TABLE OF CONTENTS
IN-DEPTH:
Systematising Case Law, De-Systematising the Remedies and De-Vulnerating the Consumer. Comments on Caixabank and Others (C-450/22)
Dominik Dworniczak
‘Health first’ for the EU’s 50,000+ large industrial Installations (Case C-626/22 Ilva SpA in Amministrazione Straordinaria)
Selin Esen
Keeping the Ship steady: the consistent Approach to Child Abduction in Greislzel (C-35/23)
Nadia Rusinova
Justice on Reserve: the Clash of Freedom of Business and Energy Security in joint Cases Trade express (C-395/22) & Devnia Tsiment (C-428/22)
Tuvana Aras
SYMPOSIUM ON THE 2024 REFORM OF THE STATUTE OF THE COURT OF JUSTICE OF THE EU
The (new) role of the Advocate General at the General Court
Jonathan Wildemeersch
Transparency and Openness at the Court of Justice – Towards ex post Publicity of Parties’ Observations
Paul Dermine
THE LONG READ:
The European Commission’s Enforcement of the Digital Markets Act: Non-Compliance Procedures and a (Revenant) Deterrence-Based Enforcement Strategy
Alba Ribera Martínez
HIGHLIGHTS OF THE WEEK
IN-DEPT H
Systematising Case Law, De-Systematising the Remedies and De-Vulnerating the Consumer. Comments on Caixabank and Others (C-450/22)
Dominik Dworniczak
On 4 July 2024, the Court of Justice handed down its judgment in Caixabank and Others (C-450/22) answering two questions referred by the Spanish Supreme Court (Tribunal Supremo). The Court interpreted Articles 4 and 7(3) of Council Directive 93/13/EEC (hereinafter: ‘UCTD’) as permitting a national court to examine the transparency of a contractual term based on the perception of the average consumer in the context of a collective action. In many respects, the judgment in Caixabank and Others represents a welcome systematisation of the Court’s previous case law on unfair terms. However, it raises some mixed feelings regarding, firstly, the relationship between the UCTD and Directive 2020/1828 on representative actions for the protection of the collective interests of consumers (hereinafter: ‘RAD’) and, secondly, certain clarifications on the concept of average consumer.
1. An Overview of the Facts of the Case and the Tribunal Supremo’s Reasoning
The case concerned a collective action lodged by a consumer organisation against 101 credit institutions to cease and desist from using so-called ‘floor clauses’ in mortgage loan agreements and, consequently, to reimburse the sums unduly paid by consumers. The floor clauses are the clauses that stipulate a minimum interest rate below which the variable interest rate cannot fall regardless of market conditions (also, see Gutiérrez Naranjo (C-154/15 and C-307/15), paras. 18-24). Both first instance and appeal courts upheld the class action in respect of almost all credit institutions. These, in turn, brought exceptional appeals before the referring court, the Tribunal Supremo
The referring court raised two questions. First, whether an abstract review of transparency of floor clauses in the context of a collective action is covered by Article 4(1) and Article 7(3) of the UCTD, if, according to the Court’s prior case law, such an examination would require a concrete assessment of all the circumstances attending the conclusion of a contract and of the pre-contractual information provided to consumers. According to the Tribunal Supremo, it would be extremely difficult to carry out the transparency review if it were obliged to follow the Court’s case law. This is because the floor clauses form part of the millions of mortgage contracts concluded between 1989 and 2019 with a significant number of credit institutions. They have also remained in compliance with subsequent legislation. Moreover, it is no longer possible at this point to review the pre-contractual information in every case.
The second question addressed the problem of characterising the ‘average consumer’. Given that the level of consumer attention varies according to several factors, such as national or sectoral advertising requirements or the language used in the commercial information provided, and since there are various specific categories of
consumers, the Tribunal Supremo stressed that it would be difficult to apply the concept of average consumer to examine the transparency of the floor clauses.
2. The Judgment: Differentiating the Remedies and Providing an Objective Benchmark for Transparency Review
At the outset, it is important to note that the Court of Justice reformulated the first question. The Tribunal Supremo asked whether the transparency review should be conducted under the requirements provided in Article 4(1) of the UCTD and the Court’s case law thereon in the context of collective actions. Nevertheless, the Court answered a slightly different question, namely whether Article 4(1) and Article 7(3) of the UCTD allow a national court to review the transparency of a contractual term in the context of a collective action brought against a large number of sellers or suppliers operating in the same economic sector and concerning a very large number of contracts.
Similar to the Opinion of Advocate General Medina (Op, paras. 27-36), the Court focused mainly on the differences between individual and collective actions within the system of remedies under the UCTD (paras. 25-46), in particular with regard to their objectives (paras. 28-31). It was pointed out that both types of actions (as provided for in the procedural law of the Member States) must nevertheless comply with the principles of equivalence and effectiveness (para. 32). In keeping with the Advocate General’s Opinion (Op, para. 32), the Court inferred the relevant differences between individual and collective actions inter alia from the wording of Article 4(1) of the UCTD, since it is ‘Without prejudice to Article 7’ of the UCTD (para. 30).
According to the Court, the referring court was uncertain whether a collective action constitutes an appropriate judicial mechanism for reviewing transparency (para. 33). In the first place, the Court stated that the obligation to draft standard terms in plain and intelligible language exists irrespective of the type of action initiated (paras. 34-35). In this manner, the Court confirmed that its case law on individual actions is transposable to collective actions, notably regarding the formal and grammatical transparency, as well as the substantive transparency (paras. 36-38). However, unlike in individual actions, in collective actions the transparency review refers to standardised (that is to say, not specific) practices of sellers or suppliers (para. 39) and the obligation to verify all the information under Article 4(1) of the UCTD must be adapted to the specific features of collective action (para. 40). It is only here that the Court provided an answer to the original question posed by the Tribunal Supremo.
Subsequently, the Court addressed the referring court’s arguments by stating that the complexity around contracts containing floor clauses is not relevant, since Article 7(3) of the UCTD only provides for two conditions, namely that sellers or suppliers must be from the same economic sector and that the terms must be the same or at least similar, neither of which referring to the complexity of factual circumstances (para. 42). In line with its recent case law, the Court suggested to the referring court how to interpret national law transposing the UCTD (in this case, the criteria from Article 7(3) of the UCTD) by considering that all the sued credit institutions are in the same economic sector and that the clauses at stake appear to be similar (paras. 43-44).
The answer to the second question had already been anticipated by the Court in its answer to the first question, namely that the transparency review must be carried out in relation to the average consumer, considering all contractual and pre-contractual practices, the drafting of the contractual provision and so on (para. 41). The Court, therefore, explicitly linked the transparency review to the concept of average consumer as an objective benchmark (para. 48). To this end, the concept of the (average) consumer has been further clarified as objective, separate from the knowledge and specific information available to that consumer. According to the Court, the consumer is only a legal fiction and an abstract entity, whatever his or her level of income, his or her age or occupation (para. 49-53). However, it has also been emphasised that the average consumer’s perception of transparency can be subject to change according to objective events, common knowledge, amendment to the legislation or development in case law (para. 54-55). All in all, this is relevant as the UCTD does not preclude taking into account changes in the perception of the average consumer, but this has to be based on concrete and objective evidence establishing the existence of such a change and that change itself cannot be inferred from the passage of time alone (para. 55). This seems to be the case, as suggested by the Court, once again, in the case at hand (para. 56).
3. Systematising Case Law but De-Systematising the Remedies?
1. Systematising the Unfair Terms Case Law Up-To-Date
In Caixabank and Others, the Court repeated and systematised its case law on unfair terms up-to-date. This refers to both the transparency requirement and the concept of consumer.
Regarding the former, the Court once again underlined that transparency is not only about the grammatically intelligibility of contract terms, but also about the possibility for an average consumer to assess possible economic consequences arising from entering a credit agreement (substantive transparency). This is, however, hardly new (and the Tribunal Supremo was well aware of it in its reference). There has been a jurisprudence constante regarding the transparency requirement as far back as 2014, starting from judgments (with regard to the UCTD) such as Kásler (C-26/13), through Andriciuc (C-186/16), to BNP Paribas Personal Finance (C-609/19). The commented case can nevertheless be seen as a welcome systematisation, since it links the transparency requirement (under Article 5 of the UCTD) with all types of proceedings, not only with individual, but also with collective actions.
Second, the Court specified the concept of consumer as an abstract entity regardless of her individual and specific level of knowledge, income, age or occupation. In this respect, all this directly stems from its previous case law (see Costea (C-110/14) or Pouvin and Dijoux (C-590/17)). This is, like the transparency requirement, not new, but it is still a welcomed confirmation of the Court’s prior case law. Similar to individual actions, the Court extended the concept of average consumer as an objective benchmark in the transparency review to collective actions as well.
