Weekend Edition Nº145

WHAT CAN THE CONSUMER WELFARE HYPOTHESIS DO FOR YOU?

AT LEAST THREE THINGS…

What can the Consumer Welfare Hypothesis do for you?

At least three things…

I.Rethinkingtheefficiencyoftheinternalmarket

Contracts, contract law, and the EU legal order: It is apparent that theyareintimatelyconnected.How,exactly,isstillunseled.Ipropose to take seriously the Consumer Welfare Hypothesis: ‘ as a maer of economic theory, an allocation of resources in a market can be beer or worse based on the benets it delivers to consumers; legal structures that are at the centre of the EU marketbuilding project t with this understanding of allocative efficiency’.(2)

e Consumer Welfare Hypothesis is a claim in the Calabresian tradition of Law and Economics, which is not reected in the mainstream scholarship EU lawyers normally encounter. e approach is signicantly different from the mainstream economic analysisoflaw,asIexplainmoreindetailhere(3) andhere(4).

A key difference is that the Consumer Welfare Hypothesis has a narrow scope of application – it is not a claim about the whole of private law or the whole the legal system (with few exceptions dea-

As a maer of economic theory, an allocation of resources in a market can be beer or worse based on the benets it delivers to consumers; legal structures that are at the centre of the EU market-building project t with this understanding of allocative efficiency

1.AssistantProfessorofPrivateLaw,NOVASchoolofLawandCEDIS,UniversidadeNovadeLisboa E-mail:fabrizio espositonovalawunl.pt.

2.Fabrizio Esposito, ,EdwardElgarPublishing,2022(hereinaer,eConsumerWelfareHypothesisinLawandEconomics:TowardsaSynthesisforthe21stCentury ‘CWH’),p 3.

3. Fabrizio Esposito, ‘ ’ , 3 Oeconomia 7, pp 375–406 (showing the difference How the Behavioural Turn in Law and Economics Vindicates the New Haven School focusingontheimpactoncentralthesesof behaviouralscholarship).

4. Fabrizio Esposito, ‘ , 1 Global Jurist 19, pp 1–11 (reecting on the On the Fitness Between Law and Economics – Or Sunstein Between Posner and Calabresi’ difference between the unilateral relationship characteristic of the Economic Analysis of Law and the bilateral one characteristic of Calabresian Law and Economics).

ling with redistribution); the Consumer Welfare Hypothesis focuses only on exchange contracts and the impact on them of EU antitrust and consumer law. is choice stems from the broad and narrow notions of consumers usedinthesetwobranchesofEUlaw,implyingthatsimilarityinndingsisinstitutionallyrobust(5).

is is a time where pluralism, especially value pluralism, is quite successful in both contract (6) and antitrust scholarship (7). Instead, the Consumer Welfare Hypothesis rests on a premise of institutional value monism: certain institutions have a core value, but this value may conict with other values (and may lose) For exchange contracts, this value is consumer welfare maximisation. Importantly, this monism does not reject the relevance of normative concepts like justice, fairness, or equality; it rejects the assumption that allocative efficiency is necessarily something other than those concepts (8). Allocative efficiency is at the core of a vocabulary – the economists’ – that was developed mostly in separation from the legal one; hence, the choice not to assume that termsfromdifferentepistemiccommunitiesnecessarilyrefertodifferentideas.

What’sinforyou?eConsumerWelfareHypothesisisvaluableinthreemainwaystoEUlegalscholars.

First,everytimeyoureadanargumentholding:

• from an economic point of view, this norm/institution/decision/policy is inefficient because it reduces totalwelfare(thissecondpartmightbeimplicit);

Youcanreplyinkind:

• good to know, but I am not interested because total welfare maximisation does not t within the relevant legal framework; does your claim hold even when this norm/institution/decision/policy is analysed in consumerwelfareterms?Yousee,thatwelfarestandardtsandisthereforemorelegallyrelevant.

Dependingonthecircumstances,youmayevenbeabletoreply:

• good to know, but from another economic point of view, this norm/institution/decision/policy is actually efficient because it increases consumer welfare; since consumer welfare maximisation ts and is therefore more legally relevant, I have a beer efficiency argument, which actually supports this norm / institution / decision/policy

5.CWH,pp 84–88.

6. See Hans-Wolfgang Micklitz, , Cambridge University Press, 2018; Martijn Hesselink, e Politics of Justice in European Private Law Justifying Contract in Europe PoliticalPhilosophiesofEuropeanContractLaw NewPrivateLaw , Oxford University Press,2021; StefanGrundmann,Hans-Wolfgang Micklitz, andMoritz Renner, eory APluralistApproach,CambridgeUniversityPress,2021.

7. See Ioannis Lianos, ‘ ’ , CLES Working Paper Series 3/2013 and Ariel Ezrachi, ‘ Some Reections on the Question of the Goals of EU Competition Law e Goals ofEUCompetition LawandtheDigitalEconomy’,BEUCDiscussionPaper2018.

8.SeeSection IV.1.

Second, the analysis supporting the hypothesis shows a different way to intertwine law and economics. If the one you have encountered in the past le you unimpressed or even irritated you, I understand; but still, try the ConsumerWelfareHypothesis Itisanentirelydifferentthing!

ird, the Consumer Welfare Hypothesis opens a wealth of research questions waiting for an answer (9). You mightwellbethebestpersontoanswerone(ormore)ofthem.

