The Week Nº21

IN-DEPTH:

Opinion of AG Medina in Jemerak (C-109/23): How do sanctions against Russia affect the legal profession?

Celia Challet and Luigi Lonardo

AG Emiliou in Illumina (C-611/22 P and C-625/22 P) - Below thresholds means beyond European control

Nora Lampecco

Subscription models for digital services in the EU – Lights and shadows

Leticia López Lapuente and Patricia Vidal

The saga that keeps on going: the General Court annuls decisions of ex-ante contributions to the SRF

Martinho Lucas Pires

Interpreting the Dublin Regulation amid fundamental rights violations at the EU’s border – Reflections on the Judgment of the Court of Justice in X v Staatssecretaris van Justitie en Veiligheid, C-392/22

Madalina Moraru and Adel-Naim Reyhani

Taking the principle of impartiality seriously in State aid procedures (Case T-486/18 RENV, Danske Slagtermestre v Commission)

Sébastien Thomas

Recognising foreign judgments in case of conflict between the jurisdictional rules of the Brussels Ibis Regulation and an international specialised convention (Case C-90/22)

Giovanni Chiapponi

No more Fingerprints in ID Cards?: C-61/22, Landeshauptstadt Wiesbaden

Meinhard Schröder

COMPETITION CORNER: SYMPOSIUM ON COMPETITION LAW AND REGULATION

Time to rethink the interaction between ex-ante-sector regulation and ex-post-competition law

Dr. Christian Bergqvist

The Principle of ne bis in idem in the Digital Economy EU Competition Law vs. the DMA?

Bernadette Zelger and Ina Kapusta

THE LONG READ:

RED III Directive: Towards Accelerating EU energy independency and large-scale renewable energy installations

Anaïs Bereni

HIGHLIGHTS OF THE WEEK

IN-DEPT H

Opinion of AG Medina in Jemerak (C-109/23): How do sanctions against Russia affect the legal profession?

Celia Challet and Luigi Lonardo

On 11 April, Advocate General Medina issued her Opinion on the reference for a preliminary ruling in Jemerak (C-109/23). This is the first time that the Court of Justice of the EU is requested to interpret the prohibition on legal advisory services to Russian legal persons and entities adopted as part of the sanctions against Russia. Delivered one month after the hearing in the cases launched by several bar associations challenging the validity of the prohibition (see cases T-797/22, T-798/22 and T-828/22), this Opinion provides an interesting contribution to the debate on the scope and legality of the ban.

A summary of the factual background and importance of the case can be found in a previous Op-Ed. It suffices here to recall that a German court requested the Court of Justice’s interpretation of the scope of Article 5n(2) and (6) of Regulation No 833/2014. The Regulation prohibits ‘legal advisory services’ while exempting those that are ‘strictly necessary to ensure access to judicial, administrative or arbitral proceedings in a Member State’. The Regulation does not contain a definition of legal advisory services (except for its preamble), but the Commission Guidelines do. The referring court asked, in essence, whether a German notary infringes the ban on legal advisory services by authenticating a contract of sale of immovable property owned by a legal person established in Russia (and if yes, whether executing the contract constitutes an infringement). The doubt arose because, while in Germany, a notary does not provide a service but performs an official function, the Commission Guidelines list notary services among those prohibited by Article 5n(2) of the Regulation (see Question 21 of the Guidelines).

In her Opinion, the AG suggested a clear-cut solution: notaries authenticating a contract are not caught by the prohibition. As argued in this Op-Ed, the Advocate General’s Opinion is convincing and presents a double interest. Firstly, her textual interpretation of Article 5n(2) of the Regulation proposes clear elements of definition of the concept (1). Secondly, should the Court follow the Opinion and delve into a contextual and teleological interpretation of the prohibition, it could be a step towards more substantial judicial scrutiny of certain sectoral restrictions (2).

The proposed clarification of the concept of ‘legal advisory services’

The Advocate General first stressed that the only elements of definition of the concept of ‘legal advisory services’, which is an autonomous concept under EU law and does not depend on national definitions, are contained in Recital 19 of the Regulation that introduced the prohibition. According to that recital, the term ‘legal advisory services’ covers (1) the provision of legal advice to customers in non-contentious matters, including commercial transactions, involving the application or interpretation of law; (2) the participation with or on behalf of clients

in commercial transactions or negotiations with third parties; and (3) the preparation, execution and verification of legal documents. According to the Advocate General, who referred extensively to the Court’s case law in this respect, the authentication tasks carried out by (German) notaries do not fall within any of the scenarios if they merely aim to authenticate a contract freely entered into by the parties. If, however, the notary provides legal advice that goes beyond such authentication, the ban may apply. The same reasoning was applied with respect to the notaries’ execution of authenticated acts. Such execution does not fall in the scope of the prohibition if it solely aims to ensure the implementation of the contract (subject to the domestic judges’ assessment).

If confirmed by the Court, the Advocate General’s interpretative solution would thus bring more clarity with respect to notaries while leaving room for national judges to apply this definition in light of the specificities of the notaries’ activities in any given case. In fact, the laws of some Member States (such as France and Portugal) do not seem to prohibit notaries from performing certain advisory functions.

The Advocate General’s take on the objectives of the sanctions against Russia

The Advocate General supported her literal interpretation of ‘legal advisory services’ by suggesting a contextual and teleological interpretation of the prohibition. She suggested a contextual interpretation based on the coherence of the reading of Article 5n(2) of Regulation 833/2014. Regarding the internal coherence within the Regulation, she stressed that its Article 5aa(1) prohibits any transaction with Russian legal persons that are owned or controlled by the Russian state or have strong links with it. By contrast, the Regulation does not prohibit transactions with Russian legal persons that do not have connections with the Russian State. In other words, ‘no provision of that Regulation expressly prohibits legal persons established in Russia from disposing of their immovable property assets located in the [EU]’. It would be incoherent to interpret the ban as prohibiting the authentication by notaries in the context of a transfer of property by Russian legal persons, especially in Member States where notary authentication is an essential requirement for transferring immovable property. It would have the effect of creating a prohibition that is not contained in the Regulation.

The Advocate General then placed the prohibition in perspective with the other legal instrument imposing sanctions on Russian legal persons. Regulation 269/2014 imposes asset freezes against certain Russian legal persons in connection with actions undermining Ukraine’s territorial integrity. The Advocate General stressed that the Russian legal person in Jemerak was not targeted by an asset freeze, otherwise the Council would have listed it under Regulation 269/2014. Interpreting Article 5n(2) of Regulation 833/2014 as prohibiting an authentication by a notary would thus place this legal person in a position similar to those listed in Regulation 269/2014, which ‘does not appear to be the expression of the Council’s intention’.

In the Advocate General’s view, this reading of the ban on legal advisory services was supported by its teleological interpretation. The prohibition was introduced to further increase pressure on Russia, however ‘no concrete explanation is given in [the legal instruments] to justify the restriction on the provision of those services’ to Russian legal persons. For the Advocate General, while the ban on business-relevant services (e.g. legal advisory

services) belongs to the general objective of weakening Russia’s economy, that objective does not imply eliminating all forms of transactions with Russian legal persons. Finally, since notarial activities cannot be exported to Russia’s economy, the authentication by a notary of a contract of sale of immovable property located in the EU territory would not affect the aim of the sectoral sanctions.

Overall, therefore, the Advocate General’s interpretation of the ban on legal advisory services provides an interesting perspective on the judicial scrutiny that the Court may exercise on sectoral sanctions. On the one hand, one might debate the Advocate General’s comparison of the two Regulations imposing sanctions against Russia. While both instruments aim to respond to Russia’s war against Ukraine, they entail different types of sanctions pursuing different rationales (on the one hand, targeting specific legal entities considered as contributing to the conflict; on the other hand, increasing pressure on Russia by targeting larger sectors of its economy). To what extent do the coexistence and effectiveness of both instruments require an interpretation of a prohibition that fits within their respective, distinct objectives? Similarly, one may wonder whether the Court might follow the Advocate General’s suggestion to carry out a teleological interpretation of the ban on legal advisory services, in an area of foreign policy in which it has been rather reluctant to do so. This is even more so that, as explained in the Opinion, Regulation 833/2014 does not provide any explanation of the objectives of the ban and the Member States that intervened in the proceedings did not share the same views in this respect. This brings the more general question of the actual need for the Court to engage in a contextual and teleological interpretation of the ban, especially as the literal interpretation suggested in the Opinion could suffice to exclude notaries from its scope.

On the other hand, one may welcome the attention dedicated by the Advocate General to the internal coherence of Regulation 833/2014 and the implementation of the ban in practice. As she argued, interpreting Article 5n(2) as imposing a blanket ban on the authentication of transactions that are not prohibited by the sanctions would lead to an infringement of the right to property under Article 17(1) of the Charter, combined with its Article 52(1). This is because this violation would not be provided for by law, as Regulation 833/2014 does not set out an express prohibition on all Russian legal persons from disposing of their immovable property assets. To quote the Opinion, ‘an incoherent outcome would arise when applying that regulation, consisting in allowing certain types of transactions while prohibiting the only means to carry them out.’ More importantly, should the Court follow the Advocate General’s contextual approach, it could reflect an increasing willingness on the part of the Court of Justice to take a stance on the scope of certain sectoral measures. A parallel could be drawn with the General Court’s Islentyeva ruling in which it laid down elements of interpretation of the flight ban against Russian-owned aircrafts (on this judgment, see Antigoni Matthaiou’s Op-Ed).

Celia Challet is Ph.D. candidate at Ghent University (Belgium) and Assistant to the Director of European Legal Studies at the College of Europe. She has published contributions on EU sanctions law and EU external relations law.

Dr Luigi Lonardo is a Lecturer at University College Cork and Visiting Lecturer at Sciences Po Paris.

SUGGESTED CITATION: Challet, C. and Lonard, L.; “Opinion of AG Medina in Jemerak (C-109/23): How do sanctions against Russia affect the legal profession?”, EU Law Live, https://eulawlive.com/op-ed-opinion-of-ag-medina-in-jemerak-c-109-23-how-do-sanctions-against-russia-affect-the-legalprofession-by-celia-challet-and-luigi-lonardo/

AG Emiliou in Illumina (C-611/22 P and C-625/22 P) - Below thresholds means beyond European control

Nora Lampecco

On 21 March 2024, Advocate General (hereafter ‘AG’) Emiliou recommended to set aside the judgement of the General Court that dismissed the annulment sought by Illumina of the Commission’s decisions accepting the referral ( T-227/21). In his Opinion, the AG found that the General Court erred in law in interpreting Article 22(1) of Regulation 139/2004 (hereafter ‘EUMR’) as enabling the Commission to accept requests to examine mergers falling outside the scope of European and national merger control. This Op-Ed will focus on the interpretation of Article 22(1) EUMR by AG Emiliou since it is the crux of the case that will determine the scope of merger control for concentrations falling below any thresholds. This is particularly important for the socalled ‘killer acquisitions problem’. Although pursuing an apparently gentle aim, the Opinion lacks persuasion.

AG’s Opinion

AG Emiliou’s interpretation of Article 22(1) EUMR is based on the European merger regime as a whole and the subtle balance between its goals, notably legal certainty and efficiency. Although he agrees that its wording, while allowing for a broad interpretation, is insufficient to answer the question, he dismisses the rest of the General Court’s reasoning. First, he accuses the General Court of cherry picking in its historical interpretation since it only analysed Commission’s documents that are posterior to the original Regulation and did not read them in their entirety. According to him, these documents prove only that Article 22 EUMR relates to the division of competences between the Commission and the national competition authorities while other unassessed documents refer to ‘referrals post-notification’. Second, while admitting that the context can sustain arguments for both sides, he considers that the balance swings more in favour of a strict interpretation. He bases his argument on recital 15 EUMR stating that ‘A Member State should be able to refer to the Commission a concentration which does not have a Community dimension but which affects trade between Member States and threatens to significantly affect competition within its territory. (…) The Commission should have the power to examine and deal with a concentration on behalf of a requesting Member State or requesting Member States’ (emphasis added). According to this and the initial version of Article 22(5), the Commission acts upon the name of the referring Member State to protect competition on its national territory under such referral. Third, he recalls the sole goals of the Article 22 EUMR referral mechanism, being the one-stop-shop and the ability to close the gap in case of non-existing national merger rules (the so-called ‘Dutch problem’). The one-stop-shop principle means that ‘the Commission has sole jurisdiction to review the mergers notified under the EUMR’ (point 193 Opinion). The original Article 22 EUMR referral was inserted to allow the control of mergers having effects on competition in Member States that did not have any national merger control at that time, in particular The Netherlands. Then, he emphasises the

different goals of the European merger regime and the importance of considering them all in the interpretation of Article 22 EUMR. The regime aims at efficiency but also legal certainty, creation of a one-stop-shop and the division of competences between the Commission and the national competition authorities. According to the AG, the broad interpretation adopted by the General Court would distort the balance between these goals by pilling up of competences, increasing legal uncertainty and leading to multiple detailed informal notifications. Fourth, the AG adds that the consequences of such a broad interpretation, being that the Commission would be competent for any merger, are contrary to the general principles of EU law such as institutional equilibrium, territoriality of the European competition law, international courtesy, equality, proportionality and strict interpretation of the exceptions. Indeed, this broad interpretation would result in (i) legislative choices regarding the thresholds made by the Commission, (ii) territorial conflicts arising from the (over)use of European competition law to nonEuropean mergers, (iii) lack of consideration for national competition legislation, (iv) differences in treatment between mergers with clear effects in the European Union and the others because it would be uncertain whether the latter would be referred, while the former would be certain to fall within the scope of the EUMR, (v) a disproportionate merger control since ex post instruments are available to the Commission to handle the gap situations, such as killer acquisitions, and (vi) a broad interpretation of an exception.

Numerous, yet unconvincing, arguments

While AG Emiliou rightly explains his Opinion based on the general principles of EU law and the various goals of the European merger regime, his arguments do not seem to stand up to scrutiny.

The underlying idea behind AG Emiliou’s Opinion is to stop the Commission in what he would call its attempt to act as a legislator in applying preexisting merger control rules to new challenges, such as the killer acquisitions, where no such application has been done before. In his opinion, the Commission tries to define Article 22 EUMR broadly to avoid the burdensome, yet democratic, way to adopt new legislations aimed at solving new challenges. However, it must be recalled that it is not because Article 22 EUMR was never applied in these cases where the merger felt below the national merger control threshold that it means that it was not possible. As an illustration, before Towercast (C-449/21), the Commission applied Article 102 TFEU to mergers only when there was no merger control. However, that did not prevent the Court of Justice to interpret it broadly and empower the Commission to use it even when merger control rules exist. The previous non-use of Article 22 EUMR in these cases can result from enforcement priorities that were different at the beginning of the merger control area than now, when the system is firmly in place.

Regarding the interpretation of Article 22 EUMR, the AG acknowledges that its literal and contextual interpretations can lead to a broad interpretation. In my opinion, the same can be said for its historical interpretation. Finally, and most importantly, the AG’s teleological interpretation of Article 22 EUMR is flawed. The one-stopshop principle and the division of competences are not compromised since the former applies to cases where multiple notifications are due when in the situation at play there are none, and that only the Commission will be competent if the referral is accepted as far as the second is concerned. Moreover, legal certainty is an important

point to underline since a balance must be found with the efficiency of the regime (see recital 11 EUMR) but it should not be used to circumvent the provision. First, the Commission published guidance that provides information about the cases that would be assessed under Article 22 EUMR. Second, the practical implications described by the AG are apocalyptic but seem overexaggerated. Indeed, instead of notifying the merger in 30 Member States, the undertakings can directly contact the Commission. Moreover, it seems dubious that every undertaking will see every merger as suspicious; it is more likely that the mergers targeted by the measure (either in a case of a dominant undertaking or an acquisition of a nascent competitor) would raise doubts in the merging parties’ minds and lead to informal notifications to the Commission. Since the Illumina decision, only two other referrals have been accepted and the Commission did not complain over the number of referrals received. Third, this argument of legal certainty has never been raised regarding the referrals solving the Dutch problem where no national merger control existed. Yet this hypothesis is perfectly accepted by everyone although the undertakings concerned by the Dutch problem at that time were in the same position than the undertakings concerned now by the Article 22 EUMR interpretation. Fourth, the use of Article 102 TFEU as the sole tool for these cases as proposed by AG Emiliou seems far more detrimental to legal certainty.

