The Week Nº25

IN-DEPTH:

The Strasbourg Effect

Daniel Sarmiento and Sara Iglesias Sánchez

The Devil is in the (Procedural) Details – the Court’s Judgment in La Quadrature du Net

Xavier Groussot and Annegret Engel

Proportionality in Union citizenship: Time, Substance and Procedure – Lessons from Joined Cases C-684/22 to C-686/22, Stadt Duisburg

Miguel del Moral Sánchez

Brexit: The tide that carried EU rights away (Préfet du Gers II, C-716/22)

Antoine Parry

The Court condemns ‘cherry-picking’ of risks and benefits of the internal market for banking services (Case C-822/21, Latvia v. Sweden (deposit guarantee schemes))

Mārtiņš Rudzītis

Mapping obligations, rights and remedies in the (future) Common European Asylum System (C-359/22, AHY v Minister for Justice)

Catherine Warin

The Ideella judgment: the GC endorses a Commission decision not to raise objections against a risk tax on large credit institutions based on its non-selective nature

Nieves Bayón Fernández

SYMPOSIUM ON CLIMATE PROTECTION AS A EUROPEAN FUNDAMENTAL RIGHT UNDER THE ECHR AND BEYOND

The Klimaseniorinnen case: Clearing the Air for Corporate Climate Litigation

Sumeyra Arslan

Intersectionality in the KlimaSeniorinnen case – ‘older women’ in action

Christa Tobler

COMPETITION CORNER: SYMPOSIUM ON COMPETITION LAW AND REGULATION

A Bias Towards Enforcement: How the DMA Changes the Landscape

Jasper van den Boom & Rupprecht Podszun

Competition law and space regulation: Orbital markets, Martian efforts, and a planetary champion?

Fabian Ziermann

THE LONG READ:

EU Citizenship and Brexit: A Mid-Term Review

Polly Ruth Polak

HIGHLIGHTS OF THE WEEK

IN-DEPT H

The Strasbourg Effect

Daniel Sarmiento and Sara Iglesias Sánchez

The influence of the European Court of Human Rights is on the rise. Recent judgments in the fields of climate change, the protection of judicial independence or immigration, to name only a few examples, have put the Strasbourg court in the limelight. The recent rise of the court’s influence is not entirely a surprise. Rule of law backsliding puts at risk some of the basic rights enshrined in the Convention, from freedom of information and expression to judicial independence. The existential crises that now affect humanity (climate change and the rise of artificial intelligence) demand a response from a fundamental rights perspective. The challenges that the new digital economy brings about come hand in hand with the emergence of new tensions in which societal values demand complex compromises, mostly through the balancing of competing fundamental rights. In sum, the signs of the times are inevitably calling the European Court of Human Rights to play a key role in solving some of the complex challenges now faced by Europeans and the world more generally.

So how does this growing influence impact the EU and its law? After all, the European Court of Human Rights (hereinafter, ‘ECtHR’) has no jurisdiction over EU action, nor has the EU acceded to the European Convention of Human Rights (hereinafter, ‘the Convention’), despite the imperative mandate to do so in Article 6 TEU. The Court of Justice has followed the path of the ECtHR in the past, aligning its case-law to the findings of the Strasbourg court, but this alignment has not always been amicable nor complete. The reiterated refusal of the Court of Justice to authorise the accession of the EU to the Convention has not made matters any easier. The Charter of Fundamental Rights includes a provision, Article 52(3), to facilitate the alignment of the Charter with the Convention, but thus far the Court of Justice has used this rule mostly as a source of inspiration, but not as a means of providing the Convention automatic legal effects over the interpretation of the Charter.

However, some recent decisions suggest that the ECtHR’s shadow looms as large as ever over the Court of Justice. In this Insight we will give some examples of this growing role of the Strasbourg court and of the Convention in the practice of EU law. Some considerations will also be made as to the broader impact of this trend and the potential consequences it may have in the future attempts of the EU to accede to the Convention.

The rulings of the ECtHR in the climate change cases (Verein KlimaSeniorinnen Schweiz and Others v. Switzerland, Carême v. France and Duarte Agostinho and Others v. Portugal and 32 Other States) made the headlines across the world. A major international court was embracing a new interpretation of the fundamental right to family life with the aim of incorporating an environmental dimension that includes the positive obligation of the contracting States to combat climate change. The substance of this case will certainly have an impact in the signatory States of the Convention, as well as indirectly in the EU’s climate agenda. However, another more technical and discreet aspect was addressed by the ECtHR, with very significant practical implications for EU law and the case-law

of the Court of Justice. In Verein KlimaSeniorinnen Schweiz and Others v. Switzerland, the ECtHR declared a violation of Article 8 of the Convention, but also of Article 6 of the Convention due to the Swiss courts’ lack of engagement with the claims brought by a non-profit association established under Swiss law to promote and implement effective climate protection on behalf of its members. In addition, the ECtHR granted victim status to the association pursuant to Article 6 of the Convention, whilst it rejected the standing of the individuals acting as applicants in the case. To come to this conclusion, the ECtHR relied heavily on the specific role granted by the Aarhus Convention to NGOs in environmental matters. This ruling will have major repercussions in the practice of climate litigation, inasmuch it paves the way for environmental NGOs to bringing actions before the Strasbourg court in their capacity as victims of a violation of the Convention, but it also puts a particular burden on Member States to articulate remedial channels for these organisations as a means of guaranteeing environmental justice. It should be noted that not only the Member States, but also the EU are parties to the Aarhus Convention, on which the ECtHR relied to reach this outcome.

The Court of Justice’s record in providing such channels has not been too inspiring to date. Due to the restrictive conditions imposed by Article 263 TFEU, fourth paragraph, to private applicants in bringing direct actions in Union courts, considerable efforts have been invested in the attempt of aligning this framework with the more generous conditions provided in the Aarhus Convention for NGOs in environmental matters. This tension ensued in a reform of Regulation 1367/2006, following a clash with the Aarhus Convention Compliance Committee, which still remains unresolved in some specific points. At the present time, the conditions that an environmental association must fulfill to comply with the requirements of individual and direct concern of Article 263 TFEU are stringent and make it difficult to challenge the inaction of the Union to introduce general measures, or the ability to challenge directly such general measures. How does Verein KlimaSeniorinnen Schweiz alter the status quo? For starters, the interpretation of Article 6 of the Convention points in the direction of imposing much more rigorous standards of review over national channels and analysis of claims brought by environmental NGOs in cases concerning climate change, in a combination in which the Aarhus Agreement and the Convention interact with the purpose of providing full judicial participation to environmental NGOs. Climate litigation could eventually reach Union courts through preliminary references of validity, but it is questionable to what extent can failures to act of the Union be reviewed through this indirect course of action. Also, Articles 7 and 47 of the Charter must be interpreted in conformity with the standards set by the ECtHR in its interpretation of the Convention. While the Court of Justice has not always been enthusiastic about deploying the full effects of Article 52(3) of the Charter, as time goes by it will be more and more untenable to close the doors of Union courts to environmental NGOs, at the same time that the Member States and other international organisations have adapted to the new remedial framework following Verein KlimaSeniorinnen Schweiz

In a different field, that of privacy and data protection, the Union has stood in the opposing side: by providing a very high standard of protection, this time in the right to private life. As is known, the Court of Justice turned the Union into the international champion of international protection of data and, in particular when national measures gathering data amounted to a retention of data. In the well-known cases of Digital Rights Ireland, Tele2

and Quadrature du Net, among others, the Court of Justice affirmed the Union’s high level of protection of privacy, by precluding measures of mass retention of data by private or public authorities, including public authorities acting in the field of defence and security. The balancing exercise provided by the Court of Justice was heavily inclined in favor of the right to privacy, whilst only in highly strict circumstances could this right be overridden by another competing interest. This approach led to serious difficulties in the Member State when it came to handle data and make use of it for the purpose of pursuing policies linked to a general interest. In contrast, the approach taken by the ECtHR was more balanced, undertaking a careful analysis of the different interests at stake and providing further leeway to the Member States when it was clear that public interest policies were at risk. Whilst the approach of the Court of Justice seemed almost categorical in its devout protection of privacy, the Strasbourg court seemed to follow a more nuanced approximation to the matter.

After more than a decade reiterating the bluntness of its case-law, the Court of Justice finally conceded in Quadrature du Net 2, delivered this month. As evidence of the difficulty that the Court of Justice found in nuancing its case-law, it was the Full Court that was called to rule on the case, a sign that evidenced the internal tensions within the Court over the handling of a case-law that had strained the relations with national courts, in particular with the French Conseil d’État. How did the Court of Justice adapt its tone and what did it rely on to reach such an outcome? An important clue can be found in paragraphs 114, 116 and 117 of the judgment, where it finally decided to rely on the case-law of the ECtHR, which had been ruling on similar cases for some time, almost in parallel to the Court of Justice, but using a balanced approach that led the Strasbourg court to provide a more nuanced protection of the right to private life. Thus, the reference in Quadrature du Net 2 to Lopez Ribalda v. Spain, Gardel v. France and K.U. v. Finland, three cases in which it is no coincidence that the ECtHR sided with the party retaining the personal data, or with the victim that had complained of the State’s cautious stance vis-à-vis law enforcement on the internet. In sum, it was the reasoning and methodology used by the ECtHR that finally prevailed in the Court of Justice’s full court decision of Quadrature du Net 2, after years of a blunt and probably too one-sided interpretation of the fundamental right to private life.

Another area in which the ECtHR has recently shown its ability to take the lead is the protection of the rule of law in the Member States. At first, the Court of Justice seemed poised to set the terms of the debate in the seminal Associação Sindical dos Juízes Portugueses, the first occasion in which the principle of judicial independence was declared to be a self-standing ground of review on the basis of Article 19 TEU, interpreted in light of Article 47 of the Charter. This judgment paved the way to a wide array of judicial decisions concerning the 2017 judicial reforms in Poland, a sweeping transformation of the Polish judiciary that led to a new composition of the National Council of the Judiciary, a reattribution of the organic links of the Prosecutor’s Office to the Ministry of Justice, the introduction of a Disciplinary Chamber in the Supreme Court and many other measures that targeted the independent judiciary in Poland as part of an offensive led by the ruling coalition parties in government. Whilst the Court of Justice was very strict in its review of the Polish reforms, it was more cautious when the matter came to the composition of the National Council of the Judiciary, which had changed its composition from a judicialbased appointments system to a model in which the appointments are subject to the influence of the legislature

and the executive. To date, the Court of Justice has been reluctant to rule on the standards of independence that must apply to a council of the judiciary of a Member State, using a balanced approach that requires proof of a specific breach of independence in the case at hand, and not in structural terms. In fact, the Court of Justice is not inclined to rule in general terms on how should judges be appointed in the Member States, a feature that was clear in the case of Repubblika, where the powers of appointment of judges of the Maltese Prime Minister were reviewed and declared in line with the Treaties, subject to a broad discretion left to the Member States.

And then the ECtHR stepped in. In the case of Guðmundur Andri Ástráðsson v. Iceland, introduced clear criteria on the appointment of judges in light of Article 6 of the Convention. And when the principles of Guðmundur Andri Ástráðsson v. Iceland, were applied to the Polish case in Advance Pharma v. Poland, the ECtHR was blunt in its assessment: the National Council of the Judicial is not an independent body and any appointment of a judge made by the institution will deprive the court in which it sits of its condition of a ‘tribunal established by law’. The Court of Justice’s cautious approach towards the appointment of judges and the composition of the bodies appointing judges was put in sharp contrast with the findings of the Strasbourg court. As time went by, the Court of Justice had to readjust its caution and act more boldly. A change that was confirmed in the more recent judgment of Krajowa Rada, when the Court of Justice finally ruled that the Chamber of Extraordinary Control and Public Affairs, whose sitting judges were appointed by the National Council of the Judiciary, was not a ‘tribunal’ for the purposes of Article 267 TFEU, and therefore it had no ability to refer questions for a preliminary reference. The wording of the judgment in paragraph 58 could hardly be more telling:

‘In the light of the Court’s own case-law on the interpretation of the second subparagraph of Article 19(1) TEU, read in the light of the second paragraph of Article 47 of the Charter, the findings and assessments made by the European Court of Human Rights in the judgment in Dolińska-Ficek and Ozimek v. Poland and by the Naczelny Sąd Administracyjny (Supreme Administrative Court) in its judgment of 21 September 2021, as described in paragraphs 47 to 57 above, lead to the conclusion that, because of the manner in which its constituent judges were appointed, the panel of judges of the Chamber of Extraordinary Control and Public Affairs which made the present request for a preliminary ruling does not have the status of an independent and impartial tribunal previously established by law, for the purposes of those provisions of EU law, with the result that that panel of judges does not constitute a ‘court or tribunal’ within the meaning of Article 267 TFEU.’

This short summary of recent interactions between the ECtHR and the Court of Justice is good proof of multiple points of connection between both jurisdictions, in which the Strasbourg court is playing a growing role in essential developments that have a direct impact in EU law and its policies. Seen in this light, it is a mistake to characterise the ECtHR as a court of minimum standards, as a jurisdiction working on a security net for all the signatory countries that can be superseded by any of them at their will. This portrait is a misconception of the role currently played by the ECtHR, in which it is not only setting a minimum standard of protection throughout the continent, but it is also pushing specific fields into new directions needed of protection, thus conditioning policy, case-law and the environment of European litigation altogether. These are not developments stemming from a

modest jurisdiction working on minimum standards, it is the outcome of a jurisdiction playing an active role in the societal and institutional discussion over key values of our times, seen through the lens of fundamental rights protection.

In these circumstances, it is questionable (to say the least) that the negotiations on the accession of the EU to the Convention remain in legal and political limbo. In the wake of Opinion 2/13, a somber mood prevailed over the prospect of Union accession and, despite the recent efforts in that direction, it is uncertain whether there is any success on the horizon. Having reached this point, the following question emerges: are the technicalities raised by the Court of Justice in Opinion 2/13 sufficiently serious as to keep the EU outside the remit of the Convention and the jurisdiction of the ECtHR? Is the EU acting wisely in its reluctance to openly embrace the role of this means of external control, particularly at a time in which the most relevant societal issues are being brought before the ECtHR, and the court is giving responses that are having a manifest impact in its signatory States, most of them members of the EU? It is no coincidence that the EU intervened in the proceedings in Verein KlimaSeniorinnen Schweiz and others, as proof that its climate agenda was indirectly put at risk when Portugal and France were brought before the Strasbourg court.

Considering the role that the ECtHR is currently playing, and its overall impact in the political and judicial landscape, is it worth carrying on the bickering over the technicalities of Opinion 2/13? While the hesitations and doubts of the Union over accession continue, the ECtHR carries on with its task of interpreting the Convention, a text that is deploying enormous influence over the laws and policies of the Member States and the Union. The longer it takes the EU to assume the need and urgency of acceding to the Convention, the longer it will take for the EU to be in a position to react, respond and have a say in the growing expansion of the Strasbourg effect.

Daniel Sarmiento is Professor of EU Law at the Universidad Complutense of Madrid and Editor-in-Chief of EU Law Live.

Sara Iglesias is Professor of EU Law at the Universidad Complutense of Madrid and In-Depth/Weekend Edition editor at EU Law Live.

SUGGESTED CITATION: Sarmiento, D. and Iglesias, S; “The Strasbourt Effect”, EU Law Live, 14/05/2024, https://eulawlive.com/insight-thestrasbourt-effect-by-daniel-sarmiento-and-sara-iglesias-sanchez/

The Devil is in the (Procedural) Details – the Court’s Judgment in La Quadrature du Net

Xavier Groussot

and Annegret Engel

Background to the case

The present ruling in Case C-470/21 La Quadrature du Net e.a. (Données contre la contrefaçon), delivered on 30 April 2024, constitutes a landmark ruling as it is of utmost importance to understand the proceduralisation of EU law and the need for ‘prior review’ when assessing violations of fundamental rights in the digital field within the framework of the proportionality clause of the EU Charter, i.e. Article 52(1). It also follows a rare instance of two opinions delivered by the Advocate General (AG) Szpunar after a reopening of proceedings. EU Law Live has reported here.

In short, the case concerns a preliminary ruling request from the French Council of State on the basis of a challenge brought by the applicants in the main proceedings regarding the violation of the right to respect for private life of national law, namely the third to fifth paragraphs of Article L. 331-21 of the French Intellectual Property Code (CPI), after a rejection of their application for repeal of Decree No 2010-236. In particular, the applicants submit that the contested national legislation permits access to connection data in a disproportionate manner for non-serious copyright offences committed online, without prior review by a judge or an authority offering guarantees of independence and impartiality.

The questions thus referred to the Court of Justice are (i) whether civil identity data corresponding to an IP address are considered traffic and location data, which require prior review by a court or an independent administrative entity; (ii) if so, should national legislation be prohibited if it is providing for the collection of such data by an administrative authority without prior review; and (iii) if so, whether only non-sensitive data could be collected and whether a systematic review of access to the data of each user by a court or a third-party administrative entity would be precluded.

In the following analysis, we will make four points – which all have some procedural connection. The first point concerns the necessity to understand why the ruling has been given in a full court formation. The second point discusses Article 52 of the EU Charter, in particular Article 52(1) and its existential relationship with ‘prior review’. The third point discusses the core of the ruling, which relates to a possible limitation of the ‘prior review’ in situations concerning non-serious crimes. The fourth point concerns the implications of the ruling considering with regard to both dialogic constitutionalism and the procedure of accession to the European Convention of Human Rights (ECHR).

Exceptionality à la Française: or Why a Full Court Ruling?

The first surprise of the case is that it is delivered in full court. AG Szpunar, in point 1 of his second opinion, refers to Article 60(3) of the Rules of the Procedure of the Court, under which the originally assigned Grand Chamber requested the formation of the full court. According to that provision, such a request for a greater number of judges may be done at any time during the proceedings.

In general, a full court would only be assigned to a case of ‘exceptional importance’, according to Article 60(2) of the Rules of the Procedure of the Court in conjunction with Article 16(5) of the Statute of the Court of Justice

Full court rulings in the context of a preliminary ruling procedure are very rare. Only ten cases have been delivered in such formation during the last twenty years. We find cases such as Wightman, Pringle, Collins and Chen in this category. Similar to the Chen and Collins rulings, which concerned the scope and limits of EU citizenship, the present case is about the scope and limits of effective judicial protection (‘prior review’) in relation to the proportionality clause of the EU Charter (Article 52(1)). So, would this be sufficient in justifying the exceptional nature of the case and thus the assignment of a full court?

Indeed, there is reason to doubt the exceptionality in this case. Yet, the Court of Justice, or at least the Grand Chamber thereof, has clearly found otherwise. What makes this case so exceptional in the eyes of the Kirchberg judges?

The nature of the core legal question that concerns a possible limitation of ‘prior review’ (and thus of effective judicial protection) in the EU digital context is certainly an essential element of the answer, though perhaps not a decisive one. Indeed, the legislative and judicial contexts of the case should be underlined and have certainly played a role in the choice of the full court formation.

From the legislative side, the case deals inter alia with the French ‘Hadopi law’ (High Authority for the dissemination of works and the protection of rights on the internet), establishing a three-strike approach or graduate response - see in particular in the present case at paras 19 and 26. It is incorporated in Article L. 331-12 and Article L-331-29 of the CPI, which forms the legal basis of the national decree at issue in this case.

The Hadopi law has always been as a difficult piece of legislation since its promulgation in 2009 as its adoption was marked by intensive legislative debates and the law was originally struck down by the French Constitutional Council. It was later amended in 2013 to exclude compulsory internet disconnection.

From the judicial side, it is impossible to dissociate this case from the first Quadrature du Net case, which was repeatedly referred to in the present case and which led to the rebellion of the French Council of State, pushed by the French government against the ruling of the Court of Justice (see for developments, Groussot and Petursson).

By attributing exceptional importance to this case, the Luxembourg judges are therefore sending a strong signal to France. Whether or not this has indeed played a role in the Grand Chamber’s decision to request a full court we can but speculate. In our view, the above reasons might be significant but not exceptional enough to justify the need for a full court. In search for an answer, we thus have to look further into the issues dealt with under this case.

A Horizontal Clause in Focus: Article 52 of the EU Charter

A central focus of the present judgment constitutes Article 52 of the EU Charter, which is certainly one of the most complex provisions of the EU Charter: made up of seven paragraphs, the first three paragraphs of this provision are of particular importance for understanding this case.

Article 52(1), the so-called proportionality clause, is referred to in many parts of the ruling, for example paras 45, 47, 52, 70 and 122. In general, Article 52(1) allows for limitations to be placed on the exercise of the rights and freedoms recognised under the Charter, provided that those limitations are provided for by law, that they respect the essence of those rights and that they are in compliance with the principle of proportionality, i.e. that they are necessary and genuinely meet the objectives of general EU interest.

