EU Law Blog

Microsoft Again: Mega Penalty Payment

The Commission has imposed a penalty payment of € 899 million (US $ 1,359 million) on Microsoft for non-compliance with its obligations under the Commission’s March 2004 Decision prior to 22 October 2007.

The Decision, adopted pursuant to Article 24(2) of Regulation 1/2003, finds that, prior to 22 October 2007, Microsoft had charged unreasonable prices for access to interface documentation for work group servers. The 2004 Decision, which was upheld in September 2007 by the Court of First Instance in Case T-201/04 as we noted here, found that Microsoft had abused its dominant position under Article 82 EC, and required Microsoft to disclose interface documentation which would allow non-Microsoft work group servers to achieve full interoperability with Windows PCs and servers at a reasonable price.

Here's the Commission's press release.

Annual Report of Commission

The Commission has published its Annual Report for 2007.

There's a special web page devoted to it here.

The report is well worth looking at because it contains such of a wealth of information, despite some of the propaganda-speak. Look at this annex on the revenues of the EC budget for example. That's good.

There's still some of this kind of fluff, however:

"The progress made in recent years with the strategy to create a modern and effective regulatory culture throughout Europe was consolidated in 2007. The Commission used the experience gained from the measures taken to improve legislation in order to refine its approach further and satisfy the demands of European citizens and economic operators for a simple and accessible regulatory framework."

But if you can grin and bear it, there is some hard information lurking there.

Reviewing an Administrative Decision, Error of EC Law and Interpreting an ECJ Judgment: Case C-2/06

The Court of Justice has handed down an interesting and important judgment in Case C-2/06 Willy Kempter AG in which it opens up the possibility even further to reopen and review national administrative decisions contrary to EC law.

Remember the judgment in C-453/00 Kühne & Heitz NV that we mentioned here ? The Court of Justice held in C-453/00 Kühne & Heitz NV that a national administrative body is, in accordance with the principle of cooperation arising from Article 10 EC, under an obligation to review a decision it has taken in order to consider the interpretation of a relevant provision of EC law given in the meantime by the Court. Such an obligation was made subject to the following four conditions:
- under national law, it has the power to reopen that decision;
- the administrative decision in question has become final as a result of a judgment of a national court ruling at final instance;
- that judgment is, in the light of a decision given by the Court subsequent to it, based on a misinterpretation of Community law which was adopted without a question being referred to the Court for a preliminary ruling under the third paragraph of Article 234 EC; and
- the person concerned complained to the administrative body immediately after becoming aware of that decision of the Court.

For brevity's sake, we won't get into the facts. Suffice it to say that Kempter, the claimant in the national proceedings, was ordered to repay some agricultural subsidies received. The point was litigated in the German courts and the claimant was finally ordered to repay them. After that, a judgment of the Court of Justice held that in a similar situation, the claimant was entitled in EC law to keep the subsidy. Kempter then sought to have the final decision ordering him to repay the subsidy reopened and reviewed based on the subsequent judgment of the Court of Justice.

Two questions came up in Case C-2/06 Willy Kempter AG. First, whether whether Kühne & Heitz requires an administrative decision that has become final by virtue of a judgment of a court of final instance to be reviewed and amended only if the claimant relied on Community law in the legal action under domestic law which he brought against that decision. And second whether EC law imposes a limit in time for making an application for review of a national administrative decision that has become final.

On the first issue, the Court replied that, in the context of a procedure before an administrative body for review of an administrative decision that became final by virtue of a judgment, delivered by a national court of final instance, which, in the light of a decision given by the Court of Justice subsequent to it, was based on a misinterpretation of EC law, EC law does not require the claimant to have relied on Community law in the legal action under domestic law which he brought against that decision.

The Court held that it is sufficient if either the point of EC law the interpretation of which proved to be incorrect in light of a subsequent judgment of the Court was considered by the national court ruling at final instance or it could have been raised by the latter of its own motion. While EC law does not require national courts to raise of their own motion a plea alleging infringement of EC provisions where examination of that plea would oblige them to go beyond the ambit of the dispute as defined by the parties, they are obliged to raise of their own motion points of law based on binding EC rules where, under national law, they must or may do so in relation to a binding rule of national law (Joined Cases C-430/93 and C-431/93 van Schijndel and van Veen, paragraphs 13, 14 and 22, and Case C-72/95 Kraaijeveld and Others, paragraphs 57, 58 and 60).

On the second issue, the Court of Justice held EC law does not impose any limit in time for making an application for review of an administrative decision that has become final. The member States nevertheless remain free to set reasonable time-limits for seeking remedies, in a manner consistent with the EC principles of effectiveness and equivalence.

