" target="_blank">European Law Blog</a></div>
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<span style="font-family: inherit;">AG
Mengozzi disentangled a case where Germany refused a visa on the grounds that
the applicant was likely to overstay. Cf. art. 21(1) <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:243:0001:0058:EN:PDF">Visa Code</a></span>. Koushkaki v. Germany (<span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0084:NL:HTML">NL</a></span>, <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0084:DE:HTML">DE</a></span>, <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0084:FR:HTML">FR</a></span>)</span></div>
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<span style="font-family: inherit;">In
other news, I came across the Commission’s <span lang="EN-GB"><a href="http://ec.europa.eu/competition/state_aid/cases/247911/247911_1417573_35_2.pdf">notification letter</a></span> concerning its decision
to open an <span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12008E108:EN:HTML">art. 108(2)</a></span> procedures against a
number of Dutch football clubs, including PSV.</span></div>
martinnedhttp://www.blogger.com/profile/15282998467090268537noreply@blogger.com0tag:blogger.com,1999:blog-22498220.post-35655213369259545072013-04-09T01:54:00.003+02:002013-04-10T02:31:51.061+02:00The Plague Reaches EUObserverRepeat after me: Not being able to win a referendum is not "<a href="http://euobserver.com/political/119735" target="_blank">undemocratic</a>". The are many things that you'd never win a referendum on. Taxes. Piers Morgan. Quantum Physics. But that doesn't make any of these things undemocratic. Instead, we have democratically elected legislatures, the marketplace and scientific consensus to decide on these things instead, respectively. Can we please, please, please stop pandering to the electorate by pretending that referendums are the only form of true democracy, or even the best kind?<br />
<br />
P.S. I should emphasise that <a href="http://www.statement-television.de/app/download/5792929033/Bilanz+einer+gescheiterten+Kommunikation.pdf" target="_blank">the Ph.D. thesis by Jens Peter Paul that is discussed in this article</a> does not suffer from the same problems, which is actually rather important given that it deals with the theory of democracy (and its practice). Without having read the whole thing, the statement of results (p. 248-252) seems to imply the following assumptions about a well-functioning democracy, which seem correct:<br />
<ol>
<li>In a healthy democracy, there is a (high-quality) public discourse about important decisions, in the form of newspaper articles, interviews in talkshows, etc.</li>
<li>In a healthy democracy, members of the legislature do not feel obligated to rule out one or more alternatives.</li>
<li>In a healthy democracy, parties position themselves in the debate based on their substantive preferences rather than power-seeking behaviour.</li>
<li>In a democracy, election results can only be said to legitimate decisions taken in the previous legislative period to the extent that those decisions were prominent in the election campaign.</li>
<li>-</li>
<li>In a healthy democracy members of the legislature are not exposed to undue pressure.</li>
</ol>
<div>
Comparing these ideals to what actually happened, the qualification "undemocratic" might not be that far off the mark. However, that's not a conclusion you can draw based on what the article says, which focuses mainly on what Kohl said - being interviewed by the author of the thesis - about the unpopularity of the euro.<br />
<br />
(Referendums don't play a prominent part at all in the thesis - the word on appears a handful of times in the main body. <a href="http://www.phdcomics.com/comics/archive.php?comicid=1174" target="_blank">Funny how reporting on science works...</a>)</div>
martinnedhttp://www.blogger.com/profile/15282998467090268537noreply@blogger.com4tag:blogger.com,1999:blog-22498220.post-14611704332826773832013-03-21T21:23:00.000+01:002013-06-01T03:33:42.867+02:00This Week in Luxembourg<span style="font-family: inherit;">The Grand Chamber (Judge Arabadijev) annulled the General Court’s state aid
judgment in <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62004TJ0425:EN:HTML">French Republic et al. v. Commission</a><span lang="EN-GB">. Siding with the
Commission, the Court criticised the General Court’s standard for the
connection between the state resource and the advantage at issue, as well as
its analysis of the nature of the alleged advantage. The case now goes back to
the General Court so that it can deal with France’s other arguments. </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62010CJ0399:EN:HTML">Bouygues Télécom and Commission v.
France</a></span><span lang="EN-GB">
Cf. </span><span lang="EN-GB"><a href="http://blog.lehofer.at/2013/03/bouygues.html">e-comm blog</a></span></span><span style="-webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px; color: black; display: inline !important; float: none; font-family: 'Times New Roman'; font-size: x-small; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: normal; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: auto; word-spacing: 0px;"> and<span class="Apple-converted-space"> </span></span><a href="http://professorgeradin.blogs.com/professor_geradins_weblog/2013/03/cjeu-ruling-overturns-general-court-on-france-t%C3%A9l%C3%A9com-state-aid.html" style="-webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px; font-family: 'Times New Roman'; font-size: medium; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: normal; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: auto; word-spacing: 0px;" target="_blank">The Antitrust Hotch Potch</a><br />
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<span style="font-family: inherit;"><span lang="EN-GB">Belgium
created a new and innovative fee for mobile telecoms operators, and the Court
(Judge Jarašiūnas) approved. The operators’ challenge under art. 3 and 12-14 of
the </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2002:108:0021:0021:EN:PDF">Authorisation Directive</a></span><span lang="EN-GB"> was rejected. </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0375:EN:HTML">Belgacom et al. v. Belgium</a></span><span lang="EN-GB"><o:p></o:p></span></span></div>
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<span style="font-family: inherit;"><span lang="EN-GB">As
expected, the Court (Judge Bonichot) shot down the Hungarian rule for counting
the number of days a 3<sup>rd</sup> country national spends in the EU under the
</span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:405:0001:0022:EN:PDF">local border traffic Regulation</a></span><span lang="EN-GB">. The Court held that
every time a person crosses the border the count starts anew. </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0254:EN:HTML">Szabolcs-Szatmár-Bereg Megyei
Rendőrkapitányság Záhony Határrendészeti Kirendeltsége v. Shomodi</a></span><span lang="EN-GB"><o:p></o:p></span></span></div>
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<span style="font-family: inherit;"><span lang="EN-GB">The
Court rejected an Austrian attempt to exempt small airport extensions from the
rules on environmental impact assessments. </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CJ0244:EN:HTML">Salzburger Flughafen v. Umweltsenat</a></span><span lang="EN-GB"><o:p></o:p></span></span></div>
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<span style="font-family: inherit;"><span lang="EN-GB">In
</span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0092:EN:HTML">RWE Vertrieb v. Verbraucherzentrale
Nordrhein-Westfalen</a></span><span lang="EN-GB">,
the Court (Judge Safjan) had some fun trying to figure out the interplay
between the </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31993L0013:en:HTML">unfair consumer contracts directive</a></span><span lang="EN-GB"> and the </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2003:176:0057:0057:EN:PDF">sectoral regulation for the gas
sector</a></span><span lang="EN-GB">.