The reasoning relating to the general principles of EU law is also unconvincing, especially in the light of the solution proposed by the AG, i.e., using only Article 102 TFEU ex post tool, and its prohibition of abuse of dominance, to remedy the anticompetitive effects of mergers falling outside national and/or European merger scope. First, the institutional equilibrium would not be compromised since Article 22 EUMR was especially added by the Council during the adoption of the first regulation (Opinion, point 78). Second, the arguments concerning the other principles are weak in themselves and would be more significant if the Commission used exclusively Article 102 TFEU to enforce competition law over these mergers falling outside merger control. Conflicts over the extraterritoriality of the European competition law finds its peak in the area of ex post tools. Equality between undertakings that have limited effects in the European Union and the ones who are certain to fall under the EUMR would be compromised in the case of a regime based exclusively on Article 102 TFEU. Indeed, there would be no time limit once the Commission/national competition authority is seized under Article 102 TFEU while European merger control provides for clear timelines, the substantive rules would be different and the undertakings could be forced to divest after the merger took place. The argument of the AG that the General Court’s interpretation was disproportionate is the most stunning given the AG’s acknowledgement of the use of Article 22 EUMR in situations where no national merger control regime exists and regarding the very raison d’être of the Merger Regulation, i.e., the inadequacy of the ex post tools (recital 7 EUMR). Since the use of Article 102 TFEU would be more detrimental to the cited general principles but has been confirmed in Towercast, it is difficult to admit that a less invasive and more delineated tool, such as Article 22 EUMR, should not have been accepted in this case.

Furthermore, the case where no national merger control exists is also more detrimental in terms of legal certainty, equality and proportionality. Accepting Article 22 EUMR to be used in these cases but refusing it when the concentration falls below the national threshold seems contradictory. It would result in accepting requests when the national legislator intentionally decided that no control was needed but refusing them when the national

legislator decided to control only some. Hence, if the national legislator decides to fully exercise its competence in not regulating, substitution by the Commission is possible. But the same substitution would be denied if the national legislator fully exercises its competence in adopting a control based on a chosen threshold.

Finally, some additional factors have been underestimated. First, the subsidiarity principle is respected since the referral concerns transnational cases where national competition authorities find the Commission more suited to examine the case. Second, the issue of conflicts arising between national competition authorities and the merging parties about the scope of national law in case of Article 22 EUMR referrals is underassessed. Since the Commission cannot rule on national law (Kesko T-22/97) and since its decision on the referral would depend on the national merger control scope, it is unclear what the Commission should do in these cases if only referrals related to mergers falling inside the scope of national merger control was allowed. It is especially problematic regarding the clear time-limit that the merger procedure imposes.

Context, importance and outcomes

Since it is the first case in which the Commission applied Article 22 EUMR to mergers falling under European and national merger control, the judgment of the Court of Justice will be of tremendous importance for ongoing cases, such as the request for annulment of the Commission decision in Illumina ( T-709/22) and the subsequent accepted referrals (EEX/Nasdaq Power and Qualcomm/Autotalks), as well as for the future control of such mergers and the linked killer acquisitions problem.

Indeed, the Court of Justice judgement will define the scope of the European merger control and its counterpart, the legal certainty for the undertaking. This decision will arrive in a context of increased control over below threshold mergers at the European and national levels. Some Member States have changed their merger regime, either by extending pre-existing tools, such as the German Competition Act allowing the national authority to oblige undertakings to notify concentrations following a market investigation under a lowered threshold (32f Competition Act), or by enabling the competition authority to call-in concentrations below the threshold such as Ireland (18A Competition (Amendment) Act 2022). In the same vein, the chairman of the Dutch competition authority called for a similar change in the Dutch merger control legislation. Other Member States have taken advantage of the Towercast judgment to examine mergers below thresholds such as Belgium in Proximus/EDPnet and Alken-Maes/AB Inbev. At the European level, Article 14 DMA requires the gatekeepers to inform the Commission of any concentration in relation to digital services. If the Court of Justice follows the AG’s Opinion, the Commission will be left with Article 102 TFEU to deal with mergers falling below any thresholds, especially the killer acquisitions. On the other hand, if the Court of Justice follows the General Court, it would support the Commission’s powers and add an extra weapon to the latter’s arsenal.

Conclusion

The AG’s Opinion pursues a gentle aim, i.e., the willingness to protect the European merger control system from the apocalyptic scenario he predicts if the General Court’s interpretation was to be followed. However, his

reasoning lacks persuasion. AG’s arguments regarding the method of interpretation are unconvincing, although numerous. In addition, the proposal of Article 102 TFEU as a solution or the acknowledgement that Article 22 EUMR can be applied when no national merger control exists are counterintuitive. In the first case, the issues identified by AG Emiliou regarding (what he considers as) the broad interpretation of Article 22 EUMR would be more important if Article 102 TFEU was used in these cases as the sole tool. In the second case, it would be tantamount to admitting the full competence of the national competition authorities to ask a referral if the legislator decided to release all merger from national control but refuse it if the legislator opted to exempt only some mergers from its control. Finally, some factors are underassessed in the Opinion such as the consequences of a conflict between the merging parties and the national competition authority on the scope of the national merger law.

With this case, the Court of Justice will have the difficult task to define the scope of the European merger control for concentrations falling below European and national thresholds. It can either narrow it, leaving national competition authorities to deal with these issues, or broaden it, providing assistance to national competition authorities. Nora Lampecco is Research fellow in European Competition law at the European Law Research Institute (CeDIE) of the Catholic University of Louvain-la-Neuve (UCLouvain).

SUGGESTED CITATION: Lampecco, N.; “AG Emiliou in Illumina (C-611/22 P and C-625/22 P) - Below thresholds means beyond European control”, EU Law Live, 17/04/2024, https://eulawlive.com/op-ed-ag-emiliou-in-illumina-c-611-22-p-and-c-625-22-p-below-thresholds-means-beyondeuropean-control-by-nora-lampecco/

Subscription models for digital services in the EU – Lights and

shadows

Leticia López Lapuente and Patricia Vidal

Meta (formerly Facebook) has recently introduced a significant change to its business model in the EU, EEA and Switzerland (see here). Users are now offered a choice between (i) paying a monthly subscription fee to use Facebook and Instagram without ads, or (ii) consent to the processing of their (first-party) personal data for personalised ads, with no fee payment (i.e. they would continue to be ad-funded services).

Despite these subscription models not being new, this shift in Meta’s business model for these countries has given rise not only to much media coverage but also to regulatory questions, as this change derives from changes in EU laws (including the Court of Justice of the European Union’s (‘the Court of Justice’ or ‘the Court’) interpretation of the GDPR , the DMA and other regulations conforming the EU Digital Strategy). In fact, Meta has not changed its business model in other regions in which digital economy regulations are very different from those applicable in the EU. Since others have also more recently adopted similar models[1] and more are expected to follow, is the EU heading towards an internet model where free (in monetary terms for the user) access to services and content is a thing of the past?

That said, EU courts - including the Court of Justice[2] - and several data protection authorities have issued their opinion endorsing subscription models as a mechanism to meet the GDPR and DMA legal requirements, even in cases of companies that have market power. This topic should be analysed in light of how important digital services have become for individuals and society as a whole (including the economy) and gives rise to far-reaching regulatory questions regarding how to balance the EU’s legislative approach to digital services and developing a digital society, while taking into account the EU Charter of Fundamental Rights and Freedoms that include, among others, data protection rights, the freedom of information and expression and the right to establish a business.

1. Analysis under the GDPR and DMA

From a data protection standpoint, challenges for serving personalised ads and funding digital services through them arise mainly - but not only - from the GDPR’s requirement that personal data processing for any purpose is only lawful if covered by one of the legal bases listed in Article 6 of the GDPR. In particular, the three bases that possibly apply to personal data processing for the purpose of personalised ads are (i) contractual necessity, (ii) legitimate interests and (iii) consent. Recent case law and decisions in this regard have shown that the Court of Justice and the data protection supervisory authorities have been reluctant to accept that personalised ads could be a necessary part of the contractual offer of online digital services, or that it could be based on the legitimate interests of the digital service providers.

In addition to the GDPR requirements, Article 5(2) of the DMA imposes upon gatekeepers, such as Meta, additional requirements in relation to the legal basis for personal data processing for personalised ads (as recently construed by the Court of Justice). As a result of the interplay between these two pieces of legislation, and the interpretation by EU authorities in relation thereto, Meta and other digital service providers are left with no other choice but to seek user consent for personalised ads.[3] In this scenario, Meta has implemented a subscription model to incorporate a consent mechanism for its business model to comply with the GDPR and DMA and continue to be economically viable.

In view of the specific opinions of EU courts, including the Bundeskartellamt Ruling, and data protection authorities (see here, here and here) subscription models should be considered a valid consent mechanism both under the GDPR and DMA as they can meet , and provided that they meet, the following requirements:

• they offer users a genuine and free choice between two equivalent alternatives. According to the Court of Justice, this requirement can be met by offering a subscription model under which the user pays a fee to access and use the digital services with no ads at all (i.e. whether or not personalised), and a free-of-charge model, funded by the advertisers, in which the user consents to receiving personalised ads as part of the digital service; and

• they provide users clear and transparent information about the type, scope and consequences of the processing of the personal data for which their consent is sought. In addition, data protection authorities have construed that, in general, when consent refers to several purposes, the user needs to give a separate consent (i.e. not bundled) for each purpose - in case of Meta’s subscription model, the consent refers to ads personalisation as the only single processing purpose.

2.

Analysis under Article 102 TFEU – Abuse of dominance prohibition

From a competition law standpoint, subscription models can also be analysed under Article 102 TFEU, which prohibits an undertaking from abusing its dominant position. This point should be analysed from two perspectives. Firstly, whether implementing a subscription model could in itself entail an abuse of dominant position. Secondly, whether the subscription fee is so high and disproportionate that it is not, in practice, a viable alternative when consent for personalised ads is refused.

The answer to the first question is clearly no and the answer to the second question ‘depends on the circumstances’ of the case. And the reason is that Article 102 TFEU is subject to two conditions: (i) that the undertaking concerned holds a dominant position, which must be evidenced by the competent authorities (i.e. competition authorities or judges with authority to apply Article 102 TFEU or its domestic equivalent; but which are not data protection authorities); and (ii) the subscription model’s conditions themselves or the subscription fees are abusive and outside the normal tools that an operator would use when competing on the merits.

As to the first point, EC and EU courts have considered some digital businesses to be dominant (such as Google). But the European Commission or the EU courts have to date not declared Meta to be a dominant undertaking

(see here). It is important to differentiate here the concept of gatekeeper under the DMA, which simply requires the application of some quantitative thresholds and does not require any market analysis, and the concept of dominance under Article 102 TFEU – which is subject to a much stricter legal test established by the EU courts and requires a careful analysis of the market. Hence, a company being declared a gatekeeper cannot replace the complex dominance analysis required under Article 102 TFEU.

As to the second point above, settled EU case law establishes that Article 102 TFEU does not preclude dominant companies from excluding competitors from the market by competing on their merits. Likewise, Article 102 TFEU does not prohibit dominant companies from charging fees for their services to recover their costs and make a profit. This is not even the case for dominant companies in extreme cases, such as when they control ‘essential facilities’ for competitors (for this concept see here and here and here). In these extreme cases, the dominant company is forced to grant access to that facility for a price, but under ‘fair, reasonable and non-discriminatory’ terms (see here, here and here).

If a dominant company that controls an essential facility cannot be deprived of its right to charge a fee for its products, much less so can a dominant company that does not control an essential facility. Applying the above principles to a subscription model in a digital business – and assuming that the competent authority declares that business dominant under Article 102 TFEU –, it is clear that if personalised ads are the main means of financing the service, then the model cannot, in itself and in abstract terms, be abusive and contrary to Article 102 TFEU. This is precisely what the Bundeskartellamt ruling has confirmed: being dominant does not invalidate a system that requires consent from users to use their data when they also have the option to avoid that use by paying a subscription fee. What may be questionable under competition law - if anything - is the amount of the subscription fee, but not the model or the fact that a business may have changed to a subscription fee model from a free model.

In relation to this latter aspect, if the regulatory framework makes it more difficult to maintain a specific level of profitability or previously obtained income, changing business model is objectively justified (see here). This is a reasonable argument for changing to a subscription model as a response to changes in how the GDPR is interpreted and to ensure the business’ economic profitability.

As regards the level of pricing, Article 102 TFEU prohibits a dominant undertaking from imposing low prices that are exclusionary (i.e. predatory prices below cost) or very high prices that are exploitative of clients and end users. Competition law provides no automatic economic formula or criteria of what constitutes a reasonable/ fair and justified profit for dominant companies. This depends on the specific circumstances of the case. In this regard, the Court of Justice has established that, just comparing costs and revenues is not enough to determine whether a price is excessive. Other factors need to be considered, such as the value of the service (see here and here), the prices the company was charging before, and the prices that companies in other similar or comparable services or markets are charging. In relation to changing from a digital business model that does not charge a fee to a subscription model, a reasonable comparison could be made with other similar or relatively similar

businesses that have already made this change (which need not be direct competitors). This comparison should be made with entities that operate in market conditions (i.e. not those that benefit from public funding, such as possibly Tik-Tok). In this regard, other platforms such as Netflix or Spotify, who compete to attract end users and advertisers have gradually implemented a similar dual model (free/pay). These cases can be used as a comparative representation in order to determine whether Meta’s subscription fee is excessive. At first sight, it seems to be charging similar prices in general.

Based on the above, the conclusion is clear: even if a company is dominant, it should be able to charge a price for its service, as long as the price is not unreasonably high and it is applied in a non-discriminatory manner. Competition law does not and cannot force dominant companies to render their services for free.

3. Cooperation mechanism between authorities

Finally, given the close interplay among different regulatory frameworks in the EU and that digital businesses - such as Meta - operate in several countries, it is key that relevant EU authorities act in a coordinated manner and respect each other’s remit when interpreting the rules and carrying out their supervisory activity in their corresponding Member States. Otherwise, the EU could end up imposing different requirements in each Member State, resulting in unfair burdens on the digital players in the EU market and in a lack of competitiveness compared to other regions, in addition to a potential violation of the right to due process under the Charter. In this context, the Bundeskartellamt ruling has imposed a ‘duty of sincere cooperation’ between the competent competition authority and the competent data protection authority.

In the data protection field, cooperation between data protection authorities has given rise to some complexities, or even impediments, that have led the EC to start a very difficult task, i.e. a targeted clarification - but without reforming the GDPR - of the GDPR rules of procedure on cross-border cases. While important topics were expected to be addressed, the EC’s proposal does not seem to fully address certain key matters such as the rules reinforcing or clarifying the lead supervisory authority’s GDPR powers, among others.

The cooperation systems established in competition laws and in the GDPR are not equipped to facilitate the cooperation across legal disciplines (competition and data protection) to which the Court of Justice refers. However, this ‘sincere’ cooperation is what has been required to support the legal framework in its aim to balance the different rights and freedoms of the EU Charter of Fundamental Rights in the context of the EU Data Strategy, to increase economic integration and the rapid digitalisation of markets, while fostering legal certainty and enabling companies to carry out their business cohesively and consistently.

Legal certainty when implementing digital and data strategies is critical to ensuring that the EU becomes a global reference point and leader in a world empowered by technology and data. An uncoordinated or politicised analysis of digital companies involving multiple EU authorities just burdens this digital growth and undermines the rule of law. Unavoidably, providing businesses with a certain and reliable legal framework that allows them to create financially viable businesses is part of this path. The Court of Justice has provided a North Star regarding

the validity of subscription models in the EU. Now it is up to the administrative authorities to play their part consistently.

Leticia López Lapuente is a partner of digital and privacy law at an international law firm and professor of the Universidad de Navarra.

Patricia Vidal is a partner of EU and competition law at an international law firm and professor of the Instituto Superior de Derecho y Economía (ISDE). The content of this article represents the personal opinion of the authors.

[1] Such is the case of Spanish newspapers and media El País, ABC, El Mundo and ¡Hola!, among others.