The Court noted that in the absence of applicable EC rules 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 EC 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 practically impossible or excessively difficult the exercise of rights conferred by Community law (principle of effectiveness) (Case C-432/05 Unibet, paragraph 43, and Joined Cases C-222/05 to C-225/05 vander Weerd and Others, paragraph 28 and the case-law cited).

The Court thus recognized that it is compatible with EC law to lay down reasonable time-limits for bringing proceedings in the interests of legal certainty (Case 33/76 Rewe-Zentralfinanz and Rewe-Zentral, paragraph 5; Case 45/76 Comet, paragraphs 17 and 18; Case 61/79 Denkavit italiana, paragraph 23; Case C-208/90 Emmott, paragraph 16; Case C-261/95 Palmisani, paragraph 28; Case C-90/94 Haahr Petroleum, paragraph 48; and Case C-255/00 Grundig Italiana, paragraph 34). Such time-limits are not liable to render practically impossible or excessively difficult the exercise of rights conferred by Community law (Case C-255/00 Grundig Italiana, paragraph 34).

New Judge Appointed to the Court of Justice

Mr. Jean-Jacques Kasel, from Luxembourg, has been appointed to the bench at the Court of Justice. He replaces Judge Romain Schintgen.

You can find a brief resume in the Court's press release here.

Judge Kasel was sworn in on January 14th, 2008 and appointment is for the remainder of Mr. Schintgen's term, that is until October 6th, 2009.

Judge Kasel will be a member of the First and Fifth Chambers according to this notice and the list of judges for the Grand Chamber has been amended according to the one here.

Congratulations !

First Case Reviewing Decision of Community Plant Variety Office, Standing and Mandarins: Case T-95/06

We don't promise to follow these issues very closely, but you may wish to know that the Court of First Instance handed down its first judgment in a case in which a decision of the Community Plant Variety Office ("CPVO") was challenged. What is cool is that it concerns the issue of standing.

The CPVO, based in Angers, France, administers a system of intellectual property rights, valid throughout the EC, granted for plant varieties. It was established by Regulation 2100/94 and has been operational since April 27th, 1995. The CPVO has received almost 30.000 applications and has granted more than 21.000 titles of protection.

In this first case, Case T-95/06 Federación de Cooperativas Agrarias de la Comunidad Valenciana ("FECOAV") v. CPVO, the Court of First Instance dismissed an action to annul a decision of the CPVO to grant a Community plant variety right.

The CPVO granted a Community plant variety right in the Nadorcott mandarin to a French company. The plaintiff in Case T-95/06, FECOAV, a federation of unions of farming cooperatives in the provinces of Alicante, Castellón and Valencia (Spain), then challenged that decision before the Board of Appeal of the CPVO. The Board of Appeal dismissed that challenge on the ground that the FECOAV did not have locus standi to mount such a challenge because it was not directly and individually concerned by the contested decision within the meaning of Article 68 of Regulation 2100/94 that provides:

Any natural or legal person may appeal, [...], against a decision, addressed to that person, or against a decision which, although in the form of a decision addressed to another person, is of direct and individual concern to the former. The parties to proceedings may, and the Office shall, be party to the appeal proceedings.

Now that sounds familiar, doesn't it ? Just like Article 230 §4 EC, isn't it ! The Court of First Instance noticed that too, of course, and held that the terms of Article 68 of Regulation 2100/94 must be regarded as being identical to those of Article 230 § 4 EC. As those terms have been specifically interpreted by the Court of Justice (judgment in Case 25/62 Plaumann v. Commission), the Court of First Instance takes the view that care should be taken to provide a consistent interpretation of the concept of a person to whom a measure is ‘of individual concern’ in so far as the terms of the basic regulation do not prevent it.

The Court of First Instance held that FECOAV did not have standing as a professional association to bring this action. It recalled that a professional association set up to protect and represent the interests of its members has standing to bring an action for annulment, firstly, where the association is differentiated by reason of the adverse impact on its own interests as an association, in particular because its position as a negotiator has been affected by the measure of which the annulment is sought, secondly, where the association represents the interests of undertakings which themselves have locus standi and, thirdly, where a legal provision expressly confers upon it a number of powers of a procedural nature (Order in Case T-381/02 Confédération générale des producteurs de lait de brebis et des industriels de Roquefort v. Commission, paragraph 54). It found that none of those conditions were met by FECOAV in this case.

Consequently, the Court of First Instance held that FECOAV lacked standing to bring the action. It also held that individual mandarin growers were not individually concerned by the contested decision and thus also lacked standing to bring the action themselves.

Since 1995, the Board of Appeal has received 76 appeals against CPVO decisions. Only two decisions have been appealed to the Court of First Instance, of which one is still pending (Case T-187/06 Schräder v. OCVV).