Can an energy company just unilaterally increase your prices? The Court
concluded that it can, as long as the whole thing is transparent, based on
clear principles, etc. Cf. <a href="http://recent-ecl.blogspot.co.uk/2013/03/mandatory-statutory-or-regulatory-rules.html" target="_blank">Recent Developments in European Consumer Law</a><o:p></o:p></span></span></div>
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<span style="font-family: inherit;"><span lang="EN-GB">AG
Bot levelled significant criticism at the General Court’s handling of </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62009A0085:EN:HTML">the second Kadi case in 2010</a></span><span lang="EN-GB">, concluding for a
variety of reasons that that judgment should be annulled, and that the General
Court should have taken a more modest approach in its judicial review, both
when it comes to the intensity of scrutiny, and to the scope of law involved. </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62010CC0584:EN:HTML">Commission et al. v. Kadi</a></span><span lang="EN-GB"> Cf. <a href="http://eutopialaw.com/2013/03/25/kadi-ii/" target="_blank">Eutopia Law Blog</a>, </span><span lang="EN-GB"><a href="http://www.verfassungsblog.de/de/rechtsschutz-gegen-un-sanktionen-rudert-der-eugh-zuruck/">Verfassungsblog</a>, <a href="http://www.ejiltalk.org/on-ag-bots-opinion-in-kadi-iv/" target="_blank">EJIL: Talk!</a> and one of Kadi's lawyers on the brand new <a href="http://europeansanctions.com/2013/03/19/the-standard-of-judicial-review-in-sanctions-cases-advocate-general-bots-opinion-in-kadi-ii/" target="_blank">European Sanctions Blog</a></span></span></div>
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<span style="font-family: inherit;"><span lang="EN-GB">AG
Kokott considered the doctrine of standing under art. 263 TFEU in the Spanish
state aid case of Telefonica v. Commission (</span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0274:NL:HTML">NL</a></span><span lang="EN-GB">, </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0274:DE:HTML">DE</a></span><span lang="EN-GB">, </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0274:FR:HTML">FR</a></span><span lang="EN-GB">, </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0274:ES:HTML">ES</a></span><span lang="EN-GB">). The </span><span lang="EN-GB"><a href="http://curia.europa.eu/juris/document/document.jsf;jsessionid=9ea7d0f130d50d3c9de0db6f4b8f93b4eb790f4a19c1.e34KaxiLc3eQc40LaxqMbN4Oah8Qe0?text=&docid=121385&pageIndex=0&doclang=FR&mode=lst&dir=&occ=first&part=1&cid=401723">General Court</a></span><span lang="EN-GB"> had dismissed the case
by order on the grounds that the plaintiff was not individually concerned while
this case was not caught by the new exception for regulatory acts which do not
entail implementing measures. The AG agrees that Telefonica does not have standing,
but only because a state aid decision requires implementing measures. <o:p></o:p></span></span></div>
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<span style="font-family: inherit;"><span lang="EN-GB">That
AG also argued that the Spanish special tax on the windfall profits associated
with the free allocation of emissions rights was permissible under the relevant
Directive, </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2003:275:0032:0046:en:PDF">Directive 2003/87</a></span><span lang="EN-GB">, unless it acted to
disincentivise energy efficiency. </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CC0566:EN:NOT">Iberdrola v. Administración del
Estado</a></span><span lang="EN-GB"><o:p></o:p></span></span></div>
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<span style="font-family: inherit;"><span lang="EN-GB">For
reasons to do with their opt-in, the UK are challenging the legal basis of the
Council’s </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2011:182:0012:0023:EN:PDF">Decision</a></span><span lang="EN-GB"> establishing a mandate
for the EU in the EEA Joint Committee, so that </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2004:166:0001:0123:EN:PDF">Regulation 883/2004</a></span><span lang="EN-GB"> might be extended to the
EEA. The “procedural legal basis” is, undisputedly, </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12008E218:EN:HTML">art. 218(9) TFEU</a></span><span lang="EN-GB">, but the UK is
challenging the choice of </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12008E048:EN:HTML">art. 48 TFEU</a></span><span lang="EN-GB"> as the “substantive”
legal basis. Instead of the free movement of workers law, the UK prefers </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12008E079:EN:HTML">immigration law</a></span><span lang="EN-GB"> as a basis. AG Kokott
disagrees. </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CC0431:EN:HTML">UK v. Council</a></span><span lang="EN-GB"><o:p></o:p></span></span></div>
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<span style="font-family: inherit;"><span lang="EN-GB">AG
Mengozzi considered a Belgian case where the plaintiff tried to use </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:376:0021:0027:EN:PDF">Directive 2006/114</a></span><span lang="EN-GB"> on misleading
advertising to go after an arguable case of domain name hijacking. The AG
proposed, not very helpfully, that registering such a domain was not captured
by the directive, but that using it might be, and that the national court
should sort out the rest. Belgian Electronic Sorting Technology v. Peelaers and
Visys (</span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CC0657:NL:HTML">NL</a></span><span lang="EN-GB">, </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CC0657:DE:HTML">DE</a></span><span lang="EN-GB">, </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CC0657:FR:HTML">FR</a></span><span lang="EN-GB">)<o:p></o:p></span></span></div>
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<span style="font-family: inherit;"><span lang="EN-GB">AG
Mengozzi also handed down an opinion in the case of </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CC0322:EN:NOT">K</a></span><span lang="EN-GB">. (It’s not otherwise very
interesting, but the way in which the Finnish method for citing cases resulted
in the most Kafkaesque of case names proved impossible to resist.)<o:p></o:p></span></span></div>
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<span style="font-family: inherit;"><span lang="EN-GB">In
Alopka et al. v. Ministre du Travail, de l’Emploi et de l’Immigration (</span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0086:FR:HTML">FR</a></span><span lang="EN-GB">), AG Mengozzi reaffirmed
the </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62009CJ0034:EN:HTML">Ruiz Zambrano</a></span><span lang="EN-GB"> line of case law. Unlike
in many other genuine enjoyment cases, where the plaintiff was unsuccessful
because </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62009CJ0034:EN:HTML">Ruiz Zambrano</a></span><span lang="EN-GB"> was distinguished, here
it looks like the precedent is directly on point.<o:p></o:p></span></span></div>
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<span style="font-family: inherit;"><span lang="EN-GB">In
the state aid case of HGA et al. v. Commission, AG Bot said that </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62008A0394:EN:NOT">the General Court</a></span><span lang="EN-GB"> got it wrong to attach
as much importance as it did to the question of the aid was requested by a
given recipient. However, he argues that the judgment should nonetheless be
upheld, because the remaining reasoning is sufficient to bear the conclusion that
the Commission’s decision is correct. </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CC0630:EN:NOT">Joined Cases Regione autonoma della
Sardegna (T-394/08), SF Turistico Immobiliare Srl (T-408/08), Timsas Srl
(T-453/08) and Grand Hotel Abi d’Oru SpA (T-454/08) v European Commission</a></span><span lang="EN-GB"><o:p></o:p></span></span></div>
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<span style="font-family: inherit;"><span lang="EN-GB">Following
the recent decisions on the merits by the General Court in the first REACH
cases against the European Chemicals Agency (ECHA), AG Cruz Villalon now handed
down the first opinions in appeals against the General Court orders dismissing
other REACH suits. He concluded that the General Court was wrong to hold that
the suits were not aimed at a challengeable act, that they were out of time and
that that belatedness was not the consequence of an excusable error. </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CC0625:EN:HTML">Polyelectrolyte Producers Group and
SNS v. ECHA</a></span><span lang="EN-GB"><o:p></o:p></span></span></div>
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<span style="font-family: inherit;"><span lang="EN-GB">AG
Sharpston took the Aarhus issues regarding the distinction between legislative
and administrative acts, first discussed in </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62009CJ0204:EN:HTML">Flachglas Torgau</a></span><span lang="EN-GB"> (where she also wrote </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62009CC0204:EN:HTML">the opinion</a></span><span lang="EN-GB">), to the next level. I’m
not sure what the logic of her proposed answer is, except that it seems to turn
the Solange rule back on Germany. </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CC0515:EN:HTML">Deutsche Umwelthilfe v. Germany</a></span><span lang="EN-GB"><o:p></o:p></span></span></div>
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<span style="font-family: inherit;"><span lang="EN-GB">Everyone’s
favourite MEP, Sophie in ‘t Veld, achieved a small win against the Commission.
