TABLE OF CONTENTS
IN-DEPTH:
On judicial Independence and the Appointment Procedure to the CJEU: Insights and Paradoxes from the Valančius case (C-119/23)
Francesca Bandini
Novo Banco: yet another Illustration of the Need for a strong(er) Banking Union
Diane Fromage
Legal Professional Privilege: Tax Lawyers welcomed into the Fold (C-432/23)
Gloria Marín
The Embryonic Maturing of a System of Remedies against Actions by the European Public Prosecutor
Jacob Oberg
Ordre Public, Press Freedom and Honour: The Balance in Private International Law (Real Madrid Club de Fútbol, C-633/22)
Alba Ruiz Ortiz
Standing for the Rule of Law? Judge Associations’ locus standi before EU Courts in Medel (T-530/22 to T-533/22)
Pekka Pohjankoski
The Court of Justice decidedly jumps on the Procurement Protectionism Bandwagon, creating legal Uncertainty along the Way (C -652/22)
Albert Sanchez-Graells
Court of Justice upholds Commission Decisions on German State Aid for Energy Network Operators
Alma Dangy
Expanding GDPR Enforcement Powers for Consumer Protection Associations (Meta Platforms Ireland: C-757/22)
Mykyta Petik
SYMPOSIUM ON THE THE APPLE STATE AID CASE (C -465/20 P):
Cases C -555/22 P, C -556/22 P and C -564/22 P UK and ITV v Commission: just like Apple, except completely different?
Stephen Daly
COMPETITION CORNER: SYMPOSIUM ON SELECTIVITY IN STATE AID
A Selective View of Recent Case Law on Selectivity
Alfonso Lamadrid
THE LONG READ:
Pens Poised: The New EU Pact on Migration and Asylum
Joyce De Coninck
HIGHLIGHTS OF THE WEEK
IN-DEPT H
On judicial Independence and the Appointment Procedure to the CJEU: Insights and Paradoxes from the Valančius case (C119/23)
Francesca Bandini
With its judgment in Valančius (C-119/23), the Court of Justice had for the first time the opportunity, in the context of a preliminary ruling procedure, to interpret the notion of judicial independence in relation to the appointment procedure for judges and advocates general to the Court of Justice of the European Union (‘CJEU’).
Articles 253, 254 and 255 of the Treaty on the Functioning of the European Union (‘TFEU’) design a ‘three-steps’ appointment procedure: during the first stage, Member States propose candidates for appointment; candidates are, then, evaluated by an expert panel (‘Panel 255’) to verify compliance with the requirements established by Treaties for the post; and, finally, representatives of the governments of Member States adopt a formal act of appointment.
The a quo proceeding relates to the first phase, with particular regard to the mechanism established by Lithuanian law, according to which, when a seat at the Court of Justice of the European Union needs to be filled, the Lithuanian Government suggests a candidate to the Council of the European Union after having obtained the consent of the Lithuanian Parliament and the President of the Republic. Candidates are selected through an open call for application, followed by an evaluation operated by a panel of experts (Working Group), which ranks applicants on the basis of the requirements provided for in the Treaties and then suggests to the Government the name of the first ranked.
In this framework, Mr Valančius, who ranked first in the list made by the Working Group at the time of his possible reappointment, brought a case before the Regional Administrative Court of Vilnius claiming that the Lithuanian Government deviated from such mechanism by proposing a candidate for appointment –who was then appointed judge– other than him.
The Court of Justice was therefore asked by the national judge to answer to two questions: i) whether Articles 254 TFEU and 19(2) TEU require a candidate for appointment to the General Court to be selected only on the basis of professional ability; and ii) whether a deviation from a national practice instituted for the sake of transparency for the selection of candidates for the post of judges and advocates general could undermine the legitimacy of the consequent appointment.
The Court of Justice’s interpretation
Pivotal in the Court of Justice’s reasoning is the notion of judicial independence and its tight link with the right to a tribunal established by law. In this sense, the Court of Justice resounds –and indeed directly cites– the Simpson case, where, for the first time it was called to offer its interpretation of the notion of ‘established by law’ pursuant to Article 47 of the Charter of Fundamental Rights.
In the present judgement, the Court of Justice reiterates its view that the establishment by law element is profoundly connected to judicial independence, in the sense that it contributes to preserve ‘public confidence in the judiciary’ (para. 49), which needs to be built since the very beginning of the appointment procedure. An irregularity occurring in that moment could indeed amount to a breach of the right to an independent tribunal and, therefore, substantial and procedural rules for appointment must not raise doubts as per the independence of judges from the executive and legislative power (para. 51).
Yet, how does this operate in a system where the appointment procedure is three-faceted such as the one applicable for the General Court (and to the Court of Justice of the European Union in general)?
The Court recognises that the appointment procedure designed by the Treaties must be considered as a whole: three stages, but one comprehensive procedure (it follows, in this sense, Advocate General Emiliou’s Opinion). Yet, its integrity is safeguarded only if the outcome of each of its phases grants ‘independence beyond doubt’ (para. 53).
With regard to the first stage of the procedure, happening at the national level, Member States are free to choose the mechanisms through which they select candidates for appointment, with the only limit of choosing people who meet ‘the requirements of independence and professional ability’ (para. 57).
In light of this, the Court of Justice affirms that, as long as these criteria are met, Member States enjoy wide discretion and a procedure such as the one at stake in the a quo proceeding cannot, in itself, cast doubts on the independence of the appointed candidate (and of the General Court). In fact, even though the Lithuanian Government did not select the first ranked candidate in the list drawn by the Working Group, nevertheless every person on that list met the requirements of independence and professional ability laid down by the Treaties and was therefore able to preserve the appearance of independence of the General Court.
All settled, then?
Since Valančius only dealt with the national phase of the appointment procedure, this allowed the Court to adopt a rather formalistic approach, based almost solely on the lack of indications, in the Treaties, on how Member States should exercise their discretion in choosing their candidates.
Yet, the Pandora’s box of issues relating to the appointment procedure is still open and a bigger question remains unanswered: is the overall procedure a guarantee for ‘independence beyond doubt’?
With Valančius dealing with the first stage of appointment, two aspects still remain unscrutinised: the role of ‘Panel 255’ and the act of appointment.
‘Panel 255’ was introduced by the Lisbon Treaty with the task of assessing the suitability of candidates proposed by Member States at the EU level, granting a layer of uniform evaluation for all aspiring judges and advocates general.
In the past years its activity has been criticised mostly due to the lack of transparency of its work and its proactiveness in laying down criteria for the evaluation of candidates that, according to some commentators, are beyond the requirements for appointment pursuant to the Treaties (see, Op-Ed by Alberto Alemanno).
Though its opinions are not binding, Member States have so far always complied with its assessments: indeed, someone has affirmed that ‘Panel 255’ has a ‘de facto veto power’ (borrowing an expression by Henri De Waele) which is alternatively deemed a guarantee of independence of the appointed candidate (see, Op-Ed by Kieran Bradley) or an additional cause for concern due to its little transparency and accountability.
On the other side, the Sharpston case paved the way to harsh criticism (see, inter alia, Graham Butler and Dimitry Kochenov) to the third stage of the appointment procedure when manifesting the lack of judicial remedy against the act of appointment of judges and advocates general: being adopted by the representatives of the governments of Member States, it falls outside the application of Article 263 TFEU and the Court of Justice cannot review its validity.
Clearly, Valančius could not be tasked with solving the puzzle of these open issues given the precise question the Court of Justice was called to answer: in fact, if ‘what really matters is how the overall process, composed of the various stages may be perceived by the public’ (AG Emiliou’s Opinion, Valančius, para. 60), then the limited scope of analysis of Valančius judgment prevents it from being crucial in assessing the ‘independence beyond doubt’ of the CJEU.
Nonetheless, in the wider context of the appointment procedure as a whole, the approach adopted by the Court shows a certain degree of reluctance in addressing the topic in its entirety, rather focusing on the fact that at each stage of the appointment procedure, the respect of the ‘substantive conditions’ for appointment laid down by the Treaties (para. 57, Valančius) is checked.
The Court underlines that an irregularity occurred in the context of the procedure for appointing judges may determine a violation of the fundamental right to an independent tribunal, but such irregularity must be of ‘such a kind and of such gravity that it creates a real risk that other branches of the State, in particular the executive, could exercise undue discretion undermining the integrity of the outcome’ (para. 52, Valančius).
However, the Court seems to state that, as long as appointed members fulfill the requirements laid down in Article 254 TFEU, then nothing else matters with regard to how the appointment procedure as a whole is conducted.
Following this path, one might wonder whether there is any margin for assessing ‘independence beyond doubt’ in the appointment procedure to the CJEU: so far, quite interestingly, the Court of Justice has seemingly admitted that there cannot be a deep scrutiny on any of the phases and yet, no overall assessment either. This is quite a paradox considering that it is then the Court of Justice itself to ask for a strict respect of rules of appointment when national judges are at stake.
Francesca Bandini holds a PhD in EU law from the University of Genoa. Her research focuses on the compatibility of procedural rules before the Court of Justice of the EU with the standard of article 47 of the Charter.
Bandini, F.; “On judicial Independence and the Appointment Procedure to the CJEU: Insights and Paradoxes from the Valančius case (C-119/23)”, EU Law Live, 25/10/2024, https://eulawlive.com/op-ed-on-judicial-independence-and-the-appointment-procedure-to-the-cjeu-insights-and-paradoxesfrom-the-valancius-case-c-119-23/
Novo Banco: yet another Illustration of the Need for a strong(er) Banking Union
Diane Fromage
Ten years have passed since the Portuguese credit institution Banco Espírito Santo (BES) failed and was resolved, and since ‘floor’ clauses previously commonly imposed on their consumers by Spanish banks were found to be illegal (see, for instance ‘Systematising Case Law, De-Systematising the Remedies and De-Vulnerating the Consumer. Comments on Caixabank and Others (C-450/22)’, by Dominik Dworniczak). Despite some rich case law and a parliamentary inquiry dedicated to BES’s failure, some issues remained open, notably in relation to the crossborder repercussions of the resolution of BES and to the obligations of a bridge bank. In a decision it rendered on 5 September, the Court of Justice has clarified these aspects in response to requests for preliminary rulings. In so doing, it has clarified the role of the publication of resolution decisions, but it has failed to examine in detail the intertwinement in this regard between the Directive on reorganisation and winding up of credit institutions (Directive 2001/24) and the Directive 2014/59 establishing a framework for the recovery and resolution of credit institutions and investment firms (BRRD), and its implications for the right to effective legal protection.
1. Overview of the facts
This judgement concerns three sets of customers, which had been clients of BES Spain (BES’s Spanish branch) and thus became customers of Novo Banco, the bridge bank created in August 2014 by the Portuguese Central Bank following BES’ resolution. However, the Bank of Portugal’s decision to resolve BES was not published in full respect of applicable rules. Art. 6(1) –(3) of Directive 2001/24/EC on reorganisation and winding up of credit institutions prescribes that an extract of said decision be published in the EU’s Official Journal at the latest within twelve days of its dispatch and in two national newspapers in each host Member State ‘in order […] to facilitate the exercise of the right of appeal in good time’. The same Directive, though, foresees that, in accordance with the principle of mutual recognition, ‘[t]he reorganisation measures shall apply irrespective of [this] and shall be fully effective against creditors, unless the administrative or judicial authorities of the home Member Sate or the law of that State governing such measures provide otherwise’, which was not the case in Spain. After its original decision adopted in August 2014, the authority in charge of crisis management, the Bank of Portugal could decide on the transfer of assets between the ‘good’ and the ‘bad’ bank at any time. And so it did when it amended its original decision in December 2015.
The first case (C-498/22) regards C.F.O, a customer who sought to have the ‘floor’ clause contained in the loan contracted with BES Spain in 2006 reimbursed to him after these were declared illegal. Although C.F.O.’s loan was transferred to Novo Banco, Novo Banco refused to reimburse the sums unduly perceived based on the ‘floor’ clause, thereby raising, in the eyes of the referring court, questions of effective judicial protection, legal certainty,
equality, prohibition of discrimination on the grounds of nationality, respect of the right to property and of the principle of high level of consumer protection.
In the second case (C-499/22), the Court deals with J.M.F.T. and M.H.D.S. who had opened securities account and concluded an atypical financial contract and a contract relating to a structured financial product with BES Spain. They sought to have both contracts annulled in 2017 on the grounds that they had not been sufficiently informed by BES Spain. Similar issues arose following the absence of adequate publication of the extract of the resolution decision. Others had to do with customers’ legitimate expectations that the bridge bank had assumed the liabilities corresponding to the responsibilities and obligations held originally by the resolved bank.
Finally, in the last case (C-500/22), the Court was confronted to Proyectos, Obras y Servicios de Badajoz SL (POSB)’s file. POSB acquired a bond issued by BES but transferred to Novo Banco prior to POSB acquiring it. Novo Banco paid the mandatory return on the bond in 2015 for the period 2014/2015, but did not pay it for the period 2015/2016 nor reimbursed the nominal value of that bond because said liability had been transferred back to BES in December 2015. Again, in this case the issues identified in the first case arise. An additional question regards POSB’s potential deprivation of its right to property seeing as BES’s assets have been stripped on the grounds that it is insolvent. There, too, the questions raised by the referring court relate to the absence of an appropriate publication of the resolution decision and its consequences, as well as to the consequences of the transfer back to the resolved bank of the responsibilities and obligations from a senior bond purchased while these were under the responsibility of the bridge bank.
2. Findings of the Court and assessment
The Court finds that the absence of publication of the extract of the decision does not preclude the recognition of the decision itself as it does not amount to discrimination and does not encroach upon the right to an effective remedy and the principle of legal certainty, although it contends that the referring court should check whether the customers possessed sufficient information to launch an action, and that it is also for it to decide against which entity this action should be brought. Likewise, it finds that customers may not rely on the principle of the protection of legitimate expectations because this principle may not be relied upon against an entity governed by private law, as is the case of Novo Banco, even if it was temporarily controlled by a public authority. It also considers that the right to property could have been infringed following the transfer back of POSB’s bond to BES, and that it will be for the referring court to assess whether that is the case, taking due account of the fact that POSB is a professional and not a private individual. The referring court should determine as well whether consumers’ legitimate expectations were respected, which is possible. Finally, the Court holds that it is indeed possible that not all liabilities against which pre-contractual or contractual liability exists are transferred to Novo Banco, as it does not find this to go against the right to consumer protection, the right to property and the principle of legal certainly.
This decision re-ascertains the (well-known) fact that the rights to property, to consumer protection and the principle of legal certainty are not absolute and may still be sufficiently protected, even where the resolution
decision has not been published widely – especially in a host Member State – when it was first adopted. The fact that three years had passed between the adoption of the decision and the moment when the claimants launched their actions before the national court compensated for the initial limited publicity. This case also usefully contributes to clarify the delimitations of responsibilities where a bridge bank is temporarily created in the framework of the resolution of a credit institution. As such, it complements the findings in BPC Lux 2 Sàrl (C-83/20) (see ‘Unforgivable late admissions: the Court of Justice decides on bank resolution in BPC Lux 2 Sàrl (C-83/20)’by Martinho Lucas Pires), which regarded other customers of BES, who were, however, based in Portugal. It is, though, noteworthy that the Court does not delve more in depth in the intertwinement between Directive 2001/24/EC on reorganisation and winding up of credit institutions and the BRRD. As noted by Advocate General de la Tour, the question could be asked whether the obligations to advertise resolution decisions contained in Art. 83(4) BRRD have now replaced those foreseen by Art. 6(1)-(3) Directive 2001/24. Those duties are, in a way, more detailed than those contained in Directive 2001/24: they foresee wider publication means of the resolution decision, on the website of the resolution authority, of the EBA, of the institution under resolution and their distribution by other means to the owners of instruments admitted to trading on a regulated market, and to shareholders and creditors directly where that is not the case. By mentioning specifically the effects of the resolution action on retail customers, this publicity requirement appears to be complementary rather than supplementary to those of Art. 6 Directive 2011/24, whose purpose is to allow those affected to exercise their right of appeal in good time. An argument in favour of this interpretation is that Art. 117 BRRD establishes that where Art. 83 BRRD applies, Art. 4 and Art. 7 Directive 2001/24 do not – whereby Art. 7 regards the duty to inform creditors and their rights to lodge claims. That is to say that no similar provision on the disapplication of Art. 6 Directive 2001/24 was included in the BRRD and it thus continues to apply, as also highlighted by Advocate General de la Tour. However, the judgment is silent as to the applicability of the BRRD to the facts in the main proceedings. It would have been interesting for the Court to examine in more detail whether only the publication of the resolution decision following the provisions of Art. 83(4) BRRD and the publication of limited, vague information on the Bank of Portugal’s, the Bank of Spain’s and Spanish media is sufficient to guarantee the right to effective legal protection.
At any rate, this case, which pre-dates the Single Resolution Mechanism, illustrates once again how cross-border crisis management of significant institutions in the absence of harmonisation gave rise to a myriad of issues, which the Single Resolution Mechanism has now hopefully contributed to solve, for some of them at least.