II.eargumentinanutshell

e Consumer Welfare Hypothesis has two main pillars: the rst in economics; the second in law. Hence, it is an economic and legal analysis, where the legal analysis offers a reason to prefer one economic conception of allocativeefficiencyoveranother(consumervstotalwelfaremaximisation)

e rst pillar (10) demonstrates that there are conceptual and historical reasons showing that it is perfectly possible for economists to put the interest of consumers rst in market analysis, to the effect that an allocation that harms them is inefficient just because it harms them At the core of the conceptual analysis, there are two points. On the one hand, in its most sophisticated account available yet, consumer sovereignty is alternative to the total welfare standard and – unsurprisingly – the different versions of the consumer welfare standard (the EU one, the US one, others) are just institutionalisations of consumer sovereignty. On the other hand, if principal-agent models are customarily used to maximise the interest of the principal, why can we not qualify the consumer as the principal and the trader as the agent and reconstruct market relations on the basis of this apparatus?Itishardtoseewhynot

9.Seebelow,Section VI.

10.CWH,chapter2.

e Consumer Welfare Hypothesis has two main pillars: the rst in economics; the second in law

is conceptual analysis is reinforced by a tailored review of the thought of economists who have contributed signicantly to the development of the economic approach to law (11). is review reveals that favouring the consumers in a particular market is a widespread premise among a remarkable list of economists, including: Adam Smith, John Hicks and Nicholas Kaldor (of Kaldor-Hicks efficiency), and Ronald Coase are particularly surprising and consequential. is is quite surprising considering that these economists are customarily enlistedinthetotalwelfarearmy.

In sum: the consumer welfare conception of allocative efficiency has a notable economic pedigree. An open question is whether these ndings are enough to challenge the total welfare standard as a maer of economic theory. But the ConsumerWelfareHypothesis rests on economic and legal analysis, so there is no need to delve intothisveryinterestingquestionhere.

e second pillar (12) of the argument builds on Richard Posner’s efficiency hypothesis of the common law (13). It improves upon it by: 1) avoiding cherry-picking problems; 2) offering a comparative analysis of the relative strength of two competing efficiency hypotheses (total vs. consumer welfare hypotheses); and 3) explaining the content of legal reasoning, not the expected effects of the law on the basis of blackboard economic analysis Four inferential disagreements between the total and consumer welfare hypotheses were tested for their tness with a signicant portion of legal materials from EU antitrust and EU consumer law e result overwhelmingly favourstheConsumerWelfareHypothesis.

Before providing some examples of how the Consumer Welfare Hypothesis is tested, four clarications are useful. First, the focus is only on one of the many markets in the economy at a time. Second, the Consumer Welfare Hypothesis focuses on the inferential component of the concept of allocative efficiency, leaving room for different ways of measuring consumer welfare. ird, the hypothesis is limited to exchange contracts, and it has lile to say about the allocation of factors of production (e.g., employment contracts). Fourth, the Consumer Welfare Hypothesis is a positive claim e argument is mainly (14) about how two competing conceptions of allocative efficiencyalignwithexistinglegalinstitutions.

III.Focusonthesecondpillar:Examplesoftheinferentialanalysis

In the short space of this text, it is useful to provide some examples of the type of analysis of legal materials warrantying the Consumer Welfare Hypothesis. e core of the analytical framework is four inferential disagreements – disagreements about the correct way to reason, depending on which welfare standard is a compatible premise with actual legal reasoning. ese disagreements can be expressed as diverging answers to these four questions:

11.CWH,chapter3.

12. Chapter 4 describes the methodology, including scope of application and dataset selection and Chapter 5 and 6 analyse EU antitrust and consumer law respectively

13. See, Richard Posner, ‘ ’ , Hofsra law Review 9, pp 775–794 and Francesco

A Reply to Some Recent Criticism of the Efficiency eory of the Common Law Parisi, ‘ ’ ,EncyclopediaofPublicChoice,pp 519–522.

eEfficiencyoftheCommonLawHypothesis

14.Butseebelow,Section IV.2onequalityandwelfarestandards

1.Whydoesthelawprotectacertaintypeofeconomicagentfromharm?

2 Howaredefencesandexceptionstotheapplicationofnormsjustied?

3.Whatisthepurposeoftheapplicablesanctions?

4 Whichroleisplayedbycertainspeciceconomicconceptsinlegalreasoning?

For current purposes, two examples will have to suffice e rst from the case-law on the Unfair Contract Terms Directive (15), is relevant for the answer to the rst question. e second is from the case-law on Article 102 TFEUandisrelevantforthefourthquestion

Inthecase-lawontheUnfairContractTermsDirective,itiscommontoreadsomethinglikethis:(16)

it is seled case-law that the system of protection introduced by the directive is based on the idea that the consumer is in a weak position vis-à-vis the seller or supplier, as regards both his bargaining power and his level of knowledge.…Article6(1)…isamandatoryprovisionwhich…re-establishesequalitybetweenthem.

esearetwostandpointsofthecompetingwelfarehypothesesabouttherelevanceofharm:

• Consumer Welfare Hypothesis: consumer harm is intrinsically problematic; harm to competitors (and others) is only instrumentally problematic, so that when competitors are harmed but consumers benet, the conduct isdesirable

• Total Welfare Hypothesis: all harm is instrumentally problematic and should be reduced when such interventionincreasestotalwelfare.