She sued over the Commission’s refusal to give her all the documents relating
to the draft international Anti-Counterfeiting Trade Agreement (ACTA) that she
asked for, and the General Court (Judge Dehousse) now granted her access to
some of the missing ones. </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62010TJ0301:EN:HTML">In ‘t Veld v. Commission</a></span><span lang="EN-GB"> Cf. </span><span lang="EN-GB"><a href="http://europeanlawblog.eu/?p=1625">EU Law Blog</a></span><span lang="EN-GB"><o:p></o:p></span></span></div>
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<span style="font-family: inherit;"><span lang="EN-GB"><a href="http://en.wikipedia.org/wiki/ITER">ITER</a></span><span lang="EN-GB"> may well be the single
coolest thing going on in Europe right now, and today it was on the receiving
(and winning) end of a public procurement suit. It turns out you cannot ask for
the annulment of “tous les actes adoptés subséquemment” (par. 48-50), and
otherwise nothing very interesting seems to have happened; the applicant’s bid
was quite rightly thrown out in pre-screening. Nexans France v. Entreprise
commune européenne pour ITER et le développement de l’énergie de fusion (</span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62010TJ0415:FR:HTML">FR</a></span><span lang="EN-GB">)<o:p></o:p></span></span></div>
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<span style="font-family: inherit;"><br /></span></div>
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<span style="font-family: inherit;"><span lang="EN-GB">Following
some creativity with import licenses for bananas, the Commission allowed a
remission of duties in respect of the customs agent, who had not obviously
erred, but not in respect of the trader, the applicant, who were held to have
been negligent. The General Court (Judge Schwarcz) now annulled that decision,
holding that insufficient evidence as to negligence had been adduced. </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62010TJ0324:EN:HTML">Van Parys v. Commission</a></span><span lang="EN-GB"> (yes, </span><span lang="EN-GB"><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62002J0377:EN:HTML">that Van Parys</a></span><span lang="EN-GB">)</span></span></div>
martinnedhttp://www.blogger.com/profile/15282998467090268537noreply@blogger.com0tag:blogger.com,1999:blog-22498220.post-44761167913113576102013-03-14T23:06:00.000+01:002013-04-09T01:20:06.344+02:00Today in Luxembourg<span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">While I missed it in the email version of this post, the big case is apparently the Spanish evictions case of <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0415:EN:HTML" target="_blank">Aziz v. Caixa d’Estalvis de Catalunya, Tarragona i Manresa (Catalunyacaixa)</a>, where the Court (Judge Tizzano) held that the way in which many Spanish mortgage loan contracts arrange for enforcement is unfair under <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31993L0013:en:HTML" target="_blank">Directive 93/13</a>, meaning that hundreds of thousands of Spanish people have been evicted unlawfully. Cf. <a href="http://bruxelles.blogs.liberation.fr/coulisses/2013/03/expulsion-les-juges-europ%C3%A9ens-condamnent-les-abus-des-banques-espagnoles.html" target="_blank">Coulisses de Bruxelles</a></span><br />
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<span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">In competition law, there is evidence of a worrying trend towards competition authorities preferring to examine whether an agreement is anticompetitive “by object” before moving on to an effects based test, rather than the other way around, as legal and economic commentators would generally prefer it. In <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0032:EN:HTML" target="_blank">Allianz Hungária et al. v. Gazdasági Versenyhivatal</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;"> the Court (Judge Ilešič) gives some guidance on the meaning of “by object” in a case that should easily pass any effects-based test. Cf. <a href="http://europeanlawblog.eu/?p=1664" target="_blank">Hans Vedder on European Law Blog</a></span><br />
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<span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">In environmental law, the Supreme Court of Austria checked with the Court (Judge Bay Larsen) whether an Environmental Impact Assessment under <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:1985L0337:20090625:EN:PDF" target="_blank">Directive 85/337</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;"> is meant to assess impacts to the “substance” of assets or to their value. The result is a fun bit of sparring with what economists call value in use and value in trade. In reply to the second question, the Court explains that a failure to do an EIA does not automatically give rise to civil liability of the state. <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0420:EN:HTML" target="_blank">Leth v. Austria</a> Cf. <a href="http://ukhumanrightsblog.com/2013/03/15/eu-claims-for-damages-because-no-environmental-assessment/" target="_blank">UK Human Rights Blog</a>, <a href="http://europeanlawblog.eu/?p=1630" target="_blank">European Law Blog</a> and <a href="http://courtofjustice.blogspot.co.uk/2013/03/case-c42011-leth.html" target="_blank">ECJBlog</a></span><br />
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<span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">Even though managers and owners of SMEs don’t usually deal with banks “in the course of their trade or profession”, they still don’t qualify as consumers for the purposes of articles 5(1)(a) and 15(1) of <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2001:012:0001:0023:en:PDF" target="_blank">Regulation 44/2001</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">. <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0419:EN:HTML" target="_blank">Česká spořitelna, a.s. v. Feichter</a> Cf. <a href="http://recent-ecl.blogspot.co.uk/2013/03/consumers-definition-refined.html" target="_blank">Recent Developments in European Consumer Law Blog</a></span><br />
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<span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">In the <a href="http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=1_38121" target="_blank">copper fittings cartel case</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">, the appeal of Viega was rejected. Viega v. Commission (<a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0276:DE:HTML" target="_blank">DE</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">, <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0276:FR:HTML" target="_blank">FR</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">)</span><br />
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<span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">Most interesting for me is this week’s opinion by AG Jääskinen in <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CC0509:EN:HTML" target="_blank">ÖBB-Personenverkehr</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">, although ultimately the case is less about railway regulation than about the effect of Regulations in EU law. The Regulation in question is <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CC0509:EN:HTML" target="_blank">Regulation 1371/2007</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;"> on passenger rights. The Austrian regulator, the <a href="http://www.schienencontrol.gv.at/englisch/homepage/homepage.html" target="_blank">Schienen-Kontrol Kommision</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">, found that ÖBB’s compensation terms were not compliant, and substituted its own scheme. The AG now argues that they were not allowed to do that absent national law authorisation, given that other national law remedies exist.</span><br />
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<span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">AG Bot is OK with the Bulgarian approach to handling disputes that arise under <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:030:0016:0099:EN:PDF" target="_blank">Regulation 73/2009</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">, the CAP procedure Regulation. It is permissible for Bulgaria to have them all handled in Sofia, as long as this does not create an excessive burden on (potential) plaintiffs. Agrokonsulting-04-Velko Stoyanov v. Izpalnitelen direktor na Darzhaven fond „Zemedelie” Razplashtatelna agentsia (<a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0093:NL:HTML" target="_blank">NL</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">, <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0093:DE:HTML" target="_blank">DE</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">, <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0093:FR:HTML" target="_blank">FR</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">)</span><br />
