The Week
2-6 September 2024
TABLE OF CONTENTS
IN-DEPTH:
EU-UK Extradition and Risk of fundamental Rights Violations in the issuing State (C -202/24, Alchaster)
Leandro Mancano
Judicial Cooperation under the EU-UK Trade and Cooperation Agreement (Alchaster, C-202/24)
Antoine Parry
The Doctrine of Exhaustion of Remedies: Gatekeepers fall out of Bounds before the General Court
Alba Ribera Martínez
The EU has its first Member in the UN Committee on the Rights of Persons with Disabilities: there is always a first Time…
Delia Ferri
SYMPOSIUM ON THE 2024 REFORM OF THE STATUTE OF THE COURT OF JUSTICE OF THE EU
Return of the Réexamen
Sara Iglesias
COMPETITION CORNER: SYMPOSIUM ARTICLE 22 EUMR: THE IMPACT OF THE ILLUMINA/GRAIL JUDGEMENT
Illumina/Grail: Facilitating acquisitions strategies for the future? (C 611/22 P & C 625/22 P)
Nathalie Nielson and Chloé Djamdji
Illumina/Grail: Killer Acquisition Detection Tool fails Trial
Sebastian Reiter
COMPETITION CORNER: SYMPOSIUM ON SELECTIVITY IN STATE AID
Selective Advantage in Tax Rulings: all the Chapters bring the Saga to one End Nieves Bayón Fernández
THE LONG READ:
The Critical Raw Materials Act: The Creation of New Markets, Governance and Disputes
Sanja Bogojević
HIGHLIGHTS OF THE WEEK
IN-DEPT H
EU-UK Extradition and Risk of fundamental Rights Violations in the issuing State (C-202/24, Alchaster)
Leandro Mancano
Introduction
Under the framework governed by the Trade and Cooperation Agreement (TCA), the terms of the EU-UK partnership resemble the two ends of an accordion: they get very close, or very far, depending on whether the Parties are playing to the tune of e.g. law enforcement cooperation, or free movement of people. Judicial development at the level of the EU Court of Justice (the Court) has hitherto occurred mostly on matters of Britons’ citizenship rights in the EU post-Brexit –Préfet du Gers I and II (C-673/20 and C-716/22)– and extradition -Abel (C-235/22) and SN and SD (C-479/21 PPU) The latest episode of the saga, under comment in this Op-Ed (C-202/24, Alchaster), belongs in the latter grouping. While Antoine Parry’s Op-Ed focused primarily on the implications of this judgment for the principle of legality (see that also for the factual background of the case), this piece considers the possible impact of the ruling and the Advocate General (AG)’s Opinion on the structure of EU-UK relations and specifically as regards the principle of mutual trust.
Special Relationships and Thresholds for Refusals
The AG’s Opinion and the Court’s ruling revolved around three main points: the role for mutual trust in EUthird countries cooperation on extradition; the comparability between the European Arrest Warrant (EAW) and the surrender mechanism set out in the TCA; the obligations on the executing authority, when confronted with concerns about the possible breach of fundamental rights in the UK following surrender. As known, mutual trust underpins, inter alia, streamlined cooperation in criminal matters –such as the EAW– and entails functional equivalence between the cooperating states’ criminal justice systems. Borrowing from the Commission’s metaphor, the AG described mutual trust as a sliding scale: the greater the trust, the lower the degree of scrutiny by the executing authority in a specific case over the compliance by the issuing state with fundamental rights. As argued by this author elsewhere (Trust Thy Neighbour? Compliance and Proximity to the EU through the Lens of Extradition), the degree of trust between the EU and a third country must be assessed by comparing how their legal relation maps onto EU membership in the relevant areas under consideration.
In that regard, Norway and Iceland offer an example of ‘special relationship’ with the EU, due to their membership of the European Economic Area (EEA), their full implementation of the Schengen acquis and the existence of a surrender agreement (SA) with the EU that closely resembles the EAW. The Petruhhin case law reveals that situations involving a Member State and a ‘less special’ third country must be treated differently: the mere accession by that third country to an international treaty safeguarding human rights –such as the ECHR– cannot
automatically exclude the risk of fundamental rights violations, especially where reliable sources suggest that practices contrary to that treaty are tolerated by that state authorities. As a result, the bar for refusing surrender in such scenarios cannot be as high as with the ‘two-step test’ under the EAW: namely, by requiring the executing authority to ascertain the existence of systemic deficiencies in the issuing state affecting the protection of a certain right which are likely to impact the specific case of the person concerned.
Interestingly the question of where the UK lies on the sliding scale of mutual trust elicited different responses from the institutional actors involved in the proceedings. The AG opined that EU-UK law enforcement cooperation under the TCA was underpinned ‘by a considerable level of mutual trust, which exceeds the trust enjoyed between a Member State and the overwhelming majority of non-member countries’ (AG’s Opinion, point 77). A different view was taken by the Commission, which regarded the UK’s non-participation in Schengen as a decisive factor in lowering the overall level of trust between the parties. The Court’s approach fell probably closer to the latter. In finding that a special relationship à-la-Norway and Iceland does not exist with the UK, the Court of Justice pointed to the circumstance that the latter country ‘is not part of the European area without internal borders, the construction of which is permitted, inter alia, by the principle of mutual trust’ (Court’s judgment, para. 70). Furthermore, the TCA ‘is not presented as being based on the preservation of mutual trust between the States concerned’ (para. 71).
Against that background, both the Court and the AG observed that, despite the similarities between the TCA surrender mechanism and the EAW, the two also presented significant differences. The AG and the Court also agreed on the existence of an obligation to surrender imposed by the TCA on the executing authority. If the AG stated that refusal could only be opposed in case of ‘tangible evidence’ of a real risk of a fundamental rights violation, the Court elaborated to a greater extent on the specific steps that must be taken by the executing authority. On a general level, the executing authority must ‘take into account’ the UK’s long-standing respect for the protection of the fundamental rights. However, and although the risk of a breach could be ruled out on the basis of that circumstance, the executing authority must still proceed with its own independent examination. Especially where that assessment would presuppose an interpretation of UK law, the executing authority must comply with its obligation of mutual assistance in good faith under Article 3(1) TCA and request additional information, from the issuing authorities, on the relevant UK rules and their application to the specific case, as well as guarantees on the compliance with fundamental rights. It is only following those steps, and in the presence of a real risk based on objective, reliable, specific and properly updated information, that the executing judicial authority will have to refuse to surrender. In coming to that conclusion, and differently from the two-step test applicable in EAW cases, the executing authority must take account ‘simultaneously’ of ‘the rules and practices generally in place in that country and the specific features of that person’s individual situation’.
Shades of Mutual Trust and Terms of Surrender. The Road Ahead
The judgment is probably more important from a systemic perspective than in terms of the principle of legality and the implications of a change in parole regime. This is also visible in the relatively short space devoted to the
latter issue, which was arguably at the core of the reference from the Irish Supreme Court. Broadly, the ruling is consistent with the stance taken so far by the Court as regards the ‘non-speciality’ of UK and its citizens in the landscape of EU’s external relations post-Brexit (see Préfet du Gers I and II mentioned above). Alchaster, however, was the first opportunity to learn about the ECJ’s view about the UK’s place on the sliding scale of mutual trust. The answer has been lukewarm, to put it mildly. In this regard, the relevance of the obligation to take into account the UK’s long-standing respect for fundamental rights should not be overstated. There, the Court simply aligned its interpretation with the letter of the TCA -as it did with regard to the obligation of cooperation in good faith. On the issue where the ECJ could leave its mark more creatively, it did so by clearly describing the UK as not being in a particularly close legal partnership with the EU. Crucially, it built this conclusion on the UK nonparticipation in the borderless area and the absence of any reference to mutual trust in the TCA. This was followed by the introduction of a new test for refusing surrender, consisting of a simultaneous examination of systemic and specific circumstances -which inevitably sets a lower threshold for refusal than requiring to meet the two steps individually. There is no presumption of mutual trust to rebut, not even of a weaker nature. This also, a contrario, tells us something about the approach that would be taken in a similar situation involving Norway or Iceland. Presumably, the EU executing authorities would be under an obligation to apply a test more similar to that used for the European Arrest Warrant.
That picture might offer a glimpse of the shape of things to come, and particularly on the possible extension of the Petruhhin case law to UK nationals present in the EU. The logic conclusion to be drawn from Alchaster, which would also agree with the ratio of Petruhhin itself, is that the extension would not fit in with the current state of EU-UK relations. That doctrine aims to protect free movement rights while avoiding impunity. As UK nationals enjoy no such rights –nor, to quote from the Court of Justice, a status of ‘quasi-EU citizens’ like Norwegians and Icelandic– there would be nothing to extend to them (in this sense, see more in detail Trust Thy Neighbour?). A counter-argument, based on the circumstance that the UK was not part of the borderless area even when it was in the EU, is inherently tenuous because it overlooks the elephant in the room: namely, the presumption of trust that the UK automatically enjoyed for the fact of holding member status. In a sense, this might give a little bit of perspective to the emphasis on the participation in the area without border controls. Otherwise, we would have to interrogate ourselves about the implications of the Court’s reasoning for current member states which are not in that area like Ireland and Cyprus.
As known, Theresa May once observed that ‘Brexit means Brexit’. Now, like it or not, the Court of Justice is taking that seriously.
Leandro Mancano is Senior Lecturer in EU Law, Edinburgh Law School, and the UK’s Deputy Contact Point for the European Criminal Law Academic Network (ECLAN).
SUGGESTED CITATION: Mancano, L.; “EU-UK Extradition and Risk of fundamental Rights Violations in the issuing State (C-202/24, Alchaster)”, EU Law Live, 06/09/2024, https://eulawlive.com/op-ed-eu-uk-extradition-and-risk-of-fundamental-rights-violations-in-the-issuing-state-c%e2%80%9120224-alchaster/
Judicial Cooperation under the EU-UK Trade and Cooperation Agreement (Alchaster, C-202/24)
Antoine Parry
Nullum crimen sine lege is an ancient legal doctrine which embodies the principle of legality. Though its roots may be traced as far back as the Roman Empire, the concept it upholds – that individuals should be punished only for acts defined as crimes by law at the time when they were committed – began to gain prominence during the 18th Century, particularly through the seminal works of legal philosophers such as Cesare Beccaria (see here). Today, that principle runs through the core of many legal orders and, most importantly, is enshrined in international and European human rights instruments such as the European Convention on Human Rights (‘ECHR’) and the Charter of Fundamental Rights of the European Union (‘Charter’). It is also the legal principle at the very centre of the case giving rise to the recent judgment of the Court of Justice in Alchaster (C-202/24), which concerns the protection of fundamental rights within the context of judicial cooperation for the purposes of extradition under the EU-UK Trade and Cooperation Agreement
The factual and legal background of the case can be summarised as follows. The Magistrates’ Courts of Northern Ireland (United Kingdom) issued arrest warrants against MA in respect of offences involving terrorism. The High Court (Ireland) ordered MA’s surrender to the United Kingdom. However, MA was granted leave to bring an appeal against that decision before the Supreme Court (Ireland), arguing that his surrender would be incompatible with the principle of legality. His claim rested on the fact that his right to conditional release would be governed by United Kingdom legislation upon his surrender, which had been amended with effect after the dates on which he had committed the alleged offences. Nonetheless, by its judgment of 19 April 2023, the Supreme Court of the United Kingdom held that the application of the parole scheme in question to offences committed before its entry into force did not infringe Article 7 ECHR (principle of legality) in so far as that scheme only amended how a custodial sentence would be served, without increasing the duration of the sentence.
In that light, and having regard to the absence of any demonstration of a systemic flaw which would suggest a breach of the rights guaranteed by the ECHR, the Supreme Court (Ireland) rejected MA’s argument. However, it wondered whether it could reach a similar conclusion as regards the risk of a breach of Article 49(1) of the Charter (principle of legality). Accordingly, noting that the United Kingdom is not bound by the Charter, it considered it necessary to seek guidance from the Court of Justice on whether the judicial authorities of a Member State may refuse to execute an arrest warrant to a third State on the ground that there may be a risk of an infringement of Article 49(1) of the Charter. Furthermore, it sought clarity on the criteria to be used in order to assess whether there is a risk of infringement of the principle enshrined in that provision. By its judgment, the Court of Justice, sitting as the Grand Chamber, handed down a decisive ruling, in which it addressed those key legal questions based on the provisions of the Trade and Cooperation Agreement and the state of the new EU-UK relationship.
In the first place, it pointed out that Framework Decision 2002/584/JHA, which lays down the provisions governing the surrender procedures based on the European arrest warrant, does not apply to the execution of arrest warrants issued by the United Kingdom after the expiry of the transition period specified in the Withdrawal Agreement. Rather, their execution is governed by the Trade and Cooperation Agreement, pursuant to which the executing judicial authorities of the Member States must ensure that the extradition of a requested individual to the United Kingdom respects the fundamental rights enshrined in the Charter. Accordingly, the risk of an infringement of those rights is liable to enable the executing judicial authority to refrain from giving effect to an arrest warrant issued on the basis of that association agreement. However, when it comes to establishing such a risk, the judicial authorities of the Member States are not obliged to carry out the same two-step examination, developed by the Court of Justice through its case law since its judgment in Aranyosi and Căldăraru (C-404/15 and C-659/15 PPU).
