EU Law Blog

The "Undistorted competition" issue

Looks like quite a few folk are all worked up about the fact that "undistorted competition" will likely be deleted from the "objectives" of the new Reform Treaty to be drafted soon.

Look for example at what the fine "Antitrust Hotch Potch" has to say here or here. Even Bondwoman at Blogging about EU Law and Politics asks why not delete Articles 81 and 82 EC altogether.

Fact is though, "undistorted competition" is not in the current objectives of the EC Treaty as set out in its Article 2. Nor is it an objective of the EU Treaty according to its Article 2. At present, ensuring competition undistorted is an "activity" of the EC listed in Article 3 §1 (g) EC. That omission has not stopped the creation of the development of substantial body of EC antitrust and state aid law.

It was the draft Constitution that "elevated" undistorted competition to the status of an objective, as well as being a policy. (For the full text of the draft Constitution, look here).

Let's remain a little skeptical of grand objectives. After all, the Constitution of the USSR listed some pretty neat objectives too...none of which came to much in reality. What matters is the practical implementation of policy.

And don't forget that the reference to cartels in the Schuman Declaration of May 9th 1950 was an after thought and inserted on the insistence of US Secretary of State Dean Acheson.

The Reform Treaty : Constitution Abandoned

The European Council has reached an agreement on what to do next in the process of revising the EU and EC Treaties. The agreement was reached in the early hours of June 23rd, 2007.

You can find the Presidency Conclusions here.

The main part on the amendment to the Treaties is to be found in Annex I to the Conclusions.

The idea of a "Constitution" is abandoned. Instead there will be a "Reform Treaty". An Intergovernmental Conference will be convened in July 2007 to draft it and it is hoped to finalize it by the end of 2007 with a view to ratifications in 2009.

More details later....

Federal Constitutionalism / European Constitutionalism in Comparative Perspective

Just came across this very interesting article entitled "Federal Constitutionalism / European Constitutionalism in Comparative Perspective" by Dr. Nicholas Aroney of TC Beirne School of Law, University of Queensland. It has been out since 2005 but so glad to have found it now.

You can download it here.

This is what the abstract says :

There has been a long-standing debate over the question whether the European Community is best understood as an international organisation founded upon a series of international treaties, a supranational organisation that is essentially constitutional in nature, or some kind of sui generis entity that partakes of both sets of characteristics. In connection with this debate, the European Community has often been compared to a variety of established federal-states, such as the United States, Canada, Germany and Switzerland.
In these comparisons, while a number of similarities between federations and the institutions of the European Community have been observed, a sharp distinction has almost always been drawn between the supposed foundations of federal constitutions in the will of ?the people' and the establishment of the European Community upon the founding treaties. Further, in many of the comparisons, it has been assumed that it is the nature of the European Community that is in question, whereas the nature of the federal-state is straightforward and uncontroversial. For this reason, it is generally supposed that the established federal-states will shed light on the problematic nature of the European Community, and not vice versa.
However, this paper argues that the constitutional foundations of federal-states are far from uncontroversial and in fact display a number of features that are uncomfortably similar to the institutional foundations of the European Community. Given that the problematic and ambiguous relationship between treaty and constitution has been highlighted by the debate over the European Community, it is argued that comparisons between the European Community and the modern federal-state can shed significant light not only upon the former but also upon the latter.

In reality, the article is very well written, insightful and carefully researched. Above all, the author's style permits him to convey ideas without abstruse wordiness. Excellent.

14th Report on Subsidiarity and Proportionality

The Commission has published its 14th Report on the application of the principles of subsidiarity and proportionality. The rather pretentious title is "Better Lawmaking 2006".

It is drawn up pursuant to Article 9 of the Protocol on the application of those principles annexed to the Treaty of Amsterdam, 1997.

It is actually worth reading. It provides an interesting overview of what the Commission in particular, but also the Council, European Parliament and the member States have done to improve the regulatory environment in the EC. It is full of useful references. For example, it notes that the Court of First Instance has referred to the principle of subsidiarity twice : In Case T-168/01 GlaxoSmithKline Services v. Commission and in Case T-253/02 Chafiq Ayadi v. Council.

For the 13th Report, see our previous post here.

UPDATE: The Commission has also issued a "Commission Staff Working Paper" SEC(2007) 737 that accompanies the main Report. It is a 37 page document that is a treasure trove of information and references. Invaluable for research. But why make life difficult for the rest of us by publishing it separately without a link on the web ? As if the Commission didn't want us to find it. We did though, so there !

National courts, the application of EC law & the European Parliament hearing

The Legal Affairs Committee of the European Parliaent recently held an interesting hearing on "The role of the national judge in the judicial system of the European Union".

