TABLE OF CONTENTS
IN-DEPTH:
Enhancing the Protection of Children in Criminal Proceedings: M. S e.a. (C-603/22)
Claudia Cantone
Nationality for Sale: different Fruits in one Basket?
Hanneke van Eijken
Domestic intra-VAT group supplies must be disregarded – insight from Finanzamt T II (Case C-184/23)
Philippe Gamito and Ione Searle
Booking a Hotel Room for your next brat Summer? The Court of Justice rules on Parity Clauses and relevant Market for multisided Platforms, but we are none the wiser (Booking (C-264/23))
Marios Constantine Iacovides
Rule of Law binds the European Union too. It is Time to scrutinize Union’s Actions accordingly
Dimitry Kochenov & Laurent Pech
Gender-Based Asylum in European Union Law: the Court of Justice’s Progressive Stance
Salvo Nicolosi & Türkan Ertuna Lagrand
At the Crossroads of Gender Identity and EU Citizens’ Right to Freedom of Movement: Mirin (C-4/23)
Carlos Santaló Goris
A (pyrrhic) Victory for vegan Steaks and another Piece in the Puzzle of plant-based Products’ Labelling: Protéines France (C-438/23)
Erriketi Tla da Silva
Data Protection Authorities’ Obligation to act: Land Hessen (C-768/21)
Evangelia Koumpiadi
SYMPOSIUM COMPETITION CORNER: ARTICLE 102 EXCLUSIONARY GUIDELINES: CODIFICATION OR RESTATEMENT?
Can the Commission’s Draft Exclusionary Guidelines serve their stated (and unstated) Purpose?
Nicole Kar and Richard Pepper
Competition on the Merits?
Damien J. Neven
THE LONG READ:
In praise of a fellow Advocate General Maciej Szpunar
HIGHLIGHTS OF THE WEEK
IN-DEPT H
Enhancing the Protection of Children in Criminal Proceedings: M. S e.a. (C-603/22)
Claudia Cantone
On 5 September 2024, the Court of Justice (‘the Court’) has delivered its judgment in M.S. e.a. (Droits procéduraux d’une personne mineure, C-603/22), regarding the rights of children in criminal proceedings under Directive (EU) 2016/800, read together with Directive 2013/48/EU on access to a lawyer, Directive 2012/13/EU on the right to information, and Directive (EU) 2016/343 on the presumption of innocence and the right to be present at the trial.
The background and the questions referred to the Court
The case before the national court (District Court, Słupsk, Poland) involved criminal charges against three persons, who were all minors when the proceedings were initiated, but (at least one of them) turned 18 throughout the trial. During the investigations, the suspects had been questioned by police officers without the presence of a lawyer. Furthermore, neither they nor their parents had been informed of their rights or the procedural steps before the initial questioning.
The Polish court referred fourteen questions to the Court, which can be summarised as follows.
Firstly, it questioned whether the national provisions –which require, in criminal proceedings involving minors, the participation of a defence counsel only at the trial stage– were compatible with Article 6 and 18 of Directive (EU) 2016/800. In case of a negative answer, the referring court asked if national rules should be replaced with the directly effective rules of the Directive, obliging the authorities to ensure that a defence counsel participate in the actions of the pre-trial proceedings as well.
In the second place, the court sought further clarification on the right to legal aid, specifically whether Member States should maintain the appointment of a public defence counsel for individuals who were children at the time of the charge but subsequently, in the course of the proceedings, reached the age of 18 years. Indeed, pursuant to Article 79(2) of the Polish Criminal Code of Procedure (CCP), the accused persons must have a defence counsel only until they reach the age of 18 years old.
A third set of questions were formulated in relation to the obligation upon competent authorities (police, public prosecutor’s office) to promptly inform the suspects and the holders of parental responsibility when the person concerned is a minor.
Fourthly, the Polish court inquired whether, in case of statements made by a minor during questioning carried out in breach of his or her procedural rights, national authorities must exclude any incriminating information obtained through such questioning.
Lastly, in addition to seeking elucidation on the scope of Directive 2016/800, the referring court also raised two questions about judicial independence, based on some events that had occurred prior to the main proceedings. Notably, the judge of the Słupsk District Court had been temporarily removed from service as, in a different case, had accepted the request by a party to exclude another judge to fully comply with EU law and the European Convention on Human Rights (‘ECHR’).
The Court’s decision
At the outset, the Court declared inadmissible the last two questions revolving around judicial independence, considering them disconnected from the case under examination. Indeed, it noted that the suspension of the referring judge was no longer in effect and, furthermore, it had been ordered in relation to an earlier case. However, on this matter, the Advocate General, in her Opinion – also opting for the inadmissibility of such questions –seized the opportunity to reiterate that the threats of disciplinary sanctions for Polish judges who abide by EU law and the ECHR remains unacceptable.
Moving to the merits of the case, the different sets of question were examined separately in the judgment.
In the first place, the Court held that the combined reading of Article 6 and 18 of Directive 2016/800 establish the mandatory right to legal assistance for children who are suspects in criminal proceedings even during the pre-trial stages. This right can only be derogated from under exceptional circumstances and with the child’s best interests in mind. Given the clear, precise and unconditional wording of such provisions, the Court affirmed their direct effect and their primacy over domestic legislation. Accordingly, having determined that Polish CCP provisions were incompatible with EU law and cannot be interpretated in a way which aligned with it, the Court instructed domestic authorities to disregard them.
In the same vein, the Court declared the direct effect of Article 4(1) of Directive, read in light of Article 5(1), under which children who are suspects in criminal proceedings as well as holders of parental responsibility have the right to receive information about procedural rights promptly and, at the latest, before being questioned by the police. Moreover, taking into account the age of the suspects and their vulnerability, information should be given in a simple and accessible language. In light of this, the Court found that the standard information form provided by Polish authorities to children –which appears to be identical to the one given to adults– fall short of the required standards of the children’ rights to be informed. Again, when national law cannot be reconciled with EU law by way of interpretation, the Court ordered to set aside any conflicting provisions which prevent the fullest protection of children.
Thirdly, in response to the questions posed by the referring court, the Court provided some clarity on the application of Directive 2016/800 to persons who reached the age of 18 during the proceedings and, more specifically, whether they continue to enjoy the right to be assisted by court-appointed lawyers. In the Court’s view, Article 2(3) of the Directive precludes national legislation from automatically excluding the continuation of these rights to all minors who turn 18 in the course of criminal proceedings. Indeed, the Court emphasised the importance of a tailored evaluation carried out by the relevant authorities, considering the maturity and vulnerability of the individual involved, to determine the necessity of a prolonged application of the rights outlined in the Directive.
Finally, the Court addressed the very tangled question of whether the breaches of rights of children in criminal procedure should lead to inadmissibility of evidence. In this context, the Directives leave Member States a wide margin of appreciation on establishing the appropriate remedies to persons whose procedural rights have been violated. Moreover, as noted by both the Advocate General and the Court, the issue of the admissibility of evidence is not directly regulated by EU Law and remains than a matter of national law.
Given these premises, however, the Court reminded that both the right to legal aid and the right to be informed constitute specific expression of the broader right to fair trial, as enshrined in Article 47 and 48 of the Charter of Fundamental Rights (ECFR). Therefore, although the Directive does not expressly require excluding evidence obtained in breach of the rights provided therein, national courts should have the flexibility to assess the overall fairness of the procedure, drawing from such an assessment any consequence they deem necessary, including the evaluation of the probative value of evidence obtained in unlawful circumstances.
Concluding remarks
The judgment handed down in M.S. e.a. (Droits procéduraux d’une personne mineure) undoubtedly marks a significant step in the protection of the rights of children involved in criminal proceedings. In dealing with the multiple questions referred by the Polish court, the Court has grabbed the opportunity to further define and expand the common minimum level of protection expected from Member States pursuant to Directive 2016/800.
On the one hand, the Court has openly stated that the Directive provisions establishing the children’ right to be assisted by a lawyer at the pre-trial stages as well as the right to be promptly and efficiently informed have direct effect and must be fully transposed into the Member States’ domestic system. If national legislation does not correctly implement these rights, the relevant authorities are expected to disregard the domestic rules and apply the EU law instead.
On the other hand, the Court has not excluded the prolonged applicability of the Directive to those who turn 18 during the criminal proceedings. It is worth recalling that the Commission’s initial proposal of establishing an automatic application of the Directive to all suspects or accused persons who reached the age of 18 years old after the beginning of the proceedings had faced some opposition. Therefore, the solution reached by the Court strikes a balance: it does not mandate a strict, automatic continuation of the Directive’s application but still requires domestic authorities to carry out a case-by-case assessment to determine the need for a prolonged enjoyment of the Directive rights.
Finally, the judgment shed light on the lack of EU rules regulating the admissibility of evidence in national criminal procedure. Hence, to answer the question on the consequences of breaches of rights of children in criminal proceedings, the Court resorted to the ‘overall fairness’ test, commonly used in the case-law of the European Court of Human Rights (Jalloh v. Germany [GC] § 96; Gäfgen v. Germany [GC], 2010, § 164). This means that national courts must be free to ascertain whether the criminal proceedings as a whole can be considered fair and, in doing so, may exclude the probative weight of evidence obtained in breach of procedural rights of the suspects or accused persons.
Claudia Cantone holds a PhD in international law from the University of Campania “Luigi Vanvitelli”. During her doctoral studies, she has been Visiting Researcher at the University of Utrecht, Faculty of Law, Economics and Governance, and Visiting Researcher at the King’s College London, Dickson Poon School of Law. Currently, she is Legal Advisor to the Office of the State Attorney of the Republic of Italy on cases before the European Court of Human Rights.
SUGGESTED CITATION: Cantone, C.; “Enhancing the Protection of Children in Criminal Proceedings: M. S e.a. (C-603/22)”, EU Law Live, 30/10/2024, https://eulawlive.com/op-ed-enhancing-the-protection-of-children-in-criminal-proceedings-m-s-e-a-c-603-22/
Nationality for Sale: different Fruits in one Basket?
Hanneke van Eijken
Friday, 4 October 2024 was a busy day at the Court of Justice of the European Union, with several interesting judgments published. One of them is the Mirin case on EU citizenship and the mutual recognition in the context of transgender persons. Another highly interesting read that day came from Advocate General Collins on the so-called ‘Golden Passport Case’: the case of Commission versus Malta, (C-181/23). On 22 March 2023, the European Commission brought a case against Malta before the Court under Article 258 TFEU. The case already garnered attention from several scholars even before the Advocate General’s Opinion (see, for example, Weiler, Chamon, Van den Brink). The European Parliament expressed in 2022 concerns about these schemes, stating that they ‘are objectionable from an ethical, legal, and economic point of view and pose serious security risks for Union citizens, such as those stemming from money laundering and corruption’ (para. 1).
The Maltese Citizenship Scheme (2020)
The Maltese Citizenship Act regulates the acquisition, deprivation, and renunciation of Maltese citizenship. It lays down specific conditions for acquiring Maltese nationality in Article 10. According to this article, naturalisation is possible when a person has resided in Malta for a period of twelve months immediately preceding the application date, and within a six-year period, at least four years of residency must have been in Malta. Moreover, other requirements, such as knowledge of the Maltese language, are also mandatory.
In 2000, a new Maltese Citizenship Act was adopted, which introduced an article allowing the Minister to offer Maltese citizenship to persons of exceptional value to Malta. This primarily applies to contributions by scientists, researchers, athletes, artists, cultural performers, investors, and entrepreneurs. The Act specifies that investors may contribute either EUR 600,000 or EUR 750,000 to the Maltese government, EUR 10,000 of which is nonrefundable. The scheme is also available for those who acquire and hold residential immovable property in Malta with a minimum value of EUR 700,000 or lease residential property for a minimum of five years at an annual rent of EUR 16,000. Additionally, a donation of at least EUR 10,000 to a registered philanthropic, cultural, sports, scientific, animal welfare, or artistic non-governmental organization is required. Applicants must have been residents in Malta for at least 36 months (reduced to 12 months with an exceptional investment of not less than EUR 750,000).
Since EU citizenship is based on nationality from one of the Member States (Article 20 TFEU), after naturalisation, investors are not only Maltese nationals but also EU citizens.
EU Citizenship and Nationality: A Dynamic Relationship
The cases Rottmann, Tjebbes, and JY, demonstrate how intertwined nationality and EU citizenship are, with Articles 20 and 21 TFEU serving as the legal foundation for granting rights to EU citizens. While Declaration
2 on nationality states that nationality remains the sole competence of Member States, this does not mean that nationality laws are immune from EU law. The key question in those cases was whether the situation fell within the scope of EU law and what EU citizenship adds to it.
The European Commission has made three main arguments. First, it contends that these investor schemes violate the principle of sincere cooperation (Article 4(3) TEU) and the integrity of EU citizenship (Article 20 TFEU) when conferring nationality on third-country nationals. Second, the Commission argues that granting nationality in such circumstances without requiring a genuine link undermines the solidarity and mutual trust between Member States. Finally, the Commission asserts that the scheme is unlawful because it allows for the systematic granting of nationality in exchange for large, predetermined payments, without requiring applicants to demonstrate a genuine link with Malta.
Malta maintains that historically, states have granted citizenship based on investments, and nationality is a national competence. Malta refers to Article 4(2) TEU, arguing that nationality is part of its national identity. It also dismisses the relevance of the Nottebohm case, cited by the Commission, noting that the case has been subject to well-founded criticism. Malta argues that if the Court accepts the Commission’s arguments, it risks becoming an ‘indirect legislature.’
‘Genuine Link’: Myth or Reality?
Advocate General Collins begins by stating that Member States have not transferred nationality matters to the Union level, referencing his earlier Opinion in the case of Préfet du Gers, which involved the electoral rights of British nationals in another Member State after Brexit. Collins maintains that while Member States have granted some rights via EU citizenship, they retain firm control over who qualifies as a national. He notes that Articles 9 and 20 TFEU are unconditional, meaning that being a Member State national automatically grants EU citizenship, regardless of the individual’s bond with the Member State.
Collins further argues that the case law on the loss of nationality deals with revocation rather than the acquisition of nationality. He thus advises the Court of Justice to dismiss the Commission’s claim on this point.
Same But Different?
There is a clear difference between the recognition of nationality in international contexts and the granting of EU nationality. While the Micheletti case established that nationality laws must align with EU law, this case concerned the acceptance of nationality without additional requirements. Cases like Rottmann, Tjebbes, and JY dealt with the loss of nationality and, by extension, EU citizenship.
Up until now there was no clear case law on acquisition of nationality in the context of EU law, so the analogy could be drawn with previous cases but there are fundamentally different. Kaur might be one of the cases that comes close to ruling on nationality acquisition. That case differs, however, also significantly since the question there was whether Ms Kaur could claim having a status as EU citizen as a ‘citizen of the United Kingdom and
Colonies’. The Court of Justice held in that case that Ms. Kaur never had the status of an EU citizen, and therefore that the EU citizenship right never arose in the first place for her.
I must agree with AG Collins that it is more than clear that the Treaty does not include a genuine link requirement. The Nottebohm case is also not persuasive as argument to include a genuine link to the acquisition of nationality within EU law. At the same time, the golden passport scheme does erode EU citizenship as a constitutional value of EU law, one might argue. While there is mutual trust between Member States on their nationality laws and their requirements on naturalisation, there might be scenarios in which such mutual trust is rebutted (as we know from the Common European Asylum System case law). Even though Article 20 TFEU does not have any reference to a genuine link, the concept is not strange in EU citizenship case law. The concept of ‘real link’ has been seen in the field of social rights for EU citizens (see, Vatsouras), but seems to be left after Alimanovic. This case law on ‘real link’ or a ‘certain degree of integration’ different, obviously from the case at stake, since it was a tool for Member States to exclude or include certain EU citizenship into social rights, rather than the question who is a EU citizen. Nevertheless, there is in EU citizenship a deep idea of integration and residency, as is also seen in Directive 2004/38.