Indeed, the particularly high threshold for establishing a real risk of a breach of fundamental rights stems from the foundational principles underpinning the surrender system between the Member States, which is predicated on a high level of mutual trust and the principle of mutual recognition. As the Court of Justice observed, while the Trade and Cooperation Agreement is based on a long-standing commitment to fundamental rights protection, it does not engender the same privileged relationship between the United Kingdom and the European Union as that which exists among the EU Member States. Additionally, substantial differences between the provisions of the Trade and Cooperation Agreement and Framework Decision 2002/584, such as the absence of exceptions, in the latter, relating to the political nature of the offences or the nationality of the requested person, only go further to illustrate the limits of the trust between the respective parties to that agreement.
In that context, the Court of Justice held that the executing judicial authorities of the Member States called upon to rule on an arrest warrant issued by the United Kingdom cannot order the surrender of the requested person if it considers, following a specific and precise examination of that person’s situation, that there are valid reasons for believing that that person would run a real risk to the protection of his or her fundamental rights if that person were surrendered to the United Kingdom. After outlining certain procedural factors which judicial authorities must take into account during their assessment, the Court of Justice then considered the specifics of MA’s arguments. With reference to the case law of the European Court of Human Rights on Article 7 ECHR, it ruled that a change to the rules relating to the execution of a sentence will be incompatible with the Charter only if it entails a change in the actual scope of the sentence provided for on the day on which the offence in question was committed, thus resulting in the imposition of a heavier penalty than the one initially provided for.
The Court of Justice’s findings are significant for several reasons. Firstly, the passages plainly expose the altered relationship and degree of proximity between the United Kingdom and the European Union as regards judicial cooperation under the Trade and Cooperation Agreement. Although Advocate General Szpunar repeatedly sought to make the point, in his Opinion, that that association agreement is marked by considerable closeness and is based on a high degree of trust in the protection of fundamental rights, both currently and in the future, the judgment struck a noticeably different, more tempered tone. Indeed, the Court of Justice correctly noted that
the Trade and Cooperation Agreement does not resemble an international agreement with the European Union establishing a special relationship based on a high level of confidence in the same way that other instruments, such as the Agreement on the European Economic Area, have managed to instil with certain third countries such as Norway. Consequently, the United Kingdom inherently enjoys a weaker relationship compared to some other third countries.
Secondly, and in practice, therefore, executing judicial authorities may apply a seemingly less stringent examination of the risks of a breach of fundamental rights under the Charter – in this instance Article 49(1) thereof (principle of legality) – in the United Kingdom before deciding on the execution of a given arrest warrant. At the same time, as the Court of Justice observed, guarantees by the United Kingdom judiciary as regards compliance with the ECHR cannot be, in themselves, decisive. Hence, the executing judicial authority does not seem bound by such assurances in the same manner as it would most likely be under the surrender system between the Member States, which mandates a high level of trust in the compliance with fundamental rights protection. As a result, the United Kingdom finds itself at a comparative disadvantage relative to its former position as a Member State – if it is not accurate to claim that extradition to that country is now more challenging, it is at least correct to state that efficiencies and the removal of hindrances which previously facilitated such processes are no longer available to it in the same way.
The critical questions is the extent to which this matters. The risk that a person’s fundamental rights will be seriously threatened upon extradition to the United Kingdom is not self-evident. Historically speaking, the United Kingdom’s legal system has been grounded in the protection of fundamental rights and adheres to international standards established by the various human rights instruments to which it is a contracting party. Moreover, the Court of Justice’s case law over the past decade on the issue of fundamental rights protection in the context of surrender between the Member States has predominantly addressed concerns regarding the prohibition on inhuman or degrading treatment or punishment under the ECHR and the Charter in view of the prison and detention conditions in Member States other than the United Kingdom (see, for instance, the judgments in Dorobantu (C-128/18) and ML (C-220/18 PPU)). Accordingly, and in theory, extradition to the United Kingdom should not be an immediate cause for concern for executing judicial authorities with respect to the protection of fundamental rights.
However, since assuming office, the new government of the United Kingdom has exposed the systemic and widespread deficiencies plaguing its criminal justice system. The current reports from the Minister of State for Prisons, Parole and Probation reveal that prisons are operating at almost maximum capacity, raising serious concerns about overcrowding and the breakdown of law and order. To exacerbate that situation, violent protests have erupted across the country in recent weeks, leading to hundreds of arrests and a probable increase in incarceration rates. In this context, astute legal counsels for individuals facing extradition to the United Kingdom might argue that such extradition poses a substantial risk of breaching Article 4 of the Charter. Based on the guidance provided in the judgment at issue, executing judicial authorities will be better equipped to consider the validity of such arguments and determine whether the situation of the person concerned meets the established
threshold. Alternatively, such authorities might deem it appropriate to refer questions to the Court of Justice, thereby enriching the case law.
Lastly, the state of the criminal justice system in the United Kingdom may bring about further concerns as regards the fundamental right mentioned in the opening passages and at the heart of the judgment in Alchaster – the principle of legality. The United Kingdom government has announced plans to amend the law temporarily so that offenders serving standard determinate sentences will leave prison before they would have otherwise been able to do so. Nonetheless, it also intends to revert to the former sentencing terms once the current situation is stabilised. This course of action creates inevitable uncertainty for those who will be prosecuted and even sentenced during that transitional period. In particular, such amendments to the parole system are likely to invite increased scrutiny, and provoke further litigation, about whether they cause an incompatibility with the principle of legality and proportionality of criminal offences and penalties. Those considerations may not be confined to the courts of the United Kingdom, but might be raised in other jurisdictions by individuals such as MA, seeking to avoid extradition to the United Kingdom.
SUGGESTED CITATION: Parry, A.; “Judicial Cooperation under the EU-UK Trade and Cooperation Agreement (Alchaster, C-202/24)”, EU Law Live, 03/09/2024, https://eulawlive.com/op-ed-judicial-cooperation-under-the-eu-uk-trade-and-cooperation-agreement-alchaster-c-202-24/
Antoine Parry is a Legal Assistant (Cabinet of Advocate General N. Emiliou) at the Court of Justice.
The Doctrine of Exhaustion of Remedies: Gatekeepers fall out of Bounds before the General Court
Alba Ribera Martínez
On 17th July, the General Court issued the first ruling of the EU courts relating to how the Digital Markets Act’s legal standards should be interpreted (Bytedance v Commission, T-1077-23). The General Court backed the European Commission’s interpretation of the DMA when performing its designation exercise against ByteDance’s online social networking service TikTok. Although deference towards the European Commission’s enforcement in antitrust sanctioning proceedings is common ground, deference we had (once again!).
The General Court engaged with its analysis of the designation decision stemming from its wide acceptance of the EU legislature’s wishes. In other words, it recognised the DMA’s objectives on their own merits as a map that should guide its overall interpretation of the DMA. By doing so, the General Court reinstated the doctrine of exhaustion of remedies as applicable to the DMA’s procedures and paved the way for the European Commission’s incremental margin of discretion in its application of the regulation.
Embracing the DMA’s objectives: quick pace is everything!
In the first few words of the ruling, the General Court established the EU legislature’s intentions in adopting the DMA. The DMA’s regulatory and institutional backdrop is that of the failures of EU competition law, notably its incapacity to ensure fair economic outcomes and to address the negative effects of the characteristics of the services catered in the digital sector (para 19). In this context, the EU legislature decided to adopt the DMA with two main objectives in mind. First, to contribute to the proper functioning of the internal market. Second, to lay down rules to ensure contestable and fair markets. The General Court even reproduces the content of Recitals 32 and 33 so as to determine what contestability and fairness mean in the regulation’s context (paras 21 and 22).
Within this specific regulatory framework, the DMA is an ex-ante mechanism applying to undertakings designated as gatekeepers. To ensure the regulation’s effective application, the General Court says, the Commission must, within a short time, designate these gatekeepers (para 233). Due to this reason, the regulation introduces, on one side, a set of quantitative presumptions under Article 3(2) DMA to streamline the designation process. On the other side, the regulation channels all exceptions to the designation via its notification procedure. In other words, the undertaking seeking to escape the DMA’s scope of application must submit with the notification of its gatekeeper status all arguments to call into question the quantitative presumption. And not after, i.e., via seeking an appeal before the General Court. Those arguments must abide, in form and substance, by the requirements set out not only in Article 3 DMA but also in Article 2(3) of the Commission’s Implementing Regulation 2023/814.
By doing this, the General Court recognises that time is of the essence for ensuring the DMA’s effective enforcement. In parallel, the General Court draws further into acknowledging that the doctrine of exhaustion of remedies applies in all its splendour as far as DMA-related actions are concerned.
The doctrine of exhaustion of remedies and its impact on the EC’s role as the DMA’s sole enforcer
The doctrine of exhaustion of remedies is well-known to EU law. In previous rulings, the Court of Justice recognised that an obligation to exhaust administrative remedies may constitute a limitation on the right to effective judicial protection, albeit limitations may be justified in particular cases (for example, see Puškár, C-73/16). That does not seem to be a problem for the General Court as far as the DMA’s application goes.
In fact, in its ruling regarding ByteDance’s appeal of its designation decision, the General Court leans in favour of administrative quickness as opposed to factual reality. In its appeal, ByteDance submitted additional arguments to rebut the EC’s application of the quantitative presumption for designation. For instance, it sought to demonstrate its small scale compared with other online platforms so as to disprove its characterisation as an important gateway for business users to reach end users (paras 226-230). The General Court refused to analyse those arguments due to the doctrine of exhaustion of remedies and it implicitly narrowed down its capacity of assessing the EC’s interpretation of the DMA (para. 232).
Although the line of reasoning gains in prominence because it was delivered in the main judgment of the case, the General Court had already hinted at the same idea when considering ByteDance’s submission for interim measures to be applied in the wake of the DMA’s compliance deadline. The Order issued by the President of the General Court on 9 February 2024 declared that the undertaking failed to prove the irreparability of harm caused to it due to the DMA’s imminent application because, among many other reasons, the undertaking had not requested a suspension of the obligations as per the administrative procedures embedded in the regulation (Case T-1077/23 R , para. 57). The President of the General Court even went as far as pointing out that the undertaking should have, at least, actioned the procedure under Article 9(1) DMA by demonstrating that compliance with those obligations would jeopardise, due to exceptional circumstances beyond its control, the economic viability of its operations in the European Union. Given that the undertaking failed to address such a request, then it was at fault and that reason sustained the request’s rejection.
The application of the doctrine can be, therefore, identified in two out of the two main documents the General Court has issued on the DMA’s application. And it is significant for two main reasons. First, by securing and asserting the regulation’s procedural quickness, the General Court’s statements may, in fact, produce the contrary effect. Undertakings-soon-to-be-gatekeepers (or gatekeepers-soon-to-be-undertakings) will have received a clear signal by now. Exercising all available procedural means at the administrative level the DMA provides will open the door for a broader judicial scrutiny on the Courts’ side over the EC’s enforcement. In turn, this will mean a more resource-intensive enforcement opening more venues for litigation, which is precisely the opposite direction the General Court is aiming to achieve. Second, if the undertakings refuse to ‘stall’ enforcement via these means,
then the European Commission’s role as the DMA’s sole enforcer will comprise not only its system of enforcement (vis-à-vis NCAs) but also the broader distribution of powers at the EU level. Once the EC makes a determination of any kind relating to the regulation, any argument that holds any credible weight of discharging that conclusion will be immediately discarded by the General Court if it has not been exhausted prior to the undertaking’s access to the judicial avenue.
Seemingly a good argument in favour of quickness, the doctrine of exhaustion of remedies may result more unpredictable and burdensome than initially planned.
Alba Ribera Martínez is a PhD Candidate at University Carlos III of Madrid and a Lecturer in Competition Law at University Villanueva.
SUGGESTED CITATION: Ribera Martínez, A.; “The Doctrine of Exhaustion of Remedies: Gatekeepers Fall Out of Bounds Before the General Court”, EU Law Live, 05/09/2024, https://eulawlive.com/op-ed-the-doctrine-of-exhaustion-of-remedies-gatekeepers-fall-out-of-bounds-before-the-general-court/
The EU has its first Member in the UN Committee on the Rights of Persons with Disabilities: there is always a first Time…
Delia Ferri
On 13 June 2024, the European Union (EU) got its own representative in a UN human rights treaty body. Ms Inmaculada Placentia Porrero, senior expert on disability issues at the European Commission and a key figure in the advancement of EU accessibility legislation, was elected as member of the Committee on the Rights of Persons with Disabilities (CRPD Committee), the body set up by the UN Convention on the Rights of Persons with Disabilities (CRPD). The proposal of an EU candidate for the CRPD Committee had been put forward by the European Commission in line with the Code of Conduct between the Council, the Member States and the Commission setting out the internal arrangements for the implementation by and representation of the EU relating to the CRPD (para. 10), and agreed upon by consensus by the Member States within the competent Council Working Group, the Working Party on Human Rights (COHOM) on 29 November 2023.
Ms Porrero’s election was welcomed by Joseph Borrell, High Representative of the Union for Foreign Affairs and Security Policy (until the new Commission is formally appointed), and by several organisations of persons with disabilities (OPD), including the main European OPD – the European Disability Forum (EDF). It marks a novel milestone in making the EU a leader in the protection of disability rights. However, this election also represents an ‘ important precedent ’ and can be viewed as the latest recognition of the EU as important international actor.