Which efficiency hypothesis describes the reasoning more precisely? In this data point, there is nothing suggesting that harming consumers is instrumentally problematic because it reduces total welfare Instead, the focus is on consumers being harmed and the goal is to avoid that. Notably, the concept of market failure plays a key role: consumers are weak and in need of help (equality needs to be re-established) because of market failures. Hence, market failures cause consumer harm. In sum, the connection is: the law complements the market in making surethatthemarketworksforconsumers.

Tournier(17) isanabuseofdominancecase,wheretheFrenchdiscothèqueindustrycomplaineditwaspayingexcessive fees for the music in comparison to other Member States. e Court of Justice of the European Union (‘theCourtofJustice’or‘theCourt’)tooktheviewthatthehigh‘operatingexpenses’ofthelegalmonopolistprobably where the cause for the high fees and since those fees were ‘appreciably higher’ than in other Member States,thedominantrmwasimposingunfairtradingconditions.

15. of5April1993onunfairtermsinconsumercontracts,OJ95L,p 29. CouncilDirective93/13/EEC

16. See, for example, , BancoEspañoldeCrédito,SAvJoaquínCalderónCamino(C-618/10, EU:C:2012:349, paras Judgmentof the Court of Justice of 14 June 2012 39-40).

17. ,MinistèrepublicvJean-LouisTournier(C-395/87,EU:C:1989:319).JudgmentoftheCourtofJusticeof13July1989

e examples that are particularly revealing, in my view, are those where the Court of Justice defeats the expected (normally, plain) meaning of a provision

isisthedisagreementaboutproductiveinefficiency

•TotalWelfareHypothesis:productiveinefficiencyisundesirablebecauseitreducestotalwelfare;

• Consumer Welfare Hypothesis: productive inefficiency is important to the extent that it has an impact on theoutcomeforconsumers.

Which efficiency hypothesis describes the reasoning more precisely? Like the Consumer Welfare Hypothesis requires, the Court of Justice is interested in the effect of the trader’s productive inefficiency on consumers. e productiveinefficiencyis,again,relevantbecauseitharmsconsumers

e legal analysis testing the hypotheses is full of examples like these, analysed in more detail. e examples that are particularly revealing, in my view, are those where the Court of Justice defeats the expected (normally, plain) meaning of a provision, thereby carving a judicial exception which is justied by a specic concern for the interest of consumers. In those cases, references to the interest of consumersare not ‘cheap talk’: they are used to justify disappointing legitimate expectations built on the plain meaning and on previous applications of that provision.

IV. e main innovations (besides redening the very concept of efficiency to be used intheeconomicanalysisofexchangecontracts)

eConsumerWelfareHypothesisrestsonsomemethodologicalandconceptualinnovation.

1.Methodologicalinnovation

As anticipated, the Consumer Welfare Hypothesis is rmly rooted in the Calabresian tradition of Law and Economics. is approach is more respectful of the legal perspective Legal materials are analysed carefully and without the purpose of distorting them into a preselected framework or criticising them if they do not t Hence, if you are normally uninterested in ‘the economic analysis of law’ stuff, you may nd something valuable here for your own research. As pointed out at the beginning, at the very least, you now have two new questions to ask to anyone offering an efficiency analysis: ‘does your claim hold even when this norm/institution/decision/policy is analysed in consumer welfare terms?’; you may even be able to reply, depending on the circumstances,‘fromanothereconomicpointofview,wherethemaximand is consumer welfare, your claim is false’. You may want to keepthisinmindnexttimeyouactasapeer-reviewer

is is a consequence of how the Consumer Welfare Hypothesis relates legal and economic discourses to each other. ey are not put on the same level. Rather, legal discourse is used as data or explanandum, and economic discourse offers the research hypotheses or explanans. is approach is based on the careful adaptation of previous research on inferentialism, in general, (18) and in a legal context, in particular (19) Contrary to the emerging use of systematic content analysis that focuses on identifying what is said (20), inferentialism focuses on what is done with words, and it includes a way to give more or less value to different data points. Hopefully,theseapproacheswillbeintegratedinthefuture

Legal discourse is used as data or explanandum, and economic discourse offers the research hypotheses or explanans

18.RobertBrandom, ,HarvardUniversityPress,2000.ArticulatingReasons:AnIntroductiontoInferentialism

19. DamianoCanale and GiovanniTuzet, ‘ ’,1Ratio Juris 20, 2007, pp On Legal Inferentialism.Toward a Pragmatics of Semantic Contentin Legal Interpretation? 32–44.

20. See, in particular, KonstantinosStylianou and Marios Iacovides, ‘ ’ , 4 Legal Stu- e Goals of EU Competition Law: a Comprehensive Empirical Investigation dies 42, pp 620–648. For a discussion of the methodology, see Or Brook, ‘ ’ , in Behind the Met- Politics of Coding: On Systematic Content Analysis of Legal Text hod:ePoliticsofEuropeanLegalResearch,EdwardElgarPublishing,2022.

e focus on legal inferences is a key reason why the Consumer Welfare Hypothesis rests on an analysis that cannot be compared in terms of legal nuance with those traditionally offered by positive economic analysis of law If that kindofanalysisdisappointedyou,givethisoneatry.

2.Novelconceptualinsights

Building on the Consumer Welfare Hypothesis, a different account of the role played in some debates about EU law is possible. In competition law, in particular, even among those who tend to agree that consumer welfare is the standard, consumer welfare is downplayed to a relatively recent and contingent political and judicial decision e analysis shows that this is not the case (21). e interest of consumers has been central since the very beginning;itisawell-establisheddoctrinalfeatureofEUcompetitionlaw

Moreover, a common strategy nowadays in the economic approach to law is embracing a sort of value pluralism where efficiency is balanced against other normative concepts, more familiar to legal and political discourses: justice,fairness,equality,etc

Seing aside the reection on the merits and demerits of value pluralism in analytical frameworks (22), this debate assumes that efficiency is different from these other values. is approach is understandable, up to a point. Since the aempt to reduce normative concepts like justice to total welfare maximisation has been rejected, it becamenecessarytoacceptthatitmustcoexistwithothervalues.