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<span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">In the General Court, President Jaeger granted an order suspending the operation of the Commission’s Decision in the <a href="http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=1_39125" target="_blank">Carglass cartel case</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;"> until the General Court has decided whether the Commission had erred in declining to keep certain information confidential. <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012TO0462:EN:HTML" target="_blank">Pilkington Group v. Commission</a></span><br />
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<span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">In other cartel news, the General Court (Judge Martins Ribeiro) upheld the Commission’s decision in the <a href="http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=1_39188" target="_blank">bananas cartel case</a> </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">against <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62008TJ0588:EN:HTML" target="_blank">Dole</a>,</span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;"> whereas <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62008TJ0587:EN:HTML" target="_blank">Fresh Del Monte</a> </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">had its liability reduced from € 14,7 million to € 8,82 million. (The total fine for Internationale Fruchtimport Gesellschaft Weichert & Co is still € 14,7 but Fresh Del Monte is only jointly and severally liable for € 8,82 million of it.)</span>martinnedhttp://www.blogger.com/profile/15282998467090268537noreply@blogger.com0tag:blogger.com,1999:blog-22498220.post-29114115152433259092013-03-13T20:13:00.000+01:002013-07-02T20:18:04.813+02:00Tacit Collusion<div class="separator" style="clear: both; text-align: center;">
<a href="http://antitrustlair.files.wordpress.com/2011/01/nicolas_ok.jpg?w=199&h=300" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="http://antitrustlair.files.wordpress.com/2011/01/nicolas_ok.jpg?w=199&h=300" /></a></div>
<a href="http://chillingcompetition.com/" target="_blank">Nicolas Petit</a>’s new(-ish) <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1999829">article</a> on tacit collusion is a wonderful piece of scholarship. Unfortunately, it is also wrong. To be clear, it is not the economics that I have a problem with. The author’s understanding of the relevant industrial organisation literature seems to be more or less unimpeachable. In fact, it’s not even really the legal analysis that is problematic. Instead, the key flaw is in the paper’s essential policy assumption. All the other problems of the article proceed from that one flaw.<br />
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The flaw in question is one that we might plausibly dub The MEP’s Fallacy, because it is Members of the European Parliament who suffer from it more than anyone else. The Fallacy is the thought that: a) there is a problem, and b) I can fix it, lead inevitably to the conclusion that: c) I should fix it.<br />
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<strong>Not all problems that can be fixed at the EU level should be fixed there.</strong><br />
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Something similar goes for competition law: <strong>Not all problems that can be resolved through competition law, should be.</strong> This is not just a question of <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2156200">the goals of competition law</a>, but also one of its suitability for pursuing various goals, not to mention wider legal principles.<br />
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In this particular case, I’m afraid I have to join the other side of the debate discussed by Nicolas (I’ve never met him in person, but we’ve been in touch in various ways, so I feel confident that he’d be OK with me calling him that): I am fundamentally uneasy with the notion of using <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12008E101:EN:HTML">art. 101 TFEU</a> for types of collusion that are not in some sense based on an agreement. It appears to me that "agreement” is the core <em>actus reus</em> of that provision, just like “abuse” is for <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12008E102:EN:HTML">art. 102</a>. It is the overt act that - in this case non-criminal - liability attaches to.<br />
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That reminds me, as an aside: How can the Dutch competition authority give six people a fine of <a href="http://www.nma.nl/documenten_en_publicaties/archiefpagina_besluiten__en_fusiemeldingen/mededinging/2012/7131bld.aspx" target="_blank">€ 120.000 each</a> without having to satisfy the standard of art. 6 <a href="http://www.echr.coe.int/NR/rdonlyres/D5CC24A7-DC13-4318-B457-5C9014916D7A/0/Convention_ENG.pdf" target="_blank">ECHR</a>? We all know that the normal competition enforcement procedure - as used by the Commission and by most Member States - only barely satisfies that provision, and that is when it is applied to companies. (Let's face it: every company that brings an action for annulment against a competition decision adressed to it will argue that the whole procedure is in violation of art. 6. We all know that those arguments never succeed, but we also know that that is more for pragmatic and stare decisis reasons than for reasons of honest merit.)<br />
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Saying that competition fines are not criminal only gets you so far. At some point that just isn't credible anymore, and as far as I'm concerned that line lies somewhere between <a href="http://europa.eu/rapid/press-release_IP-13-196_en.htm">giving Microsoft a € 561 million fine</a> and giving a private person a fine of € 120.000, and perhaps even on the other side of that Microsoft fine.<br />
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Anyway, too much creativity with the <em>actus reus</em> is equivalent to prosecuting someone for manslaughter because they drove 150 kph and someone might well have died. Much as there is some room for creativity with regard to intent, by including <em><a href="http://www.duhaime.org/LegalDictionary/D/DolusEventualis.aspx">dolus eventualis</a></em>, there has to be a link to someone dying or almost dying. Without that, the charge would just be completely unmoored from the actual offence.<br />
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In competition law, the issue is not usually one of intent. But there is some scope for creativity with regard to the "agreement"-element. Art. 101 already suggests as much, by listing as possible <em>acti rei</em>:
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<ul>
<li>- agreements between undertakings,</li>
<li>- decisions by associations of undertakings, and</li>
<li>- concerted practices</li>
</ul>
As Nicolas explains, however, the Court of Justice drew some clear lines here. These lines are - contrary to his assertion - in no way unintelligible or regrettable as long as one bears in mind that the problem is how to prove a concerted practice, rather than what kind of concerted practice falls within the scope of art. 101. After all, the word "concerted" implies some meeting of minds, which is enough - conceptually - to make concerted practices similar in nature to explicit agreements and decisions by associations; the <em>actus reus</em> is clearly the same in all cases. But as prof. Posner pointed out in the passage quoted in fn. 140, the proof is categorically different. There would normally be no "smoking gun". Instead, the relevant proof would focus on what decision makers knew and expected about each other's decisions. (Note the similarity here with the <a href="http://en.wikipedia.org/wiki/Cournot_duopoly" target="_blank">Cournot</a> and <a href="http://en.wikipedia.org/wiki/Bertrand_game" target="_blank">Bertrand</a> models. In fact, despite Nicolas' analysis I am still not entirely clear why a Cournot market would not imply tacit collusion.) Because of this proof problem, it might be safer to limit concerted practices to those cases where, evidence-wise, the balance between Type-I and Type-II errors is not too eggregious. And that is all the Court seems to have done.<br />