2. De-Systematising the Remedies
A particular problem that emerges on the basis of the request for a preliminary ruling and the Opinion of the Advocate General is the relationship of a collective action under Article 7(3) of the UCTD with the Directive
2009/22 on injunctions for the protection of consumers’ interests and the RAD. By examining the degree of similarity of standard terms under Article 7(3) of the UCTD (even though it is for national courts to ascertain), the Court indirectly recognised that it should be examined on the basis of the UCTD and not on the basis of other acts on collective actions. This is rather relevant since, in the RAD, the examination of the degree of similarity of individual claims is left to the discretion of Member States without prejudice to the right to an effective remedy under Article 47 of the Charter of Fundamental Rights (recitals 12 and 19). This is something that the Advocate General focused on in her Opinion (Op, points 72-76). Yet, the Court did not mention Directive 2009/22, nor the RAD. It seems therefore that the concept of similarity under Article 7(3) of the UCTD should be considered against the framework of remedies under the UCTD and not under the two aforementioned directives.
The problematic issue is whether a collective action under Article 7(3) of the UCTD can already be seen as a separate legal remedy from the remedies under the two collective action directives or whether it is merely a complementary remedy. If it is a complementary one, should the Court not focus, in its reasoning, on the relationship between Article 7(3) of the UCTD and the two directives? In other words, should the concept of similarity of standard terms (being essentially the most important element of individual claims in the case at stake) not be considered, not only based on the UCTD, but also in relation to the two collective action directives?
Given that the Advocate General drew attention to the RAD, the commented judgment is somewhat peculiar in this regard. In other words, there seems to be a need, firstly, to link the various consumer directives together to make consumer protection more systemic and, secondly, to define (by the Court) more clearly whether judicial remedies under the separate consumer directives are complementary and, if so, whether they are separate or joint remedies. For the time being, a literal interpretation of Article 2(1) of the RAD may lead to the conclusion that it lays down ground rules on complementary collective actions remedies as provided for in all acts listed in its Annex 1. With this in mind, while it can be concluded that one part of the commented judgment systematises the case law up-to-date, another part of the same judgment concerning collective actions remedies de-systematises what may be inferred based on legislation alone.
4. De-Vulnerating the Consumer: A Dynamic Concept of Average Consumer and Limits to the Unfairness Assessment?
1. A Dynamic Concept of Average Consumer
The concept of average consumer in Caixabank and Others can be also perceived as an unspoken abandonment of case law empowering vulnerable consumers. In cases such as Aziz (C-415/11), Sánchez Morcillo (C-169/14), Kušionová (C-34/13) and Fernández Oliva and Others (C-568/14 to C-570/14), the Court evoked the figure of the vulnerable consumer, referring to individual characteristics (the risk of losing one’s home). That being said, this case law has been limited only to national enforcement proceedings. Due to clarification on the concept of average consumer, the vulnerability as an individual characteristic seems to have become less relevant, and in the most recent consumer credit case law, little emphasis has been placed on vulnerability. But, what about vulnerability inherent to the abstract consumer?
Here, one may find some inconsistency in the case law. In the commented judgment, the Court seems to have suggested that the concept of average consumer is dynamic. In other words, the perceptions of average consumer are prone to change, and this is for national courts to ascertain it with reliable evidence. Yet, the question that arises at this point is: does the consumer always needs to be circumspect regarding the legislative changes and even changes in case law? Should the consumers, at least by now, track all the changes that appear in law? It is not in line with cases such as BBVA (C-8/14, para. 40) regarding the legislative changes or Kreissparkasse Saarlouis (C-66/19) where it has been explicitly pointed out that a clause in a consumer credit agreement cannot constitute a mere reference to the relevant legal provisions. If, in those cases, the consumer does not need to be circumspect about all legislative provisions, should he or she have to be with respect to the significant changes in the case law?
The dynamic concept of average consumer from Caixabank and Others is, therefore, likely to result in the differentiation of the transparency review. As such, this is not a negative phenomenon, but the conditions for change to the concept of the average consumer should be clearer so that there is a mitigation of the risk that there will be less transparency requirements towards the seller or supplier.
2. Setting Limits to the Unfairness Assessment?
There is also another issue, namely what happens if clauses under transparency review constitute the main subject matter of the contract? This is exactly the case with the floor clauses from Caixabank and Others. In its judgment in 2013 (No 241/2013), the Tribunal Supremo stated that these clauses constitute the main subject matter of the mortgage loan contract. Determining the floor clauses to be transparent for some categories of consumers could, under Article 4(2) of the UCTD, exclude the possibility to assess the unfairness of these clauses. There is no risk as such regarding the floor clauses with regard to Spanish legislation since Article 4(2) of the UCTD was not transposed, and the clauses relating to the main subject matter and remuneration are subject to the assessment of unfairness anyway (for example, see Caja de Ahorros y Monte de Piedad de Madrid (C-484/08), para. 41). However, with regard to other national transpositions, just like in France (Article L212-1 al. 3 of the Code de la consommation) or in Poland (Article 3851 § 1 zd. 3 of the Kodeks Cywilny), it is not the case. Does this mean that each change in case law or legislation (indirectly or directly) indicating the risk for an average consumer is going to change the character of transparency requirement from now on and therefore limit the ambit of the unfairness assessment?
It seems that the Court was too eager to focus on the abstract concept of consumer and somehow overlooked that the ignorantia juris nocet or ignorantia juris non excusat are not just equally abstract principles. It is exactly the opposite. At the end of the day, both principles relate to real-life consumer-driven litigation against credit institutions, where the former are, in principle, in the weaker position. But maybe the dynamic concept of average consumer is relevant only in the context of collective actions. This is, unfortunately, not to be found in the commented judgment. In other words: we have to wait for the next referring court to suggest this solution to the Court of Justice.
3 . Conclusions
In many respects, Caixabank and Others is a welcome systematisation of the Court’s prior case law: the transparency review has been explicitly extended to collective actions, and the objective benchmark of transparency – the concept of average consumer – has been further clarified. Nevertheless, there are some considerable concerns that arise from the same judgment. First, the Court made no reference to the relevant collective action directives and therefore did not address the potential risk of de-systemising the system of remedies available to consumers. Second, one could claim that the Court did de-vulnerate the consumer, since at this point, we do not know exactly the conditions under which the average consumer becomes circumspect and under which he or she does not. What remains is only reliable evidence. Finally, the possible lowering of the transparency requirement (because of a more circumspect average consumer) may lead to the exclusion of some standard terms from the unfairness assessment. Such lowering of the transparency requirement could have serious effects, not only on the Spanish financial market, but on other markets as well.
Dominik Dworniczak is a PhD Researcher in Law at the European University Institute (Florence, Italy). His research interests include European private law, consumer protection, contract law, tort law and legal history. E-mail: Dominik.Dworniczak@eui.eu
SUGGESTED CITATION: Dworniczak, D.; “Systematising Case Law, De-Systematising the Remedies and De-Vulnerating the Consumer. Comments on Caixabank and Others (C-450/22)”, EU Law Live, 18/07/2024, https://eulawlive.com/op-ed-systematising-case-law-de-systematising-the-remediesand-de-vulnerating-the-consumer-comments-on-caixabank-and-others-c-450-22/
‘Health first’ for the EU’s 50,000+ large industrial Installations (Case
C-626/22 Ilva SpA in Amministrazione Straordinaria)
Selin Esen
Introduction
With its ruling in Case C-626/22 Ilva SpA in Amministrazione Straordinaria, the Court of Justice has underlined that the EU’s Industrial Emissions Directive (2010/75/EU) (IED) is not only an environmental law but is also in place specifically to protect human health.
The case concerns the Acciaierie d’Italia Taranto steel plant, known as the Ilva steel plant, in Taranto, in southern Italy. People living in the vicinity of the plant brought a collective action seeking an injunction to protect their right to health, which they are alleging is impacted by the emissions from the steelworks. The questions referred to the Court of Justice by the Tribunal of Milan mainly related to the place of health in the IED regime:
1. Does an Assessment of Adverse Effects on Health form an integral part of the permitting procedure, including the granting and reconsideration of a permit?
2. When granting or reconsidering a permit, does the competent authority need to take into account all polluting substances emitted from the relevant installation which are scientifically recognised as harmful?0
3. Does the IED allow for national legislation to repeatedly extend the period for an operator to comply with health and environment protection measures, despite serious and significant health and environment risks?
The IED, which is the core subject of this preliminary reference, is the EU’s main legal instrument governing the permitting regime and regulating emissions into air, water and soil and other environmental performance markers of more than 50,000 industrial installations. The activities covered under the IED include steelworks, chemicals production, coal plants and factory farms. The Court’s findings have the potential to affect all IED installations. As the European Commission itself confirmed: Pollution from IED installations ‘still causes damage to public health and the environment amounting to many billions of euros and hundreds of thousands of premature deaths every year’ (Factsheet: Industrial emissions – Modernising EU rules for the green transition (2022)).