Citizenship investment schemes which include a period of residence are more in line with the integration thought of EU citizenship (gradual scheme of rights based on residency and integration), which is clearly visible in Directive 2004/38. The idea and logic of a genuine link, in another manner than used in the Opinion, could be relevant in light of EU citizenship. The practices do undermine EU citizenship as a fundamental status, because it creates a big gap between who can afford to invest sums of money and those who are integrated but cannot acquire –or not so easy– nationality of an EU Member State. In that sense, the Opinion in legally sound, but it is also too narrow (see on the same point Spieker). We have seen how EU citizenship revocation also fell within the scope of EU law and therefore the national law had to comply with proportionality. In this case such analogy is hard to draw because the current case concerns a direct action and therefore differs from the previous cases. Hence, what kind of proportionality test should be created? A test based on solidarity between the Member States and the effects on EU citizenship as a concept? Or still based on a real link idea, but with a foundation in other case law on EU citizenship. While the Court in Tjebbes accepted the existence of a real bond between nationals and a Member State as a justification to revoke nationality, this could be a connection point. As the Court held recently as well ‘to protect the special relationship of solidarity and good faith between it and its nationals and also the reciprocity of rights and duties, which form the bedrock of the bond of nationality’ (C-684/22 to C-686/22, Stad Duisburg, para. 34). At the same time, there is a significant difference in a justification ground and a requirement based on EU law for Member States. I therefore see the challenges the Court will face. Nevertheless, I would hope that the Court will go (at least a bit) further than its’ AG and will consider and speak out on the meaning of Article 9 TFEU, Article 21 TFEU as well (and the other rights that come with EU citizenship) in the broader context.
An alternative might be to have some harmonisation (which is also not easy, I admit). As the EP in 2022 stated, one could argue that the EU has competence to legislate on this subject based on Article 21(2), Article 79(2), Article 114, or Article 352 TFEU. That might be another, constitutional preferable way, to deal with those schemes, since
the Court is also between a rock and a hard place: it needs to protect the constitutional and fundamental status of EU citizenship, while at the same time the competence on nationality remains firmly in the hands of the Member States. EU citizenship adds ‘to the democratisation of the EU’, it creates not only ties with the Member State at stake, but also potentially with all other Member States. Free movement and electoral rights are at the heart of EU citizenship, and therefore granting EU citizenship upon investments, without a real link, does erode the concept. All eyes are on the Court, but it cannot solve everything. I will be on edge of my chair to see the judgement arriving in the upcoming months, as a lot of other legal scholars and civil servants.
Prof. Dr. Hanneke van Eijken is Professor Rule of Law and Democracy at Utrecht University, School of Law, Montaigne Centre for Rule of Law and Administration of Justice and the Utrecht Centre for Regulation and Enforcement in Europe.
SUGGESTED CITATION: Van Eijken, H.; “Nationality for Sale: different Fruits in one Basket?”, EU Law Live, 28/10/2024, https://eulawlive.com/oped-nationality-for-sale-different-fruits-in-one-basket/
Domestic intra-VAT Group Supplies must be disregarded –Insight from Finanzamt T II (C-184/23)
Philippe Gamito & Ione Searle
Introduction
Article 11 of the Council Directive 2006/112/EC (‘VAT Directive’) – which allows for Member States to fictitiously treat a group of persons as a single taxable person in their own right for VAT purposes – continues to generate legal interpretative challenges. On 1 December 2022, the Court of Justice of the European Union (‘the Court of Justice’ or ‘the Court’) issued a decision in Finanzamt T (C-269/20). In essence, the CJEU held that Article 11 allowed for a controlling company of a group to be designated as the ‘representative member’ of the VAT group provided that the controlling company was in a position to impose its will on the other members of the group and that such designation did not entail a risk of tax losses. In addition, the Court of Justice also ruled that, when the controlling company carries out non-taxable economic activities as a public authority, the provision of services by another entity of the VAT group must not be taxed (see a previous Op-Ed on this case).
It is against this background that the German referring court, having had regard to the Court’s decision in Finanzamt T, decided to refer once again to the Court in respect of the same litigation. On 11 July 2024, the Court issued its second decision in Finanzamt T (C-184/23) (‘Finanzamt T II’). This time around, the Court was confronted with a different, but nonetheless fundamental question relating to the scope ratione materiae of Article 11 of the VAT directive: do the supplies of services made between group members fall outside the scope of VAT, and if so, does it matter whether the recipient of those services cannot deduct input tax (either partially or in full)? One can express some bewilderment that this question only arose in 2024. In any case, the Court has diligently examined this issue by reference to well established principles that we explore in this commentary. We note that the Advocate General Rantos delivered an opinion on Finanzamt T II on 16 May 2024 (the ‘Opinion’).
Given that the present case relates to the 2005 tax year, the judgment refers to the provisions laid down in the Sixth Directive 77/388/EEC, which was replaced in January 2007. For the purpose of this Op-Ed, reference is made to the current legal text. That said, the principles set out by the Court of Justice in this decision should remain relevant in construing the VAT grouping provisions under the current VAT Directive.
Background Facts
S is a German foundation governed by public law and is the controlling company of both a university school of medicine and U-GmbH. In this context, S carries out activities in a building complex for which it holds two ‘VAT hats’: on the one hand, S is a taxable person carrying out an economic activity subject to VAT and, on the other hand, S is not a considered a taxable person when acting in an official capacity. The building was therefore used
for a mixture of taxable business activities and non-economic teaching activities.
U-GmbH provided cleaning, hygiene, laundry and patient transport services to S. The cleaning services were supplied for the entire building complex forming the university, both in the parts of the building where S was acting as a taxable person (e.g., the hospital area) and where S was not acting as a taxable person (e.g., lecture rooms and laboratories, representing circa 7.6% of the total surface area of the building complex).
The facts can be depicted as follows:
For the tax year 2005, the German tax authorities issued a tax assessment to S, on the basis that S is the controlling company of the VAT group, stating that the cleaning services provided by U-GmbH to S (within the VAT group) were (partly) used by S for the provision of services falling within its powers as a public authority (i.e., noneconomic activity). Therefore, U-GmbH had generated a ‘benefit in kind’ for S, on which S should have paid VAT, despite the services being provided within the VAT group.
Decision of the Court
First, the Court examined the central issue to this case as to whether the supplies of services made by U-GmbH were deemed to fall in the scope of VAT. In this context, the Court of Justice started its analysis by establishing the key principles attached to defining a taxable person and a supply for VAT purposes. Two core conditions must be met: (i) the supply must be made by a taxable person (i.e. anyone carrying out an economic activity independently); (ii) the supply only exists between the supplier and the recipient if there is a legal relationship in which there is a reciprocal performance. Having said that, the Court notes that such ‘legal relationship’ exists only if the supplier bears the economic risk arising from its business (reference is made to Skandia C-7/13 and Morgan Stanley C-165/17).
In relation to Article 11 of the VAT Directive in particular, the Court points out that the VAT group is treated as a ‘single taxable person’. In other words, the entities belonging to the VAT group are no longer treated as separate taxable persons for VAT purposes (see inter alia Finanzamt T). Therefore, individual members of the VAT group no longer submit VAT returns separately, within or outside their VAT group, as individual taxable persons, which results in the attribution of a single VAT number to the VAT group.
As noted by AG Rantos in points 44 and 45 of his Opinion, a supplier of services belonging to a VAT group cannot be treated individually as a separate taxable person from the taxable person constituted by the VAT group. As a result, there is no need to determine whether that supplier meets the ‘independence’ criterion when it provides a service for consideration to another entity of that VAT group. In addition, the Court also referred to the VAT Committee guideline from the 119th meeting in which it was set out that Member States should not treat individual group members separately for VAT purposes. The Court also made reference to a communication paper from the EU Commission issued in 2009 in which ‘intra-group supplies’ were considered to not exist for VAT purposes.
Second, the Court of Justice examined whether the absence of full input tax recovery at the level of S – which results from the non-economic activity – alters the proposition that intra-group supplies should be disregarded. In view of the Court, this question is not so much a question related to Article 11 of the VAT Directive but rather relates to the wider VAT deduction rules set out in the same directive. This is because any deduction of input tax should be assessed at the level of the VAT group as a single taxable person.
In conclusion, the Court concluded that the supply of cleaning services by U-GmbH to S, used partly by S in its capacity as a public authority, do not fall within the scope of VAT. This is the case even where the recipient of those services is not able to deduct input tax.
Comments
Although the risk of a different outcome was low, the judgment of the Court of Justice in Finanzamt T II comes as a relief for taxpayers since it unequivocally upholds that domestic intra-group supplies between members of a VAT group do not fall within the scope of VAT. This decision must be welcome.
First, this decision provides legal certainty for groups established under Article 11 of the VAT Directive insofar as it upholds that domestic intra-group ‘supplies’ must be disregarded for VAT purposes. This means that no output tax must be accounted for, and no input tax must be claimed in relation to these intra-group supplies. Beyond the administrative and compliance benefits that such approach brings, it also appears to provide a firm jurisprudential basis for the establishment of a ‘VAT group disregard principle’: only supplies coming into, and coming from the VAT group as a whole fall within the scope of VAT whilst any ‘internal flow’ within the group must be ignored. In other words, the VAT group as a whole forms a ‘black box’ within which no VAT transactions can possibly take place. To some extent, this interpretation is comparable to the principle of unity of the taxable person set out in FCE Bank (C-210/04) whereby there are no supplies between establishments of the same taxable person (i.e., between branches and the head office).
The impact of this interpretation cannot be overlooked as it dictates how companies’ VAT liability must be determined by reference to intra-group supplies. In practice, however, it should most likely be business as usual since this is the approach that taxpayers have taken all along pre-Finanzamt T II
Second, the judgment clearly dismisses the German tax authorities’ argument on the risk of ‘tax losses’. The Court’s approach on this point is pretty short and unambiguous: the mere fact that the VAT group is the only taxable person means that any internal flow between U-GmbH and S is non-existent. In other words, there is no tax loss since there is no supply in the first place. This must be applauded. The whole point of VAT grouping is precisely to prevent businesses with limited or no input tax recovery (e.g. credit companies, banks, insurers, etc.) to mitigate the impact of irrecoverable VAT on their inter-company arrangements within the group. This is important as the tax authorities’ approach seemed misplaced; output tax will be due by the VAT group itself on supplies made to third parties, and if the VAT group is engaged in non-economic or exempt activities, the VAT group’s input tax deduction will be limited accordingly in light of VAT deductibility rules.
However, the decision in Finanzamt T II does not address a corollary issue related to the scope ratione loci of Article 11 of the VAT Directive.
The issue in Finanzamt T II relates to the VAT treatment of an intra-group supply between two separate companies located in the same jurisdiction. In many instances, though, there are intra-group supplies between establishments of the same taxable person, i.e. between branches and head office or between branches of the same head office, which may not be located in the same jurisdiction. In these scenarios, the principle unity of the taxable person is juxtaposed with the concept of ‘person’ for VAT grouping purposes. Some Member States, such as Ireland, apply this interpretation whereby non-domestic branches of a VAT grouped Irish head office also belong to the Irish VAT group (the Netherlands used to apply the same rules until 31 December 2023, see Decree 2022-13545 from 1 July 2022; although no longer a Member State, the UK used to apply these rules under its EU membership and continues to do so as of today).
Against this background, one may ask whether the ‘VAT group disregard principle’ set out in Finanzamt T II is limited to domestic transactions or whether it can also apply cross-border? Sadly, but perhaps logically, the decision is silent on this issue.
One school of thought – which is mainly led by the EU Commission – considers that the decisions of the CJEU in Skandia (C-7/13) and Danske Bank (C-812/19) have resolved this conundrum since domestic VAT groupings are seen as the only permissible implementation of Article 11 of the VAT Directive (VAT Committee on Danske Bank case, taxud.c.1(2021)7398791, p. 11). Therefore, there is no such a thing as ‘intra-group cross border supplies’. By contrast – other views, including the authors – believe that these two judgments have not addressed the central issue of defining the concept of ‘person’ under Article 11 of the same directive (detailed commentary on this issue: P. Gamito ‘Danske Bank: Will EU VAT grouping survive to reverse Skandia?’ [2021] 32 International VAT Monitor 4, p. 213). Therefore, if a Member State defines a person as being the head office and all its branches (i.e. the ‘whole establishment’ concept), a person necessarily includes non-domestic branches. Under this approach, one would
argue that the conclusion of the Court of Justice in Finanzamt T II can validly be applied by taxpayers making use of cross-border VAT grouping so that, when a VAT group member receives ‘supplies’ from an overseas member, such supply should be disregarded. However, since Finanzamt T II relates to domestic transactions only, it is not possible to draw any conclusion in support of this alternative interpretation – perhaps stubborn some might say – attached to the scope of ‘person’ under Article 11.
Conclusion
In conclusion, the decision in Finanzamt T II must be welcome. It provides a clear jurisprudential basis for taxpayers to disregard domestic intra-group supplies in EU Member States where they have set up a VAT group under Article 11 of the VAT Directive. The mere fact that members have a limited right of input tax recovery is irrelevant in this regard since any internal flow within the VAT group is not deemed to exist for VAT purposes. Therefore, the VAT group as a whole is the only one receiving and making supplies, and the one that must apply normal deductibility rules by reference to those supplies.
Philippe Gamito is as senior tax adviser at Baker McKenzie in London. He holds a MSc in taxation from the University of Oxford, a Masters in tax management from the Solvay Brussels School of Economics and Management and a Master of Laws from the University of Brussels (ULB).
Ione Searle is a trainee solicitor at Baker McKenzie in London. She holds a Master of Laws from BPP University, Graduate Diploma in Law from the University of Law and a Liberal Arts degree from Durham University.
SUGGESTED CITATION: Gamito, P. and Searle, I.; “Domestic intra-VAT Group Supplies must be disregarded – Insight from Finanzamt T II (C184/23)”, EU Law Live, 31/10/2024, https://eulawlive.com/op-ed-domestic-intra-vat-group-supplies-must-be-disregarded-insight-from-finanzamt-tii-c-184-23/
Booking a Hotel Room for your next brat Summer? The Court of Justice rules on Parity Clauses and relevant Market for multisided Platforms, but we are none the wiser (Booking (C-264/23))
Marios Constantine Iacovides
In its first ever judgment on parity clauses offered by online travel agents (‘OTAs’) like Booking.com, the Court of Justice finally offers some limited clarity and strikes a fine balance between ancillary restraints and Article 101(3) TFEU, but still leaves plenty of room for experimentation by national courts and competition authorities. That is probably bad for legal certainty but at the same time understandable, given the relative novelty of the issues involved and as a reflection of the respective roles of national courts and the Court of Justice in applying and interpreting EU law.
Old tales, not so old tricks
What do brat summer and price parity clauses have in common? It is early October and a rainy day in Paris; leaves turning a yellow so gold it almost compensates for the lack of sunshine. Summer seems long behind me but as I read the Court of Justice’s preliminary ruling in Booking.com and Booking (Deutschland) (C-264/23) my mind travels to summers not too long ago when I would arrive on Greek islands and –fresh off the boat, backpack on my sweaty back, limited cash in my pocket, blinded by the bright sun– I would scan the port for the row of locals offering rooms for rental, a mix of young energetic youth shouting their prices and carrying cardboards with some photos and old ladies patiently waiting for an interested tourist to talk to them first. At times it felt chaotic, but it was a system that worked. Unless you actually wanted to sleep on the beach, you always found somewhere charming and authentic to stay.
All that changed, of course, with the arrival of OTAs, like Booking.com, the applicant in this case. Yet, what has not changed is really the basic idea behind those locals gathering at the port on the time of the ferry’s arrival: finding a place where it makes sense for those offering accommodation to meet potential guests and where those potential guests can compare quality and prices and make an informed choice regarding their holiday accommodation.
Think of Booking.com as the port. It neither supplies nor purchases accommodation; it does not determine prices nor terms and conditions for the stay. It is simply the platform where establishments and travellers meet virtually. Like at the port, the traveller is free to look around to find the accommodation that suits their taste and budget. However, unlike the port, Booking.com gets a commission from the hotel establishments for reservations.
Naturally, hotels would like to avoid that by using alternative sales channels, while still being present on Booking. com for visibility. That, and whether and how competition law restricts the platform’s conduct in relation to hotels’
alternative sales channels – whether they are other platforms or the hotels’ own sale channels – is, in essence, the fundamental issue in this case.