The CRPD in the EU
The CRPD is the first human rights treaty that the EU has concluded, long before the mandatory yet still ongoing accession to the European Convention on Human Rights (ECHR). As discussed by De Burca, the EU was a key negotiator and supported the adoption of the CRPD by the UN General Assembly in 2006. Further, the EU ratified it (alongside its Member States) in a timely fashion. While being a mixed agreement and encompassing areas that are within the remit of the Member States as well as fields of EU competence, the CRPD has prompted the EU to act decisively and quite extensively on disability matters both internally and externally, using an array of hard law and soft law tools. Furthermore, the Court of Justice, recalling, since HK Danmark and most recently in AP Assistenzprofis, that the CRPD forms integral part of EU law and situates below the Treaties and above EU legislation, has interpreted the Employment Equality Directive in light and in compliance with the Convention. With hindsight, since the conclusion of the CRPD there has been a significant development of the disability dimension of EU law, admittedly across a range of competence fields, that go far beyond the traditionally constrained social sphere and the longstanding non-discrimination action.
The CRPD has set up a treaty body –the CRPD Committee– which is entrusted with providing authoritative guidance on the Convention through General Comments, and with monitoring the implementation of the CRPD through the reporting procedure established under Article 34 et seq. The CRPD is complemented by an Optional Protocol (OP) which empowers the CRPD Committee to adopt views on individual communications, and conducts inquiries on systematic breaches of the Convention (inquiry procedure). Notably, however, the EU (as some of its Member States) has not yet ratified the OP. As recalled in the Strategy for the Rights of Persons with Disabilities 2021-2030, a proposal for a Council Decision for EU accession to the Optional Protocol of the CRPD has been pending since 2008.
The CRPD Committee is composed of 18 members ‘of high moral standing and recognised competence and experience’, who serve in their individual capacity and do not represent States Parties. They are elected from a list of people that are nominated by the States Parties at the Conference of States Parties (COSP), taking into due consideration geographical distribution, gender and legal systems representation, as well as involvement of experts with disabilities. The CRPD Committee members are elected for a four-year term, with the possibility of being re-elected once. It has been noted that the election is not without issues, with Tekuchova suggesting that ‘candidates to the Committee often have to face a rocky electoral path, which turns to be difficult for many’. To have a real chance to be elected, candidates must leverage on geopolitical alliances and support that goes beyond that of their own States. In this case, it is clear that Ms Porrero had the full force of the EU and its 27 Member States behind her, but the EU also leveraged on its role of promoter of disability rights in an array of neighbour countries and as one of the largest donors of humanitarian and development aid across the globe. Although, Ms Porrero’s experience is longstanding and well recognised, this election goes beyond her personal standing and tireless commitment towards disability rights, it can be seen as an affirmation of the EU as a whole within the international arena.
Pushing Disability Rights Forward
The election of Ms Porrero is crucial in that it will eventually allow the ‘European’ view of disability rights to shape the interpretation and implementation of the CRPD, but also to prioritize some EU concerns. Although the General Comment on accessibility was released back in 2014, the election of Ms Porrero may provide new impetus and key input on the interpretation of other accessibility obligations in the CRPD, such as Article 21 CRPD or general obligations related to accessibility, universal design and assistive technology. This was one of the areas that she in fact mentioned in advance of her election, by committing herself to ‘contribute to advancing the dialogues with State Parties in the area of accessibility and new technologies where solutions should be of a global nature, particularly in the area of ICT’ among other areas.
Ms Porrero’s noteworthy expertise on issues such as accessibility and standards, might be crucial in providing constructive feedback to States Parties within the reporting procedure. It may prove significant in further pushing EU Member States themselves towards a better compliance with EU accessibility norms, somewhat reinforcing EU infringement processes. It is breaking news that, on 25 July 2024, the Commission referred Bulgaria to the
Court of Justice of the European Union for failing to incorporate into its national law the European Accessibility Act (EAA). It is to be expected that lack of compliance with the EAA will also be engaged with by the CRPD Committee in their list of issues prior to reporting in relation to the combined second and third reports of Bulgaria (even though those are likely to be substantially delayed, and will not be adopted by the Committee in April 2025 as planned). The election of an EU representative in the CRPD Committee might also make the Concluding Observations (COs) of the CRPD Committee sharper and more privy of the legal complexities surrounding the implementation of the CRPD within the EU. It may also make the EU even keener to follow and address the CRPD Committee’s recommendations, although it would be fair to say that so far EU institutions have been relatively responsive to the Committee’s input, as the 2020 study commissioned by the European Parliament evidences.
It is quite uncertain, however, as to whether this election will actually push forward the ratification of the OP. As mentioned above, not all the Member States have ratified it, with, for example, Ireland lagging behind on this issue in spite of recent attempts to move forward on the ratification with the establishment of a dedicated inter-departmental group within the government. Further, the complex political landscape emerged after the last European election may make the ratification of the OP a tricky issue, beyond the blurred legal contours of EU competences and constitutional complexities.
Reaffirming the Role of the EU as Global Actor
The question of whether this election will further increase the EU openness towards international law, and will, for example, nudge the CJEU to cite and refer to CRPD jurisprudence is more difficult to answer. However, Ms Porrero’s election holds a symbolic and practical significance. It represents a landmark in an already substantial treaty practice, developed over the years, and has the potential to further boost the EU contribution to the development of international law. It is also a precedent that paves the way for the EU to move become an active participant in other treaty bodies or international para-judicial mechanism. This election might also be considered an evidence that the EU possesses what Odermatt terms a ‘degree of legal statehood’ on the international scene. It places the EU at the forefront of the global scene and reinforces the role of the EU as key player within the UN.
Delia Ferri is Professor of Law at Maynooth University School of Law and Criminology, Ireland – delia.ferri@mu.ie.
SUGGESTED CITATION: Ferri, D.; “The EU has its first Member in the UN Committee on the Rights of Persons with Disabilities: There is always a first Time…”, EU Law Live, 02/09/2024, https://eulawlive.com/op-ed-the-eu-has-its-first-member-in-the-un-committee-on-the-rights-of-personswith-disabilities-there-is-always-a-first-time/
SYMPOSIUM
SYMPOSIUM ON THE 2024 REFORM OF THE STATUTE OF THE COURT OF JUSTICE OF THE EU
Return of the Réexamen
Sara Iglesias
One of the major challenges of the 2024 Reform of the Statute of the Court is the potential impact that the disaggregation of the interpretative function of the preliminary ruling procedure may have on the unity of EU law. Amongst the safeguards foreseen by Regulation 2024/2019 bringing about the reform (see, generally, the previous Op-Eds in this Symposium by Takis Tridimas and Dominik Düsterhaus), the review procedure stands out as the ultimate clef de voûte. It furnishes an ex post curative avenue to reinstate coherence and remedy instances where the disharmony between the EU Courts may pose a serious risk to the unity and consistency of EU law, harming not only the credibility of the preliminary ruling procedure, but also that of the judicial guarantee of EU law as designed in the Treaties. In this regard, however, the reform is no reform at all: far from establishing a new mechanism, the reform regulation resorts to a procedural avenue designed and regulated ever since the Treaty of Nice.
The review procedure is a sui generis procedure, with quite unique features. Established in Article 246(2) and (3) TFEU, it exceptionally allows the Court of Justice to review the rulings of the General Court which are, in principle, final. Indeed, the review procedure was created by the Treaty of Nice as a corrective mechanism of ultima ratio for the situations in which the General Court was called to rule as a Supreme Court. This was the case when the General Court was acting as an appellate court to the Civil Service Tribunal and will now, for the first time, be the case when the General Court gives a ruling under the preliminary ruling procedure.
The peculiarities of the ‘review procedure’, commonly referred to in the EU jargon by its French denomination –réexamen –, are rooted in the ambitious designs of the Court of Justice. Indeed, the Treaty itself says little about this procedure, beyond emphasising its exceptional character. Paragraphs 2 and 3 of Article 256 TFEU foresee, for the two types of the review procedure, that the decisions of the General Court, both under its (deceased) appellate jurisdiction and its (new) preliminary ruling jurisdiction, ‘may exceptionally be subject to review by the Court of Justice … where there is a serious risk of the unity or consistency of Union law being affected’. These are the rather minimal criteria defined by the Treaty, upon which the Statute has built a new procedure with rather unusual features.
One may say that it is the Statute (and not so much the Treaty) that has granted the réexamen its unique character. The Statute defines not only the stages of the procedure, but also its actors and the effects of the review rulings. The trigger of the procedure is placed in institutional hands, as only the First Advocate General can ‘propose’ that the Court review a General Court decision within one month after its delivery (Article 62). The Statute also foreshadows the réexamen as an urgent procedure, preserving at the same time the possibility of the interested parties mentioned in its Article 23 to lodge statements or written observations (Article 62a). When it comes to
preliminary ruling decisions handed down by the General Court, without overtly speaking about ‘suspension’, the Statute provides that the answers given by the General Court only take effect after the deadlines to trigger the review procedure have expired. Where a review procedure is opened, the ‘answers subject to review’ will take effect only at the end of such procedure, being eventually substituted by the answers given by the Court of Justice in case the proposal for a réexamen is upheld (Article 62b).
All these features make of the réexamen a procedure fraught with tensions, due to the multiple (and often contradictory) interests which it aims to address. Although it is not a remedy controlled by the parties, the parties do participate in the proceedings. Its ultimate objective is to ensure the unity and consistency of the EU legal order – aligning it with a procedure in the interest of the law. And yet, it does not however renounce to bringing the effects of the reviewed ruling onto the parties. Despite the high stakes and the inherent complexity of the cases that typically involve issues of principle, the procedure is designed to function with urgency at every stage.
These factors, already present in the text of the Statute, have not been modified by the 2024 Reform. Similarly, the regulation of the review procedure in the Rules of Procedure of the Court of Justice (Articles 191 to 195 thereof) has remained almost unchanged. A technical improvement has been introduced into a new Article 193a by the draft amendments to the Rules of Procedure, whereby it is foreseen that the Registrar will inform the General Court, the parties and the referring court that no proposal to review has been made by the First Advocate General, in order to communicate in a transparent way that the General Court’s decision has become final.
However, in spite of this apparent situation of continuity, the use of the réexamen procedure in the preliminary ruling ‘world’ introduces significant novelties and challenges. Before exploring these, it is necessary to consider the history of the réexamen, since the previous practice may contain the key to interpreting crucial aspects of this unique procedure.
During what we may call the ‘old school’ réexamen, there were sixteen instances in which the First Advocate General proposed to use the review procedure, out of which the Court reviewed six General Court decisions (M./EMEA, C-197/09 RX II; Arango Jaramillo, C-334/12/RX-II; Commission/Strack, C-579/12 RX-II; Missir Mamachi di Luisgnano/Commission, C-417/14 RX-II; Simpson and HG, C-542/18 RX-II and C-543/18 RX-II).
In one case, the First Advocate General proposed the review, without however considering that the decision of the General Court posed a serious risk for the unity or consistency of EU law, the reason for which the Court ruled that the formal requirements for triggering the réexamen had not been met (FV v Council, C-141/18 RX).
At first glance, the number (6 out of 16) suggest a high probability of having a case reviewed. However, this is not the case when considering the broader context: the pool of potentially reviewable cases was much larger. The General Court (previously known as the Court of First Instance) acted as appellate jurisdiction in over 300 civil service cases.
The views of the Advocates General and the rulings of the Court on the ‘successful’ reviews provide some guidance as to the situations in which a réexamen may be granted. For example, Advocate General Wathelet (view in Missir
Mamachi di Luisgnano/Commission, C-417/14 RX-II, point 54) listed the four assessment criteria which could be drawn from the previous case-law as relevant to the determination of whether the unity or consistency of EU law was affected:
‘– the judgment of the General Court may constitute a precedent for future cases;
– the General Court has departed from the established case-law of the Court of Justice;
– the errors of the General Court relate to a concept that does not pertain solely to the law relating to the employment of European Union officials but is applicable regardless of the matter at issue; and
– the rules or principles with which the General Court failed to comply occupy an important position in the European Union legal order’.
Interestingly, these criteria appear to have inspired the 2024 reform of the Statute, not so much by featuring in the rules governing the review procedure – which remain unchanged – but by becoming embedded into the design of the mechanism which allows the ‘specific areas’ to be identified and the specific cases to be transferred. Indeed, the existence of previous case-law, as well as the absence of questions of principle warranting the Grand Chamber’s involvement were decisive factors in identifying the ‘specific areas’. The criteria for ‘retained jurisdiction’ outlined in Article 50b of the Statute for ‘independent questions relating to the interpretation of primary law, public international law, general principles of Union law or the Charter…’ may be traced back to the idea of the ‘important position’ that a rule occupies in EU law. The ‘encapsulation requirement’ also seems to be inspired by the will to cover situations where the issues underlying the need for a review pertain to broader areas going beyond the ‘specific area’ of transferred jurisdiction concerned.
From this perspective, the réexamen procedure enhances the safeguards against inconsistencies, as its new scope of application has been already carefully delineated to minimise risks to the consistency and unity of EU law. This legal framework, far from being overcautious, is justified by the significantly different contexts in which the réexamen is called on in its ‘new age’.