Diane Fromage, Professor of European Law, University of Salzburg (Austria). She has recently edited Redefining EU Membership. Differentiation In and Outside the European Union, OUP, 2024.
Fromage, D.; “Novo Banco: yet another Illustration of the Need for a strong(er) Banking Union”, EU Law Live, 21/10/2024, https://eulawlive.com/op-ednovo-banco-yet-another-illustration-of-the-need-for-a-stronger-banking-union/
Legal Professional Privilege: Tax Lawyers welcomed into the Fold (C-432/23)
Gloria Marín
Building on its judgments of 8 December 2022 (Orde van Vlaamse and others, C-694/20 ) and 29 July 2024 (Belgian Association of Tax Lawyers and Others, C-623/22), on 26 September 2024 the Court of Justice (or the ‘Court’) has once again addressed the scope of and restrictions that EU law can impose on the professional secrecy of lawyers in Ordre des avocats du Barreau de Luxembourg (C-432/23). Whilst the earlier cases analysed this issue in connection with reportable cross-border tax arrangements under Directive 2018/822/EU (‘DAC6’), Ordre des avocats du Barreau de Luxembourg concerns an exchange of information on request under Directive 2011/16/ EU (‘DAC’). The issue at stake was whether advice on tax matters can generally be excluded from the protection afforded to legal professional privilege – as to a certain extent Luxembourg law indeed does.
Under DAC, when the authority of one Member State requests from another information that is foreseeably relevant to the administration and enforcement of domestic tax laws, the authority that receives the request (‘Requested Authority’) is obliged to provide any information that it has in its possession or that it obtains as a result of administrative enquiries (Article 5 DAC). These administrative enquiries should be arranged by the Requested Authority when necessary to obtain the requested information (Article 6 DAC), but it may refuse to comply with the request when it would lead to the disclosure of a commercial, industrial or professional secret, a commercial process, or information the disclosure of which would be contrary to public policy (Article 17(4)).
In terms of legally privileged information in a broader sense, the Luxembourg Loi générale des impôts du 22 mai 1931 (General Tax Law of 22 May 1931) provides that defence counsel and lawyers who have acted in criminal cases and, more generally, lawyers who have been entrusted with information in the exercise of their profession, may refuse to provide the information in question. However, lawyers may not refuse to disclose ‘facts of which they became aware in connection with advice or representation in tax matters, unless an affirmative or negative response to questions would put their clients at risk of criminal prosecution’.
In the case at hand, the Spanish tax authority requested that the Luxembourg authorities obtain information for years 2016-2019 from a law firm regarding services it rendered to a company in connection with investments in Spain. The law firm refused to provide the information to the Luxembourg authorities, stating that the services related to company law matters, rather than tax, and that they were covered by professional privilege. When the fine imposed was challenged before the Luxembourg court, it sought clarification from the Court of Justice on the interpretation of the relevant provisions of DAC in light of Article 7 of the Charter of Fundamental Rights of the European Union.
In short, the Luxembourg court asked whether legal advice provided by a lawyer on company law matters falls within the scope of the strengthened protection of lawyer-client communications afforded by Article 7 of the Charter; whether the requirements and limits that Articles 7 and 52(1) of the Charter establish regarding potential interferences with the confidentiality of lawyer-client communications in the context of the system for exchange of information on request must be governed by DAC or by the domestic law of each Member State; and whether Articles 7 and 52(1) of the Charter conflict with a domestic law under which advice and representation in tax matters do not enjoy –except where there is a risk of the client facing criminal prosecution– the enhanced protection of legal privilege guaranteed by Article 7 of the Charter.
In answering these questions, the Court of Justice insisted once more that (i) the right to respect for one’s private and family life, enshrined in Article 7 of the Charter and Article 8(1) of the Convention for the Protection of Human Rights and Fundamental Freedoms (‘ECHR’), affords special protection to legal professional privilege due to the fundamental task that is entrusted to lawyers in a democratic society; (ii) the protection applies not only to the activity of representing and defending the client in court, but also to the activity of advising on law; and (iii) the protection covers not only the content of the advice but also its existence. It thus concluded that any order to a lawyer, as the information holder, to disclose information in the context of an exchange of information on request constitutes interference with the legal professional privilege protected by Article 7 of the Charter.
Where this judgment trod new ground was in recalling (though this should not in fact need recalled) that the enhanced protection of lawyer-client communications applies irrespective of the area of law to which the advice or representation relates... even if that area is tax law. Professional privilege does not differentiate between the areas of law in question and, therefore, advice on tax law provided by a lawyer is not per se excluded from the special protection afforded by Article 7 of the Charter to professional privilege. As having to fight for what one deems obvious always leaves something of a sour taste, it is very welcome that the Court of Justice has been so clear in stating that Articles 7 and 52(1) of the Charter must be interpreted as precluding an injunction that is based on national legislation under which tax advice and representation in tax matters is excluded from the special protection of legal privilege, except when there is a risk of criminal prosecution.
All legal advice provided by a lawyer to their client is therefore protected by Article 7 of the Charter, and any request to a lawyer to disclose information and documentation regarding their relations with their client constitutes interference with the right to respect for the privacy of communications guaranteed by that article. Although rights guaranteed in the Charter are not absolute, any interference with them is only legally valid if it complies with the requirements set out in Article 52(1) of the Charter. This is important to bear in mind because the fact that interference with legal privilege may pursue a legitimate interest (e.g., counteracting tax abuse and fraud) does not automatically mean that the interference complies with the rest of the requirements of Article 52(1) of the Charter.
The Court of Justice then went on to also conclude that Article 17(4) of Directive 2011/16 is not contrary to Article 52(1) of the Charter, even though it does not itself regulate the requirements and limits of a potential
interference with the confidentiality of communications between lawyers and their clients in the context of the system of exchange of information on request, considering that each Member State, when transposing DAC, must ensure that any limitation on the exercise of the rights guaranteed by Article 7 complies with Article 52(1) of the Charter.
When a directive allows for an interference with fundamental rights, but that interference is only brought about by the domestic law transposing that directive, it is the Member State that –in accordance with the first sentence of Article 51(1) of the Charter– is bound to respect fundamental rights under EU law, and therefore it is the one that must ensure that the requirements of Article 52(1) are met.
I suppose that this same reasoning could be applied for general principles of EU law –for instance, the principle of proportionality or neutrality in VAT. But that is a matter to reflect on for another occasion. For now, tax lawyers must celebrate that we are no longer the odd ones out of the profession.
Gloria Marín is an assistant tax lecturer at Universidad Pontificia Comillas (ICADE) and tax partner at Uria Menendez.
Marín, G.; “Legal Professional Privilege: Tax Lawyers welcomed into the Fold (C-432/23)”, EU Law Live, 23/10/2024, https://eulawlive.com/op-ed-legalprofessional-privilege-tax-lawyers-welcomed-into-the-fold-c-432-23/
The Embryonic Maturing of a System of Remedies against Actions by the European Public Prosecutor
Jacob Oberg
This Op-ed intends to briefly analyse the recent Opinion by Advocate General (‘AG’) Collins in EPPO v I.R.O F.J.L.R. (C-292/23) –a seminal preliminary ruling case being the first case ever concerned with the scope and nature of judicial review of procedural acts produced by the EPPO.
The most important facts of the case could be stated briefly. I.R.O. and F.J.L.R. were directors of a foundation, established under Spanish law, which obtained a subsidy to implement a project financed by EU funds. OLAF informed the Fiscalía de área de Getafe-Leganés (Public Prosecutor’s Office, Getafe-Leganés, Spain) that direct staff costs that that foundation had claimed in respect of two researchers it had employed to carry out the project, namely Y.C. and I.M.B., had been insufficiently justified. The Fiscalía de área de Getafe-Leganés filed a complaint with the Juzgado de Primera Instancia e Instrucción n° 1 de Getafe (Court of First Instance and Preliminary Investigations No 1, Getafe, Spain) alleging the commission of a subsidy fraud offence. On 20 April 2021, that court initiated a criminal investigation against I.R.O. In the context of that investigation, on 21 May 2021, the Juzgado de Primera Instancia e Instrucción n° 1 de Getafe interrogated I.R.O. as a person under investigation. I.R.O. exercised his right to remain silent. On 2 July 2021, that court examined Y.C. as a witness. The competent European Delegated Prosecutor (‘EDP’) having assumed jurisdiction in the course of the investigations, summoned through decision of 2 February 2023 Y.C. and I.M.B. to appear before them as witnesses. Relying on relevant provisions of Spanish law, lawyers representing I.R.O. and F.J.L.R. lodged an appeal on 7 February 2023 against that decision with the EPPO in so far as it had summoned Y.C. to appear as a witness. They submitted that investigation measure was neither relevant, necessary, nor useful, since the Juzgado de Primera Instancia e Instrucción n° 1 de Getafe had already heard Y.C. in that capacity.
In light of this, the referring court, the Juzgado Central de Instrucción n° 6 de la Audiencia National (Central Court of Preliminary Investigation No 6 of the National High Court), stayed proceedings and asked the Court of Justice (or ‘the Court’) through the preliminary ruling procedure to rule on whether Article 42(1) of the EPPO Regulation precludes national legislation pursuant to which persons under investigation may not directly challenge before a competent national court a decision by which the handling EDP summonses third parties to appear as witnesses in the context of that investigation.
AG Collins opined that the key issue is whether a decision, by which an EDP summonses a third party to appear before it as a witness, constitutes an EPPO procedural act intended to produce legal effects vis-à-vis the persons under investigation for the purposes of Article 42(1) of the EPPO Regulation. The AG suggests that Article 42(1) of the EPPO Regulation aims to confer jurisdiction on national courts to review acts which would
otherwise come within the exclusive jurisdiction of the EU Courts. The AG argues that this expression must be given an autonomous meaning to ensure a consistent division of jurisdiction between national courts and EU Courts in the exercise of judicial control over the EPPO’s acts.
The AG contends that the expression ‘procedural acts’ encompasses those ‘undertaken by the EPPO during its investigations’ which includes, but is not limited to, ‘investigation measures’ within the meaning of Article 30 of the EPPO Regulation. Consequently, a decision by which an EDP summonses a person to appear as a witness is a ‘procedural act’ for the purposes of Article 42(1) of the EPPO Regulation. As regards the expression ‘that are intended to produce legal effects vis-à-vis third parties’, it can be deduced that the legislator’s intention in enacting Article 42(1) was to ensure that acts of the EPPO that should normally have been subject to review by the EU Courts by way of direct action may be subject to judicial review before national courts under Article 263(1) TFEU. This suggests that a procedural act by the EDP intending to produce binding legal effects capable of affecting the interests of third parties by bringing about a distinct change in their legal position must be capable of being subject to judicial review by a competent national court.
The AG, however advised that it would be inappropriate for the Court to take a general position on the question as to whether a decision by which a handling EDP summonses a third party to appear before it as a witness falls within the scope of Article 42(1) of the EPPO Regulation. That issue is ultimately for national courts to determine, by ascertaining whether that decision is an act intended to produce legal effects binding on the third party concerned by bringing about a distinct change in their legal position. To that end, national courts must examine the substance of the decision and assess those effects in the light of objective criteria, such as its content considering, as appropriate, the specific procedural context in which it was made and the powers of the body that adopted it.
Comments
This is a quite important opinion, which, nonetheless is quite ambiguous in its conclusions. I have three minor reflections.
First, on the face of it, it seems absolutely correct to claim that the expression in the EPPO Regulation ‘acts intended to produce legal effects’ is given an autonomous meaning in EU law to ensure uniformity in the application and interpretation of the EPPO Regulation. Although the EPPO Regulation certainly is not aimed at harmonising national procedurals laws, it seems clear that the expression must be interpreted in light of the purpose, aim and content of the EPPO Regulation and other principles of EU law. Secondly, in terms of the meaning of the expression, it seems apparent from the aim and objective of the EPPO Regulation that the acts of the EPPO in general should be subject to judicial review by national courts where review before the EU Courts are not possible to pursue. The system of EU law on remedies have always intended to ensure that there exists a complete system of remedies to ensure that national courts or EU Courts can ensure the legality of the acts adopted by the EU institutions and the Member States (e.g., Les Verts).
On substance it does seem plausible to argue that a procedural decision by a prosecutor to summon a witness is an intermediate decision that generally do not produce legal effects towards one of the parties. Following Article 86(3) TFEU, it is appropriate to consider that procedural acts of the EPPO that are intended to produce legal effects vis-à-vis third parties should be subject to review by the competent national courts in accordance with the requirements and procedures laid down by national law. Member States should thus not be required to provide for judicial review by the competent national courts of procedural acts which are not intended to produce legal effects vis-à-vis third parties, such as the appointment of experts or the reimbursement of witness cost. It seems equally compelling to argue, as the Advocate General does, that the Court’s settled case-law on the concept of ‘acts intended to produce legal effects vis-à-vis third parties’ for the purposes of Article 263 TFEU should guide the interpretation of Article 42(1) of the EPPO Regulation. According to that provision and the case law (e.g. Commission v SRB, para. 65) an action for annulment may be brought against all measures or acts the EU institutions, bodies, offices and agencies adopt, which are intended to produce legal effects binding on and can affect the interests of a natural or legal person by bringing about a distinct change in their legal position.
The defendants had argued that the decision of 2 February 2023 was an EPPO procedural act that produces legal effects for them, as persons under investigation, since (a) it infringed their right to a trial within a reasonable time and (b) an additional witness statement by Y.C. could disclose inculpatory evidence that the handling EDPs could use in criminal proceedings against the defendants.
The argument advanced by the defendants is not convincing. The examination of a witness may as suggested by the Advocate General contain evidence that is of an inculpatory and an exculpatory nature. It is relevant to point out, in that context, that Article 5(4) of the EPPO Regulation provides that ‘[t]he EPPO shall conduct its investigations in an impartial manner’ and that such an examination may well have as its sole purpose to clarify certain facts, to explain a complex mechanism to the investigator or to shed light on the personality of the persons concerned and in general facilitate the conduct of an investigation contribute to the thorough investigation of allegation. On substance, it does not seem compelling to claim that the decision to summon a witness is a ‘procedural act intending to produce legal effects vis-á-vis third parties’.
To conclude, this case underlines the incomplete but slowly emergent system of EU remedies against actions of the EPPO-a system which is still very much reliant on national law and procedures. It is also apparent that the attempts to offer a uniform interpretation of the EPPO Regulation is jeopardised by different practices, different designs and case law from national courts on the scope of judicial review in national proceedings conducted by the EPPO Regulation (Mitsilegas). Contrary to the opinion of the Advocate General I would thus strongly recommend, in the name of uniformity, the Court of Justice to take the opportunity to clarify the meaning of ‘procedural acts intended to produce legal effects’ and following the analysis here rule that a decision to summons a witness, following the Court of Justice’s own case law on standing, is not a decision which strictly changes the legal position of the defendant. This would contribute to providing for a stronger and more coherent EU law system of remedies giving important guidance for prosecutors and national courts involved in interpreting the EPPO Regulation.
Jacob Oberg is Professor in EU Law, University of Southern Denmark; Guest Professor in EU Law, Örebro University
Oberg, J.; “The Embryonic Maturing of a System of Remedies against Actions by the European Public Prosecutor”, EU Law Live, 22/10/2024, https:// eulawlive.com/op-ed-the-embryonic-maturing-of-a-system-of-remedies-against-actions-by-the-european-public-prosecutor/
Ordre Public, Press Freedom and Honour: The Balance in Private International Law (Real
Madrid Club de Fútbol, C-633/22)
Alba Ruiz Ortiz
Introduction
Real Madrid CF – like many football teams around the world – is well versed in scoring goals. For all football fans, the sight of their team finding the back of the net is a decisive moment. However, what happens when the opposing side disputes the legitimacy of the goal, perhaps alleging an offside? What might have seemed like a moment of triumph is plunged into uncertainty as all eyes await the decision of the referee. As it happens, such scenarios are not confined to the football pitch and may even unfold in courtrooms across the continent. Indeed, in a long-standing dispute between Real Madrid CF and Le Monde (French newspaper) concerning claims made in an article published in 2006, the Court of First Instance No 19 (Madrid, Spain) awarded that football club damages for the harm caused to its honour. Nonetheless, the enforcement of that decision later became uncertain when the Court of Appeal (Paris, France) questioned whether it was incompatible with public policy considerations because it interfered with freedom of expression. Such uncertainty brought the case before the Court of Cassation (France), which in turn referred questions to the Court of Justice (‘the Court’) for a preliminary ruling. In similar fashion to a referee, the Court has recently delivered its judgment in Real Madrid Club de Fútbol (C-633/22), determining whether the metaphorical, legal goal ought to stand or not.