Wide, narrow, and divided
The Court of Justice’s views on parity clauses have been a long time coming. But how did we get here? The request for a preliminary ruling by Rechtbank Amsterdam (Amsterdam District Court, Netherlands) concerns the interpretation of Article 101 TFEU and of the (now, old) Verticals Block Exemption Regulation 330/2010 (old VBER). The Dutch court asked two simple questions. First, can price parity clauses, whether wide or narrow, be classified as ancillary restraints for the purposes of Article 101(1) TFEU? This would allow them to escape the application of the article altogether. Second, how does one go about defining the relevant market in these cases? Do OTAs compete with hotels’ own sales channels? How does the multi-sidedness of the market affect its definition? The national court made the request in the context of a dispute between Booking.com BV and Booking.com (Deutschland) GmbH (‘Booking.com’), on the one hand, and 25hours Hotel Company Berlin GmbH and 62 other hotel establishments in Germany (‘the respondents’), on the other.
The current case was launched by Booking.com in the Netherlands following a series of final judgments rendered against its own and competitors’ price parity clauses in German courts. Regarding wide price parity clauses, whereby accommodation providers were prohibited from offering, either through their own sales channels or through sales channels operated by competing OTAs, rooms at prices lower than those offered on the platform, Booking.com had removed them following a final judgment against a rival platform by the Higher Regional Court in Düsseldorf in 2015.
After consulting the French, Italian and Swedish competition authorities, Booking.com replaced its wide parity clauses with narrow ones, whereby accommodation providers were prohibited from offering their rooms at better prices than those offered on Booking.com only through their own sales channels; in other words, they could offer better prices through competing OTAs. In May 2021, however, the German Federal Court of Justice found that narrow parity clauses significantly restricted competition on the market for online hotel reservation platforms and on the market for hotel accommodation. Moreover, it found that the narrow parity clauses did not constitute ‘ancillary restraints’ nor could be exempt under the old VBER.
Meanwhile, in Belgium, France, Italy and Austria, parity clauses, whether wide or narrow, were banned by law. The European Commission also updated the Verticals Block Exemption Regulation to take into account developments regarding digital markets. Article 5(d) of that Regulation now classifies wide parity clauses as excluded restrictions, meaning they will have to be assessed individually under Article 101(1) TFEU. Narrow parity clauses, on the other hand, can still benefit from block exemption, although the Regulation contains a warning in Article 6(1) that the benefit of the block exemption can be withdrawn where there is a cumulative effect of narrow parity clauses that are being used by platforms covering a significant share of users and there is no evidence of efficiencies. The EU has also regulated parity clauses in Article 5(3) of the Digital Markets Act, under which Booking was designated a gatekeeper in May 2024.
In parallel with these developments, in 2020, Hotelverband Deutschland e.V, an association representing about 2 600 hotels, brought an action for private damages against Booking.com before the Regional Court in Berlin, Germany, arguing that the hotels it represents had suffered loss due to Booking.com’s agreements being contrary to Article 101 TFEU on account of the parity clauses. These proceedings, which are pending before the Berlin court, concern the same questions as those at issue in the referring Amsterdam court. Thus, the Court of Justice’s preliminary ruling in the current Dutch case will have an immediate effect on those proceedings, too.
As the above exposé makes clear, the EU has been rather divided over the issue of parity clauses and legal certainty has been lacking. Hence, the Court of Justice’s preliminary ruling has been very much anticipated. Does it offer much clarity, though?
Parity clauses are not ancillary restraints
On the issue of ancillary restraints, the ruling is clear and unambiguous. The Court of Justice has found that parity clauses, both wide and narrow, inserted into agreements concluded between OTAs and providers of accommodation services are not ancillary to those agreements and, hence, do not fall outside the scope of Article 101(1) TFEU.
The Court set out the classic analytical framework for deciding whether a clause is ancillary to an otherwise neutral or procompetitive agreement. First, one must decide whether the implementation of the main operation would be impossible in the absence of the restrictive clause. The bar here is quite high, but as the Court notes, this is necessary to preserve Article 101(1) TFEU’s effectiveness. Second, one must examine the proportionality of the restriction at issue to the objectives underlying the operation in question.
The Court of Justice noted that Booking.com’s main operation is neutral or positive for competition and leads to significant efficiency gains. That said, neither wide nor narrow parity clauses are objectively necessary for the main operation, nor are they proportionate to the aim pursued.
Regarding wide parity clauses, the Court of Justice simply notes that there is no intrinsic link between the continued existence of the main activity of OTAs and the imposition of such clauses. Unfortunately, the Court offers no clarifications as to how such an intrinsic link could be shown, choosing instead to only focus on the appreciable restrictive effects such clauses carry for competition and the risk of ousting small platforms and new entrants.
Regarding narrow parity clauses, the Court of Justice finds that they are not indispensable for the implementation of Booking.com’s main operation, even if they might be necessary to ensure its commercial success. Here the Court tries to distinguish the facts of the current case from cases where it had accepted that a clause was an ancillary restraint, interpreting its precedent as requiring to show that the main operation would be ‘necessarily compromised’ in the absence of the clause. According to the Court, negative consequences for profitability the services offered does not mean that the operation would be necessarily compromised.
The Court, here, points out to two facts for making this distinction between Booking.com and cases where claims of ancillary restraints had been successful. The first is that Booking.com’s profitability seems to be affected by the business model it chose, namely, to limit the level of commissions payable by affiliated room providers, hoping to increase the offers submitted on its platform and to reinforce the indirect network effects that are generated this way. The second is that although both wide and narrow parity clauses have been prohibited in several Member States, Booking.com’s provision of services has not been compromised.
Free-riding must be examined under Article 101(3) TFEU
Booking.com’s main argument for maintaining narrow parity clauses is that they are necessary for combating free-riding on the part of accommodation providers. According to the argument, absent the parity clause, an accommodation provider can get visibility and reach potential customers through Booking’s platform, which provides inter alia a user-friendly search function, maps, photos, easy comparison, etc., but then avoid having to pay a fee to Booking.com by enticing the customer to make the booking through its own sales channel at a better price than the one offered on Booking.com. That strips Booking.com of revenue, meaning it might not be able to amortise on the investments made to develop the platform.
The Court of Justice refused to engage with the merits of this argument, finding that it can only be taken into account in the context of the application of Article 101(3) TFEU. According to the Court, deciding on the issue of free-riding requires a balancing of the procompetitive and anticompetitive effects of the agreements between Booking.com and the accommodation providers. That balancing can only take place in the context of applying Article 101(3) TFEU, something which the national court will have to do when assessing the facts. On the contrary, classifying a restraint as ancillary for the purposes of escaping the application of Article 101(1) TFEU altogether, can be done in a relatively general and abstract manner, without the need to engage in an assessment of the facts.
Definition of the relevant market in multi-sided markets
Even if the disputed parity clauses cannot escape Article 101(1) TFEU as ancillary restraints, they may still be exempted under the old VBER, but only if the market share held by Booking.com does not exceed the 30 per cent threshold on the relevant market. Hence, the Dutch court asked the Court of Justice how to define the relevant market in the case.
In this regard, the Court of Justice’s answer is not particularly helpful. The Court of Justice noted that it could only provide guidance as to the elements of interpretation to be considered for the purposes of defining the market. According to the Court, the definition of the relevant market requires the conditions of competition and the structure of supply and demand on the market concerned to be taken into consideration and is dependent on an in-depth factual examination, which only the referring court can carry out.
Thus, the Court’s rather abstract answer is that the Dutch court must undertake a concrete examination of substitutability, from a supply and demand point of view, between online intermediation services and other sales
channels, to decide whether there is competition between OTAs and other sales channels – meaning the market is broad – or only between OTAs – meaning the market is narrow and in line with the relevant market defined in the German proceedings. The Court nods approvingly to the Revised Notice on the Definition of the Relevant market, which specifically deals with multi-sided markets.
Effect of the German proceedings in other Member States
Given the context of the case, several arguments were put forward by the parties relating to how much weight had to be given to the final decisions taken by the German Bundeskartellamt and German review courts and whether the preliminary ruling by the Dutch court should be deemed inadmissible. The legal context here is the Damages Directive 2014/104 and its Article 9(2) according to which final decisions taken in a Member State constitute at least prima facie evidence of an infringement of competition law.
The Court of Justice notes that the Dutch court is not necessarily bound by the findings relating to price parity clauses in the decisions of the Bundeskartellamt and in subsequent decisions of German courts. Hence, the admissibility of the request for a preliminary ruling could not be questioned. That said, the Dutch court must take the German findings into account when deciding whether the conditions for establishing the existence of an ancillary restraint have been met. Given the Court of Justice’s clear negative answer on this matter, this is, in fact, redundant.
As to whether the Dutch court is bound by the German findings regarding the relevant market for the purposes of applying the old VBER, the Court of Justice admits that these do not strictly relate to final decisions establishing an infringement of competition law. In any case, the Court of Justice instructs the Dutch court to take them into account as particularly relevant contextual factors, which can however be disregarded if it is shown that the market definition is vitiated by any error of analysis or is based on erroneous findings.
A static view of competition, but at least leaving room for experimentation
The ruling demonstrates more an effort by the Court of Justice to strike a delicate balance between competing interests and visions of competition in digital markets rather than offering any clear answers. The exception is on the issue of whether parity clauses are ancillary restraints, where the answer is a categorical ‘no’. Nevertheless, that answer, especially regarding narrow parity clauses, is based on rather thin argumentation and, as we observed back in 2018, on a rather static view of competition and counterfactual analysis. It may be true that Booking.com still operates (and rather successfully) even in Member States where these clauses are banned. It may also be true that its profitability is (also) affected by its choice to charge low commissions, hoping to have large market coverage. Yet, both those facts are true now, when Booking.com arguably already has market power and a certain brand image. What about its offering and services, however? Have they deteriorated absent the parity clauses and, hence, has consumers’ overall experience suffered? Could parity clauses have been indispensable earlier to avoid room providers from discriminating between price sensitive consumers, who would use the platform to find a hotel but then book directly to get a better deal, and those who are not price sensitive enough to bother? The answer to that
will be crucial for the length of the infringement but would have also proved important for smaller OTAs when entering a market as they might prefer for the restraints to be seen as ancillary, rather than having to be exempted under the VBER or Article 101(3) TFEU.
The answers to these questions will have to come by an application of the VBER, Article 101(3) TFEU and the Digital Markets Act. Despite the uncertainty, that is probably a good thing. In fast-paced dynamic markets, experimentation in the application of competition law by different national competition authorities, national courts, and the Commission, is useful as a way to learn before taking a categorical stance for or against a certain market practice. Until then, I will place my bets on finding the best price offline, through calling establishments directly, or by just showing up at the Greek island port and scanning the ferry platform for the odd old lady with a spare room.
Marios Constantine Iacovides is an Associate Professor in European Law and Senior Lecturer in Commercial Law at Uppsala University Sweden, and Academy Researcher of the Royal Swedish Academy of Letters
SUGGESTED CITATION: Constantine Iacovides, M.; “Booking a Hotel Room for your next brat Summer? The Court of Justice rules on Parity Clauses and relevant Market for multisided Platforms, but we are none the wiser (Booking (C-264/23))”, EU Law Live, 25/10/2024, https://eulawlive.com/op-edbooking-a-hotel-room-for-your-next-brat-summer-the-court-of-justice-rules-on-parity-clauses-and-relevant-market-for-multisided-platforms-but-weare-none-the-wiser-booking-c-264-23/
Rule of Law binds the European Union too. It is Time to scrutinize Union’s Actions accordingly
Dimitry Kochenov & Laurent Pech
The dominant Rule of Law narrative among the European institutions and the media focuses on ‘backsliding’ in some capitals as the key Rule of Law problem to solve. Significant resources have been (mis)invested with the EU unfortunately prioritising Rule of Law tool creation and the multiplication of monitoring and reporting mechanisms, of which the Commission’s Annual Rule of Law Report, released since 2020 is one. What has been overlooked is deafening silence about the EU itself: the Commission and the Council have persistently refused to set up mechanisms allowing for a meaningful, let alone independent, annual scrutiny of the Union’s own Rule of Law performance.
Notwithstanding recurrent calls from the European Parliament to fill this major gap, EU’s (in)actions and potential or actual lack of compliance with the EU’s own Rule of Law requirements continue to this day to be left outwith the ambit of any monitoring, contrary to what has been organised in respect of each EU Member State. Knowing that the EU is too present, real, and too important to be included among the proverbial ‘angels’ Publius would dismiss checks and balances for, this gap ought to be filled.
This is not only a matter of consistency, it is also drawing on the fast growing number of worrisome examples where EU institutions’ actions or inactions raise –to use the EU institutions’ favourite word– ‘serious concerns’. One may for instance mention ‘migration deals’ with authoritarian regimes and the funding of gross human rights violations; the disregard of EU citizens’ basic rights, especially in criminal proceedings, where guilt is sometimes presumed by EU law, and the overall balance between law and politics underpinning key decisions in our ‘Union of law’, ranging from judicial independence issues to manifest misuse of powers in response to extortion tactics, the disregarding of the well-articulated Court of Justice’s Rule of Law imperatives to the increasingly politicisation and selective triggering of enforcement tools at the EU institutions’ disposal, if at all
It is plain that while the Rule of Law is advocated as a foundational value of the European Union, serious and recurrent monitoring of the EU’s own compliance with the EU’s Rule of Law principles is severely lacking in a number of areas including inter alia the mutual recognition in criminal matters and migration management. Further, Rule of Law enforcement, especially when it comes to the EU refusing to enforce EU law, appears increasingly dependent on undue political factors with the Commission treating the Rule of Law as a bargaining chip or adjustment variable whenever politically required. This is coupled with increasing gaslighting and misleading figures –the claim that EU Member States have followed up on 68% of the Commission’s 2023 Rule of Law recommendations is for instance laughable.
This in turn weakens the credibility of EU institutions as Rule of Law actors. Crucially, it introduces systemic and significant deficiencies at EU level. The consequence of this is to undermine efforts to prevent and reverse Rule of Law backsliding in certain Member States, as well as, in some cases, to tangibly harm Rule of Law in properly functioning Member States strongly committed to Rule of Law standards.
Worse still, the EU risks to emerge as an effective shield defending abusive national governments unwilling to play by the rules of Article 2 against their own Constitutional requirements and basic Council of Europe standards to the detriment of EU-wide Rule of Law and human rights protection. Think about the EU’s questionable migration deals with third countries resulting in ‘crimes against humanity’ and brought to the attention of the ICC, or multi-billion gifts to the autocrats at home and abroad, which would never withstand serious independent legal scrutiny. The Court of Justice’s case law regarding migrants’ access to (EU) justice, especially in relation to FRONTEX, may also be questioned.
Acknowledging and addressing Rule of Law deficiencies at EU level is necessary in order to remain credible and effective when it comes to dealing with backsliding at Member State level. We would not want the EU to enable backsliding through its own actions or persistent inaction. It is thus equally indispensable to hold the EU itself to account and ensure that its values are not empty proclamations.
The Democracy Institute Rule of Law Clinic at the Central European University in Budapest made a first step in the direction of filling the gap we identify. The Shadow Report it released on October 28 this year (which was written by Barbara Grabowska-Moroz and Joelle Grogan with the contributions from the authors together with Petra Bárd, Elena Basheska, Mariam Begadze, Sarah Ganty, Emilio De Capitani, Giulia Raimondo, Omer Shatz, Jacquelyn Veraldi and Anna Wójcik) aims at starting a serious and critical discussion about the state of the Rule of Law at the level of the European Union. It calls on the EU to ensure that the values of Article 2 TEU and, especially, the Rule of Law, do not suffer from double standards and apply to the fullest extent to the EU institutions in order to guarantee robust liberal democratic constitutionalism, and institutions capable of defending EU values also at the level of the Member States.
Dimitry Kochenov is head of Rule of Law research and founder of the CEU Democracy Institute Rule of Law Clinic , Budapest and Professor of Legal Studies at CEU Vienna.
Laurent Pech is Dean of UCD Sutherland School of Law, Dublin and Academic co-director of the CEU Democracy Institute Rule of Law Clinic, Budapest.