First, applying the réexamen in the context of the transfer of jurisdiction in preliminary rulings considerably broadens its scope beyond the relatively contained area of EU staff cases. The review procedure will now be much more exposed and impactful, as the potential ‘clients’ of the réexamen now not only include EU civil servants, but also hundreds of national courts and litigants – potentially thousands of citizens since the preliminary ruling judgments settle the interpretation of EU rules beyond the specific case at issue. This a new reality puts under the spotlight the future role of parties in review procedures, considering that this reform might just be the beginning of a more general transfer of preliminary ruling jurisdiction towards the General Court.
Second, the review procedure has suffered from aggravated opaqueness in the past. Most of the Court’s decisions finding that the review could not proceed were limited in terms of their motivation and were not translated into all the official languages (with some exceptions, such as the decision in C-17/11 RX, Petrilli/Commission).
The general effects of preliminary ruling decisions again speaks to a greater transparency and motivation of the decisions whereby the Court decides not to review a case: in cases where the First Advocate General proposes a review, which is then not been granted by the Court of Justice, sufficient motivation is needed in order not undermine the authority the preliminary ruling decisions of the General Court – since gaining trust from national courts is one of the crucial issues for the success of the reform (see the Op-Ed by Corinna Wissels & Tom Boekestein).
Third, the expanded scope and diversity of cases to which this procedure will be applied necessitates a deeper reflection on the relationship between the two EU courts. It is precisely in this context where the Court has explicitly acknowledged the risk of establishing incorrect precedents as a key factor for triggering the review of decisions of the General Court, reinforcing the idea of vertical precedent. However, simultaneously, the transfer of jurisdiction in preliminary ruling procedures across various areas places material responsibility on the General Court, positioning it as the ultimate arbiter and interpreter of EU law in the specific domains concerned. This ‘new age’ of the réexamen provides an opportunity to reassess the jurisdictional interaction and hierarchy between both courts and the near-precedential value of Court of Justice rulings (as well as the precedential value of the General Court rulings in the ‘specific areas’).
Fourth, the practice of the réexamen will unfold in conjunction with the other ex-ante guarantees: the obligation of the General Court to remit the cases fall outside its jurisdiction (Article 54 of the Statute) and the possibility to refer cases back to the Court of Justice if it considers that the case requires a decision of principle likely to affect the unity or consistency of Union law (Article 256(3)TFEU). The more or less prolific use of the réexamen by the First AG and its success rate before the Court of Justice will gauge not only of the effectiveness of these safeguards but also of the overall framework for identifying specific areas, as well as of the ‘guichet unique’ system for allocating jurisdiction.
All in all, the exceptional character of this procedure and the case law of the Court applying the ‘old school réexamen’ make clear that this procedure is not bound to catch all the interpretative divergences that may emerge, but only those which raise crucial issues of principle. As already noted, the 2024 Reform of the Statute operates under the premiss that interpretative responsibility for the specific areas has shifted to the General Court and that, in this context, a certain level of dissonance may occur. The Court itself has confirmed that the existence of divergence in the case law, as well as the fact that the Court has not yet ruled on a specific issue, do not justify a review, since the case law in matters of civil service law was then solely for the Civil Service Tribunal and the General Court to develop (C-17/11 RX, Petrilli/Commission, para. 4). Will this position be maintained in the ‘new age’ of the réexamen with regard to all the transferred ‘specific areas’? The heightened significance of applying the review procedure in the realm of preliminary rulings speaks to a careful consideration of the role of the réexamen and the interpretation of the criterion of the ‘serious risk of the unity or consistency of Union law’. This need is intensified by the evolving case law concerning the parallel – yet different – standard of addressing an ‘issue that is significant with respect to the unity, consistency or development of Union law’ in the framework of the filtering of appeals (see the Op-Ed by Kieran Bradley) – where a seemingly lower standard has been interpreted
very restrictively. The criteria for the réexamen that follow from the previous case law, when applied in light of the peculiarities of the preliminary ruling procedure, may result in practice in a higher rate of reviewability. Even if the réexamen will remain exceptional, the precedential value that the preliminary ruling procedure enjoys by its very nature may more easily reach the threshold of seriousness considering that, as a general rule, ‘the judgment of the General Court may constitute a precedent for future cases’. ‘Old school’ wisdom will rest in place but adapted to the circumstances of the ‘new age’ – interpretative divergence may simply amount more often to a serious risk for the unity or consistency of Union law.
Sara Iglesias is Professor of EU Law at the Universidad Complutense of Madrid and In-Depth/Weekend Edition editor at EU Law Live.
SUGGESTED CITATION: Iglesias, S.; “Return of the Réexamen”, EU Law Live, 04/09/2024, https://eulawlive.com/op-ed-return-of-the-reexamen/
SYMPOSIUM
COMPETITION CORNER:
ARTICLE 22 EUMR: THE IMPACT OF THE ILLUMINA/GRAIL JUDGEMENT
Illumina/Grail: Facilitating acquisitions strategies for the future? (C 611/22 P & C 625/22 P)
Nathalie Nielson and Chloé Djamdji
Illumina/Grail: Facilitating acquisitions strategies for the future? (C 611/22 P & C 625/22 P)
In 2022, the General Court had upheld the Commission’s interpretation that Article 22 of Regulation 139/2004 (Regulation 139/2004) allowed the referral of a concentration below European and national thresholds if it threatened to significantly affect competition, subject to four cumulative conditions, in a decision that has caused much controversy (Illumina (Case T-227/21, para. 89)). To the question of whether a concentration below thresholds can be controlled ex ante using the referral mechanism provided by the aforementioned article, the Court of Justice this week finally replied in the negative in a critical judgment on 3rd September 2024 (Illumina/Grail (Cases C-611/22 P and C-625/22 P)), following Advocate General Emiliou’s Opinion (see here). It thus ‘sets aside the judgment of the General Court of the European Union of 13th July 2022 and annuls the Commission’s decisions from 19th April 2021, accepting national authorities’ requests to examine Illumina’s acquisition of Grail despite their respective turnovers not exceeding any thresholds.
The ECJ’s reasoning
According to the European Court of Justice, the broad interpretation that had been adopted of the referral mechanism ‘undermines the effectiveness, predictability and legal certainty that must be guaranteed to the parties to a concentration’ (Illumina/Grail (Cases C-611/22 P and C-625/22 P, para 206)). In a strict and ‘to the letter’ reading of Article 22 and the Regulation’s goals, the Court recalled that the mentioned Article had initially been drafted for Member States which did not have a merger control legal system (hence the name ‘Dutch clause’; E.g. para 147 -179) and that the historical (E.g. para 148 - 150), contextual (E.g. para 185) and teleological development of the Article did not allow it to be asserted that it ‘constituted a ‘corrective mechanism’’ (E.g. para 201). Accordingly, the purpose of Article 22 is either to allow control of a transaction in a Member State that does not have a merger control legal system, or to ‘extend the ‘one-stop shop’ principle so as to enable the Commission to examine a concentration that is notified or notifiable in several Member States, in order to avoid multiple notifications at national level’ (E.g. para 182; 199). Indeed, the Regulation was not intended to cover ‘any’ mergers - as in the entirety of mergers happening - but only those that are likely to affect competition because they exceed the thresholds, which was not the case here (E.g. para 194-195). The Court of Justice therefore reiterated that the merger control regime is based on a system of quantitative thresholds and that the Commission is therefore not empowered to ‘accept a request under Article 22 of that regulation in a situation where Member States making that request are not entitled, under their national merger control rules, to examine the concentration which is the subject of that request’ (E.g. para 222).
Analysis
• A potential problematic interpretation
From a strictly legal point of view, the reasoning is quite coherent and rational. However, since the Regulation’s adoption, almost all Member States have implemented a national merger system, one of the only Member States not to have done so yet being Luxembourg, which is currently introducing one (See here). It is therefore questionable whether there is any point in maintaining Article 22 of Regulation 139/2004 as it stands following such an interpretation.
Moreover, pragmatically, this decision will pose various difficulties and may prove controversial insofar as the Court of Justice ignores the reality of practices such as killer acquisitions and reverse killer acquisitions (Cunningham & al, 2021), presumed of causing a major impact on market efficiency by impoverishing innovation and the development of start-ups.
Additionally, this decision has an impact on national competition’s authorities’ credibility, as they become unable to implement appropriate measures. This is what the French Competition Authority (“FCA”) emphasises in particular, stressing that ‘while taking care to preserve the legal certainty of businesses, it will also consider the advisability of strengthening the merger control instruments at its disposal on the basis of national law in order to apprehend potentially problematic mergers that do not cross the notification thresholds in force in France’ (Press release, 3rd September 2024). Faced with the tipping point of hyperscalers, traditional sanctions are becoming less effective and for this reason, reinforcement of ex ante control would tend to alleviate this problem. However, this interpretation of Article 22 opens the way for companies to challenge merger rules as it offers the opportunity for companies to adapt and give rise to new strategies, as they can take advantage of legal loopholes. In other words, companies could simply carry out their mergers and acquisitions in the Member States where the merger threshold rules are more favourable to them.
As a result, the implementation of killer acquisitions or reverse killer acquisitions targeting start-ups specialising in the new technologies sector such as AI remains possible in these States. Furthermore, companies may make disguised acquisitions through investments. In this regard, the investment may be examined as part of a merger operation, as it was the case, for instance in an FCA decision (dec. 22-DDC-35 of 27th April 2022) in which it was ‘ruled for the first time that a non-controlling minority stake acquiring a non-controlling minority stake at the same time as acquiring sole control was likely to harm competition’ (dec. 22-DDC-35 of 27th April 2022, para 303). However, a strict interpretation of an ex-ante control of concentrations might make it difficult to embrace these practices and specially in innovative markets. For instance, in the field of AI, ‘investments make it possible to diversify or to have access to innovative technologies likely to improve the quality of its services. Nevertheless, they present competitive risks that call for vigilance on the part of the competition authorities. Minority shareholdings, which generally do not confer control, are rarely examined ex ante as part of merger control. They can, however, be examined ex post from the point of view of anti-competitive practices’ (FCA opinion 24-A-05 of 28th June 2024). These disguised acquisitions are used by certain structuring platforms such
as Microsoft through its major investments in Open AI. What’s more, these investments are often supplemented by the canvassing and/or poaching of data scientists, which is causing concern among the authorities (E.g. FTC in the generative AI sector).
• Exploring complementary tools
However, a closer reading of the judgment shows that the Court considers these concerns, which may explain the rigidity of the solution. Firstly, paragraph 214 refers to article 102 TFEU ex post sanction of abuse of dominance (Towercast (Case C-449/21), stating that ‘Regulation No 139/2004 cannot preclude a concentration operation with a non-European dimension, such as the concentration at issue, from being subject to a control by the national competition authorities and by the national courts, on the basis of the direct effect of Article 102 TFEU’. Nevertheless, even if this ex-post sanction can be subsidiary, it is best to prevent market harm if possible.
The DoJ and FTC (2023 Merger Guidelines) thus recommend considering situations in which ‘mergers can violate the law when they entrench or extend a dominant position’. An amendment of Article 22 along these lines could be considered by adding a paragraph setting out exceptional control below the merger thresholds, detailing precisely the conditions of applicability even if the Court of Justice strongly dismissed this possibility for now, one of the motivations being that the regulation ‘provides for a simplified procedure with a view to reviewing the thresholds’ (Illumina/Grail ((Cases C-611/22 P and C-625/22 P, paras 183-184)). This eventuality however raises the question of whether a general lowering of the European thresholds would not end up increasing the companies’ burden more than an exceptional referral mechanism. Rather than carrying out an exceptional review based on strict cumulative conditions, the review would be extended to a set of non-problematic transactions.
To prevent this, one could think of regulation targeting specific firms, such as Article 14 of the DMA (Regulation (EU) 2022/1925). Gatekeepers of essential platform services are obliged to notify any merger to the Commission, thereby remedying the shortcomings of control of concentration in digital markets. However, the issue of killer acquisitions has emerged in the pharmaceutical industry, as illustrated by the judgment, Illumina and Grail operating in this sector and thus not entering the scope of the DMA.
Conclusion
This strict, to the word, reading is faithful to ex ante control based on thresholds mechanisms, but it does not sufficiently take into account the economic reality of markets. Some companies use acquisitions to seize technologies and innovation that could either strengthen their dominant position or enable them to expand into related markets. These leveraging practices have a major impact on markets but are still not entirely understood. The richness of competition law lies in its adaptability and flexibility, and although this judgement strongly recalls the legal basis of control of concentration, it does not offer any real solution to fill the gaps that have emerged in the past few years, going back to square one for now. As the lowering of the European thresholds does not seem to be the best option – as previously mentioned – the amendment of Article 22 by directly including the
conditions under which a referral could be made regarding a problematic acquisition could be desirable to tackle these practices once and for all and operate an ex ante control on these acquisition strategies.
Chloé Djamdji, PhD in Competition Law, Université Côte d’Azur – GREDEG.
Nathalie Nielson, PhD in Competition Law, A.T.E.R., Université Côte d’Azur – GREDEG.
