Category: EU Law

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EU talkin’ to me?

https://www.hollywoodreporter.com

Coming with all the disclaimers that my most recent piece came with (https://www.markpummell.com/equity-and-trusts/trust-in-me/) this is simply an attempt to if not to eliminate, at least to mollify the angst of any students due to face the LLB EU Law exam this coming October 2018.

I have to say I didn’t find the subject at all easy; and from the relative lack of inactivity we saw on the Facebook page (in contrast to say the Equity and Trusts page) it seems that other students in my/our cohort also found engaging with the subject to a degree challenging. There is always (particularly in the shadow of Brexit) the ‘relevance’ argument, but I might suggest some other reasons. It definitely lacks the historical angle of many of the other common law modules, but is nonetheless (given its relative recency) vast, even giving Tort a good run for its money; and is very dense as regards case law.

I think in this light, whilst acknowledging that for any self-study student there is a grave danger of just getting lost in its bulkiness, it has to be said I think the examiners are practically bending over backwards to get us through this module; just what does that translate into in terms of useful advice.

i. though the ‘integration’ (essentially sovereignty) argument is where a great deal of the subject’s interest lies, it is not (other than when we consider Da costa and EU supremacy etc.) heavily emphasised in the exam. Topics such as the Commission’s legitimacy etc. seemed to have slipped somewhat to the back burner with an heavy emphasis on substantive law and the four freedoms; so if you’re pushed for time start your revision from Chapter 5 onwards.

ii. don’t whatever you do neglect the three following topics:

a. ‘direct effect’ – Van Gend en Loos etc.

b. supremacy (Da Costa etc.)

c. directives – the thorny topic of horizontal direct effect

iii. be sure to master the four freedoms… and of these I would suggest the free movement of ‘goods’ and ‘services/establishment’ reign supreme… capital being less frequently examined it would seem; if you have time Catherine Barnard’s  The Substantive Law of the EU: The Four Freedoms (ISBN – 10 0198749953) is very helpful in this endeavour.

iv. and last but not least; do not neglect a thorough understanding of  ‘justification’ and ‘proportionality’ (on this see Trailers [2009] and Scotch Whisky Association [2017])… this has been the modern emphasis within four freedom judgments… establish the relevant Article/s, consider if there is/is not a degree of ‘restriction’, look to see if the Member State can  justify said restriction, and ultimately can it be said to be a ‘proportional’ measure or should other potentially less restrictive measures be considered.

Happy Studies

 

 

 

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‘unified market access test’ – a word or two…

Following Commission v Italy (trailers) the Keck exception has been completely substituted in favour of a ‘unified market access test’, at the expense of national sovereignty.

Discuss.

The heavily judicially criticised decision of Keck & Mithouard [1993] (on this see Oliver on Free Movement of Goods) was an undoubted game-changer as regards the terrain of the ‘free movement of goods’. Heavily influenced by the academic contributions of Eric White (see in particular In search of the limits to Article 30 (EEC Treaty)) there was no doubt that it was underpinned by a judicial agenda that set out to limit the numbers of cases that traders were bringing before the Court (ECJ/CJEU) following the expansive consequences of the Dassonville/Cassis de Dijon line of judgments.

It established, what in hindsight some have considered a false dichotomy, between ‘product requirements’, and ‘selling arrangements’, provided that two criteria (established in para 16) are fulfilled; these being that:

i. the measure applies to all traders
ii. and affects, in the same manner (in law and fact) the marketing of both domestic and

imported products

Though seemingly simplifying the area, and certainly formulated with the intention of decreasing the levels of litigation, it is a decision that has been heavily criticised; and even, in some eyes, overruled by in particular Commission v Italy (trailers) [2009] and (to a degree) Scotch Whisky Association [2015] (which entirely side-stepped Keck as regards ‘certain selling arrangements’) with a shift towards an ‘unified market access test’ paradigm.