SUGGESTED CITATION: Kochenov, D. and Pech, L.; “Rule of Law binds the European Union too. It is Time to scrutinize Union’s Actions accordingly”, EU Law Live, 28/10/2024, https://eulawlive.com/op-ed-rule-of-law-binds-the-european-union-too-it-is-time-to-scrutinize-unions-actions-accordingly/
Gender-Based Asylum in European Union Law: the Court of Justice’s Progressive Stance
Salvo Nicolosi & Türkan Ertuna Lagrand
Is automatic recognition of refugee status possible for women and girls fleeing systematic discrimination in their country? This question has recently provided the Court of Justice (or the ‘Court’) with an opportunity to come full circle about its case law on gender-based asylum claims. On 4 October, the Court delivered its judgment in the two joined cases on Afghan women (C-608/22 and C-609/22). The ruling constitutes the landing point of a recent stream of case law through which the Court has progressively advanced a gender-sensitive approach to refugee protection. Notably, in WS (C-621/21), the Court acknowledged that women in a particular country could constitute ‘a particular social group’, while in Westernised women (C-646/21) it underscored the significance of gender equality in defining such a group. In Afghan women, instead, the Court tackled the question of whether women subjected to a range of restrictive, state-imposed or state-supported discriminatory measures based solely on their gender could be granted refugee status without requiring an individualised assessment of their circumstances.
This ruling is of particular importance not only because, as recently highlighted by scholars, judgments of the Court of Justice addressing gender-related elements of asylum cases are scarce, but also because it is the first case that integrates ‘systematic discrimination’ into EU asylum law. Following a brief overview of the factual background, this Op-Ed highlights three aspects of the Court’s reasoning that compels national authorities to implement the gender-sensitive shift developed by the Court.
The Factual Background of the Case
The case originates in a request for a preliminary ruling from the Austrian High Administrative Court. The applicants are two Afghan women who applied for international protection. The Austrian Federal Office for Immigration and Asylum refused to recognise their refugee status, but granted the applicants subsidiary protection on the ground that they would face economic and social difficulties if they returned to Afghanistan. The applicants unsuccessfully appealed to the Federal Administrative Court of Austria, claiming first that they had adopted Western values and a Western-inspired lifestyle, and second, that after the Taliban regime came to power in 2021, women in Afghanistan have faced widespread persecution. Accordingly, the applicants appealed before the High Administrative Court arguing that the situation of women under the Taliban regime alone justified the recognition of refugee status. The High Administrative Court thus decided to refer two questions to the Court of Justice. The first question concerned the substantial aspect of whether the accumulation of the measures taken by the Taliban regime in respect of women is sufficiently serious to be classified as an ‘act of persecution’ within the meaning of Article 9(1)(b) of the Qualification Directive 2011/95. The second question, more procedurally, concerned whether an Afghan woman may be granted refugee status without an individual
assessment of her situation being carried out, even though Article 4(3) of the Qualification Directive underlines that ‘the assessment of an application for international protection is to be carried out on an individual basis.’
The Court’s Gender-Sensitive Shift
In addressing the two questions, the Court of Justice allows a gender-oriented reading of EU asylum law, which as has been pointed out, often ‘mirrors the dominantly masculine understanding of refugees and migrants’. The Court essentially innovates the approach to refugee protection by taking three progressive stances: a) integrating the concept of systematic discrimination into EU asylum law; b) easing the procedural requirement for individualised assessment; and c) promoting gender mainstreaming and intersectionality.
1. Integrating Systematic Discrimination in EU Asylum Law
The concept of ‘discrimination’ is of paramount importance to determine the existence of persecution to seek recognition as a refugee. However, not all discrimination amounts to persecution. In this regard, the Court follows a helpful explicative approach that will offer clear guidance to national authorities while implementing the relevant EU asylum rules. The Court distinguishes between two categories under Article 9(1) of the Qualification Directive: the first category includes acts like forced marriages and inadequate protection against gender-based violence, which qualify as persecution on their own. The second category consists of measures that restrict access to healthcare, political life and education, which, while not individually qualifying, may collectively amount to persecution when systematically applied. This promotes the recognition of systematic discrimination within EU asylum law, emphasising that such discrimination is a distinct feature of a social structure that oppresses women and denies them the right to a dignified life.
2. Easing the Procedural Requirement for Individualised Assessment
Regarding the individual assessment, following the suggestion of the Advocate General, the Court allows a gender-sensitive interpretation of Article 3 of the Qualification Directive, according to which Member States may adopt more favourable standards, including by easing the conditions for granting refugee status. The novelty of the Court’s ruling thus lies in the departure from a settled case law establishing, based on Article 4 of the Qualification Directive, that ‘every decision on whether to grant refugee status or subsidiary protection status must be based on an individual assessment.’
Such a departure is operated by the Court through an appropriate systemic interpretation of EU asylum rules in light of international human rights law. This is confirmed by the Court’s strong reliance on the UNHCR Statement issued on 25 May 2023 in the context of these preliminary ruling proceedings, which emphasised the need for protection due to the persecutory measures imposed by the de facto authorities in Afghanistan, specifically targeting women and girls based on their gender. Additionally, the Court’s references to the Istanbul Convention and CEDAW further underscore the importance of these international treaties, which the Court recognises as ‘relevant treaties’ within the framework of Article 78(1) TFEU.
3. Promoting Gender Mainstreaming and Intersectionality
Beyond its direct implications for refugee protection, Afghan women is also important for its contribution to the broadening of gender mainstreaming. Introduced into the EU legal order by the European Commission in 1996, the concept is understood as ‘mobilising all general policies and measures specifically for the purpose of achieving equality’. This commitment has been further consolidated by the Gender Equality Strategy 2020-2025, whose implementation requires intersectionality, including taking into consideration various personal characteristics or identities, such as migrant status. Despite the increasing presence of migrant women in Europe, national and European policies still largely ignore the gender dimension of migration. As highlighted by the Council of Europe, gender mainstreaming primarily focuses on policy-making. Nonetheless, a gender-sensitive approach must also inform the implementation of these policies. In this connection, the Court of Justice’s ruling on Afghan women plays an important role in promoting gender mainstreaming, offering guidance to national authorities in implementing a gender-sensitive reading of EU asylum legislation.
Concluding remarks
In this last episode of a series of developments towards a more gender-sensitive EU asylum law, the Court’s reasoning has broadened protection standards by accepting that country of origin information may suffice as a basis for asylum determination in case of systematic discrimination against women. In such cases, the Court considered it unnecessary to establish a specific and immediate risk of persecution for individual applicants (paragraph 57). Such a flexible and gender-sensitive approach promises further progress in a wider spectrum of asylum claims, notably those related to sexual orientation and gender identity, where personal evidence is often lacking.
In sum, the Court’s case law has confirmed that women in a country can constitute a ‘particular social group’ that systematic persecution can arise from the cumulative impact of state-imposed measures infringing upon women’s fundamental rights and that, in such cases, no individual assessment of the applicant’s circumstances is required. Its approach underscores the need to integrate fundamental human rights principles, such as equality between women and men to ensure that women subjected to systematic oppression receive the protection they need. National authorities must now ensure consistent protection across the EU for women fleeing systematic discrimination.
Salvo Nicolosi is an Assistant Professor at Utrecht University Law School and Senior Researcher of the Utrecht Centre for Regulation and Enforcement in Europe (RENFORCE) within which he co-leads the Building Block on Citizenship and Migration.
Türkan Ertuna Lagrand is an Assistant Professor at Utrecht University Law School and a Researcher of the Utrecht Centre for Regulation and Enforcement in Europe (RENFORCE).
SUGGESTED CITATION: Nicolosi, S. and Ertuna Lagrand, T.; “Gender-Based Asylum in European Union Law: the Court of Justice’s Progressive Stance”, EU Law Live, 31/10/2024, https://eulawlive.com/op-ed-gender-based-asylum-in-european-union-law-the-court-of-justices-progressive-stance/
At the Crossroads of Gender Identity and EU Citizens’ Right to Freedom of Movement: Mirin (C-4/23)
Carlos Santaló Goris
1. United in diversity?
When it comes to the procedure for changing the legal gender of a person, solutions vary significantly from one EU Member State to another. Some Member States have adopted a rather lenient approach by enabling the selfdetermination of the gender. For instance, in Spain since 2022, it is possible to change one’s gender by simply making a ‘statement of disagreement with the registered sex’ before the civil registry. Conversely, in other Member States, the procedure is more complicated, requiring gender-affirming surgery as a prerequisite to legally change gender. The referred divergences between Member States are the core of Mirin (C-4/23).
2. Background of the case
M.-A.A.is a Romanian national who moved to the United Kingdom where he obtained the British citizenship. There, M.-A.A. also changed his gender from female to male in the United Kingdom, as well as his name through ‘the deed poll procedure’, an expedited procedure that ‘enables British citizens to change their name or first name by making a simple declaration’ (para. 27).
Relying on the British gender identity certificate, M.-A.A. asked the Civil Status Service of the Cluj Directorate for Personal Records in Romania to amend his gender and name on his birth certificate. Romanian authorities refused to do so, arguing that, according to Romanian law, that such a change on the birth certificate had to be approved through a judicial decision. M.-A.A. decided to challenge this decision before the Court of First Instance, Sector 6, of Bucharest. M.-A.A. argued that not recognizing his legally acquired gender change in the United Kingdom generates a disparity between his Romanian birth certificate and his travel documents issued by British authorities. Furthermore, the Romanian judicial proceeding to legally change his gender could end in the refusal to grant such change, pervading the lack of coherence between the British travel documents and the birth certificate. Such divergence could hinder his ‘right to move and reside freely within the territory of the Member States’ as an EU citizen that is enshrined in Article 21 of the Treaty of the Functioning of the European Union (‘TFEU’) and Article 45 of the EU Charter of Fundamental Rights (‘EUCFR’).
The Romanian court deciding on the case submitted a preliminary reference to the Court of Justice asking, in essence, to which extent Romanian legislation that does not allow the recognition of a change of the name and gender legally acquired in other Member States and that requires to undergo a judicial procedure to obtain such change in Romania is compatible with the EU citizen’s right to move and reside freely across the EU.
3. Court’s findings
The Court began its reasoning by recalling that EU citizens have the right to freedom of movement and residence across the EU. At the same time, the Court also acknowledged that such a right can be hindered if the authorities of a Member State refuse to recognize a change in the name and gender of an EU citizen legally adopted in another Member State while exercising the right to freedom of movement and residence. In this regard, the Court stated that limitations can be introduced if they respond to a legitimate and proportionate object. Nonetheless, the Romanian government nor the court that submitted the preliminary reference provided the Court with explanations on the legislation ‘which does not allow the recognition and entry in the birth certificate of a change of first name and gender identity, lawfully acquired in another Member State, and which thus obliges the person concerned to initiate before the national courts new proceedings for a change of gender identity’ (para. 51).
The Court also indicated that any restriction on the right to freedom of movement had to respect the standards of protection of fundamental rights established by the EU Charter of Fundamental Rights (‘EUCFR’). In this regard, the Court referred to the existing link between the EUCFR and the European Convention on Human Rights (‘ECHR’). According to Article 52(3) of the EUCFR, in so far as it ‘contains rights which correspond to rights guaranteed by the Convention for the Protection of Human Rights and Fundamental Freedoms, the meaning and scope of those rights shall be the same as those laid down by the said Convention’. The Court of Justice acknowledged that the European Court of Human Rights (‘ECtHR’) had found that Romania violated the right to privacy under Article 8 of the ECHR because it lacked a ‘clear procedure and foreseeable procedure for legal recognition of gender identify which allows for a change of sex’ (ECtHR, 19 January 2021, X and Y v. Romania, para.168). Article 7 of the EUCFR is the equivalent provision of Article 8 of the ECHR. Therefore, the Romanian legislation that prevented the recognition of the lawfully acquired name and gender change in another Member and required to initiate a judicial procedure to attain those same legal changes in Romania would contravene Article 7 of the EUCFR read in light of the referred ECtHR judgment (paras. 67 - 68). This implies that the restriction on the right to free movement and residence ‘would not consistent with the fundamental rights guaranteed by the Charter’ (para. 62)
The Court also highlighted that undergoing the Romanian judicial procedure to obtain a gender identity change would not necessarily mean that such change would be granted, given the ‘discretion enjoyed by the competent authorities’ to decide on such a request. That could potentially create a ‘divergence between two names and two genders used for the same person as evidence of his or her identity’. Such divergence could cause ‘‘serious inconvenience’ for that national at administrative, professional and private levels’ when exercising the right to free movement and residence (para. 55).
For all the above reasons, the Court found the right to freedom of movement and residence enshrined in Article 21 of the TFEU precludes ‘legislation of a Member State that does not permit recognition and entry in the birth certificate of a national of that Member State of a change of first name and gender identity lawfully acquired in another Member State, when exercising the right to free movement and residence, with the consequence that that
person is obliged to initiate, before a court, new proceedings for a change of gender identity in the first Member State, which disregard the change that was previously lawfully acquired in that other Member State’ (para. 71).
4. Analysis of the judgment
The reasoning that Court followed in C-3/24, Mirin, is echoed in the reasoning followed in other judgments of the Court of Justice concerning the interfaces between the right to freedom of movement and residence and the civil status of LGBT persons. In C-673/16, Coman, the Court determined that Romania had to recognise a samesex marriage for the purpose of granting the residence to a third-country national married with an EU citizen. In C-490/20, Pancharevo, the Court found that Bulgarian authorities had to recognise a birth certificate issued by Spanish authorities in which two women appeared as the parents of a child for the purpose of issuing a Bulgarian identity card for the child. Otherwise, the child nor the parents could effectively enjoy the right to freedom of movement and residence across the EU. It is not surprising that the Court expressly referred to this case law in C-4/23, Mirin (see, para. 51).
The Court’s reasoning in these three cases follows, in broad terms, the same pattern. The Court begins by acknowledging the non-recognition of the civil status of an EU citizen by a Member State can amount to a restriction of the EU citizens’ right to freedom of movement and residence. Subsequently, the Court explores whether such restriction responded to a legitimate objective. At this point, a difference can be appreciated between C-3/24, Mirin and the two other judgments. Unlike in C-673/16, Coman and C-490/20, Pancharevo, in C-3/24, Mirin, the respect of Romania’s national identity and its public policy was not brought before the Court to justify that Romania’s legislation requiring to undergo a judicial procedure legally change gender.
In the three cases, the Court determined that the restrictions on the right to freedom of movement and residence derived from the non-recognition of civil status were unjustified. The Court also indicated specific measures that Member States had to adopt to ensure EU citizens effectively enjoy their right to move and reside freely across the EU. Those measures also reflect the limited recognition of the civil status that can be attained through the right to freedom of movement and residence. For instance, in C-673/16, Coman, the recognition of a same-sex marriage in Romania was strictly limited to granting a long-term residence permit for the non-EU citizen spouse. For all other legal matters, Romania was not required to recognise such marriage. In C-490/20, Pancharevo, Bulgarian authorities were not required to issue a birth certificate acknowledging that the child has two mothers, but just the necessary travel documents that would allow the child to effectively benefit from the right to freedom to movement and residence as an EU citizen. In C-3/24, Mirin, the implications are more significant because Romania is required to amend the name and gender in the birth certificate as established in the British gender certificate. Such change has implications in purely domestic situations beyond the right to freedom of movement and residence.
From a practical perspective, C-4/23, Mirin has introduced a de facto alternative path to the complex Romanian judicial procedure to legally gender change in Romania. Those Romanian citizens who have moved to other Member States and were able to legally change their gender are those who can benefit from what the Court
established in C-4/23, Mirin. Nonetheless, as AG de la Tour remarked, there has to be a close connection between the person and the Member State where this person intends to legally change his/her gender (Opinion AG de la Tour in C-4/23, Mirin, para. 75). Such close connection can be established when a person resides or is a national (as in the case of M.-A.A) of that Member State. Moving to another Member State with the sole purpose of legally changing gender could be considered a fraudulent circumvention of the Romanian procedure to obtain such change.
Mirin (C-4/23) also exposes Romania’s disregard for the above referred ECtHR judgment that determined that Romania’s procedure to legally change of gender contravened Article 8 of the ECHR. Despite this ruling, such procedure remains as it was. The same occurred when the ECtHR determined that Article 8 of the ECHR required Romania to give legal recognition to same-sex couples (ECtHR, 23 May 2023, Buhuceanu and Others v. Romania). To the present day, same-sex couples in Romania do not enjoy any kind of legal recognition. However, when it comes to the Court’s rulings, Romania cannot ignore them as it did for those of the ECtHR. The Commission could trigger an infringement procedure against Romania if this does not follow what the Court of Justice determined in C-4/23, Mirin. For instance, after C-673/16, Coman, the Romanian government proposed a legislative amendment to recognise same-sex marriage concluded in other Member States just for the purposes of residency. C-4/23 Mirin will not fall on deaf ears in Romania, either. Nonetheless, while disparities in the recognition of LGBT rights persist across the EU, cases such as Coman (C-673/16) or in Mirin (C-4/23) will continue making their way before the Court.