Background
Those well acquainted with the case will no doubt be familiar with its highly mediatised background. On 7 December 2006, Le Monde published an online article, claiming that both Real Madrid CF and FC Barcelona employed the services of a doctor connected to a doping network in the cycling world. The following day, those same allegations were published in print, featuring a cyclist in the colours of the Spanish flag, under the headline ‘Dopage: le football après le cyclisme’. Although the newspaper subsequently published a letter it had received from Real Madrid CF in which it denied the allegations, that football club and a member of its medical staff brought an action seeking damages for the harm caused to their ‘right to honour’. Both the court of first instance and the appellate court ruled in favour of Real Madrid CF, and ordered the newspaper to pay 390 000 €, with the company and the journalist jointly and severally liable to pay 30 000 € to the member of the medical team. On 24 February 2014, the Spanish Supreme Court dismissed the appeal lodged against that decision. Thereafter, the Court of First Instance No 19 (Madrid, Spain) ordered the enforcement of the judgment and, in February 2018, the Regional Court (Paris, France) issued declarations of enforcement regarding the orders.
However, several years later, the Court of Appeal (Paris, France) overturned those declarations on the ground that the Spanish court’s orders were, inter alia, manifestly at variance with French international public policy because
the penalties created a deterrent effect on the media and interfered with the right to freedom of expression, as protected under various human rights instruments. In response, an appeal was brought in cassation against that decision, claiming that, among other things, the Court of Appeal had substituted the assessment of harm by the Spanish court for its own, thereby reviewing the merits of the original judgment in breach of Articles 34(1) and 36 of the Brussels I Regulation (the regulation has since been replaced by Regulation No 1215/2012 (‘the Recast Regulation’), but the former applies to the main proceedings). The Court of Cassation decided to stay the proceedings, requesting that the Court assist it in determining whether the financial penalty imposed on the newspaper for harming the reputation of the football club could be considered an infringement of freedom of expression under, inter alia, Article 11 of the Charter of Fundamental Rights of the European Union (‘Charter’).
Judgment
The Court’s judgment – delivered by the Grand Chamber – is concise, yet striking for its decisiveness and depth. The reasoning set out therein is thoughtfully segmented into three distinct (but interwoven) parts, which address the array of questions put before this judicial institution in a manner characteristic of its jurisprudential approach. As its point of departure, the Court notes that the system of recognition and enforcement of judgments laid down in the Brussels I Regulation is based on mutual trust. For that reason, judgments handed down in one Member State must be recognised in the other Member States and, in principle, enforced. That being said, to strike a fair balance between mutual trust in justice and respect for other key considerations, Article 45(1) of the Brussels I Regulation specifies the possibility of refusing a declaration of enforceability on the basis of Articles 34 and 35 of that regulation. Here, the Court recalls that the former provision provides for a refusal of recognition if the judgment in question is manifestly contrary to public policy considerations in the Member State where recognition is sought. However, it makes clear that, while it is not in the position to define the content of a Member State’s public policy, it does have jurisdiction to review the limits within which a national court wishing to refuse recognition on the basis of this exception is able to do so.
At this juncture, the Court clarifies that recourse to the public policy clause under Article 34(1) of the Brussels I Regulation is permitted only in exceptional circumstances if the recognition or enforcement of a judgment would result in a manifest breach of a rule of law, or a right, regarded as fundamental in the legal order of the Member State concerned. The same holds true, as was established as far back as the judgment in Krombach (C-7/98), for infringements of a rule of law or right of the European Union. Indeed, compliance with the requirements arising from the fundamental rights enshrined in the Charter is required in the context of the Brussels I Regulation, in particular where an action is brought against the enforcement of a judgment in accordance with the relevant provisions therein. Therefore, although the principle of mutual trust is of fundamental importance, there is room for manoeuvre for a national court to refuse the enforcement of a judgment if it believes that such enforcement would result in a manifest infringement of a fundamental right enshrined in the Charter. The judgment then turns to the fundamental right at the heart of the case, namely the right to freedom of expression. Aligning with the Opinion of Advocate General Szpunar, the Court emphasises that this right is an essential principle of the European Union’s legal order given its crucial significance for a democratic and pluralistic society.
Accordingly, in line with its established interpretation of Article 11 of the Charter, and drawing on the corresponding right in Article 10 of the European Convention on Human Rights (‘ECHR’), the Court repeats the, by now, deep-seated mantra that restrictions to freedom of expression are severely limited, particularly in the field of political speech and in matters of general interest. Notably, issues relating to professional sport fall within that category (see the judgment of the European Court of Human Rights in Colaço Mestre and SIC –Sociedade Independente de Comunicação, S.A. v. Portugal). At the same time, however, while the press assumes an indispensable function as a public watchdog, any legal or natural person harmed by defamatory language or harmful content must be able to bring an action for damages capable of constituting an effective remedy against the damage caused to their reputation. Indeed, press freedom is limited and, as the main proceedings illustrates, both ordinary individuals and global corporations may suffer reputational damage as a consequence of the exercise of that freedom. Even so, the Court appropriately points out that the awarding of damages, where such harm is confirmed, must have a reasonable relationship of proportionality between the sum awarded and the harm in question. A penalty – albeit justified – must not entail any undue restrictions on freedom of expression that risks hindering, in the future, media coverage of similar issues.
With the factual background no doubt in mind, the judgment subsequently provides the referring court with valuable guidance by noting that large or even substantial sums, relative to the financial resources of the party in question, can exert a deterrent effect. Additionally, it emphasises the need for factors to be considered such as the publication of a denial or correction of any false allegations made. Drawing the analysis to its conclusion, the Court categorically repeats that it is possible under Article 34(1) and Article 45 of the Brussels I Regulation to refuse the enforcement of a judgment such as the one at hand in the main proceedings where it would entail a manifest breach of Article 11 of the Charter. However, that assessment is for the referring court to make in view of all the factors or criteria mentioned above. It must ascertain whether the damages awarded are manifestly disproportionate to the amount of harm caused to the reputation at issue, thus risking a deterrent effect in breach of the freedom of expression. Lastly, but of the utmost relevance, the Court stresses that any such scrutiny cannot involve a review of the substantive assessment made by the courts of the Member State of origin since that is expressly prohibited under the Brussels I Regulation. Therefore, the referring court cannot call into question the decision of the Spanish courts as regards the seriousness of the fault of the defending parties. It must – even if it finds a manifest infringement of the freedom of the press – limit the refusal to enforce the decision(s) in question to the manifestly disproportionate part of the damages that were awarded.
Analysis
The long-awaited judgment has undeniably sparked a flurry of excitement in that curious place where the worlds of sport and law converge. This is – for obvious reasons – rather positive since judgments within the framework of EU law are brought to a broader audience. However, the accurate portrayal of the implications of this judgment, if not to say any and all judgments, is fundamental. For that reason, those hastily interpreting the Court’s ruling as a ‘defeat’ for Real Madrid CF ought to bear in mind that le diable se cache dans les details. Returning to the analogy employed in the introduction, the decision of the Court (like that of a referee) is that the ruling of the Spanish
courts in favour of Real Madrid CF (the goal) must stand since any review to establish a manifest infringement cannot entail a substantive assessment by another jurisdiction. However, the Court’s judgment does acknowledge the possibility for a national court to review and perhaps adjust the penalty, if the original sum awarded is found to be manifestly disproportionate in view of its implications for fundamental rights (here, press freedom). Indeed, the scope for refusing to enforce the decision of the Spanish courts is, as outlined in paragraph 73, strictly confined to the portion of the penalty that is deemed manifestly disproportionate.
Yet, what is disproportionate depends, of course, on the perspective of the one making the assessment. Just as football referees may interpret the same situation differently, courts across the European Union may also arrive at opposing conclusions. The Court’s judgment thus reflects the challenges inherent in the European Union; an amalgamation of Member States with diverse legal traditions, standards, and perspectives on public policy, particularly regarding fundamental rights protection. Such complexities surrounding the requirements set out in national laws may inevitably differ in sensitive cases in which fundamental rights, or even constitutional values, such as the right to honour under Article 18(1) of the Spanish Constitution, are at play. For that reason, the value of the judgment lies in its navigation of the complexities and the clarifications it provides on how national courts might approach resolving these potential conflicts within, and most importantly, in alignment with, the framework of EU law. Indeed, the Court’s findings provide useful guidance on the proper application of Article 34(1) of the Brussels I Regulation in circumstances such as those in the main proceedings, while nonetheless making it clear that reliance thereon is not without its limitations given that such use inevitably undermines the overall functioning of the recognition system.
In that respect, the judgment itself embodies a delicate balancing act – one through which the Court in fact shines light on how Article 52(3) of the Charter (which ensures that the scope of rights guaranteed thereunder is consistent with those under the ECHR) is helpful in aiding the Court in its interpretation of the given right or freedom at issue. In arriving at the conclusion that the enforcement of the original judgment must be refused if it represents a manifest infringement of freedom of the press pursuant to Article 11 of the Charter, the Court draws heavily on the equivalent provision in Article 10 ECHR. By doing so, the Court reinforces its interpretation of the former provision by directly relying on the scope and application of the latter, as interpreted by the European Court of Human Rights. That approach is praiseworthy because it fosters coherence between the two jurisdictions and ensures consistency in the guidance provided to national courts on the factors and tests to be applied to determine, for example, if the award of damages is manifestly disproportionate. The only question which remains here is whether the Court’s combined reading of the Brussels I Regulation’s provisions with Article 11 of the Charter, and in the light of Article 10 ECHR, extends beyond the factual circumstances of this specific case, or is of relevance in cases concerning other fundamental rights and freedoms that pertain to public policy considerations in the Member State in which recognition is sought.
The answer is not immediately obvious. Indeed, it is difficult to see how the margin of discretion that national courts have in such press-related matters to consider the manifest consequences of the damage award translates to other factual and legal contexts. While it is possible to observe or even calculate – based on the sum of a penalty
imposed on a newspaper – how disproportionate that is and establish the deterrent implications for freedom of the press, the same cannot be said if the fundamental freedom at hand is something completely different and the issue that represents a potential manifest infringement of said right or freedom has nothing to do with the award of any damages. As a result, the significance of the judgment in Real Madrid Club de Fútbol (C-633/22) should not be overlooked in the context of any future cases which raise similar factual and legal considerations. However, where a national court seeks to invoke Article 34 of the Brussels I Regulation (or, to be more precise, Article 45(1) (a) of the Recast Regulation) in cases involving the preservation of public policy considerations, this judgment offers limited guidance on the elements which that court must weigh, and the extent of its discretion, if the case does not concern freedom of the press under Article 11 of the Charter and Article 10 ECHR. Thus, it seems that the Court will surely be called on again to provide, on a case-by-case basis, further clarifications as regards the possibility to refuse the enforcement of a judgment where new and distinct problems of public policy emerge at the national level.
Alba Ruiz Ortiz is a Legal Assistant (Cabinet of Advocate General M. Campos Sánchez-Bordona) at the Court of Justice.
Ruiz Ortiz, A.; “Ordre Public, Press Freedom and Honour: The Balance in Private International Law (Real Madrid Club de Fútbol, C-633/22)”, EU Law Live, 24/10/2024, https://eulawlive.com/op-ed-ordre-public-press-freedom-and-honour-the-balance-in-private-international-law-real-madrid-club-defutbol-c-633-22/
Standing for the Rule of Law? Judge Associations’ locus standi before EU Courts in Medel (T-530/22 to T-533/22)
Pekka Pohjankoski
Should judge associations have standing to challenge EU measures which allegedly breach judicial independence and the rule of law? This is the question to be decided on appeal by the Court of Justice following the Order of the General Court of 4 June 2024 in Magistrats européens pour la démocratie et les libertés (Medel) and others v. Council (T-530/22 to T-533/22). In that Order, the General Court’s Grand Chamber rejected as inadmissible the actions of various European judge associations against the Council’s decision which approved Poland’s intended use of funds from the EU’s pandemic-era recovery instrument, the Recovery and Resilience Facility (‘RRF’).
On their substance, these actions contest the legality of the judicial-independence ‘milestones’ concerning Poland’s Recovery and Resilience Plan (‘RRP’), which that Member State must comply with as a precondition for the disbursement of EU funds. However, following the General Court’s ruling, the case is, for now, limited on appeal to the standing (locus standi) of private parties or their representative associations. Will the Court of Justice rule that an action purporting to defend judicial independence should benefit from less stringent standing criteria?
That is unlikely.
A Principled Enquiry: Can You Defend the General Good in Court?
Amid this regulatory-procedural thicket lies a principled enquiry. It relates to whether actions defending the general good should be admitted under relaxed standing conditions. On appeal, the judge associations claim standing based on the still-recent climate-change-related judgment of 9 April 2024 of the European Court of Human Rights (‘ECtHR’) in Verein KlimaSeniorinnen Schweiz v. Switzerland (‘KlimaSeniorinnen’), in which the ECtHR granted associations broader standing in order to vindicate rights under the European Convention on Human Rights (‘ECHR’) and to hold States to their commitments in fighting climate change.
Are challenges to the preservation of judicial independence, though no doubt fundamental in a constitutional democracy based on the rule of law, akin to those regarding access to courts in climate-change litigation? The standing rights of associations defending general causes is a notoriously complex issue. Others claiming the need for broadened standing include, for example, the environment, or yet those legally ‘voiceless’ groups such as animals or future generations. The present appeals invite the Court of Justice to reflect on what interests, if any, should be afforded broadened rights of standing.
Contesting the Judicial-Independence ‘Milestones’: the Context
The contested act is the Council’s implementing decision of 16 June 2022 on the approval of the assessment of Poland’s RRP, as amended, adopted under the Regulation 2021/241 on the Recovery and Resilience Facility (‘RRF Regulation’). Under the RRF, the EU makes available to Poland almost EUR 60 billion [sic] in nonrepayable support and loans. However, the funds come with strings attached. Before any payments are made, Poland is required to meet certain crucial ‘milestones’, specified in the annex to the contested act, relating to strengthening the independence of the judiciary and, in particular, to fixing problems connected to the Polish Supreme Court’s chamber for disciplinary procedures against judges.
The milestones have been criticised for reducing the ‘rule of law crisis’ in Poland to legislative quick fixes. To recall, at the time, Poland’s constitutional tribunal had recently purported to nullify the principle of judicial independence in EU law (see eg Craig here) and the ‘Law and Justice’ (PiS) government remained unresponsive to European criticism. In this context, the milestones appeared to many as too narrow (for more contextual analysis, see my previous Op-ed here). That said, some of this criticism was also misguided given that the contested act did not immediately disburse the funds under the RRF to Poland. Instead, a separate Commission assessment under Article 24 of the RRF Regulation continued to be required to ensure compliance with the milestones (on that procedure, see here).
In this setting, the judge associations’ actions, introduced in 2022, essentially sought to challenge the way the Council framed the situation in Poland in terms of milestones which, in their view, did not guarantee judicial independence and the right to effective judicial protection under EU law, or the protection of the EU’s financial interests under the RRF Regulation.
The General Court: Not Your Business, Judges
The General Court rejected the actions as inadmissible. Having first dismissed the specific possibility for the judge associations to act under the RRF or that the associations’ own particular interests could be sufficiently affected by the contested act, it then focused on whether the members of the associations – judges – could be ‘directly concerned’ by that act, within the meaning of Article 263(4) TFEU, the provision which famously sets out the standing criteria for private litigants. Applying the Nord Stream 2 case law (see C-348/20 P), the General Court essentially held that the contested act did not affect directly either the Polish judges concerned by disciplinary proceedings, let alone judges in other Member States. No sufficient nexus between the Council’s approval of the RRP, including the milestones, and the legal situation of those judges existed (see para. 88 of the Order).
Instead, for the General Court, the contested act was about budgetary conditionality. Its purpose was to ensure compliance with the RRF Regulation, provide an ‘effective response to the challenges identified in the context of the European Semester’, and to ensure that the EU’s financial interests are not adversely affected by the RRP’s implementation (see paras 74 and 75). As such, the purview of the milestones was limited to establishing conditions for the financial measures adopted under the RRF. While the milestones might encourage changes
in Polish legislation, the impact on the legal situation of the judges would be incidental, not direct (see para. 91). Thus, the General Court rejected the actions for lack of ‘direct’ concern. It equally turned down the invitation to assess the situation of general-good associations differently, reiterating that the criteria under Article 263 TFEU cannot be relaxed without de facto amending the EU Treaties.
Notably, the General Court highlighted, in the penultimate paragraph of the Order, that not only was Poland bound to observe the EU Treaties and the case law of the EU Courts, but that also the privileged applicants, namely the other Member States and institutions, could challenge such a Council implementing decision. Further, it noted that the Commission, as the ‘guardian of the Treaties’, must carry out the continuous assessment of Poland’s compliance with the milestones under Article 24 of the RRF Regulation, and must ensure Member States’ compliance with EU law more generally. By contrast, the Council’s budget conditionality decision was not the individual judges’ or their associations’ business.
The General-Good Argument on Appeal: Judges as EU law’s ‘Climate Seniors’?
On appeal, the judge associations’ most salient argument relates to the ECtHR’s KlimaSeniorinnen judgment, in which specific criteria were crafted regarding the locus standi of associations engaged in climate-change litigation. Under these criteria, such an association has standing independently of the standing rights of those it represents. If the KlimaSeniorinnen criteria were transposed mutatis mutandis to the present appeals, the appellants could have standing simply because they are legally established, defend judicial independence in accordance with their statutory mandate, and are ‘genuinely qualified and representative’ to act on behalf of judges affected by adverse effects to the rule of law (see KlimaSeniorinnen, para 502).
