Weekend Edition Nº169 by eulawlive

Nº169

JANUARY 12

2024

DANIEL SARMIENTO

2023 IN THE UNION’S COURTS

TEN LEADING JUDGEMENTS OF THE YEAR

Nº168 · DECEMBER 23, 2023

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2023 in the Union Courts

Ten leading Judgements of the year Daniel Sarmiento 1

2023 was yet another important and busy year for the Court of Justice. The Grand Chamber was once again at full speed, but with frequent rulings of relevance coming from five-judge chambers. The reform of the Statute and the decentralisation of preliminary references materialised into a political and legal reality, giving rise to a bundle of measures that will transform the Institution forever. The Polish crisis changed gear into a much more EU-friendly phase following the fall of the PiS-led government in Warsaw, taking pressure away from the Court after years of tensions on rule of law matters. And after a long period of continuous constitution-building, it appears that 2023 came with a change of air, a time in which competition, state aid and new policy areas, such as data protection or criminal procedures, became the main focus of the Court’s attention. It is hard to recall another recent year in which so many relevant competition cases were decided by the Court of Justice, but 2023 seems a clear winner in this regard: the Superleague saga, Towercast, Meta Platforms, CK Telecoms, are all major rulings introducing momentous change in EU competition law. They were all the result of the 2023 harvest, probably the last one to produce such a spectacular number of significant competition judgments.

2023 came with a change of air, a time in which competition, the internal market and new policy areas, such as data protection and banking union, became the main focus of the Court’s attention

Is the tide turning in the Court’s institution-building appetite, or is this a mere result of arbitrary and fortuitous docket development? It is difficult to say. 2024 will give the Union courts plenty of reasons to go back into constitution-building mode, with hugely relevant cases in the pipeline, from golden visas to Article 2 TEU infringements, the follow-up to Quadrature du Net, as well as the many sanctions cases that are piling up on appeal, awaiting the Court’s final say on the matter, just to mention a few. In any event, it gives some comfort to see the comeback of the internal market and some of the classics of EU economic law into the spotlight, as a sign that free movement, competition, State aid, etc., are still at the heart of the integration project. All the judgments rendered in these areas resulted in robust findings in an attempt to ensure the effectiveness of Union action, a sign of the importance of being judicially present in these fields, no matter how settled or well-established the case-law may seem. In 2024 we may go back to constitution-building mode, but the nice dose of internal market case-law that we got in 2023 is a sign of the vitality of the EU’s role as policy maker, and of the Court’s role in keeping those policies alive and kicking.

1. Professor of EU Law, Universidad Complutense de Madrid, and Editor-in-Chief of EU Law Live.

Nº168 · DECEMBER 23, 2023

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Meta Platforms The first major collision between the universe of data protection and the world of competition finally materialised in the Meta Platforms case.2 The result was not much of a big bang, but rather an emergence of a multiverse, in which the Court gave a green light to the overstepping tasks of national authorities dealing with competition and data protection. In the case at hand, the question concerned whether the German Competition Authority could implement GDPR and other data protection rules to enforce competition law. The Court of Justice responded with a resounding ‘yes’, highlighting the virtues of cooperation among national authorities, even in the absence of EU or national rules determining how such cooperation is to come about. In the ever growing digital economy, in which personal data has become the most valuable of assets, the mutual reinforcing of national competition and data protection authorities is an approach intended to bolster the effectiveness of Union law. Only time will tell if such an approach truly protects the individual and the holders of personal data, or whether it is just yet another layer of regulatory red tape with little impact in the overall effectiveness of EU competition and/or data policies.

In the ever growing digital economy, in which personal data has become the most valuable of assets, the mutual reinforcing of national competition and data protection authorities is an approach intended to bolster the effectiveness of Union law