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In Posner's words:
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<blockquote>
The biggest problem in applying [art. 101] to tacit collusion is that of proof: How can the existence of noncompetitive pricing be established without any proof of acts of agreement, implementation, or enforcement? Without denying that these will be extremely difficult cases, one can point to several types of evidence that should convince the trier of fact that sellers are guilty of tacit collusion as that term is used here.</blockquote>
The Court in <a href="http://www.dkrnet.de/data/curia/jurispr/53-77/numdoc=61973J0040&lg=EN.htm" target="_blank">Suiker-Unie et al. v. Commission (1975)</a>:
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<blockquote>
173. THE CRITERIA OF COORDINATION AND COOPERATION LAID DOWN BY THE CASE-LAW OF THE COURT, WHICH IN NO WAY REQUIRE THE WORKING OUT OF AN ACTUAL PLAN, MUST BE UNDERSTOOD IN THE LIGHT OF THE CONCEPT INHERENT IN THE PROVISIONS OF THE TREATY RELATING TO COMPETITION THAT EACH ECONOMIC OPERATOR MUST DETERMINE INDEPENDENTLY THE POLICY WHICH HE INTENDS TO ADOPT ON THE COMMON MARKET INCLUDING THE CHOICE OF THE PERSONS AND UNDERTAKINGS TO WHICH HE MAKES OFFERS OR SELLS.
</blockquote>
<blockquote>
174. ALTHOUGH IT IS CORRECT TO SAY THAT THIS REQUIREMENT OF INDEPENDENCE DOES NOT DEPRIVE ECONOMIC OPERATORS OF THE RIGHT TO ADAPT THEMSELVES INTELLIGENTLY TO THE EXISTING AND ANTICIPATED CONDUCT OF THEIR COMPETITORS, IT DOES HOWEVER STRICTLY PRECLUDE ANY DIRECT OR INDIRECT CONTACT BETWEEN SUCH OPERATORS, THE OBJECT OR EFFECT WHEREOF IS EITHER TO INFLUENCE THE CONDUCT ON THE MARKET OF AN ACTUAL OR POTENTIAL COMPETITOR OR TO DISCLOSE TO SUCH A COMPETITOR THE COURSE OF CONDUCT WHICH THEY THEMSELVES HAVE DECIDED TO ADOPT OR CONTEMPLATE ADOPTING ON THE MARKET.</blockquote>
And, 13 years later in <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:61985J0089(01):EN:HTML" target="_blank">Woodpulp II</a>, the Court was even more cautious with regard to these evidentiary problems:
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<blockquote>
71 In determining the probative value of those different factors, it must be noted that parallel conduct cannot be regarded as furnishing proof of concertation unless concertation constitutes the only plausible explanation for such conduct. It is necessary to bear in mind that, although [art. 101] prohibits any form of collusion which distorts competition, it does not deprive economic operators of the right to adapt themselves intelligently to the existing and anticipated conduct of their competitors (see the judgment in Suiker Unie, cited above, paragraph 174).</blockquote>
"Regarded" and "plausible" suggest that this is a statement about how cases are to be brought and proved, not about the underlying concepts. Conceptually, I would argue that any kind of "conscious parallelism" is captured by art. 101 TFEU. (Contrary to Nicolas, I regard "conscious parallelism" as an eminently useful label, because more than "tacit collusion" it neatly makes clear what exactly the offending action is. The elements are: a) parallel behaviour that is, b) consciously so. In the term "tacit collusion", the word "collusion does all the work, thus begging the question what that word actually means.) I would define conscious parallelism, conceptually, as any kind of behaviour that succeeds in reducing competition by taking advantage of each decision maker's understanding of every other decision maker's reasoning. Clearly, this is essentially the same as Nicolas's tacit collusion. (Cf. <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1999829" target="_blank">his very helpful diagram on p. 24</a>.) However, in collusion cases as in abuse of dominance cases, competition law doctrine has to be developed with an eye to the relative probability of Type-I and Type-II errors, and their relative cost to society. When it comes to tacit collusion, we want to avoid mistaking success for monopolisation, or a social-welfare enhancing coordination for a collusion-facilitating agreement. For this reason, the Court's approach seems quite sensible, although I would have preferred it if they had not been quite so categorical in ruling out the possibility of a successful tacit collusion case under art. 101 TFEU.<br />
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Relying on <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12008E102:EN:HTML" target="_blank">art. 102 TFEU</a>, on the other hand, seems highly problematic from a conceptual point of view, because it is difficult to see how a single oligopolistic firm is "dominant", while I have no idea what "collective dominance" means outside the context of "groups of firms that were legally distinct, but subject to a unified economic management, including vertically related companies (mother and subsidiaries)", i.e. “undertakings [that] present themselves on the market as a single entity and not as individuals”. (These quotes are taken originally from an article by prof. Joliet from 1974 and from <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31989D0093:EN:HTML" target="_blank">the Commission's Decision in the Italian Flat Glass case</a>, respectively.) In other words, while there is some room for creativity with respect to the concept of "one or more undertakings" which hold(s) a single "position" in the market, I would think that this concept cannot be stretched to the point where it includes companies that are clearly perceived as competitors by their customers.<br />
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And much as dr. Petit seems to think that the mere fact that tacit collusion ought to be subject to regulatory intervention means that either art. 101 or art. 102 has to give way, as noted above that is not the case. He is completely right to reject what he calls "moral justifications" for tacit collusion (p. 19 of <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1999829" target="_blank">his article</a>). Competition authorities and regulators are rarely confronted with anything other than regulatory subjects who engage in rational market conduct, and this has never been held to undermine the moral case for intervention, although it might impact the question of the size of penalties. However, this does not mean that existing competition law should be extended past its breaking point.<br />
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Instead, there are two solutions that should be preferred for those cases that cannot reasonably be brought within existing law. On the one hand, there are the market investigations that he mentions, as they are carried out in the UK by the <a href="http://www.competition-commission.org.uk/" target="_blank">Competition Commission</a> under <a href="http://www.legislation.gov.uk/ukpga/2002/40/part/4" target="_blank">part 4 of the Enterprise Act 2002</a>. <a href="http://www.legislation.gov.uk/ukpga/2002/40/section/131" target="_blank">S. 131</a>(1) says:
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<blockquote>
The OFT may, subject to subsection (4), make a reference to the Commission if the OFT has reasonable grounds for suspecting that any feature, or combination of features, of a market in the United Kingdom for goods or services prevents, restricts or distorts competition in connection with the supply or acquisition of any goods or services in the United Kingdom or a part of the United Kingdom.</blockquote>
(Ministers have the same power under <a href="http://www.legislation.gov.uk/ukpga/2002/40/section/132" target="_blank">s. 132</a>.)<br />
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When an adverse effect on competition has been established by the CC, it can take any of a wide range of measures - at a sector-wide level - to remedy the problem. It seems eminently advisable to create such a power for the Commission as well, if necessary with a veto power for the Council and the Parliament through <a href="http://en.wikipedia.org/wiki/Comitology" target="_blank">comitology</a>. As far as I can tell, Nicolas agrees.<br />