Choice of law, Consumer Contracts and Law of Consumer

A recent trawl of some questions posed by the European Parliament to the Commission revealed this interesting question and answer about the applicability and scope of the law of the state of the consumer in cross border transactions.

Look at Written Question E-1751/07 by Georgios Papastamkos. He asks basically what the Commission has done to render the law of the domicile of the consumer applicable in cross border transactions instead of the law of the domicile of the vendor, especially in internet sales, and whether the imposition of such a mandatory law complies with the principle of freedom of contract.

You can find the Commission's response here. It refers in particular to the "Rome I" proposal that is wonderfully chronicled by our friends over at the excellent Conflict of Laws Blog.

Review Procedure before the Court of Justice: Draft Amendments to the Rules of Procedure

Article 225 § 2 EC provides:

The Court of First Instance shall have jurisdiction to hear and determine actions or proceedings brought against decisions of the judicial panels set up under Article 225a.
Decisions given by the Court of First Instance under this paragraph may exceptionally be subject to review by the Court of Justice, under the conditions and within the limits laid down by the Statute, where there is a serious risk of the unity or consistency of Community law being affected.

Article 225 § 3 EC provides:

The Court of First Instance shall have jurisdiction to hear and determine questions referred for a preliminary ruling under Article 234, in specific areas laid down by the Statute.
Where the Court of First Instance considers that the case requires a decision of principle likely to affect the unity or consistency of Community law, it may refer the case to the Court of Justice for a ruling.
Decisions given by the Court of First Instance on questions referred for a preliminary ruling may exceptionally be subject to review by the Court of Justice, under the conditions and within the limits laid down by the Statute, where there is a serious risk of the unity or consistency of Community law being affected.

Work has now started in the Council, it seems, for the Rules of Procedure of the Court of Justice to be amended to accommodate the "review procedure" referred to in paragraphs 2 and 3 above.

First, there is a draft Council Decision specifying the language rules to be applied to the review procedure. Such a decision is needed because Article 64 of the Statute of the Court of Justice requires such a decision to be adopted by the Council acting unanimously after consulting the European Parliament and the Commission. The draft proposes that the language of the review procedure be that of the decision of the Court of First Instance to be reviewed.

A separate draft decision spells out the procedure for review and how the Court shall decide on the proposal of the First Advocate General as specified in Article 62 of the Statute.

Justice Forum: Networking in the Area of Justice, Freedom and Security

The Commission has announced that it will set up a "Justice Forum" on April 15th 2008 to talk about the application of the laws in the area of justice, freedom and security.

According to a recent press release, the Justice Forum

"...will comprise of practitioners, including judges at various levels, civil and criminal lawyers, prosecutors and other practitioners working in the justice systems of the Member States. Importantly, other relevant parties, such as academics and representatives of NGOs working in this field will also be involved. The individuals will be stakeholders from Member States providing their views and experience but not representing Member States."

The press release does not make very clear exactly what the Justice Forum will do. It states that a short "communication setting out the rationale, format, composition and working methods of the Justice Forum is available on Commissioner Frattini's website. But someone should have a word with him and say: "It just ain't there, dude."

Anyway, it appears that a first meeting has already taken place, even before the Forum has been established, to discuss "how best to develop a common European legal culture". No less.

The Rise of Comparative Law (And EU Law as Catalyst)

Professor Bénédicte Fauvarque-Cosson of the University of Paris II - Panthéon-Assas - has just published a monograph on how the creation EU law has had an impact on comparative law and comparative law education. The abstract states:

Over the past years, academics have reacquired a significant role in the European law-making process. A truly European legal research, based on various networks has developed. This Lecture examines the discrepancy between, on the one hand, the rise of European and comparative law and, on the other hand, the limited means allocated to the supranational education of future jurists. Legal insularity is no longer an option. Comparative law should therefore no longer be regarded as a purely academic and optional discipline but as an effective way to lead professors, judges and legislators out of national legal isolation. Moreover, the strength and durability of a truly European legal thinking depends largely on the comparative dimension of education.

You can order the monograph here.

With luck the insightful Jacco Bomhoff over at his terrific ComparativeLawBlog will write some more about Professor Fauvarque-Cosson's short piece.

File Sharing, Kazaa, Intellectual Property Rights and Privacy: Case C-275/06

The Court of Justice has handed down an interesting judgment in Case C-275/06 Promusicae v. Telefónica on the balance to be struck between privacy and the effective protection of intellectual property rights to prevent peer-to-peer musical file transfers.

It goes like this. In the blue corner you have several EC Directives protecting intellectual property rights, like Directive 2000/31/EC on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market, Directive 2001/29/EC on the harmonization of certain aspects of copyright and related rights in the information society, and Directive 2004/48/EC on the enforcement of intellectual property rights. In the red corner you have Directive 2002/58 concerning the processing of personal data and the protection of privacy in the electronic communications sector. And in the middle you have folks using Kazaa on the internet, access to which is provided by an internet service provider like Telefónica in Spain.