A questionnaire was sent out covering different aspects of the involvement of national courts in the application of EC law. Then judges from England, Hungary, Romania and Germany made statements at the public meeting chaired by Diana Wallis, MEP.

Fortunately, the Council has made public a brief but interesting summary of the submissions of the different judges.

Interestingly, Lord Justice Rix of the English Court of Appeal mentioned in his contribution the difficulty encountered in England in applying the abstract rulings of the Court of Justice in preliminary reference cases to the factual situation in the case. Judge Marosi from Hungary highlighted the difficulty of national courts coming o grips with the enormous volume of EC law. Judge Girbovan from Romania stated that the application of EC law was made difficult because the principles of primacy of EC law and of direct effect were not laid down in legislation. Judge Lünemann from Germany explained that in German law the parties could not be expected to invoke EC law and thus it was left to the national court to apply it ex officio.

Diana Wallis will draft an own-initiative report for the European Parliament on the subject in the near future.

Health and safety of workers, no fault liability & proof of infringements : Case C-127/05

The Court of Justice dismissed an action brought by the Commission against the United Kingdom in Case C-127/05 Commission v. United Kingdom for breach of Article 5 § 1 and § 4 of Council Directive 89/391/EEC on the introduction of measures to encourage improvements in the safety and health of workers at work. The case has a certain importance in the United Kingdom but above all it shows how important it is for the Commission to really prove that a member State has breached a directive.

Article 5 § 1 of the Directive provides : "The employer shall have a duty to ensure the safety and health of workers in every aspect related to the work." But then Article 5 § 4 provides

"This Directive shall not restrict the option of Member States to provide for the exclusion or the limitation of employers’ responsibility where occurrences are due to unusual and unforeseeable circumstances, beyond the employers’ control, or to exceptional events, the consequences of which could not have been avoided despite the exercise of all due care."

The United Kingdom implemented Article 5 with legislation providing that that an employer is not liable for the risks which arise or the consequences of events which occur in his undertaking if he is able to demonstrate that he took all reasonably practicable measures to ensure the safety and health of the workers.

The Commission claimed that Article 5 must be interpreted in such a way as to impose no-fault liability on employers for all accidents which occur in the workplace. Consequently, the United Kingdom's implementation was incorrect because it did not provide for such a no-fault liability.

The Court of Justice disagreed with the Commission and dismissed its action. The Court held that Article 5 did not, as the Commission asserted, set up a no-fault liability obligation on employers. The Court also held that the Commission had failed to demonstrate how the objective of Directive 89/391 could not be obtained by some means other than no-fault liability.

As a general matter, the Court recalls that in an action brought on the basis of Article 226 EC, it is for the Commission to prove the existence of the alleged infringement and to provide the Court with the information necessary for it to determine whether the infringement is made out, and the Commission may not rely on any presumption for that purpose (see Case C-287/03 Commission v Belgium, paragraph 27, and Case C-428/04 Commission v Austria, paragraph 98).

Public policy, national proceedings, raising an issue on own motion: Cases C-222/05 to C-225/05

Is a national court, when examining the legality of a national administrative measure, required to raise of its own motion a plea alleging that the national measure has infringed certain provisions of EC legislation ? That is a difficult question to answer. And in Joined Cases C-222/05 to C-225/05 van des Weerd and others the Court of Justice answered no, it was not so required as a matter of EC law.

These cases are in fact a sequel to Case C-28/05 G.J. Dokter, Maatschap Van den Top, W. Boekhout v. Minister van Landbouw, Natuur en Voedselkwaliteit which we wrote about here. What happened was that certain measures taken by the Dutch authorities to control the spread of foot and mouth disease were challenged before the competent Dutch court. The applicants in the main proceedings did not raise the issue of the compatibility of the Dutch measures with EC law, a point that had been raised in another case which gave rise to the ruling of the Court of Justice in Case C-28/05. The Dutch court was uncertain as to whether EC law requires it to take into account arguments based on EC law which had not been raised by the parties.

The Court of Justice held that in the circumstances of the present cases, the national court was not under an obligation to consider arguments of EC not raised by the parties.

The Court of Justice recalled that in the absence of Community rules in the field, it is for the domestic legal system of each Member State to designate the courts and tribunals having jurisdiction and to lay down the detailed procedural rules governing actions for safeguarding rights which individuals derive from Community law, provided, first, that such rules are not less favorable than those governing similar domestic actions (principle of equivalence) and, secondly, that they do not render virtually impossible or excessively difficult the exercise of rights conferred by Community law (principle of effectiveness) (Joined Cases C-430/93 and C-431/93 Van Schijndel and van Veen , paragraph 17, and Case C-129/00 Commission v Italy, paragraph 25).