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To the extent that this is still not enough, there is only one option remaining: sectoral regulation through the legislature. (What <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2156200" target="_blank">Bergqvist</a> calls "industrial policy". His article offers a more in-depth discussion of the interaction between competition law and sector-specific legislation.) It seems to me that under the general common market rules, the EU legislature has wide-ranging powers to create a sector-specific framework to enhance social welfare by combating tacit collusion. This power may not reach as far as <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1632723" target="_blank">structural remedies</a>, but it certainly suffices to go after any number of facilitating factors. This road seems by far preferable to the competition law path, not only because it is more legitimate, but also because it allows for more sector-specific knowledge to be brought to bare on the problem, and because it avoids the problem of a regulator working within an artificial, and artificially narrow framework. Instead, in this way the solution can be designed on a blank sheet.<br />
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To a hammer, all problems look like a nail. Let's make sure that the same isn't true for the carpenter.martinnedhttp://www.blogger.com/profile/15282998467090268537noreply@blogger.com0tag:blogger.com,1999:blog-22498220.post-60492349952619156222013-03-09T02:39:00.000+01:002013-03-20T03:27:49.481+01:00This Week in Luxembourg<span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">In <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0607:EN:HTML" target="_blank">ITV v. TVCatchup</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">, the Court (Judge Malenovský) once again endeavours to bring (TV) copyright into the internet age. It argues that the copyright <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2001:167:0010:0019:EN:PDF" target="_blank">Directive 2001/29</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;"> does not give ITV the right to forbid TVCatchup from live streaming its broadcasts over the internet to people who are already allowed to see them on TV. (Because they live in the UK, have a TV license, etc.) Cf. <a href="http://ipkitten.blogspot.co.uk/2013/03/playing-catchup-cjeu-clarifies-that.html" target="_blank">IPKat</a> and <a href="http://courtofjustice.blogspot.co.uk/2013/03/case-c60711-itv-et-al-v-tvcatchup.html" target="_blank">ECJBlog</a></span><br />
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<span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">Following last week's <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0425:EN:HTML" target="_blank">Ettwein</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">, this week normal order is restored as far as EU-Swiss relations go. For the last 12 years, Zürich airport has suffered from not being in the EU, while its approaches are. The fact that there is an <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:22002A0430(02):EN:HTML" target="_blank">EU-CH Air Transport Agreement</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;"> has not helped. Switzerland tried diplomacy, but they also sued in the General Court to annul <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2004:004:0013:0024:EN:PDF" target="_blank">Commission Decision 2004/12</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">. <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62005TJ0319:EN:HTML" target="_blank">And lost</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">. And now they lost on appeal as well. Switzerland v. Commission (<a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62010CJ0547:NL:HTML" target="_blank">NL</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">, <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62010CJ0547:DE:HTML" target="_blank">DE</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">, <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62010CJ0547:FR:HTML" target="_blank">FR</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">) Cf. <a href="http://europeanlawblog.eu/?p=1614" target="_blank">European Law Blog</a></span><br />
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<span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">Those who are interested in <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=oj:l:2006:396:0001:0849:en:pdf" target="_blank">REACH</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">, and in waste that ceases to be waste, may read <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0358:EN:HTML" target="_blank">Lapin elinkeino-, liikenne- ja ympäristökeskuksen liikenne ja infrastruktuuri -vastuualue v. Lapin luonnonsuojelupiiri ry</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;"> (Judge Bonichot) For more REACH, see below.</span><br />
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<span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">Surprisingly, Goldbet Sportwetten v. Sperindeo (<a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0144:NL:HTML" target="_blank">NL</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">, <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0144:DE:HTML" target="_blank">DE</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">, <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0144:FR:HTML" target="_blank">FR</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">) is not actually about gambling. Instead, it concerns the relationship between a European order for payment under <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:399:0001:01:EN:HTML" target="_blank">Regulation 1896/2006</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;"> and the normal rules of jurisdiction under <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32001R0044:EN:html" target="_blank">Regulation 44/2001</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">. According to AG Bot, it is all very simple: once you dispute an order for payment, the debt is no longer undisputed, meaning that the normal procedure applies. However, doing so does not count as making an appearance in the normal procedure so as to give a different court jurisdiction under art. 24 of <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32001R0044:EN:html" target="_blank">Regulation 44/2001</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">.</span><br />
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<span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">AG Sharpston explained that putting photovoltaic cells on someone's house is an economic activity for VAT purposes to the extent that you're using that installation to feed electricity back into the network for consideration. Obviously, this is a good thing rather than a bad thing for the homeowner, because this means that the VAT on the cost of the installation may be recovered. <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0219:EN:HTML" target="_blank">Finanzamt Freistadt Rohrbach Urfahr v. Unabhängiger Finanzsenat Außenstelle Linz</a></span><br />
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<span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">In the General Court, Poland sued over ETS <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011TJ0370:EN:HTML" target="_blank">and lost</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">.</span><br />
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<span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">Moreover, there were four unsuccessful actions for annulment against the European Chemicals Agency (ECHA) under the <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=oj:l:2006:396:0001:0849:en:pdf" target="_blank">REACH Regulation</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">, the first four of their kind to make it to a full judgement, with the only previous case law being orders dismissing cases as inadmissible. In each case, ECHA argued unsuccessfully:</span><br />
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<li><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">that the legal act in question was not intended to produce legal effects vis-à-vis third parties, since it was merely an "agreement of the Member State Committee",</span></li>