However,asuperciallookattherelevantlegaldatasuggeststhatsomethingmorenuancedisgoingon.Forexample, already in the plain meaning of the Unfair Commercial Practice Directive (23) and of Articles 101 TFEU, the languageoffairnessandefficiencycoexist.

is is not surprising at all. Both the total and the consumer welfare conceptions of allocative efficiency rely on an equality norm (24). Total welfare rests on the demand that all market participants be treated equally, so that only reductions in aggregate total welfare (not its distribution) can justify policy intervention. You (and I) may disagree on the merits, but this is a well-formed equality claim. Consumer welfare rests on the idea of consumer sovereignty, incapsulated in this maxim: the consumer is sovereign; the producer is servant. Accordingly, we are all equalinthatwearesovereignsasconsumersandservantasproducers.

21.CWH,chapter5.

22. See, generally, Daniel Markovits and Alan Schwartz, ‘ ’ , 2 eoretical Inquiries in Law 20, 2019, pp. Plural Values in Contract Law: eory and Implementation 571–593; Giorgio Resta, ‘ ’ , 6 e German Law Journal 23, 2022, Is Law Like Social Sciences? On ‘New Private Law eory’ and the Call for Disciplinary Pluralism pp 826–837; Martijn Hesselink, ‘ ’ , 6 e Anything Goes in Private Law eory? On the Epistemic and Ontological Commitments of Private Law Multi-Pluralism GermanLawJournal23,2022,pp 891–899.

23. oftheEuropeanParliamentandoftheCouncilof11May2005concerningunfairbusiness-to-consumercommercialpracticesinthein-Directive2005/29/EC ternal market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council andRegulation (EC)No2006/2004oftheEuropeanParliamentandoftheCouncil, OJ2005L149,p.22 24.CWH,chapter2.

In sum, the idea that legal and economic discourses and key concepts are intertwined and (possibly, partially) overlapping rather than necessarily in opposition offers a more nuanced standpoint for the study of the relationshipbetweenlegalandeconomicconceptsandtheresultingviewsofinstitutions(25).

V.Focus:Dispellingtheresilientinstrumentalizationcritiqueintwomoves

e simplifying and clarifying effect of the Consumer Welfare Hypothesis can be seen by considering the so-called instrumentalisation critique. Part of the literature believes that the EU internal market instrumentalises consumerlawandeventheinterestofconsumerstoachievelegalharmonisationintheEuropeanUnion(26).

e total welfare conception of efficiency fuels this view. In fact, if the economic goal of a market is to maximise total welfare (as normally assumed), and the European Union harmonises consumer law to build the internal market,EUconsumerlawsupportsaninstitutionalreformthatismeanttoultimatelyincreasetotalwelfare.Hence,EUconsumerlawcaresaboutconsumersonlyinstrumentallytocreatetheinternalmarket.

e Consumer Welfare Hypothesis offers a different and more charitable account of the EU legal order. In fact, if the normative foundation of the internal market project is the maximisation of consumer welfare simultaneously in all the product markets, how is it possible to claim that the interest of consumersis being instrumentalised to the achievement of an institutional goal that has, ultimately, the interest of consumers as its central substantiverationale?

25. CWH, pp. 12–16 and 176–180. On this point from an economic point of view, see also Sarah Klammer and Eric Scorsone, e Legal Foundations of MicroInstitutionalPerformance.AHeterodoxLaw&EconomicsApproach Le-,EdwardElgar,2022.eseminaltextsonthelegal-economcnexusare:WarrenJSamuels,‘ gal-Economic Nexus e Interrelations between Legal and Economic Pro- ’ , 6 George Washington Law Review 57, 1989, pp 1556–1578 and Warren J Samuels, ‘ cesses:AConsideration oftheReactions’,ConstitutionalPoliticalEconomy18,2007,pp 243–285.

26. Recently, Laura Burgers,MarijaBartl, andChantalMak, ‘ ’ , AmsterdamCentreforTransformative Introduction. e Evolving Conceptof Private Law in Europe privatelawWorkingPaperNo 2022-07

Itisnotpossible.

What remains is an important empirical question, namely: what is the best degree of exibility that Member States should have to optimally protect the interest of consumers? But this important empirical question has its ownlegalbasis,namelytheprincipleofsubsidiarity

However,itgetsmorecomplicatedthanthat TwolinesofcasesinEUlawgive apparent support to the instrumentalisation critique (27). One is in consumer law and starts with Mostaza Claro. (28) e other is in competition lawanditstartswithRoqueeFrères.(29) esecondoneisparticularlyoutspoken in connecting the protection of competition to ‘economic well-being in the Community’ Notably, this paern can be found even in Servizio ElericoNazionale,(30) wheretheECJisalsoexceptionallyoutspokeninstating that ‘the well-being of both intermediary and nal consumers must be regarded as the ultimate objective warranting the intervention of competition law in order to penalise abuse of a dominant position’. How can these two views be reconciled without holding that the consumer interest maers onlyinstrumentallytotheextentitcontributestototalwelfare?