Health Impact Assessment as Integral Part of Permitting
The Court emphasises that an assessment of the impact of an installation’s activity on human health must form an integral part of the permitting procedure as well as a prerequisite for the permit grant or reconsideration (judgment, para. 94 and 104). The Italian Government stated – in principle correctly – that this is not explicitly required in the wording of the IED (para. 102). Instead, the Court’s conclusion is based on linking the IED to
the EU’s environmental protection goal in Art. 191 of the Treaty on the Functioning of the EU and on the high level of human health and environmental protection guaranteed by Art. 35 and 37 of the Charter of Fundamental Rights (para. 67-68, 70-72). In this context, the Court highlights the close link between human health and environmental protection in general (para. 67-72, 90), which could be important for the interpretation of EU environmental law beyond the IED.
With its conclusion, the Court is bridging a key gap in the text of the IED. This is also confirmed by the wider policy context of the IED: It is a source-focussed instrument to address pollution, translating goals from more overarching legislation such as the Ambient Air Quality Directive into installation-level regulation. In the Ambient Air Quality Directive, the health link is made more forcefully in the text itself, but ultimately health protection is the true objective of the IED as well, even if less explicit. The Court has rightly recognised this. It also goes in the same direction as the EU legislators during the recently finalised IED revision process: Health protection will expressly form part of the revised IED’s objectives and health effect considerations will also be considered when determining the ‘best’ available techniques, which are essential for limit value setting under the IED (Directive 2024/1785 amending the IED, revised Art. 1 and 3(10)(c)).
All-Encompassing Emission Limit Values?
The IED requires permits to set emission limit values for the polluting substances listed in Annex II, which includes air pollutants, such as sulphur dioxide, nitrogen oxides, dust, and water pollutants, e.g. organohalogen compounds, cyanides and metals. In addition, emission limit values need to be set for ‘other polluting substances, which are likely to be emitted from the installation concerned in significant quantities, having regard to their nature and their potential to transfer pollution from one medium to another’ (IED, Art. 14 (1) (a)). The Court links this provision to the prevention principle and concludes that it may only be permissible for pollutants with a negligible effect on human health and the environment to not be regulated by emission limit values in the permit (judgment, para. 114).
The Court employs a slightly narrower construction in its conclusion: Permit granting or reconsidering procedures must take into account ‘all those polluting substances which are the subject of emissions scientifically recognised as harmful which are liable to be emitted from the installation concerned, including those generated by that activity which were not assessed during the initial authorisation procedure for that installation’ (para. 122). For the Ilva plant, this concerns in particular air pollutants PM10 and PM2.5 (para. 120).
The Court’s signal to consider effects of pollutants beyond Annex II is very sensible given that Annex II has not been revised since the IED’s predecessor, the Integrated Pollution Prevention and Control Directive. It is also in line with the functioning of the IED more widely: The ‘Sevilla process’, an information exchange under the IED between the Commission, industry and civil society representatives and Member States about the latest stage of technological innovation, can also identify relevant pollutants for a specific sector beyond Annex II. As a result, so-called emission levels associated with the best available techniques can be set for those pollutants in the conclusions of the ‘Sevilla process’, with implications for the plant-level emission limit values.
There is also room to apply the Court’s conclusion to emission limit values for greenhouse gas (GHG) emissions. These are currently excluded under the IED for installations covered by the EU’s Emissions Trading System, and are optional for all others (IED, Art. 9(1) and (2)). Taking the Court’s assessment a step further, arguably, GHG emission limit values should be included for non-ETS emission-intensive installations. This is not currently done in practice.
Suspending health- or environment-damaging industry is not optional
In case of non-compliance with permit conditions, the IED requires the operator concerned to immediately take the measures necessary to ensure compliance is restored within the shortest possible time (IED, Art. 8 (2)). In its ruling, the Court points out clearly that special rules which excessively defer the implementation of such necessary measures, having regard to the degree of seriousness of damage to the environment and human health, do not comply with the IED (judgment, para. 131). The Court dismisses to some extent the Italian Government’s arguments that compliance with the permit under the IED would have interrupted the Ilva plant’s operation for several years and that the plant is an important regional employment source (para. 129-131).
The Court emphasises that where an installation’s activity presents serious and significant risk to the integrity of the environment and human health, the IED requires that the operation of that installation be suspended (para. 132). While the Court in essence merely reiterates what is written in the IED (Art. 8(2)), its message is important: Suspension is not optional – where the criteria are met, suspending the operation is an obligation on the competent authorities of Member States. Authorities across the EU should see this judgment as a strong signal to keep a close eye on the activities of the 50,000+ large industrial installations that fall within the scope of the IED – and to remember that industry is there to serve people, not put their health on the line.
Conclusion
Overall, in its ruling, the Court rightfully highlights the health dimension of the IED. The Court indicates throughout its judgment that the focus should be on protecting public health and the environment in the best possible way, rather than on what is convenient for industry.
Selin Esen is a lawyer at an environmental law organisation based in Brussels
SUGGESTED CITATION: Esen, S.; “‘Health first’ for the EU’s 50,000+ large industrial installations (Case C-626/22 Ilva SpA in Amministrazione Straordinaria)”, EU Law Live, 15/07/2024, https://eulawlive.com/51279-2/
Keeping the Ship steady: the consistent Approach to Child Abduction in Greislzel (C-35/23)
Nadia Rusinova
The recent ruling by the Court of Justice (‘the Court’) in Greislzel (C-35/23) represents an interesting development in the interpretation and application of the Brussels IIa Regulation concerning international child abduction. This case not only clarifies the legal interplay between the Brussels IIa Regulation and the 1980 Hague Convention on the Civil Aspects of International Child Abduction but also sets an important precedent for future cases involving third countries.
Background
The case involves a German-Polish couple whose child, L, was born in Switzerland. After initially residing in Germany with her mother, L was moved to Poland. The father, who remained in Switzerland, initially consented to the move, assuming it is temporary. However, when the mother decided to stay in Poland, the father sought L’s return to Switzerland under the 1980 Hague Convention. Polish courts rejected his application, determining no wrongful removal under the Convention’s terms. The father then pursued return proceedings through the German Federal Office of Justice but did not continue them. Subsequently, he applied for sole custody and the right to determine the child’s residence through German courts.
The Court was asked to interpret essentially whether the Brussels IIa Regulation’s provisions, specifically Articles 10 and 11, apply when return proceedings under the 1980 Hague Convention involve a third country. The first question concerned the applicability of Article 10 for jurisdiction in return proceedings involving a third country; the second sought clarification on establishing continuing jurisdiction under Article 10(b)(i); the third addressed the applicability of Article 11(6) to (8) procedural obligations and cooperation mechanisms in return proceedings between an EU Member State and a third country.
The Ruling and its Implications
1. Jurisdiction under Article 10 of the Brussels IIa Regulation
The context of Article 10 addresses jurisdiction in cases of wrongful removal or retention of a child. It specifies that the courts of the Member State where the child was habitually resident immediately before the wrongful removal or retention retain jurisdiction until the child has established a new habitual residence in another Member State, provided certain conditions are met. In its first question the referring court seeks, in essence, to ascertain whether Article 10(b)(i) of the regulation must be interpreted as meaning that that provision ceases to be applicable on the sole ground that a request was made to the central authority of a third country for proceedings to be commenced for the return of the child under the 1980 Hague Convention and that those proceedings have failed.
The Court’s ruling in Greislzel confirms that Article 10 remains applicable even if a request for the return of a child under the 1980 Hague Convention was made to the central authority of a third country and subsequently failed. This conclusion follows from the definition of the wrongful removal or retention of a child, which ‘merely refers to an infringement of the rights of custody of one of the holders of parental responsibility under the law of the Member State of the child’s habitual residence immediately before that removal or retention. It does not therefore depend on the holder of rights of custody initiating proceedings, which would have to take place subsequently, for the return of the child under the 1980 Hague Convention’ (para. 53). This means that the jurisdiction of the courts in the Member State of the child’s habitual residence before the abduction is retained until the child has acquired a new habitual residence under specific conditions, such as the child having resided in the new Member State for at least one year after the parent or guardian learned or should have learned of the child’s whereabouts, the child being settled in their new environment, and no request for return having been lodged within one year, or if lodged, it has been withdrawn or dismissed without a new request being filed within the time limit. The ruling ensures that abductors do not gain a procedural advantage by moving the child to a third country, thus preventing jurisdictional manipulation.