[2] Such as in case C-252/21, Meta Platforms Inc. and Others vs Bundeskartellamt, the ‘Bundeskartellamt Ruling’.

[3] Interestingly, some argue that, however, Article 7(4) of the GDPR leaves the door open to combining two legal bases (i.e. consent and contractual necessity, if such necessity can be proven). Please see Craddock, P. (23 October 2023). Op-ed: ‘Pay or data’ has its reasons - even if you disagree, available here

SUGGESTED CITATION: López Lapuente, L. and Vidal, P.; “Subscription models for digital services in the EU – Lights and shadows”, EU Law Live, 15/04/2024, https://eulawlive.com/op-ed-subscription-models-for-digital-services-in-the-eu-lights-and-shadows-by-leticia-lopez-lapuente-and-patriciavidal/

The saga that keeps on going: the General Court annuls decisions of ex-ante contributions to the SRF

Martinho Lucas Pires

There are sagas and there are sagas, and judicial circles are no stranger to them. Some are shorter, some are longer; some are more dynamic while others are subtler. The payment of contributions to the Single Resolution Fund (SRF) is by all accounts one of the most developing, ongoing sagas in the EU judicial order, and as we consider it now, it just seems never-ending.

Let us consider the facts. At the end of 2023, there were 109 actions for annulment of SRB Decisions on contributions to the (SRF) pending in the General Court of the European Union (according to the data collected by the European Banking Institute). The contested decisions concern ex-ante contributions owed by credit institutions to the SRF, ranging from 2018 to 2023.

The reason for such intense judicial contestation concerns (according to the claimants) an insufficient justification of the calculation of the contributions based on profile of the banks. The SRF procedures for charging the contributions are also contested. The pleas of illegality have been based on different justifications, concerning inter alia the infringement of the right to be heard, infringement of general procedural requirements deriving from the principle of good administration (Article 41 of the Charter and Article 298 TFEU), a failure to state reasons for the contested decision, or the infringement of the fundamental right to effective judicial protection. Infringement of the principles of legal certainty and proportionality have also been claimed, like in Banco Cooperativo Español (Case T-323/16) .

In the cases that are already closed, the General Court has either considered the actions inadmissible, like in Iccrea Banca v Commission and SRB (Case T-494/17) and Credito Fondiaro (Case T-661/16), or accepted the claims and annulled the decisions, like in Portigon v SRB (Case T-365/16). The Court of Justice was called upon to decide on two appeals brought in the case concerning the decision addressed to Landesbank Baden-Württemberg in joined cases SRB and European Commission v Landesbank Baden-Württemberg ( Joined cases C-584/20 P and C-621/20 P). Although it set aside the judgement of the General Court, the Court of Justice ended up annulling the decision for lack of inadequate reason. Despite the annulment, the SRF welcomed this decision of the Court of Justice for the ‘legal clarity’ it brought to the matter, by providing guidelines to how justificative reasons could .

Three months later, the Court of Justice in Case C-662/19 P annulled the General Court’s decision considering inadmissible the claim against the ex-ante contribution of 2016 brought by NRW.Bank. In the repetition of the judgement, the claimant presented eleven pleas of illegality, which amounted to four sets of claims: infringement of the principle of good administration, failure to provide adequate reasons, illegality of the decision and of EU delegated and implementing acts, and infringement of general principles of law.

The eight chamber of the General Court rejected all of the pleas and upheld the decision of the SRF – NRW. Bank (Case T-466/16 RENV ). This was the first time that the General Court upholds a decision of the SRF on contributions in an annulment challenge, considering that the latter had not infringed any duty of good administration or lack for providing reasons. This was all the more important considering the decisions of the General Court taken three months before in cases Banque Postale ( T-383/21), Confédération nationale du Crédit mutuel and Others ( T-384/21), BPCE and Others ( T-385/21), Société générale and Others ( T-387/21), Crédit agricole and Others ( T-388/21), Landesbank BadenWürttemberg ( T-389/21) and BNP Paribas ( T-397/21), where SRF decisions concerning ex-ante contributions of 2021 were annulled based on the failure to state reasons and the violation of the principles of good administration and effective judicial protection.

Could a shift in perspective be on the cards? The immediate signs coming from the General Court are negative. On March 20th, a month after the ruling in NRW.Bank, the General Court published its decision in cases DZ Bank (T-390/21), Deutsche Kreditbank (T-391/21), Landesbank Hessen-Thüringen Girozentrale (T-392/21), Bayerische Landesbank (T-394/21), DZ Hyp, (T-395/21) and DZ Bank (T-404/21). The result? All SRF decisions were annulled.

All cases refer to the ex-ante contributions of 2021, and the claims presented for the annulment of the decisions of the SRF are the same. The claimants present the same eleven pleas, essentially concerning the violation of their freedom to conduct a business and their rights to equality, to a good administration and access to justice; infringement of the principle of proportionality; lack of sufficient justification of the decision; violation of other EU rules on prudential requirements; the illegality of rules of the Resolution Regulation 806/2014; and infringement of the ‘principle of calculating contributions adapted to risk’.

The eighth chamber of the General Court ruled verbatim in all cases by rejecting all pleas except for the plea concerning the provision of insufficient reasons in calculating the annual target to be considered in the definition of the contribution. According to the General Court, ‘the method actually applied by the CRU, as explained at the hearing, does not correspond to that described in the contested decision, so that the real reasons, with regard to which this target level was set, could not be identified on the basis of the contested decision either by the establishments or by the Court’ (Deutsche Kreditbank para 310, Landesbank Hessen-Thüringen Girozentrale para 340, Bayerische Landesbank para 363, DZ Hyp para 360, and DZ Bank para. 361).

These decisions seem to be in line with former decisions of the General Court and the Court of Justice regarding SRF contributions. The cause for annulment is the illegality of the decisions based on their insufficient or inadequate justification. Therefore, these decisions seem to indicate that SRF decisions concerning ex-ante contributions until 2021 (at least) can be vulnerable to contestation on the grounds of their illegality.

What about NRW.Bank? Why is it the only case where a decision of the SRF was upheld (inadmissible claims aside)? I think this has to do with the fact that the decision applied to NRW.Bank concerning ex-ante contributions of 2016 was amended in 2022 by the SRF. The amendment inserted more grounds of justification

for the decision, thus strengthening the original decision and protecting it against a claim of insufficient and inadequate justification. Although NRW.Bank won the appeal at the Court of Justice against the rejection of its claim by the General Court, that victory now seems a bitter one, since it allowed time for the SRF to amend the original decision and strengthen its claim in the retrial.

NRW.Bank shows that the SRF is learning with the judicial losses by enacting decisions on contributions that are more grounded and therefore more difficult to contest on the grounds of lack of justification. Perhaps we will see a shift in judicial results when the General Court starts considering the claims brought against ex-ante contributions enacted after 2021?

Once again, the first signs do not seem to indicate any shift. In Dexia T-411/22, the General Court struck down another decision of the SRF, this time related with ex-ante contributions for 2022. The motive was an error of law, with the General Court finding that the SRF disregarded the first and fourth subparagraphs of Article 70(2) of the Resolution Regulation 806/2014. Moral of the story: the SRF may be learning – but so are the banks challenging it. This saga still has a long way to go.

Martinho Lucas Pires is Guest Professor at Nova School of Law Lisbon and Guest Lecturer of EU law at Católica Law School Lisbon.

SUGGESTED CITATION: Lucas Pires, M.; “The saga that keeps on going: the General Court annuls decisions of ex-ante contributions to the SRF in DZ Bank v CRU (T-390/21), Deutsche Kreditbank v CRU (T-391/21), Landesbank Hessen-Thüringen Girozentrale v CRU (T-392/21), Bayerische Landesbank v CRU (T-394/21), DZ Hyp v CRU (T-395/21) and DZ Bank v CRU (T-404/21)”, EU Law Live, 17/04/2024, https://eulawlive.com/ op-ed-the-saga-that-keeps-on-going-the-general-court-annuls-decisions-of-ex-ante-contributions-to-the-srf-in-dz-bank-v-cru-t-390-21-deutschekreditbank-v-cru-t-391-21-landesbank-hesse/

Interpreting the Dublin Regulation amid fundamental rights violations at the EU’s border – Reflections on the Judgment of the Court of Justice in X v Staatssecretaris van Justitie en Veiligheid, C-392/22

Madalina Moraru and Adel-Naim Reyhani

Context and judgment: can fundamental rights violations at EU borders challenge Dublin transfers?

The extent to which the principle of mutual trust can be limited in the field of asylum based on potential violations of Article 4 of the EU Charter of Fundamental Rights (CFR) has consistently featured on the agenda of the Court of Justice. The present ruling of the Court discusses this theme, once again, around the second subparagraph of Article 3(2) of the Dublin III Regulation. Based on the Court’s ruling from the 2011 N. S. case, this provision prohibits transfers of asylum applicants to Member States where systemic flaws in their asylum procedure and reception conditions can result in ill-treatment as defined in Article 4 CFR.

In this case, a Syrian national applied for asylum first in Poland and then in the Netherlands. In challenging the transfer decision to Poland, the applicant alleged experiencing three forced returns to Belarus, detailing harsh conditions and illegal detention at the borders, coercion, and lack of independent judicial review in Poland based on reports and case law.

Against this backdrop, the referring District Court of Hagursought seeks the Court of Justice’s interpretation of the Dublin III Regulation related to halting transfers amid fundamental rights breaches at the EU’s external borders, the relevance and standard of evidence, cooperation requirements, individual guarantees, and the implications of ineffective legal recourse post-transfer.

While these questions echo prior jurisprudence – such as, more recently, Ministero dell’Interno, C. K., Jawo, and Ibrahim – this case’s unique involvement of rights violations at the border, and its connection with the rule of law crisis can shed light on the long-standing debate regarding the definition of ‘systemic deficiencies’, and the circumstances under which it can limit the application of the principle of mutual trust.

The Court of Justice first clarifies that the initial questions seek to understand if repeated pushback and detention practices at the borders, which it acknowledges as violations of secondary EU law and the Charter, should prevent Dublin transfers. Labelling them as ‘serious flaws’, the Court interprets under what conditions these measures qualify as ‘systemic’ deficiencies that result in a risk of ill-treatment under Article 4 CFR. Drawing on Jawo, it defines systemic flaws as those affecting specific groups – thus potentially also asylum seekers attempting to

reach Poland from Belarus. However, the decision’s operative part notably omits the ‘systemic’ flaw requirement. The Court leaves the final assessment of whether the pushbacks and detention practices fulfil the two-stage requirements of Article 3(2) Dublin III Regulation to the referring court. For assessing risks under Article 4, the Court prescribes evaluating first the risk of pushbacks and detention continuing also after the person is sent back to Poland, and second, if those would lead to extreme material poverty or degradation, emphasising the need to consider only the situation post-transfer. In conclusion, the Court notes that past experiences of pushbacks and detentions at the borders alone do not meet Article 3(2) criteria.

The Court then interprets the standard of proof and evidence for Article 3(2) assessments, highlighting the Regulation’s lack of specificity. It references the Ghezelbash decision to emphasise the Regulation’s intended involvement of applicants in determining responsibility and outlines provisions describing roles and interactions. The Court concludes that the Regulation mandates considering any evidence from the applicant and assesses the risks based on ‘objective, reliable, specific, and properly updated’ information while adhering to fundamental rights standards in EU law. It underscores that if Member States cannot be unaware of systemic flaws, they should not proceed with transfers and may proactively consider such information. Drawing from C. K., the Court affirms that Member States should not rely exclusively only on the ‘objective, reliable, specific and properly updated information on the functioning of the system of international protection’ in the Member State of transfer, but also should obtain information on the individual situation of the applicant, by requiring from that Member State, where applicable, adequate individual guarantees as to the reception conditions that the applicant will encounter or the conditions under which it will take charge of the applicant.

The Court deems the question on the implications of a lack of judicial effectiveness post-transfer inadmissible, arguing that the referring court’s description was insufficiently clear and disconnected from the discussed interpretation questions.

Discussion: A return to the ‘blind mutual trust’ approach?

As regards the discussion on the role of systemic flaws, the present decision, similar to Ministero dell’Interno, seems inconsistent with recent jurisprudence that had emphasised the primacy of Article 4 CFR considerations. After the N. S. decision had been critiqued for prioritising the functioning of the Common European Asylum System (CEAS) over individual rights, the Court of Justice accepted that also individual violations of Article 4 CFR could halt Dublin transfers ( Tsourdi and Costello 2023). Despite not explicitly mentioning systemic flaws in the operative part, the decision implies their necessity in assessments under Article 3(2), thus undermining the non-refoulement principle’s general and absolute character. Thus, while the C. K. judgment had brought the Court of Justice approach closer to the ECtHR approach which has prioritised the protection of Article 3 ECHR over the principle of mutual trust, it could be argued that the last two judgments of the Court of Justice have, to some extent, brought back the ‘blind mutual trust’ approach (Ferri 2024).

However, and notwithstanding the AG’s more restrictive view, the Court, in recognising pushbacks and certain detention practices as ‘serious flaws,’ potentially even ‘systemic’, emphasised key aspects of refugees’ asylum access in Europe. This stance assumes relevance beyond the Regulation’s interpretation and challenges practices threatening the EU’s fundamental rights framework.

The Court’s acceptance that illegal border practices don’t alone justify halting Dublin transfers aligns with the principle that post-removal circumstances are what matter. Yet, it failed to see a state’s overall fundamental rights record, including at borders, as indicative of its treatment of Dublin returnees. Furthermore, it failed to connect its numerous judgments on the rule of law crisis in Poland with the relevance of the lack of effective judicial remedy for the violation of asylum seekers’ rights.

In addressing evidence rules, cooperation, and individual guarantees, the Court enhanced applicants’ roles in determining the responsible state and preventing transfers to rights-violating states, thereby diverging from the AG’s narrower view. This interpretation aligns with the Court’s previous case law. After the Court, in Abdullahi, had produced an outlier case that prioritised the practicality of the Dublin system, focusing on inter-state relations, with Karim and Ghezelbash it stressed refugees’ procedural rights—a stance later nuanced in H. and R Moreover, the Court’s guidance on investigation duties and defining individual guarantee parameters clarifies an area marked by diverse practices among Dublin states.

Reflections: Between fundamental rights and distributing responsibility

The Dublin system, operating in an environment characterised by a persistent lack of harmonisation of protection standards, continues to adversely affect refugees’ position by deferring their path towards asylum (Reyhani 2019). Against this backdrop, the Court’s jurisprudence is particularly crucial beyond providing doctrinal clarity. In interpreting the Dublin Regulation, the Court sets the standards governing the relationship between states and refugees until they access a substantive asylum procedure and potentially resolve their precarious legal status.

In this context, the Court’s jurisprudence has had to navigate a tension inherent in the system, namely between the practical distribution of responsibility among Member States, based on the presumption of fundamental rights compliance, and refugees’ rights. While some of its decisions have thereby mitigated the negative impacts of the Dublin system, like for unaccompanied minors in M. A., others, such as Mirza, have exacerbated them. While conclusions on the impact of the present decision, which contains interpretations in both directions, would be premature, a few initial reflections on potential consequences are possible.

Within the future context of the planned Asylum Procedure Regulation, when border procedures will likely become the new normal, the present judgment could give the wrong message that violation of fundamental rights at the borders, although a serious violation of the Charter, cannot impede the first-entry rule on responsibility allocation. The principle of mutual trust too often remains untouchable in spite of the dire fundamental rights situation at the EU’s borders (Moraru 2022).

However, it should be recalled that the Court of Justice has progressively defined the limits of mutual trust through a ‘step-by-step approach,’ adapting its application based on specific cases it handles (Rizcallah 2023). While asylum seekers’ human rights were prioritised over national procedural autonomy in other cases where the rule of law crisis intersected with the migration crisis (such as Torubarov and FMS, see also in Moraru 2022 a), the EU constitutional principle of mutual trust does not follow this trend, and on this the Court of Justice has been consisted across the area of freedom, security, and justice (Celmer). It remains to be seen whether the Court of Justice strict interpretation of mutual trust in the AFSJ will be once again a bar to the EU’s accession to the EU ( Di Franco 2024).