A plausible solution to this problem comes from a deeper reection on the concept of consumer sovereignty and its relationship with indirect reciprocitymechanisms(31).Inanutshell,weallwinwheneveryoneactsintheinterest of their consumers as producers and receives the same preferential treatment when acting as consumer. Accordingly, the interest of consumers is not instrumental to total welfare; rather, fostering the interests of consumers in each market is constitutive of a well-functioning economy. True, from a macro perspective, total welfare is maximised (as the First Welfare eorem teaches); but when we focus on a specic exchange market, the goal is the maximisation of the welfare of the consumers on that market No one ’ sinterestisinstrumentalisedtoanexternal,economicgoal:thegoalisinternaltothelegalsystemanditisaboutfosteringtheinterestsofconsumers

27.CWH,pp 162–163and119–122.

28.

,ElisaMaríaMostazaClarovCentroMóvilMileniumSL(C-168/05,EU:C:2006:675,para37). JudgmentoftheCourtofJusticeof 26October2006

29.

, Roquee Frères SA v Directeur général de la concurrence, de la consommation et de la répression des audes, Judgment of the Court of Justice of 22October 2002 andCommissionoftheEuropeanCommunities(C-94/00,EU:C:2002:603,para42).

30.

, Servizio Elerico Nazionale SpA and Others v Autorità Garante della Concorrenza e del Mercato and Others Judgment of the Court of Justice of 12 May 2022 (C-377/20, EU:C:2022:379, para 46). For a comment, see Justine Lindeboom, ‘Op-Ed: Towards a Unied Judicial Philosophy of Article 102 TFEU? Servizio ElericoNazionaleSpA(C-377/20)’,EULawLive,6June2022.

31. Fabrizio Esposito, ‘e Consumer Welfare Standard, Consumer Sovereignty, and Reciprocity: An Evolutionary Foundation for the Positive Economic ApproachtoLawthatActuallyWorks’,forthcominginthenextvolumeoftheSpringerseriesLawandEconomicsinEurope.

e interest of consumers is not instrumental to total welfare; rather, fostering the interests of consumers in each market is constitutive of a well-functioning economy

VI.Questionswaitingtoberesearched

Insum,theargumentfavouringtheconsumerwelfareconceptionofallocativeefficiencyrestsontwopillars.e rst pillar argues that the focus on deadweight loss and total welfare is grounded in the notion of equality, which demandsthatallmarketparticipantsbetreatedequally.econceptofconsumersovereigntyoffersaclearequality norm in favour of the consumer welfare standard. e second pillar builds on Richard Posner’s efficiency hypothesis and offers a comparative analysis of the relative strength of two competing efficiency hypotheses, tested for their tness with actual legal reasoning. e result overwhelmingly favours the Consumer Welfare Hypothesis

ere is wealth of open questions that call for the engagement of scholars from a variety of elds, such as economic and legal historians, political and legal philosophers, and comparativists. New methods such as systematic content analysis or empirical legal studies could also contribute a great deal to the collective analysis of the Consumer Welfare Hypothesis and its placement into a broader theoretical account of the interplays between (EU) lawandtheeconomy.

e reason why I decided to write this piece is, however, because of the Consumer Welfare Hypothesis’ s great potential in the context of EU legal scholarship. e ConsumerWelfareHypothesis applies to exchange contracts, but itwastestedonlyonthepartoftheEUhorizontallegislationthatappliestothem Butdoesitalsoworkforairpassenger rights, sectorial legislation in energy, telecommunication, insurance, etc.? How does the theoretical distinction between exchange and production contracts apply in labour and capital markets? And what about agency and distribution contracts? And market relying on special treaty provisions, such as the agricultural policy?Relatedly,doestheConsumerWelfareHypothesisworkforEUfoodlaw?

One of the main concerns EU legal scholars have is the silo mentality of the eld. We look at the bits and pieces and fail to see the elephant in the room. Maybe the EU elephant has a lot to do with our welfare as consumersand ourdutiesasproducersand,therefore,withallocativeefficiency.Let’sndout!

e reason why I decided to write this piece is, however, because of the Consumer Welfare Hypothesis’ s great potential in the context of EU legal scholarship

News Highlights

5 June to 9 June 2023

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Monday 5 June

Official publication was made of Regulation (EU) 2023/1077, issued by the European Parliament and the CouncilonMay31,2023,whichintroducestemporarytradeliberalization measures to supplement trade concessions for Ukrainian products under the Association Agreement betweentheEUandUkraine

CourtofJusticestreaminghearingtomorrow morning in case concerning the righttoeffectivelegalprotectionandtoa fairtrial

Monday 5 June

e Court of Justice’s hearing, in HANN-INVEST, MINEL-SEKULINE, and UDRUGA KHL MEDVEŠČAK ZAGREB (Joined cases C-554/21; C-622/21; C-727/21) concerning clarication on the compatibility of Article 177(3) of the Croatian Rules of Procedure of the Courts, which prescribes the procedure as to when a case before a second instance court will be deemed closed, with Article 19(1) TEU and Article 47 of the Charter, is available at the Court’s website

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Monday 5 June

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Court of Justice: Polish amending law, affecting the impartiality, independen-

and privacy of the judges, incompatiblewithEUlaw

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e Grand Chamber of the Court of Justice rendered its decision in Commission v Poland (Independence and private life of judges) (C-204/21), a case concerning the compatibility of a Polish law amending the national rules relating to the organization of the ordinary courts, the administrative courts, and theSupremeCourtwithvariousprovisionsofEUlaw

ce

Regulation enhancing transparency and accountability of ECB sanctions, publishedinOJ

Tuesday 6 June

Official publication was made of Regulation (EU) 2023/1092 of the European Central Bank (ECB) which amendsRegulation(EC)No.2157/1999,concerningthepowers of the ECB to impose sanctions. e purpose of the amendment is to strengthen the effectiveness, proportionality, and dissuasive effect of sanctions imposed by the ECB for breachingitsregulationsordecisions.