This interpretation aligns with the objective of the Brussels IIa Regulation to deter child abductions and to ensure that the child’s habitual residence jurisdiction remains consistent until a stable, new residence is established. Similarly, in Rinau (C-195/08, para. 72), the Court stressed the importance of prompt return and minimal procedural delays to ensure the original jurisdiction is maintained, preventing procedural advantages for abductors. The Detiček case (C-403/09 PPU, para. 54) further reinforced this principle by ruling that unlawful removal should not result in a jurisdictional shift, ensuring the courts of the original habitual residence retain authority. Additionally, in A (C-523/07, para. 44), the Court clarified that habitual residence should be determined based on the child’s actual circumstances rather than the actions of the abducting parent, thereby preventing manipulation of jurisdiction. Greislzel judgment endorses this approach, ensuring jurisdiction with the courts of the child’s original habitual residence and preventing procedural advantages for abductors.
2. Concept of ‘Request for Return’
The second question of the referring court is, in essence, whether the concept of a ‘request for return’ (which is not specified in the regulation) within the meaning of Article 10(b)(i) covers an application request for the return of the child to a State other than the Member State in which the child was habitually resident immediately before the wrongful removal or retention or an application for custody of that child brought before the courts of that Member State.
The judgment predictably rules that ‘request for return’ under Article 10(b)(i) of the regulation first refers to applications made to the competent authorities of the Member State where the child has been wrongfully removed and is physically present, and second, that request seeks to obtain the return of that child to the Member State where the child was habitually resident immediately before the wrongful removal. This does not extend to requests for the child to be taken to another State, moreover to third countries, in whose territory the child was not
habitually resident before the wrongful removal. Consequently, application for the child to join one of the parents in a third country where that child was not habitually resident immediately before the wrongful removal does not constitute a ‘request for return’ within the meaning of Article 10(b)(i). The distinction is crucial as it ensures the focus remains on restoring the status quo ante, and prevents jurisdictional fragmentation by keeping the matter within the courts of the original habitual residence until the child’s new habitual residence is firmly established. It also reinforces the primary goal of the Brussels IIa Regulation to provide a swift and effective remedy for wrongful removal or retention within the EU framework.
By interpreting ‘request for return’ under Article 10(b)(i) narrowly, the Court follows its earlier case law to ensure that jurisdiction remains stable and consistent, preventing procedural delays. The distinction between a request for the return of a child and an application for custody, as delineated in Article 10(b) of the regulation, remains challenging for many parties (and regretfully even courts) despite their fundamentally different purposes. A request for return, guided by the expedited nature of proceedings aims for the swift return of the child to their habitual residence to prevent jurisdictional manipulation and protect the child’s best interests (see for example Rzecznik Praw Dziecka and Others, C-638/22 PPU, paras. 68 and 70, and TT, C-87/22, para. 44). Conversely, custody applications require an in-depth examination of parental responsibility, considering the child’s best interest comprehensively, thus necessitating a longer timeframe.
3. Applicability of Article 11
The third question referred to the court essentially asks whether Article 11(6) to (8) of the Brussels IIa Regulation applies in situations where proceedings for the return of a child under the 1980 Hague Convention have started between a third country and a Member State, where the child is currently located after being wrongfully removed or retained, considering that the child was habitually resident in another Member State before the removal.
The traditionally controversial ‘trumping mechanism’ provided for in Article 11 of the Brussels IIa Regulation complements the 1980 Hague Convention by allowing subsequent judgments on return issued by the courts of the child’s habitual residence to override non-return decisions, and mandating prompt and effective cooperation between Member States to secure the child’s return. The Court’s ruling on this question is not surprising –Article 11(6) to (8) does not apply to return proceedings between an EU Member State and a third country, because the requirements arising from Article 11, relating to the implementation of procedures under the 1980 Hague Convention, do not apply, since the Swiss Confederation is not bound by the Brussels IIa Regulation. These provisions are explicitly designed for intra-EU cases, where common legal frameworks and mutual trust in judicial decisions facilitate enhanced cooperation and procedural efficiency. At the same time, this distinction acknowledges the different legal and procedural standards that might exist between the EU and third countries.
Conclusion
Overall, Greislzel reinforces the protective mechanisms of the Brussels IIa Regulation, ensuring that the child’s best interests are prioritised through swift and effective legal remedies. It one more time emphasises the importance
of a clear procedural pathway for handling complex cross-border abduction cases, maintaining legal certainty and consistency within the EU. This ruling is as well in line with the Brussels IIb Regulation, which further enhances procedural safeguards and cooperation mechanisms, ensuring the evolving legal landscape remains child-centric.
Nadia Rusinova is a lecturer in EU family law and private international law at The Hague University of Applied Sciences, and specizlized attorney-at-law.
Rusinova, N.; “Keeping the Ship steady: the consistent Approach to Child Abduction in Greislzel (C-35/23)”, EU Law Live, 15/07/2024, https://eulawlive. com/op-ed-keeping-the-ship-steady-the-consistent-approach-to-child-abduction-in-greislzel-c-35-23/
Justice on Reserve: the Clash of Freedom of Business and Energy Security in joint Cases Trade express (C-395/22) & Devnia Tsiment
(C-428/22)
Tuvana Aras
In the joint cases Trade Express (C-395/22) and Devnia Tsiment (C-428/22) – a seemingly technical case –, the third Chamber of the Court of Justice dealt with important questions involving legal obligations that could infringe the freedom of companies to conduct a business and the right to property under the Charter of Fundamental Rights of the European Union (‘Charter’). Specifically, the Court of Justice was asked whether an economic operator tasked with importing a certain type of petroleum product can be obligated to build up stocks of different types of petroleum product under Article 3 of Directive 2009/119/EC on Emergency Oil Stocks (‘Directive’) and, if so, how the scope of that obligation should be determined. The request for a preliminary ruling was submitted to the Court by the Administrative Court of Varna, Bulgaria (‘referring court’).
The applicants, Trade Express and Devnia Tsiment, respectively acquired lubricating oils and petroleum coke for their economic activities. Both products are petroleum products under Regulation (EC) No 1099/2008 on Energy Statistics (‘Regulation’). Following this transaction, Bulgaria’s National Agency for State Reserves and Military Stocks (‘National Authority’), through an administrative order, required the applicants to maintain emergency stocks of heavy fuel oil, by way of their own resources. It is important to highlight that under the Regulation, heavy fuel oil is considered a different type of energy product than the abovementioned petroleum products.
The legal basis for the action in question stems from Bulgarian law on stocks of oil and petroleum products of 15 February 2013 (‘National law’), establishing which oil and petroleum products must have emergency stocks, and the conditions for creating and financing the stock at the level which they are ordered to guarantee.
The applicants brought an action for annulment of the administrative order before the referring court, arguing that heavy fuel oil does not form part of their economic activities, and thus, they should not, at their own expense, be required to create and maintain an emergency stock for heavy fuel oil.
According to the referring court, the obligation for an economic operator to build up a stock of a petroleum product which does not form part of its economic activities could financially burden the operator and could affect the internal market and competition rules. Still, the Directive could support an obligation to store an energy product falling within the scope of its economic activities.
The referring court therefore decided to stay the proceedings and to refer five questions to the Court of Justice for a preliminary ruling:
1. Whether the provisions of the Directive should be interpreted as precluding national legislation, under which persons who have made intra-Union acquisitions or imports of lubricating oils can be obliged to build up emergency stocks;
2. Whether the provisions of the Directive should be interpreted as precluding national legislation which requires building and maintaining stocks for certain types of energy production;
3. Whether the provisions of the Directive are to be interpreted as precluding national legislation under which limits the types of products for which an emergency stocks must be built up and maintained to certain types of energy products;
4. Whether the provisions of the Directive should be interpreted as precluding national legislation, which obliges a company to build up and maintain stocks of a product which they do not use in their own economic activities, especially if such obligation entails a significant financial burden;
5. And, should any of the first four questions be answered in the negative, whether the Directive should be interpreted as meaning that a person who has made intra-Union acquisitions or imports of a particular type of product can only be obliged to build up and maintain emergency stocks of the same type of product which it has acquired or imported.
Preliminary Question 2
The Court of Justice starts its analysis with the second question. The Court of Justice answers it negatively, providing that Member States are not required to maintain emergency stocks of all the categories of energy products listed under the Regulation in order to fulfil their obligations under the Directive. Member States have flexibility when determining which energy products necessitate an emergency stock and can determine this based on needs and consumption patterns.
Preliminary Question 1
The Court of Justice responded to the first question in the negative, providing that Member States can require, through national law, economic operators, which are considered as ‘any natural or legal person who pursues an economic activity’ to undertake stockholding obligations. The only distinction made is between central stockholding entities and economic operators, where the former is defined under the Directive as a non-profit entity acting in the general interest, and thus shall not be considered as an economic operator. Moreover, it was particularly emphasised that if an economic operator engages in activites, such as importing and trading of energy products under the regulation, the operators can reasonably fall within the scope of ‘economic operators’ under the directive, and thus be required to build and maintain an emergency stock through national law.