However, it is clear that the procedural law of standing under the EU Treaties and the ECHR is different, and KlimaSeniorinnen clearly concerns climate-change litigation. That said, the appeals provide an opportunity for the Court of Justice to reflect on whether similar considerations exist, in the context of Article 263(4) TFEU, for the preservation of judicial independence as those which prompted the ECtHR to devise particular standing rules – indeed a limited carve-out to the ban on action popularis – for associations in the climate-change context.
The General Court has now implied (see comments on the Order’s penultimate paragraph above) that, in the present situation, there are multiple privileged applicants to oversee judicial independence in Europe, which in part speaks against extending the grounds of standing. The Court of Justice has in recent years been receptive to broader standing rights in the context of specific sectoral rules, such as the Aarhus Convention (regarding environmental organisations, see eg C-664/15, para 47). However, as regards Article 263(4) TFEU, it has remained skeptical of broadening the criteria. No standing rights for acting specifically in the interest of judicial independence exist, for now, in EU legislation.
Conclusion: New EU Financial Governance on Trial
The judge associations may face an uphill battle. Nevertheless, the appeals are worth watching closely. They not only invite the Court of Justice to consider under what conditions private parties are able to participate in rule-
of-law litigation but also to clarify whether budget conditionality measures can be contested. On this latter point, too, the appeals may prove significant.
Indeed, the EU’s new forms of financial governance, such as the RRF, require of Member States increasingly substantive policy outcomes. Going forward, the question of who can contest such governance via financial conditionality, personally or through their association, may yet come to have considerable relevance.
Pekka Pohjankoski is Postdoctoral Researcher at the Faculty of Law, University of Turku (Finland)
Pohjankoski, P.; “Standing for the Rule of Law? Judge Associations’ locus standi before EU Courts in Medel (T-530/22 to T-533/22)”, EU Law Live, 23/10/2024, https://eulawlive.com/op-ed-standing-for-the-rule-of-law-judge-associations-locus-standi-before-eu-courts-in-medel-t-530-22to-t-533-22/
The Court of Justice decidedly jumps on the Procurement Protectionism Bandwagon, creating legal Uncertainty along the Way (C-652/22)
Albert Sanchez-Graells
By falling just short of mandating a complete ban on access to EU procurement by third-country economic operators not covered by international agreements, in Kolin Inşaat Turizm Sanayi ve Ticaret (C-652/22) (‘Kolin’), the Court of Justice has suddenly crystallised a change in EU procurement-related trade policy. Kolin will have many, and potentially quite problematic, practical ramifications. In this Op-Ed, I reflect on the broader context in which the Court has reached its position. I also stress why I think this is an extraordinary case of judicial activism, as the Court of Justice has gone out of its way to answer a question it had not been asked. I show how the position taken by the Court goes well beyond the settled (expectations of) legal interpretation under the EU procurement rules, creates significant legal uncertainty, and brings into question the future of recently developed EU procurement-related trade law instruments. I had previously criticised the Opinion of AG Collins in this case, and that earlier comment contains additional problems in the position taken by the Court.
Some context
The EU historically kept its procurement markets open to international trade, not only through the inclusion of procurement commitments in free trade agreements (FTAs) and championing developments under the World Trade Organisation Government Procurement Agreement (GPA), but also by being one of the most open procurement markets in the world. The traditional policy approach was largely one of economic persuasion; by granting or tolerating access to its internal market for public contracts, the EU expected to obtain (legal or de facto) reciprocity. Traditionally, EU procurement law has thus not prevented access from third-country economic operators. While it has stressed the bindingness of commitments towards economic operators covered by the FTAs or GPA (‘agreement-covered economic operators’), it has also tolerated participation of other ‘third-country economic operators’.
This is clear in the 2014 public procurement package, and especially in the context of procurement in the water, energy, transport and postal services sectors, where the Utilities Directive (2014/25/EU) explicitly contains, on the one hand, a reminder of the obligation of ‘no less favourable treatment’ of agreement-covered economic operators (Art. 43) and, on the other, rules on the treatment of tenders including products originating in third countries (Art. 85), and on the broader procurement relations with those third countries (Art. 86). This reflects the traditional position of pragmatic tolerance of access by third-country economic operators in search for (legal or de facto) reciprocity.
This policy started to shift in parallel with the negotiations of the 2014 public procurement package, and eventually resulted in the adoption, in 2022, of the International Procurement Instrument (IPI) and the Foreign Subsidies Regulation (FSR). In simple terms, these instruments grant powers to the Commission to restrict or ban access to procurement markets by third-country economic operators and, in the case of the FSR, this includes agreementcovered operators. These instruments signal a significant ‘hardening’ of the EU’s stance towards trade-related procurement and, in my view and the view of others, a shift towards economic protectionism.
It is important to stress that the IPI and FSR are built on the premiss that EU procurement law does not mandate the absolute exclusion of third-country economic operators. This was already clear in the 2019 Guidance on the participation of third-country bidders and goods in the EU procurement market, which stressed that thirdcountry economic operators ‘do not have secured access to procurement procedures in the EU and may be excluded’ (my emphasis). The IPI was precisely developed to create a process for such exclusion. The summary of the IPI stresses that it gives the Commission the power to ‘impose, as a last resort, IPI measures to restrict access to EU public procurement procedures for businesses, goods and services from the non-EU countries concerned’ (my emphasis). The non-EU countries concerned being only those with which the EU does not have a procurement agreement, as the IPI does not apply to agreement-covered economic operators (Art. 1(3)). Similarly, the FSR grants the Commission the power to prohibit the award of a contract to an economic operator that has benefitted from a foreign subsidy distorting the internal market, in this case without distinguishing between agreementcovered and other third-country economic operators (Art. 31(2) and recital 45).
It goes without saying, but seems to need spelling out, that if the EU procurement rules—and the Utilities Directive in particular—had already banned access from third-country economic operators, the IPI would be entirely redundant and the FSR would only be relevant in relation to agreement-covered economic operators. This does not seem to be the view of the Court, though, as we will see that the Judgment in Kolin markedly deviates from the—until now majoritarian, if not universal—view that EU procurement law tolerated participation by third-country economic operators.
Getting out of its way to answer a question that was not asked
Before getting into the substance of the Judgment, it is worth highlighting third-country economic operators’ access to EU procurement markets was by no means an issue the Court necessarily had to rule on in Kolin. Indeed, for me, one of the striking aspects of Kolin is that the Court has gone out of its way to answer a question it was not asked.
The case concerned a rather mundane set of circumstances where the contracting authority allowed its preferred tenderer to provide additional documentation demonstrating that it met the relevant technical and professional capacity requirements, after the original award decision had been quashed for shortcomings in the initial documentation. The preliminary reference thus concerned a set of questions seeking to ascertain the limits on the contracting authority’s discretion to request and consider such supplementary documentation at such late stage of the procedure, in particular in relation to a potential breach of the principles of equal treatment and
non-discrimination—if necessary, interpreted in relation to the right to good administration under Art. 41 of the Charter (although this does not seem to have been raised in the case).
The focus of the dispute could thus squarely be placed on the behaviour of the contracting authority and its duties under the Utilities Directive. From the perspective of the adequate interpretation and application of EU (procurement) law, it is irrelevant how the case reaches the Court of Justice, as the core legal issue concerns the constraints of the behaviour of a contracting authority that has positive duties under the Utilities Directive. There is no question that the Utilities Directive applied to the conduct of the specific tender procedure. From this perspective, there is limited room to question the applicability of EU (procurement) law and the relevance of the questions posed by the referring court. The case could have been decided like others in a long-running saga of case law on clarifications of tenders.
However, the Court took a different approach and decided to focus on the fact that the complainant in the domestic dispute is a third-country economic operator (from Türkiye) (Kolin, para. 39). This shifted the focus from the duties constraining the contracting authority under the Utilities Directive to the rights of the complainant. In the end, the question that Kolin addresses is whether third-country operators can participate in tenders for public contracts covered by EU law and, if so, under which conditions. This question had not been asked by the referring court (Kolin, para. 40). This marked shift in approach not only opened a Pandora’s box of issues concerning the interpretation of the Utilities Directive and its fit with other instruments of procurement-related trade policy, but also provided the (self-generated) opportunity for the Court to decidedly jump on the protectionism bandwagon.
Given how purposefully the Court grabbed the opportunity to answer a question it had not been asked, the way in which it addressed the question becomes particularly problematic because, in falling short of explicitly and unqualifiedly mandating exclusion of third-country operators, the Court has created legal uncertainty with potentially significant practical and conceptual ramifications.
Participation without enforceable rights?
The Court of Justice has taken the view that, regarding third-country economic operators, ‘although EU law does not preclude those economic operators, in the absence of exclusion measures adopted by the European Union, from being allowed to participate in a public procurement procedure governed by Directive 2014/25, it does, however, preclude those economic operators from being able, in the context of their participation in such a procedure, to rely on that directive and thus to require that their tender be treated equally to those submitted by tenderers from Member States and by the tenderers from third countries referred to in Article 43 of that directive’ (Kolin, para. 45, emphasis added). The justification given the Court is that allowing third-country operators to rely on the provisions of the Directive to make claims of equal treatment ‘would have the effect of conferring on them a right to no less favourable treatment, contrary to Article 43 of that directive, which limits the benefit of that right to economic operators from third countries which have concluded with the European Union an international agreement’ (Kolin, para. 46, emphasis added). The Court further states that
… To interpret that provision differently and thus to render unlimited the personal scope of that directive would be tantamount to guaranteeing economic operators of those third countries equal access to public procurement procedures in the European Union. For the reason set out in paragraph 46 of the present judgment and as is also stated, now, in recital 10 of the IPI Regulation, Directive 2014/25 must be understood as meaning that the access of economic operators of those third countries to public procurement procedures in the European Union is not guaranteed and that those operators may be excluded from them (Kolin, para. 47, emphasis added).
Ultimately, then, the Court established that ‘in a situation … involving the participation, as accepted by the contracting entity, of a Turkish economic operator in a public procurement procedure governed by Directive 2014/25, that operator cannot rely on … that directive in order to challenge the decision awarding the contract concerned’ (Kolin, para. 51).
The Court seems to be aiming for an impossible equilibrium between the traditional position of de facto tolerance and the preservation of the rights of agreement-covered economic operators. In my view, in falling short of mandating a ban on participation and opting instead for the position that EU procurement law foresees the possibility for third-country economic operators to participate with no enforceable rights, the Court creates two problems.
The first problem arises from the recognition by the Court that, ultimately, treating the tenders submitted by thirdcountry economic operators equally to those submitted by tenderers from Member States and by the tenderers from agreement-covered economic operators limits the benefit of the rights of the latter. This raises the question whether, functionally, the mere tolerance of participation by third-country economic operators on an equal basis would also be an infringement of Art. 43 of the Utilities Directive because contracting authorities would not be preserving the benefits expected to the rights of agreement-covered economic operators (and tenderers from Member States?). Is the logical implication of the position stated by the Court that Art. 43 of the Utilities Directive requires ‘less favourable’ treatment to be granted to tenders from third-country economic operators?
The second, and related, problem is that the Court limits its judgment to the impossibility for third-country economic operators to rely on EU procurement law in order to challenge the decision awarding the contract concerned. But does this extend to challenges based on national law or other grounds?
The Court goes on to ‘fix’ those two problems. But, in my view, it does so in a manner that triggers more problems than it solves.
A problem actually pushed down to the domestic level, on a case-by-case basis
The issue of the treatment of third-country economic operators’ participation at the domestic level is also addressed by the Court of Justice in Kolin. After rehearsing the position under the Treaties and in case law, the Court reminds us that
…only the European Union has competence to adopt an act of general application concerning access, within the European Union, to public procurement procedures for economic operators of a third country which has not concluded an international agreement with the European Union guaranteeing equal and reciprocal access to public procurement, by establishing either a system of guaranteed access to those procedures for those economic operators or a system which excludes them or provides for an adjustment of the result arising from a comparison of their tenders with those submitted by other economic operators (Kolin, para. 61).
And that
… the European Union has not empowered the Member States to legislate or adopt legally binding acts concerning access to public procurement procedures for economic operators of a third country which has not concluded an international agreement with the European Union (Kolin, para. 62).
Logically, this should have extended the ban on relying on EU law to challenge procurement decisions to the national level, and the consistent position would have been that Member States cannot enable ‘no less favourable treatment’ claims under their domestic provisions.
However, in a surprising twist of argumentation identifying contracting authorities as something potentially separate from the Member State to which they belong, the Court stressed that
In the absence of acts adopted by the European Union, it is for the contracting entity to assess whether economic operators of a third country which has not concluded an international agreement with the European Union guaranteeing equal and reciprocal access to public procurement should be admitted to a public procurement procedure and, if it decides to admit them, whether provision should be made for an adjustment of the result arising from a comparison between the tenders submitted by those operators and those submitted by other operators (Kolin, para. 63, emphasis added).
Weirdly, this comes to empower each and every single contracting authority to take its own decisions on whether to tolerate participation of third-country economic operators. It can be that this will become a red herring, though, given the Court’s framing of the obligation to generate some degree of ‘less favourable’ treatment in case contracting authorities do decide to tolerate participation.
DIY ‘less favourable treatment’
In its final passages, the Court addresses the issue of the functional prohibition of no less favourable treatment for third-country economic operators. The Court indicates that
… it is open to the contracting entity to set out, in the procurement documents, arrangements for treatment intended to reflect the objective difference between the legal situation of those operators, on the one hand, and that of economic operators of the European Union and of third countries which have concluded such an agreement with the European Union, within the meaning of Article 43 of that directive, on the other hand.
In any event, national authorities cannot interpret the national provisions transposing Directive 2014/25 as also applying to economic operators of third countries which have not concluded such an agreement with the European Union, which have been admitted, by a contracting entity, to participate in a procedure for the award of a public contract in the Member State concerned, as otherwise the exclusive nature of the European Union’s competence in that area would be disregarded.
While it is conceivable that the arrangements for treatment of such operators should comply with certain requirements, such as transparency or proportionality, an action by one of those operators seeking to complain that the contracting entity has infringed such requirements can be examined only in the light of national law and not of EU law (Kolin, paras 64-66, emphases added).
This is, in my view, the most problematic part of the Kolin Judgment because it will be almost impossible to implement in any way that does not completely exclude participation by third-country economic operators. Assessing all implications of this passages exceeds the possibilities of this Op-Ed, as they concern, among other issues, how ‘less favourable’ must the treatment be and how does that square with approaches under the IPI and FSR, the extent to which EU and agreement-covered economic operators can challenge such treatment and claim that it does not adequately ‘reflect the objective difference between the legal situation’ of the different competitors, the interaction between the ECHR (in particular in relation to due process rights) and domestic rules that, by virtue of being excluded from the scope of the EU procurement directives may be seen not to be covered by the Charter (although I have my doubts that the Court could say, without departing from its prior case law) that the mandated ‘less favourable treatment’ of third-country economic operators is not within the scope of EU law for the purposes of the application of the Charter, the impact on domestic public and administrative law doctrines, the impact on current procurement procedures and procurement challenges, etc.
Final thoughts
Overall, I think Kolin is a bad Judgment. I think it does not make sense from a policy perspective because it crystallises an absolutist position that was not being pursued by the European Commission or the EU legislators. More importantly, in its own terms, I think it is a bad Judgment because the Court does not quite finish the job by establishing an absolute ban on participation. The position that domestic legislation is pre-empted by the EU’s exclusive competence but case-by-case decisions by contracting authorities are allowed as long as they ensure a degree of objective less favourable treatment that adequately reflects the objective difference between the legal situation of the different competitors (what a test to apply…) has opened a Pandora’s box that will have long lasting negative consequences.
Looking further ahead, it could well be that Kolin results in an explicit prohibition of third-country participation in the new procurement directives that are just about being developed. In that case, the EU legislator would have to take the explicit step the Court has tried to avoid or conceal. However, it could also be that it triggers a very complex approach to seeking to consolidate the ‘participation without rights and in less favourable conditions’
approach followed by the Court. Given the context of judicial activism in which Kolin has emerged, I keep wondering why did the Court not simply state that preserving the benefits arising from Art. 43 and the EU’s international commitments requires exclusion of third-country economic operators. I would still have thought it was a bad case on policy or normative grounds, but it would at least have made more legal sense and avoided creating a tidal wave of legal uncertainty, especially if the Court restricted the effects of the interpretation to the future.
Albert Sanchez-Graells is a Professor of Economic Law at the University of Bristol Law School. With Roberto Caranta, he co-edited ‘European Public Procurement. Commentary on Directive 2014/24/EU’ (Edward Elgar 2021).