2. Judgment of 4 July 2023, Meta Platforms Inc. and Others, C-252/21, EU:C:2023:537.

Nº168 · DECEMBER 23, 2023

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European Superleague / ISU / Royal Antwerp These were undoubtedly the most talked about rulings of the year.3 But of course, once football comes into play, it is difficult for any other cases to compete, no matter how interesting they may be. In the ‘sports trio’ of 2023, the Court of Justice faced an important question of principle: to what extent is the ‘European Sports Model’ sufficiently robust to justify a derogation from standard EU competition law? The development of a Superleague by a group of rebellious (but very powerful) football clubs, a project accused of being elitist and too ‘American’ in its approach to football competition, was the perfect scenario to raise such an issue. The Court of Justice gave a balanced answer, making it clear that there is no special status for football (or sports, for that matter) under EU competition law, in contrast with the proposal raised by the Advocate General.4 As a result, UEFA is fully subject to EU law and its activity is ‘economic’ for the purposes of Articles 101 and 102 TFEU, thus subject to specific duties of care in order to remain within the remit of the EU competition rulebook. The conditions were fleshed out in sufficiently broad terms to allow UEFA to claim victory, but the reality is that EU law has now fully entered into the realm of international sports, irrespective of where their governing bodies are located or of the kind of social dimension that the activity may have. The battle for the Superleague and the soul of European sports is far from over, but the basic terms of the game have been clearly spelled out by the Court of Justice in these three major judgments.

Puig Gordi The judgment is not revolutionary, but it was eagerly awaited by many.5 The Court of Justice had the opportunity of reviewing and codifying its previous (and abundant) case law on the grounds under which a European Arrest Warrant can be rejected, and in the politically charged environment of the criminal proceedings launched by Spanish authorities against several Catalan pro-independence leaders. Belgian courts had repeatedly refused to enforce EAWs issued by Spanish courts, on the grounds that basic rule of law standards had not been complied with in Spain. This analysis was far from being kosher and the parallelisms with the previous Polish cases (LM and others6) sounded too extreme to be credible, but that did not stop Belgian courts from boycotting the enforcement of several EAWs coming from Spain. In its judgment, the Court of Justice developed in detail the terms under which an enforcement court is empowered to question the conditions in which an issuing court makes its request, the procedural context in which it issues the order and the overall guarantees that the issuing Member State must abide by. The bottom-line is simple: unless a serious deficiency of a structural scope is confirmed in the issuing Member State, the EAW must be enforced. The logic that applied to Irish courts enforcing Polish EAWs in the LM saga, should also apply to Belgian courts when having to enforce orders they are unhappy with. To make things even more interesting, the reference did not come from the enforcement jurisdiction, but from the Member State of issuance of the EAW. As a result, courts of issuance can now question the behaviour of the enforcement courts, reversing the traditional logic of mutual recognition.7

3. Judgments of 21 December 2023, European Superleague Company and Others, C-333/21, EU:C:2023:1011; International Skating Union v Commission, C-124/21 P, EU:C:2023:1012 and Royal Antwerp Football Club, C-680/21, EU:C:2023:1010. 4. Opinion of Advocate General Rantos of 15 December 2022, European Superleague Company and Others, C-333/21, EU:C:2022:993. 5. Judgment of 31 January 2023, Puig Gordi and Others, C-158/21, EU:C:2023:57. 6. Judgment of 25 July 2018, Minister for Justice and Equality (Deficiencies in the system of justice) C-216/18 PPU, EU:C:2018:586; judgment of 17 December 2020, Openbaar Ministerie (Independence of the issuing judicial authority) C-354/20 PPU and C-412/20 PPU, EU:C:2020:1033; judgment of 22 February 2022, Openbaar Ministerie (Tribunal established by law in the issuing Member State), C-562/21 PPU and C-563/21 PPU, EU:C:2022:100. 7. Further advancing the avenue opened in the judgment of 25 July 2018, AY (Arrest Warrant – Witness), C-268/17, EU:C:2018:602.

Nº168 · DECEMBER 23, 2023

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CK Telecoms The CK Telecoms judgment provides further guidance as to the intensity of judicial review in merger control and, when read together with ECB/Crédit Lyonnais, the implications go well beyond the terrain of competition law

The judgment in CK Telecoms is a landmark case in EU competition law,8 in particular for merger control. The ruling is of major significance for two reasons: First, it contains the Court of Justice’s first judicial elaboration on the application of the ‘Significant Impediment to Effective Competition’ (SIEC) test, particularly in oligopolistic markets. Second, it provides clarity on the scope and intensity of judicial review and the Commission’s discretion in its economic assessments. On both counts, the judgment sets the record straight, overruling the attempt of the General Court to enter into the field of economic assessment and confirming the need to limit the court’s role to an assessment of the merits based on the law. In this regard , the CK Telecoms judgment provides further guidance as to the intensity of judicial review in merger control and, when read together with ECB/Crédit Lyonnais (see below), the implications go well beyond the terrain of competition law.