This was established in para 37 of Commission v Italy (trailers) [2009] where it was stated that:

Consequently, measures adopted by a Member State the object or effect of which is to treat products coming from other Member States less favourably are to be regarded as measures having equivalent effect to quantitative restrictions on imports within the meaning of Article 28 EC, as are the measures referred to in paragraph 35 of the present judgment. Any other measure which hinders access of products originating in other Member States to the market of a Member State is also covered by that concept.

The net result of this was (as the question suggests) to once more swing the pendulum back towards empowering the Court to override regulations/legislation that Member States had put in place i.e. market prioritisation at the expense of national sovereignty; carrying with it a real danger of the Court trammelling the very Member State nuances (social goals/non- economic objectives) that Keck was designed to protect.

In practice the Keck test prove difficult for the Member State/s to establish, and in many instances, matters were simply returned to the national courts for decision.

Indeed, case law has established that practically, situations are rarely as black and white as the Keck ‘dichotomy’ might suggest; with cases such as De Agostini [1995] and Gourmet [2001] affirming that in particular ‘advertising bans/restrictions’ may well impact non- domestic traders disproportionally. But with all its attendant difficulties it may still be be a potentially more sophisticated and workable formula than the ‘bulk measure’ approach of Commission v Italy (trailers) [2009] which greatly widens the scope of Articles 34/35 and places a heavy burden of provenance on the Member States.

EU law has never had the same rigid hierarchical relationship with precedence that is found in say the case law (‘common law’) of England & Wales, and this has led to something of a ‘pick and mix’ attitude by the CJEU when negotiating these paradigms.

In a 2010 essay, forming part of a collection celebrating the Classics of EU Law 50 years on from the Rome Treaty Allan Rosas noted:

“Despite the criticism expressed against Keck & Mithouard in legal literature and by some Advocate General, the subsequent case law of the ECJ has by and large applied a combination of Dassonville, Cassis de Dijon and Keck to assess alleged restrictions to the free movement of goods.”

So it seems likely that such an approach will endure, with the Court (in spite of the decisions of Commission v Italy (trailers) [2009] and Scotch Whisky [2015]) still having Keck in the armoury as and when Member State dissatisfaction (and this is as much political as it is legal) boils over.

All is not lost, and the Court still has recourse to the doctrine of ‘proportionality’ to supplement the Article 36 and Cassis (‘mandatory requirements) justifications, and this has certainly been used effectively to soften the potential impact of a return to the ‘market access’ paradigm (see Case 36/02 Omega Spielhallen [2004]) allowing Member States to feel that they still have a voice that is listened to at the negotiation tables of Brussels.

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a wee dram… a brief consideration of C – 333/14 + Scotch Whisky Association [2017]

 

Read the case Case C-333/14, Scotch Whisky. Explain, in short, the way in which the Court assesses justifications and proportionality. What did the national court decide (see https:// www.supremecourt.uk/cases/docs/uksc-2017-0025-judgment.pdf)?

Case 333/14 concerned a request for a preliminary ruling (Article 267 TFEU) from the Court of Session concerning the validity of the national legislation and a draft order relating to the imposition of a minimum price per unit of alcohol (‘MPU’) with respect to the retail selling of alcoholic drinks in Scotland; and as such concerned proceedings between the Scotch Whisky Association (and other interested parties) on the one hand, and the Lord Advocate and the Advocate General for Scotland on the other.

With a general consensus (para 32) that such measures amount to what Article 34 describes as ‘measures having an equivalent effect to quantitative restrictions’ (MEE) much of the judgment concerns on what grounds a Member State may seek to justify potential derogations, and by what criteria the ‘proportionality of such measures’ may be established.

Specifically concerning the interpretation of Regulation (EU) No 1308/2013 the Court were concerned to ensure “measures should be taken in a way that avoids market disturbances and that ensures equal access to the goods and equal treatment of purchasers”.

On 25 September 2012 the Commission issued its opinion, that the national measure concerned constituted a quantitative restriction within the meaning of Article 34 TFEU which could not be justified under Article 36 TFEU; seemingly closing the door on legislative measures for fixing minimum retail prices, when other permissible fiscal measures were already available.

justifications:

At 12 (3) we see the Court beginning to explore the ‘protection of human health’ justification, and the extent to which national courts are at liberty to consider “information, evidence or other materials”.