Sanchez-Graells, A.; “The Court of Justice decidedly jumps on the Procurement Protectionism Bandwagon, creating legal Uncertainty along the Way (C-652/22)”, EU Law Live, 25/10/2024, https://eulawlive.com/op-ed-the-court-of-justice-decidedly-jumps-on-theprocurement-protectionism-bandwagon-creating-legal-uncertainty-along-the-way-c%e2%80%91652-22/
Court of Justice upholds Commission Decisions on German State Aid for Energy Network Operators
Alma Dangy
On September 26, 2024, the Court of Justice of the European Union (‘Court of Justice’ or the ‘Court’) issued several judgements on a set of appeals concerning Germany’s unlawful State aid to large energy consumers through network charge exemptions. These judgments addressed appeals against European Commission decisions by both the German government and beneficiary companies, including Covestro, AZ, Infineon Technologies, and WEPA Hygieneprodukte (C-790/21 P and C-791/21 P; C-792/21 P and C-793/21 P; C-794/21 P and C-800/21 P; C-795/21 P and C-796/21 P).
Upholding the General Court’s rulings and following the AG Medina Opinions, the Court of Justice confirmed that network charge exemptions provided between 2012 and 2013 constituted illegal State aid. Through its judgements, the Court of Justice clarified key points about what constitutes State aid under Article 107(1) TFEU and emphasised the procedural standards for challenging such decisions as outlined in Article 263 TFEU.
Background of the Cases
The key issues in these cases centered on the legality of network fee exemptions provided to large electricity consumers. These exemptions were provided under German law, and allowed certain industrial users to avoid network charges, which were then redistributed to other network users effectively reducing the financial burden on large energy consumers. In May 2018, The European Commission decided that these exemptions constituted illegal State aid and ordered their recovery, prompting multiple appeals.
The main points of contention centered around the qualification of State aid and use of state resources, Article 263 TFEU procedural issues, and equal treatment when it comes to state aid recovery.
Qualification of Network Fee Exemptions as State Aid and use of State Resources
The companies and the German government argued that the network fee exemptions provided to large energy consumers did not constitute State aid under Article 107(1) TFEU. They contended that these exemptions were not financed through state resources but were rather private transactions. The Transmission System Operators (‘TSOs’) were private entities that collected and managed these funds, and the appellants asserted that this private nature meant that the funds should not be classified as state resources. Conversely, the Commission maintained that the exemptions were indeed State aid. It argued that even though the funds were administered by TSOs, the scheme was orchestrated by the German government, and the collection and allocation of funds were controlled by a regulatory framework established by the state. The regulatory oversight meant that the state had significant control over these resources, and thus, the funds had to be treated as state resources.
State Resources and State Control
Appellants also argued that the mere existence of a surcharge, coupled with state control over TSOs, should not be enough to classify the funds as state resources. They asserted that the General Court had incorrectly treated the existence of a tax and state control over the funds as interchangeable criteria. Addressing this argument, the Advocate General (‘AG’) stated in her Opinion that the General Court correctly treated the existence of a tax and state control as alternatives for classifying the funds as state resources. AG Medina highlighted that state control was evident, as the TSOs were obligated by law to collect and distribute the surcharges according to stateimposed rules, thereby fulfilling a public function.
Procedural Matters under Article 263 TFEU
Those cases also addressed procedural issues regarding the timeframe for bringing an action for annulment of a Commission Decision. The Commission contended that the starting point for calculating the two-month limit should be when the decision became known to the interested parties, rather than waiting for formal publication in the Official Journal. According to the Commission, this interpretation was necessary to prevent the beneficiaries from delaying legal action beyond reasonable timelines.
Conversely, appellants argued that the two-month time limit for appeal should begin only after the formal publication of the decision in the Official Journal. They maintained that without a formal publication, it was impossible to ensure that all interested parties were fully aware of the Decision, which would violate principles of legal certainty.
AG Medina supported the General Court’s interpretation, stating that the formal publication in the Official Journal serves as the appropriate starting point for calculating the time limit for annulment actions. The AG argued that relying solely on when parties became aware of the decision could create uncertainties and unequal access to justice.
Equal Treatment and State Aid recovery
Companies stated that the recovery of State aid would violate the principle of equal treatment. They maintained that requiring them to repay the aid placed them at a disadvantage compared to companies that had not benefited from the exemptions. Consequently, they claimed that state aid recovery was discriminatory, as it treated them differently even though they were acting in accordance with German regulations when benefiting from the network charge exemptions.
Judgement of the Court of Justice
State Aid Qualification and State Resources
The Court of Justice upheld the General Court’s findings that the network fee exemptions constituted State aid, confirming that the funds collected via network surcharges managed by the TSOs could indeed be considered as
state resources. The Court of Justice clarified that the key factor was not whether the funds were held by public or private bodies, but rather the extent of state control over those resources.
With this, the Court of Justice followed the AG’s Opinion, who underscored that state control was evident because the TSOs were mandated by regulation to collect and distribute the surcharges, thus fulfilling a public function. This involvement of regulatory oversight, combined with the obligation imposed on the TSOs by the state, meant that the funds were effectively under state control and, therefore, constituted ‘state resources.’
Publication under Article 263 TFEU
Following the AG’s Opinion, the Court of Justice insisted on the need for uniformity and predictability in procedural law. It stated that an action brought for annulment should not depend on the early awareness of the Decision by the parties involved. Publication in the Official Journal merely serves a formal purpose and is the proper trigger for the countdown for legal challenges. This ensures transparency and certainty in procedural deadlines, thereby preventing an ad hoc determination of when the period begins.
Equal Treatment and Recovery of Aid
The Court of Justice also addressed the central aspect related to the principle of equal treatment in the context of recovering unlawful aid. Following again the AG’s Opinion, the Court of Justice clarified that companies benefiting from unlawful State aid are not in the same position as those that complied with regular network fee requirements. Therefore, the argument that recovering the aid would constitute unequal treatment of similar entities was not accepted as beneficiaries of the aid were, by definition, in a distinct category.
Conclusion and Implications of the Court of Justice’s judgements
The Court’s judgments reflect a strict interpretation of EU State aid rules, emphasising transparency, fair competition, and adherence to established procedural standards. By categorising funds managed by private transmission system operators as ‘State resources’ when these funds are collected and administered under state mandates, the Court of Justice confirmed that even indirect State involvement can bring such arrangements under Article 107(1) TFEU. This sends a clear signal that State aid rules are not limited to direct State actions but also encompass cases where private entities carry out public responsibilities under State control.
Those judgments confirm that exemptions granted at a national level are scrutinized to prevent potential market distortions. As a result, through these ruling, the Court sends a clear signal to Member States about the limits of national discretion in granting economic advantages through exemptions or reduced rates.
Overall, those judgements establish significant guidance for the interpretation of State aid and underline the Court of Justice’s commitment to procedural integrity and equality among all economic operators. This consistent adherence to State aid principles not only impacts the specific parties involved but also sets a benchmark for future State aid assessments, affirming the importance of legal certainty and equal treatment in maintaining an open and competitive European market.
Alma Dangy is a lawyer who worked for an international law firm in Competition and European Law. She is now finalizing her bar qualifications and academic research projects.
Dangy, A.; “Court of Justice upholds Commission Decisions on German State Aid for Energy Network Operators”, EU Law Live, 24/10/2024, https:// eulawlive.com/analysis-court-of-justice-upholds-commission-decisions-on-german-state-aid-for-energy-network-operators/
Expanding GDPR Enforcement Powers for Consumer Protection Associations (Meta Platforms Ireland: C-757/22)
Mykyta Petik
Introduction
In Meta Platforms Ireland (C-757/22) (the ‘Judgment’), the Court of Justice of the European Union (the ‘Court’) ruled on a dispute between Meta Platforms Ireland (formerly Facebook) and a German consumer protection group. The case focused on whether the General Data Protection Regulation (‘GDPR’) allows consumer protection associations to file legal actions independently of individual data subjects, challenging Meta’s data protection practices. The Court upheld that national consumer organisations can bring representative actions, even without individual mandates, as long as data protection rights are potentially affected. The ruling emphasises the role of transparency in data processing under the GDPR.
Background
The case originated when the Bundesverband der Verbraucherzentralen (Federal Union of Consumer Organisations and Associations, a German consumer protection association), filed a legal action against Meta Platforms Ireland (formerly Facebook) regarding data privacy concerns in Facebook’s App-Zentrum (App Center). This platform allowed users to access third-party games, but users were prompted to share personal data and give third-party applications permissions to post on their behalf, often without clear consent. When using the App Center, users were notified that by interacting with certain applications, they were allowing the collection of personal data and granting permission to publish information such as their scores, statuses, and photos, while also agreeing to the applications’ general terms and data protection policies.
The Federal Union claimed that the information provided to users was misleading, specifically the way Meta handled user consent, which allegedly violated the GDPR. The Federal Union brought the case to the Landgericht Berlin (Regional Court, Berlin), arguing that Meta violated German laws on unfair competition and data protection. The lower court ruled in favour of the Federal Union, but Meta appealed, asserting that the GDPR might preclude consumer associations from filing such complaints without individual mandates from affected users.
The German court, the Bundesgerichtshof (Federal Court of Justice), sought clarification from the Court of Justice of the European Union (‘the Court’) regarding whether Article 80(2) of the GDPR allows consumer associations to bring legal actions independently of specific complaints from data subjects. This question was key in determining whether Meta’s appeal would succeed, as the outcome depended on how broadly GDPR rights and enforcement mechanisms could be interpreted. The Court addressed some of the concerns raised in its April 2022 judgment in Meta Platforms Ireland (C-319/20) but did not fully clarify the requirement in Article 80(2)
GDPR about whether the rights of data subjects must be infringed ‘as a result of the processing’. The BGH questioned if ‘processing’ includes actions before data collection.
Before the Court issued its decision, the Advocate General Richard de la Tour stated that such associations can act independently, even if the rights of specific individuals were not violated directly due to the broad scope of ‘processing’ under GDPR, meaning that the Federal Union could file such a complaint and Meta’s arguments must be rejected.
Law
Article 80 of the GDPR concerns the representation of data subjects in the enforcement of their data protection rights. Specifically, Paragraph 1 grants data subjects the right to mandate a not-for-profit body, organisation, or association – which is properly constituted under the laws of a Member State, pursues objectives in the public interest, and is active in the protection of personal data rights – to act on their behalf. This representation includes lodging complaints, exercising rights outlined in Articles 77 (right to lodge a complaint with a supervisory authority), 78 (right to an effective judicial remedy against a supervisory authority), and 79 (right to an effective judicial remedy against a controller or processor), and, where permitted by Member State law, seeking compensation under Article 82.
Paragraph 2 provides Member States with the option to allow such organisations to act independently of a data subject’s mandate. In this capacity, these bodies may lodge complaints with the competent supervisory authority and exercise the rights in Articles 78 and 79 if they consider that a data subject’s rights under the GDPR have been violated due to data processing activities. This provision enhances the enforcement mechanisms of the GDPR by enabling collective action and advocacy by specialised organisations.
Decision of the Court of Justice
The Court addressed whether Article 80(2) of the GDPR allows consumer protection entities to bring representative actions when the violation involves a data controller’s failure to provide transparent information regarding data processing. The Court reaffirmed that such entities could act without individual mandates as long as the violation affects data subjects’ rights. The court emphasised that transparency obligations, including clear communication about data collection purposes and recipients, are critical under GDPR. Violating these obligations can lead to actions under Article 80(2), ensuring broader enforcement of data rights.
The judgment clarified that the purpose of GDPR is to protect fundamental privacy rights, including through preventive representative actions by consumer associations. It held that a lack of transparency in providing information to data subjects about how their data will be used or shared constitutes an infringement of their rights ‘as a result of the processing’. This means that a failure to inform users adequately about data processing, even before the processing starts, can lead to legal action without the need for showing specific harm.
The Court explored the principles of fairness, transparency, and lawfulness outlined in GDPR Article 5, stressing that these principles are foundational to how personal data should be handled. It noted that any data processing must be accompanied by a clear explanation of its purpose and the recipients of the data at the time of collection. Without such clarity, any subsequent consent from users could be invalid, rendering the data processing unlawful.
The Court’s interpretation supported the idea that the infringement of the rights to transparent information can itself be considered an infringement ‘as a result of the processing’, justifying representative legal actions under the GDPR. The right to clear, concise, and transparent information is thus tightly linked to lawful data processing. Additionally, the Court examined the balance between protecting individual rights and empowering consumer associations to act in their defence. By confirming that no specific individual harm needs to be shown for such actions, the judgment reinforced GDPR’s goal of ensuring broad, preventive measures in safeguarding data privacy. This interpretation broadens the scope for consumer associations and organisations to take action against companies for violations, particularly regarding information disclosure.
The Court pointed to the importance of Chapters II and III of the GDPR, which detail the rights of data subjects and obligations for data controllers. It reiterated that data controllers must not only ensure lawful and transparent data processing but also demonstrate compliance by providing users with information in clear language. The ruling connects these rights to the possibility of representative actions being pursued in the interest of protecting collective consumer rights.
The ruling also referred to the principle of ‘informed consent’, which is central to GDPR. If users do not receive all the relevant information regarding how their data will be processed, any consent they provide is invalid. This would mean that the data processing violates GDPR, allowing consumer groups to bring legal actions to hold the responsible parties accountable. It underscores the requirement for data controllers to maintain high standards of transparency.
Moreover, the Court confirmed that consumer protection associations have a preventive role within GDPR’s framework, as was established in Meta Platforms Ireland (C-319/20). By allowing these bodies to act without individual mandates, the court ensured that enforcement of data rights can take place on a broader scale, which is particularly significant for large companies like Meta Platforms, where user data collection practices are under scrutiny. This broad interpretation of GDPR serves the regulation’s overarching aim to uphold personal data rights across the EU.
The Court’s ruling allows consumer protection associations, like the Federal Union, to scrutinise data protection notices and privacy policies, as well as consent collection procedures, increasing the likelihood of complaints. This development reflects growing interest from consumer and privacy groups in particular and from society in general in enforcing data protection laws. Though German supervisory authorities have not previously prioritised reviewing such notices, the ruling now elevates the risk of litigation over inadequate compliance, especially concerning consent.
Controllers must ensure their data protection notices meet GDPR’s transparency and accessibility requirements under Articles 12 and 13, aligning with the CJEU’s judgment. This ruling shifts even more responsibility to data controllers, while consumer associations gain more influence in GDPR enforcement.
Mykyta Petik is a doctoral researcher at KU Leuven Centre for IT & IP Law. His doctoral research (promotor: Prof. Dr. Peggy Valcke) deals with legal issues of cybersecurity, data protection, and privacy in 5G networks.
Petik, M.; “Expanding GDPR Enforcement Powers for Consumer Protection Associations (Meta Platforms Ireland: C-757/22)”, EU Law Live, 21/10/2024, https://eulawlive.com/analysis-expanding-gdpr-enforcement-powers-for-consumer-protection-associations-meta-platforms-ireland-c-757-22/
SYMPOSIUM
SYMPOSIUM ON THE APPLE STATE AID CASE (C‑465/20 P)
Cases C-555/22 P, C-556/22 P
and C-564/22
P UK and ITV v Commission:
just like Apple, except completely different?
Stephen Daly
Introduction
That’s all folks! The UK Controlled Foreign Company (‘CFC’) judgment (C-555/22 P, C-556/22 P and C-564/22 P), handed down by the Court of Justice on 19 September 2024, was the final it would hand down concerning the UK. This Op-ed examines the case and highlights the contrast between the reasoning in this judgment and that of the Court of Justice, the previous week, in Apple ( C-465/20 P).
General Background
When triggered, the CFC rules attribute (all or some portion of) the overseas profits of a Subsidiary (the ‘CFC’) to a controlling Parent in the Parent’s home jurisdiction, for our purposes the UK. CFC rules, in principle, run counter to the territoriality principle, which broadly constrains a country’s taxing power to the activities that take place within its borders. As a result, they tend to be narrowly targeted at activities where the risk of profits being artificially shifted is high. In the absence of CFC rules, there are two very easy ways in which a Parent could shift profits to a low tax jurisdiction. The Parent could provide funds to a low taxed Subsidiary which it would then lend back to the Parent (known as an ‘upstream loan’). The interest payable to the CFC would be deducted from the Parent’s taxable profits. Or, rather than the Parent depositing those funds in a bank itself and paying tax on any interest accrued, the Parent could provide them to the Subsidiary which in turn would deposit them in a bank and generate interest (known as a ‘moneybox loan’).
The UK has had CFC rules since 1984 following an apparent increase in the use of tax haven companies after the removal of exchange controls in 1979. There have been multiple changes to the rules since. Most notably, the rules were amended in response to the Cadbury Schweppes (C-196/04) case, where it was found that the UK regime was not compatible with EU law insofar as it targeted more than just ‘wholly artificial arrangements’.
The relevant UK CFC rules
The rules were changed in 2012, with effect from January 2013 and amended again from January 2019. It was the 2012 iteration of the rules that the Commission took issue with, in particular the rules around non-trading finance profits (‘NTFP’). Putting it at its simplest, NTFP are profits which arise from the provision of loans, hence ‘finance profits’, but the entity which provides the loans is not functionally equivalent to a bank and instead might act more like an investor, hence ‘non-trading’. Specifically, the Commission argued that the rules imposing a CFC charge on the NTFP of a CFC (found in Chapter 5 of 2010–Taxation [International and Other Provisions] Act,
‘TIOPA’) breached Article 107(1) in so far as there was an exemption (partial or full, and to be found in Chapter 9 of TIOPA 2010) to the charge in cases where these profits arise from a qualifying loan (‘QL’) relationship, namely where loans are made to other non-UK subsidiaries.