SUGGESTED CITATION: Djamdji, C. and Nielson, N. ; “Illumina/Grail: Facilitating acquisitions strategies for the future? (C 611/22 P & C 625/22 P)”, EU Law Live, 06/09/2024, https://eulawlive.com/competition-corner/illumina-grail-facilitating-acquisitions-strategies-for-the-future-c-611-22-p-c625-22-p-by-nathalie-nielson-and-chloe-djamdji/
Illumina/Grail: Killer Acquisition Detection Tool fails Trial
Sebastian Reiter
In essence
In its Grand Chamber Judgment, Illumina/Grail (C-611/22 P and C-625/22 P) of 3 September 2024 the Court of Justice reversed the General Court’s decision (Illumina v Commission (T-227/21)): Article 22 Merger Regulation 139/2004 (‘EUMR’) is not a ‘corrective mechanism’ to allow for the review of concentrations below EU and national merger control thresholds. Previously, the General Court had confirmed the European Commission’s competence to review mergers based on requests by national competition authorities (‘NCAs’) under Article 22 EUMR; notably, even if these authorities did not have competence based on national law.
Going forward, NCAs of EU Member States can only submit a request to review a concentration to the European Commission if they have jurisdiction to review a merger under their national regimes. In addition, NCAs, whose jurisdictions do not provide for merger control rules, can also submit a request (for now: the Luxembourgian NCA, although merger control might be introduced in Luxembourg soon).
A recap of the facts
The factual background to the decision is well-known in the competition community: After a complainant voiced concerns about Illumina Inc.’s (‘Illumina’) intended acquisition of sole control over Grail LLC (‘Grail’), a developer of blood tests for the early detection of cancer, the European Commission had invited NCAs to submit requests that the Commission examine the concentration pursuant to Article 22 (1) EUMR. The French Autorité de la concurrence submitted such a request in which the Belgian, Greek, Icelandic, Dutch and Norwegian NCAs joined. The Commission accepted the request, blocked the concentration on the grounds that Grail’s integration into Illumina would have incentivised and enabled Illumina to foreclose Grail’s rivals, imposed fines of € 432 million on Illumina and a symbolic € 1,000 fine on Grail for intentionally breaching the standstill obligation and asserted its new-found powers through a Guidance on the application of Article 22 EUMR
European Commission response
On the same day, that the Court of Justice rejected the Commission’s approach, Executive Vice-President Vestager published a statement announcing that the Commission will continue to accept referrals from NCAs, including cases which transactions that do meet national thresholds, but can be called in by national authorities under their merger control regimes regardless. The Commission’s approach to the Illumina/Grail merger and its Guidance on Article 22 EUMR were motivated by a perceived need to review acquisitions of companies with limited turnover that may nonetheless play a significant role, including start-ups with significant potential (killer-acquisitions).
Such companies should be protected against the risk of elimination. The Commission will now look toward finding a way to review mergers in cases that do not meet the EU notification threshold, but nonetheless would have an impact in Europe, noting that the regulatory landscape in the EU today is more extensive than at the time of the Illumina/Grail referral.
A few general observations help situate the most-pressing question: what’s next?
First, Italy now authorises its NCA to call-in below-threshold mergers, in particular, if there are real risks for competition in the Italian market, taking into account detrimental effects on innovative start-ups. Ireland, more generally, provides for a call-in option, while Denmark allows for the call-in of low-turnover mergers. In an immediate reaction to VP Vestager’s statement, the heads of the Austrian and German NCAs affirmed that they would continue submitting referrals under Art 22 EUMR if the national thresholds, including the turnoverindependent transaction value based thresholds, are met. The Court of Justice (Illumina/Grail (C-611/22 P and C-625/22 P, para 217)), pointed Member States to the possibility to lower their turnover-based thresholds, should they observe a need to review mergers involving ‘innovative undertakings which play or are capable of playing an important competitive role despite the fact that they generate little or not turnover’.
Second, the wisdom of an ex-ante screening of below-threshold mergers for killer-acquisitions is not self-evident. Insofar as killer-acquisitions justify competition concerns, it is not clear why ex-ante merger control should be preferred to ex-post abuse of dominance enforcement. Absent explicit internal documents, distinguishing real killer acquisitions from pro-competitive mergers faces a significant evidentiary burden. Curiously, Illumina / Grail was not a killer acquisition. The Commission’s theory of harm was the threat that Illumina might have incentives and the capacity to foreclose Grail’s competitors from accessing Illumina’s next generation sequencing systems for the development of NGS-based cancer detection tests.
Third, killer acquisitions are rare (cf. Ivaldi, et al). There is a trade-off between the risks imposed on all businesses by reducing legal certainty through an extension of merger control to below-threshold transactions and the dynamic efficiencies associated with the prevention of killer acquisitions. Notably, the Court of Justices emphasised in Illumina/Grail, para 208 et seq that ‘the thresholds set for determining whether or not a transaction must be notified are of cardinal importance’.
Fourth, gatekeepers must notify the Commission of intended mergers if the merging parties or the target provide core platform services, any other services in the digital sector or enable the collection of data irrespective of any notification requirement under merger control rules (Article 14 DMA).
Towercast to the rescue?
Against this backdrop, parties to below-threshold transactions will continue having to navigate significant merger control risks.
Citing its Towercast (C-449/21) judgment, the Court of Justice emphasised in Illumina/Grail, para 214 that the EUMR ‘does not preclude the competition authority of a Member State from regarding a concentration of undertakings which has no European dimension […] and which is below the thresholds for mandatory ex ante control laid down in national law, as constituting, for example, an abuse of a dominant position prohibited under Article 102 TFEU.’ The Court of Justice does not mention its additional reasoning in Towercast (C-449/21), para 53, that the review under Article 102 TFEU may take place for below-threshold mergers that ‘ha[ve] not been referred to the Commission under Article 22’. Through this omission, the Court of Justice at the same time affirmed Towercast, while updating it to the ruling in Illumina/Grail. Since below-threshold mergers (without other grounds for jurisdiction) can no longer be referred pursuant to Article 22 EU Merger Regulation, the application of Article 102 TFEU can no longer turn on whether an NCA had referred such a case to the Commission or not. NCAs continue to have authority to review non-notifiable mergers with a non-European dimension under Article 102 TFEU.
What about mergers that are non-notifiable because they fall below all thresholds, but that have an EU-wide dimension?
While the Commission is searching for ways to review non-notifiable mergers, the public consultation on its Draft Guidelines on the application of Article 102 of the Treaty on the Functioning of the European Union to abusive exclusionary conduct by dominant undertakings (‘Draft Guidelines on Article 102 TFEU’) is ongoing. At this time, the Draft Guidelines on Article 102 TFEU, paras 10 and 12 quote Towercast (C-449/21) solely to state that the types of abuses mentioned in Article 102 TFEU is exemplary only and that the Guidelines are without prejudice to the application of other provision of EU law to the same facts.
The reasoning of Austria-Asphalt (C-248/16, para 32) speaks against extending the Commission’s powers to review non-notifiable mergers via Article 102 TFEU based on the Towercast-judgment: ‘As follows from Article 21(1) of Regulation No 139/2004 [EU Merger Regulation], that regulation alone is to apply to concentrations as defined in Article 3 of the regulation, to which Regulation No 1/2003 is not, in principle, applicable.’ The qualifier ‘in principle’, could, theoretically, open up space for the Commission to apply Article 102 TFEU to non-notifiable mergers more generally. But the Court of Justice’s reasoning in Illumina/Grail (C-611/22 P and C-625/22 P, paras 211 et seq.) points in another direction: Referencing Austria Asphalt, (C-248/16, para 31), the Court of Justice reasoned that the ‘need to permit effective control of all concentrations with significant effects on the structure of competition in the European Union’ cannot justify extending the scope of the EU Merger Regulation, that the EU Merger Regulation provides ‘for prior control, based on a system of mandatory notification’ and that it is ‘part of a legislative whole intended to implement Articles 101 and 102 TFEU and to establish a system of control ensuring that competition is not distorted’. If the EU Merger Regulation and Articles 101 and 102 TFEU form a legislative whole and the EU Merger Regulation alone is to apply to mergers, an extension of Towercast to authorise the Commission to review mergers based on Article 102 TFEU is doctrinally difficult.
Does that preclude the Commission from reviewing (true) killer acquisitions? The reasoning from Austria Asphalt that the Court of Justice relied on in Illumina/Grail relates to the review of mergers but does not relate to the
review of the conduct of a dominant undertaking. However, the theory of harm behind killer acquisitions is not that a (perhaps dominant) company acquires a challenger. It’s that a dominant undertaking acquires a challenger and abandons the challenger’s innovation, i.e., the conduct after the acquisition constitutes the (potential) abuse. While Illumina/Grail likely limits the Commission’s powers to review mergers ex ante based on Towercast, it does not prevent the Commission from building a cased based on a killer acquisition theory of harm under Article 102 TFEU ex post.
Considering the altered regulatory landscape that allows Italy, Ireland and potentially Denmark to call-in mergers, parties will do well to strategically structure their regulatory filings within the EU.
Sebastian Reiter is an attorney based in Vienna and a Lecturer of Private Law Theory at the University of Vienna. Most recently, Sebastian published (in German) on the interplay of the EU Data Act and the Horizontal Guidelines on access to non-personal data (ÖBl 2023/74) and the extension of Austria’s antitrust sustainability exemption to its merger control regime (ÖBl 2022/32).
SUGGESTED CITATION: Reiter, S.; “Illumina/Grail: Killer acquisition detection tool fails trial”, EU Law Live, 06/09/2024, https://eulawlive.com/ competition-corner/illumina-grail-killer-acquisition-detection-tool-fails-trial-by-sebastian-reiter/
SYMPOSIUM
COMPETITION CORNER: SELECTIVITY IN STATE AID
Selective Advantage in Tax Rulings: all the Chapters bring the Saga to one End
Nieves Bayón Fernández
The year 2019 marked the beginning of the development of an important line of case law in the application of State aid rules to national tax rulings, as the General Court delivered its judgments in Belgian Excess Profits (Cases T-131/16 and T-263/16), Fiat (Cases T-755/15 and T-759/15), Starbucks (Cases T-760/15 and T-636/16), Apple (Cases T-778/16 and T-892/16), Amazon (Cases T-816/17 and T-318/18) and Engie (Cases T-516/18 and T-525/18). These judgments clarified important aspects concerning the application of State aid rules in the field of direct taxation and, more specifically, on Member States’ discretion to grant tax rulings.
However, uncertainty still remained as to the approach that the European Court of Justice would take when ruling on appeal. Starting in 2021, with its judgment in Belgian Excess Profits (Case C-337/19 P), and pending its ruling in Apple (Case C-465/20 P), the European Court of Justice has now brought together the different chapters of the tax rulings saga first in Fiat ( Joined Cases C-885/19 P and C-898/19 P) and then in its latest judgments in Engie ( Joined Cases C-451/21 P and C-454/21 P) and Amazon (Case C-457/21 P). Developing a so far consistent line of case law, the European Court of Justice has made it clear that, although Member States must refrain from adopting tax measures liable to constitute State aid that is incompatible with the internal market, the European Commission’s discretion in its State aid analysis of national tax ruling measures is rather limited: to safeguard Member States’ national fiscal autonomy in matters involving direct taxation that have not yet been harmonised, the Commission shall base its State aid analysis exclusively on national law tax rules.
Of the conditions required by Article 107(1) TFEU for there to be State aid, establishing the existence of a selective advantage has proven to be the most controversial requirement in tax ruling cases - in particular, in relation to the determination of the reference framework. As this Op-Ed will show, the latter is of particular importance in analysing the State aid nature of national tax measures, as (i) an economic advantage under Article 107(1) TFEU may be established only when compared with normal taxation; and (ii) it is the first step of the selectivity analysis, which determines which undertakings can be compared.
The Role of the Arm’s Length Principle in Determining the Existence of an Economic Advantage under Article 107(1) TFEU
The Commission Decisions in Fiat (SA.38375), Starbucks (SA.38374), Apple (SA.38373) and Amazon (SA.38944) found the granting of an advantage to the respective beneficiary undertakings stemming from the wrong application of the arm’s length principle (“ALP”) - which the Commission argued was an EU law principle, implicit in Article 107(1) TFEU and applicable even if national law did not recognise it.
The Commission’s approach failed to take into account that the existence of an economic advantage shall be established with reference to the normal (national) taxation system (in the words of Daniela Gschwindt, “[t]he national legal framework [was] simply ignored”; see the Op-Ed on the Dynamics of selectivity in EU Law Live). Indeed, the General Court confirmed already in its first judgments that the Commission did not have at this stage of development of EU law competence to define the applicable reference system, disregarding national tax rules (see e.g. General Court in Fiat, para 112, Starbucks, para 159 and Apple, para 223). The General Court left however the door open for the Commission to rely on the ALP as a “tool” to determine whether a given national tax measure is in line with market conditions (see e.g. General Court in Fiat, para 151, Starbucks, para 163 and Apple, para 214), understanding also that to the extent the national tax system did not distinguish between integrated and standalone, or resident and non-resident companies, for the purpose of the corporate income tax (“CIT”), it had adopted the ALP (see e.g. General Court in Fiat, para 157, Starbucks, para 159, Amazon, para 120 and Apple, paras 221-224). The European Court of Justice has clearly overturned also this possibility. In its judgment in Amazon, in particular, the European Court of Justice has clearly confirmed that:
(i) the existence of an economic advantage may be established only when compared with normal taxation (para 35);
(ii) outside the sphere in which EU tax law has been harmonised, it is for the Member State concerned to determine the characteristics of the reference system (para 39);
(iii) there is no autonomous ALP under EU law (para 42);
(iv) to apply the ALP, the Commission must, as a preliminary step, satisfy itself that this principle was incorporated into the national tax law concerned, which as a minimum requires that that law refer “explicitly” to it (paras 46 and 54); and
(v) the OECD Guidelines have practical importance to the extent that national tax law makes reference to them and the Commission shall prove that they have been, wholly or in part, “explicitly” adopted in national law (paras 47 and 56).