Madalina Moraru is Associate Professor of EU Law at the University of Bologna, and the Centre for Judicial Cooperation of the European University Institute and ERC StG holder (ACCESS project)

Adel-Naim Reyhani is research fellow, member of the ACCESS project, at the University of Bologna, and senior researcher at the Ludwig Boltzmann Institute of Fundamental and Human Rights in Vienna

SUGGESTED CITATION: Moraru, M. and Reyhani, A; “Interpreting the Dublin Regulation amid fundamental rights violations at the EU’s border – Reflections on the Judgment of the Court of Justice in X v Staatssecretaris van Justitie en Veiligheid, C-392/22”, EU Law Live, 15/04/2024, https:// eulawlive.com/op-ed-interpreting-the-dublin-regulation-amid-fundamental-rights-violations-at-the-eus-border-reflections-on-the-judgment-of-thecourt-of-justice-in-x-v-staatssecretaris-v/

Taking the principle of impartiality seriously in State aid procedures (Case T-486/18 RENV, Danske Slagtermestre v Commission)

Sébastien Thomas

On 10 April 2024, the General Court (GC) delivered a judgment in Case T-486/18 RENV, Danske Slagtermestre v Commission in the field of State aid which went largely unnoticed, probably because it was rendered by a threejudges chamber, after the Court of Justice (‘the Court’) (in Case C-99/21 P) sent the case back to the GC to deal with the case on the merits, as it had erroneously rejected the case as being inadmissible.

The judgment delivered by the GC on the merits (in a different formation than the one which had adopted the inadmissibility Order and presided by Judge Spielmann, former President of the ECtHR) is very interesting in many aspects and constitutes a very timely reminder of the importance of the principle of impartiality in the EU legal order.

The case at hand concerned a Danish State aid scheme established by a law of 2013 amending the rules relating to contributions payable to waste water treatment operators. According to the applicant, who lodged a complaint in October 2013 to the Commission, by adopting that law, the Kingdom of Denmark granted State aid to large slaughterhouses in the form of a reduction in their contributions for waste water treatment. It was not until April 2018 that the Commission adopted a ‘no objections decision’ (phase I) in which it found that the contributions scheme introduced by law No 902/2013 did not constitute State aid within the meaning of Art. 107(1) TFEU, as it did not confer and advantage on specific undertakings (the ‘Contested decision’).

As it appears from the GC judgment (para. 22), the applicant raised seven pleas in its action for annulment. Interestingly, the GC decided to uphold not only the second plea, alleging an infringement of the principle of impartiality, but also, ‘for the sake of completeness’ (‘à titre surabondant’ in French – see para. 46), the third plea, alleging infringement of Article 107(1) TFEU in so far as concerns the conditions of the existence of an advantage and, more specifically, on the application of the private operator principle. It seems therefore that the GC really wanted to make a point on the violation of the principle of impartiality in the present case, as annulling the Contested decision for an infringement of Art. 107(1) could have been sufficient in terms of judicial economy.

The present analysis will therefore focus only on this plea, on the basis of which the GC found a breach of the principle of impartiality, as it is very uncommon for such a plea to be raised and to be upheld, especially in the field of State aid law (although the judgment also contains interesting developments as regards the application of the private operator principle for the financing of public infrastructures).

The principle of impartiality as a fundamental principle of the EU legal order

As the GC usefully reminds, the principle of impartiality derives directly from Article 41(1) of the Charter, which states, inter alia, that ‘every person has the right to have his or her affairs handled impartially by the institutions, bodies, offices and agencies of the European Union’.

According to settled case-law (notably case C-680/16 P, August Wolff), ‘the requirement of impartiality (…) is intended to guarantee equality of treatment, which is at the heart of the European Union. Having regard to the fundamental importance of ensuring the independence and probity of EU institutions, bodies, offices and agencies as regards both their internal functioning and external reputation, the requirement of impartiality covers all circumstances in which an official or agent who is called upon to decide on an issue must reasonably consider that issue as being of such a nature as to be viewed by third parties as a possible source of impairment of his or her independence in that matter’ (para. 27, emphasis added).

Thus, according to the GC, quoting as well, by analogy, the Court’s judgment in the Polish rule of law cases on the Independence of the Disciplinary Chamber of the Supreme Court (Cases C-585/18, C-624/18 and C-625/18, A.K. and others), ‘it is incumbent on those institutions, bodies, offices and agencies to comply with the requirement of impartiality in particular as regards its component relating to objective impartiality, according to which there must be sufficient guarantees to exclude any legitimate doubt as to possible bias on the part of the institution concerned, appearances possibly also being of importance’ (para. 28, emphasis added).

In that regard, ‘in order to show that the organisation of an administrative procedure does not ensure sufficient guarantees to exclude any legitimate doubt as to possible bias, it is not necessary to prove lack of impartiality but is sufficient for a legitimate doubt to arise that cannot be dispelled ’ (para. 29, emphasis added).

In the present case, the applicant was claiming that the Commissioner in charge of Competition (never named in the judgment but who is of course well-known) lacked objective impartiality as, first, she had taken part in the adoption of Law No 902/2013 by virtue of her duties within the Danish Government and, second, assumed ‘ultimate administrative responsibility’ for the handling of its complaint and the adoption of the contested decision.

The GC first took note and accepted the Commission’s arguments that (i) it was the Danish Minister for the Environment and not the Commissioner in question who had presented the draft that led to the adoption of Law No 902/2013 and, (ii) that law had been adopted following a majority vote of the members of the Danish Parliament.

The GC nevertheless noted the following:

• First, the Commissioner in question was, prior to occupying that position, at the time of the submission of the draft giving rise to Law No 902/2013 and at the time of its adoption, Minister for the Economy and the Interior, Deputy Prime Minister of the Kingdom of Denmark and a member of the Coordination Committee

of that government. Thus, before becoming a Commissioner, she held a particularly important position within the Danish Government.

• Second, the purpose of Law No 902/2013 was to amend the existing rules on water pricing and therefore included measures intended to have an impact on the expenditure of private individuals and undertakings, such as the contribution for the treatment of waste water. Therefore, according to the GC, ‘it is reasonable to consider’ that such measures could have been proposed in agreement with the minister responsible for the economy, namely the Commissioner in question. Indeed, the law was part of an overall plan of action of the Danish Government at the time entitled ‘Growth Plan for Denmark’.

• Third, it appeared that the Commissioner in question had participated on behalf of the Danish Government, together with other prominent Ministers, in a press conference concerning the presentation of that action plan, which included the draft which gave rise to Law No 902/2013.

The GC found, therefore, that the Commissioner in question had taken a position at national level, publicly and explicitly, in favour of the reduction of the contribution for the treatment of waste water, so that ‘it may legitimately be considered that the Commissioner in question had an interest in the contribution for the treatment of waste water provided for by Law No 902/2013 (…) not being called into question on the ground that it was unlawful under the rules of EU law concerning State aid’ (para. 37).

The absence of sufficient guarantees aimed at preventing an infringement of the principle of impartiality

The GC then examined whether the organisation of the administrative procedure within the Commission that led to the adoption of the contested decision offered sufficient guarantees to prevent such an interest from vitiating that procedure by an infringement of the requirement of impartiality.

In that regard, the Commission argued that, according to Article 250 TFEU, it is to act by a majority of its members. Therefore, the Commissioner in question had no casting vote in adopting the Contested decision.

The GC reminded, however, that despite the collegiate nature of the method of adopting decisions within the Commission, the Commissioner in question was, as the member responsible for competition, specifically responsible for the preparation of the Contested decision – which the Commission moreover confirmed at the hearing, stating that she had ‘ultimate responsibility for the preparation of the proposal for that decision’.

In that regard, according to the GC, ‘the preparatory role is an important role as far as the decision ultimately adopted by the Commission is concerned”’ (para. 41). Such an assessment is reinforced, particularly in the perception of third parties, by the fact that the Commissioner in question is the only signatory of the contested decision (para. 42).

After those findings, the Court’s conclusion was inevitable: such a situation of conflict of interests (special responsibility in the adoption of the Danish law, on the one hand, and ultimate political responsibility for the adoption of the Contested decision concerning the same law, on the other) is ‘such as to give rise, in the eyes of

third parties, to a legitimate doubt with respect to possible bias on the part of the Commissioner in question, irrespective of her conduct.’ Moreover, as the Commission has not adduced any evidence capable of calling into question the applicant’s allegations in order to dispel the doubt thus created, the GC found that ‘the procedure which led to the adoption of the contested decision did not offer sufficient guarantees of objective impartiality.’ (para. 44, emphasis added)

Conclusion on the principle of (objective) impartiality : it’s all about perceptions!

As can be seen from the analysis of the GC in the present case, the Commission’s arguments as to the lack of decisive involvement (or of any personal interest) of the Commissioner in charge of Competition in the adoption of the Law No 902/2013 in Denmark, and in the Contested decision at Commission level, were not sufficient to exclude a violation of the principle of (objective) impartiality in the present case.

Indeed, for the GC, it was sufficient, in order to find a lack of impartiality in the present case, that, in the eyes of third parties (like the applicant), the situation was such as to give rise to a ‘legitimate doubt with respect to possible bias on the part of the Commissioner in question, irrespective of her conduct’.

The judgment will probably generate some headaches inside the Commission and other EU institutions on how to comply with it (unless they decide to appeal of course) and how to prevent such situations of perceived lack of impartiality to arise in the future.

Most (if not all) EU institutions and organs have adopted internal rules aimed at preventing situations of conflict of interests. As far as the Members of the Commission are concerned, they are not bound by the EU Staff Regulation, but by the Code of conduct of 31 January 2018 for the Members of the European Commission. This Code of conduct provides in its Article 2(6) that ‘Members shall avoid any situation which may give rise to a conflict of interest or which may reasonably be perceived as such. A conflict of interest arises where a personal interest may influence the independent performance of their duties.’ Article 4(1) further provides that ‘Members shall recuse themselves from any decision or instruction of a file and from any participation in a discussion, debate or vote in relation to a matter that falls under Article 2(6)’.

In the light of these provisions, one may only guess the reasons why the Commissioner in charge of Competition (and her advisors) did not consider that her former positions as Vice-President and Minister of the Economy of Denmark at the time when the Law No 902/2013 was adopted did constitute a ‘personal interest’ giving rise to a potential conflict of interests. Indeed, unlike financial or other kinds of personal interests, it could be argued that the Commissioner had nothing to gain ‘personally’ from the outcome of a specific State aid decision being adopted at EU level concerning a Law for which she was not even directly responsible when she was a Minister in Denmark.

The case-law mentioned by the GC judgment does not only refer to personal interests, however, but to ‘all circumstances’ which may reasonably give rise, in the eyes of third parties, to a legitimate doubt with respect to possible bias. Arguably, when administrative functions overlap and when one and same person is involved in a

same matter wearing a different hat (or decisional function), this may reasonably create a legitimate doubt with respect to possible bias. Applied strictly, such an interpretation would require EU Commissioners (and other Members of EU institutions or high-level officials with important responsibilities) to recuse themselves from all cases involving files in which they have been – even remotely – involved in their previous professional or political life. Some could argue that this would not necessarily be a bad thing though and that it would only reinforce public trust in EU institutions.

The judgment thus raises new and interesting questions, but one thing is clear, it shows once again (see also, recently, cases C-291/22 P, D&A Pharma v Commission and EMA and C-111/22 P, Hamers v Cedefop) the growing importance that the Court attaches to the principle of impartiality and its fundamental role in the EU legal order, having regard to the fundamental importance of ‘ensuring the independence and probity of EU institutions’

Sébastien Thomas (LL.M.) is a Senior Advisor in EU & Competition Law in a major law-firm in Luxembourg. Previously, he served as a law clerk for different judges both at the General Court and at the Court of Justice. He was also a Member of the Legal Service of the European Commission (State aid team) and worked as an academic assistant at the College of Europe (Bruges). Sébastien is the author of a book in State aid law (in French) as well as several articles and case-law analysis in this field.

SUGGESTED CITATION: Thomas, S.; “Taking the principle of impartiality seriously in State aid procedures (Case T-486/18 RENV, Danske

Slagtermestre v Commission)”, EU Law Live, 19/04/2024, https://eulawlive.com/op-ed-taking-the-principle-of-impartiality-seriously-in-state-aidprocedures-case-t-486-18-renv-danske-slagtermestre-v-commission-by-sebastien-thomas/

Recognising foreign judgments in case of conflict between the jurisdictional rules of the Brussels Ibis Regulation and an international specialised convention (Case C-90/22)

Giovanni Chiapponi

Background

In Case C-90/22 Gjensidige, the Court of Justice ruled that the recognition of a foreign judgment cannot be refused under Regulation No 1215/2012 (‘Brussels Ibis Regulation’) where the court in the Member State of origin declared itself competent according to the rules of an international specialised convention, despite the existence of an agreement conferring jurisdiction on other courts.

The facts are the following. A contract containing a choice of court agreement in favour of Lithuanian courts has been concluded between two Lithuanian companies for the carriage of goods from the Netherlands to Lithuania. As a consequence of the theft of part of the cargo, the insurer made an insurance payment to the customer. The carrier thus filed an action before a Dutch court seeking a declaration that its liability was limited. Despite the choice of court agreement at hand, such court considered itself to have jurisdiction according to Art. 31 of the Convention on the Contract for the International Carriage of Goods by Road (‘CMR’). The insurer then initiated legal proceedings against the carrier before a Lithuanian court seeking damages. Proceedings in Lithuania were stayed until the rendering of the final Dutch decision which stated a limitation of carrier’s liability. The res judicata effects attached to this judgment led the Lithuanian court to dismiss the action for damages. After that the insurer’s appeal was rejected, an action has been brought before the Lithuanian Supreme Court which considered that, where the CMR and the Brussels Ibis Regulation contain concurrent rules of jurisdiction, the provisions of the CMR should prevail and govern the questions of international jurisdiction. However, that court wondered about the compatibility between the CMR and the principles and objectives pursued by the Brussels Ibis Regulation, as long as Art. 31 CMR, contrary to the Brussels Ibis jurisdictional regime, grants to the judge the possibility to disregard choice of court agreements without giving exclusive jurisdiction to the courts designated by the parties.

Under these circumstances, the Lithuanian Supreme court suspended the proceedings and lodged a preliminary ruling to the Court of Justice. The referring court asked, in case a choice of court agreements is disregarded, first, whether Art. 71 of the Brussels Ibis Regulation prevails over Art. 31 CMR and, second, whether the grounds for refusal of recognition laid down in the Brussels Ibis Regulation –either Art. 45 (1)(a) or Art. 45 (1)(e)(ii))– apply.

Judgment

In its reasoning, the Court, first, recalls the interpretation of the grounds for refusing the recognition of a judgment provided for in Art. 45 (1)(a) and (e)(ii) of the Brussels Ibis Regulation and, second, assesses whether the recognition of a judgment can be refused where the foreign court declared itself to have jurisdiction according to an international specialised convention notwithstanding the existence of an agreement conferring jurisdiction on other courts.

As a preliminary observation, the Court noted that the questions submitted can validly be analysed under the scope of the Brussels Ibis Regulation, insofar as lacking a specific regime on the recognition of judgments in the CMR, the applicable rules are those provided for under the law of the Member State addressed, which in the case of Lithuania is the Brussels Ibis Regulation.

Notably, the Court focused on the grounds for refusal laid down in Art. 45 (1)(a) and (e)(ii) of the Brussels Ibis Regulation.

First, Art. 45 (1)(a) deals with the public policy exception which is meant to be an ultimate safeguard – its interpretation should be strict and exceptional – against the recognition of a judgment given in another Member State. The content of public policy is defined at national level, but its contours and limits are shaped by the Court of Justice in its settled case law. The public policy clause can be used only if the effect of the recognition of a foreign judgment would be incompatible with the fundamental principles of the legal order of the requested Member State. In any case, recourse to public policy cannot result in a review of the findings of law or fact made by the court of origin. Art. 45 (3) further specifies that public policy does not apply to the rules relating to jurisdiction.

Second, Art. 45 (1)(e)(ii) provides for a specific refusal ground that applies where a judgment conflicts with Section 6 of Chapter 2 on rules of exclusive jurisdiction, i.e. Art. 24. Despite one of the main objectives of the Brussels Ibis Regulation is enhancing the effectiveness of choice of court agreements, the formulation of Art. 45 (1)(e)(ii) is clear in the sense that it does not include in its scope Section 7 of Chapter 2 dealing, inter alia, with the rules on prorogation of jurisdiction by an agreement (Art. 25).