The Court examined, as regards the principle of equivalence, how and when as a matter of national law the national court court raise issues of its own motion. It found that it was clear from the order for reference that the Dutch court is competent to raise of its own motion issues relating to the infringement of rules of public policy, which are construed in Dutch law as meaning issues concerning the powers of administrative bodies and those of the court itself, and provisions as to admissibility. Those rules lie at the very basis of the national procedures, since they define the conditions in which those procedures may be initiated and the authorities which have the power, within their area of responsibility, to determine the extent of the rights and obligations of individuals. But, interestingly, the Court of Justice held that the provisions of EC law in issue in these proceedings were not equivalent to provisions dealing with matters of public policy.

As regards the principle of effectiveness, the Court recalled that each case which raises the question whether a national procedural provision renders the exercise of rights conferred by the Community legal order on individuals impossible or excessively difficult must be analyzed by reference to the role of that provision in the procedure, its progress and its special features, viewed as a whole, before the various national instances. In that context, it is necessary to take into consideration, where relevant, the principles which lie at the basis of the national legal system, such as the protection of the rights of the defence, the principle of legal certainty and the proper conduct of the proceedings (see, to that effect, Case C-312/93 Peterbroeck, paragraph 14, and Van Schijndel and van Veen, paragraph 19).

The Court recalled also that the principle of effectiveness does not, in circumstances such as those which arise in the main proceedings, impose a duty on national courts to raise a plea based on a EC provision of their own motion, irrespective of the importance of that provision to the EC legal order, where the parties are given a genuine opportunity to raise a plea based on Community law before a national court.

The Court went on to distinguish Case C-126/97 Eco Swiss; Joined Cases C-240/98 to C-244/98 Océano Grupo Editorial and Salvat Editores; Case C-473/00 Cofidis; and Case C‑168/05 Mostaza Claro.

For related posts, see our post on Case C-168/05 Mostaza Claro and our post on Case C-234/04 Kapferer.

Swedish alcohol monopoly takes a blow: Case C-170/04

The Court of Justice has handed down a judgment in Case C-170/04 Klas Rosengren and others v. Riksåklagaren which restricts the scope of the Swedish retail alcohol monopoly. The judgment deals with just one aspect of the monopoly - the importation of drinks by private individuals - and does not deal with the very existence of the monopoly itself.

The story goes like this. According to the Swedish Law on alcohol, retail sales of booze in Sweden are carried out under a monopoly held by Systembolaget. Only Systembolaget and wholesalers authorised by the State may import alcoholic beverages. Private individuals are prohibited from importing booze. If a person wants to import alcohol from another member State, that person must do so exclusively through Systembolaget. Systembolaget is required to obtain any alcoholic beverage on request at the consumer’s expense, provided that it sees no objection to doing so.

Klas Rosengren and several other Swedes ordered cases of bottles of Spanish wine by correspondence. The wine was imported into Sweden, without being declared to customs, by a private transporter. The wine was then confiscated by the Swedish customs authorities. Mr Rosengren and the others were charged with the criminal offense of unlawful importation of alcoholic beverages.

The Swedish Supreme Court asked the Court of Justice whether the provisions of the Swedish legislation are compatible with Community law, in particular with the principle of free movement of goods guaranteed by the Treaty.

The Court cut straight to the chase and held that the Swedish rules on importation of booze must be assessed in the light of the EC provisions on the free movement of goods (Article 28 EC) and not in the light of the specific provisions relating to State monopolies (Article 31 EC), since the latter apply only to rules relating to the existence or operation of monopolies (see Case C-189/95 Franzén. The importation of alcoholic beverages is not the specific function assigned to the monopoly by the Law on alcohol, which rather confers on the monopoly the exclusive right to retail sales of alcoholic beverages in Sweden.

The Court held that the Swedish rules on importation constituted a clear quantitative restriction on the free movement of goods. Even though the Systembolaget could not in principle refuse to import on the request of individual, by forcing consumers to address themselves to the monopoly body, the law imposed on them a variety of inconveniences with which they would not be faced if they imported the beverages themselves. The Court also noted that the price charged by the Systembolaget to consumers included all manner of extras which would not have been charged in the event of a direct import.

The Court then went on to examine whether the restriction could be justified. It held that it could not be justified. In particular, it held that the prohibition of importation must be considered unsuitable for attaining the objective of protecting the health and life of persons and was clearly disproportionate to the goal of protecting young people because it applied to all, regardless of age.

EU case law blog

Here's another very good blog on the leading cases of the European Court of Justice, the Court of First Instance and the Civil Service Tribunal. It is called EU Case Law and it is worth checking regularly.

It is written by Lucia Martin who is a PhD student at the Law Faculty of the University of Basel, Switzerland. She researches EU law and is currently writing a thesis on “EU Citizenship and the Free Movement of Persons”.

Good luck with that. And the blog too.