Carlos Santaló Goris is Lecturer at the European Institute of Public Administration.
Santaló Goris, C.; “At the Crossroads of Gender Identity and EU Citizens’ Right to Freedom of Movement: Mirin (C-4/23)”, EU Law Live, 29/30/2024, https://eulawlive.com/op-ed-at-the-crossroads-of-gender-identity-and-eu-citizens-right-to-freedom-of-movement-mirin-c-4-23/
A (pyrrhic) Victory for vegan Steaks and another Piece in the Puzzle of
plant-based Products’ Labelling: Protéines France (C438/23)
Erriketi Tla da Silva
On Friday, 4 October, the Court of Justice of the European Union (‘the Court of Justice’ or the ‘Court’) issued its judgment in Case C-438/23. The case dealt with the question of whether a Member State is permitted to prohibit the use of names such as ‘steak’ and other terms traditionally associated with animal products to describe foods made from vegetable proteins, or whether such a prohibition is pre-empted by EU law. The Court concluded that in the absence of a designation of ‘legal names’ in EU or national law, a Member State cannot prohibit the use of terms traditionally linked to products of animal origin for labelling plant-based products.
Background of the case
This case arose when four organisations involved in the vegetarian and vegan product industry contested a French decree aimed at ensuring transparency in food labelling. The decree banned the use of terms like ‘steak’ or ‘sausage’ for plant-based products, even with qualifiers like ‘vegetable’ or ‘soya’. The organisations argued that the decree violated Regulation 1169/2011, on the provision of food information to consumers. The French Conseil d’État, to which the organisations applied for annulment of the decree, sought a preliminary ruling from the Court of Justice on the interpretation of Regulation 1169/2011 and in particular of Articles 7, 17 and 38 and point 4 of Part A of Annex VI thereto.
It is worth noting that this is not the first time that the issue of the denomination of plant-based products reaches Luxembourg. In 2017, the Court had dealt with the similar issue of labelling of plant-based dairy products in Tofutown (C-422/16). In that case, a German association for fair competition sued a plant-based product manufacturer for using terms like ‘plant-based cheese’ and ‘veggie cheese’. The Court ruled that terms such as ‘milk’, ‘whey’, ‘cream’, and ‘butter’, could not be used for plant-based products, as these terms are specifically reserved for products derived from animal milk. Essentially, the Court held that if a product does not contain animal milk, it cannot use those terms on its label. A parallelism with this case would suggest that meat-related names could not be used for labelling plant-based products. However, the Court of Justice decided otherwise in the case at hand.
The Court’s judgement
In Protéines France the Court stressed that the Regulation 1169/2011 permits the adoption of legal names at Member State level if such names are not already established at EU level. If legal names have been defined, these names cannot be used for products that do not comply with the specified criteria. The Court of Justice used an
example concerning the term ‘meat’ which is legally defined as ‘the edible parts of animals’ in point 1.1. of Annex 1 of Regulation 1169/2011. Therefore, any product that does not contain animal parts cannot be labelled as ‘meat’, even if accompanied by qualifiers such as ‘vegetarian’.
The Court then moved on to discuss whether the French decree in question designated legal names in order to enable the referring court to render its judgment. Firstly, the Court pointed out there is no provision in EU law that mandates the use of specific legal names for plant-based products or that prescribes legal names for products solely because they are defined as being of animal origin. Additionally, the Court stated that the French authorities themselves in the context of the main proceedings had dismissed the possibility that French decree establishes a ‘legal’ name.
The Court recalled its judgment in Tofutown which had established that terms associated with milk cannot be used to describe plant-based products due to the existence of EU legal framework that prohibits this kind of labelling. However, in the current case, as the Court pointed out, there are no rules that reserve terms from the butchery, charcuterie, or fishmonger sectors for animal-based products in neither EU nor French law. Consequently, the Court concluded that the reasoning from the Tofutown judgment does not apply in this case.
In addition, the Court clarified that when legal names under the Regulation 1169/2011 are defined they must be specifically created to identify a food product. This requires linking a particular term to a specific product and setting certain standards, especially regarding its composition. However, the French decree merely prohibits the use of certain meat-related names for plant-based products without actually defining those names legally.
Therefore, the Court of Justice departed from the opinion of Advocate General Ćapeta who had argued that the French decree established legal names, and suggested that the decree in question does not set legal names. Therefore, subject to verification by the referring court, the Court considered that the decree at issue does not contain ‘legal’ names but concerns the question of which ‘customary’ or ‘descriptive’ names may not be used to designate plant-based foodstuffs.
Following this conclusion, the Court determined whether these two concepts are expressly harmonised by Regulation 1169/2011. It noted that Article 2(2)(o) and (p) of Regulation 1169/2011 does not provide that the Member States may adopt measures regulating the ‘customary’ or ‘descriptive’ names of a particular foodstuff. Indeed, in view of the definitions adopted in Regulation 1169/2011for these ‘customary’ and ‘descriptive’ names, their scope cannot be circumscribed, in a general and abstract manner by national authorities.
Thus, the Court concluded that when a legal name has not been adopted, a Member State cannot, by means of a general and abstract prohibition, prevent producers of plant-based foods from indicating the name of those foods through the use of ‘customary’ or ‘descriptive’ names.
In addition, the Court pointed out that the Regulation in question also deals with the issue of the information which must be provided to consumers when the composition of the foodstuff concerned becomes completely different. Accordingly, the Regulation establishes a rebuttable presumption that the information provided
sufficiently protects consumers, even in the event of total replacement of the only component that consumers can expect to find in a foodstuff designated by a ‘customary’ or a ‘descriptive’ name. However, if a national authority considers that the actual way in which a foodstuff is sold or promoted is misleading the consumer, it may take legal action against the food business operator concerned.
Consequently, the Court concluded that Regulation 1169/2011 expressly harmonises the protection of consumers from the risk of being misled by the use of names, other than ‘legal’ names, made up of terms from the butchery, charcuterie and fishmonger sectors to describe plant-based products instead and therefore Member States are precluded from enacting national measures regulating or prohibiting the use of such names.
Finally, the Court considered that this express harmonisation does not preclude a Member State from imposing administrative penalties in the event of failure to comply with the requirements and prohibitions resulting from Regulation 1169/2011 or from national measures which are in conformity with it. On the other hand, the fixing of maximum permitted levels of vegetable protein for foodstuffs to be designated by certain ‘customary’ or ‘descriptive’ names is tantamount to regulating the use of such names which is precluded due to the express harmonisation provided by Regulation 1169/2011.
The missing piece in the puzzle of plant-based products’ labelling?
While the case seems like a win for plant-based products industry, it does not put an end to the saga of plantbased products’ labelling. Pursuant to the Court’s ruling, provided that a ‘legal’ name has not been adopted on an EU or on a national level, the Member States cannot prohibit the use of meat-related names. Therefore, when legal names have been set by a Member State this prohibition does not stand. In essence the judgement provides a way out for Member States and may result in an increase of legal names for meat products in order to prohibit the use of such names for their plant-based counterparts.
Regarding the possibility of adopting EU rules on ‘legal’ names for plant-based products, this issue had sparked heated debates in Brussels. The question gained traction during discussions surrounding the Common Agricultural Policy reform, but the attempt to restrict meat-related terms to animal products was ultimately rejected by the European Parliament in 2020. More specifically, Amendment 165 which was initially approved by the European Parliament’s agriculture committee in April 2019 and proposed that meat-related terms and names used for meat and meat cuts should be exclusively reserved for edible parts of animals, was voted down by the European Parliament.
Now that the Court has provided its interpretation of Regulation 1169/2011 in response to the questions raised by the French referring court, it is up to the national court to resolve the dispute in line with the preliminary ruling. Overall, this case marks an important chapter in the ongoing debate over the labelling of plant-based products, but the saga is far from over, and future developments in this area will be interesting to follow.
Erriketi Tla da Silva is a PhD candidate in Wageningen University and an Academic Assistant at the College of Europe.
SUGGESTED CITATION: Tla da Silva, E.; “A (pyrrhic) Victory for vegan Steaks and another Piece in the Puzzle of plant-based Products’ Labelling: Protéines France (C-438/23)”, EU Law Live, 31/10/2024, https://eulawlive.com/op-ed-a-pyrrhic-victory-for-vegan-steaks-and-another-piece-in-thepuzzle-of-plant-based-products-labelling-proteines-france-c-438-23/
Data Protection Authorities’ Obligation to act: Land Hessen (C768/21)
Evangelia Koumpiadi
On September 26th the Court of Justice of the European Union (hereafter ‘the Court’) handed down its judgement on case C-768/21, which touches upon the national Data Protection Authorities’ (hereafter ‘DPAs’) obligation to act under the General Data Protection Regulation (GDPR - 2016/679).
Facts of the case
The facts at hand concerned a savings bank in Germany, where an employee had unlawfully and repeatedly accessed the stored personal data of a client. The bank took disciplinary measures against the employee and made her sign in writing that she had not copied, retained or transferred the accessed personal data. It also notified the breach to the competent DPA, pursuant to Article 33 of the GDPR, but not to the data subject, whose data had been unlawfully accessed, as it considered that the breach did not pose a high risk for his fundamental rights, as prescribed by article 34 GDPR.
The data subject discovered the data breach incidentally and lodged a complaint with the competent DPA, claiming that his rights had been violated. However, the DPA took the view that the savings bank had not violated article 34 GDPR by failing to communicate the breach to the complainant and that it had taken adequate measures to restore compliance with the GDPR otherwise. After being informed of this decision, the complainant filed an action before the Administrative Court of Hessen, asking the court to order the DPA to take action against the bank. The court decided to stay the proceedings and referred a preliminary reference to the Court of Justice, asking whether, when a breach of the GDPR is established, the DPAs have an obligation to take action or the discretion to make use of the different powers vested in them by the Regulation, according to the specific circumstances of the case.
Judgment of the Court
The Court ruled that no such obligation can be inferred. According to its reasoning, both Article 58(2) GDPR which concerns the corrective powers conferred upon the supervising authority (the DPA) and Article 83(2) GRPR on the imposing of administrative fines, imply a certain discretion accorded to the DPA to ‘react appropriately in order to remedy the shortcoming found’. The Court goes on to provide a teleological interpretation of the provisions at hand, finding that their objective is to ensure compliance with the GDPR and to achieve strong enforcement of the rule, respectively. This means that when a situation has already been sufficiently remedied so as to be aligned with EU law, the lack of action on the part of the DPA is not liable to undermine the strong enforcement of the Regulation. When it comes to fines, Recital 148 of the GDPR provides that a reprimand
can be issued instead of a fine, when the supervising authority is dealing with only a minor infringement or the imposition of a fine would constitute a disproportionate burden. The logical extension of this conclusion is that data subjects, whose rights have been infringed, do not have a right to demand from the DPA to impose a fine on the controller.
However, the Court highlights that it is only in exceptional circumstances, when the facts of a specific case, such as the present one, justify so, that DPAs can abstain from exercising corrective measures against an infringement of the GDPR. Throughout its judgment the Court is careful to stress the importance of upholding a high level of protection of rights under the GDPR. As the case concerns a preliminary ruling, the Court leaves the final say to the national court to determine whether the DPA acted within the limits of its discretion and handled the lodged complaint with due diligence.
Opinion of the Advocate General
The Court followed to a large extent the Opinion of Advocate General Pikamäe. The AG underlined the importance of the principle of proportionality that should be respected upon the adoption of corrective actions on the part of the DPAs. He also suggested that some additional legal requirements should be respected when the supervising authority limits itself to the ‘autonomous measures’ adopted by the controller to rectify the breach, namely: a prior rigorous examination of the situation by the DPA, the explicit consent of the DPA to the adoption of the corrective measures by the controller, and the right to intervene at any point, when its instructions are not being respected. The Advocate General also considered that there must be limits to the discretion enjoyed by the DPAs, and namely the general principles of EU law of equal treatment and ne bis in idem
Context and impact
This case adds a piece to the puzzle of lessons learned by Facebook Ireland and Schrems (C-311/18) and SCHUFA (Joined cases C-26/22 and C-64/22). The former clarified that DPAs must handle complaints submitted to them with all due diligence and determine which course of action is appropriate and necessary. The authority might even be required to adopt a specific measure, if it considers that compliance with EU law cannot be achieved otherwise, as AG Pikamäe pointed out in his Opinion for the present case. The latter judgment clarified that complaints before the DPAs are not mere petitions, but a mechanism devised to ensure protection of the subject’s rights and as such are subject to full judicial review. Contrarily to these cases, the present judgment outlines for the first time what DPAs are not required to do and further strengthens their discretionary power.
This judgment sheds further light on the procedural aspects of GDPR enforcement by the national supervising authorities and is expected to ‘influence [the] administrative practice, thereby contributing to a consistent application of the Regulation within the European Union’, according to AG Pikamäe. It also seems likely that it will affect the final shape of the Proposal for a regulation on procedural aspects of GDPR enforcement, and especially Article 4, which provides guidance as to the appropriate extent of a complaint investigation by the DPAs.
Evangelia Koumpiadi is an Academic Assistant in the European Legal Studies Department of the College of Europe in Bruges.
SUGGESTED CITATION: Koumpiadi, E.; “Data Protection Authorities’ Obligation to act: Land Hessen (C-768/21)”, EU Law Live, 29/10/2024, https://eulawlive.com/analysis-data-protection-authorities-obligation-to-act-land-hessen-c-768-21/
SYMPOSIUM
COMPETITION CORNER:
ARTICLE 102 EXCLUSIONARY GUIDELINES: CODIFICATION OR RESTATEMENT?
Can the Commission’s Draft Exclusionary Guidelines serve their stated (and unstated) Purpose?
Nicole Kar and Richard Pepper
On 1 August 2024, the Commission published a draft set of guidelines on exclusionary abuses of dominance under Article 102 of the Treaty on the Functioning of the European Union (the Draft Guidelines). This article provides a brief summary of the Draft Guidelines, considers their goal(s), and assesses whether the Commission is likely to succeed in achieving them.
What do the Draft Guidelines say and what is their aim?
The stated purpose of the Draft Guidelines is to “set out principles to assess whether conduct by dominant undertakings constitutes an exclusionary abuse under Article 102 TFEU, in the light of the case law of the Union Courts” (para. 7). However, they represent a more ambitious approach to Article 102 enforcement than this may suggest:
• The Draft Guidelines set out a two-part test for identifying exclusionary abuse of dominance (para. 45): (a) has the conduct departed from the principle of competition on the merits; and (b) is the conduct capable of excluding competitors? This test appears in certain recent Court precedent (C-377/20 Servizio Elettrico Nazionale and Others, paras. 60-62; C-680/20 Unilever Italia Mkt Operations, para. 45; T-612/17 Google and Alphabet v Commission (Google Shopping), paras. 254-257) but presenting it as the definitive framework for assessing exclusionary abuse may be seen as a policy decision by the Commission, given the complexity of the Court’s jurisprudence in this area.
• The Draft Guidelines claim that the Commission can “deem” conduct to be “off the merits” (para. 47) where it (a) satisfies a legal test previously established by the European Courts (section 4.2) or (b) holds no economic interest for the dominant firm except restricting competition (section 4.3).
• As regards the capability of excluding competitors, the Draft Guidelines emphasize that the Commission need only prove that the conduct is “capable” of excluding rivals (it need not demonstrate actual effects and is not subject to a de minimis threshold) (paras. 61, 64, 71-75). They then describe a sliding scale of presumptions: a “hard” presumption for naked restrictions that have no economic interest for the dominant firm other than restricting competition; a “soft” presumption for conduct that is likely to produce exclusionary effects; and a residual category where the Commission bears the burden of demonstrating that the conduct is capable of excluding competitors (para. 60).
• Finally, the Draft Guidelines set out a detailed summary of the various categories of conduct that have been the subject of European Court judgments.
As noted, the Draft Guidelines purport to limit themselves to summarising the relevant legal principles to assessing whether a given set of conduct may infringe Article 102: “the Commission seeks to enhance legal certainty and help undertakings self-assess whether their conduct constitutes an exclusionary abuse under Article 102 TFEU” (para. 8). They also note an aspiration “to give guidance to national courts and national competition authorities of the Member States in their application of Article 102 TFEU” (para. 8). Conversely, they do not offer any explicit indication of how the Commission intends to administer Article 102 as a matter of practice.