In the case law related to Article 52(1) of the EU Charter in the digital context (such as Tele 2 Sverige, Quadrature du Net I, Garda) the Court of Justice has developed the interpretation of the ‘strictly necessary’ test and the ‘balancing test’ (see also Promusicae in this respect) with regard to possible limitations to be imposed on certain EU values enshrined under Article 2 TEU.

Following the Tele 2 Sverige case, Article 15(1) of Directive 2002/58, read in the light of Articles 7, 8 and 11 in conjunction with Article 52(1) of the Charter, must be interpreted as precluding national legislation governing the protection and security of traffic and location data and access by the competent national authorities to retained data, where that access is not subject to a prior review by a court or an independent administrative body (see to this effect, e.g., judgment of the German BVerwG 6 C 6.22).

In the present case (and as we shall see in detail in the next point), the Court notably takes the opportunity to develop further the scope of the ‘strictly necessary test’ in the situation of non-serious crimes and thus confirms the true procedural nature of this test encapsulated in Article 52(1) of the EU Charter.

The case is also interesting for its reference to Article 52(2) of the EU Charter, which is rather rare. Here, the Court of Justice considers that ‘the retention of and access to those IP addresses are – as regards combating criminal offences such as offences infringing copyright or related rights committed online – strictly necessary for the attainment of the objective pursued and therefore meet the requirement of proportionality imposed by Article 15(1) of Directive 2002/58, read in the light of recital 11 of that directive and Article 52(2) of the Charter’ (see para. 118).

Finally, it is worth remarking that there is no explicit reference to Article 52(3) of the Charter, which is the socalled homogeneity clause that regulates the relationship between the substantive provisions of the EU Charter and the ECHR case law. The Court’s silence on this point is surprising since there is an abundance of references (by analogy) to the ECHR case law in the part of the ruling concerning the requirements surrounding access to data relating to the civil identity associated with an IP address retained by providers of electronic communications services (see paras. 95-122).

However, there is no reference to the ECHR case law in the crucial part of the case, which specifically concerns the requirement of prior review by a court or an independent administrative body before a public authority accesses data relating to the civil identity associated with an IP address (see paras. 121-151). Neither is there any reference in the present case to Opinion 2/13 (which also was a full court decision) on the accession of the EU to the ECHR.

Consequently, does this mean that this autonomous interpretation of EU fundamental rights is perhaps not in line with the ECHR jurisprudence? Or is it merely a re-affirmation of the autonomy of EU law in this field?

A Procedural Keck?

In its judgment, the Court of Justice did not fully follow the two Opinions delivered by the AG. Had it done so it would have led – in our view – to a severe curtailment of effective judicial protection in the context of non-serious crime in the digital field. The present judgment diverts from the AG’s opinions mainly by imposing the need to have a prior review by a court or an independent administrative body before a public authority accessing data relating to the civil identity.

This aspect of the ruling should be highlighted; it is in that sense that the present case may be viewed as a progressive ruling for ensuring the protection of substantive and procedural rights of individuals in the digital sphere.

Unlike AG Szpunar, the Court of Justice considers that ‘the requirement of a prior review by a court or by an independent administrative body is necessary where, in the context of national legislation allowing a public authority to access personal data, that access carries the risk of a serious interference with the fundamental rights of the person concerned in that it could allow that public authority to draw precise conclusions about the private life of that person and, as the case may be, to establish a detailed profile of that person’ (see para. 131).

These situations are described by the court as so-called ‘atypical situations’, i.e. where there is a requirement of prior review. By contrast, what constitutes ‘typical situations’ are such where prior review is not necessary. Essentially, thus, an ‘atypical situation’ constitutes an exception to the general rule, i.e. a limitation to the limitation of individuals’ rights and freedoms, similar to the logic of certain selling arrangements under the Keck ruling.

Crucially in the present case, the Court of Justice went at lengths in defining what constitutes an ‘atypical situation’. Accordingly, ‘it is only in ‘atypical situations’ that there is a risk to reveal potentially sensitive information about aspects of the private life of the individual in question that, taken together, could enable that public authority to draw precise conclusions about his or her private life, for example by establishing a detailed profile of that person’ (para. 111).

The Court went on to explain that this would be the case for example ‘with regard to a person whose IP address has been used for activities infringing copyright or related rights on peer-to-peer networks repeatedly, or on a large scale, in connection with protected works of particular types that can be grouped together on the basis of the words in their title that are liable to reveal potentially sensitive information about aspects of his or her private life’ (para. 112).

For the Court of Justice, this is precisely the situation in the context of a graduated response procedure, which constitutes the circumstances of the present case. Therefore, it considers that the Tele 2 Sverige line of reasons should also be applicable to non-serious crimes. This is the heart of the ruling, and many commentators will rush to analyse this part in particular. The approach of the Court of Justice should be welcomed in the light of the increased attention to the effective protection of individual rights under EU law.

Nevertheless, it would have been better – in our view – to also use this opportunity to make an explicit mention to effective judicial protection and Article 47 of the EU Charter in relation to this new line of reasoning. It was obviously not the choice of the Court of Justice, which construed this procedural approach within the frame of Article 52(1) of the EU Charter following its previous logic.

It is thus to be expected that the current case is opening the door for further judicial review in this area and the need to explain its own reasoning in this case in relation to the Tele 2 Sverige line of case law.

(Fifty years of) Inspiration Information

In our view, this ruling will become a classic in EU law textbooks as an example of dialogic constitutionalism between the different levels of the judiciary in the EU.

Exactly fifty years ago in May 1974, the Federal Constitutional Court of Germany issued the Solange 1 case which marks the starts of a long and rich – and at times tumultuous – exchange between the national courts and the Court of Justice. This constitutional dialogue has previously been characterised, most notably, through the doctrine of general principles of EU law and more recently through the interpretation of EU values enshrined under the EU Charter.

That same year, in 1974, Shuggie Otis released its (at the time quite unknown) masterpiece song: ‘inspiration information’. This song was an encouragement for looking at the outside world. That is what the German judges were doing already in 1974 and this is also what the Court of Justice is doing in the present case: placing the external context (i.e. the world) in the central focus and attributing it with maximum importance.

Just like the song, the case thus serves the function of delivering a message directed to the peoples of EU Europe, the EU Member States and even other courts, in particular the European Court of Human Rights.

To the peoples of Europe, the Court of Justice sends a strong signal that it takes individual rights protection (even if it is merely procedural) very serious in the digital context. To the Member States, and especially France, it sends the message that the worries expressed in relation to previous case law are taken into consideration by giving an exceptional importance to the case at issue through delivering it in plenum. To the European Court of Human Rights, it signals that it is prone to accept and follow the ECHR case law in many (but not all) circumstances.

Therefore, the overall message of the Court is that the interpretation of EU fundamental rights is the result of an autonomous process. Yet, the current ruling should not be seen as a barrier to the ongoing procedure of accession to the ECHR (see in this regard the still pending decision in the eagerly awaited KS and KD case and the already available opinion of AG Capeta respectively).

Finally, this ruling should also be understood and analysed in consideration of the internal context. On the same day of this full court decision, on 30 April 2024, the Court of Justice delivered two additional Grand Chamber rulings: Procura and Encrochat Both of these cases also concern the digitalisation of EU law. This is not the place here to comment on these two cases. Nevertheless, it is astonishing that the Encrochat ruling makes only very few references to the EU Charter (paras. 31, 37, and 124) when the case clearly deals with the need to interpret national law in the light of fundamental rights.

Much remains to be done, in order to make the EU Charter of Fundamental Rights the Leitnormen of EU law – as it rightly should be so.

Xavier Groussot is Professor in EU law, Lund University, Sweden; Email: xavier.groussot@jur.lu.se. Annegret Engel is Associate Professor in EU law, Lund University, Sweden; Email: annegret.engel@jur.lu.se.

SUGGESTED CITATION: Groussot, X. and Engel, A.; “The Devil is in the (Procedural) Details – the Court’s Judgment in La Quadrature du Ne”, EU Law Live, 13/05/2024, https://eulawlive.com/op-ed-the-devil-is-in-the-procedural-details-the-courts-judgment-in-la-quadrature-du-net-by-xaviergroussot-and-annegret-engel/

Proportionality in Union citizenship: Time, Substance and Procedure – Lessons from Joined Cases C-684/22

to C-686/22, Stadt Duisburg

Miguel del Moral Sánchez

Introduction

The judgement of the Court of Justice in Stadt Duisburg ( Joined Cases C-684/22 to C-686/22) may seem the chronicle of a death foretold, given that a reform of its raison d’être, namely, the ‘German Law on Nationality’ (Staatsangehörigkeitsrechts or StAG) foreseeing the loss, by principle, of German citizenship when acquiring a third country nationality (§25(1) StAG), has been recently approved and will soon enter into force.

However, the Court’s ruling is of great importance for two main reasons. First, because it consolidates and develops some of the principles in relation to the proportionality analysis of national legislations concerning the withdrawal of a Member State (MS) nationality. Notably, the procedural guarantees that must be respected in such cases. Second, given that the German reform of 2024 does not apply retroactively to the people who lost their nationality under the previous version of the law.

Facts

In these three joined cases, several Turkish nationals became naturalised Germans in the late 90s, with the subsequent withdrawal of their Turkish nationality. They all reapplied for and reacquired their Turkish nationality and, according to the German authorities, this was granted after a reform of the StAG on 1 January 2000.

The StAG, after this reform, established the loss of German nationality by principle when individuals acquired other nationalities, with some exceptions irrelevant to the applicants. Yet, it permitted individuals to maintain their German nationality providing that, before acquiring the new nationality, they had applied for and received permission from the competent German authority. The latter’s decision would be taken by weighing up public and private interests. However, none of the applicants had applied for the retention permit.

The referring court asked the Court of Justice, in essence, whether Art. 20 TFEU allows a national legislation foreseeing the loss ex lege of a MS nationality (and therefore, Union citizenship) by virtue of the acquisition of a third-country nationality, where an individual examination of the consequences of this loss is only conducted when the person concerned makes an application for a retention permit, and this is approved previously to the acquisition of the third-country nationality.

Analysis

Although the regulation of nationality falls within the sphere of competences of MS, it is also the defining factor of Union citizenship according to Art. 20 TFEU and the ‘fundamental status of nationals of the [MS]’ (case Grzelczyk, C-184/99, para. 31). It is the tension between the European and national dimensions of citizenship that frames this case in a long line of the Court of Justice’s rulings that can be traced back to the 1990s. See cases from Micheletti (C-369/90, para. 10) in 1992 to the recent Udlændinge- og Integrationsministeriet (C-689/21, para. 28), in 2023.

It is precisely the consequences in terms of the loss of Union citizenship status (and the rights attached to it) derived from the withdrawal of the nationality of a MS that brings national rules in this matter under the scope of EU law. As such, they must comply with the requirements laid down therein and in the case law of the Court of Justice, as stated in the present case (paras. 34-36).

The first filter that these national legislations must pass through is that of having a legitimate objective. In this respect, the Court has rarely questioned the objective pursued by MS. In the present case, the objective of the German Law was to avoid the retention by the same individual of multiple nationalities (para. 38), which is consistent with Art. 7(1)(a) of the Convention on Nationality of the Council of Europe. In Udlændinge- og Integrationsministeriet, the goal was to ensure the existence of a ‘genuine link’ between the individual and Denmark (para. 34), as established in Art. 7(1)(e) of the cited Convention. More generally, the Court recognises in its case law in this relation the legitimacy of MS laws that wish to protect ‘the special relationship of solidarity and good faith between it and its nationals and also the reciprocity of rights and duties’ (see, for example, Rottman, C-135/08, para. 51).

Yet, the most contentious part of the analysis revolves around the question of whether these national rules, however legitimate their objectives may be, respect the principle of proportionality. As stated by Advocate General (AG) Spuznar (Opinion in Joined Cases C-684/22 to C-686/22, para 35), this includes an obligation to carry out an individual assessment of the consequences of the loss of nationality on the person concerned and their family, the respect of the Charter of Fundamental Rights, and the obligation to assess these consequences as an ancillary issue in other procedures and, where appropriate, to enable the retention or recovery ex tunc by the persons concerned of their nationality.

Three points are central to the Court’s analysis in this case in relation to the individual assessment and develop its case law in this area: the time period (reasonable time), the substantive requirements (proportionality examined in accordance with its case law) and the procedural conditions (effective assessment).

In terms of the time period for the individual assessment, EU law does not preclude, in principle, that such an examination is conducted during an advanced permission procedure, as was the case under the German legislation (para. 46). The Court and the AG agree that the requirement for individuals to make the application for permission

to retain their German nationality before the acquisition of the third-country nationality seems to fall within the limits of a reasonable period (para. 54 of the judgement and 63 of the Opinion).

Concerning the substance of the individual examination, the referring court, in its request for a preliminary ruling (C-684/22, paras. 35-39), expresses doubts on whether, during the procedure for the acquisition of the retention permit, regard is had by the administrative authorities to the consequences of the loss of Union citizenship and the conditions developed by the Court of Justice. Although the Court does not spend too much time on this point, it empowers national courts to supervise and ensure that this proportionality assessment is carried out. Indeed, it states that when national administrative authorities do not conduct the proportionality analysis under these conditions, it is for national courts to carry out the same assessment or to make sure that administrative authorities do (para. 49).

Yet, in terms of the procedural requirements for this assessment, as AG Szpunar points out (para. 58), it must allow for an actual individual examination of the consequences of the loss of MS nationality. Interestingly, the AG raises serious doubts as to whether the applicants in the main proceedings were duly informed of the consequences for them and their families of recovering their Turkish nationality (para. 64-67). Also, whether the lack of any transitional provision for persons in the situation of the applicants, who applied for the recovery of Turkish nationality previous to the entry into force of the reform of the StAG, is compatible with the principle of effectiveness (para. 71). Although the Court does not explicit these doubts as strongly as the AG, it gives very detailed guidelines to the referring court for addressing these questions (para. 57-61).

Even if this judgement considers the German legislation, as it was after the reform of 1 January 2000, compatible with EU law, it is very close to stating that the way it was applied to the applicants of this procedure is not. Moreover, the Court adds that, if the referring court considered that the applicants were not capable of effectively initiating the procedure for the individual assessment of the consequences of the loss of German nationality, it must be possible to make it, as an ancillary issue, in other proceedings, where individuals must be in a position to recover their nationality ex tunc (para. 62).

Conclusion

The recent reform of the law makes the possibility of acquiring third-country nationality without losing German nationality the rule. However, as explained above, this was not the sticking point for EU law, since the Court readily acknowledged the compatibility with Art. 20 TFEU, in principle, of the German law in force at the time of the loss of the applicant’s nationality.

In reality, the most interesting point of the Court’s judgment concerns the concrete practice of this legislation and, in particular, its procedural requirements. The case law of the Court of Justice has long recognised the need for an individual assessment of the consequences of the loss of nationality on the person concerned and his or her family.

However, this case concerns the effective exercise of the applicants of this possibility, given that, as stated by the

AG (point 66), there were reasonable doubts as to whether they had ‘effective access to an individual examination of their situation from the point of view of EU law’.

This ruling is also likely to transcend Germany, as many other MS still have more or less restrictive rules in relation to the accumulation of multiple nationalities by the same individual. It is another example of how EU law, through the status derived from Union citizenship, limits the competencies of MS concerning the withdrawal of nationality.

SUGGESTED CITATION: del Moral Sánchez, M.; “Proportionality in Union citizenship: Time, Substance and Procedure – Lessons from Joined Cases C-684/22 to C-686/22, Stadt Duisburg”, EU Law Live, 13/05/2024, https://eulawlive.com/op-ed-proportionality-in-union-citizenship-time-substanceand-procedure-lessons-from-joined-cases-c-684-22-to-c-686-22-stadt-duisburg-by-miguel-del-moral-sanchez/

Miguel del Moral Sánchez is Academic Assistant in the Law Department at the College of Europe.

Brexit: The tide that carried EU rights away (Préfet du Gers II, C-716/22)

Antoine Parry

Lord Denning once famously likened European Community law – as it was known back then – to an incoming tide flowing into the estuaries and up the rivers that could not be held back (H.P. Bulmer v J. Bollinger [1974] EWCA Civ 14). By this, his lordship sought to emphasise the irreversible and profound transformations which would be brought upon the United Kingdom’s legal and constitutional landscapes by virtue of its membership to this supranational legal order. At that time, it was inconceivable that such a tide would one day begin to ebb back to whence it came, taking with it the rich tapestry of life (that is to say, inter alia, the various rights and freedoms) which had either arrived on the crest of its waves or had spawned over the subsequent years. Nevertheless, half a century after that statement was committed to paper, the Court of Justice’s recent judgment in Préfet du Gers II (C-716/22), provides another glimpse into what little life seemingly remains on the bedrock of European Union citizenship for UK nationals as a direct consequence of Brexit.

By now, the applicant’s story is widely familiar within the EU legal community. Indeed, EP is a UK national who has resided in France since 1984. She was removed from the electoral roll and was not authorised to participate in the municipal elections following the entry into force of the Withdrawal Agreement on 1 February 2020. On 9 November 2020, EP challenged that decision before the Court of Auch in France, leading the national court to submit a request for a preliminary ruling to the Court of Justice. By its judgment in Préfet du Gers I (C-673/20), the Court of Justice ruled that UK nationals had lost their Union citizenship and their right to vote and to stand as a candidate in municipal elections in their Member State of residence (for further detail, see here and here). Nevertheless, in its second request for a preliminary ruling, that national court wondered whether the findings drawn from that first judgment were just as applicable to the right of UK nationals to vote and to stand in European Parliament elections.

At the outset, the Court of Justice recalled the precedent laid down in Préfet du Gers I – that UK nationals no longer enjoy the status of Union citizenship – to rule that such third-country nationals no longer enjoy the rights which are conferred by virtue of that status, including the right to vote and to stand as a candidate in elections to the European Parliament in a Member State of residence (paras. 37-43). Moreover, it pointed out that no provision in the Withdrawal Agreement granted such a right, nor did Article 12 thereof on non-discrimination concern the right to vote and to stand in those elections. Accordingly, a UK national who exercised his or her right under EU law to move and reside in a Member State before the end of the transition period could not validly rely on that provision, nor provisions of the Charter of Fundamental Rights of the European Union (the Charter) covering non-discrimination, to claim such a right (paras. 47-54).

In that light, the Court of Justice determined that EU law – in particular Article 22 TFEU and the Withdrawal Agreement – does not extend the right to such democratic participation to UK nationals. In the same vein, therefore, EU law does not oblige the Member States to grant UK nationals residing in their territory the rights recognised by those provisions and conferred on nationals of the Member States who enjoy the status of citizen of the Union. In the latter parts of the judgment, the Court of Justice further held that Decision 2020/135 on the conclusion of the Withdrawal Agreement could not be regarded as being contrary to Article 6(3) TEU or to various provisions of the Charter in so far as the Withdrawal Agreement, which it approved, does not confer on UK nationals, who exercised their right to reside in a Member State before the end of the transition period, the rights referred to above. Such a conclusion was not altered by consideration of the principle of proportionality (paras 64-70).

By and large, the judgment unfolds with little surprise. It even serves as a standard illustration of the common law principle stare decisis in action. Indeed, if Articles 20 and 22 TFEU are to be interpreted as meaning that the United Kingdom’s sovereign decision to withdraw from the European Union results in UK nationals no longer having the right to participate in municipal elections then, a fortiori, the same interpretation should also apply to their participation in the elections to the European Parliament. Be that as it may, whereas the Court of Justice expressly referred, in its judgment in Préfet du Gers I, to the discretion of the Member States to decide who has the right under national law to vote and to stand as a candidate in national elections within their territories, that court bypassed an opportunity to engage in a similar discussion, in its second judgment in Préfet du Gers II, in direct response to submissions put forward by EP at national level concerning the 2006 judgment in Spain v United Kingdom (C-145/04).

The central question in that case was whether the United Kingdom could lawfully extend the right to vote in European Parliament elections to residents of Gibraltar (British Crown Colony not part of the United Kingdom), who are not Union citizens. That case arose a few years after the judgment of the European Court of Human Rights in Matthews v. The United Kingdom (28576/95) which found the United Kingdom to be in violation of Protocol No 1 to the ECHR for its failure to organise elections to the European Parliament in Gibraltar. In short, the Court of Justice held that the state of Community law at that time did not prevent the Member States from granting the right to vote and to stand as a candidate in those elections to certain persons who have close links to the Member State in question, other than their own nationals or Union citizens resident in their territory. Despite this, in its judgment in Préfet du Gers II, the Court of Justice held that that ruling could not be applied to a situation such as the one at hand.