Xella Magyarország The Foreign Direct Investment Screening Regulation was finally put to a test in the Xella Magyarország case,9 but its judicial inauguration turned out to be quite a disappointment. In a rather restrictive approach, the Court of Justice concluded that the Regulation does not apply to the screening of indirect foreign investment, thus excluding a wide array of economic activity indirectly controlled from third countries. However, this restrictive reading of the Regulation was balanced out with a broad interpretation of the scope of application of free movement rules, which, according to the Court, apply to an investment involving two domestic companies, of which the purchaser is controlled by an EU parent. In sum, the FDI Screening Regulation will have to coexist with free movement rules, in a way that will need close coordination between the Member States (and mostly the abundant legislation introduced in the recent years, most of it highly restrictive of foreign investment from third countries), the Commission and the development of the Court’s case-law. To give a glimpse of how seriously the Court is taking the matter, in Xella Magyarország it stated that a Hungarian provision empowering a Minister to outlaw an acquisition on the grounds of risks to the national economy was in breach of freedom of establishment provisions. Considering the very restrictive national legislations that have been enacted to implement the FDI Screening Regulation thus far, the Xella Magyarország judgment is an important wakeup call calling for caution and contention when trying to stretch the scope of this new tool and its national progeny.

The Xella Magyarország judgment is an important wakeup call calling for caution and contention when trying to stretch the scope of this new tool and its national progeny

8. Judgment of 13 July 2023, Commission v CK Telecoms UK Investments, C-376/20 P, EU:C:2023:561. 9. Judgment of 13 July 2023, Xella Magyarország, C-106/22, EU:C:2023:568.

Nº168 · DECEMBER 23, 2023

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Towercast The edifice of EU competition law was shaken following the Towercast case.10 The ruling confirms that mergers falling below the European and national thresholds can be assessed by national competition authorities under Article 102 TFEU, thus allowing for a new tool to be used by an extended set of authorities under strict conditions. This was a welcome clarification of Contintental Can (6/72)11 and Austria Asphalt (C-248/16),12 but the effect of the judgment is clear: merger control is now widened, since a merger not reaching the national and European thresholds can be assessed by national authorities under Article 102 TFEU – even outside an Article 22 EUMR referral. Some safeguards were introduced by the Court of Justice to avoid too much uncertainty (mostly by setting a high standard for the use of Article 102 TFEU), but the effect of the ruling has already begun to be felt in the national competition arenas.

ECB/Credit Lyonnais The signal being sent from Luxembourg is good news for the ECB and for EU Institutions and agencies generally: wherever they hold technical discretion, it is not the role of the Union courts to second-guess the executive branch

The debate around the intensity of judicial review in EU courts came back with a vengeance in ECB/Crédit Lyonnais,13 a case touching on a highly technical point of banking supervision that gave the Court of Justice a chance to set the record straight. The judgment rejects the General Court’s intensive approach towards judicial review in banking supervisory matters, an approach that led the first instance court to substitute the technical discretion of the ECB by a judicial-made solution. The Court of Justice disagreed, in line with the powerful Opinion of AG Emiliou,14 and along the way it codified the position of the case-law on the always sensitive matter of intensity of judicial review. The importance of the case goes well beyond the realm of Banking Union, an area in which the General Court was struggling to find an appropriate balance in the face of growing litigation and robust ECB administrative action. The signal being sent from Luxembourg is good news for the ECB and for EU Institutions and agencies generally: wherever they hold technical discretion, it is not the role of the Union courts to secondguess the executive branch. The message is not revolutionary, it was always there, but the frequent incursions of the General Court into more intrusive forms of judicial review could have shed some doubts about the robustness of the official stance. There are no doubts no more, orthodoxy has been reinstated, including in areas in which the EU holds powerful federal-like powers, as is the case of banking supervision.

10. Judgment of 16 March 2023, Towercast, C-449/21, EU:C:2023:207. 11. Judgment of 21 February 1973, Europemballage and Continental Can v Commission, 6/72, EU:C:1973:22. 12. Judgment of 7 September 2017, Austria Asphalt, C-248/16, EU:C:2017:643. 13. Judgment of 4 May 2023, ECB/Crédit Lyonnais, C-389/21 P, EU:C:2023:368. 14. Opinion of Advocate General Emiliou of 27 October 2022, ECB/ Crédit Lyonnais, C-389/21 P, EU:C:2022:844.