EUimposessanctionsundertheGlobal HumanRightsSanctionsRegimeonindividuals involved in sentencing VladimirKara-MurzainRussia

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e EU imposed restrictive measures on nine individuals under the Global Human Rights Sanctions Regime, in response to the sentencing of Russian opposition politician Vladimir Kara-Murza to 25 years in prison on politically motivated charges.

European Parliament and Council reach agreement on Anti-Coercion Instrument to safeguard interests and countereconomicpressures

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case

Tuesday 6 June

eCourtofJustice’shearinginMinisterstvovnitraČeskérepubliky, Odbor azylové a migrační politiky (C-406/22), concerning the clarication of Directive 2013/32/EU on common procedures for granting and withdrawing international protection, specically, its provisions outlining the criterion for the designation of safe countries, is available at the Court’s website.

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e European Parliament and the Council reached a nal political agreement on the Anti-Coercion Instrument (ACI), a new tool designed to defend EU interests and those of its member states on the global stage which aims to act as a deterrent against economic coercion and provides a framework for addressing and countering coercive measures taken by thirdcountries

Tuesday 6 June

e Court of Justice, siing in its Grand Chamber formation, delivered its judgment in O G (European Arrest Warrant issued against a third-country national) (C-700/21), a case concerningtheexecutingjudicialauthority’soptionofrefusingto execute a European arrest warrant in order for a third-country national to serve the sentence, imposed by the issuing MemberState,intheterritoryoftheexecutingMemberState

Commission proposes measures to combat misuse of commercial transportforirregularmigration

Tuesday 6 June

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e European Commission proposed new measures to address the misuse of commercial transport by criminal networksinvolvedinfacilitatingirregularmigrationtotheEU

EU law precludes the automatic exclusionofthird-countrynationalsfrombeneting from optional non-execution ofanEAW

Court of Justice to stream hearing today in

concerning the criterion for the designation of safe countries of origin

Council and European Parliament reach provisional agreement on labellingrulesfororganicpetfood

Wednesday 7 June

e Council and the European Parliament reached a provisional agreement on new labeling rules for organic pet food in the EU which aim to simplify the process for consumers to purchaseorganicfoodfortheirpets.

General Court annuls decision ordering Member of Parliament the payment of costs resulting from the termination of a contract of an employee of theParliament

Wednesday 7 June

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e General Court, siing in its Extended Composition formation, delivered its decision in a case concerning an action, seeking the annulment of a decision ordering the recovery fromtheapplicantofremuneration,socialcosts,andtravelexpenses of an employee whose contract was terminated: case TCvParliament(T-309/21).

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Wednesday 7 June

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daforpartnershipandcooperation

Wednesday 7 June

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e Commission published Questions and Answers on the NewAgendaforEURelationswithLatinAmericaandtheCaribbean (LAC), seeking to strengthen its partnership with LAC, address global challenges together, and become partnersofchoiceinachievingcommongoalsandpromotingmutualbenetsforEUandLACcitizens

Énergie’s action for annulment of Commission’s leer rejecting its complaint against France’s increase in the maximum overall volume of electricity that maybesoldbyEDF READ

Wednesday 7 June

e General Court dismissed Unsa Énergie’s action seeking the annulment of Commission’s leer of 8 April 2022 rejecting its complaint against France’s increase in the maximum overall volume of electricity that may be sold by Électricité de France (EDF) to alternative electricity suppliers underregulated access to historical nuclear electricity providers under the regulated access to historical nuclear electricity (ARENH)scheme,aswellasthepricesfortheadditionalelectricity volumes sold: UNSA Énergie v Commission (T-322/22).

Council and European Parliament reach agreement on national authorities’accesstonancialinformation READ

Wednesday 7 June

e Council and European Parliament reached a provisional agreement on a proposal to speed up and ease access of nationalauthoritiestonancialinformation.

General Court dismisses Unsa

Commission carries out unannounced inspectionsinthesyntheticturfsector

ursday 8 June

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e European Commission conducted surprise inspections at various companies operating in the synthetic turf industry across multiple Member States, prompted by concerns that these companies may have violated EU antitrust rules, specically those prohibiting cartels and restrictive business practicesoutlinedinArticle101oftheTFEU.

Court of Justice rules on the refund of travel packages in the context of COVID-19

ursday 8 June

READ

e Court of Justice delivered its judgment in Union fédérale des consommateurs — Que choisir (UFC — Que choisir), Consommation, logement et cadre de vie (CLCV) v Premier ministre, Ministre de l’Économie, des Finances et de la Relance (C407/21) concerning the obligation of travel organisers to refund payments made for travel packages aer the termination ofthecontract,followingtheCOVID-19crisis.