Whilst at 12 (4) we see the Court openly wondering:

under Article 36 TFEU, to what extent is the national court required, or entitled, to form — on the basis of the materials before it — an objective view of the effectiveness of the measure in achieving the aim which is claimed; the availability of at least equivalent alternative measures less disruptive of intra-EU competition; and the general proportionality of the measure?

With questions (5) and (6) concerning respectively ‘justification’ and ‘proportionality’.

We see in the Court’s answer to question 1 (at para 29) that it sets the stage for a consideration of these matters in greater depth when it states:

Consequently, the answer to the first question is that the Single CMO Regulation must be interpreted as not precluding a national measure, such as that at issue in the main proceedings, which imposes an MPU for the retail selling of wines, provided that that measure is in fact an appropriate means of securing the objective of the protection of human life and health and that, taking into consideration the objectives of the CAP and the proper functioning of the CMO, it does not go beyond what is necessary to attain that objective of the protection of human life and health.

At para 33 we see the Court (referring to Case 456/10 ANETT [2012]) establishing orthodoxy where it states:

“a measure having equivalent effect to a quantitative restriction on imports can be justified, for example, on grounds of the protection of the health and life of humans, under Article 36 TFEU, only if that measure is”:

  1. appropriate (‘suitability’) for securing the achievement of the objective pursued and
  2. does not go beyond what is necessary (‘necessity’) in order to attain it

At para 35 we see the Court clarifying the scope of Article 36 TFEU suggesting: “it is for the Member States, within the limits imposed by the Treaty, to decide what degree of protection they wish to assure.” (Case 170/04 Rosengren and Others [2007])

With para 37 further clarifying:

“that a restrictive measure can be considered to be an appropriate means of securing the achievement of the objective pursued only if it genuinely reflects a concern to secure the attainment of that objective in a consistent and systematic manner” (Case 161/09 Kakavetsos-Fragkopoulos [2011])

proportionality:

Para 40 affirms that even if a measure is deemed both ‘appropriate’, and of reasonable ‘scope’ (criteria ii. above) such a measure needs to be ‘proportionate’.

This subject is considered in more detail in the Court’s answers to questions 4 and 6; with para 53 establishing the principle:

that [any legislation] is [required to be]:

i. necessary in order to achieve the declared objective, and
ii. that that objective could not be achieved by prohibitions or restrictions that are less

extensive, or
iii. that are less disruptive of trade within the European Union

paras 54/55 establish the burden of proof:

(54) the reasons which may be invoked by a Member State by way of justification must be accompanied by appropriate evidence or by an analysis of the appropriateness and proportionality of the restrictive measure adopted by that State, and specific evidence substantiating its arguments (Case 42/02 Lindman)

(55) that burden of proof cannot extend to creating the requirement that, where the competent national authorities adopt national legislation imposing a measure such as the MPU, they must prove, ‘positively’, that no other conceivable measure could enable the legitimate objective pursued to be attained under the same conditions

Para 59 helpfully clarifies:

It follows from the foregoing that Article 36 TFEU must be interpreted as meaning that, where a national court examines national legislation in the light of the justification relating to the protection of the health and life of humans, under that article, it is bound to examine

objectively whether it may reasonably be concluded from the evidence submitted by the Member State concerned that the means chosen are appropriate for the attainment of the objectives pursued and whether it is possible to attain those objectives by measures that are less restrictive of the free movement of goods and of the CMO.

With Para 66 answering the question outlined in 12 (3) above:

Consequently, the answer to the third question is that Article 36 TFEU must be interpreted as meaning that the review of proportionality of a national measure, such as that at issue in the main proceedings, is not to be confined to examining only information, evidence or other material available to the national legislature when it adopted that measure. In circumstances such as those of the main proceedings, the compatibility of that measure with EU law must be reviewed on the basis of the information, evidence or other material available to the national court on the date on which it gives its ruling, under the conditions laid down by its national law.