These conclusions add to the ruling of the European Court of Justice in Fiat, which had imposed a high standard (“manifestly inconsistent” with the objective of the reference system, leading to a “systematic undervaluation” of the applicable transfer prices) on the Commission to prove the existence of an advantage when a Member State has chosen to apply the ALP (European Court of Justice in Fiat, para 122; see also the Op-Ed on the Fiat case in EU Law Live by Ricardo García Antón and Nieves Bayón Fernández).
Although the judgments of the European Court of Justice in Amazon and Fiat have both pointed to the same end, the Apple case could constitute a turning point. The judgment of the General Court had annulled the underlying Commission Decision on the basis that it had relied on a method which was inconsistent with the applicable national law (General Court in Apple, paras 186, 187, 259, 361, 362, 379). Advocate General (“AG”) Pitruzella has
however proposed that the European Court of Justice set aside the judgment of the General Court on the basis that it incurred a number of errors in law when ruling that the Commission had not proved the existence of an advantage to the requisite legal standard (AG Pitruzella in Apple). There is a question however as to whether in spite of the errors identified by AG Pitruzella, the underlying Commission Decision can be upheld to the extent that it did not appear to rely exclusively on national law in the assessment of the existence of the advantage as required in line with Amazon or Fiat. Dr. Dimitrios Kyriazis actually pointed out that “AG Pitruzella arguably disregarded the due respect paid by the [European Court of Justice] to national fiscal autonomy and insisted on using the arm’s length principle and it variations as a reference point for establishing the existence of a [S]tate aid advantage in favour of the Apple group” (see the Op-Ed on Selectivity in tax ruling cases in EU Law Live).
The Role of National Law in Defining the Reference System for the Purposes of the Selectivity Analysis under Article 107(1) TFEU
In its tax ruling cases concerning the application of the ALP, the Commission identified the CIT system as the reference system (Fiat, Section 7.2.1, Starbucks, Section 9.2.1, Apple, Section 8.2.1, and Amazon, para 587), without taking into account the administrative tax ruling practice of the national tax authorities, and disregarding national tax law in its selectivity analysis. Although the General Court only analysed the selectivity condition in Fiat (and it did so “irrespective of the reference framework used”), its judgments in Fiat, Starbucks, Apple and Amazon, all suggest that the General Court accepted the broad definition of the reference system adopted by the Commission.
In Engie, which did not concern the application of the ALP, the Commission had also identified the CIT system as the reference system (Engie, Section 6.2.1.1.), but it still performed a subsidiary analysis, considering a narrower reference system. The General Court confirmed the underlying Commission Decision. In its judgment, it only reviewed the analysis performed by the Commission under the narrower reference framework, arguably rejecting the Commission’s analysis in light of the broader reference system (paras 232 and 234) and it appeared to confirm that the Commission could find links between national provisions that national law did not appear to have - at least explicitly - created (paras 292-301) and decide on the interpretation of national provisions on abuse of law and assess their selective nature, without referring to the administrative practice of the national tax authorities (para 409).
The judgments of the European Court of Justice in Belgian Excess Profits, Fiat, Amazon and Engie all broadly overturn the Commission’s and General Court’s approach, making it clear that:
(i) the administrative practice of the national tax authorities can constitute an aid scheme (European Court of Justice in Belgian Excess Profits);
(ii) correctly identifying the reference system is “necessary” to assess the selective nature of a national measure (European Court of Justice in Amazon, para 37 and Engie, para 110);
(iii) an error made in that determination necessarily vitiates the whole of the analysis of the condition relating to selectivity (European Court of Justice in Amazon, para 37 and Engie, para 110);
(iv) in cases concerning direct taxation, when determining the reference system, the Commission has an obligation to “exclusively” take into account the national law applicable in the Member State concerned (European Court of Justice in Fiat, paras 74 and 94 and Engie, para 113) and is in principle required to accept the national interpretation of the relevant provisions of national law (Engie, para 120);
(v) respect to Member States’ national fiscal autonomy entails that the Commission cannot rely on the general objective of the CIT system to apply an ALP not based on national law (European Court of Justice in Fiat, paras 91 and 96) and can neither establish a derogation from the reference framework merely by finding that a national measure departs from a general objective of taxing all resident companies, without taking account of national law provisions specifying how that objective is to be implemented (European Court of Justice in Engie, para 177);
(vi) it is not for the Commission to define what does or does not constitute a correct application of a national provision: the Commission cannot conclude that the non-application of a certain provision by the tax authorities grants a selective advantage unless that non-application departs from the national case law or administrative practice relating to that provision (European Court of Justice in Engie, para 155).
The latest cases have made it clear that correctly defining the reference framework taking due account of national law is crucial in the Commission’s analysis of the selective nature of tax ruling measures. Although the European Court of Justice still refers to its ruling in Gibraltar ( Joined Cases C-106/09 P and C-107/09 P) to clarify that the reference framework itself could be incompatible with EU law if configured according to manifestly discriminatory parameters, it is not very clear today under which conditions the Commission could be able to go beyond the (national) “regulatory technique” used by Member States as provided in Gibraltar, at least in what concerns tax rulings.
The European Court of Justice has also accepted that a systematic contra legem application of a national tax measure by the tax authorities of a Member State could be part of an administrative practice and de facto constitute a scheme. It remains to be seen however, as Daniela Gschwindt also noted in her Op-Ed, under which circumstances a wide margin of discretion granted by national legislation to the national tax authorities can per se constitute State aid (and this is a question that is not completely clear as the case law stands today; see the Op-Ed on Selectivity in the Spanish Tax Lease case in EU Law Live by María López Ridruejo and Alexandre Picón). This is important because one could conclude that, if national tax laws do not necessarily grant a margin of discretion upon the national tax administration and the tax ruling practice of the national tax authorities may constitute an aid scheme, the Commission always needs to analyse (and can never presume) selectivity (at least in cases concerning tax rulings) (see also “Fiat, Starbucks, Apple, Amazon and Engie: Do Individual Tax Rulings Confer a Selective Advantage?”, Milestones in State Aid Case Law EStAL’s First 15 Years in Perspective, by José Luis Buendía Sierra and Nieves Bayón Fernández).
Ultimately, the EU Courts have made it clear in their latest judgments that the Commission shall respect Member States’ fiscal autonomy in their selectivity analysis of national tax measures, a principle that plays a particular role when identifying the reference framework, which itself determines which undertakings can be compared.
Conclusions
Establishing the existence of a selective advantage has proven to be the most controversial requirement in the State aid analysis of tax ruling measures. During the past five years, the EU Courts have issued a series of judgments that now make it clear that in the matter of direct taxation, in areas that have not been harmonised under EU law, and that are therefore within the Member State’s fiscal autonomy, the Commission’s discretion in its State aid analysis is limited and shall be performed with due regard to Member State’s national laws.
The effects of this case law go however well beyond the sphere of tax rulings and in the next few years we might see further developments on how the EU Courts assess Member States’ discretion in designing the objectives and elements of their national reference framework. The latest developments outside the tax rulings sphere show that the burden to show that a national tax system contains manifestly discriminatory elements in line with Gibraltar is rather high, ensuring respect for Member States’ national fiscal autonomy (see, in particular, the Analysis of the Ideella judgment by Nieves Bayón Fernández).
The latest developments do not however mean that the debate surrounding the selective advantage condition in cases concerning direct taxation measures within the sphere of Member States’ exclusive competence is close to being closed. Jacques Derenne and Ana Álvarez Vidal have recently analysed the complexity of the determination of the reference framework in tax ruling matters in relation to the Spanish Goodwill saga (see their Op-Ed on Selectivity and the reference framework), concluding that “[d]eciphering selectivity is a complex exercise”, a complexity that also applies when analysing the existence of an advantage to the extent that the latter may be established only when compared with normal (national) taxation.
Nieves Bayón Fernández is an Associate at the EU and Competition law department of an international firm in Brussels.
SUGGESTED CITATION: Bayón Fernández, N.; “Selective Advantage in Tax Rulings: All the Chapters Bring the Saga to One End”, EU Law Live, 06/08/2024, https://eulawlive.com/competition-corner/selective-advantage-in-tax-rulings-all-the-chapters-bring-the-saga-to-one-end-by-nieves-bayonfernandez/
THE LONG READ
The Critical Raw Materials Act: The Creation of New Markets, Governance and Disputes
Sanja Bogojević 1
Without secure and sustainable access to critical raw materials, the EU’s ambition to become the first climate neutral continent is in jeopardy. That was the message delivered at the 2022 State of the Union address and echoed in the same forum the following year.2 It is no understatement. Critical raw materials (CRMs) are deemed fundamental to an economy that, by 2050, needs to be net zero. Beyond being ‘irreplaceable’ in solar panels, wind turbines, electrical vehicles and energy-efficient lightning, critical raw materials are linked to ‘all industries across all stages of the supply chain’, as well as space and defence technologies.3 Raw materials are considered critical based on two parameters: economic importance and supply risk.4 The concern about stable supply chains is rooted in the fact that both the extraction and the processing of CRMs is highly concentrated in a handful of third countries:5 the EU sources 97% of its magnesium in China, for example;6 and roughly 75% of the world’s supply of cobalt, used in car batteries, is mined in the Democratic Republic of Congo.7 Considering that climate-driven economic adjustments are unfolding not only in the EU but globally, there is an international increase in demand for CRMs. This means that in addition to being highly export-dependent, the EU is in competition with all major economies for the same materials at a time fraught by high geopolitical tensions.
It was against this backdrop that the EU enacted the Critical Raw Materials Act, which lays out ‘a framework to ensure the Union’s access to a secure, resilient and sustainable supply of critical raw materials’.8 The Regulation was adopted at what may be considered the speed of light – at least what counts as such in the context of EU law making. The Commission put forward the legislative proposal in March 2023; by December that same year, a preliminary agreement had been reached, and the final text was adopted on 11 April 2024. Considering the pressing timeline for achieving climate neutrality, and the global rush for critical raw materials, the urgency
1. Fellow and Professor of Law, Lady Margaret Hall and University of Oxford, and Guest Professor at Lund University (E-mail: sanja. bogojevic@law.ox.ac.uk).
2. 2022 State of the Union Address (accessed 1 July 2024); 2023 State of the Union Address (accessed 1 July 2024).
3. See European Council factsheet (accessed 1 July 2024).
4. European Commission, Methodology for Establishing the EU List of Critical Raw Materials: Guidelines (Publications Office of the EU 2017).
5. Regulation (EU) 2024/1252 of the European Parliament and of the Council of 11 April 2024 establishing a framework for ensuring a secure and sustainable supply of critical raw materials and amending Regulations (EU) 168/2013, (EU) 2018/858, 2018/1724 and (EU) 2019/1020 [2024] OJ L, recital 1.
6. For a grim overview of the human and environmental impact of such mining activities, see Siddharth Kara, Cobalt Red: How the Blood of the Congo Powers our Lives, St. Martin’s Press, 2023.
7. Proposal for a Regulation of the European Parliament and of the Council establishing a framework for ensuring a secure and sustainable supply of critical raw materials and amending Regulations (EU) 168/2013, (EU) 2018/858, 2018/1724 and (EU) 2019/1020, COM/2023/160 final (Proposal for CRMA) p 1.
8. Article 1(1).
is understandable. Whether the Regulation will manage to achieve what it sets out to do is another question. But that is not part of the scope of this inquiry. There is much to attract the attention of legal scholars in this groundbreaking internal market regulation. With a total of 49 provisions covering significant points on waste and waste management, environmental assessment and planning, there is no space in this analysis to cover everything. The focus, therefore, is rather on how this Regulation, which seeks to ‘safeguards the functioning of the internal market’,9 creates new markets for CRMs, instils novel governance structures relevant to critical raw material management, and risks setting off a long list of disputes between mining companies and other stakeholders, primarily local communities.
The Creation of New Markets in Critical Raw Materials
Although many Member States have lengthy (and often problematic) mining histories,10 the mining of critical raw materials on EU territory is largely in its infancy. One of the main objectives of the CRMA is to propel such domestic exploitation and thereby contribute to a stable and resilient supply of CRMs. By pushing for the opening of new sources of CRM, this regulatory framework effectively creates and fosters new markets in critical raw materials. This is done by specifying benchmarks for CRM production and recycling on EU grounds. More precisely, the Commission and the Member States are obliged to strengthen the different stages of the CRM value chain to reach, by 2030, the benchmarks of 10% of extraction, 40% of processing, and 15% of recycling of the EU’s annual consumption of so-called ‘strategic’ raw materials – a subgroup of CRMs that ‘score among the highest in terms of strategic importance, forecasted demand growth and difficulty of increasing production’.11 The CRMA also insists on import diversification, stipulating that no single third country shall provide more than 65% of the Union’s annual consumption of the set materials.12 Notably, benchmarks are aspirational and not legally binding. This may explain why the original labelling of these provisions as ‘targets’ – which might have enabled challenges in the case of non-compliance – was amended in the legislative procedure.13 Still, benchmarking informs industries and other actors about the anticipated future of CRM mining in the EU, thereby promoting the economic activity in question.