National regulator entitled to impose different billing obligations on operators of xed and mobile telephony operators,CourtofJusticends

ursday 8 June

Limitation of private hire vehicle licences in Barcelona is contrary to EU law: CourtofJustice

ursday 8 June

In Prestige and Limousine (C-50/21), the Court of Justice rendered its judgment concluding that the administrative regulation of the Barcelona Metropolitan Area that sets out several limitationstoprivatehirevehiclelicensesviolatesEUlaw

Consumer Protection and Choice-ofLaw: Court of Justice claries the term “consumer” in contracts with dual purposes

ursday 8 June

e Court of Justice rendered its judgment in Lyoness Europe (C-455/21), clarifying the term of consumer under Article 2(b)ofCouncilDirective93/13/EEConunfairtermsinconsumercontracts.

AG Koko: Commission’s appeal seeking to uphold its decision on unlawful tax selective advantage should be dismissedbyCourtofJustice

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e Court of Justice delivered its judgment in Fastweb and Others (Périodicités de facturation) (C-468/20) concerning a preliminary reference from the Council of State in Italy, regarding a dispute between four xed and mobile telephone operators operating in Italy, on the one hand; and the CommunicationsRegulatoryAuthority (AGCom),ontheother,forthe billingofxedandmobiletelephonyservices.

ursday 8 June

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AdvocateGeneralKokodeliveredherOpinioninacaseconcerning an appeal lodged in front of the Court of Justice against the General Court’s decision in Luxembourg and Others v Commission (Joined cases T-816/17 and T-318/18) inconnectiontoaCommissiondecisionondeclaringataxselective advantage as unlawful: Commission v Amazon.com and Others(C-457/21P).

Court of Justice rules on res judicata in relationtotheBrusselsIRegulation

ursday 8 June

e Court of Justice handed down its judgment in BNP Paribas (C-567/21), a request for a preliminary ruling from the Cour de Cassation (France) concerning the interpretation of Aricles 33 and 36 of the Brussels I Regulation, following a dispute between NBP Paribas and TR, concerning the laer’s dismissal, which was the subject of a decision handed down byanEnglishcourt.

Court

Rules

ursday 8 June

e Court of Justice rendered its judgment in a case concerning an action, brought by the Commission against the Slovak Republic for failure to fulll its obligations under EU law, particularly under Articles 12(2), 12(3)(b), 12(4) of Directive (EU) 2015/2302 on package travel and linked travel arrangement, in conjunction with Article 4 of that directive: CommissionvSlovakia(C-540/21).

National legislation governing access to electroniccommunicationsforthepurposes of prosecuting ‘serious criminal offences’ is compliant with EU law: AG Collins

ursday 8 June

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On8thJune,AdvocateGeneralCollinsdeliveredhisOpinion in Procura della Repubblica presso il Tribunale de Bolzano (C-178/22), a case concerning the interpretation of Directive2002/58/EConprivacyandelectroniccommunications.

Court of Justice claries, inter alia, the conceptof“irregularity”withinthecontextoftenderprocedures

ursday 8 June

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e Court of Justice rendered its decision in a case concerning a preliminary ruling request seeking clarication of, among other things, the concept of “irregularity” within the contextoftenderprocedures:ANAS(C-545/21)

Commission proposes creation of interinstitutional Ethics Body to establish commonstandardsforEUinstitutions

ursday 8 June

e European Commission has put forth a proposal to establish an interinstitutional Ethics Body that would enforce commonethicalstandardsformembersofEUinstitutions,aiming to ensure transparent and comprehensible standardsfor ethicalconductamongEUpoliticians

Commission launches infringement procedure against Poland regarding newlawestablishingspecialcommiee

ursday 8 June

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On 8th June, the Commission sent a leer of formal notice to Poland for violations of EU law, concerning the recently introduced law on the State Commiee for the Examination of Russian inuence on the internal security of Poland between 2007and2022

of Justice:

that, within the context of the pandemic, grant customers an amendment of, or alternative to, the traveling package offered to themareincompatiblewithEUlaw

Court of Justice dismisses appeal in Councilv.Pech

ursday 8 June

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e Court of Justice handed down its judgment in Council v Pech (C-408/21 P), which follows an appeal from the General Court’s ruling in Pech v Council (T-252/19), regarding the interpretation of Article 4 of Regulation 1049/2001 regarding public access to European Parliament, Council, and Commissiondocuments

ECHtR rejects Italian lawyers’ applicationsoverunjustiedfeesandproceduralabuse

Friday 9 June

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e ECHtR rejected 19 applications led by three Italian lawyers, who relying on Articles 6 § 1 (right to a fair trial) and Article 1 of Protocol No. 1 (protection of property), complained that because of the non-enforcement of assignment orders directly awarding them legal fees in legal proceedings, the State authorities had failed to pay them the money they had been due: Ferrara and Others v. Italy (application no. 2394/22and18others).

Commissionpublishes2023EUJustice Scoreboard

Friday 9 June

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e European Commission published the 11th edition of the EU Justice Scoreboard, an annual overview providing data on the efficiency, quality, and independence of justice systems in theEUMemberStates.

ursday 8 June

Today,theCourtofJusticedelivereditsjudgmentinacaseconcerning a preliminary ruling request seeking the interpretation of Articles 173 and 174 of Regulation 952/2013 laying down the Union Customs Code: case Zes Zollner Electronic (C-640/21)

Friday 9 June

Official publication was made of a Notice to stakeholders on the withdrawal of the United Kingdom and EU rules in the eld of state aid, according to which, EU State aid control no longer applies to any aid granted by the United Kingdom aer the transition period, unless it affects trade between Northern IrelandandtheEU

Regulation (EU) 2023/1115 combating deforestation and forest degradation,publishedinOJ

Friday 9 June

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Official publication was made of Regulation (EU) 2023/1115 which addresses the availability and export of certain commoditiesandproductsassociatedwithdeforestationandforestdegradation.