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“you’ve gotta ask yourself one question…”

‘the purpose of competition law has never been to achieve optimal market outcomes, but to preserve the ability and the incentive of firms in the marketplace to outperform their rivals.’

Pablo Ibanez Colomo

 

Article 102 of the TFEU could not be plainer; it reads:

“any abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it shall be prohibited as incompatible with the internal market in so far as it may affect trade between Member States.”

But as with all legislation,  just what any provision means, and perhaps more importantly just how far it ‘reaches’ remains, until the court decides, something of a mystery. As regards Article 102, and the specifics of the recent Google anti-trust deliberations, its meaning is only too apparent:

€2 424 495 000

Though facing two further investigations (concerning the Android OS and AdSense) this particular investigation concerned Google’s use of its high degree of EU market dominance, to unfairly advantage one of its other ‘products’, a ‘comparative shopping’ tool which started life as Froogle, now known to most as Google Shopping.

Just how this was achieved is not difficult to grasp. and can perhaps be best considered visually:

Let’s take a simple example to clarify.

My father, based in Norwich UK, decides to visit me in Shanghai, China, and being the tech-savvy 88 year old he is, he whips out his i-pad and opens up Google to try to find the best price for a round trip airplane ticket. He punches in “Shanghai flights”. What happens then is not visible at what is often called the ‘front end’ of the website, but in simple terms a formula (known as an ‘algorithm’) is applied, and moments later your ‘search’ page appears.

 

 

What Google was accused of doing, was essentially manipulating that ‘search’ (i.e. modifying their algorithm) in two fundamental ways:

  1. prominent placement – obviously of their own ‘comparative shopping’ service and
  2. ‘demoting’ their rivals – once again there are various ways to do this, but on average competitor services were appearing no higher than page 4 of any Google search.

Well, imagining you are just that, a ‘rival’, what are the implications for your business?

Well with Google already controlling over 90% of the ‘search’ market share (a ‘dominant position’ on any reading of Article 102) it effectively means commercial death. The European Commission ‘fact sheet’ on the case further clarifies:

“even on desktops, the ten highest-ranking generic search results on page 1 together generally receive approximately 95% of all clicks on generic search results (with the top search result receiving about 35% of all the clicks). The first result on page 2 of Google’s search results receives only about 1% of all clicks. The effects on mobile devices are even more pronounced given the much smaller screen size.”

And that is exactly what was seen to have happened, with enormous growth in Google Shopping traffic (up to 45 fold in the UK alone) with evidence of “sudden drops” of traffic to rival services (up to 92% in Germany).

So coming under increasing pressure from the European Parliament to close the case, in particular given the speed of the ICT (information and communication technology) industry, and the fact that the investigation stretches back to 2010, that is exactly what they did.

After reviewing over 5.2 Terabytes of data (amounting to approx. 1.7 billion search queries) on 27 June 2017, the judgment (yet to be published in full) was released. Google has 90 days (from the ‘decision’) to cease its illegal conduct, whilst the fine was calculated on the “basis of the value of Google’s revenue from its comparison shopping service in the 13 EEA countries concerned.”

Commissioner Margrethe Vestager, in charge of ‘competition policy’, clarified:

“Google has come up with many innovative products and services that have made a difference to our lives. That’s a good thing. But Google’s strategy for its comparison shopping service wasn’t just about attracting customers by making its product better than those of its rivals. Instead, Google abused its market dominance as a search engine by promoting its own comparison shopping service in its search results, and demoting those of competitors.

What Google has done is illegal under EU antitrust rules. It denied other companies the chance to compete on the merits and to innovate. And most importantly, it denied European consumers a genuine choice of services and the full benefits of innovation.”

At the core of the decision is consumer protection, and this has/is always been the goal of EU competition law, as opposed to protecting competitors and as such the decision seems reasonable, and was well received – “firm and fair’ the Guardian Editorial described it.

Struggling to remember where the article’s title comes from, well a quick Google search will give you the answer, and the quote in full:Well 27.6.2017 seems to mark the day when, at least to a degree, Google’s run of European ‘luck’ might have just started to dry up; and given the tone surrounding the two pending investigations we can presume Vestager may well have a bullet or two left in her considerable Commission armoury.