However, two additional aims can be identified in the approach articulated in the Draft Guidelines:
• First, they mark a clear departure from the Commission’s 2009 Guidance on the Commission’s enforcement priorities for abusive exclusionary conduct (the 2009 Communication from the Commission — Guidance on the Commission’s enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings (2009/C 45/02)). That earlier document indicated that (a) the Commission’s enforcement efforts would prioritise conduct that was most harmful to consumers, and (b) intervention decisions would focus on whether conduct was likely to lead to anti-competitive foreclosure in light of a detailed assessment of the relevant facts, and whether it was capable of limiting competition from equally efficient competitors. In contrast, the Draft Guidelines seek to distil the complexity of Article 102 jurisprudence into a two-part test which can be partly satisfied by relying on legal presumptions, with a considerably decreased emphasis on the notion of equally efficient competitors. The driver behind this shift is likely the pressure the Commission has faced to increase the pace of its enforcement since it issued the 2009 Guidance, in particular in fast-moving sectors that feature “winner-takes-all” dynamics and, possibly to future proof the guidelines in nascent but dynamic technologies like AI.
• Second, the intended audience of the Draft Guidelines may well be the Union Courts as much as dominant undertakings. There have been several successful Court challenges to Commission exclusionary abuse decisions (most recently in European Commission v Intel, judgment of the European Court of Justice, 24 October 2024), including as a result of issues that arose in carrying out the economic/effects-based assessment articulated by the 2009 Guidance. While the Draft Guidelines are not binding on the Courts, they may be seen as an attempt to change the legitimate expectations of dominant companies as to enforcement and lay the ground for Court challenges against future infringement decisions.
Do the Draft Guidelines achieve their aim?
The Commission has pulled off an impressive feat in pulling together a disparate and, frankly, inconsistent set of case law, into a unified theory of exclusionary abuse of dominance. Not only has the Commission updated the detail of its 2009 Guidance to reflect intervening judicial developments, but it has attempted to retrospectively fit the entirety of Article 102 case law into a single test. Whatever one thinks of the substance, this is an act of considerable ingenuity.
However, in doing so we fear the Commission may have fallen short of its stated (and unstated) objectives.
Enhanced legal certainty. Elements of the Draft Guidelines provide a fair summary of the relevant law. While welcome, this may not provide (generally well-resourced and sophisticated) dominant firms with assistance in guiding their conduct. Conversely, other elements of the Draft Guidelines reflect an attempt by the Commission to push a particular perspective that is not indisputably rooted in Court precedent. To this extent, they add further uncertainty to an already complex legal framework. For example, the authoritative use of a two-part test only appears in certain Court jurisprudence (for example, C-377/20 Servizio Elettrico Nazionale and Others, para. 61: “in order to establish that an exclusionary practice is abusive, a competition authority must show that, first, that practice was capable, when implemented, of producing such an exclusionary effect, in that it was capable of making it more difficult for competitors to enter or remain on the market in question and, by so doing, that that practice was capable of having an impact on the market structure; and, second, that practice relied on the use of means other than those which come within the scope of competition on the merits. Neither of those conditions requires, in principle, evidence of intent) and may not be universally accepted by the antitrust bar (For example, Luc Peeperkorn argues that the test is in tension with a line of case law that focuses more on whether the relevant conduct hinders competition and the extent to which it has actual or likely exclusionary effects to the detriment of consumers. See ‘The Draft Article 102 Guidelines: A Somewhat Confused Attempt to Partly Roll Back the Effects-based Approach of the Union Courts’ available at https://competitionlawblog.kluwercompetitionlaw.com/2024/09/04/the-draft-article-102-guidelines-asomewhat-confused-attempt-to-partly-roll-back-the-effects-based-approach-of-the-union-court). In the same vein, the Commission’s claim in footnote 131 that legal tests found in Court case law can be reinterpreted as a presumption (and the implications this has for the burden and standard of proof) are controversial. These, and other, positions may be confirmed by future Court judgments, but equally they may not. In the meantime, the position taken by the Draft Guidelines could undermine, as much as enhance, legal certainty.
Guidance for national courts and competition authorities. In some respects, the Draft Guidelines fail to address issues that go to the heart of the relevant legal assessment. This may lead to less predictable decisionmaking by the national courts and competition agencies. For example:
• The concept of competition off the merits is not clearly defined by European case law. The Draft Guidelines implicitly recognize this by providing in paragraph 55 a range of factors that have previously been taken into account by the European courts, which footnote 118 notes “should not be understood as an exhaustive list of all the factors that may be relevant to establish that a given conduct departs from competition on the merits.” The uncertainties of the case law are not the Commission’s fault (though one could argue that the Commission could have gone further in defining the concept), but codifying the test in the Draft Guidelines without providing any clear indication on its limitations may encourage national courts and competition agencies to sanction a wide range of conduct, including that which has never previously been subject to Article 102 enforcement. A number of current cases involving allegations of competitor disparagement by allegedly dominant firms are already controversial in this regard.
• As regards the capability of excluding competitors, paragraph 75 emphasizes the lack of a de minimis threshold and notes that “any actual or potential exclusionary effect” satisfies the test. This may prompt national courts and
competition agencies to enforce Article 102 against conduct without regard to the importance that the Union Courts (and Commission) have given to the extent of the relevant conduct when assessing whether it can be considered an exclusionary abuse. Court precedent and the Draft Guidelines themselves demonstrate that the bar for abusive conduct is higher than a possibility. For example, consistent with European jurisprudence, the Draft Guidelines note that the higher the share of customers covered by an exclusivity obligation, the more likely the conduct is to produce exclusionary effects (para. 83) and acknowledge the relevance of the “degree of consumer inertia or bias in the tied market” when assessing tying (para. 94; additional examples include that the Draft Guidelines notes in the context of margin squeeze that “the more important the upstream input is to effectively compete downstream, the more likely it is that the conduct is capable of having exclusionary effects” (para. 127) and recognises the relevance of several factors (e.g., the dominant undertaking’s market power, the size of the rebate, and the length of the reference period) in assessing whether a conditional rebate be capable of having exclusionary effects (para. 145)). The failure of the Draft Guidelines to expressly acknowledge this runs the risk of national courts and competition authorities inappropriately—and incorrectly—taking the position that any conduct that raises the possibility of excluding competitors in any way, can be considered abusive.
It is entirely appropriate for courts and competition agencies to apply Article 102 in a flexible way, including in response to technological developments, changes in market structures and behaviors, and even companies’ regulatory strategy. However, this should not come at the sake of legal certainty. This applies in particular when it comes to enforcing an instrument that curtails the unilateral behavior of otherwise economically rational business activity, albeit premised on the “special responsibility” (Case 322/81 Nederlandsche Banden Industrie Michelin v Commission [1983] ECR 3461, para. 57) of dominant firms. Enforcement outside of a predictable legal framework runs a real risk of “chill[ing] the very conduct the antitrust laws are designed to protect” (Verizon Communications v Office of Curtis v Trinko 540 US 398 (2004), p. 414).
Influencing the Union Courts. Finally, we are sceptical of how much weight the Union courts will ascribe to a soft-law instrument prepared by the Commission when assessing future infringement decisions issued by the Commission. The Courts have a rich—perhaps too rich—set of jurisprudence to draw on in this area and it is not immediately clear why they would give material weight to the Commission’s own views of the relevant law, above-and-beyond arguments put forward by the Commission’s Legal Service in the relevant appellate processes (this is likely to hold true in particular where the Draft Guidelines diverge from findings of the Court (e.g., the Court’s findings on as-efficient competitors in Case C-48/22 P Google Shopping, paras. 164-165)). As Nils Wahl recently commented at the 2024 Fordham conference: “Why do we need these guidelines?” (“Wahl warns of EU court’s ‘slippery slope’ on antitrust abuses and effects”, MLex (September 2024), available here).
Concluding remarks
The limitation of the Draft Guidelines to summarising Court precedents represents a lost opportunity. The decision to frame them in this way partly reflects a view held by many in the hierarchy that guidelines should merely inform companies and their advisors on how the Commission sees the current state of the law ( “EU
merger guidelines are adaptable, not ‘fossilized,’ Guersent says”, MLex (October 2023), available here) However, the Commission has certainly gone much further in other soft-law instruments. By way of example—and in addition to the approach taken in the 2009 Guidance—the Commission’s 2023 Horizontal Cooperation Guidelines contain a new section on sustainability agreements that creates an entirely new “soft safe harbour” for certain sustainability standardisation agreements without any clear framework from the European courts (Commission Guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union to horizontal co-operation agreements (2023/C 259/01), para. 549).
Ultimately, then, this limitation does reflect a policy choice by the Commission. We fear it may prevent the Draft Guidelines from achieving their goals, and may even undermine the legal certainty that they hope to provide. The next Commission may be willing to provide a clearer, policy-based instrument that helps dominant firms and their rivals understand how Article 102 will be enforced in practice in the coming years and that properly reflects the role of the as-efficient-competitor principle in doing so. But until then, we hope the forthcoming debate on the Draft Guidelines at least results in a document whose contours provide a predictable roadmap to the enforcement of exclusionary abuse in Europe.
This article was written by Nicole Kar and Richard Pepper, antitrust partners based in the London and Brussels offices of Paul, Weiss, Rifkind, Wharton & Garrison LLP.
SUGGESTED CITATION: Kar, N. and Pepper, R.; “Can the Commission’s Draft exclusionary Guidelines serve their stated (and unstated) Purpose?”, EU Law Live, 28/10/2024, https://eulawlive.com/competition-corner/can-the-commissions-draft-exclusionary-guidelines-serve-their-stated-and-unstatedpurpose-by-nicole-kar-and-richard-pepper/
Competition on the Merits?
Damien J. Neven
Introduction
The Draft Guidelines (DG) (Draft Guidelines on the application of Article 102 of the Treaty on the Functioning of the European Union to abusive exclusionary conduct by dominant undertakings) on Art 102 issued by the Commission aim to reflect the case law of the Union Courts (as acknowledged in §9). It differs in this respect from the Guidance paper which put forward an overarching framework to assess the conduct of dominant firms in terms of whether they would lead to anti-competitive foreclosure.
Taking stock of the existing case law in a comprehensive way is however a challenge as the case law is “partially unclear and partially incoherent” (Schweitzer H and S. de Ridder, How to Fix a Failing Art. 102 TFEU: Substantive Interpretation, Evidentiary Requirements, and the Commission’s Future Guidelines on Exclusionary Abuses, Journal of European Competition Law & Practice, Volume 15, Issue 4, June 2024, Pages 222–243). As a consequence, the Commission made significant choices in its account of the case law. There are two dimensions in which the choices of the Commission may have far reaching consequences for the guidance provided to stakeholders and enforcement more generally, namely (i) the prominence that it gives to the concept of competition of the merits in the definition of an abuse and (ii) the emphasis of the capability (rather than likelihood) to exclude.
This short essay will focus on the first issue, namely the emphasis given to competition on the merits and will argue that the emphasis given by the Commission to this criterion, and the approach that it proposes to follow in its assessment are unlikely to provide useful guidance and might lead to more discretion in enforcement.
A few additional, more general, observations on the DG may however be useful at the outset. First, the DG, by comparison with the guidance paper, no longer discuss in detail the mechanisms of exclusion associated with each practice or the potential theories of harm. Some useful guidance may be lost in this respect, in particular regarding relevant economic theories or principles. Second, the Commission puts forward a taxonomy of conducts according to the “presumptions” that they are capable of leading to exclusionary effects and what triggers the presumptions for particular conducts tends to reflect (the most restrictive) case law; with the exception of exclusion and rebates contingent on exclusivity, triggering the presumption also requires a factual assessment and is not based on form. Third, the DG tend to reduce the requirements for showing that a conduct is abusive (or at least is capable of excluding competitors). In particular, the DG tends downplay the significance of the As Efficient Competitor Test and principle. The DG goes as far as denying the evidentiary value of the test when it is passed (when effective prices are above cost). The soft safe harbour put forward by the guidance paper is thus further weakened, relative to its amendments that the Commission adopted in 2023. The DG also weakens the discipline with respect to the definition of the counterfactual, suggesting that it may not be necessary when it is very difficult (§ 66-67). And there is no longer reference to consumer harm, except as an overall objective of enforcement (§5).
Overall, the DG provide less guidance for the stakeholders and greater discretion to the Commission in finding that a conduct is abusive.
The rest of this essay focuses on the definition of the abuse and the emphasis given by the Commission on the concept of competition on the merits. We first recall why competition on the merit was introduced and why its purpose could be simply achieved by an adequate interpretation of what is meant by the “degree of competition”. We then discuss how the DG define competition on the merits and show that this definition is unlikely to be operational and might introduce more discretion. Finally, we consider whether competition on the merits could be defined in terms of a “replication test” as hinted by the DG.
What is an abuse? Is a two-pronged test necessary?
The DG (§6) put forward two conditions for a conduct to be abusive, namely (i) that the conduct is capable of having exclusionary effects and (ii) that the conduct departs from competition on the merits.
In order to understand the association of these two criteria, it is useful to wonder why the capability to have exclusionary effects does not suffice. According to the case law, a conduct that is “capable of having exclusionary effects is a conduct that has the actual or potential effect of hindering the maintenance of the degree of competition still existing in the market or the growth of that competition”.
In light of this definition, it is not clear why a conduct that has the capability to have exclusionary effects should in some circumstances not be abusive. According to Schweitzer and de Ridder (2024), the reason is that this criterion might come into conflict with the principle that the aim of Art 102 is not to protect less efficient competitors (a formulation which however leaves open the possibility that in some circumstances less efficient competitors might be protected). Indeed, if the “degree of competition” is understood as referring to competitive constraints coming from less efficient firms, a conduct that excludes less efficient firms will be found abusive even when it reduces competition from less efficient firms and thereby protects them.
Hence, a second criterion is required and since Hoffmann-LaRoche (85/76), the Union Courts required that adverse effects must result from ‘recourse to methods different from those which condition normal competition” (also referred to as competition on the merits: “which is such as to influence the structure of the market’ and which ‘through recourse to methods different from those which condition normal competition’ has the effect of ‘hindering the maintenance of the degree of competition existing in the market or the growth of that competition” (§91)). This criterion is thus meant to guarantee that less efficient firms are not unduly protected; the absence of protection is however unlikely to be absolute and the courts have recognised that less efficient firms also provide a valuable competitive constraints (AKZO Chemie v Commission (62/86), paragraph 72: in relation to pricing below average total cost (ATC) the Court of Justice stated: ‘Such prices can drive from the market undertakings which are perhaps as efficient as the dominant undertaking but which, because of their smaller financial resources, are incapable of withstanding the competition waged against them’. See also Judgment of 10 April 2008 in Deutsche Telekom v Commission ( T-271/03)). However, if the “degree of competition” is
understood more generally in relation to the overall outcome of competitive interactions, then there is no need for a second criterion. A conduct which leads to the marginalisation of less efficient firms will only be found abusive (and thereby protect them) if it leads to a deterioration of the competitive outcome (relative to a well-defined counterfactual). A contrario, conduct that marginalises less efficient firms will not protect them if it does not lead to a deterioration of the competitive outcome (for instance because the competitive constraint that they exercises is not material).
The reference to competition on the merit is thus from this perspective superfluous. Advocate General Rantos in Servizio Ellettrico Nazionale (C-377/20) understood this. He indicates (§ 48) that ‘To my mind, demonstrating that a dominant undertaking used means other than those which come within the scope of ‘normal’ competition is not a requirement that needs to be assessed separately from the restrictive effect of the conduct.’
There is also some case law that does not give prominence to competition on the merits and certainly falls short of a two-pronged test. For instance, in Post Denmark II (C-23/14) (§67-69), the Court found: “It follows that only dominant undertakings whose conduct is likely to have an anticompetitive effect on the market fall within the scope of Article 82 EC”. … Such an assessment seeks to determine whether the conduct of the dominant undertaking produces an actual or likely exclusionary effect, to the detriment of competition and, thereby, of consumers’ interests.
Hence, the Commission could have chosen not to emphasize “competition on the merits”. This presumably would have contributed to the adoption of a single criterion over time.