Preliminary Questions 3, 4 & 5
Lastly, the Court of Justice examines questions 3, 4 and 5 together. With those questions, the Court of Justice was asked whether the Directive, read in the light of Article 17 and Article 52(1) of the Charter, allows or requires economic operators that import a certain type of energy product to also maintain emergency stocks of different energy products that they do not import or acquire for their business, which can financially burden the economic operators in question.
The Court of Justice underlines that Member States have the discretion, under the Directive, when it comes to the selection of an economic operator for a specific stocktaking obligation. However, given that this discretion is given through an EU legal act, the Charter applies within the scope of its implementation. Therefore, the Member State’s discretion is subjected to the provisions of the Charter, namely Articles 16 and 17 thereof in this case on the freedom to conduct a business and the right to property. This is also emphasised by Advocate General Rantos in his Opinion
Obliging an economic operator to engage in stockholding through its own resources may jeopardise the rights mentioned under the Charter, especially if such stockholding concerns products that are not part of the business of the said operator. However, the Charter rights are not absolute, and can be limited by Member States, subject to the principle of proportionality. Given that the obligation is provided by national law, with the aim of guaranteeing security of oil supplies, the Court of Justice affirms that it is an objective of general interest, notably an objective of public security. Therefore, the Court of Justice establishes that the national law imposing the stockholding obligation can be considered appropriate for the attainment of the objective of public security.
Nonetheless, it is for the national court to determine whether the proportionality test is fulfilled. Following AG Rantos’ Opinion, the Court of Justice establishes that an important consideration is whether an operator can potentially delegate their obligations to another economic operator. In addition, factors such as the duration of the obligation, the quantities of the stocks and the possibility of leasing or even purchasing and reselling stocks at the end of the compulsory stockholding period, and the financial impact of the obligation on the operator, should also be taken into account by the referring court, according to the Court of Justice.
Therefore, the Charter does not prohibit a Member State from imposing on an economic operator the obligation to maintain an emergency stocks for products that are not part of the economic activities of the said operator, so long as the measure is proportionate.
Tuvana Aras is a Meijers PhD Candidate at the Europa Institute and the Institute of Air and Space Law at Leiden University (t.aras@law.leidenuniv.nl).
SUGGESTED CITATION: Aras, T.; “Justice on Reserve: the Clash of Freedom of Business and Energy Security in joint Cases Trade express (C-395/22) & Devnia Tsiment (C-428/22)”, EU Law Live, 17/07/2024, https://eulawlive.com/analysis-justice-on-reserve-the-clash-of-freedom-of-business-andenergy-security-in-joint-cases-trade-express-c-395-22-devnia-tsiment-c-428-22/
SYMPOSIUM
SYMPOSIUM ON THE 2024 REFORM OF THE STATUTE OF THE COURT OF JUSTICE OF THE EU
The (new) role of the Advocate General at the General Court
Jonathan Wildemeersch
The core of the reform resulting from the Regulation of the European Parliament and of the Council of 11 April 2024 amending Protocol No 3 on the Statute of the Court of Justice of the European Union (hereinafter referred to as the ‘Regulation’) is, by all means, the transfer of part of the jurisdiction for preliminary rulings to the General Court. This transfer brings an incidental but truly revolutionary change in the practice of the General Court: the obligation to designate an Advocate General in each preliminary ruling case to be dealt with by that court.
Anyone who is familiar with proceedings before the General Court knows that, unlike the Court of Justice, the former does not have Advocates General among its members. According to Article 254 TFEU, the Statute of the Court of Justice of the European Union (hereinafter referred to as the ‘Statute’) may nevertheless provide for the General Court to be assisted by Advocates General. However, until the entry into force of the Regulation, Article 49 of the Statute simply provides that ‘The Members of the General Court may be called upon to perform the task of Advocate General’ in respect of a particular case.
Interestingly, that possibility was only used at the beginning of the General Court’s existence, in the early 1990s (judgements of 24 November 1991, T-1/89 to T-3/89, of 17 December 1991, T-4/89 and T-6/89 to T-8/89, of 10 March 1991, T-9/89 to T-15/91). However, in the Court of Justice’s request of 30 November 2023, its generalisation to the preliminary ruling procedure is presented as one of the three procedural guarantees to be offered to national courts and to the parties to the main proceedings, the Member States and the institutions. This measure is likely to ensure a uniform approach in the treatment of references for preliminary rulings by the Court of Justice and the General Court. The other guarantees to that purpose are the allocation of such references to the specially designated chambers and the possibility for the General Court to sit in an intermediate-sized formation, i.e. between the chambers of 5 judges and the Grand Chamber composed of 15 judges.
What might have initially seemed like a minor aspect of the change of the competence of the General Court, has eventually become a major element of the reform. Whereas the request of the Court of Justice suggested to simply indicate the designation of the Advocates General in a recital 9 and under (3) of the new Article 50b of the Statute dedicated to the preliminary rulings of the General Court, the Regulation dealt with it in more meticulous way – it is now the subject of a detailed recital and a new article in its own right.
Strengthened in the course of the legislative process, both recital 19 of the Regulation and the future Article 49a of the Statute state that the General Court shall be assisted by one or more Advocates General in dealing with requests for a preliminary ruling transmitted to it. Moreover, the Judges of the General Court will elect from among their number the members who will perform the duties of an Advocate General. Those Judges will not sit in preliminary ruling cases during the period in which they perform those duties and they will belong to
other Chambers that the one to which the case has been assigned. The Judges elected to perform the function of Advocate General will do so for a term of three years, renewable once only.
Regarding the role of the Advocate General, Article 49(2) of the Statute (unchanged) defines it in terms identical to those of Article 252(2) of the TFEU: ‘It shall be the duty of the Advocate General, acting with complete impartiality and independence, to make, in open court, reasoned submissions’ on certain cases that require his or her intervention, i.e. cases that raise a new point of law. That provision is an application of Article 20(5) of the Statute that states that if ‘the case raises no new point of law, the Court may decide, after hearing the Advocate General, that the case shall be determined without a submission from the Advocate General’. This provision was made applicable to the General Court by Article 53(1) of the Statute. Therefore, not all the cases are adjudicated upon with Advocate General’s Opinion.
This limitation is expressly envisaged in the Court of Justice’s request of 30 November 2023. On the other hand, in any case, the appointment of an Advocate General ‘will contribute to the strength of the analysis carried out by that court, given that each case will benefit [as at the Court] from twofold consideration, as the examination of the case file by the Advocate General designated might usefully supplement, qualify or enrich the analysis carried out by the Judge-Rapporteur in his or her preliminary report’.
Those are the limits of this ‘guarantee’ and its usefulness.
Indeed, as already explained, the appointment of an Advocate General for preliminary ruling cases demonstrates a concern to overcome any reluctance to the reform on the part of the Member States. This obligation, which was presented from the outset as a ‘guarantee’ to ensure that preliminary ruling cases before the Court of Justice and the General Court will be dealt with in the same way, has been largely clarified in the course of the legislative process. However, it seems rather surprising to require the designation of an Advocate General for matters which have already given rise, in the words of recital 6 of the Regulation, ‘to a substantial body of case-law of the Court of Justice which is capable of guiding the General Court in the exercise of its jurisdiction to give preliminary rulings’ while the Advocate General is, in principle, called upon to deliver opinions only in cases raising a new question of law.
It is true that this criterion of the new question of law is not the only one that leads to an Advocate General’s Opinion. The complexity of the legal problem, the desirability of a reversal or a choice between two lines of caselaw, the ‘political’ sensitivity of the question asked, all these criteria govern, at the very least informally, the decision to have the Opinion of an Advocate General. One may nevertheless wonder which of the preliminary ruling cases referred to the General Court will require an Advocate General’s Opinion. It is conceivable that, initially, the task of the Advocates General might be to summarise this ‘substantial body of case-law’ in order to make it easier for judges unfamiliar with these matters to assimilate it. However, does such a task require the election of several Advocates General – the number of which is not specified in the Regulation or, more surprisingly, in the General Court’s Rules of Procedure as amended following the adoption of the Regulation?
Quite apart from these issues, a more fundamental difficulty relates to the ‘dual personality’ of the Judges called upon to play the role of Advocate General. The intellectual exercise is not the same, which explains why the General Court quickly abandoned this possibility in the past. Will the Judges/Advocates General manage to extricate themselves from their decision-making role in order to take a step back, which is necessary for a critical analysis? Will they be able to propose a possible reversal of case-law if needed?
While the integration of a new competence is undoubtedly a new challenge for the General Court, the institutionalisation of a hitherto unknown role is equally so.