References:

  1. Pablo Ibanez Colomo, Discriminatory Conduct in the ICT Sector: A Legal Framework, in: G. Surblyte (ed.), Competition on the Internet, pp. 73-74
  2. “is 2.42 billion euros a lot” image: http://blogs.lse.ac.uk/businessreview/2017/07/08/the-european-commissions-google-decision-will-affect-competition-law/
  3. http://www.europarl.europa.eu/RegData/etudes/BRIE/2015/565870/EPRS_BRI(2015)565870_EN.pdf
  4. https://www.theguardian.com/commentisfree/2017/jun/27/guardian-view-eu-google-judgment-fair-fine
  5. http://www.imdb.com/title/tt0066999/quotes

 

 

 

 

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United States of Europe – transcript

Winston Churchill – speech delivered at the University of Zurich, 19 September 1946:

Mr. President, ladies and gentlemen, I am honoured today by being received in your ancient university, and by the address which has been given to me on your behalf, and which I greatly value. I wish to speak to you today, about the tragedy of Europe, this noble continent, comprised of the fairest and the most cultivated regions of the earth, enjoying a temperate and equitable climate, is the home of all the great parent races of the Western world. It is the fountain of Christian faith, and Christian ethics, it is the origin of most of the culture, arts, philosophy and science both of ancient and modern times. If Europe were once united in the sharing of its common inheritance, there would be no limit to the happiness, to the prosperity and the glory which its 300 or 400 million people would enjoy. Yet it is from Europe that has sprung that series of frightful nationalistic quarrels, originated by the Teutonic nations in their rise to power, which we have seen in this 20th century and even in our own lifetime wreck the peace and mar the prospects of all mankind.

And what is the plight to which Europe has been reduced? Some of the smaller states have indeed made a good recovery, but over wide areas a vast, quivering mass of tormented, hungry, careworn, and bewildered human beings, gape at the ruins of their cities, and their homes, and scan the dark horizons for the approach of some new peril, tyranny or terror. Among the victors there is a Babel of voices, among the vanquished the sullen silence of despair. That is all that Europeans, grouped in so many ancient states and nations, that is all that the Germanic races have got by tearing each other to pieces and spreading havoc far and wide. Indeed, but for the fact that the great republic across the Atlantic ocean has at length realised that the ruin or enslavement of Europe would involve their own fate as well, and has stretched out hands of succour and of guidance, but for that the Dark Ages would have returned in all their cruelty and squalor. Gentlemen, they may still return.

Yet all the while there is a remedy which, if it were generally and spontaneously adopted by the great majority of people in many lands, would as if by a miracle transform the whole scene and would in a few years make all Europe, or the greater part of it, as free and as happy as Switzerland is today. What is this sovereign remedy? It is to recreate the European fabric, or as much of it as we can, and to provide it with a structure under which it can dwell in peace, in safety and in freedom. We must build a kind of United States of Europe. In this way only will hundreds of millions of toilers be able to regain the simple joys and hopes which make life worth living. The process is simple. All that is needed is the resolve of hundreds of millions of men and women to do right instead of wrong and to gain as their reward blessing instead of cursing.

Much work, ladies and gentlemen, has been done upon this task by the exertions of the Pan-European Union, which owes so much to Count Coudenhove-Kalergi, and which commanded the services of the famous French patriot and statesman Aristide Briand. There is also that immense body of doctrine and procedure which was brought into being amid high hopes after the First World War – I mean the League of Nations. The League of Nations did not fail because of its principles or conceptions. It failed because these principles were deserted by those states who had brought it into being, it failed because the governments of those days feared to face the facts and act while time remained. This disaster must not be repeated. There is, therefore, much knowledge and material with which to build and also bitter, dear bought experience to spur the builders.