What is competition on the merits ?
The DG attempt to provide a definition, as well as an open list of conduct that do not involve competition on the merits and a discussion of factors that are relevant for its assessment.
According to the definition (§51), competition on the merit “cover(s) conduct within the scope of normal competition on the basis of the performance of economic operators and which, in principle, relates to a competitive situation in which consumer benefit from lower price…”. This is a bit difficult to decipher. If anything, it seems to say that conduct which leads to consumer benefit is competition on the merits. If that is the case, then it seems to be equivalent to the first criteria – conduct which does not lead to restrictive effects, with the added bonus that it refers explicitly to consumer harm.
The list of factors that are relevant includes a list of conducts that have been found not to involve competition on the merit (see Microsoft v Commission (T-201/04), AstraZeneca v Commission (T-321/05), Meta Platforms and Others (C-252/21), Superleague (C333/21), and Google shopping (T-612/17)) without organizing principle.
The last factor (§54 f) considers a principle, namely whether a hypothetical competitor as efficient as the dominant undertaking would be unable to adopt the same conduct as the dominant firm. This approach is further discussed below.
Regarding the evidence that is relevant for the assessment of whether a conduct involves competition on the merit, the DG struggle to find evidence that only informs this criterion. Rather, evidence appears to be relevant for both prongs of the test adopted by the DG.
For instance, the DG finds (§55) that while the outcome of the As Efficient Competitor Test (AECT) test is relevant for the assessment of whether the conduct involves competition on the merits, it is also relevant to assess whether it leads to exclusionary effects.
There is further confusion for instance in reference to pricing conducts (§57) ; “Conduct that at first sight does not depart from competition on the merits (e.g. pricing above average total costs (“ATC”)) and therefore does not normally infringe Article102 TFEU may, in specific circumstances, be found to depart from competition on the merits, based on an analysis of all legal and factual elements, notably: (i) market dynamics; (ii) the extent of the dominant position; and (iii) the features of the conduct at stake”. What the analysis of all legal and factual elements in the end is supposed to establish is whether the pricing conduct is capable of having exclusionary effects (see Peeperkorn 2024).
A similar discussion can be found in the Google Shopping Court of Justice Judgment (Judgment of the Court, 10 September 2024) (§ 165 and ff). The Commission had used three circumstances (the importance of traffic generated by Google, consumer behaviour online and the significance of diverted traffic) to qualify Google selfpreferencing as having restrictive effects but also to characterise them as falling outside the scope of competition on the merits. The Court was confronted with the claim that the circumstances could not be used as part of the qualification of practices falling outside competition on the merits.
The Court ruled that the circumstances were relevant because (§171) these circumstances were instrumental for the success of Google’s comparison shopping service, …, which, as a consequence “were not due to the merits of that service”. Here again, the distinction between the two criteria is unclear. The characterisation of the competition on the merits refers to an exclusionary effect and the fact the same circumstances can be used to validate the two criteria does not help in distinguishing between them.
The fact that the same evidence can be relevant for both criteria is also acknowledged explicitly in the DG (§ 46). The DG mention that one or the other criteria might require a more detailed assessment in particular circumstances but does not explain what these circumstances might be.
Overall, the Commission’ discussion of what competition on the merits involves and how it can be assessed remains unclear. The question arises however whether the concept could be usefully focused in terms of a replication test, as hinted by § 54 (f).
A replication test?
As mentioned above, the DG refer to one organising principles such that a conduct falls outside the scope of competition on the merit if a “hypothetical competitor as efficient as the dominant undertaking would be unable
to adopt the same conduct, notably because that conduct relies on the use of resources or means inherent to the holding of the dominant position, particularly to leverage or strengthen that position in the same or another market”.
There is a close similarity between this norm and the As Efficient Competitor Test. The latter asks whether a hypothetical as efficient competitor could profitably match the offer (conduct) of the dominant firm (see Neven (2023)). Hence, whereas the AECT refers to matching the offer of the dominant firm (possibly with a different product, which is differentiated in variety or quality from that of the dominant firm), the DG refers to the adoption of the same conduct. In practice however, there is no differences as the AECT is implemented assuming that the competitor is offering the same product and asks whether it could profitably sell the same product. For instance, consider a retroactive rebate with the dominant firm having non contestable sales because of a superior product quality/reputation. The AECT would ask whether a competitor which has the same cost as the dominant could profitably attract contestable sales, assuming implicitly that it would offer the same product.
The additional reference in the DG to “the use of resources or means inherent in the holding of the dominant position” is also unlikely to differentiate the two principles. Indeed, in any theory of effects, there is an asymmetry between the dominant firm and competitors which allows the dominant firm to adopt a different conduct (for instance, the existence of non-contestable sales in the example above).
Hence, for all practical purposes, the replication test and the AECT test are equivalent. The suggestion that conduct should be found to be abusive only if the test fails (if the effective price is below cost), effectively advocates a hard safe harbour from the AECT (see Padilla (2024) for a discussion; even if the outcome of the replication test is not decisive, its implementation might be appropriate from a law and economics perspective as it provides a structure on the assessment of the conduct).
As discussed above, the DG essentially removes this safe harbour (going beyond the amendment of the guidance paper) and this would not be compatible with the interpretation of § 54 (f) as involving a “hard” replication test.
From a normative perspective, there may also be a concern about attaching too much significance to the result of a replication (or AECT) test. Such tests are not cast in the context of particular theories of harm and depending on the underlying theory, they might lead to both type I and type II errors (when the counterfactual is the absence of the conduct, see Neven (2023) for a discussion).
In this respect, it is worth pointing out that a replication test would be part of a full analysis of effects but that a positive outcome (the test is passed) might not necessarily be decisive. The validation of a theory of harm would not only ask whether competitors would be in position to replicate the conduct of the dominant but might also compare this outcome of this replication with counterfactuals.
This is particularly relevant for dynamic theories of harm. Consider the illustration above in which a dominant firm has non contestable sales. Assume that the effective price is above cost (so the replication test is passed in the short term). Even then, the competitor may be marginalised and its ability to reduce non contestable sales in the
long term (by achieve dynamic scale economies) may be impaired. Hence, in the context of a dynamic theory of harm, the relevant replication test is whether in the long-term competitors could match the offer of the dominant firms – including in relation to non-contestable sales.
A full analysis of effects will take this into account and will in addition consider what would have happened in reasonable counterfactuals; if is found that in the long term, the competitor cannot replicate the conduct (contest all sales), the conduct might fall outside the scope of competition on the merits at least if it is found that there is a counterfactual (for instance involving less powerful retroactive rebates) in which competitors would be able to do so. Even if the competitor is in position the replicate the conduct of the dominant firm in the long term, one may ask whether there is a reasonable counterfactual in, the reduction in non-contestable sales (and thus full-scale entry) would have taken place earlier. This last case admittedly gives a very wide interpretation to the responsibility placed on the dominant firm not to distort competition (see Padilla (2024)).
Damien J. Neven is Professor of Economics, Graduate Institute of International and Development Studies, Geneva, Academic Affiliate, Compass Lexecon and CEPR. I would like to thank Assimakis Kominos, Jorge Padilla, Luke Peeperkorn, Neil Dryden, Georges Siotis, Petros Mavroidis, the editors, in particular Pablo Solano Diaz, and seminar participants at the Belgian Competition Authority and Compass Lexecon for comments on a previous version of this note.
SUGGESTED CITATION: J. Neven, D.; “Competition on the Merits?”, EU Law Live, 30/10/2024, https://eulawlive.com/competition-corner/ competition-on-the-merits-by-damien-j-neven/
THE LONG READ
In praise of a fellow Advocate General
Maciej Szpunar 1
Thank you very much for entrusting me with the honour of saying a few words about Eleanor Sharpston –as an introduction to today’s ceremony.
I treat this opportunity as a great privilege and hope to rise to the occasion.
It is not an easy task to make a presentation of the achievements of such a distinguished jurist.
For this is about a person whose achievements are in every respect –not only as a lawyer– remarkable. It is about a person whose life path, experience, versatility of interests and fascinating personality would be enough to fill the shoes of at least a few outstanding lawyers.
After a closer look at her unofficial CV, I have the impression that no amount of laudatio would suffice. It would take the writing of a screenplay for a film, which would surely become a bestseller. However, that is not my role at today’s ceremony. We can only hope to inspire the film industry to take up such a challenge.
I know that I should focus primarily on her achievements as Advocate General. Before I get to that, however, I would like to start with some personal reflections.
Eleanor probably does not remember this, but I first had the opportunity to meet her back in 1998 –at Cambridge, as it happens. As a British Council scholar and a member of Jesus College, I was trying to explore the ins and outs of EU law. One day I received an invitation to a lecture by a person I had previously known nothing about. All I knew was that the lecture would be given by someone important who deals with EU law in a serious manner –as a practitioner. By someone who was not just as an academic –which was my role at the time.
This lecture was given, of course, by Eleanor, whose appearance at Cambridge was quite the big event. And I must admit: although I don’t remember the exact subject of Eleanor’s lecture, I do remember that it made me realise the shortcomings in my own knowledge of EU law. But fortunately, her lecture also encouraged me to continue to work on EU law.
And when, 15 years later, I was appointed Advocate General and arrived in Luxembourg, I asked around for a friendly person who I should meet with first. The answer was clear: meet Eleanor Sharpston –she is the best Advocate General and she will give you guidance on how to do the job. This is exactly what happened!
1. First Advocate General, Court of Justice of the European Union. This is the text of the Laudatio presented in the Conference in Honour of Eleanor Sharpston that took place in the Trinity College, Cambridge University, on 25 and 26 October 2024, Organised by the University of Cambridge, the University of Westminster and EU Law Live. The recording of the conference can be accessed here: Day 1 - Day 2
The legacy left by Eleanor in terms of her Opinions is enormous, in terms of both quality and quantity. Their subject matters span almost all areas of EU law, from classical internal market issues (particularly the free movement of persons), to citizenship, to environmental law, to legal remedies and to the EU’s external competence, just to mention a few.
The liber amicorum which will be handed to her today bears testimony to the breadth and depth with which she has literally ploughed through EU law.2
Eleanor Sharpston served at the Court of Justice as Advocate General from 11 January 2006 to 10 September 2020. She was the fourth –and last– Advocate General appointed on a proposal of a UK government. Few members of the Court can claim to have made an impact as lasting as that of Eleanor Sharpston on both the EU legal order and the modus operandi of the Court of Justice.
It is common knowledge that under Lord Mackenzie Stewart, the first British judge at the Court (who would later become its seventh President), judgments changed in style and started to refer to precedent.
But it was the British Advocates General, from AG Warner, to Lord Slynn, to Francis Jacobs and ultimately to Eleanor Sharpston, who radically altered the style of Opinions from strictly decisive to deliberative. This has, in my view, led to a paradigm shift in the way Opinions are now drafted. Nowadays, almost all the Advocates General hand down their Opinions in a more deliberative, sometimes dialectic style. What changed, with regard to the style of Opinions, specifically upon the arrival of Eleanor in 2006? Opinions were garnered with an element of wit.
Dry humour entered the odd Opinion here and there. Eleanor Sharpston is well-known for her occasional use of wit, irony, and even humour in her Opinions –in addition, of course, to her intellectual rigour. This lighter touch is common in Britain, but rare in judicial writing on the continent. It is my firm contention that occasional humour helps make her complex legal arguments more accessible and engaging. This ultimately reinforces the authority of an argument.
I will give you an example. In the case Trianel Kohlekraftwerk Lünen,3 a case on remedies in the context of environmental law, the question was whether the German principle making locus standi dependent on the existence of substantive individual rights is compatible with the EU principle of effectiveness. While the German
2. C. Barnard, A. Łazowski and D. Sarmiento, Pursuit of Legal Harmony in a Turbulent Europe. Essays in Honour of Eleanor Sharpston, Hart Publishing 2024.
3. Opinion of 16 December 2010, C-115/09, EU:C:2010:773.
government contended that this was the case, Eleanor stated, and I quote, ‘However, like a Ferrari with its doors locked shut, an intensive system of review is of little practical help if the system itself is totally inaccessible for certain categories of action’. End of quote. Eleanor then went on to conduct a rigorous examination of the German system.
This is just one example among many. And it is fair to assert that without Eleanor, most Opinions read nowadays would not display an element of wit or irony or, to put it differently, would simply be drafted in less suave a fashion. Eleanor’s style has thus proved to have had a transformative impact on the writing of almost all other Advocates General. For more details, I refer to Michal Bobek’s piece in the liber amicorum.
II.
I would now like to turn to three cases, in which it is no exaggeration to say that Eleanor has quite literally written legal history.
In the case Asma Bougnaoui4 the issue was religious expression in the workplace, particularly the wearing of the Islamic veil, and how this right interacts with employers’ business interests.
The question was whether an employer could dismiss an employee for wearing a religious symbol, like the Islamic veil, simply because a client had objected to it.
Asma Bougnaoui, a Muslim woman, worked as an engineer for Micropole SA, a French IT consultancy. Throughout her employment, she wore a hijab. Micropole’s clients eventually raised objections to her appearance, and Ms. Bougnaoui was asked to stop wearing the hijab when visiting clients.
In her principled and nuanced approach, Eleanor tackled the complex interplay between religious freedom, client preferences, and workplace policies. Her Opinion in this case is grounded in a clear message: clients’ preferences or prejudices cannot justify religious discrimination in the workplace.
First, she addressed the nature of the discrimination at play. She concluded that the dismissal amounted to direct discrimination on the grounds of religion. Why? Because the company had taken action based on Ms. Bougnaoui’s religious practice—specifically, her choice to wear the hijab. This action was directly linked to her religious identity, and thus her dismissal was based on a characteristic inextricably tied to her religion.
Eleanor recalled that direct discrimination was fundamentally prohibited by EU law and that in this particular instance there was no valid justification.
4. Opinion of 13 July 2016, Asma Bougnaoui and ADDH v. Micropole SA, C-188/15, EU:C:2016:553.
On this point, she stressed that an employer cannot accommodate a client’s desire for religious neutrality by infringing on the rights of the employee. Drawing on the case-law of the Strasbourg court, she emphasised that freedom of religion is a fundamental right, which should not be compromised based on subjective feelings or opinions from clients. If an employer allows clients to dictate the appearance of its employees, it risks endorsing and perpetuating discriminatory attitudes.
Moreover, Eleanor found there to be no general occupational requirement applicable in Ms. Bougnaoui’s case. She pointed out that there was no evidence to suggest that wearing a hijab in any way impaired Ms. Bougnaoui’s ability to perform her job as an engineer. Her role did not require any particular appearance or dress code beyond professional standards.
Eleanor concluded that the client’s preference for neutrality did not equate to an occupational requirement. It was simply a subjective preference, not an objective necessity for the performance of Ms. Bougnaoui’s duties.
Eleanor’s Opinion in this case is a firm reminder that the principles of equality and anti-discrimination are foundational to the European Union’s legal framework. If employers are allowed to dismiss employees simply because a client objects to their religious expression, this would create a dangerous precedent, undermining these core values.
Her reasoning underscores the idea that in the European Union, individual rights must come first, and the law must remain vigilant in protecting these rights from undue interference.
As a last remark, I should like to stress that the importance of this Opinion is demonstrated by the fact that three contributions to the liber amicorum, touch upon the legal issues it raises: those by Jo Shaw, Mark Hill and David Guild.
Next, we turn to Eleanor’s Opinion in Opinion 2/155 (no pun intended!) – and here I can recommend the contributions of Allan Rosas and Isabelle Van Damme in the Festschrift. This Opinion dealt with the scope of the EU’s powers in concluding trade agreements, specifically the EU-Singapore Free Trade Agreement (FTA). The key question here was whether the EU could act alone in signing this agreement or whether the Member States also had to be involved.
Eleanor’s Opinion provided important clarity on the division of competences between the EU and its Member States.
First, she addressed the issue of exclusive competence versus shared competence. Much of the agreement, she argued, could be concluded by the EU alone. Provisions relating to trade in goods, services, intellectual property,
5. Opinion of 21 December 2016, EU:C:2016:922.
and competition policy fell within the scope of the Common Commercial Policy under Article 207 of the Treaty on the Functioning of the European Union (TFEU).
As such, the EU had exclusive competence to sign off on these matters. This is the core of the EU’s trade policy, and she concluded that the EU could act alone on these aspects.