In this context, the Court highlighted that the fact that the Dutch court disregarded a choice of court agreement contained in an international specialised convention had the effect that the applicable law (Dutch law) was different from the law that would have applied if the agreement was observed (Lithuanian law) and this led to a less favourable outcome for the defendant. Based on the above, the Court concluded that under these circumstances neither a violation of a fundamental principle of the Lithuanian legal order falling under the scope of Art. 45 (1) (a) nor a breach of Art. 45 (1)(e)(ii) occurred.

Comment

In this ruling, the Court confirms that refusing the recognition of a judgment for the breach of a jurisdictional rule – e.g. disregarding a choice of court agreement – must be limited to exceptional hypotheses as the whole architecture of the Brussels Ibis Regulation, which harmonises rules on jurisdiction applicable in the Member State of origin, aims at preventing an examination of the jurisdiction of the court of origin by the court of the State of enforcement. On a different note, the Court did not deal with the question of compatibility between Art. 71 of the Brussels Ibis Regulation and Art. 31 CMR. To solve the issue one could theoretically refer –as Advocate General Emiliou did in his Opinion– to the criteria set out in the Court’s settled case law (C-533/08 TNT Express Nederland) which are, on the one hand, those of high predictability of jurisdictional rules and legal certainty for litigants and, on the other, the sound administration of justice. When looking at Art. 31 (1) CMR one can find several categories of venue – i.e. the defendants’ seat, the place where the goods were taken over by the carrier, the place designated for delivery or, the agreement entered into by the parties – granting to litigants reasonable standards for predicting which court is competent. The fact that Art. 31 CMR does not qualify as exclusive choice of courts agreements is a political choice related to the rationale of a specialised instrument like the CMR that amounts to a mere difference with the Brussels Ibis regime (Art. 25). In such circumstances, prioritising the Brussels Ibis I Regulation would deprive of any effect Art. 71 and prevent the use of any specialised regime differing from the Brussels Ibis Regulation which could ever be applied in intra-EU legal relations.

Giovanni Chiapponi is Doctor in Law at the Universities of Luxembourg and Bologna.

SUGGESTED CITATION: Chiapponi, G.; “Recognising foreign judgments in case of conflict between the jurisdictional rules of the Brussels Ibis Regulation and an international specialised convention (Case C-90/22)”, EU Law Live, 16/04/2024, https://eulawlive.com/analysis-recognisingforeign-judgments-in-case-of-conflict-between-the-jurisdictional-rules-of-the-brussels-ibis-regulation-and-an-international-specialised-conventioncase-c-90-22/

No more Fingerprints in ID Cards?: C-61/22, Landeshauptstadt Wiesbaden

Meinhard Schröder

On 21 March 2024, the Court of Justice delivered its judgment in C-61/22, Landeshauptstadt Wiesbaden, and declared invalid Regulation 2019/1157 on strengthening the security of identity cards of Union citizens and of residence documents issued to Union citizens and their family members exercising their right of free movement invalid. The case had been referred to the Court of Justice by a German administrative court, which had to deal with an application by a citizen who had requested to issue him with an ID card with no fingerprints being collected, contrary to the requirements for ID cards contained in Article 3 (5) of Regulation 2019/1157. The administrative court questioned the validity of the Regulation on three grounds, (i) it was adopted on an incorrect legal basis, (ii) it infringes Article 35(10) of the GDPR and, (iii) it is contrary to Articles 7 and 8 of the Charter.

The Court of Justice rejects two of the three arguments. With regard to the alleged breach of the GDPR, it briefly points out that the EU legislator was not bound by the GDPR when adopting Regulation 2019/1157 (paras. 64–68). With regard to the alleged violation of Articles 7 and 8 of the Charter, the Court of Justice holds that the obligation to include two fingerprints in the storage medium of ID cards constitutes a limitation both of the right to respect for private life and of the right to the protection of personal data, enshrined in Articles 7 and 8 of the Charter respectively (paras. 70–74). However, it finds sufficient justification for the limitation, as the EU legislator complied with the principle of legality, by adopting Article 5 (3) of Regulation 2019/1157 (paras. 77–79), respected the essence of the fundamental rights guaranteed in Articles 7 and 8 of the Charter (paras. 80, 81), and complied with the principle of proportionality (paras. 82-124).

The proportionality test is very detailed and contains the classical four steps (though the first two steps are combined under one headline): First, it is examined whether one or more objectives of general interest recognised by the European Union are pursued (in casu: ensure the authenticity of those cards and to enable the holder of that card to be reliably identified). Second, the Court checks whether the measure at issue is appropriate for actually meeting the objectives of general interest pursued and whether the measure to attain those objectives is appropriate (in casu: answered in the affirmative). Thirdly, it is analysed whether recourse to the measure at issue is necessary for the purpose of attaining the objectives of general interest pursued (in casu, all other options were considered less effective). Fourthly, the Court assesses whether there is a balance between, on the one hand, the seriousness of the interference with the fundamental rights involved, and, on the other hand, the objectives pursued by that measure. In casu, in view of the nature of the data at issue, the nature of the processing operations and the manner in which they are carried out and the safeguards laid down, it considers the limitation on the exercise of the rights guaranteed in Articles 7 and 8 of the Charter the rights not to be disproportionate when

compared with the significance of the various objectives pursued by that measure – the EU legislator found a fair balance between, on the one hand, the objectives pursued by Regulation 2019/1157 and, on the other, the fundamental rights involved.

Whereas the ‘material conformity’ with primary EU law is thereby confirmed, the Court of Justice finds that Regulation 2019/1157 was adopted on an incorrect legal basis, and thus in an incorrect legislative procedure. Comparing the respective scopes of Article 21 (2) TFEU (which was used as the legal basis by the EU legislator) and Article 77 (3) TFEU, and assessing the purpose and content of Regulation 2019/1157, the Court finds that that the regulation should have been adopted under Article 77 (3) TFEU. Unlike in many other cases, where it may be debatable what the (main) purpose of a measure is (see, in particular, C-301/06, Ireland/Parliament and Council), Landeshauptstadt Wiesbaden is a case where the purpose and content of the regulation is quite obvious, and the lex specialis-rule applies with regard to the legal bases (para. 46: ‘where the Treaties contain a more specific provision that is capable of constituting the legal basis for the measure in question, the measure must be founded on that provision’).

Despite the invalidity of Regulation 2019/1157, the Court of Justice, making use of Article 264 (2) TFEU, maintains its effects until 31 December 2025, because it assumes that the invalidity with immediate effect would be likely to have serious negative consequences for a significant number of EU citizens, in particular for their safety in the area of freedom, security and justice (para. 126–128). Maintaining the effects of a measure for a certain time is a common practice in cases where the only reason for the invalidity is ‘formal inconformity’ with primary EU law. In the case at hand, however, one might raise the question if returning to the security standards applicable before 2 August 2021, since when Regulation 2019/1157 applied, would really be problematic, especially since ID cards are regulated primarily by additional national legislation (for instance, the German Personalausweisgesetz mentions Regulation 2019/1157 only once in Section 5 [9]).

As for the future, it remains to be seen if the EU legislator manages to achieve the unanimity in Council, which is required under Article 77 (3) TFEU. When Regulation (EU) 2019/1157 was adopted, the Czech Republic and Slovakia had voted against the proposal. If only one Member State does not support a new regulation, from 2026 it will be up to the Member States to decide if they want to include fingerprints in the storage medium of ID cards. Nota bene: For passports issued by EU Member States, the storage of fingerprints is obligatory since 2005, according to Article 1 of Regulation 2252/2004, which was adopted on the basis of the predecessor of Article 77 (3) TFEU.

Meinhard Schröder holds the chair of Public Law, European Law and IT Law at the University of Passau (Germany).

SUGGESTED CITATION: Schröder , M.; “No more Fingerprints in ID Cards?: C-61/22, Landeshauptstadt Wiesbaden”, EU Law Live, 18/04/2024, https://eulawlive.com/analysis-no-more-fingerprints-in-id-cards-c-61-22-landeshauptstadt-wiesbaden-by-meinhard-schroder/

SYMPOSIUM

COMPETITION CORNER:

SYMPOSIUM ON COMPETITION LAW AND REGULATION

Time to rethink the interaction between ex-ante-sector regulation and ex-post-competition law

Dr. Christian Bergqvist

It follows directly from the EU’s legal structures that in the case of conflicts between competition law and any secondary regulation, priority must be given to the former by virtue of its higher place in the legal hierarchy. Regardless, in DB Station (C-721/20), at para. 81, the European Court of Justice suggested halting competition law enforcement if sectoral regulation derived from an EU Directive was available, indicating a different position. In the underlying case, a potential victim of excessive pricing for railroad services in Germany had complained. Initially, the complaint was made to the sector regulator designated under the EU Directive, but following discontent with the lack of progress due to appeals, etc., an Article 102 case had been tabled before a local court. Confronted with this, the court referred questions to the European Court of Justice, yielding a ruling that does not comport with the notion of competition law as superior and always applicable regardless of sectoral regulation. However, it does comport with what tacitly have been practiced for years by DG COMP.

Why does it make sense to halt competition law enforcement?

In DB Station, the European Court of Justice outlined a position that sits uneasily with DG COMP’s official position. For the last 30 years, this has been that ex-post-competition law enforcement is not waived or halted for ex-ante sector regulation unless the latter essentially coerced the infringement. This position was expressed in the Guidelines on the application of ECC competition rules in the telecommunication sector recital 17 (1991) and the Access Notice, recital 12-23 (1998). However, in practice, DG COMP has tacitly applied a different position, prioritising ex-ante sector-specific regulation over ex-post competition law if both were available. A principle that holds merits as a rigid application of competition law might conflict with EU objectives. Below, these concerns are developed, followed by an exploration of the scope of the DG COMP priority rule.

Applying competition law might undermine long-term objectives

Since the 80s, the EU has promoted a Single Market agenda, eventually reaching traditional utility sectors such as telecom, post, energy, and railroad, where ex-ante sector regulation often would mandate network access. In this, a delicate balance had to be secured in the adopted sector regulation, as mandatory shared access to the incumbent’s network might foster competition at the downstream retail level but chill future investments at the upstream access level. Not only with the incumbents, unwilling to invest if also beneficial to the competitors, but also newcomers, who can free-ride on the existing network instead of making their own investments – a risk discussed by, e.g., the Advocate General in Bronner (C-7/97) para 57 and the 102-Enforcement Paper, recital 75

when it came to Article 102. Ex-ante sector regulations should be better positioned to balance short-term access competition v. long-term infrastructure competition, making it prudent to give priority to this.

Applying competition law can promote collusion

Another danger associated with a generous access regime under Article 102 is the persistent risk of promoting collusion when relying on the same underlying infrastructure. Promoting shared use could uniformise costs and quality, reducing the scope for competing on these, and eventually uniforming retail prices across providers. This risk is highlighted in the Horizontal Merger Guidelines recital 48 and the UK Network Sharing Agreement (COMP/C-1/38.370), recitals 104 and 121. Naturally, the risk is affected by many other factors and can even be reduced by well-crafted remedies but should, on the other hand, neither be ignored nor downplayed.

Applying competition law can dilute core concepts

An imprudent application of competition law to network-tied sectors can also dilute core concepts such as abusive behaviour and anti-competitive agreements. To successfully apply Article 102 TFEU to the telecommunication sector, DG COMP was, e.g., in Wanadoo Interactive (COMP/38.233), recitals 70-106, forced to cross novel ground and include a portion of the fixed cost in the predatory pricing test. Usually, this would be assessed against the recovery of Average Variable Cost (AVC), but an expanded test was applied to account for the substantial fixed cost associated with building and maintaining a network.

Also Article 101 has been bent to secure what DG COMP viewed as an acceptable solution. In Verbändevereinbarung (See XXVIII Report on Competition Policy (1998), pp. 160-163), DG COMP accepted not to act against a hardcore horizontal price agreement. The agreement pertained to prices and terms for using the German electricity transmission network, a matter left explicitly out of adopted sector regulation and referred to direct negotiations or national legislation. Deciding that a horizontal industry agreement was better than individual discussions with the many German transmission operators, DG COMP decided to turn a blind eye to the matter. Regardless, it remains how DG COMP had to bend Article 101 (and 102) to reach an acceptable solution, making it apparent how core concept could be diluted unless priority is given to ex-ante sector regulation specifically bespoken to the specific situation.

Applying competition law can create conflicts

Applying competition law to matters covered by sectoral regulation might also disturb a delicate balancing of interests, if the sector regulation either represents a compromise or has not been implemented correctly. The need for a horizontal sector agreement in Verbändevereinbarung only emerged because of a lack of provision in the adopted EU Electricity Directive (96/92), but this had been a concession to Germany rejecting mandatory rules. The EU legislator, therefore, had to accept an incomplete Directive and, later, DG COMP had to respect this by ignoring a blatant infringement of Article 101 TFEU.

Other examples of this interaction, where competition laws are drafted to close regulatory lacunas, can be seen in Deutsche Telekom (COMP/37.451) and Swedish Interconnectors (COMP/39.351). In the former, the designated German regulator had approved the prices leading to an abusive margin squeeze. In the latter, it was the Swedish system operator that acted abusively by periodically closing an electricity cable, inflating the prices. Across both cases, the sector regulator designated in accordance with adopted EU Directives had failed. Rather than directing its frustration at the member states (or the designated national regulator), DG COMP used competition law to remedy the problem directly, but in this, DG COMP circumvented formal procedures and ignored the fault of the Member States.

Applying competition law opens for forum shopping

Another risk of imprudent application of competition law relates to the risk of forum shopping. In cases such as Telefónica (COMP/38.784), recitals 302-304 Telekomunikacja Polska (COMP/39.525), recitals 704 and 803807, and Slovak Telekom, (COMP/39.523), recitals 363 and 428-442, the obligation to grant access (to telecom networks) rested on adopted sector regulation but had, to various degrees, been thwarted in practice. However, as ex-ante sector regulation mandated access, DG COMP did not have to establish how this could qualify as an abusive refusal to supply, lowering the threshold for intervention. A consistent application of the principle of separate systems should have led some of these cases to be pursued under other principles and doctrines (or dropped). Deutsche Telekom, Telefónica, and Slovak Telekom appear more akin to excessive or predatory pricing if not refusal to supply. Telekomunikacja Polska and Slovak Telekom as refusal to supply cases, and Verbändevereinbarung as a price and market sharing cartel. Sector regulation not only creates but also forms an antitrust infringement, allowing plaintiffs to present their claims in the manner most beneficial for this and not as dictated by fact and the law.

Applying competition law and ne bis in idem

Traditionally has, the matter of double punishment, or ne bis in idem, been of limited concern under the EU competition law enforcement, but as outlined by Zelger and Kapusta, has the Court of Justice (finally) cleared its position by recent rulings as Bpost (C-117/20), at para 10-12, 30, 47-48 and 51, Nordzuker (C-151/20), at para 44-48 and Volkswagen (C-27/22), at para 57. On the one hand, these rulings confirm the doctrine but then, on the other, confine it to situations of almost overlapping facts. Against these cases, it must be assumed that if a specific set of actions ex-post are deemed infringing ex-ante sector regulation by a designated (national) sector regulator, this will only prevent DG COMP from pursuing the matter under competition law in a very narrow set of circumstances. However, fines must reflect that the behavior has already been reviewed, often mandating a reduction, and more generally, DG COMP must be mindful of the issue, exercising some restraint in its pursuit of cases to avoid conflicts. Regardless, a more prudent solution would probably be to refrain from reviewing the matters ex-post under competition law.

A practical priority rule formulated by DG COMP

The main takeaway from the principles outlined above is that, in practice, DG COMP waives competition law enforcement if effective sector regulations are available. The latter would emerge from comparing, e.g., Deutsche Telekom, with UK Network Sharing Agreement, as the sector regulation in the former obviously had not worked as intended. This begs the question of what to consider effective sector regulation, and seeking outside Articles 101 and 102 clues on this can be found. Under the Merger Regulation (Regulation 139/2004), DG COMP has, e.g., been called several times to evaluate sector regulation and determine if this would alleviate concerns. In Gencor, DG COMP had rejected a set of submitted merger remedies and was subsequently called to defend this before the General Court (T-102/96) para 217-220. The Court confirmed DG COMP’s decision, as remedies could only be accepted if DG COMP could clearly evaluate if they addressed the identified impediments. Translated to the issue of effective sector regulation, DG COMP must be able to review the matter ex-ante in a convincing manner.