Indeed, in paragraph 61 of the judgment, it determined that the case before it did not concern the question whether Member States may grant the right to vote and to stand as a candidate in European Parliament elections to persons who are not Union citizens, but rather it concerned the question whether the Member States are required to grant such a right to persons who are no longer Union citizens. Alas, distinguishing in this manner is both regrettable and puzzling. Certainly, the factual and legal contexts surrounding the judgment in Spain v United Kingdom are not the same as those in Préfet du Gers II. Furthermore, case law handed down since then

has enriched the understanding of who is lawfully entitled to partake in the democratic life of the Union and so, in that respect, the legal question raised in the latter judgment may not have necessarily found its answer in the passages of the former judgment. However, do the nuances referred to in paragraph 61 render that former judgment entirely irrelevant to the case at hand?

The status of Union citizenship is binary. The relevant provisions of the EU Treaties, as well as the judgments in Préfet du Gers I and II, make it palpably clear that one either enjoys that status on the basis of their nationality of a Member State or does not. Likewise, one is able to partake in the European Parliament elections by virtue of that status or one cannot. Therefore, the distinction drawn between those who are not Union citizens and those who are no longer Union citizens – as a relevant factor to distinguish from a previous judgment – is unclear. Yet, if such a distinction is to be drawn, does this not then suggest an underlying reason for doing so? Specifically, the notion that a collective group of persons who were once Union citizens, and who may have developed close links to the EU legal and political order, and the Member State in which they reside, such as EP in France, are possibly not the same as any and all non-Union citizens.

It would appear that this distinction inevitably leads one back to the reason why the referring court expressly mentioned the judgment in Spain v United Kingdom in the questions referred. Accordingly, for the purposes of clarity and certainty, the judgment in Préfet du Gers II may have benefited from some discussion on the findings in the former judgment. In similar vein, the distinction made because the judgment in Spain v United Kingdom concerned the question whether Member States may grant the right at issue, as opposed to must grant that right, is likely to raise an eyebrow or two. On the other side of obligation lies the realm of discretion. While the judgment in Préfet du Gers II puts to bed the question of whether EU law grants a right – or places an obligation upon the Member States to grant said right – to UK nationals to vote and to stand in the elections to the European Parliament, it fails to engage with the issue of whether the Member States hypothetically wield the discretion to do so.

Any attempt to float the argument that they do will no doubt encounter strong currents aiming to have it sunk, not least because national legislation which grants non-Union citizens such as UK nationals the right to vote and stand as candidates in European Parliament elections would surely be incompatible with Articles 20 and 22 TFEU. However, the mix of legal proceedings initiated in the wake of Brexit by those – such as EP – facing new and peculiar circumstances has brought to the surface a variety of legal arguments for the retention of such rights, mostly driven by the previous exercise of EU fundamental freedoms and close connections with the Member States of residence. After all, from the moment that the United Kingdom acceded to the European Union, the rights and freedoms that came with the tide were intended to become part of an individual’s ‘legal heritage’ (a reference to legal heritage can be traced back to the landmark judgment in Van Gend en Loos, C-26/62). Despite Brexit, individuals who are no longer Union citizens continue to live out the exercise of that legal heritage in the Member States they now call home.

In that respect, a more comprehensive engagement with such specific issues would have been welcomed even if the contexts behind the judgments in Spain v United Kingdom and Préfet du Gers II differ significantly. Whether the Court of Auch decides to refer questions to the Court of Justice for a third time, or whether a new case concerning comparable legal questions will be sighted on the horizon, is to be determined only by the passage of time. For now, under the current state of EU law, it is settled that UK nationals will not be participating in the elections to the European Parliament taking place in the coming month. Even so, putting aside the law for one brief moment, the absence of such democratic participation from a body politic which has – for the last 45 years or so – formed part of this particular political process will constitute a poignant moment for both UK nationals watching from the side-line, and all citizens of the Union who hold the opinion that Brexit marks a regrettable chapter in this continent’s story of integration.

SUGGESTED CITATION: Parry, A.; “Brexit: The tide that carried EU rights away (Préfet du Gers II, C-716/22)”, EU Law Live, 14/05/2024, https:// eulawlive.com/op-ed-brexit-the-tide-that-carried-eu-rights-away-prefet-du-gers-ii-c-716-22-by-antoine-parry/

Antoine Parry is a Legal Assistant (Cabinet of Advocate General N. Emiliou) at the Court of Justice.

The Court condemns ‘cherry-picking’ of risks and benefits of the internal market for banking services (Case C-822/21, Latvia v. Sweden (deposit guarantee schemes))

Mārtiņš Rudzītis

The Swedish banks, which have long considered the Baltics their ‘home market’, were quick to reap the benefits of the internal market by expanding across the borders. However, the global financial crisis revealed the downside of this expansion and promoted banks to consolidate their position. The institution of the Banking Union, by centralising the supervision and resolution of the banks at the EU level, also incentivised banking groups, such as Nordea Bank, to re-domicile their headquarters from Sweden to the Euro Area. This strategic decision allowed them to benefit from the same set of regulatory standards across the group. The Banking Union remains, however, incomplete as depositor protection is decentralised at the national level. Even though national deposit guarantee schemes (DGS) operate according to harmonised rules set out in Directive 2014/49/EU (Directive), national variations persist. These national divergencies may be problematic as they can undermine the integrity of the internal market for banking services. This tension is at the heart of the Court’s judgement of 30 April 2024, opposing Latvia and Sweden on the question of the transfer of contributions between DGS.

Facts and judgement

The case revolves around the transfer of Nordea Bank’s contributions made to the Swedish DGS to the Latvian DGS following the restructuring of its activities in the Baltic countries. On 1 October 2017, the business of Nordea Bank branches in the Baltic countries was transferred to the subsidiaries of DNB Bank, and those branches changed their affiliation from the Swedish DGS to the Estonian, Latvian, and Lithuanian DGSs. The Swedish DGS refused, however, to transfer to the three receiving DGS contributions, which had been paid to it by Nordea Bank with respect to deposits connected with the activities of its Baltic branches. In support of its decision, the Swedish DGA invoked Article 14(3) of the Directive under which, if a credit institution ceases to be a member of a DGS and joins another DGS, the contributions ‘paid’ during the 12 months preceding the end of the membership, has to be transferred to the other DGS. It argued that, during the 12 months preceding the date of the transfer of the activities of Nordea Bank’s branch to the Latvian DGS, namely during the period from 1 October 2016 to 30 September 2017, it had not paid any contribution to the Swedish DGS. This is because credit institutions have to, in accordance with Swedish law, pay their contributions annually within one month of the decision of the Swedish DGS.

After exhausting other available legal remedies, Latvia brought infringement proceedings against Sweden under Article 259 TFEU. Latvia lodged a complaint with the Commission asking to conclude that, by refusing to transfer to the Latvian DGS the contributions paid by the Latvian branch of Nordea Bank for the 12 months preceding the transfer of that branch’s activities, Sweden had infringed Article 14(3) of the Directive. Latvia also asked the Commission to conclude that Sweden has breached the duty of sincere cooperation laid down in Article 4(3) TEU, claiming that the refusal of the Swedish DGS is undermining the mutual trust between EU Member States. It argued that the refusal of the Swedish DGS to transfer contributions to its DGS undermines the integrity of the internal market and violates the principle of equal treatment of the Member States since, in a comparable legal situation, the Swedish DGS had agreed to transfer contributions to the Finnish DGS. Indeed, following the re-domiciliation of the Nordea Bank seat from Sweden to Finland in 2018, the Swedish DGS transferred to the Finnish DGS the contributions paid by Nordea Bank in the 12-month period prior to the redomiciliation. In defence, Sweden relied on a literal interpretation of Article 14(3) of the Directive, arguing that the two situations were not comparable since, in the latter case, the 12-month condition was satisfied.

The Commission issued a reasoned opinion supporting Latvia’s first objection but did not uphold the second objection. Similarly, the Court found that Sweden had failed to fulfil its obligations under Article 14(3) of the Directive. It rejected, however, Latvia’s second objection, alleging infringement of the duty of sincere cooperation, considering that it concerned the same conduct as that constituting the infringement of Article 14(3) of the Directive.

The case is of a particular interest due to the use of Article 259 TFEU to seek a declaration from the Court that another Member State has failed to fulfil its obligations under the Treaties. This Article is rarely used due to its blaming character of the alleged rule-breaker. Member States usually prefer that the Commission leads the investigation of the alleged breach of EU law under Article 258 TFEU. The case stands out as one of the few inter-state infringement proceedings brought to the Court under Article 259 TFEU, underscoring its importance as a remedy of last resort.

A legal remedy of last resort

The interstate infringement proceedings have been rarely used and have been usually reserved for politically sensitive issues. This was the case of actions dealing with the voting rights of Commonwealth citizens in Gibraltar (Spain v. UK, C-145/04), a border dispute between Slovenia and Croatia (Slovenia v. Croatia, C-457/18) and the prohibition to enter the territory of Slovakia (Hungary v. Slovak Republic, C-364/10). In other cases, inter-state infringement proceedings have been used to enforce internal market rules. This was notably the case of the UK unilateral fishery protection measure (France v. UK, 141/78), a Spanish regulation on the designation of origin of wine (France v. Spain, C-388/95), the discriminatory German tax relief on the motor vehicle tax (Austria v. Germany, C-591/17), and a license extension to conduct mining activities near the Polish border (Czech Republic v. Poland (Turów mine), C-121/21). If, in several of these cases, infringement proceedings were used as a prelude to a settlement between the Member States, it was used as a remedy of last resort in the commented case.

Furthermore, under Article 273 TFEU, the Member States may elect the Court of Justice by way of a special agreement as a forum to decide any dispute between them that relates to the subject matter of the Treaties. In 2015, Austria seized the Court of Justice under an arbitration clause with a request to settle a dispute on the interpretation of the provisions of the Austro-German double tax treaty regarding the taxation of interest income from hybrid financial instruments (Austria v. Germany, C-648/15). However, the nature of this action is different from inter-state infringement proceedings. Under Article 273 TFEU, the Court has jurisdiction to settle an international law dispute between the Member States having a link with the subject matter of the Treaties. In contrast, disputes between the Member States on the interpretation and application of the provisions of the EU law, such as those of the Directive, should be resolved according to Article 259 TFEU.

The deposit guarantee authorities of the three Baltic States had first initiated a mediation procedure with the Swedish DGA before the European Banking Authority (EBA), which closed the case in 2019 without the parties having reached an agreement. The case attests that a non-binding mediation before EBA may be of a limited effectiveness if the parties are unwilling to reach an agreement. In such cases, the mediation panel may only propose that the Board of Supervisors adopt an opinion or recommendation. Under Article 19 of the EBA Regulation and Article 14(5) of the Directive, a binding mediation mechanism is available only where the DGSs have entered into a cooperation agreement which covers, among others, the transfer of DGS contributions. If the DGSs cannot reach an agreement or if there is a dispute about the interpretation of a cooperation agreement, each party may defer the disagreement for a binding mediation. For instance, this course of action was chosen by the Spanish DGS, which requested the EBA to settle its dispute with the Belgian DGS regarding the transfer of contributions upon the transfer of the banking business. The EBA held that the Belgian DGS should transfer to the Spanish DGS the contributions collected in respect to the 12-month period prior to the credit institution transfer, regardless of the actual date of their payment.

The legal remedies before Swedish administrative courts also proved to be ineffective. They rejected the Estonian DGS’s action against the Swedish DGS’s refusal on the grounds that Swedish law had correctly transposed EU law. The Swedish court also dismissed the request of the Estonian DGS to grant a leave to appeal this judgement to a higher instance and to make a preliminary ruling reference to the Court. It is, however, established case law that a national court, in case of reasonable doubts, has an obligation, under Article 267(3) TFEU, to bring a matter on the interpretation of the EU law before the Court if there is no judicial remedy under national law against its decision. In light of the interpretation retained by the Court, it is evident that the Swedish courts had erred in their findings.

It was only after all these measures had proved ineffective that Latvia decided to initiate infringement proceedings against Sweden to preserve the integrity of its DGS.

Preservation of the integrity of the deposit guarantee scheme

The Court’s conclusion that Sweden has failed to comply with its Treaty obligations is supported by a contextual and purposeful construction of Article 14(3) of the Directive. The Court dismisses the literal reading proposed by the Advocate General de la Tour, considering that only the construction of this provision in the light of its object is capable of preserving the integrity of DGS and a level playing field in the internal market. In doing so, it condemns ‘cherry-picking’ the risks and benefits of the internal market for banking services.

The Court first observes that Article 14(3) of the Directive must be interpreted in the light of Article 10(1) of this Directive, which obliges the DGSs to raise the available financial means by contributions which are to be made by their members at least annually. It follows that the contributions paid by the members to the DGS should be regarded as ‘consideration for the deposit guarantee for a certain period.’ It is, therefore, consistent with the underlying logic of the DGS that, in the event of the transfer of specific activities from a credit institution to another Member State and, consequently, the transfer of liability for the covered deposits to the DGS of that other Member State, the consideration for the deposit guarantee should also be transferred to the receiving DGS. The Court concludes that the Swedish DGA must transfer to the Latvian DGS the contributions paid to it by Nordea Bank, which relate to the 12 months preceding the transfer of its activities to the Latvian DGS, regardless of the actual date on which those contributions had been paid to it.

The Court highlights that the purpose of Article 14(3) of the Directive is ‘to compensate the receiving DGS for the financial risk linked to the transfer of covered deposits of the credit institution’. It concludes that the retained interpretation is the only one capable of ensuring that a DGS of origin, which no longer bears the risk associated with the covered deposits transferred to the DGS of another Member State, does not retain contributions in question solely because they were paid to the DGS after that period. This interpretation is also consistent with the objective of the Directive to protect depositors in the event that the deposits made with a credit institution which is a member of a DGS are unavailable and to ensure the stability of the banking system by avoiding the phenomenon of massive withdrawals of deposits. The interpretation proposed by Sweden must be thus dismissed as being disruptive to the functioning of the internal market. Indeed, it would imply that only the liability to make pay-outs to covered depositors would be transferred to the Latvian DGS, whereas the corresponding contributions would remain with the Swedish DGS.

Finally, the Court highlights the importance of preserving the level playing field in the internal market. The arrival of a new credit institution within a DGS automatically increases the total amount of covered deposits and is liable to result in a call to contribute to that DGS. If the contributions in question were not transferred from the Swedish DGS to the Latvian DGS, the arrival of a new credit institution within the Latvian DGS could result in new calls on the Latvian credit institutions to make additional contributions to the Latvian DGS. This would, however, undermine the solidarity between the members of a DGS and would create market distortions by favouring the DGS of origin to the detriment of the transferring credit institution and the members of the receiving DGS. Indeed, a literal interpretation could create obstacles to the freedom of establishment within the

internal market since the DGS receiving the credit institution without receiving the latest contribution made could be incentivized to request an ‘entry contribution’ to compensate for the increase in risk.

Outlook

The interpretation retained by the Court must be welcomed as it seeks to preserve the integrity of the DGS and the level playing field in the internal market. Also, the Commission has acknowledged that the vagueness of Article 14(3) of the Directive may result in divergent national interpretations, which could cause distortions in the internal market. To mitigate this risk, the Commission has already proposed to amend Article 14(3) of the Directive to clarify that, in the event a credit institution changes affiliation to a DGS, the DGS of origin should calculate the amount of contributions to be transferred based on contributions due rather than contributions paid.

More broadly, the case illustrates the shortcomings of minimum harmonisation and fragmented implementation of the Directive across the EU. In the absence of mutualisation of the default risk at the EU level, the prevalence of national interests in the application of rules leaving a certain margin of appreciation to the Member States may undermine the mutual trust between the Member States and the integrity of the internal market. In this context, a gradual replacement of national DGS with risk-sharing mechanisms at the EU level remains a missing piece of the current crisis management framework for the Euro Area. Establishing the European deposit insurance scheme and the European deposit insurance fund remains a critical outstanding component for completing the Banking Union, which would further enhance financial stability and increase the protection of depositors.

Mārtiņš Rudzītis is a PhD Researcher at the University of Panthéon-Assas (Paris II) and Of Counsel at a law firm.

SUGGESTED CITATION: Rudzītis, M.; “The Court condemns ‘cherry-picking’ of risks and benefits of the internal market for banking services (Case C-822/21, Latvia v. Sweden (deposit guarantee schemes))”, EU Law Live, 13/05/2024, https://eulawlive.com/op-ed-the-court-condemns-cherry-pickingof-risks-and-benefits-of-the-internal-market-for-banking-services-case-c-822-21-latvia-v-sweden-deposit-guarantee-schemes-by-martin/

Mapping obligations, rights and remedies in the (future) Common European Asylum System (C-359/22, AHY v Minister for Justice)

Catherine Warin

For asylum seekers desperate to escape a ‘Dublin transfer’ –or for their lawyers– the ‘discretionary clause’ of the Dublin Regulation can seem like a lifebuoy when there is no other hope of challenging a transfer decision. Article 17(1) of the Dublin Regulation indeed allows a Member State to take responsibility for an asylum application, even if the criteria laid down in the regulation point to another Member State as responsible for that application. The AHY judgment crushes hopes of using this discretionary clause for creating an enforceable right to preventing a transfer. Yet in the long run, this judgment might help preserve the consistency and solidity of the EU legal system of protection of individuals and their rights.

It is clear by now that against transfer decisions made on the basis of the classic Dublin criteria, there must be an effective judicial remedy. This is based both on Article 27 of the Dublin Regulation and on Article 47 of the Charter of fundamental rights. It is also clear from previous case law that the discretionary clause does not impose an obligation on a Member State to take responsibility for an asylum seeker whom the other provisions of the regulation identify as being the responsibility of another Member State. The AHY judgment now focuses on the implications of this previous case law, specifically in terms of judicial review.

Ubi non jus, ibi remedium nullum

The first question addressed by the Court of Justice is whether EU law provides a right to a remedy against a decision of a Member State not to apply the discretionary clause. The Court of Justice insists on its established case law: ‘no circumstance, even a matter of fundamental rights, could oblige a Member State to make use of that clause and to examine itself an application which is not its responsibility’ (para. 40). In other words, Member States have complete discretion to decide to make use of the option given by Article 17(1). Since they have no obligation to do so, there is also no correlative right of the asylum seeker to request the application of Article 17(1); this, the Court of Justice concludes, in turn means that there is no requirement of a judicial remedy against a decision of a Member State declining to use the discretionary clause. This is the lesser-known twin of the classic rule ubi jus ibi remedium embodied in Article 27 of the Dublin regulation and more generally in Article 47 of the Charter: here, there is no individual right under EU law, therefore there is no remedy.

However disappointing this may be for AHY, this solution protects the consistency of the EU legal system and arguably also its protective power. The underlying rationale is that if a fundamental rights issue arises from the application of an EU law instrument, its correction should not be left to the discretion of the Member States. This was already quite clear in previous judgments, especially in MA and Others , to which the Court of Justice refers

several times in AHY: the rights of the child (guaranteed under Article 24 of the Charter) could not trigger an obligation to use the discretionary clause of the Dublin Regulation; instead, the other (compulsory) provisions of the Dublin Regulation were interpreted in the light of Article 24 – and must be applied in compliance with it. The discretionary clause is not there to close a gap in fundamental rights protection because, at least in theory, there should not be such a gap...

Implementing EU law, a classic prerequisite for applying EU fundamental rights – and the right to a remedy

Although AHY makes clear that there can be no individual right to applying the discretionary clause, the judgment acknowledges that national procedural law may provide a remedy against a decision not to apply Article 17(1). This leads to the second question addressed by the Court: does the use of such a remedy have a suspensive effect - i.e., must a Member State refrain from implementing a transfer decision until a court has addressed the refusal to apply the discretionary clause? The Court’s answer is a clear ‘no’. Firstly, because we cannot use Article 47 of the Charter to assess the need for a suspensive effect of a remedy that is not itself required by EU law. Secondly, because Article 29(1) of the Dublin Regulation provides that the six-month time limit for a Member State to implement a transfer decision starts to run from the day that another Member State accepts a request to take charge or to take back the person concerned (para. 58). This provision, as the Court points out, is ‘clear and precise’ (para. 57) – characteristics which are known to allow for the direct effect of a EU law provision, and to allow for the conferral of a right upon an individual. Here, those characteristics lead the Court to state that the judicial review of a refusal to apply the discretionary clause cannot postpone the starting point of the time limit.