Court of Justice renders judgment on a preliminary reference concerning the interpretation of certain provisions of theUnionCustomsCode

Official publication of Notice on WithdrawalofUKandEUstateaidrules:implicationsandconditionsexplained

Council adopts negotiating position regarding key legislation on migration andasylum

Friday 9 June

e Court of Justice handed down its judgment in Council v Pech (C-408/21 P), which follows an appeal from the General Court’s ruling in Pech v Council (T-252/19), regarding the interpretation of Article 4 of Regulation 1049/2001 regarding public access to European Parliament, Council, and Commissiondocuments.

Council and European Parliament reach agreement on proposed directive onintelligenttransportsystems

Friday 9 June

e Court of Justice handed down its judgment in Council v. Pech (C-408/21 P), which follows an appeal from the General Court’s ruling in Pech v. Council (T-252/19), regarding the interpretation of Article 4 of Regulation 1049/2001 regarding public access to European Parliament, Council, and Commissiondocuments.

EU Regulations on Crypto-assets: Transfers of Funds and Market Regulation

Friday 9 June

Today,theCourtofJusticedelivereditsjudgmentinacaseconcerning a preliminary ruling request seeking the interpretation of Articles 173 and 174 of Regulation 952/2013 laying down the Union Customs Code: case Zes Zollner Electronic (C-640/21).

EU takes stand against strategic lawsuitstosafeguardpressfreedomandpublicdebate

Friday 9 June

Today,theCourtofJusticedelivereditsjudgmentinacaseconcerning a preliminary ruling request seeking the interpretation of Articles 173 and 174 of Regulation 952/2013 laying down the Union Customs Code: case Zes Zollner Electronic (C-640/21)

Friday 9 June

e Council took a signicant step in the ght against organized crime and its illicit prots by reaching an agreement on a dra directive on asset recovery and conscation, which establishes minimum rules for tracing, identifying, freezing, conscating, and managingcriminalproperty.

Insights, Analyses & Op-Eds

e-Treaty-that-must-not-be-named’: e relevance of international treaties for dening violence against women in the Opinion of Advocate General RicharddelaTourinWS(C-621/21)

by Janine Silga

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Op-Ed on Advocate General Richard de la Tour’s Opinion whereby he claried, among other things, the crucial question about the relevance of the Convention on the Elimination of All Forms of Discrimination against Women (CEDAW) and the Istanbul Convention in reference to Article78(1)TFEU.

Can EU officials teleworking outside their place of employment still be considered as expatriates? (case PP and othersvEuropeanParliament,T-39/21)

by Anaïs Guillerme

Op-Ed on the Court of Justice’s judgment in PP a.o. v European Parliament (T-39/21) concerning the clarication of whether, in the context of the Covid-19 pandemic, EU officialscould have their expatriation allowance suspended when teleworkingoutsidetheirplaceofemployment

Entry bans issued against third country nationals for reasons of national security: individual assessment required by theMemberStates! READ MORE ON EU

by Aniel Pahladsingh

Op-Ed on the Court of Justice’s judgment in M.D. (C-528/21) concerning an entry ban decision into the territory of the European Union in respect of a third-country national, who is a family member of a Union citizen, for reasons connected with national security, without consideration being given to his or her state of health and, where appropriate, his or her family life and the best interests of his or her mi-

eGreatestSnowballofAll(DataPro-

Times: e Irish Data Protection Commission Impinges EU-US DataTransfersAtLarge

by Alba Ribera Martínez

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Op-Ed on the Irish Data Protection Commission’s nal decision against Meta Platforms for an infringement of Article 46(1) of the GDPR, stating that the platform did not transfer personal data to the United States with an adequate level of protection to that present in EU law and did not remedy this disconnectwithanyotheradequatemeasure.

tection)

by Silvia Scarpa

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Op-Ed on certain legal issues arising from the intersection of the asylum and trafficking procedures in Staatssecretaris van Justitie en Veiligheid (State Secretary for Justice and Security of theNetherlands)v.S.S.,N.Z.,andS.S.(C-338/21).

Essential clarications regarding the Environmental Impact Assessment Directive (Case C-575/21, WertInvest Hotelbetrieb)

by Erriketi Tla da Silva

Analysis of the Court of Justice’s judgment in WertInvest Hotelbetrieb (C-575/21) where the Court provided several useful clarications regarding Directive 2011/92/EU on the assessment of the effects of certain public and private projects on the environment, as amended by the Environmental ImpactAssessmentDirective.

by Andrea Circolo

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Analysis of the Court of Justice’s judgment in Úrad pre dohľad nad zdravotnou starostlivosťou and Others (C-204/22) where the Court conrms the restrictive trend regarding the admissibility of references for preliminary rulings, mainly addressedtonationaladministrativeauthorities.

by Konstantinos Zoumpoulakis

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Analysis of the Court of Justice’s judgment in XN (C-608/21)regardingtheinterpretationofArticle6(2)ofDirective 2012/13/EU on the fundamental importance of the righttoinformationincriminalproceedings.

Administrative authorities can talk to the hand: Úrad pre dohľad nad zdravotnou starostlivosťou and Others (C-204/22)

To Stay or Not to Stay? Dublin Transfers of Presumed Trafficking Victims (C-338/21)

e right to information in criminal proceedings as a shield against Kaaesqueprocedures(C-608/21)

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