The Chapter 5 charge applied in 2 scenarios: where the profits were attributable to (1) significant people functions (‘SPFs’) carried out in the UK or (2) UK funds. As for scenario (1), analysing whether SPFs are present, and if so where, is a form of transfer pricing analysis, which is complicated and time-consuming. As for scenario (2) meanwhile, tracing whether fungible capital within a multinational group comes from the UK is also a cumbersome exercise. As such, Chapter 5 triggers serious administrative inconvenience both for the tax authority and the taxpayer concerned. That administrative inconvenience is spared by the Chapter 9 exemption.
According to the UK (and other interested parties in the litigation), Chapter 9 provided the exemption because there was a low risk of profits being artificially diverted where the CFC provides QLs. The exemption did not apply, conversely, to instances where the risk of abuse was high, such as in the case of upstream or moneybox loans. Limiting the scope of the CFC rules to those high-risk circumstances also accorded with the Cadbury Schweppes judgment insofar as they only targeted wholly artificial arrangements.
The Commission decision
In matters of tax, it is the ‘selective advantage’ criterion which is essentially determinative as to whether Article 107(1) TFEU is breached (AG Kokott opinion in Case C-66/14, para 114). The Commission’s selective advantage assessment, with which the General Court agreed (Cases T-363/19 and T-456/19), was as follows:
• the reference framework was the UK CFC rules;
• there was an advantage insofar as NTFP were exempted for CFCs with QL relationships;
• this advantage was a priori selective as it applied to UK parented groups with a CFC making QLs, but not in comparable circumstances as with upstream or moneybox loans;
• as for justification, the Commission agreed that in instances where the NTFP of the CFC arise from UK funded loans but where the CFC has no UK SPF, it would be excessively cumbersome to require a tracing exercise (scenario (2) above). But this would not be the case where the NTFP of the CFC arise from UK SPFs (scenario (1). Such SPF analysis would also have ensured that only wholly artificial arrangements (à la Cadbury Schweppes) were combatted.
The UK was ordered accordingly, in April 2019, to collect unpaid back taxes, which may have been over £1billion (though the author understands that a far lower figure was in fact due).
The Court of Justice
The UK (and interested parties) appealed to the Court of Justice, with the determination of the reference framework being key to the appeal. In line with the Advocate General’s opinion, the Court of Justice agreed with the UK’s analysis that the reference framework ought to have been the General Corporation Tax System (‘GCTS’) and the failure to apply the correct reference framework vitiated the entire analysis. The GCTS is largely territorial and the CFC rules provided an exception to the principle of territoriality only where there was a high risk of profits being artificially diverted from the UK; profits which would, but for the artificial diversion, ordinarily be taxable in the UK. As such, the logic of the CFC and GCTS rules was the same and they were inseparable (paras. 107108). The risk-based approach to the legislation mandated that Chapter 9 should not be seen as an exemption to Chapter 5. Instead, the two should be read together as defining the scope of the charge (para. 112). In other words, the risk of artificial diversion of profits was high not where Chapter 5 applies per se, but instead only where Chapter 9 does not apply and Chapter 5 conditions are present.
In arriving at this conclusion, the Court of Justice faithfully applied the approach handed down by the Court last year in Engie (C-451/21 P and C-454/21 P). In determining the reference framework, the Commission should defer to the Member State’s interpretation of its rules, provided that it is compatible with the wording of the legislation and the Commission cannot point to consistent and reliable evidence to the contrary from case law or administrative practice. Given that the Commission could not point to such contrary evidence, the Court’s analysis hinged on the compatibility of the UK interpretation with the legislative wording, which the Court found not to be incompatible (see paras. 113-127).
Reconciling Apple?
The judgment, handed down just over a week after the Court’s controversial findings in the €13billion Apple case (C-465/20 P), jars in its use of the deferential Engie approach. Whereas in UK CFC , the Court of Justice applied Engie to the tee, in Apple, the Court of Justice very much did not. In Apple. there was a dispute about how to interpret Irish law, specifically Taxes Consolidation Act (TCA) 1997, s. 25, which taxes non-resident companies on their Irish trading profits. Was the Irish interpretation compatible with the wording of the legislation? Well, given that the legislation at the time was quite vague, it is very difficult to say the interpretation was incompatible. In that case, the Commission should have accepted the Irish interpretation unless it had evidence to the contrary. But the case law is best read as aligning with the Irish interpretation (see my discussion of Murphy v Dataproducts [1988] IR 10 in Intertax) and the Commission itself had accepted that Ireland did not have a consistent administrative practice as regards how to approach TCA 1997, s. 25 (recital 403). That the Court of Justice could so radically change its approach to the State aid rules from one week to the next is, frankly, scandalous.
The only way of reconciling the judgments is by hiding behind the principle of res judicata (paras. 144 and 303), by way of which unchallenged findings from the General Court cannot be reopened at the Court of Justice. But that is entirely unsatisfactory for myriad reasons, only two of which I raise here. First, the Engie case postdates the appeal in the Apple case, so the effect of res judicata is to bar Ireland from pursuing an argument that it never had the opportunity to make.
Secondly, in Koen Lenaerts’ own words (at p. 29), the principle of res judicata is not ‘absolute’. The Court is not barred per se from re-examining issues even where there is no cross appeal. If the Court wants to find a way of re-examining an issue, it can certainly find a way (as suggested also by Juan Jorge Piernas López). Indeed, it did just that in the context of an issue in the case which was not subject to appeal: the Court (see paras. 273-275 in particular) happily reopened the issue of the conflation of the advantage and selectivity criteria by the General Court, despite this not being subject to cross appeal. Indeed, the possibility that the Court can reopen points is reinforced by its strong pronouncements in the Engie (para. 78), FIAT (para. 85), and UK CFC (para. 60) cases that an error in defining the correct reference framework is an error of EU law that the Court of Justice cannot be barred from revisiting. But in Apple, the Court of Justice should bar itself from revisiting such an issue knowing that, in the process, it is making an error of EU Law?
There is a further tension between the Apple and UK CFC judgments in respect of the treatment of territoriality. Ireland had argued its interpretation of TCA 1997, s. 25 reflected the territoriality principle (recital 195), but the Court did not accept the relevance of the principle to understanding Irish law (para. 309). In the UK CFC judgment on the other hand, the Court was clearly very receptive to using the territoriality principle to understand UK law.
Conclusion
Ultimately, the UK CFC judgment is another in a growing list of State aid judgments (Amazon, Engie, FIAT and the turnover tax cases ( C 562/19 P and C 596/19 P)) where the Court of Justice has strongly upheld Member State sovereignty and pushed back against the Commission’s attempts to expand the scope of the State aid rules. When it comes to fundamental tax rules or the interpretation of domestic tax rules, the Court will respect Member State choices. Just not all the time, as the Apple decision tells us.
Stephen Daly (BCL, LLM, DPhil, CTA (Fellow)) is Reader in Tax Law at King’s College London and visiting lecturer at Imperial Business School. He sits on the editorial boards of the British Tax Review and the Journal of Tax Administration.
Daly, S.; “Cases C-555/22 P, C-556/22 P and C-564/22 P UK and ITV v Commission: just like Apple, except completely different?”, EU Law Live, 21/10/2024, https://eulawlive.com/op-ed-cases-c%e2%80%91555-22-p-c%e2%80%91556-22-p-and-c%e2%80%91564-22-p-uk-and-itv-v-commissionjust-like-apple-except-completely-different/
SYMPOSIUM
COMPETITION CORNER: SELECTIVITY IN STATE AID
A Selective View of Recent Case Law on Selectivity
Alfonso Lamadrid
This contribution to EU Law Live’s Symposium provides a very personal, and necessarily selective, view of the evolution and status of the law on selectivity. My first assignment as an intern in a competition law practice, in 2004, was to assist in the Basque fiscal State aid saga. Since then, and over the past 20 years, I have been fortunate enough to witness the evolution of the case law on selectivity from a privileged front row position, representing over 50 applicants in several of the cases previously discussed in this Symposium, including the Spanish financial goodwill (this long saga is still ongoing, as the Commission has appealed the General Court Judgment annulling its third decision; the Commission’s appeals are, however, unrelated to the selectivity condition discussed in this piece) and tax lease sagas, the appeals against the decision on digital terrestrial television annulled in Retegal (as well as in the ongoing proceedings against the decision that eventually replaced it), and in the appeal against the opening decision recently annulled in the EDP case (both discussed in Leo Flynn’s contribution).
These cases, all of which resulted in annulments of Commission decisions and/or of General Court judgments (most often due to errors in the selectivity analysis) exemplify very well: (i) the recent oscillations and evolution in the case law and decisional practice on selectivity; and (ii) the Court of Justice’s attempts to introduce order, consistency and a clear analytical framework in an unruly area of EU law, arguably (as explained below) with mixed results.
Selectivity analyses in themselves raise complex legal and factual debates and comparisons. Those challenges are moreover exacerbated by their profound economic and institutional implications as well as, in many cases, by the politically charged contexts in which they arise. Indeed, the interpretation of the notion of selectivity by the Commission and the EU Courts is liable to have a major impact on the boundaries of Member States’ sovereignty on areas of fundamental political, economic and societal importance, and on the fate of the internal market. Far from being purely anecdotal, the magnitude of those consequences in individual cases may also perhaps help explain some of the apparent inconsistencies in the case law (see, for example, Sebastien Thomas’ comments here or the Apple case discussed below), in the decisional practice, and also, importantly, in the absence of certain decisional practice (given that measures considered to be general – i.e., not selective – can fly under the radar).
Over the past few years, the law on selectivity has evolved significantly (hence the relevance and timeliness of this symposium) and there is an apparent consensus that it has become increasingly sophisticated; yet, in practice, selectivity analyses in individual cases remain largely unpredictable and open to a certain degree of discretion on the part of decision-makers. Let me briefly explain at least some of the reasons why.
The consolidation of the 3-step test: lights and shadows
In December 2016 the Court of Justice’s judgment in C-20/15 P and C-21/15 P, Santander/World Duty Free, quashing a previous GC judgment, clarified our understanding of general measures by finding that measures that are open de jure and de facto to all undertakings could still be selective if they favoured certain behaviours and not others in a comparable situation. This new notion of “behavioural selectivity”, which remains controversial (see, for instance, here), appeared to significantly enlarge the notion of selectivity and, therefore, the ambit of the State aid control, at least in theory. Perhaps aware of the consequences of this approach, at the same time (both in this very case and in the Lübeck airport case) the Grand Chamber of the Court of Justice arguably started to introduce stricter requirements, in particular by emphasising that the selectivity analysis is, in essence, a discrimination analysis (see also Jorge Piernas’s comments about this here); it is about whether undertakings in a comparable factual and legal situation receive a comparable treatment. In a way, the Court rejected a limit but insisted on another based on a material comparative exercise.
Specifically, the Court has sought to introduce increased methodological rigour in the Commission’s selectivity analysis by emphasising the relevance of the three-step test, under which the Commission bears the burden of: (i) identifying the normal or reference system is (step 1); and (ii) establishing that the measure differentiates between undertakings that are in a comparable factual/legal situation in light of the objective of that reference system (step 2); the evidential burden shifts to Member States to show, under step 3, that the prima facie discriminatory measure is justified by the logic of the system of which those measures form part (good luck with that). The Court has since applied this framework in several tax cases (including recently, in its Apple judgment), but also in cases not involving taxes, like C-524/14 P, Lübeck or C-70/16 P, Retegal.
In the latter judgment, in particular, the Court surprised many when it ruled the Commission is required to conduct meaningful comparability analysis also in relation to measures confined to a given sector because that sector, or companies in that sector, may not be in the same legal and factual situation as others. More recently, in EDP, the Court clarified that the Commission is required to conduct this analysis, albeit in a preliminary manner, already in any decision to open a formal investigation.
The welcome progressive “juridification” and consolidation of the three-step test has not dispelled all doubts, and certainly not the margin for administrative or judicial discretion. The devil then is in the details of who needs to compare what, in what step, and in the light of what criteria. Both the identification of the reference system and the comparability analysis remain subjective and yet, as the Court and other contributors to this symposium have highlighted; see here and here), an error made in that regard will vitiate the whole analysis. There is a risk, for example, that the Commission and/or the Courts may define the reference system based not only on rules and principles inherent to national law, but based on external or hypothetical principles (while the Court consistently warned against this in most cases in relation to tax rulings, it surprisingly did the opposite in Apple – Case C-465/20 P – under the reasoning that it was bound to findings by the General Court that Apple had failed to challenge in a cross-appeal and that were therefore res judicata).
There is a further risk that, in some cases, the Commission or the Courts may define an excessively wide reference system (e.g., the corporate tax system or even “normal market conditions”) under step 1 only to then find that any specific rule or formal derogation to that system is prima facie selective under step 2. A remarkable illustration, unknown to many, of this approach is visible in the Commission’s new decision in the digital terrestrial television saga following the annulment in Retegal (currently under appeal before the GC in Case T-715/21). In that decision, the Commission advances, as its primary line of reasoning, an interpretation of selectivity under which any subsidy is by definition selective because it constitutes a derogation from normal market conditions (see here; paras. 169-170). A version of this argument is also presented in the comments concerning the EDP case here The reader is invited to consider the consequences that would arise if the Court were to accept these shortcuts to establish selectivity (e.g., would this mean that all public subsidies granted to address the effects of the Covid-19 pandemic must be treated as selective measures?).
Establishing selectivity outside the three-step test: some practical challenges
The Court has also accepted, in specific circumstances, valid shortcuts or derogations to the 3-step test; these scenarios raise their own challenges.
Beyond scenarios where the reference system is constructed in a manifestly discriminatory fashion (i.e., the Gibraltar scenario), the Court has accepted that the three-step test is not necessary in the case of individual measures (which are presumed selective once an advantage is established; e.g., in some tax ruling cases discussed here); in some cases, however, distinguishing individual measures from scheme may not be necessarily straightforward, but a matter of optics (e.g., an advance price agreement viewed in isolation may seem like an individual measure, but is it an individual measure if other companies in a comparable situation benefit from comparable agreements?).
The Court has also accepted that the three-step test is not necessary in cases where public authorities retain a margin of discretion to determine the scope of applicability/beneficiaries of the measure at issue. In the Spanish tax lease case, C-649/20 P and others, para. 63, also discussed here), the Court accepted that, since the selectivity analysis must be conducted from an ex ante perspective, the existence of discretion necessarily results in the selectivity of the measure even in cases where there is no evidence that this discretion was actually used to favour, de jure or de facto, certain undertakings over others (which raises the question: in those cases, the aid is selective in favour of whom?).
This same case illustrates another practical difficulty arising in “discretion=selectivity” scenarios: the case law accepts that there is no selectivity where the degree of latitude of the public authorities is limited to verifying certain objectives/criteria inherent to the tax system (see C-6/12, P Oy), but assessing whether certain criteria are objective may not always be an objective exercise; in this particular case, for example, the Commission and the EU Courts found that that the criteria used by Spanish public authorities were “vague” even when they were arguably materially identical criteria to the criteria (applied by the same authorities) that were considered as objective, consistent, rational and necessary in the decision confirmed in Case C-100/15 P, Netherlands Maritime).
Conclusion
In spite of all of the progress made and of all the valuable lessons learnt in recent years, and of the Court of Justice’s commendable move towards setting a generally applicable, more sophisticated and more rigorous analytical framework, the analysis of selectivity in individual cases continues to remain, in many cases, highly unpredictable.
The principles and rules set by the case law have certainly raised the standard for the Commission, which is now required, as a matter of principle, to engage in a material comparability analysis before finding any measure to be prima facie selective. The precise mechanics of this comparability analysis remain, however, unclear. While this may, in some cases, result in a certain margin of appreciation for the Commission, it also affords very significant leeway to the Court of Justice, which has moreover shown its readiness to step in and have the last word in these often politically and economically sensitive cases.
As the analysis of selectivity has become more sophisticated, complex and unpredictable, the relevance of the condition may decline as State aid law evolves (rightly or wrongly) towards fewer notifications, more flexibility and more opportunities for selective/discriminatory measures to be found compatible with the internal market. Indeed, the interpretation of the selectivity condition is arguably the most important factor in determining how wide we cast the State aid control net. Nonetheless, the size of the net will be less relevant as the number of holes increases.
Alfonso Lamadrid is a partner in the EU and competition law practice at a Spanish international law firm in Brussels and a professor at the College of Europe in Bruges.