* The opinions expressed in this article are purely personal to the author and in no way commit the institutions in which he works
Jonathan Wildemeersch is Professor at the EU Legal Institute, University of Liège (Belgium) and Référendaire at the ECJ
SUGGESTED CITATION: Wildemeersch, J.; “The (new) role of the Advocate General at the General Court”, EU Law Live, 16/07/2024, https:// eulawlive.com/op-ed-the-new-role-of-the-advocate-general-at-the-general-court/4
Transparency and Openness at the Court of Justice – Towards ex post Publicity of Parties’ Observations
Paul Dermine
Debates about the recent reform of the Court of Justice of the European Union have so far mainly focused on the transfer of preliminary reference jurisdiction to the General Court. This is only legitimate, considering how central and transformative this mechanism is. This should however not distract us from the fact that the recent amendment of the Court’s Statute does also include other important measures. Kieran Bradley’s contribution to this Symposium has examined the adjustments made to the appeal filter mechanism. This contribution focuses on another axis of the reform: increased transparency of the Court’s action, as primarily ensured through the publication of parties’ written observations.
The Regulation amending the Court’s Statute foresees that Article 23, devoted to the preliminary ruling procedure before the Court, shall be complemented by an additional paragraph reading as follows: ‘Statements of case or written observations submitted by an interested person pursuant to this Article shall be published on the website of the Court of Justice of the European Union within a reasonable time after the closing of the case, unless that person raises objections to the publication of that person’s own written submissions’. This is no less than a small revolution in the Union’s judicial universe. If judicial deliberations naturally remain secret, parties’ submissions will as a matter of principle no longer be confidential but will be made accessible to the public. Publicity will be ex post, and written observations will only be available once the case has been closed, which is welcome for the serenity of judicial proceedings and deliberations. For now, the measure is limited to preliminary ruling proceedings under Article 267 TFEU and does not cover other forms of direct action. Recital 4 of the Regulation justifies this choice by the fact that in such proceedings, ‘the Court of Justice is increasingly required (…) to rule on matters of a constitutional nature or related to human rights’. The measure will in contrast apply indiscriminately to all parties involved in Article 267 proceedings: private litigants intervening before the Court, EU institutions and Member States. Lastly, transparency naturally comes with exceptions, as parties are entitled to raise ‘objections’ (not further specified by the Statute) to the publication of their observations, which could therefore remain confidential.
This new transparency regime is noteworthy in several regards.
Institutionally, it reveals interesting dynamics. The measure did not originate from the Court itself: the initial request which opened the reform process did not include anything on transparency and access to written observations. The measure emerged later during the legislative process at the initiative of two members of the European Parliament: René Repasi, member of the SPD and professor of European law at Erasmus University Rotterdam, and Patrick Breyer, member of the Pirate Party, human rights activist and long-time promoter of government transparency. It was the only successful amendment of a longer series (including proposals on the
development of an amicus curiae practice or the creation of a conciliation mechanism between the Court of Justice and national supreme courts). If anything, the episode is testament of the liveliness of the debates prompted by the reform project, the active contribution of lawmakers and their willingness to leave their mark on the Court’s future evolution. More fundamentally, this demonstrates that the Court is not in full control of its own institutional fate. On the contrary, as is the case for any organ of the political community, its prerogatives and internal organisation are largely shaped by the political and democratic will of the co-legislators and that of the Treaty drafters.
From a substantive perspective, it must be noted that ex post publicity of parties’ written observations had already been promoted in the literature and by certain actors within the Court. Most recently, Krenn had proposed that the Court’s ‘procedural and organisational law’ be adjusted along such lines. In a 2009 opinion already, AG Poiares Maduro had recommended that parties’ observations in closed cases be made publicly available except when ‘exceptional circumstances demand that secrecy be maintained’. This new transparency regime nonetheless marks an evident break with the Court’s past practice. The 2017 Breyer ruling made clear that access to documents does, as a matter of principle, cover ECJ submissions related to closed cases held by EU institutions. But the Court itself had never engaged in proactive disclosure measures. On the contrary, its own access to documents regime, set in a 2019 Decision, only covered administrative documents, and excluded judicial files.
The recent reform is a welcome and promising evolution. As the famous maxim goes, ‘justice must not only be done, it must also be seen to be done’. Together with other recent measures, and most notably the broadcasting of Plenary and Grand chamber hearings since 2022 (to be formalised and more clearly regulated through to the insertion of a dedicated provision in the Court’s rules of procedure), it undeniably contributes to making European justice more open, more accessible and more visible. As hinted at in Recital 4 of the Regulation, this increases the accountability of the Court, consolidates the legitimacy and authority of its decisions, and builds trust in the Union as well as in Union law. This evolution will undeniably bring the Court closer to the citizen and make judicial debates and the diversity of views defended before it more visible, thereby increasing the intelligibility of the Court’s reasoning and deliberative processes, to the benefit of all types of observers and commentators, and that of the public in general. This seems all the more warranted that the Court does not, for perfectly legitimate reasons, have a practice of separate (dissenting or concurring) opinions, and has long stopped publishing hearing reports. Last but not least, with this reform, the Court of Justice moves closer to the standard practice of other supranational judicial fora starting with its Strasbourg counterpart where, as provided by Article 40(2) of the European Convention of Human Rights, ‘documents deposited with the Registrar shall be accessible to the public unless the President of the Court decides otherwise’.
At this stage, a certain number of questions remain. If the principle of transparency is now consecrated in the reformed Statute of the Court, the exact modalities of the regime still need to be agreed upon in the revised rules of procedure, which are yet to be published. The draft amendments submitted by the Court to the Council in March 2024 however offer certain interesting insights as to the direction discussions have been taking. Most importantly, parties objecting to the publication of their observations will not need to state their reasons. This
stands in stark contrast with what the European Parliament had proposed: the initial amendment included a duty to state reasons and an exhaustive list of confidentiality grounds. The matter is now entirely left to the appreciation of the parties, and grounds would not be specified whatsoever. The role of the Court would be purely mechanistic, collecting objections without examining them, and publishing on its website the observations or a reference to the party’s objection. It should also be noted that, still following the Court’s proposal, objections will not be challengeable before the Court or the General Court. Objections will, as a matter of principle, need to be communicated to the Registry within three months after the closing of the case. Non-publication will not be irreversible, and parties will have the possibility to withdraw their objection. The system put forward by the Court may make practical sense, as the EU judicature may lack the time and resources to systematically examine the merits of the objections raised by parties. Moreover, it is true that the reform transforms the dynamics on the matter. Proactive disclosure is now the rule, and confidentiality will require a formal objection, which will be announced on the Court’s website. The public will thus know where parties, governments and EU institutions have chosen secrecy over transparency. However, the framework proposed by the Court will not prevent parties from systematically objecting the publication of their observations, without having to provide any form of justification, and without any remedy available. This would of course defeat the very purpose and spirit of the reform.
With this amendment on the publicity of parties’ observations, an important and welcome step towards increased transparency has been made. But as often, the devil is in the details and only time will tell how the practice develops and how frequently objections are raised by parties. Judicial openness remains an ongoing process.
Paul Dermine Professor of European Law, Centre de droit européen, Université libre de Bruxelles (Belgium)
SUGGESTED CITATION: Dermine, P.; “Transparency and Openness at the Court of Justice – Towards ex post Publicity of Parties’ Observations”, EU Law Live, 19/07/2024, https://eulawlive.com/op-ed-transparency-and-openness-at-the-court-of-justice-towards-ex-post-publicity-of-partiesobservations/
THE LONG READ
The European Commission’s Enforcement of the Digital Markets Act: Non-Compliance Procedures and a (Revenant) DeterrenceBased Enforcement Strategy
Alba Ribera Martínez 1
The obligations under the Digital Markets Act (DMA)2 became applicable in March 2024 for six undertakings, labelled as gatekeepers under the regulation, namely Alphabet, Apple, Amazon, ByteDance, Meta and Microsoft. The DMA is cemented on the premiss that the application of competition law rules was not successful in capturing Big Tech conduct. Therefore, the regulation sought to introduce a regulatory framework to capture conducts quickly and effectively via a reinforced enforcement system. The DMA combines both a deterrence-based and responsive set of rules, moving away from the purely adversarial approach of antitrust where gatekeepers litigate with the European Commission (EC) to the point of exhaustion.
However, the EC’s enforcement strategy has demonstrated to be particularly oriented towards seeking deterrence. 18 days after the compliance deadline, it triggered five non-compliance procedures against three of the regulation’s targets (Alphabet, Apple and Meta).3 The European Commission added a sixth non-compliance procedure to the roster regarding Apple’s implementation on the opening of its ecosystem.4 By doing so, the EC set the tone for the decisions to come in terms of its approach, as well as the overall enforcement strategy it wishes to deploy in the coming months regarding potentially detrimental conduct carried out by gatekeepers.
The Non-Compliance Procedures and what they mean in Practice
On 25 March 2024, the European Commission issued a press release communicating its first enforcement action regarding gatekeeper compliance with the DMA. First, it opened five non-compliance procedures against Alphabet, Apple and Meta for what EC officials and representatives have termed ‘blatant infringements’ of the regulation. Second, it confirmed that it is carrying out further investigatory steps regarding other potential infringements of the DMA. And what do any of those mean in practice? The EC jumped the gun on the regulation’s infringement by actioning the punitive and precautionary mechanisms embedded within it.