<li><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">that the act was not of direct concern to the applicants, (cf. the orders in <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62010TO0346:EN:HTML" target="_blank">Borax Europe v. ECHA</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;"> and <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62010TO0343:EN:HTML" target="_blank">Etimine v. ECHA</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;"> from 2011), and</span></li>
<li><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">that the act did not fall in the category of "a regulatory act which does not entail implementing measures" under <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12008E263:EN:HTML" target="_blank">art. 263(4) TFEU</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">.</span></li>
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<span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">On substance, however, the applicants lost each time. The judgements, by the Judge who will presumably be the REACH-judge from now on, Judge Dittrich, are: <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62010TJ0096:EN:HTML" target="_blank">Rütgers et al. v. ECHA</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">, <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62010TJ0095:EN:HTML" target="_blank">Cindu Chemicals et al. v. ECHA</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">, again <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62010TJ0094:EN:HTML" target="_blank">Rütgers et al. v. ECHA</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">, and <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62010TJ0093:EN:HTML" target="_blank">Bilbaína de Alquitranes et al. v. ECHA</a></span>martinnedhttp://www.blogger.com/profile/15282998467090268537noreply@blogger.com0tag:blogger.com,1999:blog-22498220.post-14043623629187249122013-02-28T21:58:00.004+01:002013-06-09T18:35:39.630+02:00This Week in LuxembourgIn <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62010CJ0617:EN:HTML">Åklagaren v. Åkerberg Fransson</a>, the Court (Judge Safjan) applied the <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2007:303:0001:0016:EN:PDF">Charter</a> to a case that was within the scope of EU law but not a necessarily an implementation of EU law in the sense of art. 51(1) <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2007:303:0001:0016:EN:PDF">Charter</a>. Also fun, the Court discusses the relationship between EU fundamental rights law, ECHR law and national fundamental procedural and fundamental rights law (par. 43-49). Cf. <a href="http://eulawstudent.blogspot.co.uk/2013/02/case-c-61710-akerberg-fransson.html">EULaw Student Blog</a>, <a href="http://europeanlawblog.eu/?p=1594">European Law Blog</a>, Eutopia Law Blog (<a href="http://eutopialaw.com/2013/03/14/akerberg-and-melloni-what-the-ecj-said-did-and-may-have-left/" target="_blank">1</a>, <a href="http://eutopialaw.com/2013/03/20/akerberg-and-melloni-what-the-court-said-did-and-may-have-left-open/" target="_blank">2</a>), and Verfassungsblog (<a href="http://www.verfassungsblog.de/de/menschenrechtsverstos-ist-kein-grund-einen-eu-haftbefehl-nicht-zu-vollstrecken/">1</a>, <a href="http://www.verfassungsblog.de/de/eugh-akerberg-fransson-mangold-reloaded/" target="_blank">2</a>)<br />
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The execution of an EAW cannot be made conditional on the in absentia judgement in question being open to review, not even if the national court invokes the <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2007:303:0001:0016:EN:PDF">Charter</a>. Cf. <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:081:0024:0036:EN:PDF">Framework Decision 2009/299</a>. Notice also the national court’s question 3, which invoked art. 53 <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2007:303:0001:0016:EN:PDF">Charter</a> in order to be able to use national constitutional law to evaluate a rule of EU law. Unsurprisingly, the Court (Judge Safjan) did not like that either. <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0399:EN:HTML">Melloni v. Ministerio Fiscal</a> Cf. <a href="http://eutopialaw.com/2013/05/23/melloni-and-the-future-of-constitutional-conflict-in-the-eu/" target="_blank">Eutopia Law Blog</a> and <a href="http://www.ejiltalk.org/human-rights-member-state-eu-and-echr-levels-of-protection/" target="_blank">prof. Joseph Weiler on EJIL: Talk!</a><br />
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Delay compensation for air passengers is not conditional on delayed departure, but only on delayed arrival at the passenger’s final destination. (Judge Malenovský.) <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0011:EN:HTML">Air France v. Folkerts</a> Cf. <a href="http://europeanlawblog.eu/?p=1599">European Law Blog</a>, <a href="http://eutopialaw.com/2013/03/18/sturgeon-revisited-yet-again-case-c-1111-air-france-v-folkerts/" target="_blank">Eutopia Law Blog</a> and <a href="http://recent-ecl.blogspot.co.uk/2013/02/compensation-for-delayed-connecting.html" target="_blank">Recent Developments in European Consumer Law Blog</a><br />
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A number of cases were handed down this week about the 1st Railway Package, all of them courtesy of Judge Borg Barthet and AG Jääskinen. A quick rundown:<br />
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<li>In <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62010CJ0556:EN:HTML">Commission v. Germany</a>, the Court followed <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62010CC0556:EN:HTML">the AG</a> and dismissed the action.</li>
<li>In <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62010CJ0555:EN:HTML">Commission v. Austria</a>, the Court followed <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62010CC0555:EN:HTML">the AG</a> and dismissed the action.</li>
<li>In <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62010CJ0483:EN:HTML">Commission v. Spain</a>, the Court followed <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62010CC0483:EN:HTML">t</a><a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62010CC0483:EN:HTML">he AG</a> and found that Spain had failed to correctly transpose the rules on the allocation of infrastructure capacity and the levying of access charges. (Charges are ultimately set by the minister, there is no performance scheme and the minister has too much discretion in how to deal with capacity scarcities.)</li>
<li>In <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62010CJ0473:EN:HTML">Commission v. Hungary</a>, the Court followed <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62010CC0473:EN:HTML">the AG</a> and found that Hungary had failed to transpose the rules on the allocation of infrastructure capacity and the levying of access charges. (The financial equilibrium of the infrastructure manager is not ensured, the charges are not linked to direct costs, and there is no incentive scheme.)</li>
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In <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0427:EN:HTML">Kenny et al. v. Commissioner of An Garda Síochána et al.</a>, the Court (Judge Silva de Lapuerta) tackled a straight-up indirect gender discrimination case, providing some guidance – though perhaps not as much as the Irish court would have liked – on the burden of proof for the defendant if a pay difference is to be justified.<br />
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In <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0425:EN:HTML">Ettwein v. Finanzamt Konstanz</a> for once the Swiss don’t get the short end of the stick. The <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2002:114:0006:0006:EN:PDF">EU-CH Agreement on the Free Movement of Persons</a> requires equal treatment here, according to the Court (Judge Juhász).<br />
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In <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CJ0334:EN:HTML">Arrango Jaramillo et al. v. EIB</a>, the Court reviewed a judgement by the General Court (<a href="http://curia.europa.eu/juris/document/document.jsf?text=&docid=124121&pageIndex=0&doclang=FR&mode=lst&dir=&occ=first&part=1&cid=47708">FR</a>) on appeal from the Staff Tribunal (<a href="http://curia.europa.eu/juris/document/document.jsf?text=&docid=83476&pageIndex=0&doclang=FR&mode=lst&dir=&occ=first&part=1&cid=48073">FR</a>). Even though such a review procedure requires the ECJ to be quite deferential (“if it affects the unity or effectiveness of EU law”), it was not pleased and sent the case back to the General Court.<br />