SUGGESTED CITATION: Lamadrid, A.; “A selective view of recent case law on selectivity”, EU Law Live, 24/10/2024, https://eulawlive.com/ competition-corner/a-selective-view-of-recent-case-law-on-selectivity-by-alfonso-lamadrid/
THE LONG READ
Pens Poised: The New EU Pact on Migration and Asylum
Joyce De Coninck1
Pens poised we sit ready: ready to analyse, critique, predict and categorise. Early career scholars dipping their toes into the scholarly debates and interventions for the first time, and more senior scholars who have sat through almost-endless iterations of new pacts and developments in the realm of borders, asylum and migration. Time and time again, the proposals on the table are codified and advertised as a novelty, hailing their ingenuity and proclaiming to be the way out of the circular impasse of political leveraging of migration discourse, human rights atrocities at the EU’s external border, and the security-externalisation nexus. Scholars hover over the new legislative developments, the transitions from directives to regulations, agonising over minute details in recitals and operative provisions, and pondering the intent and rationale behind these changes. Like Agatha Christie’s detectives, we embark on a search for signs of legislative inconsistency and incoherence both within individual legal texts, as well as across the different legal texts that comprise these pacts. We conjecture about the conformity of these legislative developments with the EU’s Charter of Fundamental Rights and its compliance with different domestic and international legal regimes. We ponder how these European developments will impact how the law on borders, asylum and migration (‘BAM’) develops elsewhere. The EU’s New Pact on Migration and Asylum which was adopted by the European Parliament on April 10th 2024, kept true to this tendency and inspired a new set of interventions detailing how and why the new legislative packages do or do not conform with international (human rights) law, how these developments may contribute to fissures between the Court of Justice of the European Union (‘CJEU’) and the European Court of Human Rights (‘ECtHR’), and how these legislative developments will continue to entrench lawless zones in which third country nationals will be reduced to data points and barred from accessing any meaningful human rights protections.2
Having worked in this space for some time, it is not just the perceived erosion of rights that is alarming or disappointing,3 nor is it the almost predictable incoherence that arises from big legislative projects that implicate a
1. Max Weber Fellow, European University Institute.
2. Steve Peers, ‘The New EU Asylum Laws: Taking Rights Half-Seriously’ (2024) Yearbook of European Law; See for a schematic overview of the broad and stricter conceptualization of the Pact: Philippe De Bruycker, ‘Genealogy of and Futurology on the Pact on Migration and Asylum’ (EU Migration Law Blog, 6 May 2024); Lilian Tsourdi, Daniel Thym, Iris Goldner Lang and Catherine Warin (eds.), Special Collection on the EU Asylum and Migration Legislation after the Pact, (EU Immigration and Asylum Law and Policy), EU Migration Law Blog; Jouni Häkli, Gintare Kudžmaitė, Kirsi Pauliina Kallio, ‘Devaluing personhood: The framing of migrants in the EU’s new pact on migration and asylum’ (2024) Transactions of the Institute of British Geographers, 1–15; Sarah Wolff, ‘ The New Pact on Migration: Embedded Illiberalism?’ (2024) JCMS: Journal of Common Market Studies; PICUM, ‘More than 160 Civil Society Organisations call on MEPs to vote down harmful EU Migration Pact’ (February 2024) PICUM
3. PICUM, ‘More than 160 Civil Society Organisations call on MEPs to vote down harmful EU Migration Pact’ (February 2024) PICUM
plethora of actors and legal instruments within the field of borders, asylum and migration. Rather, it is the apparent lack of deeper engagement with the underlying sources of contestation and questions of (in-)justice in the realm of borders, asylum and migration that is particularly troubling. We – scholars, practitioners and stakeholders alike – work within the EU’s acquis on borders, asylum and migration, endlessly dissecting its idiosyncrasies, without taking an urgent and much needed step backwards to allow for a more reflective perspective.4 Legal scholars in particular, are presented new draft legislation, legislative instruments, and judgements on these topics and almost instantaneously produce scholarly critiques. But stepping out of this scholarly hamster wheel ever so briefly, may very well generate some fresh and possibly even novel insights on what EU BAM governance could and perhaps, should look like. Without any claim to comprehensiveness, three sequential fallacies surface when surveying the anticipated changes brought about by the New Pact on Asylum and Migration, which are dealt with in what follows.
1. The Sanitised Singularity of Border Management
The New Pact finds its origins in the 2015-2016 migratory surge to the European Union. In direct response to this crisis, and notwithstanding the reform of the Common European Asylum System (‘CEAS’) that had just taken place,5 there arose renewed interest in reforming the system altogether. The rationale undergirding the entirety of the New Pact appears to be that if we can just get border management right, and fine-tune it in such a way that it addresses all the intangible factors it needs to—ranging from instrumentalisation to force majeure, to renewed approaches to ‘screening’—then migratory flows will stabilise and decrease. The underlying assumption appears to be – that is to say: how it is explained to the public – that the driving, if not determinative factor for mobility towards the European Union is the manner in which EU border management is conducted. And while terminologically, the New Pact is about asylum and migration, in practice, many of its legislative developments are by and large geared towards increasing the effectiveness of border management (e.g., enhanced rules on screening; rules on crisis and force majeure in relation to border management; the impact of instrumentalisation on border management).
Naturally, a critical reader will point out that a relevant tool in the toolbox of migration management, is border management and that the legal bases upon which these border management specifically and migration management policies generally are based (Article 77, 78 and 79 TFEU) are inevitably interconnected and can never be fully severed. Furthermore, that same reader will note that the new Pact (if construed broadly)6 has equally given rise to a revised Blue Card Directive and Single Permit Directive. The point here is not to discount the work of so many
4. For deeper engagement with these questions, see: E. Tendayi Achiume, ‘Migration as Decolonization’ (June 2019) Stanford Law Review 71, 1509.
5. Peers n 2.
6. See for a schematic overview of the broad and stricter conceptualization of the Pact: Philippe De Bruycker, ‘Genealogy of and Futurology on the Pact on Migration and Asylum’ (EU Migration Law Blog, 6 May 2024).
unnamed individuals working tirelessly within the EU institutions towards a more balanced set of BAM policies,7 but rather to point out the continued dominance of border management in a debate on migration management.
It seems almost farcical to imagine that if all the right border management measures are in place, somehow that would bring a halt to (irregular) migratory flows to the EU. If the objective –as historically developed– is truly to construct an Area of Freedom, Security, and Justice, in which open borders prevail between Member States, surely this cannot be achieved by developing and predominantly pursuing a border management policy that ossifies trends of externalisation, militarisation, informalisation, digitalisation and datafication.8 These approaches have clearly failed to deliver on populist promises of bringing a halt to migration, and equally so on promises of safer and more human rights-centric access to international protection.9 Yet, the New Pact appears to overwhelmingly bring more of the same: border management measures that consolidate ongoing and largely unsuccessful approaches, with the question of borders largely being conflated with the question of migration management. In so doing, there is no real deep or critical engagement with the underlying assumptions and foundations upon which the New Pact, and the EU’s BAM policy generally, is based.
2. Law on the Books and Law in Practice
Building on this previous point, a second fallacy surfaces. The New Pact suggests through its adoption of new legislative measures (e.g., the Screening Regulation,10 the Force Majeure and Instrumentalization Regulation,11 Asylum Procedures Regulation)12 that border management strictly and migration management more broadly, will be improved. Yet even where such legislative novelties provide for new collaboration, improved procedures, funding mechanisms to facilitate these changes and even legal obligations to prompt implementation (e.g., recital 11 Asylum Procedures Regulation; Common Implementation Plan for the Pact on Migration and Asylum13) the
7. See (i.a.) for work on the ‘invisible’ infrastructure behind the EU’s institutions: Päivi Leino-Sandberg, The Politics of Legal Expertise in EU Policy-Making, (2021 Cambridge University Press).
8. Giulia Raimondo, The European Integrated Border Management (Hart Publishing, 2024); Joyce De Coninck and Giulia Raimondo, ‘Understanding European Border Management: A Tale of Transformation and Orchestrated Impunity’ (VerfBlog, 27 February 2024).
9. International Organization for Migration, Europe Arrivals - Displacement Tracking Matrix (IOM, 2024).
10. Regulation (EU) 2024/1356 of the European Parliament and of the Council of 14 May 2024 introducing the screening of third-country nationals at the external borders and amending Regulations (EC) No 767/2008, (EU) 2017/2226, (EU) 2018/1240 and (EU) 2019/817 (OJ L, 2024/1356, 22.5.2024).
11. Regulation (EU) 2024/1359 of the European Parliament and of the Council of 14 May 2024 addressing situations of crisis and force majeure in the field of migration and asylum and amending Regulation (EU) 2021/1147 (OJ L, 2024/1359, 22.5.2024).
12. Regulation (EU) 2024/1348 of the European Parliament and of the Council of 14 May 2024 establishing a common procedure for international protection in the Union and repealing Directive 2013/32/EU (OJ L, 2024/1348, 22.5.2024).
13. Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: Common Implementation Plan for the Pact on Migration and Asylum, COM (2024) 251 Final, https://eur-lex. europa.eu/legal-content/EN/TXT/?uri=COM%3A2024%3A251%3AFIN
question of capacity for implementation remains largely unaddressed. Capacity here does not relate to the financial means to set in place the mechanisms required under EU law. Instead it relates to the more granular questions of who will be charged with the task of correctly applying and implementing new legislation, (willingness of) training of public officials and border authorities charged with implementing relevant legislation, and the setting in place of the necessary infrastructure to conduct border procedures. The European Commission’s Common Implementation Plan makes strides in drawing out a detailed plan to guide and support implementation of the New Pact, but crucially misses that further harmonisation does not necessarily resolve the fragmented and existing implementation issues that pre-date the New Pact. Instead, the Common Implementation Plan stipulates that Member States ‘should’, are ‘invited to’, ‘will have to’ and are ‘encouraged’ to adopt measures for the purpose of implementation – none of which point to clearly defined actionable commitments. Additionally, at different junctures the Common Implementation Plan requires Member States to ‘review administrative processes, workflows and standard operating procedures’, and to adhere to reporting obligations – both of which place significant emphasis on complying with procedures rather than considering how to enhance substantive legal compliance.
Vedsted-Hansen notes that in prior negotiations of the Asylum Procedures Regulation, the question of capacity to implement, as well as lacking infrastructure were in fact been raised.14 The question of capacity (or the lack thereof) here is intertwined with a crucial distinction in the Asylum Procedures Regulation between mandatory and optional border procedures, the application of which necessarily brings about case load variations across Member States. In other words, the Asylum Procedures Regulation brings about new dynamic complexities which necessarily complicate the application of the law on the books in practice. Similarly, the Screening Regulation which is intended to expedite the directing of individuals into either an asylum or return procedure at the border, negates the fact that law on the books is frequently and simply not applied in practice. Lyra Jakuleviciene rightfully notes that even where asylum protections had previously been in place at the EU’s external border, Lithuania and Poland have been repeatedly condemned by the ECtHR for simply not applying these asylum safeguards.15 Similarly, what was at stake in the case of MH v Croatia before the ECtHR, was essentially the non-application of the Dublin Regulation, resulting in the preventable death of 6-year-old Madiny Hussiny.16
The point that is made here is not that implementation is not being considered within negotiations of the New Pact – indeed the feasibility of and requirements for implementation are being considered for its new instruments and complemented with anticipated EU-support. Yet, the New Pact seems to overlook the critical issue of the widespread failure to enforce existing legislative measures in a meaningful and substantive way. Adding more elements to border procedures (and assessing the requirements for this implementation) may result
14. Jens Vedsted-Hansen, ‘Harmonisation of types of asylum procedures: new Regulation, old dilemmas’ (EU Migration Law Blog, 17 May 2024).
15. Lyra Jakuleviciene, ‘EU Screen Regulation: closing gaps in border control while opening new protection challenges?’ (EU Migration Law Blog, 17 May 2024).
16. MH and others v Croatia, App nos. 15670/18 and 43115/18) (ECtHR, 18 November 2021).
in harmonisation on a legislative and procedural level, but this does not tackle the non-implementation of (preexisting) asylum safeguards. To the contrary: it makes it more difficult.
Arguably what is at stake is thus not the need for more or innovative legislation, but instead, improved application of existing laws – including a multidisciplinary approach to applying these laws, mindful of the vulnerabilities of often already traumatised third country nationals. The requirements under the Screening Regulation for example (to expeditiously direct individuals towards asylum procedures where appropriate), were already inherent to the right to apply for asylum under international (human rights) law and EU secondary legislation. And while the codification of these screening requirements is commendable and undoubtedly necessary, it obscures the larger looming implementation gap evinced by continuous pushbacks at the EU’s external borders that remains largely unaddressed. In short, the law on the books does not mean that the law is applied in practice. The Pact does not meaningfully address this problem.
3. The Legality of EU Secondary Law
A third fallacy relates to the roles of the EU legislator on the one hand, and that of the Court of Justice of the EU (the ‘Court of Justice’ or ‘the Court’) on the other hand. Sandra Fredman has explored the different balancing exercises fulfilled by political and legislative decision-making on the one hand, and adjudication on the other hand.17 Inspired by Habermas, she posits that the former is engaged predominantly in interest-based and stakeholder coordination, whereas the latter is concerned more with reconciliation of (competing) values and the persuasiveness of argument rather than power dynamics (at least in theory).18 Applying this to the Pact, and the controversies that have already been raised,19 it is not unlikely that certain elements of the Pact will be challenged before the Court of Justice at some point. In other words, the veil of legality through formal legalisation of the Pact, does not mean that these acts will be ipso facto considered legal. Two noteworthy cases spring to mind. Firstly, in FMS the Court of Justice found that transit measures imposed by Hungary constituted detention, contrary to findings by the ECtHR for analogous facts in Ilias and Ahmed, as well as RR and others. 20 Jakuleviciene rightly points out that the Pact and the Screening Regulation in particular, somewhat counterintuitively and using different terminology, appear to adopt a similar approach to what prompted the FMS case by the Hungarian authorities.21 The second case that springs to mind is the Court of Justice recent X v Staatssecretaris van Justitie en Veiligheid, where it was held by the Court that pushbacks from EU territory are not in compliance with EU
17. Sandra Fredman, Comparative Human Rights Law, (OUP 2018) 459-460.
18. Ibid.
19. See among others: Lilian Tsourdi, ‘The EU’s New Pact on Migration and Asylum: three key arguments’ (EU Law Analysis, 14 September 2023); Anja Bossow, ‘Europe’s Faustian Bargain’ (VerfBlog, 1 October 2023); Tsourdi, Thym, Goldner Lang and Warin n 2.
20. [Grand Chamber] Judgment of the Court of Justice 14 May 2020, FMS and Others v Országos Idegenrendészeti Főigazgatóság Dél-alföldi Regionális Igazgatóság and Országos Idegenrendészeti Főigazgatóság, Joined Cases C-924/19 PPU and C-925/19 PPU, ECLI:EU:C:2020:367. See also on the Hungarian Röske Transit Center: Ilias and Ahmed v Hungary, App no. 47287/15 (ECtHR, 21 November 2019) and RR and others v Hungary, App no. 36037/17 (ECtHR, 2 March 2021).
21. Jakuleviciene, n 15.
law.22 While Peers notes that the Screening Regulation essentially concerns a filtering function, and does not necessarily involve a final decision on whether an individual meets the criteria to obtain access to international protection, there is a legitimate concern that the Screening Regulation may just be a gateway to further (semiautomated) refusal of entry,23 particularly when its application coalesces with the application of the Asylum Procedures Regulation (see above).
The foregoing suggest that the Pact places a strong emphasis on border management by presenting border control as a decisive factor for regulating mobility to the European Union, while seemingly downplaying the significance of a comprehensive migration strategy that extends beyond border control.24 Furthermore, the Pact’s emphasis on adjusting border management implies that an increase in legal provisions would inherently enhance the application of existing law, rather than focusing on improving the implementation of current instruments. Finally, the semblance of legality conferred by the EU’s legislative process does not guarantee that the Court of Justice will endorse the solutions proposed by the EU’s legislator. These findings are not particularly novel, astute or pathbreaking. Yet, such fallacies do prevent a deeper inquiry into the underlying and unaddressed issues in the Pact.
4. Deepening the Discourse
The foregoing suggests that a deeper inquiry is not only necessary but urgent if the objective is to truly develop an Area of Freedom, Security and Justice that is no longer a flanking measure to internal freedoms and instead offers a border, asylum and migration policy that is respectful of the values reflected in Article 2 TEU.
Without claiming to be exhaustive, two points are worth raising in this respect.
First, we seem to have flattened and oversimplified the existence and lived experiences of third-country nationals. The Asylum Procedures Regulation, along with the Screening Regulation, reduces the complex issues of mobility and migration to a binary question resulting in the classification of individuals as either worthy or unworthy of protection. However, this approach flattens an individual’s existence into a simplistic, binary determination, with significant consequences for their living conditions, employment opportunities, and overall well-being including the potential risk of retraumatisation, all of which are intrinsically tied to this categorisation. Such an approach precludes the consideration of alternative mobility schemes that may be more suitable and could potentially improve the lived experiences of those affected, including regulating return once conditions in the country of origin have stabilised.