Consideration on the notion of being ‘effective’ is also available from Tetra Laval/Sidel, where the General Court (T-5/02), para 217-219, as an obiter dictum, noted how the prospect of an Article 102 case might reduce the risk of abusive behavior post-merger by acting as a deterrent on the merged entity. On appeal, the Court of Justice (C-12/03 P), at paras. 75 and 78, rebutted the relevance of this. Further consideration on the matter was offered in Orange/Jazztel (COMP/M.7421), recital 156 when DG COMP noted how changes in the regulatory environment were relevant if they could be reasonably predicted. This suggests that ex-ante sector regulation can only be considered effective if it significantly reduces the prospect of subsequent needs for ex-post-competition law intervention. Moreover, DG COMP must be able to evaluate this, making it insufficient that national intervention is possible unless also plausible. Embedded in this, the sector regulator must also be effective.

Does DG COMP’s priority rule also apply to itself?

Lacunes remains in DG COMP’s priority rules, including if it applies to DG COMP. Across the cases cited above, the ‘failure’ to remedy matters effectively under sector regulation rested with the national sector enforcers and, in reality, this was also the matter at hand in DB Station. However, with the adoption of the Digital Market Act (Regulation 2022/1925), DG COMP will get a more active role in ex-ante sector regulation enforcement, as DG COMP will be co-responsible for enforcement. It will probably be DG COMP’s position that it remains at liberty to apply competition law, but this rests uneasily with DG COMP’s priority rule and the principles emerging from DB Station. A more logical reading of the priority rule, and potentially, DB Station, would be that DG COMP initially must stall the application of, e.g., Article 102 until it has been cleared if the matter falls under the DMA and any of the adopted decisions.

Conclusions and Points of Consideration

With the Court of Justice’s ruling in DB Station, legal cover has been provided to what DG COMP (tacitly) has practiced for years in terms of waiving competition law enforcement if sector regulation is available. However, lacunae remain in our knowledge of the scope and application of this (secret) doctrine. E,g., is it unclear if both private and public enforcement can (or must) be waived for (effective) ex-ante sector regulation. The doctrine’s compatibility with other rulings can also be discussed as the Court of Justice; otherwise, e.g., in Courage and Crehan (C-453/99), at paras. 25-26 has described access to private enforcement as a form of a fundamental right that could not be denied. It would, therefore, be beneficial if the Court of Justice was given the opportunity to revisit the matter, ideally reformulating its finding into a recommendation rather than an obligation. Which accidentally was the position advanced by the Advocate General in DB Station, at paras. 84 and 86-90. Its scope and application beyond national private enforcement must also be cleared. Having said this, prioritising ex-ante sector regulation appears prudent, provided it does not conflict with the citizen’s right to pursue competition law claims before designated and able bodies.

Dr. Christian Bergqvist, University of Copenhagen, and GW Competition and Innovation Lab at The George Washington University.

SUGGESTED CITATION: Bergqvist, C.; “Time to rethink the interaction between ex-ante-sector regulation and ex-post-competition law”, EU Law Live, 17/04/2024, https://eulawlive.com/competition-corner/time-to-rethink-the-interaction-between-ex-ante-sector-regulation-and-ex-postcompetition-law-by-dr-christian-bergqvist/

The Principle of ne bis in idem in the Digital Economy EU Competition Law vs. the DMA?

Bernadette Zelger and Ina Kapusta

1. Setting the scene

The digital economy has expanded ever since the invention of the Internet and its becoming accessible to the public in the 1990s. It has brought changes in many ways and been a breeding ground not only for new technologies, but also business models, online markets as well as the rise of the so-called Big Tech companies (GAFAM/GAMAM, since Facebook was named Meta). Moreover, their business models combined with the characteristics of online markets and particularly (also) platform markets (i.e., for example, economies of scale, network and lock-in effects, etc.) have become quite a challenge for competition policy makers around the world. The answer of the European Commission has been fierce competition law enforcement while, at the same, adopting “sectoral regulation” as regards gatekeepers in the digital economy by means of the Digital Markets Act (“DMA”). These developments bring along various different issues concerning, inter alia, questions of parallel application of the two frameworks, i.e., the competition provisions of the TFEU and national competition provisions vs. the provisions of the DMA, as well as the very potential of a parallel application of the latter on procedural tenets such as the principle of ne bis in idem. It is the latter which shall be dealt with in the following.

2. The legal framework for the application of the ne bis in idem principle after bpost (C-117/20) and Nordzucker (C-151/20)

Undoubtedly, the principle of ne bis in idem as it is enshrined in Art 50 of the Charter of Fundamental Rights of the EU (“CFR”) is a fundamental principle of EU law that not only applies to criminal procedures but also to those, which are “sufficiently similar in nature”, including competition law (Bania 2023, pp. 141–142). Up until recently, the approach as regards the ne bis in idem principle in the area of competition law differentiated from the one adopted in other areas of EU law, as the Court of Justice of the European Union (“ECJ” or “Court”) applied a so-called “triple identity” test as regards the idem. Hence, the test for the establishment of the idem condition not only required the identity of the facts and unity of offender, but also the unity of the legal interest protected (Aalborg Portland [C-204/00], para 338; Toshiba [C-17/10], para 97; Nazzini 2014, p. 284). This latter criterion of the so-called “competition approach” (Tomkin 2021, para 50.86) has been considered irrelevant in other areas of EU law (Van Esbroeck [C-436/04], para 32; van Straaten [C-150/05], paras. 41 and 44; Zelger 2023, pp. 239–240) where it was not necessary to identify the same legal interest in order to fulfil the test.

With its decisions in bpost (C-117/20) and Nordzucker (C-151/20) the ECJ has abandoned the “competition approach” and introduced a uniform twofold criterion as regards the idem condition. It thereby converged

the approach in the area of competition law with the standards as regards the idem in other areas of EU law. Furthermore, as regards the bis condition it adopted a “restriction-justification approach” (Zelger 2023, 241 referring, as regards the notion of a “restriction-justification approach”, to Tomkin 2021, para 50.86) thereby abandoning the tenets as established in Åkerberg Fransson (C-617/10) and following its line in the case law (Rossi-Maccanico 2021, pp. 269–271) established in Menci (C-524/15), Garlsson (C-537/16) and Di Puma (joined cases C-596/16 and C-597/16). Doing so it aligned its jurisprudence with the case law of the ECtHR (A and B / Norway [Applications nos. 24130/11 and 29758/11]) allowing for a dual or “double track enforcement” (Opinion of AG Bobek in bpost [Case C-117/20], heading of section 4) of different proceedings in response to the same behaviour (Vetzo 2018, p. 57).

a. The main takeaway from Nordzucker (C-151/20): the abandonment of the “competition approach” and the twofold condition of the idem

The ECJ clarified that the application of the principle of ne bis in idem is subject to a twofold condition: firstly, there must be a prior final decision (bis condition) and, secondly, this prior decision must concern (idem condition) the same facts (bpost [C-117/20], para 28; Nordzucker [C-151/20], paras. 32-33; Volkswagen [C-27/22], para 57; Mayr 2022, p. 554; Kreße 2023, p. 44). The same facts, i.e., the idem condition, requires the identity of the material facts, i.e., “a set of concrete circumstances stemming from events which are, in essence, the same, in that they involve the same perpetrator and are inextricably linked together in time and space” (Juan [C-164/22], para 32; similar in bpost [C-117/20], para 53; Nordzucker [C-151/20], para 38). The idem thus requires the unity of the offender and the identity of facts. As regards the establishment of the identity of the facts the ECJ stuck to its “effects approach” as adopted in Toshiba (C-17/10; Zelger 2021, p. 266). This means that in order for parallel proceedings to be considered concerning the same facts, the decisions imposing the penalties must relate to the same effects of a measure in a certain territory and within a certain period of time (Zelger 2023, pp. 252–256).

b. The main takeaway in bpost (C-117/20): the abandonment of Åkerberg Fransson (C-617/10) and the “restriction-justification” approach as regards the bis

In bpost (C-117/20) the Court has furthermore clearly continued its approach regarding the bis as developed in Menci (C-524/15) and subsequent case law (Garlsson [C-537/16], Di Puma [joined cases C-596/16 and C-597/16) and thus abandoned its approach as adopted in Åkerberg Fransson (C-617/10). In other words, the ECJ, unlike in Åkerberg Fransson (C-617/10), where it left it to the national court to decide whether in case of successive penalties according to tax and criminal law, the tax penalty was indeed considered criminal in nature and thus suitable to establish a bis, it did not avoid ruling on the bis in case of parallel administrative and criminal law proceedings in bpost (C-117/20). Rather, it affirmed the existence of a bis by means of the proceedings of the Belgian telecommunication regulator and the Belgium competition authority. However, the Court also emphasised that such a breach of the prohibition of double jeopardy might nevertheless be justified pursuant to Art 52(1) CFR (Zelger 2023, p. 254). Such justification is subject to different criteria (Menci [C-524/15], paras.

44, 46 and 49; Robertson 2023, pp. 7–9) and thus, among others, the requirement that the two sets of rules pursue distinct legitimate objectives (bpost [C-117/20], paras. 44 and 47).

3. EU Competition Law vs DMA: dual proceedings – how to solve the matter?

With this framework in mind, what are the consequences of the aforementioned for potential dual proceedings of (EU or national) competition law on the one hand, and the DMA (or even national DMA-like provisions) on the other hand in the digital economy? There are various constellations possible; however, the following two shall be dealt with in this blogpost

a. Parallel proceedings of the Commission according to the EU competition provisions and the DMA

As argued elsewhere (Zelger 2023, p. 258), considering the approach as established in bpost (C-117/20) and Nordzucker (C-151/20), parallel proceedings according to the DMA as well as the EU competition provisions would very likely constitute an infringement of Art 50 CFR. However, such a breach of the ne bis in idem principle could still be justified under Art 52(1) CFR and thus the Menci (C-524/15) test (Andreangeli 2022, pp. 499–504; van den Boom 2023, pp. 79–80). Hence, it is pivotal in this regard whether the two sets of rules pursue distinct legitimate objectives. In other words, it all boils down to the question of whether or not the DMA and the competition provisions “pursue the same objective of general interest of ensuring that competition in the internal market is not distorted” or rather “pursue complementary aims relating to different aspects of the same conduct” (Nordzucker [C-151/20], paras. 56-57). While such question will be ultimately for the ECJ to decide, there are, as often, arguments on both sides.

In fact, considering the case law of the Court a breach of sector-specific regulation can still amount to an abuse of a dominant position within the meaning of Art 102 TFEU too (Slovak Telekom [C-165/19 P], para 57). Moreover, the DMA “aims to complement the enforcement of competition law” (recital 10). Therefore, the DMA expressly pursues an objective that is arguably complementary and thus different from the objective of protecting undistorted competition in markets, which is enshrined in competition law, namely, to ensure that markets in which gatekeepers operate are and remain contestable and fair (Horstkotte and Jannausch 2022, p. 152). This difference becomes particularly evident when considering the legal basis of the DMA. The regulation is based on Art 114 TFEU (the approximation of laws for the establishment of the internal market according to Art 26 TFEU) rather than on Art 103 TFEU providing the legal basis for competition law-related provisions (Ribera Martínez 2023, pp. 90–91; Bernatt and Zoboli 2022, p. 22). However, one could also argue the converse, i.e., that the ideological premise on which the DMA is based is the protection of undistorted competition as implicated in recital 7 (Bania 2023, pp. 146–147). Others go even further claiming that the DMA, in fact, could be (at least partially) considered lex specialis to competition law (Beems 2023, p. 20).

b. Parallel proceedings according to national competition provisions and the DMA

In case of parallel proceedings of a national competition authority due to a breach of the national competition provisions and proceedings of the Commission due to an infringement of the DMA, the pivotal questions in the context of the principle of ne bis in idem are twofold:

First, such a case could already be “solved” at the level of the idem condition (Zelger 2023, p. 259). Put differently, depending on which effects were taken account of by (i) the Commission and a subsequent decision of a national authority or, vice versa, (ii) the national authority and a subsequent decision of the Commission, such a case might not be caught by the prohibition of double jeopardy at all. This would be the case if either of the authorities excluded the effects already taken account of by the other authority in its earlier decision. By means of an example: Provided an infringement decision of the Commission considered the effects of an anti-competitive measure within the whole of the EU market, an infringement decision of, let’s say, the Austrian competition authority, would establish a breach of the ne bis in idem principle as the very same effects would have already been taken account of and fined by the decision of the Commission. However, in the case of an earlier decision of a national competition authority, the Commission could still penalise the very same anti-competitive behaviour without even triggering the ne bis in idem principle, given it excluded the effects of the measure in, given our previous example, the Austrian market (Bania 2023, p. 145; Engel et al. 2023, pp. 26–27).

Second, even if one were to conclude that there was indeed a breach of the principle of ne bis in idem, the arguments in favour and against a justification of the breach according to Art 52(1) CFR would be the same as under 3.a.

Similar issues surrounding the idem criterion as well as the notion of a distinct objective of general interest at the justification level could also occur in other constellations of parallel proceedings. The parallel application of stricter national provisions than Art 102 TFEU (e.g. § 19a dGWB) with parallel procedures under Art 102 TFEU on the one hand or parallel procedures under the DMA on the other, serve as examples to this effect. Here too, one might make the same claim as has been made in the context of the DMA, i.e., that they purportedly “pursue other legitimate public interest objectives as set out in the TFEU or […] as recognised by the case law” (recital 9; Art 1(6) DMA; Fratini 2023, pp. 68–69; Robertson 2023, pp. 8–9).

These questions and the high topicality of the issues stemming from the ne bis in idem principle at the intersection of competition law and its complementing laws (such as the DMA) is backed up by recent developments, e.g. the Commission’s recent decision to impose a fine on Apple in the amount of EUR 1.8 billion for abusing its dominant position for behaviour that is also prohibited under Art 5(4) DMA.

In light of this, the legal framework developed by the Court in its most recent case law and considering the various possible overlaps of competition law and the DMA as an ex-ante “economic regulatory law framework”, one thing seems to be certain: It won’t take long for the ECJ to get the chance to decide on the application of the ne bis in idem principle in case of such dual proceedings in the digital economy.

Dr Bernadette Zelger is an Assistant Professor at the Institute of European Law and Public International Law at the University of Innsbruck and currently an Emile Noël Fellow at the Jean Monnet Center for International and Regional Economic Law & Justice, NYU School of Law, New York, holding a Dr. iur., Mag. iur. from the University of Innsbruck, a Postgraduate Diploma in EU Competition Law from King’s College London and an LL.M. in Competition Law from Queen Mary University of London.

Ina Kapusta is an Assistant Professor at the Institute of Public Law, Constitutional and Administrative Theory at the University of Innsbruck and currently on a research stay at Max Planck Institute for Innovation und Competition in Munich, holding a Mag. iur. and LL.B. from the University of Innsbruck.

SUGGESTED CITATION: Zelger, B. and Kapusta, I.; “The Principle of ne bis in idem in the Digital Economy EU Competition Law vs. the DMA?”, EU Law Live, 15/04/2024, https://eulawlive.com/competition-corner/the-principle-of-ne-bis-in-idem-in-the-digital-economy-eu-competition-law-vsthe-dma-by-bernadette-zelger-and-ina-kapusta/

References

*Andreangeli, Arianna. 2022. The Digital Markets Act and the enforcement of EU competition law. European Competition Law Review 43 (11): 496–504.

*Bania, Konstantina. 2023. Fitting the Digital Markets Act in the existing legal framework: the myth of the “without prejudice” clause. European Competition Journal 19 (1): 116–149.

*Beems, Belle. 2023. The DMA in the broader regulatory landscape of the EU: an institutional perspective. European Competition Journal 19 (1): 1–29.