Relatedly, the CRMA makes various sources of funding available, including the Just Transition and the European Regional Development funds, to support a ‘European value chain’ in order to ensure security of CRM supply.14 Such provisions seek to incentivise and attract economic engagement in the internal market by creating demand for EU-sourced CRMs. Along similar lines, the Member States are tasked with establishing national exploration
9. Recital 4.
10. Sweden, for example, has a mining history dating back to the 11th century, intertwined with its colonial past, see Sanja Bogojević, ‘The European Green Deal, Colonialism and the Rush for Critical Raw Materials’, Transnational Legal Theory, 2024 (in press).
11. Article 5(1)(a)(i)-(iii); Article 3(2).
12. Article 5(1)(b).
13. The Romanian Senate, for example, described some of the targets as ‘unrealistic and ambitious in the short and medium term’, see 2023/007(COD).
14. These are outlined in the recital 17 as well as in Section 4.
programmes ‘to increase available information on the Union’s critical raw material occurrences’,15 and thereby increase ‘the probability of locating new deposits, which should in turn stimulate investments in exploration’.16 Market creation and promotion are thus led by the availability of funding and information.
But that is not all. Project leaders of CRM mining may also apply for their projects to be recognised as ‘strategic’, which comes with a list of benefits. The CRMA grants such projects ‘priority status’. They are to be recognised as having ‘the highest national significance possible, where such a status exists in national law’, meaning that all authorities concerned shall treat these as ‘urgent’ in resolving any disputes or deciding on issues pertaining to permits17 – or as per the time limits prescribed in the CMRA.18 As an Article 114 TFEU measure, the CRMA thus seeks not only to help the functioning of the internal market, but also to expand it further – with a great sense of urgency.
New Governance Structures for Critical Raw Materials Management
To support and further promote CRM markets, the CRMA sets up a new governance structure both at national and EU level. Nationally, the Regulation obliges the Member States to designate ‘one or more authorities as a single point of contact’ to facilitate and coordinate the permit-granting process for critical raw materials.19 The aim is to ensure that the administrative support for CRM-related projects is easily accessible and useful to project leads in navigating legal obligations relevant to mining. However, it is not enough that such contacts exist and are clearly visible and easily accessible.20 They also need to have ‘a sufficient number of qualified staff and sufficient financial, technical and technological resources necessary for the effective performance of their tasks under this Regulation’.21 Moreover, the points of contact, as well as all relevant national authorities, must go about the permit-granting process swiftly, and when it comes to dealing with strategic projects, strict time-frames are explicitly stipulated.22 This again shows the underlying sense of urgency in the adoption of the Regulation that has been transposed into the legislative text, adding to the rush for CRMs.
The Regulation also lays out a new governance structure for CRM projects at the EU level. It establishes a ‘European Critical Raw Materials Board’ composed of ‘high-level representatives’ from all Member States as well as the Commission, with its representative acting as the Board’s chair,23 with the possibility ‘where appropriate’ for other stakeholders and experts, including representatives from academia, trade unions, and third countries,
15. Article 19.
16. Recital 42.
17. Article 10(3)-(5).
18. Article 11.
19. Article 9(1) and (3) [emphasis added].
20. See Article 9(2) on the need for a website.
21. Article 9(9).
22. Article 11.
23. Articles 35-36.
to attend the meetings and submit written contributions on the Commission’s invitation.24 The Board’s main function is to ‘advise the Commission’ and help carry out the tasks under the Regulation, including assessing applications for strategic projects, and discussing progress made by Member States in fulfilling its objectives – in particular, meeting the aforementioned benchmarks.25 This suggests that ultimately, the main actor at the EU level in realising the CRMA’s ambitions is the Commission. Indeed, it is the Commission that decides which projects fulfil the criteria to be recognised as ‘strategic’, and whether some projects already enjoying that status should be stripped of it.26 The collective efforts under the Board’s jurisdiction instead involve discussing and sharing ‘best practices’ that, should the Commission so decide, will be drawn up as guidelines ‘to be taken into account’ by the relevant national authorities acting as points of contact.27
What is more, the Commission is also tasked with monitoring CRM supply risks and, based on mandatory reports from Member States, keep a data-base on stocks of strategic raw materials for the EU as a whole. The quality of this information will depend on what the Member States feed the Commission. An information stream on CRM stock to the Member States covers data provided by undertakings, who are under an obligation to submit project reports and draw ‘risk preparedness’ plans as part of the mission to ensure a stable and secure supply of CRMs into the EU.28 On this point, the Regulation stipulates that the Member States will need to implement penalties at the national level against any infringement of the Regulation, including against undertakings failing to deliver such reports and plan.29 This is clearly a forceful provision to ensure that CRM projects in the EU materialise and thereby help secure the EU’s supply chain of the set materials.
Returning to the Board, its significant power lies in discussing ‘strategic partnerships’, i.e. international collaborations with third parties aimed ‘to increase cooperation related to the raw materials value chain that is established through a non-binding instrument’.30 Such discussions have no legal implication under the Treaties; it is the Council that enjoys the competence to conclude such bilateral agreements. Yet, it is safe to assume that the political implications of the Board’s findings will have a bearing on the kind of agreements the Council decides to pursue. What will be interesting to see if the interaction between the different actors and institutions in the case of disputed mining-projects, as mentioned next.
The Rise of Disputes Between Mining Companies and Other Stakeholders
The CRMA demonstrates that the EU wishes to see more CRM mining in the EU and beyond to fulfil the aspiration of a net-zero internal market. The regulatory framework stemming from the CRMA should appease mining industries: funding is made available for their economic endeavours, national bodies are established to
24. Article 36(3).
25. Articles 35(2) and 36(5).
26. Article 6 and also recitals 14 and 23.
27. Article 36(7).
28. Qualifications for such obligations are outlined in Article 24.
29. Article 47 and recital 71.
30. Article 37.
assist them in navigating the permit processes and other relevant paperwork, and all institutions are instructed that CRM mining should be approached with urgency, especially the strategic projects which should enjoy priority status and, where possible, be given the highest national significance possible.
That being said, not everyone is equally thrilled by the prospect of increased CRM mining and the CRMA. In two separate studies, I have discussed conflicts that CRMA risks stoking or perpetuating, one related to lithium mining in Serbia,31 and one concerning rare earth minerals (an even narrower subsection of CRMs) found on indigenous territory in Sweden. The Serbian case, which is ongoing,32 illustrated how CRM mining initiatives may cause social unrest, lead to land disputes, and raise serious constitutional-law questions regarding who should decide what counts as a ‘public interest’, a designation which permits the expropriation of land for mining purposes.33 In the Swedish case, CRM mining plans stirred up disputes entrenched in colonial history involving indigenous communities. Neither dispute, nor potential conflict, is easy to resolve.
The EU is not blind to the fact that mining may have social and environmental impacts.34 This is reflected in the CRMA and the criteria stipulated for the recognition of strategic projects, which includes demonstrating that the project would35 be implemented sustainably, in particular as regards the monitoring, prevention and minimisation of environmental impacts, the prevention and minimisation of socially adverse impacts through the use of socially responsible practices including respect for human, indigenous people and labour rights…
This provision is echoed in the criteria for which international partnership or CRM project should be ‘prioritised’.36 The emphasis is on good governance; yet the list of safeguards ultimately leaves broad leeway in determining what constitutes ‘socially responsible practices’, including how different human rights are to be balanced against each other and what ‘meaningful engagement’ entails – not only in terms of participatory rights but also regarding the extent to which the rights of certain stakeholder may be traded against each other.
In this case of international cooperation, it should be added that Annex III, with its long list of international instruments, is also to be ‘take[n] into account’ when assessing whether a project in a third country qualifies as a strategic project. But, as per the set wording, non-compliance with the international measures listed does not automatically disqualify such projects, meaning that they might still go ahead.
31. Kalina Arabadjieva and Sanja Bogojević, ‘The European Green Deal: Climate Action, Social Impacts and Just Transition Safeguards’ 43, Yearbook of European Union Law, 2024 (in press).
32. See eg Andrew Higgins, ‘”Bad Blood” Stalks in Lithium Mine in Serbia’, The New York Times (18 August 2024).
33. Sanja Bogojević, ‘The race for lithium and the rule of law’, Climate Change and the Rule of Law, UCL Blog (22 March 2022).
34. I discuss these points in more detail in Arabadjieva and Bogojević (n 30) and (n 9).
35. Article 6(1)(c) ibid [emphasis added].
36. Article 37(1)(c)(ii).
Looking Ahead
Toward the latter provisions of the CRMA, Article 48 thereof outlines that, by 24 May 2028, the Commission shall carry out an evaluation of the Regulation. Its assessment will cover a list of questions, including whether the benchmarks have been met and proven effective for stimulating CMR markets; the extent to which national administrative law and environmental law has been aligned with the concept of a ‘strategic project’ enjoying priority status in permitting procedures; and ultimately, whether a more ‘stable, resilient and sustainable’ supply of CRMs to the EU has been achieved. The question of how the CRMA deals with conflicts concerning CRM mining – whether inside the EU or connected to it, and which are bound to multiply – is not part of the current scope of the assessment. It is an inquiry, nevertheless, that will captivate the imagination of legal practitioners and scholars for many years to come.
SUGGESTED CITATION: Sanja Bogojević; “The Critical Raw Materials Act: The Creation of New Markets, Governance and Disputes)”, https:// eulawlive.com/weekend-edition/weekend-edition-no197/
HIGHLIGHT F THE WEEK S O
Compass-Datenbank GmbH challenges Commission over delayed response concerning the reuse of documents from the European Central Platform: official publication today
Monday 2 September
Compass-Datenbank GmbH, an Austrian business information provider, initiated legal action against the European Commission, claiming that the Commission failed to process a confirmatory application within the legally required time frame.
Read on EU Law Live
Action contesting Commission’s approval decision of SEFE’s merger with WIGA, published in OJ
Monday 2 September
Official publication was made of an action, brought on 17 July 2024, by Ferngas Netzgesellschaft mbH against the European Commission claiming that the Court should annul the Commission’s Decision of 26 March 2024, C(2024) 2041 final, in Case SA.112489 (2024/N): Ferngas Netzgesellschaft v Commission ( T-363/24).
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Amendments to the Statute and the Rules of Procedure of the Court of Justice and the General Court of the European Union enter into force
Monday 2 September
Effective 1 September 2024, significant amendments to the Statute and the Rules of Procedure of the Court of Justice and the General Court of the European Union were implemented.
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Preliminary reference on whether Trade Mark Directive precludes application of national general principle of consequences of inaction
Monday 2 September
A request for a preliminary ruling from the Korkein oikeus (Finland), lodged on 26 June 2024, in Oy Lunapark Scandinavia Ltd v Hardeco Finland Oy, concerning the interpretation of the Trade Mark Directive, was published in the Official Journal: Lunapark Scandinavia (C-452/24).
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Preliminary ruling request concerning indefinite entry ban for terrorist threat, published in OJ
Monday 2 September
The Oberverwaltungsgericht der Freien Hansestadt Bremen (Higher Administrative Court of the Free Hanseatic City of Bremen, Germany) referred a case to the European Court of Justice (ECJ) concerning the interpretation of EU law regarding the imposition of an indefinite entry ban.
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Commission reintroduces Polish credit union liquidation scheme
Monday 2 September
The European Commission approved the reintroduction of a Polish credit union liquidation scheme, which includes a budget increase of €770 million.
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Court of Justice to clarify scope of air navigation services Regulations
Tuesday 3 September
The Oberster Gerichtshof (Supreme Court) of Austria requested a preliminary ruling from the Court of Justice of the European Union (CJEU) concerning the interpretation of specific provisions in the European Union’s regulatory framework governing air navigation services.
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Italian court submits preliminary ruling request on asset control in discretionary trusts
Tuesday 3 September
The Tribunale Amministrativo Regionale per il Lazio (Italy) referred two significant legal questions to the Court of Justice of the European Union (CJEU) in the case concerning the interpretation of Article 2(1) of Regulation (EU) No 269/2014, which addresses restrictive measures against certain individuals, entities, and bodies in light of actions undermining or threatening Ukraine’s territorial integrity, sovereignty, and independence.
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Preliminary ruling request on liability regime for hosting providers of online advertising of gambling, under e-Commerce Directive
Tuesday 3 September
Official publication was made of a request for a preliminary ruling from the Consiglio di Stato (Italy), lodged on 14 June 2024, in Autorità per le Garanzie nelle Comunicazioni (AGCOM) v Google Ireland Limited, a case concerning, in essence, the interpretation of Article 1(5) and Article 14 of the e-Commerce Directive.