1. PhD Candidate at University Carlos III of Madrid and Lecturer in Competition Law at University Villanueva.
2. Regulation (EU) 2022/1925 of the European Parliament and of the Council of 14 September 2022 on contestable and fair markets in the digital sector and amending Directives (EU) 2019/1937 and (EU) 2020/1828 (OJ 2022 L 265, p. 1).
3. Directorate-General for Competition and Directorate-General for Communications Networks, Content and Technology, ‘Commission opens non-compliance investigations against Alphabet, Apple and Meta under the Digital Markets Act’, Digital Markets Act, 25 March 2024.
4. Directorate-General for Competition and Directorate-General for Communications Networks, Content and Technology, ‘Commission sends preliminary findings to Apple and opens additional non-compliance investigation against Apple’, Digital Markets Act, 24 June 2024.
On the side of the precautionary measures, the EC triggered other investigatory steps, including the sending of requests for information or the power to carry out interviews regarding other breaches of the DMA, notably Amazon’s infringements of the self-preferencing prohibition and Apple’s re-framing of its terms and conditions to enable alternative venues of app distribution.
Furthermore, the EC recognised in its five decisions resulting in the five non-compliance procedures that it had opened this type of proceedings with a view to the possible adoption of a decision under the legal basis outlined in Article 29(1) DMA. In other words, the EC’s objective via the proceedings is to produce a potential finding of non-compliance, despite the regulatory dialogue path available under Article 8.5 Accordingly, the EC’s enforcement strategy is to pursue a clear declaratory decision: whether the gatekeepers complied with some of the DMA’s provisions or not. There is no regulatory discussion to be held between the gatekeepers and the EC since the discussion is purely oriented in a punitive fashion. In turn, however, the EC must issue its preliminary findings before issuing the full-scale non-compliance decision, which it must issue within twelve months from the moment the proceedings are initiated. Those procedures pursue five different technical implementations of the DMA from the gatekeepers. First, Alphabet’s non-compliance with the anti-steering provision under Article 5(4) DMA. That is the capacity of business users to communicate promotional offers on their apps without being hindered by gatekeepers from doing so. Second, Alphabet’s breach of the self-preferencing prohibition laid down in Article 6(5) DMA. The non-compliance procedure follows the long-drawn debate surrounding Google’s strategy in displaying search queries on its comparison-shopping service Google Shopping. Third, Apple’s non-compliance with the provision compelling it to technically enable the easy uninstallation of apps and the change of default settings on its operating system, iOS.
Finally, two additional procedures have caused the clearest stir in terms of their overlap with data protection regulation and EU competition law: Meta’s rolling out of its pay or consent model and Apple’s implementation of the anti-steering provision. Specifically, both procedures are reported as being at a rather advanced stage in their investigation and the EC is expected to issue its preliminary findings in the coming weeks. This is quite a surprise, given the intricacies surrounding each one of them.
Meta’s Pay or Consent Model: Prohibition and Exception under Article 5(2) DMA
Any tech-savvy reader will have heard about the pay or consent model.6 The gatekeeper’s social networks (Facebook or Instagram) address a question to the user: do you wish your personal data to be processed for the purposes
5. The five decisions opening the non-compliance procedures remark on this fact, see, for instance, Commission decision opening proceedings pursuant to Article 20(1) of Regulation (EU) 2022/1925, Case DMA.100055 Meta – Article 5(2), C(2024) 2052 final, 25 March 2024, paras 2 and 3 or Commission decision opening proceedings pursuant to Article 20(1) of Regulation (EU) 2022/1925, Case DMA.100109 – Apple – Online Intermediation Services – app stores – App Store – Article 5(4), C(2024) 2056 final, 25 March 2024.
6. For a brief review of the model, see Alba Ribera Martínez, ‘The Ambivalence of Rejecting and Granting Consent: Ad-F(r)ee Digital Services’, EU Law Live, 16 October 2023.
of behavioural advertising? If you do, then you will enjoy the services without any further friction. Behavioural advertising stays ‘business as usual’, except now Meta considers that you have consented to the processing of personal data under the legal basis of consent under Article 6(1)(a) GDPR.7 If you do not, then the ‘paid’ strand of the model kicks in and you will have to pay EUR 9,99 (or EUR 12,99 if you complete the purchase on a mobile device) to hinder Meta’s capacity to perform processing in this fashion. This does not mean, however, that Meta will stop processing your personal data for every single purpose.8 Nothing could be further away from reality. In exchange for the fee, Meta does not process your personal data for the purposes of behavioural advertising, but it will carry on processing data for other purposes (e.g. for security reasons and/or for delivering contextual advertising).
Data protection authorities (DPAs) have been called to analyse this false dichotomy between the end user’s protection of his personal data and the granting of consent in the sense of the GDPR. The DPAs did not quite reach a middle ground in their findings: some held that the GDPR outright prohibits the processing of personal data in this manner, whereas others found it to be a lawful mechanism for data processors to collect their user’s consent in the sense of EU data protection regulation. Therefore, the EDPB enters the scene. In its Opinion 08/2024, the EDPB established that some ‘large online platforms’ cannot simply apply the most intensive option in terms of data processing as a default, albeit the term ‘large online platforms’ is not explicitly recognised as a term to differentiate any subset of data processors in the context of the GDPR.9 Instead, according to the EDPB, the ‘large online platforms’ should offer a third alternative, not delivering on behavioural advertising but on other types of advertising requiring less processing of personal data in order to function.
Why is any of this relevant for the DMA? Well, because Article 5(2) DMA introduces a clear prohibition on processing, cross-using and combining personal data across the gatekeeper’s services. For instance, Meta cannot by default process these personal data from Facebook to Instagram through WhatsApp. The caveat to the provision is, however, that an exception applies to the general rule. The prohibition may be lifted on the occasion the user grants consent in the sense of Articles 4(11) and 7 GDPR. To that call, Meta proposed its pay or consent model as a means of compliance with the DMA’s provision.10
This is the cornerstone of the interplay between EU data protection regulation and the DMA’s interpretation. The EDPB interpreted that, in most cases, ‘large online platforms’ (also known as gatekeepers in the DMA’s language) did not comply with the requirements for valid consent if they confronted users with a binary choice between
7. Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation) (OJ 2016, L 119, p. 1).
8. This was made clear by Meta’s representatives in their participation in a compliance workshop held by the European Commission, see ‘Meta DMA compliance workshop’, Digital Markets Act, 19 March 2024.
9. Opinion 08/2024 on Valid Consent in the Context of Consent or Pay Models Implemented by Large Online Platforms
10. Meta, ‘Meta’s Compliance with the Digital Markets Act: Non-Confidential Public Summary of Meta’s Compliance Report’, Meta, 6 March 2024.
their consent to the processing of personal data for behavioural advertising purposes and vis-à-vis the payment of a fee. Therefore, if one were to follow the EDPB’s Opinion, then Meta would automatically be in breach of Article 5(2) DMA.
But is the association of ideas so straightforward? I would beg to differ. First, the DMA applies without prejudice to the GDPR as set out in recital 12. This means the DMA is lex specialis when confronted with EU data protection regulation. Second, although the sense of Articles 4(11) and 7 GDPR must permeate the interpretation of the ‘granting of consent’ in the sense of the DMA, this does not intrinsically mean that the EDPB’s Opinion is legally binding on the EC as a matter of fact. In principle, the EC and the EDPB remain two separate bodies within the broader Union. Moreover, the Opinion can only serve to clarify the Member States’ DPAs interpretation of the terms of the GDPR. Third, the DMA must build upon the experience of the interpretation of EU competition law relating to the GDPR. Competition authorities have reluctantly incorporated EU data protection regulation as a benchmark to produce their findings on the infringements of competition law rules. Thus, the DMA should, at least, stand within this same line of reasoning.Fourth, if a direct association of ideas from one field of law to the other were to apply, then the DMA would only serve as the necessary grounds to capture elusive conduct that cannot be caught in any other way. This is an unpredictable way to construe the DMA, since the threshold of intervention required by Article 5(2) DMA would never be realistically met.11 Since the regulation is based on the premiss that there is an imbalance in the bargaining power of the gatekeepers with respect to business and the end users, a data subject’s choice will always fall foul of satisfying the ‘informed’ requirement of EU data protection regulation. The pay or consent model would, therefore, only be the extreme depiction of one way of asking for the user’s consent which does not satisfy the requirement of the exception under Article 5(2) DMA.
As regards the interpretation of the DMA’s provision, the EC took issue with the way in which it organised its data flows across its services. Moreover, it also questioned its implementation of a monetisation model framed as a binary choice that does not provide for a ‘real and equivalent’ alternative in terms of the quality delivered to the user in terms of targeting if he or she chooses not to consent to the processing.