I was very glad to read in the newspapers 2 days ago that my friend President Truman had expressed his interest and sympathy with this great design. There is no reason why a regional organisation of Europe should in any way conflict with the world organisation of the United Nations. On the contrary, I believe that the larger synthesis will only survive if it is founded upon coherent natural groupings. There is already a natural grouping in the Western Hemisphere. We British have our own Commonwealth of Nations. These do not weaken, on the contrary they strengthen, the world organisation. They are in fact its main support. And why should there not be a European group which could give a sense of enlarged patriotism and common citizenship to the distracted peoples of this turbulent and mighty continent? And why should it not take its rightful place with other great groupings and help to shape the onward destinies of man?

In order that this should be accomplished there must be an act of faith in which millions of families speaking many languages must consciously take part. We all know that the two World Wars through which we have passed arose out of the vain passion of a newly united Germany to play the dominating part in the world. In this last struggle crimes and massacres have been committed for which there is no parallel since the invasion of the Mongols in 14th century, and no equal at any time in human history. The guilty must be punished. Germany must be deprived of the power to rearm and make another aggressive war. But when all this has been done, as it will be done, as it is being done, then there must be an end to retribution. There must be what Mr Gladstone many years ago called a “blessed act of oblivion”. We must all turn our backs upon the horrors of the past, we must look to the future. We cannot afford to drag forward across the years that are to come the hatreds and revenges which have sprung from the injuries of the past. If Europe is to be saved from infinite misery, and indeed from final doom, there must be this act of faith in the European family, and this ‘act of oblivion’ against all the crimes and follies of the past. Can the free peoples of Europe rise to the height of these resolves of the soul and of the instincts of the spirit of man? If they can, the wrongs and injuries which have been inflicted will have been washed away on all sides by the miseries which have been endured. Is there any need for further floods of agony? Is the only lesson of history to be that mankind is unteachable? Let there be justice, mercy and freedom. The peoples have only to will it and all will achieve their heart’s desire.

I am now going to say something that will astonish you. The first step in the re-creation of the European family must be a partnership between France and Germany. In this way only can France recover the moral and cultural leadership of Europe. There can be no revival of Europe without a spiritually great France and a spiritually great Germany. The structure of the United States of Europe, if well and truly built, will be such as to make the material strength of a single State less important. Small nations will count as much as large ones, and gain their honour by their contribution to the common cause. The ancient states and principalities of Germany, freely joined together for mutual convenience in a federal system, might take their individual places among the United States of Europe.

I shall not try to make a detailed programme for hundreds of millions of people who want to be happy and free, prosperous and safe, who wish to enjoy the four freedoms of which  the great President Roosevelt spoke, and live in accordance with the principles embodied in the Atlantic charter. If this is their wish, if this is the wish of Europeans in so many lands, there is no need to say so, and means can certainly be found, and machinery erected to carry that wish to full fruition.

But I must give you a warning, time may be short. At present there is a breathing space. The cannons have ceased firing. The fighting has stopped. But the dangers have not stopped. If we are to form the United States of Europe, or whatever name it may take, we must begin now. In these present days we dwell strangely and precariously under the shield, and I will even say protection, of the atomic bomb. The atomic bomb is still only in the hands of a nation which, we know, will never use it except in the cause of right and freedom, but it may well be that in a few years this awful agency of destruction will be widespread and that the catastrophe following from its use by several warring nations will not only bring to an end all that we call civilisation, but may possibly disintegrate the globe itself.

I must now sum up the propositions which are before you. Our constant aim must be to build and fortify the strength of the United Nations Organisation. Under and within that world concept we must recreate the European family in a regional structure called, it may be, the United States of Europe, and the first practical step would be to form a Council of Europe. If at first all the States of Europe are not willing or able to join the Union, we must nevertheless proceed to assemble and combine those who will and those who can. The salvation of the common people of every race and of every land from war and servitude must be established on solid foundations, and must be guarded by the readiness of all men and women to die rather than to submit to tyranny. In all this urgent work France and Germany must take the lead together. Great Britain, the British Commonwealth of Nations, mighty America – and, I trust, Soviet Russia, for then indeed all would be well – must be the friends and sponsors of the new Europe and must champion its right to live and shine.

And therefore I say to you “Let Europe arise!”.