The second answer is therefore also bad news for AHY. But again, thinking of the bigger picture, the Court’s interpretation means that asylum seekers are protected from Member States playing with the possibility of applying the discretionary clause to postpone the starting point of the six-month time limit after which a transfer will no longer be allowed. The judgment therefore ensures legal certainty and visibility for individuals waiting, often in anguish, to know when they will be transferred – or when they can stop fearing the transfer.

The logic in both of the Court’s answers in this judgment appears to be that long as the Member State has not ‘opted in’ to apply the discretionary clause, there is no implementation of EU law and therefore no EU fundamental rights protection. What the judgment does not explore is what happens for EU fundamental rights, once a Member State has actually decided to apply the discretionary clause. What if there is an incident in the procedure, for instance a decision to apply the clause followed by a withdrawal of that decision, possibly violating legitimate expectations or the right to good administration? One could expect that in such a case, where the Member State has opted for applying the option opened by Article 17(1), EU fundamental rights would then become applicable; but for now, this is left unaddressed by the Court.

Ultimately, following the AHY judgment, the discretionary clause will not be of much help to an asylum applicant seeking the judicial review of a transfer decision. The same can be said of the successor to Article 17(1) the Dublin Regulation: Article 35(1) of the new Asylum and Migration Management Regulation. With so many questions

raised by this and other instruments composing the New Pact on Migration and Asylum, the importance of AHY lies in the implicit reminder of a fundamental principle of EU law – that obligations of Member States translate into rights for individuals, and that where EU law confers a right, it also gives a remedy.

Dr. Catherine Warin is a Lecturer in EU Law at the European Institute of Public Administration in Luxembourg and a practicing lawyer. Her research, teaching and practice cover European and Luxembourgish public law with an emphasis on fundamental and human rights.

SUGGESTED CITATION: Warin, C.; “Mapping obligations, rights and remedies in the (future) Common European Asylum System (C-359/22, AHY v Minister for Justice)”, EU Law Live, 13/05/2024, https://eulawlive.com/op-ed-mapping-obligations-rights-and-remedies-in-the-future-commoneuropean-asylum-system-c-359-22-ahy-v-minister-for-justice-by-catherine-warin/

The Ideella judgment: the GC endorses a Commission decision not to raise objections against a risk tax on large credit institutions based on its non-selective nature

Nieves Bayón Fernández

On 17 April 2024 the General Court (‘GC’) delivered its judgment in Ideella (Case T-112/22), dismissing an application for the annulment of the European Commission Decision, SA.56348 (the ‘Ideella Decision’), which had found that a risk tax adopted by the Kingdom of Sweden targeting large credit institutions whose liabilities exceeded a given liability threshold did not constitute State aid under Article 107(1) TFEU without initiating the formal investigation procedure.

According to the Ideella Decision: (i) the normal tax regime was not configured according to manifestly discriminatory parameters, but pursued its own logic, was independent of other national tax regimes, and its constituent elements were consistent with its objective of strengthening public finances by means of contributions from large credit institutions which could potentially create significant indirect costs for society in case of future financial crises; (ii) the credit institutions targeted by the tax were not in the same legal and factual situation as other financial institutions in light of the objective of the tax given that the latter did not present the same degree of risk of causing instability; and (iii) the exemption of the institutions that did not reach the liability threshold set by the legislator was not a derogation from the normal reference system because the threshold intended to reflect the size of the credit institutions and the risk of them creating significant indirect costs to society (GC, paras. 13-15).

In confirming the legality of the Ideella Decision, the GC made it clear that although the Commission is obliged to open the formal investigation procedure if it entertains doubts as to the classification of a national measure as State aid, it is not for the Court to determine whether there are reliable indications that there are no doubts as to the classification of the measure at issue as aid; on the contrary, the burden is on the applicants to adduce evidence on the existence of such doubts.

The applicants’ burden to adduce evidence of doubts

Following the settled case law of the EU Courts, the GC observed that:

• The lawfulness of a decision not to raise objections under Article 108(3) TFEU relies on whether the assessment of the evidence and information at the Commission’s disposal during the preliminary phase should objectively have raised doubts as to the classification of the national measure as State aid (GC, para 22). If

so, the failure to open the formal investigation procedure would constitute an infringement of the applicants’ procedural rights (GC, para. 23).

• The applicants bear the burden to adduce evidence of doubts as to the characterisation of the measure as State aid. The GC’s role is to ascertain whether the applicants have adduced evidence of such doubts, not to carry out its own analysis of whether there are reliable indications that there are no doubts (GC, para. 24).

• The fact that a Commission’s investigation may have been insufficient or incomplete indicates the existence of serious difficulties (GC, para. 25). The judicial review of the existence of serious difficulties cannot be restricted to whether or not there has been a manifest error of assessment (GC, para 26).

The GC’s review of the legality of the Ideella Decision

The applicants had challenged the Commission’s analysis of selectivity in relation to the identification of the reference system and the existence of a derogation from that system. The GC rejected the applicants’ arguments, heavily relying on the objective defined by the national legislator:

• The applicants had not demonstrated that the objective of the tax was biased insofar as it singled out large credit institutions although, according to the applicants, all credit institutions were likely to contribute to indirect costs in the event of a financial crisis. According to the GC, the applicants (i) did not demonstrate that the failure of the credit institutions not subject to the tax, even collectively, would pose a systemic risk and have a very negative impact on the financial system and the economy, giving rise to significant indirect costs to society (GC, para. 42); and (ii) did not question the possibility that only the failure of large credit institutions may on an individual basis create such risk and negative impact, but merely disputed this finding (without substantiating their arguments) during the court proceedings (GC, para. 43).

• The applicants had not demonstrated that the parameters of the tax were not consistent with the objective of the reference system, particularly in what concerned the tax base, the persons liable to pay the tax, the tax threshold and the consolidation mechanism in the calculation of the threshold and the tax base.

• Tax base (GC, paras. 54-61). According to the GC, the applicants did not demonstrate that a tax base established on the basis of the liabilities of large credit institutions was not consistent with the objective of the reference system. The GC confirmed that Member States could base the tax regime on a liabilities threshold (even if there were better indicators), emphasising in particular that (i) the national tax was not intended to prevent or address the risks posed by credit institutions but to strengthen national public finances to cope with future financial crises and (ii) the liabilities threshold was not aimed to target the credit institutions more exposed to risk, but those that would produce significant costs to society, on an individual basis, in the event of failure.

• Persons liable to the tax (GC, paras. 62-82). The GC stated that the fact that the persons liable to the tax did not coincide with other lists of institutions of systemic importance or the institutions subject to other legal regimes did not necessarily mean that the Commission experienced serious difficulties in the assessment of selectivity with regard to the determination of the persons liable to pay the tax. The GC relied heavily on the objective of the national legislator, which allegedly did not aim to prevent possible failures or to avoid the consequent direct costs, but aimed to address the indirect costs caused by the possible failure of the credit institutions liable to the tax. The GC found that the applicants failed to prove the threat that other institutions could pose to financial stability, to question the risks and costs that large credit institutions could alone cause on an individual basis, and to show that the failure of undertakings not liable to the tax could, even collectively, have the same consequences.

• The threshold for liability (GC, paras. 83-99). The GC found that the applicants did not show why the liabilities threshold was manifestly inappropriate in light of the objective of the tax, and that they failed to indicate which level would be most appropriate. According to the GC, (i) a threshold based on liabilities was consistent with the objective of the tax and (ii) the applicants should have shown why, in light of its objective, the tax should have intended to influence the behaviour of the undertakings liable to pay it.

• The consolidation mechanism in the calculation of the threshold and the tax base (GC, paras. 100-106). The GC rejected the argument that the Commission should have had doubts as to the discriminatory nature of the consolidation mechanism given that (i) unlike subsidiaries, branches of Swedish credit institutions are linked to that institution and their failure would also produce effects in Sweden; and (ii) there was no asymmetry between the treatment of the liabilities of foreign branches of a Swedish credit institution and those of the branches of foreign credit institutions located in Sweden given that the latter could cause indirect costs both in Sweden and in the State where they were located.

The applicants had not demonstrated that there was a derogation from the reference system. According to the GC, the applicants had not demonstrated why the Commission should have had doubts as to the comparability of the undertakings subject to the tax and those to whom the tax did not apply, in particular in relation to (i) the systemic importance of the credit institutions that did not meet the liability threshold with regard to possible indirect costs or (ii) how, by their failure, they could on an individual basis have such a negative impact on that system and on the economy in general that they would give rise to significant indirect costs for society (GC, paras. 120-123). The fact that the different groups of undertakings were in a competitive relationship did not suffice (GC, para. 124).

Conclusion

The Ideella judgment set a high burden on the applicants to prove that the assessment of the evidence and information at the Commission’s disposal should objectively have raised doubts as to the State aid nature of the

underlying national tax measure, in particular in what regards the selectivity condition. The high burden imposed on the applicants, and the GC’s reluctance to second-guess the configuration of a given tax regime, may be partly explained by the fact that the underlying tax measure was a direct tax, the design of which remains a national competence (GC, para. 50): Member States are in principle competent to define the elements of the tax, including the chargeable event for the tax and the tax base (GC, para. 76) as well as the tax threshold and the methods for calculating the basis of assessment (GC, para. 90). However, even when exercising their competence in the field of direct taxation, Member States must comply with State aid law: to ensure that a given tax is not selective, the configuration of the main elements of a given tax must be consistent with its objective and not manifestly discriminatory.

Nieves Bayón Fernández is an Associate at the EU and Competition law department of an international firm in Brussels.

SUGGESTED CITATION: Bayón Fernández, N.; “The Ideella judgment: the GC endorses a Commission decision not to raise objections against a risk tax on large credit institutions based on its non-selective nature”, EU Law Live, 13/05/2024, https://eulawlive.com/analysis-the-ideella-judgment-the-gcendorses-a-commission-decision-not-to-raise-objections-against-a-risk-tax-on-large-credit-institutions-based-on-its-non-selective-nature-by-nie/

SYMPOSIUM

SYMPOSIUM ON CLIMATE PROTECTION AS A EUROPEAN FUNDAMENTAL RIGHT UNDER THE ECHR AND BEYOND

The Klimaseniorinnen case: Clearing the Air for Corporate Climate Litigation

Sumeyra Arslan

The Klimaseniorinnen case constitutes a pivotal point in history for corporate climate litigation. From acknowledging the direct link between climate change and human rights violations to further clarifying the role of national courts on such matters, Klimaseniorinnen delves into arguments often used by corporations in climate litigation and demystifies them. Polluting companies have been fighting climate responsibility and accountability for far too long. Diving into the multifaceted significance of Klimaseniorinnen, this piece will examine its implications for present and future corporate climate litigation.

Corporate climate accountability

For decades, polluting companies have known about the risks of climate change, and for decades, they have chosen to ignore the risks and continue business as usual. The fossil fuel industry alone is responsible for 75% of global greenhouse gas emissions, perpetuating extreme weather events such as droughts, floods, and forest fires that destroy land, livelihood and property. Trying to hold the companies most responsible accountable, more and more civil society members have turned to climate litigation as a last resort. The majority of corporate climate litigation cases so far has centred around reducing greenhouse gas emissions, using false solutions while continuing business as usual (greenwashing), violating human rights and causing damage to the land and property of Indigenous Peoples and local communities.

The polluting industry’s lobbying efforts have held climate accountability back for far too long. Big companies, and especially the fossil fuel sector, have been lobbying against climate regulation and accountability while knowing for decades the catastrophic risks of climate change. As the Special Rapporteur on Climate Change and Human Rights has stated in its 2022 report: ‘…it is evident that business elites with interests in the fossil fuel and carbon-intensive industries have disproportionate access to decision-makers, a phenomenon described as “corporate capture.”’ A key corporate capture strategy is the revolving door phenomenon, where employees switch jobs between the private industry and public offices. Another example of corporate capture is the record amount of fossil fuel lobbyists that have been present during the international climate negotiations; during COP28 alone, at least 2.456 fossil fuel representatives were granted access.

As the UN Special Rapporteur on Human Rights and Climate Change stated: ‘There is an enormous injustice being manifested by developed economies against the poorest and least able to cope. Unwillingness by developed economies and major corporations to take responsibility for drastically reducing their greenhouse gas emissions has led to demands for “climate reparations” for losses incurred.’ Limiting global warming to 1.5 degrees is

undeniably impossible if the most responsible companies do not reduce their emissions. Especially since the chances of limiting global warming to 1.5 degrees have already been reduced to 50%, according to the IPCC.

The precarious nature of corporate climate litigation

While the number of corporate climate litigation cases continues to rise in Europe, the landscape remains fraught with challenges. National legislation and judicial systems often dictate the success or failure of such cases, leading to disparate outcomes across jurisdictions in Europe.

The first-ever judgment requiring a company to reduce its emissions was the Milieudefensie v. Shell case in 2021. The District Court of the Netherlands ruled that Shell must reduce 45% of its total emissions by 2030, shaping the future of corporate climate litigation. Since then, new cases of corporate climate litigations have risen in Europe, including Fossielvrij NL et al. v. KLM (The Netherlands), Allhof Cramer v. Volkswagen AG (Germany), ClientEarth v. Shell’s board of directors (The United Kingdom), Asmania et al. v. Holcim (Switzerland), Friends of the Earth v. Total (France), Luciano Lliuya v. RWE (Germany) and many more.

Corporate climate litigation is precarious. While Milieudefensie and Fossielvrij NL may have succeeded in holding Shell and KLM responsible in the Netherlands, the court rulings differ in other countries. For example, in the United Kingdom (ClientEarth v. Shell’s board of directors), a single judge decided on the procedural merits of the case without a hearing that ClientEarth could not appeal the verdict. In a paper, Lord Robert Carnwath, a retired Supreme Court judge, stated that he found it ‘unfortunate’ that the permission to appeal was dismissed without any hearings. In Germany (Allhof Cramer v. Volkswagen), the national court dismissed a request to order Volkswagen to reduce its greenhouse gas emissions, stating that the damage to the plaintiff could not be remedied by reducing its emissions. Therefore, whether companies can be held responsible is often bound to national systems of rules and access to justice, making binding cases like the Klimaseniorinnnen case that clarify crucial components related to access to justice and the interlinkages between human rights and climate change on the regional level even more important.

Climate change and human rights

The European Court of Human Rights (ECtHR) made a significant stride by acknowledging, for the first time, the direct link between climate change and human rights violations in Klimaseniorinnen. Specifically, the Court found that anthropogenic climate change ‘poses a serious current and future threat to the enjoyment of human rights guaranteed under the Convention’ (paras. 410 and 436). With this acknowledgement, the Court underscored the urgent need for corporate accountability in mitigating the adverse effects of climate change. Despite the polluting industries’ denial of this link, the Court’s ruling establishes a crucial precedent in advancing corporate climate litigation efforts.

It is widely acknowledged that climate change and human rights are interlinked (see the IPCC AR6 WGII, General Comment no. 26 of the Child Rights Committee and Human Rights Council resolutions), but corporate

actors continue to deny their relationship and treat them as separate paradigms. From financial institutions to polluting companies like ING, RWE, Shell, BP, Saudi Aramco and Exxonmobil, there is no chain of causation between greenhouse gas emissions and human rights that could lead to civil liability. For these actors, climate responsibility is a voluntary effort to strive for a better planet where we (almost magically) reach net zero emissions by 2050. In contrast, human rights, an established body of law, is seen as liable grounds for misconduct related more to labour rights and operational and environmental safeguards.

In contrast to the belief of polluting companies, the Court states that ‘[i]n the longer term, some of the consequences [of climate change] risk destroying the basis for human livelihoods and survival in the worst affected areas. Whole populations are, or will be, affected, albeit in varying ways, to varying degrees and with varying severity and imminence of consequences’ (para. 417). The Court concludes that in light of climate change’s unique character and previous rulings and considerations, ‘Article 8 must be seen as encompassing a right for individuals to effective protection by the State authorities from serious adverse effects of climate change on their life, health, well-being and quality of life’ (para. 519).

While the Court’s finding focuses on the obligation of State authorities, the mere acknowledgement of the direct link between the two paradigms provides protection from inadequate climate action by business actors under international human rights law. Most polluting companies are committed to the Race to Zero campaign, United Nations Guiding Principles on Business and Human Rights (UNGPs), and the updated OECD Guidelines (which recently expanded their scope to include climate change), which are all based on or mention the protection of international human rights. Due to the fierce commitment of the sector to these voluntary/non-binding instruments, it is a small step in logic to assume their understanding of these voluntary industry initiatives and soft law instruments will, after Klimaseniorinnen, encompass harms related to climate change, including their responsibility to reduce their greenhouse gas emissions emitted into the atmosphere.

Actio popularis and locus

standi

By protecting the association’s right to a court and setting clear criteria to determine the association’s locus standi in climate litigation, Klimaseniorinnen sets a precedent against the rising trend to limit the locus standi and, therefore, actio popularis, of such organisations in Europe. Since national legislation does not (yet) make a difference in the locus standi of cases against states or companies, Klimaseniorinnen creates a more robust standing in national proceedings in corporate climate litigation.

The growing attempts to restrict actio popularis and locus standi in climate litigation across Europe are alarming. For example, discussions about new legislation proposals (Wamca 36 169, nr 40 and motie Stoffer) in the Netherlands aim to restrict actio popularis, focussing on limiting the representation of civil society by associations. Another significant example is the Klimaseniorinnen case at the national level. Swiss courts dismissed the Klimaseniorinnen case altogether without looking at the substance of the case or the locus standi of the association representing older women above 75 years old before it reached the European Court of Human Rights.

In corporate climate litigation, companies often argue that associations do not have locus standi, aiming to restrict actio popularis. For example, Shell argued during the appeal of the Milieudefensie v. Shell case that ‘[t]he public interest in relation to climate change is much broader and more varied than the interests Milieudefensie claim to represent, they ignore all of the other interests at stake.’ Shell adds that ‘[t]here are wide-ranging views on how to address climate change.’ In Luciano Lliuya v. RWE, RWE argued that the plaintiff does not have a ‘legitimate interest’ in the case because it lacks specificity. Swiss courts had similar motives to deny the association standing, stating that the real act (or inaction in this case) did not affect the rights or obligations of the applicants. In the Klimaseniorinnen case, the ECtHR ruled that ‘[t]he domestic courts did not engage seriously or at all with the action brought by the applicant association’ (para. 636) and that the association was lawfully qualified to represent the applicants. The Court goes on to clarify three criteria to assess the locus standi of an association: 1. The association is lawfully established, 2. It showed that it pursues a dedicated purpose in accordance with its statutory objectives to defend human rights against the threats of climate change in the State 3. and ‘that is it genuinely qualified and representative to act on behalf of those individuals who may arguably claim to be subject to specific threats or adverse effects of climate change on their life, health, well-being and quality of life as protected under the Convention’ (para. 524). The Court then ruled that the association has locus standi, that its complaint falls within the scope of Article 8 of the Convention, and that the very essence of the applicant association’s right to access to a court was impaired (para. 638-9).

Separation of powers - the role of national courts

In corporate climate litigation, a recurring debate emerges regarding the role of judges in climate corporate responsibility. Companies often argue that such issues fall within the purview of the legislative and executive branches, dismissing the judiciary’s involvement as a breach of democratic principles. This sentiment was echoed in the appeals of the Milieudefensie v. Shell and Luciano Lliuya v. RWE cases, where both companies argued that corporate climate responsibility should be addressed solely at the state and political levels. However, Article 13 of the European Convention on Human Rights (ECHR) underscores the pivotal role of national courts in safeguarding human rights, especially when political mechanisms falter. The Klimaseniorinnen case further illuminates this complex issue. While the Court acknowledged the limitations of judicial authority vis-à-vis legislative and executive prerogatives, it also underscored the imperative to uphold human rights in the face of climate change’s existential threats.

During the appeal in the Milieudefensie v. Shell case, Shell argued that ‘[o]nly governments and legislators have the democratic and constitutional legitimacy to make such decisions based on the needs of citizens and policy priorities and in the face of evolving technology and a dynamic geopolitical landscape. The [national] court is not able to make these trade-offs for the Netherlands or for the world.’ According to the fossil fuel sector, corporate climate responsibility is a matter of politics and not of justice. Similarly, RWE argued in the Luciano Lliuya v. RWE case that ‘long term damage (climate change) should be resolved at state and political levels.’