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Court of Justice streaming hearing of case on compatibility with secondary EU law of return decisions for foreign nationals still lawfully resident in a Member State
Tuesday 3 September
The Court of Justice’s Grand Chamber hearing in Kaduna and Abkez (Joined cases C-244/24; C-290/24, cases concerning the interpretation of the Return Directive and the Temporary Protection Directive, in the context of return decisions, issued in regard to third-country nationals, on a date when they are still lawfully resident on the territory of a Member State, was streamed on the Court’s website.
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Court of Justice sets aside judgment of General Court upholding referral of examination of Illumina’s acquisition of Grail to the Commission
Tuesday 3 September
The Court of Justice delivered its judgment in Illumina v Commission and Grail v Commission (Joined cases C-611/22 P; C-625/22 P), a case concerning the referral from national competition authorities to the European Commission of the examination of Illumina’s acquisition of GRAIL.
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ESA approves amendments to Norway’s media grant scheme
Wednesday 4 September
The EFTA Surveillance Authority (ESA) approved amendments to Norway’s production grant scheme for news and current affairs media, aimed at fostering media diversity and supporting independent journalism.
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Council Decision on the signing of Council of Europe Convention on AI, published in OJ
Wednesday 4 September
Official publication was made of Council Decision (EU) 2024/2218 of 28 August 2024 on the signing, on behalf of the European Union, of the Council of Europe Framework Convention on Artificial Intelligence (AI) and Human Rights, Democracy and the Rule of Law.
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General Court upholds Commission’s Decision refusing status of IMG as international organisation capable of indirect management of EU budget
Wednesday 4 September
The General Court, sitting in its Extended Composition formation, handed down its judgment in two cases concerning actions against the Commission’s Decisions of 8 May 2015 and of 8 June 2021, denying IMG the status of an international organisation, capable of implementing Union funds: IMG v Commission (T-381/15 RENV II) and (T-509/21).
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General Court annuls SRB decisions concerning 2017 ex ante contributions of Hypo Vorarlberg Bank
Wednesday 4 September
The General Court delivered its judgment in Hypo Vorarlberg Bank v SRB (Contributions ex ante 2017) (case T-599/22), concerning the calculation of its 2017 ex-ante contributions to the Single Resolution Fund (SRF).
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General Court upholds EU sanctions against Kesaev and Shamalov
Wednesday 4 September
The General Court issued a ruling regarding two cases (T-290/22 and T-763/22) filed by Igor Albertovich Kesaev, a Russian national, who sought the annulment of several European Union (EU) measures imposed on him due to his alleged support for actions threatening Ukraine’s territorial integrity, sovereignty, and independence.
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Commission did not err in imposing and calculating fine for breach of Article 101(1) TFEU in the market of canned goods, rules General Court
Wednesday 4 September
The First Chamber of the General Court delivered its judgment in a case concerning an action seeking the annulment of the Commission’s Decision C(2021) 8259 of 19 November 2021 (Case AT.40127 — Canned Vegetables), relating to proceedings pursuant to Article 101 TFEU and Article 53 of the EEA Agreement, as regards the calculation of the fine and the reduction of the amount of the fine: Conserve Italia and Conserves France v Commission (T-59/22).
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Strategic Dialogue on EU agriculture presents Final Report to President von der Leyen
Wednesday 4 September
President Ursula von der Leyen received the final report, titled ‘A Shared Prospect for Farming and Food in Europe’, from the Strategic Dialogue on the Future of EU Agriculture, delivered by Chair Professor Peter Strohschneider.
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European Court of Auditors’ report: EU medical agencies’ pandemic preparedness and lessons from COVID-19
Thursday 5 September
The European Court of Auditors (ECA) published a Special report 12/2024: The EU’s response to the COVID-19 pandemic – The EU medical agencies generally managed well in unprecedented circumstances.
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Directive 2001/24: A failure to publish resolution measures in the home Member State does not render them invalid, or their effects unenforceable, in the host Member State
Thursday 5 September
The Court of Justice handed down its judgment in Novo Banco and Others (Cases C-498/22 to C-500/22), a request for a preliminary ruling from the Spanish Supreme Court regarding the Bank of Portugal’s resolution measures in respect of Banco Espírito Santo SA (BES), a Portuguese credit institution.
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Notary authentication of Russian property sales not covered by legal advisory ban: Court of Justice rules in Jemerak (C-109/23)
Thursday 5 September
The Court of Justice delivered its judgment in Jemerak (C-109/23), a request for a preliminary ruling on the interpretation of Regulation 833/2014, as amended by Regulation 2022/1904 concerning restrictive measures adopted by the Council in the wake of Russia’s invasion of Ukraine.
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AG Medina: Development of software by Google to satisfy needs of operator requesting access to its platform cannot in itself justify refusal of such access
Thursday 5 September
Advocate General Medina handed down her Opinion in a case concerning a request for a preliminary ruling seeking the interpretation of the concept of abuse of a dominant position, within the meaning of Article 102 TFEU, in particular as regards the identification of the relevant markets and any obligations of an undertaking that is dominant in one or more digital markets: Alphabet and Others (C-233/23).
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Court of Justice upholds ruling dismissing ClientEarth’s action against Commission’s decision refusing to grant access to documents related to fisheries control
Thursday 5 September
The Court of Justice delivered its judgment in ClientEarth v Commission (C-249/23 P), by which the appellant asked the Court to set aside the judgment of the General Court of the European Union of 1 February 2023, ClientEarth v Commission (T-354/21), by which the General Court dismissed its action for annulment of Commission Decision C(2021) 4348 final of 7 April 2021 refusing access to certain documents related to the state of implementation of the fisheries control in France and Denmark and on the existence of pilot cases and infringement procedures in the European Union relating to the implementation of Regulation 1224/2009.
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ECHA cannot bring, before the EU Courts, an action for enforcement of a pecuniary obligation imposed on a person in a decision taken by the Agency
Thursday 5 September
The Court of Justice delivered its judgment in ECHA (C-256/23 and C-290/23), a preliminary reference from the Federal Court of Justice (Germany) concerning the European Chemical Agency (ECHA)’s ability to enforce pecuniary penalties against private parties who fail to pay fines imposed by the ECHA.
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Court of Justice dismisses appeal against Commission’s Decision on the status of a complaint concerning alleged State aid granted to Paris Saint-Germain football club
Thursday 5 September
The Second Chamber of the Court of Justice delivered its judgment in a case on appeal, by which the applicants, PBL and Mr. Abdelmouine, sought the annulment of the judgment of the General Court in PBL and WA v Commission (T538/21), where it dismissed their action for annulment of Commission Decision COMP/C.4 /AH/mdr 2021(092342) of 1 September 2021 on the status of a complaint concerning alleged State aid granted to the Paris Saint-Germain football club (SA.64489): PBL and Abdelmouine v Commission (C-224/23 P).
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Court of Justice rules on VAT exemption for occupational pension funds
Thursday 5 September
The Court of Justice delivered its judgment in Joined Cases C-639/22 to C-644/22 concerning whether and under what conditions certain occupational pension funds can be regarded as special investment funds within the meaning of Article 135(1)(g) of the VAT Directive.
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Court of Justice interprets scope of Article 2(2)(a) of Regulation 194/2008 renewing and strengthening the restrictive measures in respect of Burma/Myanmar
Thursday 5 September
The Court of Justice handed down judgment in W. GmbH (C-67/23), a preliminary reference from the Federal Court of Justice (Germany) concerning the interpretation of Article 2(2)(a) of Regulation 194/2008 renewing and strengthening the restrictive measures in respect of Burma/Myanmar.
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Resolution of Banco Popular: Purchasers of capital instruments converted into Banco Popular shares cannot bring a subsequent action for annulment of the contract for the subscription of those instruments against Banco Santander
Thursday 5 September
The Court of Justice handed down judgment in Banco Santander (Résolution bancaire Banco Popular II) (C-775/22, C-779/22 and C-794/22), a case concerning disputes involving several investors suing Banco Santander, as Banco Popular’s successor, due to faulty or erroneous information they allege was provided to them in the issue prospectuses when they purchased equity instruments between the years 2010 and 2011.
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General Court’s judgment in Czech Republic v. Commission on unjust enrichment by EU, set aside by Court of Justice
Thursday 5 September
The Court of Justice delivered its judgment in Commission v. Czech Republic (C-494/22 P), a case concerning ‘the obligation to credit EU own resources’.
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Direct effect and primacy of EU law in relation to directives protecting the rights of children in criminal proceedings clarified by Court of Justice
Thursday 5 September
The Court of Justice delivered its judgment in M.S. e.a. (Droits procéduraux d’une personne mineure) (C-603/22), a case concerning the interpretation of several provisions of Directive (EU) 2016/800 on the rights of children in criminal proceedings,read together with Directive 2013/48/EU on access to a lawyer, Directive 2012/13/EU on the right to information, and Directive (EU) 2016/343 on the presumption of innocence and the right to be present at the trial.
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Court of Justice upholds General Court’s judgment establishing Commission’s obligation to initiate formal State aid proceedings in Slovenian pharmaceutical sector
Thursday 5 September
In Slovenia v Flašker and Commission (C-447/22 P), the First Chamber of the Court of Justice has rendered its judgment in an appeal case against the General Court’s judgment in Flašker v Commission (T-392/20), the latter regarding an action for annulment of Commission Decision C(2020) 1724 final of 24 March 2020 closing the examination of measures concerning the public pharmacy Lekarna Ljubljana in the light of the State aid rules in Articles 107 and 108 TFEU (Case SA.43546 (2016/FC) – Slovenia), in so far as that decision concerns the assets under management of that public pharmacy.
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AG Rantos invites Court of Justice to dismiss majority of appeals by airlines contesting Commission Decision on airfreight markets cartel
Thursday 5 September
Advocate General Rantos delivered his Opinion in a series of 13 appeals lodged by certain airlines in relation to a cartel, penalised by the Commission on the basis of Article 101 TFEU, Article 53 of the EEA Agreement and Article 8 of the EC-Switzerland Air Transport Agreement and concerning freight services provided on intra-EEA routes, EU-third country routes, non-EU EEA-third country routes, EEA-third country routes, and EU-Switzerland routes.
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Clarifying prospectus requirements for transferable securities: Advocate General Richard de la Tour’s Opinion in Communes de Schaerbeek and de Linkebeek (C-627/23)
Friday 6 September
Advocate General Richard de la Tour delivered his Opinion in Communes de Schaerbeek and de Linkebeek (C-627/23), where he addressed a request for a preliminary ruling concerning the interpretation of Article 2(1)(a) of the EU Prospectus Directive (Directive 2003/71/EC) on the definition of ‘transferable securities negotiable on the capital market.’
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Jurisdiction for cross-border IT services: Advocate General Richard de la Tour ‘s Opinion on software development disputes
Friday 6 September
Advocate General Richard de la Tour delivered an Opinion on a novel issue in VariusSystems (Case C-526/23) regarding the international jurisdiction of courts in cross-border IT service contracts.
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Commission publishes findings of evaluation of EU antitrust procedural rules
Friday 6 September
The European Commission published a Staff Working Document summarising findings of the evaluation of EU competition rules, namely of Regulation 1/2003 and Regulation 773/2004.
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AG Rantos invites Court of Justice to dismiss majority of appeals by airlines contesting Commission Decision on airfreight markets cartel
Friday 6 September
Advocate General Rantos delivered his Opinion in a series of 13 appeals lodged by certain airlines in relation to a cartel, penalised by the Commission on the basis of Article 101 TFEU, Article 53 of the EEA Agreement and Article 8 of the EC-Switzerland Air Transport Agreement and concerning freight services provided on intra-EEA routes, EU-third country routes, non-EU EEA-third country routes, EEA-third country routes, and EU-Switzerland routes.
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Commission Implementing Regulations relating to imposition of anti-dumping measures on imports of certain goods originating from China, published in OJ
Friday 6 September
Official publication was made of two Commission Implementing Regulations relating to the imposition of anti-dumping duties on imports of oxalic acid originating from China and India, as well as electric bicycles originating from China: Commission Implementing Regulation (EU) 2024/2211 and Commission Implementing Regulation (EU) 2024/2206.
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AG Pikamäe: Short procedural time limits prevent national authorities from adequately safeguarding anti-competitive and unfair commercial practices
Friday 6 September
Advocate General Pikamäe delivered his Opinion in a couple of cases concerning preliminary references on the interpretation of Article 102 TFEU and Articles 11 and 13 of the Unfair Commercial Practices Directive: Trenitalia (C-510/23) and Caronte & Tourist (C-511/23).
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AG Szpunar delivers Opinion in case concerning applicability of reciprocity clause of the Berne Convention, in light of EU law
Friday 6 September
Advocate General Szpunar handed down his Opinion in a case concerning a preliminary reference from the Dutch Supreme Court concerning the applicability to the Member States of the reciprocity clause in the Berne Convention, in light of the Copyright Directive and the Charter of Fundamental Rights: Kwantum Nederland and Kwantum België (C-227/23).
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Commission withdraws decisions in the Illumina/GRAIL merger case
Friday 6 September
The European Commission announced its decision to withdraw several decisions, in the aftermath of the Court of Justice’s judgment in llumina v Commission and Grail v Commission (C-611/22 P and C-625/22 P), where the Court found that the Commission does not have jurisdiction to review the acquisition of GRAIL by Illumina, thereby annulling six referral decisions adopted by the Commission on 19 April 2021.
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