However, the real complexity came with two key areas: investment protection and portfolio investments.
Eleanor made it clear that investment protection provisions, including the Investor-State Dispute Settlement (ISDS) mechanism, went beyond the EU’s exclusive powers. Why? Because these mechanisms directly affect the jurisdiction of national courts. She argued that Member States must be involved in signing off on such provisions, making them an area of shared competence.
Similarly, she found that portfolio investments, which involve buying shares or bonds without controlling the company, were not clearly linked to trade policy. For these reasons, they too required the participation of Member States.
Another important point was the agreement’s provisions on environmental and labour standards, embedded in the FTA’s sustainable development chapter. Eleanor viewed these provisions as being closely connected to trade, meaning they fell within the EU’s exclusive competence.
So, in conclusion, while much of the agreement could be concluded by the EU alone, AG Sharpston was clear that certain key aspects—namely investment protection and portfolio investments—required Member States’ involvement. As a result, the FTA could not be adopted solely by the EU; it needed to be a mixed agreement, involving both the EU and its Member States.
This Opinion had significant implications for the future of EU trade agreements, especially those dealing with investment protection, helping to clarify the boundaries of EU competence in this evolving area of international trade.
Finally, the Opinion with probably the most lasting impact on both the EU legal order and the EU polity is the Opinion which also made Eleanor famous outside strictly legal circles in Europe: I’m talking about the Ruiz Zambrano case,6 which was groundbreaking and constituted a pivotal moment in the development of EU citizenship law. Again, three contributions in the liber amicorum analyse issues raised, directly or indirectly, by this case: those of Charlotte O’Brien, Daniel Sarmiento and Takis Tridimas.
6. Opinion of 30 September 2010, C-34/09, EU:2010:560.
At the heart of this case was a fundamental question: What does it mean to be a citizen of the European Union? More specifically, can a citizen be denied the effective enjoyment of their rights simply because of their family circumstances?
Eleanor began her opinion by reminding us that EU citizenship, as established under Article 20 of the Treaty on the Functioning of the European Union, is not just a legal formality –it is a fundamental status. It applies to every citizen of the Union, regardless of their age, nationality, or residence. And with this status come real, tangible rights. Among these rights, the most important is the right to remain and live within the EU.
Now, in this case, we are talking about two young children born in Belgium, therefore Belgian nationals and EU citizens by birth. The problem was that their father, Mr. Ruiz Zambrano, was not an EU citizen; he was a thirdcountry national from Colombia. Belgium had refused to grant him residence and work rights, meaning that if he were forced to leave, his young children would have no choice but to leave with him. This would strip them of their EU citizenship rights.
Eleanor asked a crucial question: Does EU law step in to protect these children, even though they had never actually left Belgium? Could we vindicate their rights without what we call, in a rather technocratic manner, a cross-border element? Traditionally, EU law in this domain only applied where there was such a cross-border element. But in her view, the essence of EU citizenship was at stake here. She argued that EU law must prevent situations where the very substance of citizenship rights is undermined –even in purely internal matters. Denying the father the right to stay would deprive his children of their citizenship rights by forcing them to leave the EU. But Eleanor went further, highlighting the importance of family life. She pointed out that depriving Mr Zambrano of his rights would destroy the family unit. How can a child enjoy EU citizenship if they are separated from their parent or forced out of the EU entirely? Protecting the family was not only a matter of justice but also of basic human rights, rights enshrined in the EU’s Charter of Fundamental Rights.
She was clear in her conclusion: EU citizenship is not just a theoretical concept –it carries real meaning. Denying Mr. Zambrano residence and work rights would amount to depriving his children of their EU citizenship rights. She urged the Court of Justice to take a bold, principled stance and rule in favour of Mr. Zambrano to protect his children’s fundamental rights as EU citizens.
The Court took such a bold stance. Sadly, the reasoning was rather cryptic and a far cry from Eleanor’s thoroughly reasoned Opinion.
This Opinion was a call to rethink the scope of EU citizenship. It asked the Court to recognise that the rights of EU citizens –even in purely internal situations – must be protected whenever they are under threat. And while the Court ultimately followed much of her reasoning, her Opinion remains a milestone in and of itself, reminding us of the depth and significance of European citizenship.
I would personally urge anyone having the slightest doubt about the concept and usefulness of EU citizenship to read this Opinion. Any such doubts will be blown away afterwards.
III.
Having bombarded you with rather dense legal questions in the case-law of the Court of Justice, let us now turn to lighter, and in my view, much more important issues: a few anecdotes from Eleanor’s life in Luxembourg.
As I mentioned already, when I began my role as Advocate General, Eleanor provided me with invaluable advice on how to carry out this function. She stressed that thoroughness should always come first. Referring to the constraints of deadlines, she told me: ‘Maciek, crafting an Opinion is not like baking bread in a bakery. It’s not done in the whiff of a second’. But this advice has stayed with me and guided me in the past years. The internal deadlines of the Court are important, but they must not lead to a reduction in the quality of our Opinions.
It is my contention that Eleanor’s advice is so thorough because it is grounded, quite simply, in who she is as a person. The term which best describes Eleanor’s personality is probably that of a ‘Renaissance woman’. It is impossible for me to list, in this laudation, all her interests and areas of expertise. Otherwise we would all still be sitting here tomorrow. That is why I like to limit myself to three specific aspects of Eleanor’s personality: dogs, music and a big hidden talent stemming from Eastern Europe.
First, Eleanor’s love of dogs is known – and this is probably the biggest thing she has in common with the late queen. I was regularly informed about their well-being and how they were doing. While it is well known that Boris-the-samoyed and Rudy-the-hovawart are her loyal and steady companions, what most people do not know is that the dogs have also triggered innovation in the European automobile-industry. On longer journeys, such as to her hillside second home in the Maremma, Tuscany, she uses her camper –which has been tailor-made in such a way that when she has to change gear, the dogs are placed in a position where she can give them a brief stroll. Should the Cambridge Advanced Learner’s Dictionary still be looking for illustrative examples on the term ‘multitasking’, I suggest they contact Eleanor.
Secondly, I would like to turn to an anecdote which I hope is not too personal: one day when I entered the office, one of my secretaries told me that her mother in law met a very pleasant Luxembourger with a British background among a group of people participating in an event of the ‘amis de l’Orchestre Philharmonique de Luxembourg (OPL)’. When not keenly studying her scores for playing the viola, this cheerful lady was engaging in conversation with the other participants. When one person asked, in passing, what she did in Luxembourg, she said: ‘oh, I work for the Court of Justice, up on Kirchberg’. None of the other people had any clue who she was.
And Eleanor did nothing to change this.
I have taken the liberty to mention this episode, because it demonstrates the quality which I most associate with Eleanor: her tremendous humility.
Thirdly and lastly, I would like to conclude my speech by referring to a part of Eleanor’s personality which we will not read about in any scholarly publication. I think I can say this because I consider it an honour that we also share a friendship and not just a working relationship from our time together at the CJEU.
I have witnessed both happy and sad moments in Eleanor’s life, and she has witnessed the same in mine.
Eleanor is an extremely sensitive and –in a positive sense– emotional person (mainly because of this, she can understand emotions of other people). I think this is the part of her personality and identity that stems from her roots in Eastern Europe (which is also the part of Europe I am from). In my opinion, this is her greatest quality and greatest asset. She reconciles Anglo-Saxon rationality and Eastern European emotionality –and, of course, a Luxembourgish sense of order and decency. In this sense – Eleanor is a true European.
But what I wanted to say is this: it is largely Eleanor’s emotions that make her a great lawyer. Rationality and a sense of order can be created by artificial intelligence, but emotions –never. That makes Eleanor a unique and irreplaceable jurist.
I would like to end my speech on this note.
All the best for the future, dear Eleanor.
HIGHLIGHT F THE WEEK S O
Commission Implementing Regulation on management of conflict of interest in the Coordination Group on Health Technology Assessment, published in OJ
Monday 28 October
Official publication was made of Commission Implementing Regulation (EU) 2024/2745 laying down rules for the application of Regulation (EU) 2021/2282 regarding the management of conflicts of interest in the joint work of the Member State Coordination Group on Health Technology Assessment and its subgroups.
Read on EU Law Live
Regulation (EU) 2024/2773 establishing the Ukraine Loan Cooperation Mechanism and providing exceptional macro-financial assistance to Ukraine, published in OJ
Monday 28 October
Regulation (EU) 2024/2773, adopted on October 24, 2024, creates the Ukraine Loan Cooperation Mechanism, mobilising unprecedented support to bolster Ukraine’s economic resilience during the current crisis.
Read on EU Law Live
Revised criteria for case assignment and Chambers Composition of the General Court, published in OJ
Monday 28 October
Official publication was made of the Criteria for the assignment of cases to Chambers, Composition of the Grand Chamber and of the Intermediate Chamber and Formation of Chambers and assignment of Judges to Chambers of the General Court.
Read on EU Law Live
Revised criteria for case assignment and Chambers Composition of the General Court, published in OJ
Monday 28 October
Official publication was made of the Criteria for the assignment of cases to Chambers, Composition of the Grand Chamber and of the Intermediate Chamber and Formation of Chambers and assignment of Judges to Chambers of the General Court.
Read on EU Law Live
Legal challenge by Antoni Comín i Oliveres against European Parliament’s election decision
Monday 28 October
On 12 September 2024, Antoni Comín i Oliveres initiated legal action against the European Parliament (Case T-477/24), following its decision to deny him recognition as an elected Member of the European Parliament (MEP) for the 2024-2029 parliamentary term.
Read on EU Law Live
General Court to hear Hungary’s action against the European Peace Facility Committee’s decision on allocation of amounts of assistance to Ukrainian Armed forces
Monday 28 October
An action, brought on 30 August 2024, by Hungary against the Council and European Peace Facility Committee was published in the Official Journal, earlier today: Hungary v Council and European Peace Facility Committee (T-457/24).
Read on EU Law Live
Action against restrictive measures of the Council and Commission affecting transit of potash fertilizers from Belarus, officially published
Monday 28 October
An action brought by Birių Krovinių Terminalas, the largest loading company in the port of Klaipėda, specializing in the loading of mineral fertilizers and cereals, against the Council of the EU and the European Commission: Birių Krovinių Terminalas v Council and Commission (T-261/24).
Read on EU Law Live
Council Decision (EU) 2024/2780 on the position to be taken on behalf of the EU on Protocol to Eliminate Illicit Trade in Tobacco Products, published in OJ
Tuesday 29 October
Official publication was made of Council Decision (EU) 2024/2780 of 29 January 2024 on the position to be taken on behalf of the European Union at the third session of the Meeting of the Parties to the Protocol to Eliminate Illicit Trade in Tobacco Products.
Read on EU Law Live
Commission Decision establishing the Ecodesign Forum, published in OJ
Tuesday 29 October
Official publication was made of Commission Decision (EU) 2024/2779 of 24 October 2024 setting up the group of experts on ecodesign for sustainable products and energy labelling (‘the Ecodesign Forum’).
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Preliminary ruling request on application of time limit imposed in context of family reunification proceedings, officially published
Tuesday 29 October
A request for a preliminary ruling from the Oberverwaltungsgericht Berlin-Brandenburg (Germany), lodged on 27 August 2024, in the case of YO, CT v Federal Republic of Germany, was officially published in the OJ, yesterday: Kreis Bergstraße (C-571/24).
Read on EU Law Live
Preliminary ruling request concerning the interpretation of private copying exceptions in the context of emerging technologies, published in OJ
Tuesday 29 October
On July 17, 2024, the Hoge Raad der Nederlanden (Supreme Court of the Netherlands) referred several questions to the Court of Justice of the European Union regarding the application of the Copyright Directive in a case involving Stichting Onderhandelingen Thuiskopie vergoeding and Stichting de Thuiskopie against HP Nederland B.V., Dell B.V., and Stichting Overlegorgaan Blanco Informatiedragers (Case C-496/24).
Read on EU Law Live
Court of Justice to rule on applicable law in employment in multi-state context
Tuesday 29 October
On July 10, 2024, the Cour de cassation (French Supreme Court) submitted a request for a preliminary ruling to the Court of Justice of the European Union regarding the interpretation of Articles 3 and 6 of the 1980 Convention on the Law Applicable to Contractual Obligations, in the case of Locatrans Sarl v. ES (Case C-485/24).
Read on EU Law Live
Technical negotiations for the EU-UK Competition Cooperation Agreement concluded
Tuesday 29 October
The European Commission and the UK concluded technical discussions on a competition ‘supplementing agreement’ to the EU-UK Trade and Cooperation Agreement (‘TCA’).
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Commission introduces countervailing duties on imports of battery electric vehicles from China
Wednesday 30 October
Following its anti-subsidy investigation, the European Commission imposed definitive countervailing duties on imports of battery electric vehicles (BEVs) from China for a period of five years.
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Commission Implementing Regulation (EU) 2024/2746 laying down rules for the application of Council Regulation (EC) No 1217/2009 setting up the Farm Sustainability Data Network, published in OJ
Wednesday 30 October
Official publication was made of Commission Implementing Regulation (EU) 2024/2746 of 25 October 2024 laying down rules for the application of Council Regulation (EC) No 1217/2009 setting up the Farm Sustainability Data Network and repealing Commission Implementing Regulation (EU) 2015/220.
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European Court of Auditors highlight persistent procurement issues and call for greater financial transparency in agencies
Wednesday 30 October
The European Court of Auditors (ECA) published the Annual report on EU agencies for the financial year 2023, which showed that most of the EU’s 43 agencies managed their finances well, but four agencies had issues with spending due to errors in public procurement procedures.
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Commission’s notice of initiation of anti-dumping proceedings regarding choline chloride imports from China, published in OJ
Thursday 31 October
Official publication was made of the European Commission’s Notice of initiation of an anti-dumping proceeding, pursuant to Article 5 of Regulation 2016/1036, concerning imports of choline chloride originating in the People’s Republic of China.
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Request for Advisory Opinion from EFTA Court in case concerning access to evidence containing trade secrets, officially published
Thursday 31 October
A request for an Advisory Opinion from the EFTA Court, lodged by the Supreme Court of Norway, dated 17 June 2024, in the case of Elmatica AS v Confidee AS and Vidar Olsen, has been published in the OJ: Case E-14/24.
Read on EU Law Live
Council approves Ecuador’s accession to Andean trade agreement and concludes trade deal with Colombia and Peru
Thursday 31 October
Official publication was made of Council Decision (EU) 2024/2728 of 14 October 2024 on the conclusion, on behalf of the Union, of the Protocol of Accession to the Trade Agreement between the European Union and its Member States, of the one part, and Colombia and Peru, of the other part, to take account of the accession of Ecuador and Council Decision (EU) 2024/2751 of 14 October 2024 on the conclusion of the Trade Agreement between the European Union and its Member States, of the one part, and Colombia and Peru, of the other part.
Read on EU Law Live
Borgarting Court requests EFTA Court’s Advisory Opinion on parental relocation rights under EEA Law: official publication today
Thursday 31 October
The Borgarting Court of Appeal in Norway submitted a request to the EFTA Court for an Advisory Opinion in a case concerning questions whether Norwegian legislation that restricts a custodial parent’s right to relocate with their child to another EEA country, without court permission and non-custodial parent consent, aligns with EEA law and Directive 2004/38/EC, as well as Article 28 of the EEA Agreement.
Read on EU Law Live
EFTA Court Advisory Opinion Request on aquaculture movement restrictions in Norway
Thursday 31 October
The Supreme Court of Norway submitted a request for an Advisory Opinion to the EFTA Court regarding the case of Nordsjø Fjordbruk AS v the Norwegian State (Case E-8/24), which revolves around the interpretation of Regulation (EU) 2016/429, specifically several key articles concerning veterinary health and the movement of farmed fish.
Read on EU Law Live
Teva fined €462.6 million by Commission over abuse of dominant position in the market for medicine for treatment of multiple schlerosis
Thursday 31 October
The European Commission fined Teva €462.6 million over abuse of its dominant position to delay competition regarding its medicine for the treatment of multiple sclerosis, Copaxone.
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Commission investigates Temu’s compliance with Digital Services Act for possible violations
Thursday 31 October
The European Commission initiated formal proceedings to investigate Temu, a major online platform, for potential violations of the Digital Services Act (DSA).
Read on EU Law Live