22. Case C-392/22, X v Staatssecretaris [2024] ECLI:EU:C:2024:195, 50-51.
23. Steve Peers, ‘The New Screening Regulation – Part 5 of the analysis of new EU asylum laws’ (EU Law Analysis, 26 April 2024)
24. See the Common Implementation Plan, where ‘legal pathways’ for migration are focused on in an ancillary manner and solely in relation to ‘labour migration’.
This brings me to a broader, and arguably more controversial, question—one that, despite its contentious nature, is worth exploring. Much of the Pact is anchored in the framework of international protection or refugee status. Alternative forms of migration are typically marginalised or entirely absent from discussions on EU border, asylum, and migration policy. Yet, the very concept of refugee status, which emerged as a direct response to the atrocities of World War II, was initially intended as a temporary measure which grew out of a very specific context. With this in mind, refugee status may no longer serve as the most appropriate (legal) basis upon which to anchor and structure the EU’s migration and border policies, if the EU’s objective is truly to develop a wellfunctioning migration system that reflects the AFSJ as not just a flanking measure for internal freedoms. The current framework places the burden on third-country nationals to prove their dependency and vulnerability, while positioning the EU Member States as benefactors, selectively dispensing protection, rather than recognising the mutual benefits of mobility schemes and its own role in facilitating mobility and migratory flows.
This observation ties into the work of E. Tendayi Achiume, who argues that despite the formal end of colonialism, de facto colonial structures and power-balances persist that may very well be contributing factors towards migratory flows to the European Union.25 Achiume’s rethinking of sovereignty and mobility, challenges the EU’s traditional approaches to border management, asylum, and migration, by significantly opening and deepening the debate on the role of border control within migration management. It prompts further inquiry into the historical and contemporary causal relationship between EU actions—beyond mere border management—and the migratory movements towards its borders. Some may dismiss scholarship and inquiries that push the question of the EU’s BAM policies in this direction. But exploring the extent to which EU and Member State policies contribute to third country national migration could lead to an entirely new way of theorising how borders, asylum, and migration should be governed. And is this not the role of (at least) the scholar? To bridge the divide between the interest-balancing of the legislator and the value-balancing of the judges and to continue to push new lines of inquiry, by unveiling new and alternative paths of research that push us beyond the maelstrom of revised legislation that largely reenacts what was already there?
This leads to a final point that appears to be overlooked in the Pact. Without delving into detailed critiques of potential EU human rights responsibilities arising from non-compliance with human rights standards during the adoption and implementation of the Pact, it is important to note that one of its primary developments is the move towards harmonisation. As Peers observes, this harmonisation assigns a greater role to EU entities in implementing the Pact26, which inevitably raises longstanding concerns among scholars, activists, litigators, and stakeholders in this field regarding shared responsibility.27 In an earlier piece, Sarmiento discussed the complexities of integrated
25. Achiume, n 4.
26. Peers, n 23.
27. Between Spring 2023 and September 2023, a series of conferences and workshops were organized under the overarching theme of ‘Shared Responsibility at the EU’s External Borders.’ These events facilitated in-depth discussions with officials from both the European Parliament and the European Commission, while also bringing together a diverse array of scholars, policymakers, and experts specializing in EU border management and the concept of shared responsibility. This same set of events, gave rise to the ‘Joint Guidelines on Shared
decision-making within the EU and judicial review.28 The questions asked in his contribution are precisely the types of questions that triggered the SHARED project and the development of the SHARED Guidelines on Shared Responsibility for European Integrated Border Management. These questions are also precisely the questions that lay at the basis of the Marián Kočner ruling29 before the Court of Justice, and have been the subject of action for damages before the CJEU against Frontex.30 In other words, in various domains of the EU’s AFSJ, there is a clear need for a theory and practice of shared responsibility, which adequately accommodates the power dynamics at play. Perhaps relational human rights responsibility can capture such dynamics?31
Responsibility for European Integrated Border Management’ and has given rise to a forthcoming special issue: Violeta Moreno-Lax (ed), Special Issue on Conceptualising ‘Shared Responsibility’ in EU Law: Insights from the Schengen External Border, (forthcoming) European Law Open.
28. Daniel Sarmiento, ‘Integrated Decision-Making in the EU and Judicial Review: Can the Puzzle be Fixed?’ (EU Law Live Weekend Edition, 24 May 2024).
29. Judgement of the Court of Justice (Grand Chamber) of 5 March 2024, Marián Kočner, C-755/21 P, EU:C:2024:202.
30. Judgement of the General Court of 6 September 2023, WS and others v Frontex, T-600/21, EU:T:2023:492; Order of the General Court of 13 December 2023, Alaa Hamoudi v Frontex, T-136/22, EU:T:2023:821.
31. Joyce De Coninck, The EU’s Human Rights Responsibility Gap (Hart, 2024).
HIGHLIGHT F THE WEEK S O
Preliminary ruling request concerning military vaccination mandates in Italy, published in OJ
Monday 21 October
Official publication was made of a case involving a request for a preliminary ruling from the Consiglio di Stato (Italy) concerning the applicant’s challenge against the Ministero della difesa regarding compulsory military vaccinations: Ministero della difesa (C-522/24).
Read on EU Law Live
General Court to hear case on Commission’s technical screening criteria determining economic activities that substantially contribute to climate change
Monday 21 October
Official publication was made of an action, brought on 27 August 2024, by Dryade and other environmental organisations against the decision of the European Commission concerning the rejection of a request for internal review of Commission Delegated Regulation (EU) 2023/2485: Dryade and Others v Commission (T-449/24).
Read on EU Law Live
Action against Commission’s rejection of application for access to documents concerning designation of gatekeeper under the Digital Markets Act
Monday 21 October
Edward William Batchelor’s action against the decision of the European Commission, by which he claims that the decision infringes Article 4(2) of Regulation 1049/2001 on the exception for the protection of the purpose of investigations, by erring in determining that designation as a gatekeeper, under the Digital Markets Act, constitutes an ‘investigation’, was published in the OJ: Batchelor v Commission ( T-433/24).
Read on EU Law Live
Action against Commission’s rejection of application for access to documents concerning designation of gatekeeper under the Digital Markets Act
Monday 21 October
Edward William Batchelor’s action against the decision of the European Commission, by which he claims that the decision infringes Article 4(2) of Regulation 1049/2001 on the exception for the protection of the purpose of investigations, by erring in determining that designation as a gatekeeper, under the Digital Markets Act, constitutes an ‘investigation’, was published in the OJ: Batchelor v Commission ( T-433/24).
Read on EU Law Live
Poland appeals General Court decision on daily penalty payments in environmental dispute: official publication today
Monday 21 October
Poland’s action against the General Court’s May 2024 ruling and the European Commission’s decisions in February and March 2022 concerning the offsetting of daily penalty payments, imposed following a dispute with the Czech Republic over environmental issues, was published in the OJ: Republic of Poland v Commission (C-554/24 P).
Read on EU Law Live
Vacancy for a position of référendaire at the General Court
Monday 21 October
A vacancy announcement has been made for a référendaire to join the Sixth Chamber at the General Court, where the selected candidate may be called upon to work with Judge Maria José Costeira, and in close collaboration with Judges Kancheva and Tichy-Fisslberger, advising them on both substantive and procedural points of law.
Read on EU Law Live
Commission greenlights Swedish State aid supporting transition from coal-based to nearly zero-emission steel production
Monday 21 October
The European Commission approved a €128 million Swedish support measure concerning SSAB’s project to transition from the current coal-based steel production process to a nearly zero-emission system.
Read on EU Law Live
Presidents of European Commission and European Parliament agree on revision of Interinstitutional Agreement
Tuesday 22 October
On the 21st of October, the President of the European Commission and the President of the European Parliament agreed to the revision of the Interinstitutional Framework Agreement, through new principles, the aim of which is to strengthen the cooperation between the two institutions.
Read on EU Law Live
ECtHR in Kobaliya and Others v. Russia: Russian “foreign agents” law creates a climate of distrust
Tuesday 22 October
The European Court of Human Rights (ECtHR) ruled unanimously that Russia’s legislation on “foreign agents” violates key human rights protections.
Read on EU Law Live
Court of Justice clarifies applicability of EU secondary legislation on public procurement to third-country economic operators
Tuesday 22 October
The Grand Chamber of the Court of Justice delivered its judgment in a case regarding a preliminary ruling request on the interpretation of Directive 2014/25/EU on procurement by entities operating in the water, energy, transport and postal services sectors: Kolin Inşaat Turizm Sanayi ve Ticaret (C-652/22).
Read on EU Law Live
ECtHR ruling on Tasoncom S.R.L. v. Republic of Moldova: violations of fair trial and property rights in tax proceedings
Tuesday 22 October
The European Court of Human Rights (ECtHR) found violations of both Article 6 § 1 and Article 1 of Protocol No. 1 in a case concerning the applicant company facing tax penalties imposed by Moldovan authorities for deducting VAT and expenses from transactions with suppliers who were no longer VAT-registered, despite being acquitted in the criminal case.
Read on EU Law Live
AG Richard de la Tour’s Opinion on Return Directive and the Temporary Protection Directive for displaced persons from Ukraine
Tuesday 22 October
Advocate General (AG) Richard de la Tour delivered his Opinion 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 States.
Read on EU Law Live
European Court of Auditors (ECA) Special Report 22/2024 on the risks of double funding within the Recovery and Resilience Facility, published
Wednesday 23 October
The European Court of Auditors Special Report 22/2024 focuses on the risks of double funding within the Recovery and Resilience Facility (RRF), the largest EU financial support initiative that does not link funds to actual costs, introduced in response to the COVID-19 pandemic.
Read on EU Law Live
Commission invitation to submit comments on Belgian alleged State aid granted in the gambling sector, published in OJ
Wednesday 23 October
Official publication was made of the Commission’s invitation to interested parties to submit comments in relation to Belgium’s alleged State aid granted to Ladbrokes concerning virtual betting.
Read on EU Law Live
Commission gives green light to acquisition of Courir by JD Sports, subject to compliance with commitments
Wednesday 23 October
The European Commission approved, under the EU Merger Regulation, the proposed acquisition of Groupe Courir SAS (‘Courir’) by JD Sports Fashion Plc Group (‘JD Sports’), provided that certain commitments offered by the parties are complied with.
Read on EU Law Live
General Court rejects action for damages due to illegality of Commission Implementing Directive on technical specifications for alarm and signal weapons
Wednesday 23 October
The Eighth Chamber of the General Court delivered, earlier today, its judgment in Keserű Művek v Union européenne (T519/23), a case concerning an action brought, on 22 August 2023, by Keserű Művek against the European Commission.
Read on EU Law Live
General Court annuls SRB’s 2022 ex ante contributions, temporarily maintains effects
Wednesday 23 October
The General Court delivered its judgments in 12 cases concerning the validity of the Single Resolution Board’s (SRB) decision on the ex-ante contributions required from these institutions for 2022, which had been calculated under EU Regulation 806/2014.
Read on EU Law Live
General Court annuls EU sanctions against Vladimir Plahotniuc
Wednesday 23 October
The General Court annulled EU sanctions imposed on Moldovan businessman and politician Vladimir Gheorghe Plahotniuc in case Plahotniuc v Council (T-480/23).
Read on EU Law Live
Commission’s investigation finds Swedish tax exemptions for non-food-based biogas and bio-propane to be compatible with EU State aid rules
Wednesday 23 October
The European Commission concluded that two Swedish tax exemption schemes for non-food-based biogas and bio-propane used for heating comply with EU State aid rules.
Read on EU Law Live
Council greenlights €35 billion in financial assistance for Ukraine
Thursday 24 October
The Council approved a significant financial aid package to support Ukraine, including a macro-financial assistance (MFA) loan of up to €35 billion.
Read on EU Law Live
Commission Decision finding Polish State aid in the electric vehicles battery production sector compatible with the internal market, published in OJ
Thursday 24 October
Official publication was made of Commission Decision (EU) 2024/2710 of 18 March 2022 on the State Aid SA.53903 (2020/C ex 2019/NN) implemented by Poland for LG Chem Wrocław Energy, an undertaking operating in the manufacturing of batteries for electric vehicles.
Read on EU Law Live
Directive 2001/29 mandates protection of artistic works regardless of origin, Court of Justice rules
Thursday 24 October
The Court of Justice delivered its judgment in Kwantum Nederland and Kwantum België (C-227/23), where it ruled that EU Member States must protect works of art, including those originating from third countries, without regard to the nationality of the author or the country of origin of the work.
Read on EU Law Live
Court of Justice dismisses Commission’s appeal and annuls €1.06 billion fine imposed on Intel for abuse of dominant position
Thursday 24 October
The Fifth Chamber of the Court of Justice rendered its judgment in Commission v Intel Corporation (C-240/22 P), a case on appeal claiming the setting aside of the General Court’s judgment in Case (T-286/09 RENV), by which certain provisions of Commission Decision C(2009) 3726 final of 13 May 2009 relating to a proceeding under Article 102 TFEU and Article 54 of the EEA Agreement (Case COMP/C 3/37.990 – Intel) were annulled.
Read on EU Law Live
Consumer credit obligations and sanctions clarified by Court of Justice
Thursday 24 October
The Court of Justice addressed the interpretation of Articles 8, 10, and 23 of Directive 2008/48/EC concerning consumer credit contracts.
Read on EU Law Live
Consumer protection expanded: Court of Justice ruling on buy-to-let mortgage agreements
Thursday 24 October
The Court of Justice issued a ruling in the case Zabitoń (C-347/23) concerning the interpretation of Article 2(b) of Directive 93/13/EEC, which deals with unfair clauses in consumer contracts.
Read on EU Law Live
Court of Justice interprets Articles 3(1) and 5(1) of Directive 2008/104 on temporary agency work
Thursday 24 October
The Court of Justice handed down judgment in Omnitel Comunicaciones and Others (C-441/23), a request for a preliminary ruling from the High Court of Justice of Madrid (Spain) concerning the interpretation of Articles 3(1) and 5(1) of Directive 2008/104 on temporary agency work.
Read on EU Law Live
AG Szpunar clarifies extent to which documents used in leniency competition proceedings may be included in criminal investigation file
Thursday 24 October
Advocate General (AG) Szpunar handed down his Opinion in regard to a preliminary ruling request on whether the protection of leniency statements and settlement submissions, contained in Directive 2014/104, has an effect that extends to prosecution authorities: FL und KM Baugesellschaft and S (C-2/23).
Read on EU Law Live
AG Szpunar: Copyright related rights may be assigned to employers through regulatory acts, subject to established consent rightholders
Thursday 24 October
Advocate General (AG) Szpunar delivered his Opinion in a case regarding the interpretation of Directive (EU) 2019/790 on copyright and related rights in the Digital Single Market in relation to the transfer, by means of a regulatory act, of the related rights of statutory employees in performances carried out in the context of the employment relationship: ONB and Others (C-575/23).
Read on EU Law Live
AG Szpunar: Discount campaigns run by a pharmacy do not constitute ‘advertising of medicinal products’ within the meaning of Article 86(1) of Directive 2001/83
Thursday 24 October
Advocate General Szpunar handed down his Opinion in Apothekerkammer Nordrhein (C-517/23), a request for a preliminary ruling from the Federal Court of Justice (Germany) concerning the interpretation of Directive 2001/83 on the Community code relating to medicinal products for human use (as amended).
Read on EU Law Live
Rising discrimination against Muslims in Europe: EU report highlights increasing challenges
Friday 25 October
A new report by the EU Agency for Fundamental Rights (FRA) reveals a worrying increase in racism and discrimination faced by Muslims across Europe, particularly impacting those in employment and housing.
Read on EU Law Live
Pursuit of Legal Harmony in a Turbulent Europe: Conference in Honour of Eleanor Sharpston: University of Cambridge, University of Westminster and EU Law Live, 25-26 October 2024
Friday 25 October
At Trinity College, Cambridge, leading legal minds from across Europe convened for the first day of “Pursuit of Legal Harmony in a Turbulent Europe,” a conference held in honor of Eleanor Sharpston, the influential former Advocate General at the Court of Justice of the European Union (CJEU).
Read on EU Law Live
Iceland fails to implement key EU Regulations and Directives, EFTA Court rules
Friday 25 October
The EFTA Court ruled in three cases against Iceland for failing to incorporate several EU regulations and directives into its legal framework, namely Implementing Regulation (EU) 2021/1042, Implementing Regulation (EU) 2018/1212, and Directive (EU) 2017/828, as required under the EEA Agreement.
Read on EU Law Live
Vacancy announcement: Legal Officer at the Innovative Health Joint Undertaking
Friday 25 October
The Innovative Health Initiative Joint Undertaking (IHI JU), based in Brussels, Belgium, is looking for a Legal Officer (Temporary Agent, Grade AD 5).
Read on EU Law Live
European Court of Auditors publishes report on Commission’s State aid crisis framework: swift reaction but shortcomings in monitoring and evaluation
Friday 25 October
The European Court of Auditors (ECA) published its report, titled ‘State aid in times of crisis: Swift reaction but shortcomings in the Commission’s monitoring and inconsistencies in the framework to support the EU’s industrial policy objectives’.
Read on EU Law Live