*Bernatt, Maciej and Laura Zoboli. 2022. Unveiling the Evolution of EU Competition Law Enforcement: Achievements, Challenges and Emerging (Digital) Questions. Jean Monnet Network on EU Law Enforcement Working Paper Series. https://jmneulen.nl/wp-content/uploads/sites/575/2023/11/WP-Series-No.-22-23.-Unveiling-the-Evolution-of-EU-CompetitionLaw-Enforcement-Achievements-Challenges-and-Emerging-Digital-Question.pdf. Accessed 11 March 2024.

*Engel, Annegret, Xavier Groussot and Emilia Holmberg. 2023. The Digital Markets Act and the Principle of Ne Bis in Idem: A Revolution in the Enforcement of EU Competition Law? https://ssrn.com/abstract=4547947. Accessed 11 March 2024.

*Fratini, Alessandra. 2023. Double Jeopardy Between Regulatory and Competition Proceedings: The bpost Judgment and the Digital Markets Act. In Postal Strategies, eds. Pier Luigi Parcu, Timothy J. Brennan and Victor Glass, 59–70. Topics in Regulatory Economics and Policy. Cham: Springer Nature Switzerland.

*Horstkotte, Christian and Matthias Jannausch. 2022. Ne bis in idem im Europäischen Wettbewerbsrecht. Zugleich Besprechung der Urteile des EuGH vom 22. 3. 2022 in Sachen C-151/20 (Nordzucker) und C-117/20 (bpost). IWRZ (4): 147–153.

*Kreße, Bernhard. 2023. Entscheidungsanmerkung zu EuGH v. 22.3.2022 – C-151/20 – Bundeswettbewerbsbehörde ./.

Nordzucker AG u.a. GPR 20 (1): 43–46.

*Mayr, Michael. 2022. Redefining the Ne Bis in Idem Principle in EU Competition Law: bpost and Nordzucker. Journal of European Competition Law & Practice 13 (8): 553–557.

*Nazzini, R. 2014. Fundamental rights beyond legal positivism: rethinking the ne bis in idem principle in EU competition law. Journal of Antitrust Enforcement 2 (2): 270–304.

*Ribera Martínez, Alba. 2023. An inverse analysis of the digital markets act: applying the Ne bis in idem principle to enforcement. European Competition Journal 19 (1): 86–115.

*Robertson, Viktoria H.S.E. 2023. The complementary nature of the Digital Markets Act and Articles 101 & 102 TFEU. https:// ssrn.com/abstract=4458112. Accessed 11 March 2024.

*Rossi-Maccanico, Pierpaolo. 2021. A Reasoned Approach to Prohibiting the Bis in Idem : Between the Double and the Triple Identities. eucrim - The European Criminal Law Associations’ Forum (4): 266–273.

*Tomkin, Jonathan. 2021. Commentary on Article 50 – Right not to be Tried or Punished Twice in Criminal Proceedings for the same Criminal Offence. In The EU charter of fundamental rights. A commentary, eds. Steve Peers, Tamara Katherine Hervey, Jeff Kenner, Angela Ward and Pekka Aalto. Oxford, New York, NY, Dublin, München, Baden-Baden: Hart; Beck; Nomos.

*van den Boom, Jasper. 2023. What does the Digital Markets Act harmonize? – exploring interactions between the DMA and national competition laws. European Competition Journal 19 (1): 57–85.

*Vetzo, Max. 2018. The Past, Present and Future of the Ne Bis In Idem Dialogue between the Court of Justice of the European Union and the European Court of Human Rights: The Cases of Menci , Garlsson and Di Puma. Review of European Administrative Law 11 (2): 55–84.

*Zelger, Bernadette. 2021. The Principle of ne bis in idem in EU Competition Law. WuW 71 (5): 261–268.

*Zelger, Bernadette. 2023. The Principle of ne bis in idem in EU competition law: The beginning of a new era after the ECJ’s decisions in bpost and Nordzucker? Common Market Law Review 60 (1): 239–262.

THE LONG READ

RED III Directive: Towards Accelerating EU energy independency and large-scale renewable energy installations

Anaïs Bereni 1

Russia’s invasion of Ukraine has once again highlighted the strategic nature of energy.2 The last revision of the Renewable Energy Directive, known as ‘RED III’,3 comes at a time of extreme geopolitical tensions. And it is the same tensions that are putting the case for a massive expansion of renewable energy in the EU back on the agenda. For this reason, the aim here is to give a brief, succinct account of the main developments in the promotion of renewable energy. This presentation is not intended to be exhaustive but rather to provide the key to understanding the partial revision of the legal framework for renewable energy. The RED III Directive was published in the Official Journal of the European Union on 31 December 2023 and follows the Green Deal’s objective of climate neutrality by 2050.4 In the short term, RED III makes possible to achieve the objectives of the ‘Fit-for-55’ plan, which guarantees a reduction in greenhouse gases of at least 55% by 2030.5

RED III Directive substantially amends the previous Directive,6 in particular by setting a binding target of 42.5%, and ideally 45%, of renewable energy in the EU’s gross final energy consumption (compared to 32% in the RED II Directive).7 The target is broken down by sector and energy type: 49% in buildings,8 29% in transport (plus a 5.5% sub-target for advanced biofuels).9 In industry, the share of renewable energy must increase by 1.6% per year compared to the previous year’s target.10 Also in the industrial

1. Ph.D. Candidate, CERIC, UMR 7318, Aix-Marseille Université, France.

2. On this matter, see e.g.: Bjarne Steffen, Anthony Patt, ‘A historical turning point? Early evidence on how the Russia-Ukraine war changes public support for clean energy policies’, Energy Research & Social Science, Vol. 91, 2022.

3. Directive (EU) 2023/2413 of the European Parliament and of the Council of 18 October 2023 amending Directive (EU) 2018/2001, Regulation (EU) 2018/1999 and Directive 98/70/EC as regards the promotion of energy from renewable sources, and repealing Council Directive (EU) 2015/652, (OJ 2023 L 2413), hereafter, ‘RED III’; Christine Le Bihan-Graf, Laure Rosenblieh, Hadrien Lemoine, ‘Analyse des principales mesures de la directive RED III, des modalités et des enjeux de sa transposition en droit interne’, Énergie – Environnement -Infrastructures, no 1, janvier 2024, comm. 1.

4. Ibid

5. Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions ‘Fit for 55’: delivering the EU’s 2030 Climate Target on the way to climate neutrality, COM(2021) 550 final.

6. Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion of the use of energy from renewable sources (recast), (OJ 2018, L 328, p. 82). Hereafter, ‘RED II’.

7. RED III, Art. 1; amending RED II, Art. 3.

8. RED III, Art. 1; RED II, Art. 15a, (inserted).

9. Ibid.; RED II, Art. 25 (replaced).

10. Ibid.; RED II, Art. 22a (inserted).

sector, 42% of the hydrogen used must come from renewable fuels of non-biological origin by 2030 and 60% by 2035.11 For sustainable biomethane, the target has been increased to 35 billion cubic meters (m3) by 2030.12 To this end, RED III seeks to accelerate the large-scale deployment of renewable energy sources and improve their attractiveness.13 EU’s renewable energy ambitions will be ensured through cooperation between Member States and spatial planning and simplification of permit-granting procedures.14 With regard to the economic attractiveness of projects, the focus has traditionally been on modernising existing support schemes and promoting power purchase agreements (PPA’s).15 This Long-Read is divided into two parts. Firstly, it is necessary to highlight the factors that will accelerate the development of installations at a large-scale (1). Secondly, we will look at how the European legislator intends to improve the attractiveness of projects (2). Those elements are presented hereafter.

1. Towards large-scale development of renewable energy installations and related components

In this first part, we will focus on cooperation and planification mechanisms. Indeed, those are the main instruments used by the EU’s legislator for the large-scale development of renewable energy. Indeed, the Commission precises that ‘cooperation mechanisms, should aim to ensure that renewable energy production will be sufficient to achieve Member States’ contribution to the overall Union renewable energy target set in Article 3(1) of Directive (EU) 2018/2001’.16 To that end, mapping is a necessity that Member States may use to aim the overall Union renewable energy targets.17

1.1 Establishing a framework for cooperation on joint projects

Several types of measures should enable the large-scale development of installations and their associated components. Firstly, Article 9 of RED II has been amended.18 This amendment requires each Member State to establish a cooperation framework for joint projects. This framework must be in place by 31 December 2025. By 31 December 2030, the framework must enable at least two joint projects to be

11. Ibid. ; É. Durand, ‘La contribution de l’hydrogène à la réalisation des objectifs du Green Deal’, Revue juridique de l’environnement, vol. 48, 2023/4, pp. 835-842.

12. RED III, para. no 9.

13. See e.g., Marcin Relich, ‘Renewable Energy in the European Union: The State of the Art and Directions of Development’, WSEAS Transactions on Business and Economics, vol. 21, 2024, pp. 630-637; see also, Council Regulation (EU) 2024/223 of 22 December 2023 amending Regulation 2022/2577 laying down a framework to accelerate the deployment of renewable energy, (OJ 2024 L 223).

14. RED III, paras. 20 and 35.

15. Ibid., paras. 15 and 88 ; Louis de Fontenelle, Marie Lamoureux, ‘Les contrats de vente directe d’électricité et de gaz, AJDA, 2023, no 22, juin 2023, p. 1145

16. Ibid., para. 32.

17. Ibid., Art. 15 (b)(1).

18. Ibid., para. 13 and Art. 9(1)(a).

established between Member States. In addition, by 31 December 2033, Member States whose annual electricity consumption exceeds 100 TWh must agree to implement a third joint project.19 Here, the legislator has been very precise: only States whose annual electricity consumption exceeds 100 TWh are concerned have to implement a third joint project – and only them. In addition, the RED III Directive specifies that joint offshore renewable energy projects fall within the scope of the newly amended Article 9. These projects are primarily covered by the provisions of Article 14(2) of Regulation 2022/86920 and the EU-wide 10-year network development plan adopted and publish by the ENTSO.21 This last article specifies that a ‘[…] high-level strategic integrated offshore network development plans shall provide a high-level outlook on offshore generation capacities potential and resulting offshore grid needs, including the potential needs for interconnectors, hybrid projects, radial connections, reinforcements, and hydrogen infrastructure.’

But, although Member States have to publish such plan, RED III precises that they may ‘go beyond these requirements and involve local and regional authorities and private undertakings’.22 Said otherwise, it seems EU’s legislator urges States to develop significantly offshore renewable energy projects, offshore grids and interconnectors –in collaboration with local authorities and undertakings– because those technologies can importantly participate in the reach of the ‘Fit-for-55’ objectives. In other words, the EU’s energy transition depends on the diversification of renewable energies and offshore technologies have the potential that Member States are looking for: to product important quantity of energy with less intermittency.

In order to facilitate the emergence of joint projects, Member States shall endeavor to share fairly the costs and benefits of such projects. That is why joint projects shall be the subject of a cooperation agreement which they shall notify to the Commission. The agreement shall include a date for the operational character of the joint project. Regarding this last point, Member States may refer to the Guidelines on the sharing of costs and benefits in the context of cooperation projects in the field of renewable energy of 29 December 2001.23 Indeed, this guidance aims to ‘shedding light on the options and design elements available for cost-benefit sharing, […] [and] to facilitate the overcoming of this barrier to further use

19. Ibid

20. Regulation (EU) 2022/869 of the European Parliament and of the Council of 30 May 2022 on guidelines for trans-European energy infrastructure, amending Regulations (EC) no 715/2009, (EU) 2019/942 and (EU) 2019/943 and Directives 2009/73/EC and (EU) 2019/944, and repealing Regulation (EU) no 347/2013, (OJ 2022 L 152, p. 45).

21. RED II (amend.), Art. 9(1)(a) ; Regulation (EU) 2019/943 of the European Parliament and the Council of 5 June 2019 on the internal market for electricity (recast), (OJ 2019 L 158, p. 54), Art. 30 §1, b).

22. RED II (amend.), Art. 9(1)(a).

23. Commission Notice, Guidance on Cost-Benefit Sharing in Cross-border Renewable Energy Cooperation Projects, (2022/C 495/01), C/2022/9284, (OJ 2022 C 495, p. 1).

of the cooperation mechanisms.’24 In our opinion, RED III urges Members States to joint their effort to create favourable conditions for the large-scale development of renewable energy projects, especially offshore.

1.2. Improving regional planning

In order to achieve their national contributions to the overall target of 42.5% of the EU’s gross final consumption of energy from renewable sources, Member States must, by 21 May 2025, carry out a coordinated mapping of the areas available for the development of installations and their associated components.25 In particular, States shall identify in their territory the domestic potential and the available land surface, sub-surface, sea or inland water areas that are necessary for the installation of renewable energy plants and their related infrastructure.26 Within this framework, the mapping must include Renewable Acceleration Areas (‘RAA’) by 21 February 2026.27 These areas may cover one or more type of energy sources. These areas exclude Natura 2000 sites and areas designated under national nature and biodiversity protection schemes. States are free to determine the size of these RAA, taking into account the specific characteristics and requirements of the type of technology installed. However, Member States are encouraged to designate significant RAAs in such a way that they contribute to achieving the objectives of the Directive. In addition, Member States may adopt one or more plans to designate specific infrastructure areas for the development of networks or storage infrastructure. Indeed, those elements are a necessity for the integration of renewable energy into the electricity system. The purpose of these infrastructures areas is to complement the RAA and to create synergies.28

1.3. Simplify the permit-granting procedure

The amended Article 16 creates a ‘contact point’ to which project applicants must apply.29 The procedure will be dematerialised by 21 November 2025. The competent authority will have 30 days to declare the application complete in the case of renewable energy installations located in RAA - compared to 45 days for projects outside these areas. Within this framework, Member States must ensure that administrative and judicial appeals relating to the development of the installation and all the elements necessary for its operation are subject to an expeditious procedure.

24. Ibid.

25. RED II (amend.), Art. 15b).

26. Ibid

27. Ibid., Art. 15c).

28. RED II (amend.), Art. 15e).

29. RED II (amend.), Art. 16 ; Christine Le Bihan-Graf, Laure Rosenblieh, Hadrien Lemoine, ‘Analyse des principales mesures de la directive RED III, des modalités et des enjeux de sa transposition en droit interne’, op. cit.

The duration of the permit-granting procedure falls under two conditions. Firstly, it depends on the type of installation. Secondly, it depends on the location of the installation, meaning whether it is outside or inside an RAA. In general, and subject to specific provisions, the duration of the permitting procedure for renewable energy projects is extended to 2 years and 1 year in RAAs. In exceptional cases, Member State may extended these deadlines by 6 months.

For example, for offshore renewable energy projects, the permit-granting procedure may not exceed 2 years in RAA, but may be spread over 3 years outside these areas. While this timeframe seems conducive to the development of technologies such as offshore wind turbines, it is harder to imagine that Member States will actually respect this deadline when it comes to marine renewable energy projects where the technology is less mature.

Certain categories of installations located in RAA may be exempted from the requirement of an environmental impact assessment (‘EIA’).30 This applies in particular to wind and solar energy projects. Outside these areas, where an EIA is required, it is carried out as part of a single procedure. In this way, the procedure combines all relevant assessments for a given renewable energy project.31

The European legislator is thus tending to create an increasingly favourable framework for the large-scale development of renewable energy installations. It should be noted, however, that it is up to the Member States to apply these provisions within the deadlines set.

2. Making renewable energy installations and their associated components more economically attractive

RED III Directive encourages Member States to establish a framework to remove remaining barriers to the development of renewable energy installations. The European legislator therefore urges Member States to develop appropriate support schemes32 and to adopt measures to facilitate the use of PPA’s for electricity from renewable energy sources.33

30. Ibid., Art. 16(a).

31. Ibid., Art. 16(b) (2).

32. RED II (amend.), Art. 3(3).

33. Ibid., Art. 4a (inserted).

2.1 State aid schemes

Public support for renewable energy projects plays an important role in large-scale development and so regarding security of supply.34 In terms of support schemes, the elements that deserve to be highlighted concern biomass and bioenergy. Indeed, RED III recognises the need to align bioenergy policies with the principle of the cascading use of biomass.35 The latter aims at the efficient use of resources by giving priority to the material use of biomass. Indeed, RED III precise the principle of the cascading use of biomass seeks ‘to achieve the resource efficiency of biomass use by prioritising, wherever possible, the material use of biomass over its energy use, thus increasing the amount of biomass available within the system. Such an alignment is intended to ensure fair access to the biomass raw material market for the development of innovative, high value-added bio-based solutions and a sustainable circular bioeconomy.’36 In this context, Member States should adopt schemes for raw materials for which there is little or no competition and whose supply is positive for the climate and for biodiversity . In other words, support schemes for bioenergy must not create a disincentive that would favor unsustainable bioenergy sectors. In addition, States cannot grant direct financial support for the use of sawlogs. Again, they may not grant new or renewed aid for the production of electricity from forest biomass in exclusively electrical installations, but this affirmation can support some exceptions.37 However, the European legislator recognises that the principle of cascading depends largely on national specificities, so that Member States may derogate from it, in particular for reasons of security of supply.38 Finally, RED III encourages Member States to make use of PPA’s, which are presented hereafter.