As Milieudefensie argued in the appeal, judicial protection must also apply when politics fail to protect the human rights embedded within the ECHR. The Strasbourg Court acknowledges that judicial intervention cannot replace or substitute action by the legislative and executive branches of the government, but it also considers that ‘... democracy cannot be reduced to the will of the majority of the electorate and elected representatives, in disregard of the requirements of the rule of law.’ The remits of the national courts are, therefore, complementary to democratic processes. While the legal basis for the Court’s intervention is always limited to the Convention, the Court finds that ‘[t]he relevant legal framework determining the scope of judicial review by domestic courts may be considerably wider and will depend on the nature and legal basis of the claims introduced by litigants’ (para. 412).

In addition, the Court adds that it must take into consideration that ‘past State action to combat climate change globally entails an aggravation of the risks of its adverse consequences, and the ensuing threats arising therefrom, for the enjoyment of human rights—threats already recognised by governments worldwide.’ The Court emphasises that while it is tasked with enforcing human rights, it also cannot dismiss the scientifically proven impact of climate change on human rights (para. 413). The Court then concludes that in the Klimaseniorinnen case, the Swiss courts had obstructed the right to a fair trial (Article 6 ECHR) by not examining the case’s merits and dismissing the requests of the plaintiffs by stating that there was still some time to limit global warming from reaching a ‘critical limit’ (paras. 630 and 635).

Article 8 - State’s positive obligations

After national cases such as the Klimaatzaak v. Belgium case and the Urgenda v. The Netherlands case obligating governments to reduce their emissions, the Klimaseniorinnen case followed suit. The Court ruled that contracting States have positive obligations under Article 8 of the Convention to reduce their greenhouse gas emissions within the next three decades (para. 548), constituting a significant turning point. With sheer logic and considering the disproportionate role of the polluting sectors in climate change (set out in the sections above), these positive obligations to reduce emissions necessitate the regulation of the most polluting industries.

The Court finds that immediate action must be taken, and short-term reduction targets must be set to ensure a ‘genuinely feasible’ outcome and to avoid a disproportionate burden on future generations. The Court adds that these measures must be set in a binding regulatory framework at the national level, followed by adequate implementation. The relevant targets and timelines must form an integral part of the domestic regulatory framework as a basis for general and sectoral mitigation measures. The Court lists five positive obligations for Switzerland to achieve these targets (paras. 544-50). While acknowledging the margin of appreciation afforded to States in determining the means to achieve these targets, the Court’s ruling imposes a diminished margin of appreciation, signalling a shift towards increased accountability to reduce their emissions.

Due to the disproportionate amount of greenhouse gas emissions stemming from polluting industries, such as the fossil fuel industry, which is responsible for 75% of global greenhouse gas emissions, robust accountability

mechanisms for polluting industries become a prerequisite to effectively reducing emissions without relying on unproven and risky solutions.

Conclusion

In conclusion, Klimaseniorinnen represents an important moment in the fight for climate justice. By acknowledging the direct link between climate change and human rights violations, clarifying the crucial role of national courts, setting positive obligations on States, and strengthening the locus standi of associations representing members of society, this ruling provides a stronger footing in further corporate climate litigation. Moving forward, it is imperative that stakeholders leverage the precedent set by Klimaseniorinnen to strengthen ongoing litigation and hold polluting companies accountable for their climate responsibility.

Sumeyra Arslan is a researcher on the climate litigation team at Milieudefensie and functions as a legal advisor on the Supervisory Board of Fossielvrij NL.

SUGGESTED CITATION: Arslan, S.; “The Klimaseniorinnen case: Clearing the Air for Corporate Climate Litigation”, EU Law Live, 13/05/2024, https://eulawlive.com/48770-2/

Intersectionality in the KlimaSeniorinnen case – ‘older women’ in action

Christa Tobler

Introduction

The judgment of 9 April 2024 by the Grand Chamber of the European Court of Human Rights (ECtHR) in Verein KlimaSeniorinnen Schweiz v. Switzerland, finding that Switzerland has failed to undertake adequate measures to address climate change, thereby breaching the European Convention of Human Rights (ECHR), has led to a heated public debate in Switzerland. As was to be expected, opinions are sharply divided, between those who welcome the judgment as a beacon of light in an otherwise dark climate world and those who condemn it roundly as incomprehensible and wrong. Even some of the Swiss multi-party government ministers spoke up in public. Notably, the Swiss minister for environment, Albert Rösti, criticized the Strasbourg judgment as being incompatible with the Swiss system of direct democracy, asking: ‘How can it be reconciled if the Court says that Switzerland is doing too little when the population has decided that it does not want to do more at this point in time?’ In contrast, the Justice Minister, Beat Jans, stated that Switzerland will continue to decide sovereignly and independently on its climate policy and that the Strasbourg judgment is ‘not a decision against the Swiss population, but rather strengthens the rights of the people who live in this country’. Explaining the judgment on Swiss public radio, the Swiss judge at the ECtHR, Andreas Zünd, underlined that the Strasbourg court is not a ‘foreign court’ (to be rejected absolutely following the rhetoric in the nationalist discourse in Switzerland), but rather ‘our common court’ for the ECHR. My academic colleague from Basel University, Andreas Müller, pointed to the broader context, noting in a Swiss daily that the Swiss government ‘must take the rap for a message that in fact goes out to all European states’.

Indeed, this is more than a mere ‘Swiss’ case – and it is more than a case about climate change. In the general noise around the decision, one interesting aspect appears to have moved somewhat to the sideline, namely the fact that the case had been brought by ‘older women’ concerned about, and particularly affected by, climate change, who had set up an association with this aim in view and who had chosen the name for the association accordingly, namely Verein KlimaSeniorinnen Schweiz. In this Op-Ed, I wish to look at the issue of admissibility in the KlimaSeniorinnen case through the lens of intersectionality.

The eye of the needle: admissibility

Without admissibility, there will be no substantive analysis. The action in the KlimaSeniorinnen case was brought by the Verein KlimaSeniorinnen Schweiz and by four of its individual members. In Switzerland, the courts found it to be inadmissible. At the last instance, the Swiss Federal Supreme Court left it open whether the association

had standing under Swiss law and focused on the individual applicants instead. It considered their action to be of an actio popularis nature and held that the individual applicants were not affected with sufficient intensity. The ECtHR, too, rejected the individuals’ actions as inadmissible, finding that they do not meet the two key criteria for victim status under Art. 34 ECHR, namely: (a) a sufficiently high intensity of exposure of the applicants to the adverse effects of climate change, and (b) a pressing need to ensure the applicants’ individual protection were not fulfilled. In academic comments on the judgment, it has been noted that the ECtHR in this respect ‘applied its existing case law in a relatively orthodox manner’ (thus Letwin).

In contrast, the ECtHR’s approach to the standing of the association was ‘anything but orthodox’ and rather highly innovative (again, Letwin). According to the Court, specific considerations relating to climate change weigh in favour of recognising the admissibility of actions of associations. The Court notes that the association in question represents a vehicle of collective recourse aimed at defending the rights and interests of individuals against the threats of climate change, and individual applicants did not have access to a court in Switzerland. According to the Court, granting associations standing is in the interests of the proper administration of justice in climate change cases.

At the same time, the ECtHR confirms that actio popularis type of complaints are not permitted in the Convention system, ‘this prohibition being intended to avoid cases being brought before the Court by individuals complaining of the mere existence of a law applicable to any citizen of a country, or of a judicial decision to which they are not party’ (KlimaSeniorinnen, paras. 446 and 596). According to the Court, ‘[i]t is clear that the Convention mechanism cannot accept an abstract complaint about a general deterioration of the living conditions of people without considering its impact on a particular person or group of persons’ (KlimaSeniorinnen, para. 500). In order to distinguish the action before it from an actio popularis, the Court applies a threefold test, which the Verein KlimaSeniorinnen Schweiz passes: 1) It is lawfully established, 2) it has demonstrated that it pursues a dedicated purpose in accordance with its statutory objectives in the defence of the human rights of its members and other affected individuals against the threats arising from climate change in the respondent State, and 3) it is genuinely qualified and representative to act on behalf of those individuals who may arguably claim to be subject to specific threats or adverse effects of climate change on their life, health, well-being and quality of life as protected under the ECHR.

According to Letwin (who is one of many critical commentators on this aspect of the case), this sets an extremely low bar for the standing of associations in climate change cases, in particular given that the right of an association to act on behalf of its members or other affected individuals is not subject to a separate requirement that those on whose behalf the case has been brought would themselves meet the victim-status requirements for individuals (thus the ECtHR in para. 502). But what about the element of intersectionality in this context, i.e. the fact that the association represents ‘older women’? Could it be argued that this played a role in the Court’s finding and perhaps even in tilting the balance away from the actio popularis?

‘Older women’: a case of intersectionality

The association whose standing was accepted by the ECtHR in KlimaSeniorinnen focuses on ‘older women’. Indeed, only women residing in Switzerland and aged above the current Swiss pension age for women of 64 years (which is about to raise as a consequence of a popular vote) can become members. According to its statute, the association was established to promote and implement effective climate protection on behalf of its members. Explaining its approach in the KlimaSeniorinnen litigation, the association states on its website: ‘Why an association? Because that way the legal proceedings do not depend on individual persons. Why female seniors? Because older women are particularly susceptible to intense and frequent heat waves. Obviously, we are aware that older men, people with diseases as well as small children also suffer from heat waves and other climate effects. By focusing on the proven particular susceptibility of us older women we are simply enhancing our lawsuit’s chances of success which is ultimately good for everyone.’ In essence, the applicants argued in court that, according to scientific studies, women aged 75 and over have a significantly higher mortality risk in hot summers and that their health is significantly more affected than that of the general public, and, in addition, that their well-being is more affected. Against this background, the applicants argued that they are members of a most vulnerable group affected by climate change. In addition, the individual applicants stated that this could be seen in their specific cases as they all had various health impairments affected by heatwaves.

Putting the focus on ‘older women’ means to choose the lens of intersectionality, i.e. not to focus on older people in general, nor on women in general, but rather on the specific group of ‘older women’. Intersectionality is a term originally coined by Kimberlé Crenshaw in her critique of the traditional single-axis approach in antidiscrimination law, drawing attention to the fact that multiple forms of disadvantage may compound themselves. In B.S. v. Spain, the ECtHR recognised that discrimination under Art. 14 ECHR can be of an intersectional nature – a finding, by the way, that is markedly different from that of the Court of Justice of the European Union in Parris with respect to EU law (see on the approach under EU law e.g. Solanke in The Routledge Handbook of Gender and EU Politics). In the KlimaSeniorinnen case, the applicants did not claim a violation of Art. 14 ECHR. Even so, the importance of the concept of intersectional discrimination was emphasised before the ECtHR in third-party interventions (e.g. here, as of p. 4, and here, as of p. 5). Writing when the case was pending, other voices more generally referred to ‘an intersectional climate justice approach’ (de Jong) or to ‘a specific intersectional legal strategy’ employed by the applicants (Sußner). Indeed, according to Sußner, the KlimaSeniorinnen case is unique because the ‘applicants assert the formal admissibility and substantive merits of their claim on the grounds of being older women.’

In my analysis, it is in the part on admissibility of the judgment (which the ECtHR analyses combined with the applicability of the substantive provisions of the ECHR) where intersectionality may have played a role. The interesting question is: How important was the specific strategic focus chosen by the applicants for the association’s success in having its case pass the eye of the needle of admissibility and make it to the level of substance?

Intersectionality in the judgment

In its judgment, the ECtHR acknowledges the adverse effects of climate change on older women, and the need to protect them from such effects, as stressed in international documents relating to climate change which the Court reviews. In such documents, ‘women’ and ‘gender equality’ are very regularly mentioned (e.g. the preamble to the Paris Agreement), sometimes in parallel with, among others, age (e.g. Resolution 50/9 of the Human Rights Council: ‘a comprehensive, integrated, gender-responsive, age-inclusive and disability-inclusive approach to climate change adaptation and mitigation policies’). Some documents explicitly take up the intersectional perspective, most notably the report Human rights of older women: the intersection between ageing and gender, where the United Nations’ Independent Expert on the enjoyment of all human rights by older persons states that the specific risks and impacts brought on by climate change for older women are ‘generally invisible’ (p. 16).

With respect to the individual applicants, the ECtHR states that the findings in these international materials ‘undoubtedly suggest that the applicants belong to a group which is particularly susceptible to the effects of climate change’ (KlimaSeniorinnen, para. 531). As for the association, it will be remembered that it is made up by the exactly same type of people, namely older women faced with the effects of climate change. References in the judgment about the need, in the context of avoiding an actio popularis, for an ‘impact [of climate change] on a particular person or group of persons’ (KlimaSeniorinnen, para. 500), to ‘affected individuals who are subject to specific threats or adverse effects of climate change on their lives, health or well-being’ (para. 502) and to ‘the membership basis and representativeness of the applicant association, as well as the purpose of its establishment’ (para. 523) in my reading provide a clear link to the intersectional aspect of the case and indicate its importance in the eyes of the Court.

However, in other places the ECtHR refers to a more general context, e.g. when it states that the Verein KlimaSeniorinnen Schweiz ‘acts not only in the interest of its members, but also in the interest of the general public and future generations, with the aim of ensuring effective climate protection’ (KlimaSeniorinnen, para. 521). Similarly, the Q & A on the three climate cases, of which KlimaSeniorinnen was the only one to pass the admissibility threshold, refers to a ‘common concern for humankind’ and ‘intergenerational burden-sharing’. Further, explaining the Court’s finding on the association’s standing on Swiss radio, Swiss ECtHR Judge Zünd said that ‘many people will be affected by climate change – all of us. The ECtHR assumes that such organizations are representative of all the people affected’.

So, which is it, the general public or rather the specific group of the association’s members, in accordance with its statute? There appears to be an uncertainty, even a contradiction on this issue. From a practical point of view, the ambiguity of the judgment in this respect leaves room for interpretation – and for clarification by the ECtHR in future case law. If, after all, it was the element of intersectionality that tilted the balance away from the actio popularis, or if it at least helped tilting it, it should mitigate some of the criticism levelled at the Court: In that case, there is no actio popularis in the KlimaSeniorinnen case, precisely, because the case was brought by a) a particular group of persons with b) a proven particular susceptibility to climate change, namely older women – even if their

action at the same time benefits ‘all of us’, to use the words of Judge Zünd. It would, however, remain to be seen what this means for future cases, on climate change or other matters.

Finally, acknowledging the influence of the intersectional aspect on the judgment would also mean that, for once, the specific risks and impacts brought on by climate change for older women, rather than generally remaining invisible, as lamented by the UN’s Independent Expert on the enjoyment of all human rights by older persons, are acknowledged by Europe’s highest Human Rights Court. If indeed so, then the intersectional aspect of the case is an important part of the Court’s message that goes out to all European states, a message, in fact, that could and should be made more explicitly and more forcefully.

Christa Tobler is professor of European Union law at the Universities of Basel (Switzerland) and Leiden (the Netherlands).

SUGGESTED CITATION: Tobler, C.; “Intersectionality in the KlimaSeniorinnen case – ‘older women’ in action”, EU Law Live, 17/05/2024, https:// eulawlive.com/op-ed-intersectionality-in-the-klimaseniorinnen-case-older-women-in-action-by-christa-tobler/

SYMPOSIUM

COMPETITION CORNER:

SYMPOSIUM ON COMPETITION LAW AND REGULATION

A Bias Towards Enforcement: How the DMA Changes the Landscape

Jasper van den Boom & Rupprecht Podszun

The regulation of digital markets is picking up steam. Last year, the long-awaited Digital Markets Act (‘DMA’) and Digital Services Act (‘DSA’) came into effect. As of 17 February 2024, the DSA applies to all platforms. Just this March, the first compliance reports were issued by designated gatekeepers under the DMA, marking the start of enforcement of the substantive obligations imposed under the DMA. These new, and far-reaching, regulations complement existing legislation such as the General Data Protection Regulation (‘GDPR’) and the P2BRegulation. This regulatory deluge is far from over. For instance, the Data Act entered into force in January 2024 and will start to apply from 12 September 2025, the AI Act has passed the vote for adoption on the 13th of March 2024, and there is a proposal for a CHIPS Act, which would be aimed at stimulating the European semiconductor industry, rather than regulating software and how we use it. There is no indication that the European legislative pipeline is to run empty anytime soon, especially where it concerns the digital economy.

From largely unregulated to heavily regulated

As digital markets are becoming increasingly regulated, their nature changes. So far, markets have been largely unregulated which means that the behaviour of companies was only subject to competition scrutiny. Now, this turns into a (heavily) regulated sector. The introduction of new regulatory frameworks will change the application of competition law, as competition authorities will increasingly have to navigate sets of rules and obligations when it comes to enforcing competition law. These different regulatory frameworks have strongly diverging rationales, which range from protecting privacy and personal data (GDPR, Data Act), protecting customers and consumers, content moderation, and transparency (Digital Services Act, P2B-Regulation), enhancing competition (DMA) and industrial policy (CHIPS Act). This writing raises – and attempts to answer - the question how the emergence of such sector-specific rules changes the role of competition laws in digital markets and their enforcement. This analysis operates on the premise that some rules will have a stronger link to competition laws and policies than others, but that the role of competition law invariably changes with the growing body of legislation governing digital markets. This writing aims to answer the question how competition law and regulatory frameworks interact with one another, and how the introduction of these frameworks – in particular the DMA – may shape the application of competition law over time.

The DMA is the focal point because it is the ex-ante regulatory framework with the most direct impact on competition law enforcement in digital markets. It has been argued that the DMA is in substance a sector-specific competition policy.[1] However, one must then wonder whether a ‘digital sector’ truly exists, and if there is some demarcation possible as to where this sector starts and ends.[2] The DMA diverges strongly from competition

law in a number of aspects, as it pursues its own objectives (fairness and contestability), has its own mechanisms (designation of entities, which are then subjected to clear-cut rules and obligations, instead of enforcement on the basis of broadly applicable standards) and its own approach to enforcement, which is discussed hereunder.

Four major differences

The DMA’s approach to protecting and stimulating competition diverts from competition law enforcement in three major ways. Firstly, it only applies to a select group of undertakings which have been designated as gatekeepers following the procedure laid down in Article 3 DMA. Secondly, it relies on self-executing obligations rather than case-by-case analysis. Thirdly, it moves away from the ‘more economic approach’ used in competition law since the early 2000s, and towards a rules-based approach where the effects on consumers associated with certain behaviours are not studied on a case-by-case basis.[3] Fourth, and finally, the DMA does not allow for an efficiency defence as to justify certain behaviour on the basis of facts and circumstances surrounding the behaviour. With this approach, the DMA marks an explicit rejection of the important role individual economic assessments play in competition law cases in the past years. This is certainly a reaction to the complexities of such assessments – and the deficits perceived in the enforcement of competition law. In competition cases, proceedings got overly long and exhaustive (at least partly) due to the high hurdles set by the “more economic approach”.

By trading complexity and nuance for enforceability, the DMA seems more focused on preventing false negative than false positive interventions. In other words, there is a bias towards enforcement instead of against enforcement, even if the effects of certain behaviours are not necessarily well studied. The justification for such a bias if found partly in the scope of the DMA and is partly derived from competition law enforcement. Firstly, since the DMA only applies to a handful of very powerful undertakings, it can be argued that the effects of possible false positives are contained to undertakings which can afford to cope with unnecessary regulatory burdens. Secondly, the obligations imposed in articles 5, 6, 7, 14, and 15 DMA are largely based on experiences gained in competition law enforcement. With the DMA, lessons from the study of effects that took place in a specific case-by-case analysis have been generalized to develop detailed rules.[4] Consequently, it can be argued that while the DMA minimises the role of economic assessments, its foundation is still built on the study of economic effects.[5]

The feedback loop to competition law

A quick look at the nature and design of the DMA demonstrates why it should be viewed as a set of rules that complements competition policy, without the intention to replace the application of competition law in the digital sector. Its narrow scope and methodological approach allow it to speed up enforcement where it is deemed necessary, not to evolve into a horizontally applicable regime such as competition law. It is possible – and even likely – that the approach adopted in the DMA will work through in competition law and shape the application of competition law itself, especially in light of the complexities associated with enforcing competition law in digital markets. For instance, the use of specific obligations, formal requirements, no case-to-case assessment, less economic input, may seep through from ex-ante regulation to the ex-post enforcement of competition law. It

may also be the other way round: with a strong regulatory regime there may a greater appetite for a more robust competition law application so that it complements the quick approach taken in the DMA. Finally, it may change the division of labour between one department and another. As digital markets are increasingly regulated under the DMA, this may free up attention to intervene in other sectors and areas which were previously underenforced. However, such a recalibration would require that there remains sufficient capacity for the general enforcement of competition law, even if a part of the resources is redirected to the enforcement of the DMA. The upcoming section discusses why it may be wise to reduce the complexity of assessments required in competition law, as to retain enforceability not just in light of the DMA, but also the net of regulations that spans across the digital sector.