Nº168 · DECEMBER 23, 2023

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Nordic Info The first major Covid case reached the Grand Chamber in 2023 in Nordic Info,15 a preliminary reference originating from Belgian courts questioning a general national measure imposing a ban on the entry and exit of Union citizens based on a color code drawn up on the basis of epidemiological data. The national court had doubts as to the compatibility of this national regime with the residence Directive and the provisions of the Schengen Borders Code. In a carefully crafted ruling, the Court of Justice gave its blessing to Belgium’s restrictions to freedom of movement during the pandemic, confirming that Member States can enforce travel bans and impose testing and quarantine obligations on individuals entering their territories. But the most relevant part of the judgment is not to be found in the restriction, but in the analysis of the conditions to be complied in order for the regime to pass the proportionality test. In this regard, the judgment provides useful guidance for future national legislation on emergency situations requiring limitations on movement of persons, thus fleshing a postCovid codification of how emergency law should look like in the Member States.

GK and B.O.D GmbH The European Prosecutor’s Office is one of the most ambitious and groundbreaking institutional projects created by the Union in recent times. Touching at the very core of Member State sovereignty, in the heart of criminal policy, it is no surprise that it took many years and significant political capital to finally come through (and when it did, it became a reality only through an enhanced cooperation). Once in force, the legal edifice was full of questions and gaps to be resolved by the Court of Justice. The time came in the case of GK and B.O.D GmbH, the first judgment of the Court of Justice on the matter,16 in which it had to decide on the scope of national judicial review undertaken by the domestic criminal courts in the context of cross-border investigations. The case in itself was not of systemic relevance, but the Court of Justice used the opportunity to flesh out its general approach towards the interpretation of the EPPO’s Regulation. In a nutshell, the ruling reinforces the role of the handling prosecutor (in charge of centralising the procedure) and limits the scope of review of the courts in the assisting Member State. The purpose is to bolster the powers of the centralising authority in order to avoid the fragmentation of the system and, consequently, its ineffectiveness. This remedy before the courts of the handling prosecutor includes claims of breaches of fundamental rights, irrespective of the fact that their impact might materialize in the assisting Member State. In sum, the EPPO received a considerable boost that will reinforce the effectiveness of its investigations and, eventually, of its powers too.

15. Judgment of 5 December 2023, NORDIC INFO, C-128/22, EU:C:2023:951. 16. Judgment of 21 December 2023, G.K. and Others (Parquet européen), C-281/22, EU:C:2023:1018.

The EPPO received a considerable boost that will reinforce the effectiveness of its investigations and, eventually, of its powers too

Nº168 · DECEMBER 23, 2023

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Krajowa Rada In the midst of the rule of law crisis in Poland, doubts emerged as to whether Polish courts could still be considered to be independent, in light of the continuous degradation that the legislative reforms of the judiciary had provoked in the country. For several years, the Court of Justice was reluctant to affirm, as a matter of principle, that Polish courts were not ‘jurisdictions’ pursuant to Article 267 TFEU for lack of independence, in the tacit understanding that it was precisely through the preliminary reference procedure that the Polish judges that still remained independent could protect themselves from legislative interventions. The Court of Justice became open to the idea, but only on a case-by-case basis following the Getin Noble case.17 However, it was not until 2023, in the Krajowa Rada case,18 when the Court of Justice finally came to the conclusions that a Polish court, and none other than the Supreme Court, was not independent and was therefore precluded from making preliminary references to the Court of Justice. This is a major development with dramatic consequences, in particular in light of the role played by any Supreme Court in a Member State. Depriving the Polish high court from making references to Luxembourg is a major development, now turned into an ever-more complex scenario following the latest elections in Poland, which have ousted the ruling PiS from government, but leaving its judicial proxies in place. If handling a rule of law crisis was difficult for the Court of Justice, having to deal with its aftermath might become an even more challenging task.

If handling a rule of law crisis was difficult for the Court of Justice, having to deal with its aftermath might become an even more challenging task

17. Judgment of 29 March 2022, Getin Noble Bank, C-132/20, EU:C:2022:235. 18. Judgment of 21 December 2023, Krajowa Rada Sądownictwa (Maintien en fonctions d’un juge), C-718/21, EU:C:2023:1015.