2.2. Creating a favourable framework for PPA’s

Managing the price risks in the long term is essential to make investments in renewable projects bankable. In this regard, PPA’s seek to manage time price risks.39 A renewable energy purchase agreement is ‘a contract under which a natural or legal person agrees to purchase renewable energy directly from a producer, which encompasses, but is not limited to, renewables power purchase agreements and renewables heating and cooling purchase agreements’.40 It is therefore a long-term purchase contract for renewa-

34. Mariia Kozlova, Kaisa Huhta, Alena Lohrmann, ‘The interface between support schemes for renewable energy and security of supply: Reviewing capacity mechanisms and support schemes for renewable energy in Europe’, Energy Policy, vol. 181, 2023.

35. RED II (amend.), Art. 3(3).

36. RED III, para. 10.

37. See: RED II (amend.), Art. 3(c) and (d).

38. RED III, para. 10.

39. Saara Hollmén, Fabian Levihn, Gustav Martinsson, ‘When markets don’t deliver: bilateral hedging by means of PPAs in managing intertemporal price risks in power generation investments’, IEEE, 2022.

40. Ibid., Art. 1(d), 14q.

ble energy. This new market complements the market for renewable energy production in addition to support schemes or direct sales on the wholesale electricity market. However, these contracts concern only a small part of the Member States and specific undertakings. This is mainly due to the fact that significant administrative, technical and financial barriers remain in a large part of the European energy market. This is why RED III encourages the development of PPAs through the use of credit guarantees. These guarantees must limit the financial risks associated with these contracts. When these guarantees are public, they are complementary to private financing and are not intended to replace it. In order to develop PPAs for renewable energy in the EU more broadly, the Commission must analyse the remaining obstacles. In the near future, the Commission will have to publish guidelines on how to remove these obstacles, in particular with regard to the use of cross-border agreements –which will undoubtedly play a decisive role in the large-scale development of renewable energies in the EU.41

Conclusion

RED III creates new renewable energy targets that are in line with the EU’s climatic and geopolitics challenges. RED III aims to facilitate the implementation of new onshore and offshore projects in accelerating granting permitting procedures and facilitating joint projects. It should be noted, however, that the implementation of projects will depend on the resources allocated to the national services responsible for permitting. Finally, it should be emphasised that the acceleration of the deployment of installations depends –importantly– on the development or the maintenance of energy networks. On this matter, investments will be essential. That is why the development of the networks shall be carried out in a joint and coordinated manner by the Member States. This joint and coordinated development seems to be, in my opinion, the only way to go neutral by 2050.

SUGGESTED CITATION: Anaïs Bereni: “RED III Directive: Towards Accelerating EU energy independency and large-scale renewable energy installations”, EU Law Live Weekend Edition nº183, https://eulawlive.com/weekend-edition/weekend-edition-no183/

41. On this point, see: Art. 15(8).

HIGHLIGHT F THE WEEK S O

Ombudsman decision on on the refusal of the European Health and Digital Executive Agency to grant full public access to documents concerning the AI4Gov Master education programme

Monday 15 April

The Ombudsman made public the Decision on the refusal of the European Health and Digital Executive Agency (HaDEA) to grant full public access to documents concerning the AI4Gov Master education programme (case 376/2024/SF), by finding no maladministration but made a suggestion to address the fact that not all relevant exceptions had been invoked by HaDEA.

Read on EU Law Live

Commission Delegated Regulation amending existing rules on binding information in the field of customs valuation, published in OJ

Monday 15 April

Official publication was made of Commission Delegated Regulation (EU) 2024/1072 of 25 January 2024 amending Delegated Regulation (EU) 2015/2446 as regards decisions relating to binding information in the field of customs valuation and decisions relating to binding origin information.

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Anti-SLAPP Directive to combat strategic lawsuits, published in OJ

Tuesday 16 April

Official publication was made of Directive (EU) 2024/1069 of the European Parliament and of the Council of 11 April 2024 on protecting persons who engage in public participation from manifestly unfounded claims or abusive court proceedings [Strategic lawsuits against public participation (SLAPP)].

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ECtHR rules in Tonchev v. Bulgaria: Violation of privacy rights due to prolonged data retention

Tuesday 16 April

The European Court of Human Rights (ECtHR) delivered its judgment in the case of Borislav Tonchev v. Bulgaria (Application no. 40519/15) concerning the prolonged retention of data related to a substitute administrative penalty imposed on the applicant in 2004, raising concerns about compliance with Article 8 § 2 of the Convention for the Protection of Human Rights and Fundamental Freedoms.

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The Week

EU requests consultations on UK’s sandeel fishery closure under Trade Agreement

Tuesday 16 April

The EU initiated consultations with the United Kingdom (UK) under the dispute settlement mechanism of the EU-UK Trade and Cooperation Agreement (TCA) regarding the UK’s decision to permanently close the sandeel fishery.

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Commission publishes 2024 State of Schengen report highlighting key achievements and priorities

Tuesday 16 April

The Commission reported on the 2024 State of Schengen over the past year and set the priorities for the year ahead.

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European Media Freedom Act laying down common framework for media services in the internal market, published in OJ

Wednesday 17 April

Official publication was made of Regulation (EU) 2024/1083 of the European Parliament and of the Council of 11 April 2024 establishing a common framework for media services in the internal market and amending the Audiovisual Media Services Directive (European Media Freedom Act).

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Regulation (EU) 2024/1106 amending Regulations (EU) No 1227/2011 and (EU) 2019/942 concerning the Union’s protection against market manipulation on the energy market, published in OJ

Wednesday 17 April

Official publication was made of Regulation (EU) 2024/1106 of the European Parliament and of the Council of 11 April 2024 amending Regulations (EU) No 1227/2011 and (EU) 2019/942 as regards improving the Union’s protection against market manipulation on the wholesale energy market.

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General Court upholds rejection of “Pablo Escobar” trademark due to public perception

Wednesday 17 April

The General Court has delivered its judgment in case T-255/23 | Escobar v EUIPO (Pablo Escobar) concerning the registration of the word sign Pablo Escobar as an EU trade mark.

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General Court dismisses challenges to EU’s rejection of National Energy and Climate Plans review requests

Wednesday 17 April

The General Court delivered its judgments in NLVOW v Commission (T-331/22), Stichting Nationaal Kritisch Platform Windenergie v Commission (T-344/22), Stöttingfjällets Miljöskyddsförening v Commission (T-345/22) and Föreningen Svenskt Landskapsskydd v Commission (T-346/22), cases revolve around the Netherlands Integrated National Energy and Climate Plan 2021-2030 and concerns the rejection of an internal review request by the European Commission.

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Council Decision approving conclusions of Agreement establishing Association between EU and Central America, published in OJ

Wednesday 17 April

The Official Journal of the EU published Council Decision (EU) 2024/1156 of 12 April 2024 on the conclusion of the Agreement establishing an Association between the EU and its Member States, on the one hand, and Central America on the other.

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General Court upholds import restrictions on Russian goods in response to Ukraine crisis

Wednesday 17 April

The General Court delivered a judgment concerning restrictive measures imposed by the European Union (EU) in response to Russia’s actions destabilizing Ukraine.

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General Court dismisses action against Commission’s decision finding Swedish tax on credit institutions as compatible with State aid rules

Wednesday 17 April

The General Court, sitting in its Extended Composition formation, delivered its judgment in a case concerning an action, brought by Svenska Bankföreningen and Länsförsäkringar Bank against Commission, concerning the annulment of the Commission’s decision of 24 November 2021 in Case SA.56348(2021/N) – Sweden: Swedish tax on credit institutions: Svenska Bankföreningen and Länsförsäkringar Bank v Commission (T-112/22).

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The Week

Commission sends TikTok request for information, under DSA, concerning the potential impact of TikTok Lite on protection of minors and users’ mental health

Wednesday 17 April

The Commission sent TikTok a request for information under the Digital Services Act (DSA), asking for more details on the risk assessment TikTok should have carried out before deploying its new app, TikTok Lite, in the EU.

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College of Commissioners approves establishment of interinstitutional ethics body

Wednesday 17 April

The European Commission officially greenlit an agreement among EU institutions and bodies to create the first-ever interinstitutional Ethics Body.

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Large online platforms’ ‘consent or pay’ model, based on processing of personal data, should provide real choice for users

Wednesday 17 April

The European Data Protection Board (EDPB) adopted an Opinion, following an Art. 64(2) GDPR request by the Dutch, Norwegian & Hamburg Data Protection Authorities (DPA), concerning the validity of consent to process personal data for the purposes of behavioural advertising, in the context of ‘consent or pay’ models deployed by large online platforms.

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EFTA Surveillance Authority Guidelines providing national courts with information on enforcement of State aid rules at national level, published in OJ

Thursday 18 April

Official publication was made of EFTA Surveillance Authority (ESA) Decision No 081/23/COL of 31 May 2023 amending the procedural and substantive rules in the field of State aid by introducing revised Guidelines on the enforcement of State aid rules by national courts [2024/1181].

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Court of Justice: Former Czech rules on limitation period make exercise of right to claim compensation for harm resulting from infringement of competition law impossible or excessively difficult

Thursday 18 April

The Grand Chamber of the Court of Justice handed down its judgment in a case concerning a request for a preliminary ruling on the interpretation of Directive 2014/104 (EU Damages Directive), of Article 102 TFEU, and of the principle of effectiveness: Heureka Group (Comparateurs de prix en ligne) (C-605/21).

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The Week

Legal interpretations and implications of Air Berlin insolvency cases for worker claims, asset transfers, and cross-border insolvency proceedings, clarified by the Court of Justice

Thursday 18 April

The Court of Justice delivered its judgment in cases C-765/22 Luis Carlos and others and C-772/22 Victoriano and others, cases originating with the initiation of insolvency proceedings against Air Berlin by the Civil and Criminal Court of Charlottenburg (Berlin, Germany) on November 1, 2017.

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Court of Justice: Article 27(1) of the Dublin III Regulation does not oblige Member States to offer remedy against decisions made under Article 17(1)

Thursday 18 April

The Court of Justice delivered its judgment in case Minister for Justice (Clause discrétionnaire – Recours) (C-359/22) concerning the interpretation of various provisions of Regulation (EU) No 604/2013, commonly known as the Dublin III Regulation.

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AG Campos Sánchez-Bordona suggests vehicle supplier could be regarded as producer, in the context of pursuing liability for damage arising from defective product

Thursday 18 April

Advocate General (AG) Campos Sánchez-Bordona delivered his Opinion in a case regarding a preliminary reference, from the Corte suprema di cassazione (Italy), on the liability of economic operators (producer and supplier) for the damage caused as a result of a traffic accident which took place in Italy and in which an airbag of a vehicle of the Ford brand did not work:

Ford Italia (C-157/23).

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Court of Justice rules on excise duty exemption for accidental loss

Thursday 18 April

The Court of Justice delivered its judgment in case C-509/22, a preliminary ruling request from the Corte suprema di cassazione (Supreme Court of Cassation, Italy) concerning the interpretation of Article 7(4) of Council Directive 2008/118/ EC of December 16, 2008, regarding the general excise duty regime and repealing Directive 92/12/EEC.

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AG Medina delivers Opinion concerning Regulation No. 1346/2000 and Brussels Ia Regulation scope in insolvency proceedings

Thursday 18 April

Advocate General Medina delivered her Opinion in Oilchart International (C 394/22) concerning whether the action brought by the creditor before a national court, different from the one that is seised with the insolvency proceedings, for an invoice that has been filed for verification with the insolvency liquidator falls within the scope of the Insolvency Regulation or within that of the Brussels Ia Regulation.

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Préfet du Gers II: UK nationals who exercised their free movement rights before the end of the transition period no longer entitled to participate in European Parliament elections

Thursday 18 April

The Court of Justice handed down its judgment in Préfet du Gers and Institut national de la statistique and des études économiques II (‘Préfet du Gers II’) (C-716/22), a request for a preliminary ruling from the Court of Auch (France) concerning the validity of Council Decision 2020/135 on the conclusion of UK’s Withdrawal Agreement.

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OT and Others: Request for preliminary ruling from Sofia City Court deemed inadmissible by Court of Justice

Thursday 18 April

The Court of Justice handed down judgment in OT and Others (C-634/22), a request for a preliminary ruling from the Sofia City Court (Bulgaria) concerning the interpretation of Articles 2, 6(1), 6(3) and 19(1) TEU, read in conjunction with Article 47 CFR and the principle of primacy of EU law.

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Dumitrescu and Others: criterion for calculating payment of travel expenses pursuant to Article 8(2) of Annex VII to the Staff Regulations infringed principle of non-discrimination on the grounds of nationality

Thursday 18 April

The Court of Justice handed down judgment in Dumitrescu and Others (Cases C-567/22 P to C-570/22 P), a set of cases concerning the interpretation of the Staff Regulations.

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Court of Justice interprets meaning of ‘trust or company service provider’ for the purposes of Article 3(7) (c) of Directive 2015/849

Thursday 18 April

The Court of Justice handed down its judgment in Citadeles nekustamie īpašum (C-22/23), a request for a preliminary ruling from the District Administrative Court (Lithuania) concerning the interpretation of Article 3(7)(c) of Directive 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing.

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Court of Justice should dismiss appeal concerning Commission’s decision on examination of support measures granted to Slovenian public pharmacies, suggests AG Rantos

Thursday 18 April

Advocate General (AG) Rantos delivered his Opinion in a case, on appeal, seeking the setting aside of the General Court’s judgment in Case T-392/20, by which the Commission Decision C(2020) 1724 final of 24 March 2020 closing the examination of measures concerning the public pharmacy chain Lekarna Ljubljana, in the light of the State aid rules in Articles 107 and 108 TFEU (Case SA.43546 (2016/FC) – Slovenia), in so far as it concerns the ‘assets under management’ of Lekarna Ljubljana was annulled: Slovenia v Flašker and Commission (C-447/22 P).

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EFTA Court interprets meaning of ‘minimum benefit’ for the purposes of Article 58 of Regulation 883/2004

Thursday 18 April

The EFTA Court handed down judgment in A v. Arbeids- og velferdsdirektoratet (Case E-3/23), a dispute concerning the interpretation of Article 58 of Regulation 883/2004 on the coordination of social security systems.

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Ombudsman’s decision on how the Commission managed concerns regarding its impact assessment of ‘new genomic techniques’ in light of EU legislation on GMOs

Friday 19 April

The European Ombudsman concluded an inquiry into how the European Commission managed concerns regarding its impact assessment of ‘new genomic techniques’ in light of EU legislation on genetically modified organisms (GMOs).

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Vacancy notice: Référendaire at the General Court

Friday 19 April

A vacancy notice was published to fill the post of référendaire at the General Court.

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The Week

EDPB sets out key priorities in its Strategy for 2024-2027

Friday 19 April

During its latest plenary, the European Data Protection Board (EDPB) adopted its strategy for 2024-2027, which sets out the EDPB’s priorities, grouped around four pillars.

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Commission proposes youth mobility agreement with UK

Friday 19 April

The European Commission proposed initiating negotiations with the UK to establish an agreement aimed at enhancing youth mobility between the two entities.

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Commission invites comments on commitments offered by Vifor relating to its alleged abuse of dominant position in the market for intravenous iron treatment

Friday 19 April

The European Commission invited all interested parties to submit their comments on the commitments, offered by Vifor, to address competition concerns over the alleged disparagement of its closest competition in Europe for intravenous iron treatment medicine.

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