Promusicae, a Spanish organization of producers and publishers of musical and audiovisual recordings, applied to the Spanish courts for an order that Telefónica should disclose the identities and physical addresses of people whom it provided with internet access services, and who were allegedly using the KaZaA file exchange program to share musical and audiovisual files. It sought disclosure of that information to be able to bring civil proceedings against the persons concerned.

Under Spanish law the communication of the data sought by Promusicae was permitted only in a criminal investigation or for the purpose of safeguarding public security and national defence. What Promusicae wanted to commence were clearly civil, not criminal proceedings. Thus, the question was referred to the Court of Justice whether EC law requires member States to lay down, in order to ensure effective protection of copyright, an obligation to communicate personal data in the context of civil proceedings.

The Court held that EC law as it currently stands does not require member States to render mandatory the disclosure of the sort of information requested by Promusicae to commence civil proceedings to protect intellectual rights.

As a result, the file sharers can have their data protected in Spain and it won't be disclosed to the likes of Promusicae to commence civil proceedings against them.

The question is therefore whether Spain could change its law to render disclosure of the personal data sought obligatory in the context of commencing civil proceedings.

The Court held that EC law does not preclude the mandatory disclosure of such information. But when member States introduce legislation to render such disclosure mandatory, the Court held that they must, when transposing the directives on intellectual property and the protection of personal data, rely on an interpretation of those directives which allows a fair balance to be struck between the various fundamental rights protected by the EC legal order. Further, when implementing the measures transposing those directives, the authorities and courts of the Member States must not only interpret their national law in a manner consistent with the directives but also make sure that they do not rely on an interpretation of them which would be in conflict with those fundamental rights or with the other general principles of Community law, such as the principle of proportionality (see Case C-101/01 Lindqvist, paragraph 87, and Case C-305/05 Ordre des barreaux francophones et germanophones and Others, paragraph 28 - a case we noted here.

A close reading of the Court's judgment and of the Advocate General's Opinion shows a divergence of view on disclosure of such personal data could ever be made mandatory in the context of civil proceedings.

The Advocate General in paragraphs 84 to 86 of her opinion came to the conclusion that Directive 2002/58 does not allow member States to render mandatory disclosure of personal data in the context of civil proceedings brought to protect the rights of others. She pointed out that Article 15(1) of Directive 2002/58 set out two types of bases for exceptions, namely, on the one hand, in the first four alternatives, national security (that is, State security), defense, public security, and the prevention, investigation, detection and prosecution of criminal offenses and, on the other, in the fifth alternative, unauthorized use of the electronic communication system. In addition, Article 15(1) of Directive 2002/58 refers to Article 13(1) of Directive 95/46, which contains further grounds of exception. The question was what exactly did that reference to Article 13(1) of Directive 95/46 mean. She noted that Article 13(1)(g) of Directive 95/46 allows the communication of personal data for the protection of the rights and freedoms of others. Unlike the grounds of exception in Article 13(1) of Directive 95/46, this ground is not expressly listed in Article 15(1) of Directive 2002/58.
Viewed in isolation, that could be understood as a reference to all the grounds of exception under Article 13(1) of Directive 95/46. However, that is contradicted, she opined, by the fact that Article 15(1) of Directive 2002/58 itself mentions grounds of exception which are intended to allow a restriction ‘in accordance with Article 13(1) of Directive 95/46’. Those grounds correspond only in part to the grounds in Article 13(1) of Directive 95/46 and do not include the exception for the rights of others, mentioned under (g). Consequently, the grounds mentioned in Article 13(1) of Directive 95/46 are applicable in the electronic communications sector only in so far as they are expressly included in Article 15(1) of Directive 2002/58. As the protection of the rights and freedoms of others was clearly omitted from the list in Article 15(1) of Directive 2002/58, the reference to Article 13(1) of Directive 95/46 could not incorporate it indirectly.

The Court of Justice took the opposite view in its judgment. It held in paragraph 53 of its judgment:

"It is clear, however, that Article 15(1) of Directive 2002/58 ends the list of the above exceptions with an express reference to Article 13(1) of Directive 95/46. That provision also authorises the Member States to adopt legislative measures to restrict the obligation of confidentiality of personal data where that restriction is necessary inter alia for the protection of the rights and freedoms of others. As they do not specify the rights and freedoms concerned, those provisions of Article 15(1) of Directive 2002/58 must be interpreted as expressing the Community legislature’s intention not to exclude from their scope the protection of the right to property or situations in which authors seek to obtain that protection in civil proceedings."