A tighter net

The DMA is not the only regulatory regime that will impact competition law enforcement. Instead, the newly introduced regulations span across the digital network that encapsulates competition law. As the set of rules governing digital markets continues to grow, the number of interests, objectives, and effects which can – and maybe should – be taken into account by competition authorities grow as well. This may initiate or accelerate the shift from a monocentric to a polycentric competition law regime.[6] Here, monocentricity refers to a competition law which focuses wholly on price-based effects with the purpose of stimulating one objective, generally consumer welfare, while a polycentric competition regime would focus on a range of different objectives that competition authorities aim to stimulate, where authorities consider the complexity of social interactions across spheres of social activity.[7] Such a broad view may be particularly important in the networked economy, where competitive strategies affect overlapping networks of products and users and where success in one area of the network may have significant spillovers across the rest of the network, often with significant social and political implications.[8] While the modernisation of competition law in the past decades has moved us far past a sole focus on price within a specific market, the scope of competition law is still relatively narrow.[9] In order to reflect a reality with more complex and unpredictable effects related to distortions of competition, this scope may have to be broadened significantly.

In digital markets, the Facebook case initiated by the German competition authority (Bundeskartellamt; ‘BKartA’), should be considered as a step in the direction of polycentricity that is driven by the complexity of digital markets and the existence of specific regulatory frameworks that govern the digital economy. A polycentric competition law refers to a law that incorporates a multitude of interests and simultaneously pursues multiple objectives, moving it away from a monocentric competition law which merely focuses on economic considerations.[10] In the Facebook case, the BKartA took privacy considerations as laid down in the GDPR into account in its application of competition rules. With affirmation of the Court of Justice, the door towards including data protection considerations in applying competition law has been opened. The convergence of objectives pursued in competition law and the various regulatory frameworks are unlikely to stop there. In Google Shopping (par.180), the General Court referred to regulation specific for the telecommunications sector to impose a neutrality on

Google, it motivated this ad hoc extension of regulatory principles by arguing that Google was super dominant in the market for horizontal search. Such ad hoc regulatory extensions – where the court directly transfers a principle from a regulatory framework to the realm of competition law, without intervention by the legislature - may continue as relevant rules specific to the digital economy emerge. For instance, one can imagine that the obligations on Very Large Online Platforms (‘VLOPs’) under the DSA are considered relevant in assessing competitive conduct or designing remedies, or that being active within certain high risk AI markets as defined in the AI Act may lead the court to the conclusion that dominance in this area is particularly problematic. It can also inspire remedies, for instance related to the access to certain types of data or moderating duties of VLOPs, or the divestment of certain important AI technologies following the abuse of dominance.

Sector-specific regulation, industrial policy and competition law.

Besides impact on the substantive assessment of competitive power and possibly anti-competitive conduct, the emergence of industrial policy rules such as the CHIPS Act may impact the balancing of interests between competition within the internal market and the global competitive position of European companies. We have seen in the assessment of the Alstom/Siemens merger that protecting competition within the European Union and protecting our global competitive position as the European Union may conflict with one another.[11] It could be possible that competition authorities may be inclined to accept certain mergers if this strengthens our global competitive position.[12] This may expand beyond the semiconductor industry, for instance where it relates to the objective of the EU as a global leader in ‘responsible AI’.[13]

A brief look into the emerging different regulatory frameworks regarding digital markets shows that we are increasingly moving away from relying on the unregulated free market. Instead, we see that there is a rapid and far-reaching increase in governmental steering within the networked economy, especially in sectors that are deemed critical or essential by the European legislature. It is clear that the European legislature no longer subscribes to the laissez faire approach to the operations of markets and competition. Instead, regulators are trying to steer the development of – especially digital and critical – technologies and products on a granular level. To ensure consistency between competition law and other regulatory frameworks, competition laws will have to become increasingly polycentric if we wish to ensure that competition law enforcement does not hinder or contradict the wider policies pursued in the European Union. This is, of course, no one-way-street: regulation needs to be driven by a pro-competitive purpose. If competition law enforcement becomes open to regulation, regulation should become open to competition concerns. Enforcing competition rules in regulated sectors is not new, it has happened before in other network industries such as the telecommunications sector.[14] In non-digital network industries, enforcing competition law often consisted of a balancing act between national and European interests, as well as national rules and regulatory agencies, on the one hand, and creating pro-competitive impulses on the other. A similar exercise will likely be needed in digital markets, which are more complex, global, and dynamic than non-digital network industries.

An additional layer of complexity is introduced with the increased reliance on EU-level industrial policies which aim to strengthen the global competitive position of the EU, as this may be at odds with the focus of stimulating intra-EU competition. In light of the rapid technological and societal developments and external pressures the EU faces, it seems unavoidable that competition law evolves and adapts. In changing, it is important to strike a balance between accuracy on the one hand and enforceability on the other. As such, it may be warranted that we attempt to reduce the role of complex economic assessments in enforcing competition rules, both in the DMA and beyond. By simplifying the assessments of the economic effects, competition law can retain its relevance while navigating an ever more complex network of industries, regulation, interests, and objectives. The DMA may serve as a testing ground for enforcement on the basis of rules and presumptions, which may in turn inspire competition law. It will be interesting to see how this multidirectional relationship between the DMA, competition law, and other regulatory frameworks unfolds. One thing that is clear is that in times of great uncertainty, we must embrace flexibility and adaptation. It is likely unwise, or even impossible, for competition law to retreat towards a monocentric approach in an attempt to retain the principles it has developed for non-digital markets in the digital age. At the same time, market freedoms and competition remain the fundament underlying competition law actions, much as they underlie the European Project itself. While it is possible for European institutions and Member States to attempt steering innovation, we cannot demand it through regulation. Thus, at its core competition law should remain concerned with protecting competition and the competitive process, even if other interests and objectives are taken into consideration.

Prof. Dr. Rupprecht Podszun is Professor at the Heinrich Heine University Düsseldorf (HHU), where he holds the Chair for Civil Law, German and European Competition Law. Rupprecht Podszun is also one of the Principal Investigators for the Shaping Competition in the Digital Age (SCiDA) Project; Dr. Jasper van den Boom is a postdoctoral researcher at HHU with the Chair of Civil Law, German and European Competition law, where he acts as a researcher and day-to-day coordinator for the SCiDA Project (https://www.scidaproject.com)

[1] Petit N., The Proposed Digital Markets Act (DMA): A Legal and Policy Review, JECLAP 12/7 (2021).

[2] Podszun R., From Competition Law to Platform Regulation – Regulatory Choices for the Digital Markets Act, De Gruyter (2023).

[3] Ibid., p. 6-7.

[4] Ibid., p. 7-8 describes this as the difference between standards developed in competition law enforcement and rules as imposed under the DMA.

[5] de Streel, Alexandre and Crémer, Jacques and Heidhues, Paul and Fletcher, Amelia and Kimmelman, Gene and Monti, Giorgio and Podszun, Rupprecht and Schnitzer, Monika and Scott Morton, Fiona M., The Effective Use of Economics in the EU Digital Markets Act (July 30, 2023). Yale Tobin Center for Economic Policy Discussion Paper No. 8.

[6] Lianos I., Polycentric Competition Law, Current Legal Problems, Volume 71, Issue 1, 2018, Pages 161–213.

[7] Ibid.

[8] Ibid.

[9] Ibid.

[10] Lianos (2018)

[11] Case M.8677 - SIEMENS/ALSTOM, Commission Decision of 6 February 2019; see also Konstantinos Efstathiou, The AlstomSiemens merger and the need for European champions, Bruegel (2019) online: https://www.bruegel.org/blog-post/alstom-siemensmerger-and-need-european-champions; Anja Naumann, The Siemens-Alstom merger-thriller – indicator of a new era for European champions?, Lexxion (2019), online: https://www.lexxion.eu/en/coreblogpost/the-siemens-alstom-merger-thriller-indicator-of-a-newera-for-european-champions/

[12] Ibid.,

[13] See European Commission, ‘Excellence and Trust in Artificial Intelligence’, online: https://commission.europa.eu/strategy-andpolicy/priorities-2019-2024/europe-fit-digital-age/excellence-and-trust-artificial-intelligence_en

[14] De Streel A, ‘The New Concept of “Significant Market Power” in Electronic Communications: The Hybridisation of the Sectoral Regulation by Competition Law’ (2003).

SUGGESTED CITATION: Podszun, R. and van den Boom, J.; “A Bias Towards Enforcement: How the DMA Changes the Landscape”, EU Law Live, 07/05/2024, https://eulawlive.com/competition-corner/a-bias-towards-enforcement-how-the-dma-changes-the-landscape-by-jasper-van-den-boomrupprecht-podszun/

Competition law and space regulation: Orbital markets, Martian efforts, and a planetary champion?

Fabian Ziermann

For a long time, Apollo 11 and the first manned landing on the moon in 1969 were our first thoughts of space exploration. Since then, Elon Musk’s SpaceX (founded in 2002), Jeff Bezos’ Blue Origin (founded in 2000), and Richard Branson’s Virgin Galactic (founded in 2004) have pushed the boundaries of (sub-)orbital exploration. SpaceX and Blue Origin lead the field in terms of revenue, while SpaceX and the United Launch Alliance (ULA), a joint venture of Boeing and Lockheed Martin, lead the field in terms of launch capabilities. Thus, the days of government-led space exploration may be slowly but surely coming to an end, with NASA frequently awarding billion-dollar contracts to SpaceX and Blue Origin

The Canadian science fiction television series Continuum aptly depicts the world of 2077 and an oligarchic dystopia run by the Corporate Congress, i.e., corporations that have succeeded in technology and space exploration. Since this appears to be the current trajectory, we no longer need to ask how to regulate space, but how to apply competition law to the corporations that may well control our planet’s space endeavours. At the same time, however, we should be careful not to stifle what could become one of, if not the, largest economies.

1. Satellite and launch ‘competition’

The first layer of competition in space can be derived from the types of orbits surrounding our planet and the capabilities required to reach them. The closest layer, known as Low Earth Orbit, or simply LEO, has an altitude of 2000 km or less. LEO is home to the International Space Station, and is often explored as the location for new platforms and applications to be built in space. As of May 1, 2023, it was also home to 6768 of the 7560 active satellites orbiting the Earth, 5165 from the United States, with 651 from the United Kingdom in second place. In other words, 89.5% of our current satellite efforts are located in LEO, of which 68.3% are from the US. Another 143 satellites were in Medium Earth Orbit (MEO), with an altitude between 2000 and 35786 km, representing 1.9% of our satellite efforts, and another 590 (7.8%) were in Geostationary Orbit (GEO), which is located at exactly 35786 km, has the same orbital period as the Earth, and is just above the equator. Last but not least is High Earth Orbit (HEO), where satellites can take more than a month per orbit, compared to 90 minutes or less in LEO. As a result, HEO is used less frequently (0.8%) and can even be used to depose of satellite junk in so-called graveyard orbits, several hundred kilometres above their operational orbits.

As of May 4, 2023, SpaceX reportedly had 4338 Starlink satellites in space, representing 57.3% of the planet’s satellite efforts at that time. On January 14, 2024, this number had increased to 5737, while on January 3, 2024, there were 8377 active satellites. This gives SpaceX a 68.4% share of all satellites in space and an increase of more

than 10% in less than eight months. While it is difficult to determine a runner-up, obviously excluding military capabilities by states, a distinction recognised by the European Commission, noteworthy competitors are the post-2023 merger Eutelsat OneWeb which controls 648 LEO and 36 GEO satellites or Telesat with 198 LEO satellites. Amazon’s Project Kuiper aims to build a LEO constellation of 3236 satellites, but only two prototypes are currently in orbit. However, these notable competitors pale in comparison to SpaceX, which is pursuing a LEO-megaconstellation of around 42,000 satellites.

It should also be noted in this context that many competitors rely on SpaceX for satellite launches, for example through its rideshare program, with some referring to SpaceX’s position as a ‘near monopoly ’, since even Amazon’s Starlink competitor Project Kuiper cannot rely on SpaceX’s competitors for launches. It is therefore unlikely that anyone will be able to challenge SpaceX’s and Starlink’s grip on the market anytime soon. This is consequential in that it speaks to the efficiency and price leadership of Space X’s capabilities, while potentially enabling it to foreclose or hinder competitors from establishing satellite constellations that could compete with Space X in the long run, unless they make comparable investments in launch capabilities. In addition, it could potentially give Space X the ability to pick and choose which space projects to further, thereby giving it the de facto power to control (to some extent) emerging space markets. This may warrant considering Space X’s launch capabilities as an essential facility.

2. Orbital markets and competition

In 2019, both the UK’s Competition and Markets Authority (CMA) and the European Commission approved the Inmarsat/Viasat merger on the basis of a ‘market for the supply of broadband in-flight connectivity’. SpaceX is also active in this market, providing services to some airlines. Both the CMA and the EC concluded that the satellite market was competitive and expanding, driven by demand for connectivity. Of course, much has changed since 2019. However, this satellite-functionality-centric approach may not be appropriate for examining space operations in the future. Instead, a (launch) capability-centric and a ‘(lack of) space-in-space-centric’ approach may be more appropriate. For instance, as the Los Angeles Times noted, ‘part of SpaceX’s goal in filing for 30,000 satellites may be to reserve its place and prevent competitors from taking its desired orbit and frequency first.’ Since satellites, and especially large constellations, can interfere with other satellites, a first-mover advantage may be absolute in some respects, as the very existence of one’s space efforts can interfere with or even prevent the space efforts of another ‘by taking up some of the frequency spectrum needed to communicate with Earth.’ This may justify considering orbits, rather than Earth locations, as the relevant geographic market for competition law purposes. Consequently, orbits such as LEO, MEO, or GEO may be considered as a single relevant market. In particular and more likely, orbital shells, e.g., 525, 530, and 535 kilometres and inclinations of 53, 43, and 33 degrees respectively, and their surroundings may constitute potential (sub-)markets, as exemplified by the orbital locations of Starlink.

This also follows from the fact that the ‘usefulness’ of each orbit or orbital shell is further constrained by the service that the satellites provide. For example, while broadband satellites are located in both LEO and GEO, allowing

for some orbital substitutability, GPS satellites are located in MEO, and satellite television requires the dish to be pointed at a specific, stationary GEO satellite. With the rapid growth of LEO satellites and their capabilities, it may only be a matter of time before one (or a few) undertakings achieve an absolute first-mover advantage for certain orbits, services, and frequencies.

Thus, the EC’s Inmarsat/Viasat claim that satellite markets offer ‘significant opportunities for both current competitors and potential new entrants’ may be outdated due to SpaceX’s efforts.

3. Martian efforts and a planetary champion?

The above assessment - which is far from straightforward and only scratches the surface - is arguably further complicated by the fact that SpaceX’s Starlink was arguably born as a by-product of Elon Musk’s Mars ambitions. For example, SpaceX’s investment in launch and transportation capabilities, particularly the reusability of its rockets, has reduced the cost of a pound of payload to a market-leading $1,200, compared to up to $30,000 for a pound on NASA’s Space Shuttle. This is, of course, because government space exploration has declined significantly since the days of Apollo 11, and this is unlikely to change with the emergence of the civilian players discussed. Thus, SpaceX has largely filled a void left by the government’s retreat and/or inefficiencies.

While it is irrelevant to a competition law assessment that Starlink’s dominant satellite efforts and SpaceX’s dominant launch efforts may be a mere by-product of Elon Musk’s Mars ambitions, competition law does recognise the concept of national champions. National champions are benefactors of financial aid, are backed by extensive lobbying and/or diplomatic efforts, and are subject to a more lenient application of competition law. In other words, against the backdrop of the massive financial investments required to: 1) reach Mars; and 2) colonise it, it might be an acceptable consequence, in this particular instance, to support SpaceX’s tendency to monopolise (or at least dominate) the satellite and launch markets, thereby designating it as the first planetary champion. This is because once these colonisation efforts are sufficiently advanced, new markets or even entire economies may open up, such as asteroid mining, markets, or economies on or for Mars, to name but a few of the otherwise potentially unattainable economic benefits.

Space X’s designation as a planetary champion, rather than a national or international champion, may be justified on the one hand by its competitive edge in reusable rocket technology, such as the Falcon 9/Falcon Heavy, of which it plans 148 launches in 2024. In contrast, Blue Origin’s New Glenn reusable rocket was debuted on the launch pad in late February 2024, while Space X launched its first Falcon 9 in June 2010. In other words, in the private sector, Space X could be more than a decade ahead of its competitors, while already developing the next generation of space exploration: Starship. Moreover, in terms of (inter)national space efforts, government spending also speaks to the leadership of the US efforts, with the US spending more than the next ten countries and the European Union combined. With ULA, Virgin Galactic, Blue Origin and Space X all operating from the US, the US national champion may very well be the planetary champion.

The question of how to regulate these efforts is as much a question of competition law as it is of competition policy.

On the one hand, in terms of competition law, Space X may certainly tip the space race in its favour (if it has not already done so), thereby closing off particularly lucrative markets and enabling it to reap monopoly profits (in the short run). On the other hand, what we are witnessing with the US (private) space efforts is mirrored by China’s land and deep sea mining efforts, where it is trying to extend its land monopoly for critical minerals to the deep sea. Thus, regulatory efforts may ultimately be overridden by policy considerations to obtain minerals, whether on or around Earth, and said policy considerations may well be the designation of champions.

However, this approach would not render competition law inapplicable, but merely postpone its application, and could be followed by a later ‘liberalisation’ of the market(s) should SpaceX come to control entire sectors of the economy. The tools required for this process of liberalisation are not alien to competition law, but can be found in constructs similar to the European Digital Markets Act, only for different industries, in the sense that markets or their complements, once developed, are made contestable, through the application of competition law disguised as regulation. In the short term, however, a combined effort is certainly more useful than a myriad of fragmented efforts, since space markets and industries need to be developed first, and given the scale of space exploration, premarket development competition may hinder progress. In other words, a temporary Continuum dystopia might not be the worst idea.

Fabian Ziermann is Doctoral Researcher at the WU Vienna and Recipient of a DOC Fellowship of the Austrian Academy of Science.

SUGGESTED CITATION: Ziermann, F.; “Competition law and space regulation: Orbital markets, Martian efforts, and a planetary champion?”, EU Law Live, 07/05/2024, https://eulawlive.com/competition-corner/competition-law-and-space-regulation-orbital-markets-martian-efforts-and-a-planetarychampion-by-fabian-ziermann/

THE LONG READ

EU Citizenship and Brexit: A Mid-Term Review

Polly Ruth Polak 1

In 2001, the Court of Justice made an aspirational statement that remains a subject of intense debate.2 Indeed, just how far has EU citizenship progressed towards its destiny of becoming ‘the fundamental status of the nationals of the Member States’?3 When it comes to answering this elusive question, one might find new insight by assessing the relevance EU citizenship had during the process of the UK’s withdrawal from the Union. Simply put, if EU citizenship and the rights it entails can be disregarded, downgraded or even erased, how valuable was it in the first place? In the early days, between the Brexit referendum and the effective withdrawal of the UK, academic speculation about the potential consequences for EU citizenship of leaving the EU ran high. These initial debates essentially mirrored the opposing conceptions that have always surrounded Union citizenship.4 On the one hand, EU citizenship can be considered a merely political creation; a simple continuation of the classical four freedoms that does not go beyond a set of market-oriented rights enshrined in EU secondary law. Consistent with this view, such rights can be removed just as easily as they are granted. In this sense, certain scholars argued at the time that EU citizenship could not possibly affect, legally speaking, the regulation of withdrawal, mainly because Article 50 did not contain any EU citizenship-related conditions. From this perspective, any protection offered of EU citizens’ rights depended solely on the political will of the withdrawal negotiators: anything was possible.5 Alternatively, it could be considered that years of jurisprudential evolution of EU citizenship has transformed it from a purely political concept into a bedrock for asserting tangible legal rights.6 This other side of the debate linked Article 50 TEU with the constitutional framework of the Treaties and believed in certain legal constraints stemming from other EU rules and principles that necessarily required withdrawal to be legally consistent with the protection of EU citizenship.7

This paper returns to these debates just over four years after Brexit became final. As conveyed in Cambien, Kochenov and Muir’s 2020 collective volume ‘European Citizenship under Stress: Social Justice, Brexit and Other

1. Professor of International and European Law at the University of Salamanca (Spain).

2. Jo Shaw, ‘EU Citizenship: Still a Fundamental Status?’ Robert Schuman Centre for Advanced Studies Research Paper No. RSCAS 2018/14, 2018.