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The Greek State Aid case of Ellinika Nafpigeia v. Commission (<a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CJ0246:FR:HTML">FR</a>) took an unexpected turn for the interesting when the appellant – a shipbuilder – invoked art. <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12008E346:EN:HTML">346</a> and <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12008E348:EN:HTML">348</a> TFEU in order to get out of repaying the aid. The Court (Judge Silva de Lapuerta), however, relied heavily on the last clause of art. 346 (1)(b) TFEU to interpret that article even more narrowly than it was already going to do anyway. The General Court judgment is <a href="http://curia.europa.eu/juris/document/document.jsf?text=&docid=120422&pageIndex=0&doclang=FR&mode=lst&dir=&occ=first&part=1&cid=53965">here</a>, also in French.<br />
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The Court (Judge Arabadijev), explained to a Portuguese court that a system of compulsory training for chartered accountants does fall under art. 101 TFEU, meaning that, once it is shown that it is problematic from a competition law point of view, it will require an equivalently weighty justification. <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CJ0001:EN:HTML">Ordem dos Técnicos Oficiais de Contas v. Autoridade da Concorrência</a><br />
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AG Kokott goes out on a limb in competition law by arguing that a company that relies in good faith on advice by outside counsel saying that its behaviour is lawful under competition law cannot be punished for infringement if the competition authorities disagree. I suppose she had the Verbotsirrtum of § 17 <a href="http://www.gesetze-im-internet.de/stgb/__17.html">StGB</a> (<a href="http://www.gesetze-im-internet.de/englisch_stgb/englisch_stgb.html#p0120">translation</a>) in mind, but I doubt that the Court will go for it. <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CC0681:EN:HTML">Schenker and Co AG et al.</a><br />
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AG Mengozzi proposed that the Commission should win its cartel appeal in <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CC0287:EN:HTML">Commission v. Aalberts Industries et al</a>.<br />
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AG Jääskinen, on the day of his railway victory, did some public procurement law: “Articles 47(2) and 48(3) of <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2004:134:0114:0240:EN:PDF">Directive 2004/18</a> (…) preclude national legislation (…) which prohibits, except in special circumstances, reliance on the capacities of more than one auxiliary undertaking in order to fulfil the selection criteria concerning the economic and financial standing and/or technical and/or professional ability of an economic operator.” That seems quite obviously right. <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CC0094:EN:HTML">Swm Costruzioni 2 and D.I. Mannocchi Luigino v. Provincia di Fermo</a> Cf. <a href="http://eutopialaw.com/2013/03/08/with-a-little-help-from-my-friends-a-flexible-and-competition-oriented-interpretation-of-rules-on-reliance-on-third-party-capabilities-in-public-procurement-opinion-in-c-9412/" target="_blank">Eutopialaw</a></div>
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martinnedhttp://www.blogger.com/profile/15282998467090268537noreply@blogger.com0tag:blogger.com,1999:blog-22498220.post-26780282434153040222013-02-25T20:45:00.004+01:002013-03-02T01:16:33.095+01:00Last Week in Luxembourg<span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">In <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0332:EN:HTML" target="_blank">ProRail v. Xpedys et al</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">, the Court (Judge Ilešič) considered whether the procedure created by <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2001:174:0001:0024:EN:PDF" target="_blank">Regulation 1206/2001</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;"> for a Court to enlist the help of the Court in another Member State for taking evidence there is mandatory. The Court found that it is not; the Belgians were entitled to simply appoint an expert to report on the situation in the Netherlands without involving the Dutch courts.</span><br />
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<span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">In the mutual recognition of qualifications case of <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62012CJ0111:EN:HTML" target="_blank">Ministero per i beni e le attività culturali et al. v. Ordine degli Ingegneri di Verona e Provincia et al.</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">, there is something noteworthy going on in par. 35, where the Court deals with the objection that this is a purely internal matter. It argues that it may still answer the prejudicial question where the national court is required by its domestic law to treat internal cases the same as cross-border cases.</span><br />
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<span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">The Court (Judge Berger) discussed the application of the rule of <i>audi et alteram partem</i> to the situation where a court has found, of its own motion, that a contractual term is unfair under <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31993L0013:en:HTML" target="_blank">Directive 93/13</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">. The conclusion is that parties must be invited to submit their views about which remedies the Court should impose.<a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0472:EN:HTML" target="_blank"> Banif Plus Bank Zrt v. Csipai</a> Cf. Recent Developments in European Consumer Law Blog <a href="http://recent-ecl.blogspot.co.uk/2013/02/in-case-of-unfairness-cjeu-judgment-in.html" target="_blank">post 1</a> and <a href="http://recent-ecl.blogspot.co.uk/2013/02/ex-officio-unfairness-vs-audi-alteram.html" target="_blank">post 2</a>.</span><br />
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<span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">Relying on art. 24(2) Charter, AG Cruz Villalón proposed bringing the best interest of the child standard into <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2003:050:0001:0010:EN:PDF" target="_blank">Dublin-II</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;"> asylum law. As a result he concluded that when an unaccompanied minor (cf. art. 6 of the <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2003:050:0001:0010:EN:PDF" target="_blank">Dublin-II Regulation</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">) applies for asylum in more than one Member State, the best interest of the child will usually (but not always) require that the application be treated in the Member State of the most recent application. <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CC0648:EN:HTML" target="_blank">MA et al. v. Secretary of State for the Home Department</a></span><br />
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<span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">AG Sharpston handled yet another case on financial aid for students, arguing that the German three-year rule should suffer the same fate as <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62009CJ0542:EN:HTML" target="_blank">its Dutch equivalent</a></span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">. <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CC0523:EN:HTML" target="_blank">Joined cases Prinz v. Region Hannover and Seeberger v. Studentenwerk Heidelberg</a> Cf. <a href="http://eutopialaw.com/2013/03/01/case-comment-c-52311-and-c-58511-prinz-and-seeberger-ag-sharpston-strikes-again/" target="_blank">Eutopia law blog</a></span><br />
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<span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">Surprisingly, Melli Bank lost its latest asset freeze suit. Some of its heads of claim were held to be inadmissible, and the others were rejected on the merits. <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62010TJ0492:EN:HTML" target="_blank">Melli Bank v. Council</a></span>martinnedhttp://www.blogger.com/profile/15282998467090268537noreply@blogger.com0