An Antitrust Rollercoaster: Apple and its Anti-Steering Provisions
Apple’s technical implementation of the anti-steering provision is somewhat more complex. Article 5(4) requires the gatekeeper to allow business users, free of charge, to communicate and promote offers to the end users, even if they have been acquired via their own services. The mandate is, in reality, a spin-off of the several cases that Apple has confronted in antitrust by not allowing the ‘steering’ of users from the apps downloaded on the iPhone to outside offers. Apple introduced a rule within its developer playbook to hinder this possibility because it undermined its monetisation model, that is to say, charging a 30% fee over each transaction completed on an app by the user.
11. I put forward this same idea in Alba Ribera Martínez, ‘The Circularity of Consent in the DMA: A Close Look into the Prejudiced Substance of Articles 5(2) and 6(10)’ Vol. 29/2022: Numero Speciale Concorrenza e Regolazione nei Mercati Digitale Rivista Concorrenza e Mercato 2023, pp. 191-212.
The main sanctioning proceedings stemmed from a complaint submitted by music streaming service Spotify to the EC as an infringement of the prohibition of an abuse of a dominant position. The EC followed through the complaint and fined Apple EUR 1.8 billion for not allowing music streaming service providers to steer users to outside promotional offers.12 The EC categorised the conduct as an unfair trading condition.
Two tenets of that decision present the largest of overlaps with the DMA. On the one hand, the decision was issued on 4 March 2024. That is, three days in advance of the DMA’s compliance deadline. The EC, thus, hints at the idea that the same conduct (not enabling business users to steer users away from their apps) is sanctionable under antitrust until that date and, three days later, it transforms into conduct potentially captured by Article 5(4) DMA. On the other hand, the decision clearly illustrates the conduct’s unfairness with reference to the DMA. Even though the EC recognises that the concepts of fairness are not the same for antitrust and the DMA, it redirects the locus of the conduct’s analysis through the lens of that regulatory instrument. By this token, the EC establishes that ‘the fact that Article 5(4) (of the DMA) generally prohibits, due to their unfair character, the imposition by gatekeepers of anti-steering rules further supports the Commission’s view that such conditions imposed by a dominant undertaking should be qualified as unfair’. The DMA’s alleged complementarity with respect to EU competition law is, therefore, not so apparent when one considers this particular case.
Accordingly, it seems the EC will be capturing Apple’s conduct via the DMA to the extent that the remedies sought under the antitrust sanctioning proceedings do not manage to address the conduct’s anti-competitiveness. Apple proposed to strip the anti-steering clause from its agreements with developers and to allow link-outs within apps downloaded from the App Store by means of a tappable URL.13 Apple will charge 17% of a fee per transaction completed (and a fee of 10% will apply to subscriptions after their first year) in this fashion.
As a response, the EC was concerned about whether those measures comply with the requirements under Article 5(4) to allow business users free of charge to ‘steer’ users. Additionally, it also established that, although the DMA does provide some scope for leeway in enabling the gatekeepers to charge for an initial acquisition fee, the charging of a recurring fee after the conclusion of the contract surpasses the DMA’s legal standard. Just a few weeks ago, the EC issued its first preliminary findings in a DMA non-compliance procedure and essentially declared that none of the business terms put forward by Apple as a matter of compliance permitted developers to freely steer their customers. For instance, the EC explicitly takes issue with the fact that the 17% fee goes far and beyond what is strictly necessary for such remuneration.
In similar vein to Meta’s non-compliance procedure, the EC holds the possibility of replicating the same set of facts itself (via a different unit in DG COMP) considered under the terms of EU competition law. Where unfairness
12. Commission Decision of 4.3.2024 relating to a proceeding under Article 102 of the Treaty on the Functioning of the European Union (the Treaty) and Article 54 of the EEA Agreement (Case AT.40437 – Apple – App Store Practices (music streaming)), C(2024) 1307 final, 4 March 2024.
13. Apple, ‘Apple’s Non-Confidential Summary of DMA Compliance Report’, Apple, 7 March 2024.
manifested under a sanctioning procedure within the meaning of Article 102 TFEU, the DMA prolongs the breach of that same conduct onto a different manifestation of fairness in the sense of the DMA. . By doing so, the EC’s mandate in deploying its enforcement regarding the DMA may become more punitive than responsive.
SUGGESTED CITATION: Alba Ribera Martínez; “The European Commission’s Enforcement of the Digital Markets Act: Non-Compliance Procedures and a (Revenant) Deterrence-Based Enforcement Strategy)”, https://eulawlive.com/weekend-edition/weekend-edition-no196/
HIGHLIGHT F THE WEEK S O
EU framework on energy and emissions for climate neutrality, published in OJ
Monday 15 July
Official publication was made of Regulation (EU) 2024/1787 on Methane Emissions Reduction, Regulation (EU) 2024/1789 on Internal Markets for Renewable Gas, Natural Gas, and Hydrogen, Directive (EU) 2024/1785 of the European Parliament and of the Council of 24 April 2024 amending Directive 2010/75/EU of the European Parliament and of the Council on industrial emissions (integrated pollution prevention and control) and Council Directive 1999/31/EC on the landfill of waste and Directive (EU) 2024/1788 of the European Parliament and of the Council of 13 June 2024 on common rules for the internal markets for renewable gas, natural gas and hydrogen, amending Directive (EU) 2023/1791 and repealing Directive 2009/73/EC.
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Action against Commission’s decision ordering inspection of tyre manufacturer Michelin over competition concerns, published in OJ
Monday 15 July
Official publication was made of a case concerning an action brought on 8 April 2024 by Compagnie générale des établissements Michelin against the European Commission: Compagnie générale des établissements Michelin v Commission (T-188/24).
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Council adopts first-ever assistance measure to enhance Albanian Armed Forces operational effectiveness
Monday 15 July
The Council adopted a €13 million assistance measure under the European Peace Facility to boost operational effectiveness of the Albanian Armed Forces, in terms of mobility, manoeuvrability and protection.
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Sweden joins European Public Prosecutor’s Office
Tuesday 16 July
Sweden has officially joined the European Public Prosecutor’s Office (EPPO). The decision was confirmed by the Commission. The EPPO will begin operations and investigations in Sweden 20 days after the appointment of the European Prosecutor from Sweden, expected to occur in the Autumn.
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Council reaches agreement on country-specific recommendations for Member States, part of the European Semester process
Tuesday 16 July
The Council agreed its country-specific recommendations on the economic, social, employment, structural and budgetary policies of each Member State, as part of the 2024 European Semester process.
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General Court rules Commission failed to provide sufficient access to Covid-19 vaccine purchase agreements
Wednesday 17 July
The General Court of the European Union found that the European Commission did not adequately provide public access to purchase agreements for Covid-19 vaccines, particularly concerning indemnification clauses and conflict of interest declarations of the negotiating team members. These cases, T-689/21 (Auken and Others v Commission) and T-761/21 (Courtois and Others v Commission), arose after the Commission only partially disclosed these documents in response to requests from Members of the European Parliament (MEPs) and private individuals.
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General Court dismisses TikTok’s challenge to EU gatekeeper designation
Wednesday 17 July
The General Court dismissed Bytedance Ltd’s action against the European Commission’s decision to designate it as a gatekeeper under the Digital Markets Act (DMA). Bytedance, the parent company of TikTok, had challenged this designation made in September 2023. The Court’s expedited judgment, delivered eight months after the action was initiated, upheld the Commission’s decision: Bytedance v Commission (T-1077/23).
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Court of Justice annuls SRB decisions concerning ex ante contributions of French credit institutions to the Single Resolution Fund
Wednesday 17 July
On 17th July, the General Court handed down judgment in Société générale and Others v. SRB (T-391/22), Confédération nationale du Crédit mutuel v. SRB (T-392/22), BPCE v. SRB (T-393/22), La Banque postale (T-394/22), Crédit Agricole v. SRB (T-410/22) and BNP Paribas v. SRB (T-420/22). By their actions for annulment, the applicants seek the annulment of Single Resolution Board (SRB) decision (SRB/ES/2022/18) on the calculation of pre-contributions for the Single Resolution Fund (SRF) for the year 2022 (‘the contested decision’), insofar as it concerns the applicants.
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EU’s renewable hydrogen policy needs reality check: ECA Report published
Thursday 18 July
The European Court of Auditors (ECA) released a Special Report 11/2024 assessing the EU’s industrial policy on renewable hydrogen. The report reviews the EU’s efforts to create a renewable hydrogen market, a crucial element in decarbonizing hard-to-electrify sectors as part of the EU’s climate neutrality goal by 2050. The EU committed €18.8 billion for hydrogenrelated projects from 2021-2027, aiming to boost hydrogen production and imports through the Hydrogen Strategy and REPowerEU plan.
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