3. Judgment of the Court of 20 September 2001, Rudy Grzelczyk v Centre public d’aide sociale d’Ottignies-Louvain-la-Neuve, C-184/99, EU:C:2001:458, para 31.

4. Dimitry Kochenov, ‘The Present and the Future of EU Citizenship: A Bird’s Eye View of the Legal Debate’, Jean Monnet Working Papers (NYU Law School) No.2/12, 2012.

5. Dimitry Kochenov, ‘EU Citizenship and Withdrawals from the Union: How Inevitable is the Radical Downgrading of Rights?’, LEQS Discussion Paper Series no. 111, 2016.

6. Phoebus Athanassiou and Stephanie Shaelou, ‘EU Citizenship and Its Relevance to EU Exit and Secession’, in Dimitry Kochenov (ed.), EU Citizenship and Federalism: the Role of Rights (CUP, 2016), p. 731.

7. Piet Eeckhout and Eleni Frantziou, ‘Brexit and article 50 TEU: A constitutionalist reading’ 3 Common Market Law Review 54, 2017, pp. 695-733.

Challenges,’8 among the different obstacles to EU citizenship fulfilling its destiny to become ‘the fundamental status’ of nationals of the Member States, Brexit occupies a particularly prominent place. It is thus interesting today to consider how the concept and scope of EU citizenship and the rights attached to it have emerged from this significant challenge. In order to do so—and with the benefit that always comes from hindsight—this paper will address three pivotal aspects regarding EU citizenship before, during and after the UK’s withdrawal from the Union while also considering some more recent developments and others yet to come.

1. Voting Brexit

To begin with, it is safe to assume that the only means under the democratic principle to take the constitutionally momentous step of withdrawal from the EU would be via a referendum in the withdrawing state.9 This, however, means grappling with the issue of determining who has the right to vote on the potential loss of their EU citizenship.10 The first question to consider, therefore, is whether EU citizenship has a role to play when a Member State establishes its franchise in order to determine who can vote on the decision to withdraw from the EU and to potentially remove their EU rights. The franchise established in the UK for the EU referendum is especially interesting in this regard, notably for its controversial nature. Indeed, based on the franchise for the general elections in force at that moment, the European Union Referendum Act 2015 denied the vote to some of the individuals that were to be the most affected by the result: British nationals living in other Member States if they had been away for more than 15 years, and non-Commonwealth EU citizens living in the UK. Following O’Neill’s arguments at the time, this franchise clearly violated EU law by penalising British nationals who had exercised their free movement rights and by discriminating EU citizens resident in the UK as Irish, Cypriot, and Maltese nationals were allowed to vote due to their Commonwealth citizenships, but all other EU citizens in the UK were not.11

Interestingly, the British courts agreed that the national competence to decide the EU referendum franchise had to be exercised with due regard to EU law, and that if the conditions for the UK parliamentary franchise laid down in national legislation restricted the exercise of the EU right of free movement, this could run contrary to that legal order. However, the court also considered that the 15-year rule, although a disadvantage, could not be characterized as a restriction. Specifically, it was not a measure liable to dissuade or deter EU citizens from exercising their rights of free movement. On the contrary, it had the legitimate purpose of confining the vote to those citizens with a close and objective connection with the UK.12 This assertion weakens considerably when

8. Nathan Cambien, et al. (eds.), European Citizenship under Stress: Social Justice, Brexit and Other Challenges (Brill, 2020).

9. Polly Ruth Polak, ‘Beyond Article 50 TEU: The Constitutionalisation of EU Withdrawal’, Re:constitution Working Paper 34, 2024 (forthcoming).

10. Jo Shaw, ‘Unions and Citizens: Membership Status and Political Rights in Scotland, the UK and the EU,’ in Carlos Closa (ed.), Secession from a Member State and Withdrawal from the European Union (CUP, 2017), p. 153.

11. Aidan O’Neill, ‘(Dis)Enfranchisement and Free Movement,’ in Panos Koutrakos, Niamh Nic Shuibhne and Phil Syrpis (eds), Exceptions from EU Free Movement Law: Derogation, Justification and Proportionality (Bloomsbury, 2016).

12. UK High Court of Justice, Harry Shindler and Jacquelyn Maclennan v. Chancellor Of The Duchy Of Lancaster and Secretary of State for Foreign And Commonwealth Affairs, [2016] EWHC 957.

taking into account the European Commission’s starkly opposite view: ‘it must be taken into account that national policies which lead to disenfranchising citizens may be considered as limiting the enjoyment of rights attached to EU citizenship, such as the right to move and reside freely within the EU, a fundamental right of every EU citizen. This is at odds with the founding premise of EU citizenship, namely that it is additional to national citizenship and is designed to give additional rights to EU citizens, whereas in this case the exercise of the right of free movement may lead to losing a right of political participation.’1 In fact, the UK court’s ruling has been further discredited by the passage of the new UK Elections Act 2022 which has removed the 15-year limit on voting rights in the UK general elections for British citizens living overseas and which had inspired the EU referendum franchise. The UK Governments’ declarations on adopting its new ‘votes for life’ policy are especially revealing of the contestable nature of the previous system: ‘British expatriates are also directly affected by decisions made in the UK Parliament – for example, on foreign policy, defence, immigration, or pensions. It is therefore right that they have a voice in elections to that body. There is considerable demand for these reforms. Expats of all political stripes are keen to have their say on issues that affect them.’2

Brexit has clearly highlighted the need to take close account of EU citizenship rights when designing national rules determining the franchise for an EU withdrawal referendum. However, regarding the participation of resident EU citizens, the legitimacy for their enfranchisement in the referendum was counterbalanced by arguments against the government creating an artificial majority to precondition the outcome by including a group so obviously in favour of EU membership. To this, however, we might add the curious fact that the UK authorities did not oppose including EU citizens in the Scottish independence referendum of 2014 despite similar allegations of using loaded dice. In any case, and notwithstanding clear democratic and justice-based arguments for including those who are taking advantage of EU free movement rights in the other direction, that is, EU citizens residing in the withdrawing state, there have been no legal challenges nor developments concerning the legality of their questionable disenfranchisement in the Brexit referendum.

2. Negotiating Brexit

The second question to ask is if EU citizenship was treated as a legal restraint on the Brexit negotiations. I believe this to be true in a number of ways. Firstly, there was never any doubt among the parties that EU citizenship was the most powerful part of EU law when it came to conditioning the withdrawal negotiations. So much so that it was the only substantive issue dealt with in depth during the first phase of withdrawal talks towards reaching a divorce deal, while the vast amount of other material aspects affected by the UK’s withdrawal were left to be part of the future trade agreement.3 Furthermore, although Article 50(3) TEU allows for a unilateral withdrawal, the negotiators were also aware that a no deal Brexit would prove particularly severe for citizens

1. European Commission, Communication addressing the consequences of disenfranchisement of Union citizens exercising their right to free movement, COM(2014) 33 final, 29 January 2014.

2. UK Policy Paper, Overseas electors: Delivering ‘votes for life’ for British expatriates, 3 February 2022.

3. Polly Ruth Polak, EU Withdrawal as a Supranational Affair: The Case of Brexit, Brill Nijhoff, 2023.

exercising free movement rights. Where valuable rights are lost litigation is likely and thus it was probable that both national courts and the Court of Justice would have been open to offering some kind of legal protection to so-called ‘former EU citizens.’4 Thus, not only to protect EU citizens but also to protect themselves from a certain avalanche of legal claims, both negotiating parties took unilateral action in case they failed to agree on mutual safeguards for citizens’ rights. In this sense, the EU27 prepared national contingency measures coordinated by the European Commission to ensure continued legal residence for UK nationals already residing in their territories.5 Meanwhile, the UK Government’s EU Settlement Scheme to allow EU citizens to remain in the UK and protect their rights was to be put in place with or without a deal.6

Nonetheless, we can also discern here clear indication that EU citizenship didn’t prove as legally powerful as some had hoped.7 Indeed, protection was only ever intended for certain EU rights, mainly, free movement, and only for those already exercising it. Thus, Brexit also highlights uncomfortable truths: EU citizenship is to a certain extent a simple collection of rights, as only some were treated as legally significant under the concept of ‘acquired rights’ while others were deemed entirely removable. Even the right to free movement, recognised as the most important of the rights that needed protecting from withdrawal, was split into the right to reside in the host state and what was labelled as ‘future’ movement rights. Only the former was considered unnegotiable, while allowing British nationals living abroad to conserve their EU rights beyond their host state was only ever treated as another bargaining chip in the negotiations.8 Moreover, Brexit also damages recent arguments that EU citizenship has come to mean more than cross-border movement,9 in as much as ‘static’ EU citizens were entirely left out of the withdrawal negotiations. Finally, although an agreement on citizens’ rights was a major priority for the Brexit talks and unilateral measures were forthcoming in case they failed, EU citizenship also proved too weak to ensure more immediate guarantees. In this sense, calls to ring-fence these rights from the rest of the divorce issues and offer reciprocal protection no matter what were ignored on the basis of the ‘nothing is agreed until everything is agreed’ principle.10 Thus, EU citizens endured a terrible period of uncertainty while their rights were made conditional upon reaching a deal on all other divorce matters. Similarly, it was only very close to the finish line that the parties began showing real concern about a no deal scenario and decided to offer conclusive unilateral guarantees.

4. Eleanor Spaventa, ‘Mice or Horses? British Citizens in the EU 27 after Brexit as “Former EU Citizens”’, 44 European Law Review 5, 2019, 589.

5. European Commission, Communication and legislative proposals from the Commission on limited contingency measures in the absence of an agreement on a future partnership with the United Kingdom, COM(2020) 831 final, 10 December 2020.

6. UK Government, No-Deal Readiness Report, 14 October 2019.

7. Volker Roeben et al., ‘Revisiting Union Citizenship from a Fundamental Rights perspective in the time of Brexit’, European Human Rights Law Review 5, 2018, pp. 450-473.

8. Adam Łazowski, ‘When Cives Europae became bargaining chips: free movement of persons in the Brexit negotiations’, 18 ERA Forum 4, 2018.

9. Daniel Sarmiento and Eleanor Sharpston, ‘European Citizenship and Its New Union: Time to Move On?’, in Dimitry Kochenov (ed.), EU Citizenship and Federalism. The Role of Rights (CUP, 2017).

10. Stijn Smismans, ‘Ring-Fencing Citizens’ Rights in the Brexit Negotiations: Legal Framework and Political Dynamics’, DCU Brexit Institute Working Paper, 2019.

3. Challenging Brexit

Part Two of the EU-UK Withdrawal Agreement (WA) creates a new category of migrant, the so-called ‘Brexit citizen.’ These relatively privileged migrants are UK citizens that were residing in the EU and EU citizens residing in the UK at the end of the transition period (31 December 2020). In essence, they are now protected for life, along with their families, by the legal regime of Directive 2004/38/EC under the EU law principles of direct effect and primacy, and under the coverage of prior EU case law and the CJEU’s preliminary ruling mechanism within a period of 8 years from the date of entry into force of the agreement.11 On the other hand, all ‘moving’ Brits have lost their EU citizenship and most other rights attached, including any ‘future’ movement rights. All ‘static’ Brits have reverted entirely to third-country nationals. Thus, while the WA is an unprecedented and extraordinary supranational instrument12 as a direct consequence of the legal obligation that weighs on the parties to prevent the termination of significant rights,13 it has also been the object of serious criticism from a Union citizenship point of view. In other words, it brings to the fore another set of harsh realities concerning the limits of EU citizenship. As we already mentioned when discussing the Brexit negotiations, the WA is a stark reminder of the requirement for a cross-border element as a precondition for triggering EU rights. In addition, as O’Brien points out, the new regime is also clearly constructed not around the concept of EU citizenship but around the limitations and conditions in Directive 2004/38.14 It thus also puts the spotlight on the need to have an economic activity or sufficient resources as well as comprehensive health insurance to benefit from free movement rights. Finally, the division of free movement rights into right of residence in the host state and no rights of future movement by which British Brexit citizens are essentially ‘locked’ in one Member State, further complicates any view that EU rights are part of a single borderless space creating a unique supranational relationship between their beneficiaries and the EU as a whole.15

It is notable, however, that unlike the more complicated task of making politicians accountable, the WA is a binding legal instrument justiciable both in the national courts of the Member States and the UK, as well as before the Court of Justice. The latter, therefore, has the ability to answer all our questions regarding whether the WA does in fact offer sufficient coverage of EU citizens’ rights after withdrawal. There is, however, an obvious drawback in so far as the Court can only answer when and what it is asked. Unfortunately, and despite most scholars arguing that it is possible to request a 218(11) TFEU Opinion on a withdrawal agreement’s compatibility

11. Agreement on the withdrawal of the UK of Great Britain and Northern Ireland from the EU and the European Atomic Energy Community [2020] OJ L 29/ 7.

12. Stijn Smismans, ‘EU citizens’ rights post Brexit: why direct effect beyond the EU is not enough’, 14 European Constitutional Law Review 3, 2018, pp. 443-474

13. Polly Ruth Polak and Ramses A. Wessel, ‘The Emergence of EU Withdrawal Law’, 61 Common Market Law Review 1, 2023, pp. 167194.

14. Charlotte O’brien, ‘Between the devil and the deep blue sea: Vulnerable EU citizens cast adrift in the UK post-Brexit’, 58 Common Market Law Review 2, 2021, pp. 431-470.

15. Eleanor Spaventa, ‘Brexit and the free movement of persons: what is EU citizenship really about?’, In Niamh Nic Shuibhne, Revisiting the Fundamentals of the Free Movement of Persons in EU Law (OUP, 2023), p. 158.

with the Treaties, none was requested of the UK’s draft WA.1 Similarly, all individual actions for annulments lodged with the General Court regarding citizens’ rights in the Brexit context have been dismissed on account of not meeting the restrictive conditions on standing of Article 263 TFEU.2 Thus, for the time being, there have only been two major judgments from the Court of Justice on the implications of Brexit for Union citizens, both arising from proceedings brought by the same British national before the same French court that decided to twice activate the preliminary reference mechanism. The first thing that strikes us, therefore, is the surprisingly low level of litigation that has actually emerged from Brexit in this area, particularly as no British court—midway through their 8 year deadline—has yet requested any preliminary rulings. Nonetheless, these two decisions can provide us with some insight into the Court’s perception of EU citizenship and withdrawal and further inform our understanding of its real value.

E.P., a United Kingdom national, had resided in France since 1984. Following the entry into force of the WA, she was removed from the electoral roll in France. E.P. then filed two complaints, one concerning her deprivation of the right to vote and to stand as candidate in French municipal elections and another with regards to the removal of her right to vote and to stand in elections to the European Parliament. However, when the French Court referred the questions to the EU Court, it began by asking more generally whether Union citizenship and the rights it entails could be removed on account of Article 50 TEU and the EU-UK WA. In the first case, C-673/20, Préfet du Gers I, 3 the Court dismissed any argument that British citizens could retain EU citizenship after the UK’s withdrawal by noting that possession of the nationality of a Member State is essential to acquiring and retaining the status of citizen of the Union and to benefit fully from the rights attached. As a result, the Court concluded that UK nationals no longer enjoy the right to vote and stand as a candidate in municipal elections in the Member States. In the second case, C-716/22, Préfet du Gers II,4 the Court applied a similar interpretation to conclude that UK nationals no longer benefitted from a right to vote and to stand as candidates in elections to the European Parliament in their Member State of residence. Thus, these rulings essentially confirm that neither the loss of EU citizenship nor the loss of the electoral rights attached to it, due to the voluntary withdrawal of a Member State from the Union, is incompatible with the Treaties.

Préfet du Gers I has been heavily critisised, among other reasons, for the lack of any ‘consideration of the fact that Union citizenship might be a status that transcends the confines of international law nor of any residual responsibility of the EU towards its former citizens’5 in what might be seen as a ‘considerable blow to EU

1. Polly Ruth Polak, ‘The UK Withdrawal Agreement as a Sui Generis EU International Treaty and its Admissibility to the CJEU’s Opinion Procedure’ in José Martín y Pérez de Nanclares y Daniel González Herrera (eds.), El diálogo judicial internacional en la protección de los derechos fundamentals (Tirant lo Blanc, 2019).

2. Judgment of the General Court of 26 November 2018, Shindler and Others v Council, T- 458/ 17, EU:T:2018:838; Order of the General Court of 24 June 2020, Price v Council, T- 231/ 20, EU:T:2020:280; Order of the General Court of 8 June 2021, Silver and others v Council, T-252/ 20, EU:T:2021:347.

3. Judgment of the Court of Justice of 9 June 2022, Préfet du Gers I, C- 673/20, EU:C:2022:449.

4. Judgment of the Court of Justice of 18 April 2024, Préfet du Gers II, C-716/22, EU:C:2024:339.

5. Spaventa n 27, p. 183

citizenship as a status.’6 Although these views may be justified, I would however refrain from reading too deeply into these judgements. Firstly, the idea that one must hold the nationality of a Member State to be a citizen of the Union was already widely accepted in scholarship before these decisions were delivered.7 The fact is that retaining EU citizenship after a state withdraws from the Union is not only incompatible with basically all references to citizenship in EU law, but would somewhat defeat the purpose of leaving.8 Nonetheless, this still doesn’t mean that all EU citizenship rights are removable, and these judgments do not confirm this either. On the contrary, while the Court is very direct in asserting that the loss of nationality of a Member State entails the loss of Union citizenship, it also indicates that the consequence is that such nationals no longer meet the essential condition to benefit fully from the rights attaching to that status, thus suggesting loss of citizenship does not imply loss of all EU rights. Likewise, the Court very carefully circumscribes its answers to the two political rights at hand and thus I don’t believe we need to make any general conclusion that former EU citizens can be deprived, again, of all their EU rights. In this sense, when the Court states that ‘[i]t is irrelevant, in that regard, that United Kingdom nationals have previously exercised their right to reside in a Member State’ (emphasis added), it is clearly referring to ‘the right to vote and to stand as a candidate in municipal elections in their Member State of residence’ mentioned in the previous sentence,9 and thus it would be hasty to conclude that whether the UK citizen has exercised any Treaty rights before withdrawal is immaterial, nor that no rights at all remain from their previous Union status. Likewise, the Court recognises that the EU institutions enjoy broad discretion in policy decisions in the conduct of external relations and are not required to grant, unilaterally, third-country nationals rights ‘such as the right to vote and to stand as a candidate in municipal elections’10 or ‘such as the right to vote and to stand as a candidate in elections to the European Parliament’,11 both of which are ‘reserved solely to Union citizens.’12 Indeed, where it seems logical and legitimate that voting rights should fall within political discretion as they are so obviously connected to the EU citizens’ interest in taking part in the political life of the Union and therefore tend only to be exercised by them, there are a number of core EU citizenship rights that, unlike these, are sometimes provided to third country nationals (for example, to citizens from the EEA countries and Switzerland), and may well merit a different approach from the Court in the context of withdrawal. Thus, one might still expect a different outcome if the Court is questioned about other aspects of the WA, such as the political decision to exclude other EU rights or the downgrading of included rights and their legal protection as an ex EU citizen transitions from the coverage of the Treaties to that of the WA.13

6. Serhii Lashyn, ‘Sacrificing EU citizenship on the altar of Brexit’, 29 Maastricht Journal of European and Comparative Law 6, 2022, p. 744.

7. Vaughne Miller, ‘Brexit and European Citizenship’, House of Commons Briefing Paper, 6 July 2018, p. 15.

8. Martijn van den Brink and Dimitry Kochenov, ‘Claiming “We are out but I am in” post-Brexit. AG Collins’ Opinion in the Préfet du Gers Case’, Verfassungsblog, 25 February 2022.

9. Préfet du Gers I, para 58

10. Id., para 99

11. Préfet du Gers II, para 68

12. Ibid.

13. Niamh Nic Shuibhne, ‘Protecting the legal heritage of former Union citizens: EP v. Préfet du Gers’, 60 Common Market Law Review 2, 2022, pp. 475-516

4. Conclusions

In this Long-Read, I have returned to the UK’s withdrawal from the EU as one of the most significant challenges to the concept of EU citizenship in recent times with the aim of assessing just how far it has come from its original conception as a mere set of economic rights to a truly fundamental status whose disregard, downgrading or loss can be legally challenged in court. The first issue touched upon was whether EU citizenship can condition a withdrawal referendum franchise. We have seen how the UK courts have recognised that it would be contrary to EU law if national legislation in this regard restricted EU free movement. Thus, it has become quite clear that disenfranchising nationals abroad is at odds with the ‘founding premise of EU citizenship.’ However, there have been no legal challenges or developments when it comes to excluding resident EU citizens in this kind of referendum. Secondly, no substantive issue emerged as of greater relevance for the UK’s withdrawal negotiations while also proving worthy of unilateral contingency measures in case of a no deal Brexit. Nonetheless, Brexit has so far proven that only certain EU rights cannot be made entirely contingent on political agreement while the rest can be left to politicians to be used as bargaining chips. Finally, EU citizenship is not an autonomous status that can be acquired or retained without the nationality of a Member State. Likewise, political rights generally reserved to Union citizens can be legally removed from the citizens of a state that has withdrawn from the Union. However, the EU-UK WA is testament to the fact that EU citizenship offers the holder a number of rights that must under all circumstances be guaranteed. What we can only guess at for the time being, is whether this unique but quite limited regime conserving free movement rights only for those who were exercising them at the time of Brexit, only in their host state, only if they meet certain economic conditions and only if they have successfully applied for residency, is a legally valid outcome of a Member State’s withdrawal in light of EU citizenship.

My conclusion, therefore, is that Brexit has not changed the nature of EU citizenship but simply provided insight into its present status. There is no doubt that while it has held significant legal power over every phase of the UK’s withdrawal, it has also revealed its current limitations. Nonetheless, it is important to bear in mind that there is still time for Brexit to be seized by the Court as an opportunity to continue advancing EU citizenship towards its destiny.

SUGGESTED CITATION: Polly Ruth Polak; “EU Citizenship and Brexit: A Mid-Term Review, https://eulawlive.com/weekend-edition/weekendedition-no187/

HIGHLIGHT F THE WEEK S O

Guidance Note concerning certain provisions of Regulation (EU) 2024/795 establishing the Strategic Technologies for Europe Platform (STEP), published in OJ

Monday 13 May

The European Commission released a non-binding Guidance Note to provide practical assistance in implementing Regulation (EU) 2024/795, which establishes the Strategic Technologies for Europe Platform (STEP), aiming at clarifying certain provisions of the regulation, without altering the rights and obligations outlined within it.

Read on EU Law Live

General Court to hear legal challenge to CPVO decision on Cripps Pink and Cripps Red apple varieties

Monday 13 May

The Western Australian Agriculture Authority (WAAA) filed a legal challenge against the Community Plant Variety Office (CPVO) regarding its decision on the Cripps Pink and Cripps Red apple varieties, a case, identified as T-159/24, involving nullity proceedings before the CPVO, with Teak Enterprises Pty Limited also participating in the proceedings.

Read on EU Law Live

Action against Commission Implementing Regulation imposing a definitive anti-dumping duty and definitively collecting the provisional duty on imports of steel bulb flats from China and Türkiye

Monday 13 May

Official publication was made of an action, brought on 2 April 2024, by Özkan Demir Çelik Sanayi against the Commission, Case T-175/24, concerning the applicant’s claim that the Court should annul Commission Implementing Regulation (EU) 2024/209 of 10 January 2024 imposing a definitive anti-dumping duty and definitively collecting the provisional duty imposed on imports of steel bulb flats originating in China and Türkiye.

Read on EU Law Live

Disputed Satellite Communications Tender: Airbus Defence and Space vs. European Defence Agency, published in OJ

Monday 13 May

In the case brought before the General Court, Airbus Defence and Space SAS and Marlink Events SAS contested decisions made by the European Defence Agency (EDA) regarding a tender procedure for satellite communications services.

Read on EU Law Live

Official Publication: European Parliament challenges Commission Decision on Hungary’s Judicial Reforms

Monday 13 May

The European Parliament initiated legal action against the European Commission in Case C-225/24 regarding a Commission Implementing Decision from December 13, 2023, concerning judicial reforms in Hungary.

Read on EU Law Live

Action against Section 3.21 of Annex I to Delegated Regulation (EU) 2021/2139 inserted to the Taxonomy Regulation, published in OJ

Monday 13 May

The Official Journal of the EU published an action, brought on 14 February 2024, by Dassault aviation against the Commission, Case T-77/24, concerning the applicant’s claim that the Court should annul Section 3.21 of Annex I to Delegated Regulation (EU) 2021/2139, inserted by point 2 of Annex I to Commission Regulation (EU) 2023/2485 of 27 June 2023 amending Delegated Regulation (EU) 2021/2139 establishing additional technical screening criteria for determining the conditions under which certain economic activities qualify as contributing substantially to climate change mitigation or climate change adaptation and for determining whether those activities cause no significant harm to any of the other environmental objectives.

Read on EU Law Live

Court of Justice to hear case on appeal on State Aid granted by Germany to support CHP Plants

Monday 13 May

An appeal, brought on 3 April 2024 by the European Commission against the judgment of the General Court, delivered on 24 January 2024 in Case T-409/21 Federal Republic of Germany v European Commission, which concerned he Commission Decision C(2021) 3918 final of 3 June 2021 on State Aid SA.56826 (2020/N) – Germany – 2020 reform of support for cogeneration and on State Aid SA.53308 (2019/N) – Germany – Change of support to existing CHP plants, was officially published in the OJ.

Read on EU Law Live

Digital Markets Act: Commission initiates market investigation for X and designates Booking as gatekeeper

Monday 13 May

The European Commission designated, under the Digital Markets Act (DMA), Booking as a gatekeeper for its online intermediation service and opened a market investigation to further assess the rebuttal submitted in relation to the online social networking service X.

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Commission registers European Citizens’ Initiative on taxation of greenhouse gas emissions

Monday 13 May

The European Commission registered a European Citizens’ Initiative (ECI) titled ‘Save the Planet by shifting taxation from labour to greenhouse gas emissions’, which calls for strengthening the Fit for 55 Package and the EU carbon pricing system, advocating for a faster phase-out of free allowances and uncapped carbon pricing to achieve emission reduction goals.

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Commission boosts renewable energy deployment with new guidance and recommendations

Monday 13 May

As the REPowerEU Plan approaches its two-year mark, the European Commission is taking steps to accelerate the deployment of renewable energy and reduce reliance on Russian fossil fuels.

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Council Implementing Regulation (EU) 2024/1340 of 13 May 2024 implementing Regulation (EU) 2017/2063 concerning restrictive measures in view of the situation in Venezuela, published in OJ

Tuesday 14 May

The Council of the European Union issued Implementing Regulation (EU) 2024/1340 on 13 May 2024, in line with Regulation (EU) 2017/2063 concerning restrictive measures regarding the situation in Venezuela, aiming to update the list of individuals and entities subject to restrictive measures outlined in Annex IV of Regulation (EU) 2017/2063.

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Commission Recommendation (EU) 2024/1238 of 23 April 2024 on developing and strengthening integrated child protection systems in the best interests of the child, published in OJ

Tuesday 14 May

The European Commission issued Recommendation (EU) 2024/1238 on 23 April 2024, emphasizing the imperative to develop and fortify integrated child protection systems to prioritise children’s welfare.

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ECtHR: Violation of Article 8 of the ECHR in Oleg Balan v. The Republic of Moldova

Tuesday 14 May

In the case of Oleg Balan v. The Republic of Moldova, the European Court of Human Rights (ECtHR) rendered its judgment (Application no. 25259/20) evaluating whether Moldova’s courts failed to protect the reputation of Oleg Balan, former Minister of the Interior, in a defamation case against Renato Usatîi, a politician and leader of an opposition party.

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Court of Justice clarifies assessment of access to legal counsel in criminal proceedings

Tuesday 14 May

The Court of Justice delivered its judgment in case C 15/24 PPU [Stachev] (i) CH v Sofiyska rayonna prokuratura, the Sofiyski rayonen sad (District Court, Sofia, Bulgaria), concerning a preliminary ruling request regarding the interpretation of Directive 2013/48/EU in light of Article 47 of the Charter of Fundamental Rights of the European Union.

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Regulation 2024/1037 amending existing rules regarding temporary derogations on use of technologies by certain providers to combat online child sexual abuse, published in OJ

Tuesday 14 May

Official publication was made of Regulation (EU) 2024/1307 of the European Parliament and of the Council of 29 April 2024 amending Regulation (EU) 2021/1232 providing for a temporary derogation regime as regards the use of technologies by certain providers of publicly available interpersonal communications services for the purpose of combating online child sexual abuse, pending the preparation and adoption of a long-term legal framework addressing the prevention of and combating online child sexual abuse.

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Council agrees to renewal of EU trade measures regarding Ukraine and Moldova

Tuesday 14 May

The Council approved the suspension of import duties and quotas on Ukrainian and Moldovan exports to the EU for another year.

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Court of Justice streaming hearing of case on the interpretation of Article 24(4) of Brussels I Regulation (recast) on acceptance of jurisdiction by a national court to hear patent infringements

Tuesday 14 May

The Court of Justice’s Grand Chamber hearing in BSH Hausgeräte (C-339/22), a case concerning a preliminary ruling request seeking clarification on the interpretation of Article 24(4) of Regulation (EU) 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, in the context of a national court, which, pursuant to Article 4(1) of that regulation, has declared that it has jurisdiction to hear a patent infringement dispute, was streamed on the Court’s website.

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Single Resolution Board Legal Conference 2024: Navigating Legal Frontiers in the EU Banking Union and Beyond

Tuesday 14 May

The Single Resolution Board (‘SRB’) will hold its next legal conference, on Thursday, 6th of June 2024, with the aim of exploring the convergences and tensions of law in the EU Banking Union and beyond.

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Reasoned opinion in case brought by Italy against Austria on road transport, adopted by Commission

Tuesday 14 May

The European Commission issued a reasoned opinion in a legal dispute initiated by Italy against Austria under Article 259 TFEU, whereby Italy accused Austria of violating EU law by implementing several road traffic restrictions on the Brenner axis, specifically on the A12 and A13 motorways.

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Annual compilation of key EU Court judgments, published

Tuesday 14 May

The “Selection of Major Judgments” is an annual publication featuring summaries of the most significant decisions from the Court of Justice and the General Court of the European Union.

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Council adopts new European asylum and migration system

Tuesday 14 May

The Council adopted a new reform of the European asylum and migration system, consisting of 10 legislative acts, that will help to manage arrivals in an orderly way, by thus creating efficient and uniform procedures and ensuring fair burden sharing between the Member States.

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European Court of Auditors’ report on the potential of the Commission to recover more irregular EU expenditure faster, published in OJ

Wednesday 15 May

Official publication was made of the European Court of Auditors special report 07/2024: ‘The Commission’s systems for recovering irregular EU expenditure – Potential to recover more and faster’, which assessed whether the Commission’s systems for managing and recovering irregular expenditure incurred by beneficiaries of EU funds have been effective in protecting the EU budget.

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Council reaches agreement on new rules for safer and more efficient cross-border withholding tax procedures

Wednesday 15 May

The Council adopted its general approach on safer and faster procedures to obtain double taxation relief, which will help boost cross-border investment and help fight tax abuse.

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ECtHR to stream Grand Chamber hearing in the case of an athlete challenging sports regulations requiring her to decrease testosterone levels

Wednesday 15 May

The European Court of Human Rights held a Grand Chamber hearing in the case of Semenya v. Switzerland (application no. 10934/21) concerning Articles 6 (right to a fair hearing), 8 (right to respect for private life), 13 (right to an effective remedy), and 14 (prohibition of discrimination) of the European Convention on Human Rights, which was webcasted on the Court’s website.

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General Court rejects action seeking annulment of restrictive measures imposed against Russia’s sovereign wealth fund

Wednesday 15 May

The General Court handed down judgment in Russian Direct Investment Fund v. Council (T-235/22), a case concerning the applicant, one of Russia’s sovereign wealth funds, challenging the imposition of restrictive measures against it following Russia’s illegal invasion of Ukraine in 2022.

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General Court dismisses action against decision of the Commission suspending the national marketing authorisations for certain medicinal products

Wednesday 15 May

The General Court, sitting in its Extended Composition formation, handed down its judgment in a case regarding an action, by which the applicant claimed that the Court should declare Commission Decision of 24 May 2022 C(2022) 3591 null and void insofar as it orders the Member States to suspend the national marketing authorisations for the medicinal products as referred to in Annex I thereof: Fresenius Kabi Austria and Others v Commission (T-416/22).

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General Court upholds its previous stance on the annulment of Commission’s decision finding Spanish Tax Lease Scheme incompatible with EU State aid rules

Wednesday 15 May

The General Court, sitting in its Extended Composition, handed down judgment in Naturgy Energy Group v. Commission (T-508/14) and in Duro Felguera and Others v. Commission (Joined Cases T-401/14 et al.), both constituting the latest episodes in the so-called ‘Spanish Tax Lease System’ saga, which concerns several actions brought against Commission Decision 2014/200/EU of 17 July 2013 on State aid SA.21233 C/11 implemented by Spain through a tax leasing regime applicable to certain finance lease agreements.

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Commission adopts progress report on commitments made under the Security Union Strategy

Wednesday 15 May

The Commission adopted the Seventh Progress Report on the implementation of the EU Security Union Strategy for 20202025, thus providing an assessment of the progress achieved in the following 5 key areas: (i) protecting the EU’s physical and digital infrastructure; (ii) fighting terrorism and radicalisation; (iii) fighting organised crime; (iv) strengthening law enforcement and judicial cooperation; and (v) cooperation with international partners.

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EFTA Court clarifies criteria for horse race betting concessions under Directive 2014/23/EU

Thursday 16 May

The EFTA Court issued a judgment regarding the interpretation of Directive 2014/23/EU, focusing on the distinction between services concessions and administrative authorizations in the context of exclusive rights for horse race betting in Norway.

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Court of Justice: Legislation which grants more extensive rights to resident workers than it does to non-resident workers constitutes indirect discrimination on the grounds of nationality

Thursday 16 May

The Court of Justice handed down judgment in Hocinx (C-27/23), a case concerning the discriminatory treatment of frontier workers.

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Court of Justice: no retroactive worker involvement required for European companies’ post-registration

Thursday 16 May

The Court of Justice has delivered its judgment in Konzernbetriebsrat (case C-706/22) on the interpretation of Article 12(2) of Regulation (EC) No 2157/2001 concerning the European Company (SE) Statute and Articles 3 to 7 of Directive 2001/86/EC on worker involvement.

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Request for advisory opinion from the EFTA Court regarding the compatibility of Liechtenstein legislation with the Anti-Money Laundering Directive, published in OJ

Thursday 16 May

Official publication was made of a request for an advisory opinion from the EFTA Court by Verwaltungsgerichtshof des Fürstentums (Liechtenstein), dated 20 December 2023 in the case of TC: Case E-1/24.

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Article 3(1) of Directive 2014/56/EU precludes national rules which prohibit cross-border transmission of orders from clients in one Member State to authorised investment firms established in another Member State

Thursday 16 May

The Court of Justice handed down judgment in Fondee a.s. (C-695/22), a request for a preliminary reference from the Municipal Court of Prague concerning the interpretation of Directive 2014/65/EU on markets in financial instruments.

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Clarification on VAT reimbursement rights for cross-border businesses in Slovenské Energetické Strojárne (Case C-746/22)

Thursday 16 May

The Court of Justice delivered its judgment in Slovenské Energetické Strojárne (Case C-746/22) regarding the interpretation of EU directives related to VAT reimbursement, following a request for a preliminary ruling from the Fővárosi Törvényszék (Budapest-Capital Regional Court, Hungary).

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Court of Justice rules on the compatibility of Bulgarian legislation with Brussels I Regulation (recast), in the context of an order for payment procedure

Thursday 16 May

In Toplofikatsia Sofia (Notion de domicile du défendeur) (C-222/23), the Fourth Chamber of the Court of Justice delivered its judgment in a case concerning a preliminary reference seeking clarification on the interpretation of Article 18(1) TFEU and of Articles 4(1), 5(1) and 62(1) of the Brussels I Regulation (recast), in the context of an application addressed to the referring court for an order for payment relating to a pecuniary claim.

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ECtHR: Violation of lawyer’s freedom of expression in Lutgen v. Luxembourg

Thursday 16 May

The European Court of Human Rights (ECtHR) issued a final ruling in the Lutgen v. Luxembourg case, concerning the application of Article 10 of the European Convention on Human Rights regarding a lawyer’s conviction for contempt of court.

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AG Richard de la Tour: Article 47 CFR does not preclude national legislation under which a decision revoking a Facility Security Clearance does not state the classified information which served as the basis for that decision

Thursday 16 May

Advocate General Richard de la Tour delivered his Opinion in protectus (C-185/23), a request for a preliminary reference from the Supreme Administrative Court of the Slovak Republic concerning Council Decision 2013/488/EU, on the security rules for protecting EU classified information, in light of Articles 47 and 51 of the Charter of Fundamental Rights.

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AG Medina proposes to set aside the judgment in case T-603/19 concerning the action seeking annulment of Commission Decision (EU) 2020/1814 on State aid implemented by Finland for the appellant

Thursday 16 May

Advocate General Medina issued an Opinion on Case C 697/22 P concerning an appeal seeking to overturn the General Court’s judgment, which upheld Commission Decision (EU) 2020/1814, declaring state aid granted by Finland to the appellant as incompatible with the internal market and ordering its recovery.

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AG Ćapeta: Court’s interpretation of Article 1(3)(b) of the Waste Shipments Regulation in Conti 11. Container Schiffahrt does not render that provision contrary to the Basel Convention 1989

Thursday 16 May

Advocate General Ćapeta delivered her Opinion in Land Niedersachsen v. Conti 11. Container Schiffahrt (C-188/23), a request for a preliminary reference from the Higher Regional Court in Munich (Germany).

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AG Richard de la Tour: National court must raise ex officio the breach of the principle of non-refoulement, not been relied on by third-country national subjected to return proceedings

Thursday 16 May

Advocate General (AG) Richard de la Tour delivered his Opinion in a case concerning a preliminary reference seeking clarification on the possible obligation of the national court, in proceedings initiated not by an application for international protection but by another application for permission to stay, to verify ex officio whether the principle of non-refoulement has been observed: Ararat (C-156/23).

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AG Sánchez Campos-Bordona: General Court erred in opposing the applicants’ acquisition of qualified holdings pursuant to Article 15 of Regulation 1024/2013

Thursday 16 May

Advocate General Campos Sánchez-Bordona delivered his Opinion in Fininvest v. ECB and Others (C-512/22 P and C-313/22 P), a case concerning the interpretation of Directive 2013/36/EU on access to the activity of credit institutions and the prudential supervision of credit institutions; Regulation 1024/2013 on the Single Supervisory Mechanism (‘SSM Regulation’), and Regulation (‘SSM Framework Regulation’).

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AG Ćapeta: Court of Justice should confirm General Court’s judgement upholding countervailing duties imposed on certain imports from China and Egypt

Thursday 16 May

Advocate General (AG) Ćapeta rendered her Opinion in an appeal case concerning an action seeking to annul the judgment of the General Court in Case 480/20: Hengshi Egypt Fiberglass Fabrics and Jushi Egypt for Fiberglass Industry v Commission; Jushi Egypt for Fiberglass Industry v Commission (Joined cases C-269/23 P; C-272/23 P).

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Digital Services Act: Commission initiates formal proceedings against Meta in relation to the protection of minors

Thursday 16 May

The Commission has opened formal proceedings to assess whether Meta, the provider of Facebook and Instagram, may have breached the Digital Services Act (DSA).

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Agreement establishing an interinstitutional body for ethical standards for members of institutions and advisory bodies, published in OJ

Friday 17 May

The European Parliament, the Council of the European Union, the European Commission, the Court of Justice of the European Union, the European Central Bank, the European Court of Auditors, the European Economic and Social Committee, and the European Committee of the Regions established an agreement to form an interinstitutional body for ethical standards.

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Increased openness amid rising violence: FRA survey highlights challenges for LGBTIQ community in Europe

Friday 17 May

The latest survey by the EU Agency for Fundamental Rights (FRA) indicates that while more LGBTIQ individuals in Europe are open about their identities, they face escalating violence, harassment, and bullying.

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Commission Delegated Regulation on the establishment of a common Union rating scheme for data centres, published in OJ

Friday 17 May

Official publication was made today of Commission Delegated Regulation 2024/1364 of 14 March 2024 on the first phase of the establishment of a common Union rating scheme for data centres.

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Two notices on initiation of anti-subsidy proceedings concerning certain products originating from India and China, published in OJ

Friday 17 May

The Official Journal published two notices of initiation of anti-subsidy proceedings concerning imports of optical fibre cables from India and certain seamless pipes and tubes of iron or steel originating in China.

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Vacancy notice: Référendaire at the Court of Justice

Friday 17 May

A vacancy notice for the position of référendaire has been made available in the office of Mrs. Ramona Frendo, future judge at the Court of Justice of the European Union (subject to adoption of the decision by the governments of the Member States, scheduled for May 22, 2024).

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