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Soft Law in EU Competition Law and its Judicial Reception in Member States: A Theoretical Perspective

Published online by Cambridge University Press:  06 March 2019

Zlatina Georgieva

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This work draws from accounts on the nature and legal effects of soft law instruments in EU and international law with the ultimate aim to construct a theoretical framework for recognition of EU competition soft law—guidelines, communications, notices, and the like—in the judicial discourse of national courts of the European Union. “Recognition” is used to encompass instances in which the national judiciary either explicitly interprets—that is, agrees or disagrees with—the content of competition soft instruments, or treats their substance in a roundabout, implicit way—without explicit reference to soft law in the judgment proper. This second option is called “the persuaded judiciary scenario.” Importantly, a foundational assumption of the current work is that courts do not transform soft law into hard law when subjecting the former to judicial interpretation/recognition.2

Type
Articles
Information
German Law Journal , Volume 16 , Issue 2 , May 2015 , pp. 223 - 260
Copyright
Copyright © 2015 by German Law Journal GbR 

References

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109 Id. at para. 18.Google Scholar

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125 For an illustration, see, infra Section D.I.1.b, the section on community loyalty.Google Scholar

126 Raitio testifies that, “In EU law literature, the principle legal certainty has been linked with other general principles.” See Raitio, Juha, The Principle of Legal Certainty as a General Principle of EU Law, in General Principles Of EC Law In A Process Of Development, 47 (Ulf Bernitz et al. eds., 2008). For the concrete conditions under which the proposed combination could work, see, infra Section D.Google Scholar

127 The possibility of pairing legitimate expectations and community loyalty to induce indirect legal effects of competition soft law will be explored in Section D, infra. Google Scholar

128 Pfleiderer AG v. Bundeskartellamt, CJEU Case C-360/09, 2011 E.C.R. I-05161, paras. 21–24.Google Scholar

129 Id. at paras. 21, 23.Google Scholar

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131 Id. at para. 24.Google Scholar

132 Id. at para. 30.Google Scholar

133 Id. at para. 26.Google Scholar

134 In order to take account of this substantive judicial disagreement, the Commission issued a new version of the de minimis notice in 2014 (O.J. 2014 C 4136) where paragraph 2 of the old de minimis notice (O.J. 2001 C 368) was replaced by the holding of the CJEU in para. 37 of its Expedia judgment.Google Scholar

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136 Expedia Inc., CJEU Case C-226/11 at para. 37.Google Scholar

137 Commission Staff Working Document SWD (2014) 198, Notice on Agreements of Minor Importance Which Do Not Appreciably Restrict Competition Under Article 101(1) of the Treaty on the Functioning of the European Union (De Minimis Notice), 2014 O.J. (C(2014) 4136 final).Google Scholar

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139 Senden, supra note 9, at 406–7.Google Scholar

140 Expedia Inc., CJEU Case C-226/11 at para. 38.Google Scholar

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142 With regard to state aid soft law, the previous section, see, infra Section C.II, showed that incidental binding force has also been accepted by the courts.Google Scholar

143 This is why in the introductory definition of “judicial recognition,” the formalist possibility for the courts to “refuse to interpret soft law,” is not foreseen.Google Scholar

144 See, infra Section D.I.Google Scholar

145 See, infra Section D.II.Google Scholar

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147 Scott & Sturm, supra note 36, at 566.Google Scholar

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149 Id. at 570. The same observation is also made by Stone-Sweet, supra note 132, at 117.Google Scholar

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152 Id. Scott and Trubek also detect instances at which governance had been (1) thwarted—in the instances where the CJEU had insisted that Directives creating rights and obligations for individuals be transposed as hard legislation only—(2) distorted—an artificial concept is created in order to enable the output of a new governance process to be interpreted in light of general principles of community law—or (3) taken seriously—when interpreting the concept of representativeness as a democratically legitimating feature of the process of lawmaking. It is passible that national courts also exhibit similar attitudes to competition soft law in their first direct interactions with it.Google Scholar

153 Stone-Sweet discusses the high stakes involved in novel lawmaking in the following way: “At this first stage governments and parliaments enjoy wide policy-making discretion, but face high constitutional uncertainty.” This constitutional uncertainty is according to the current author unfortunately not tackled by the CJEU when it comes to the issue of competition soft law. Stone-Sweet, supra note 151, at 114.Google Scholar

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155 Council Regulation (EC) No. 1/2003 of 16 Dec. 2002 on The Implementation of the Rules on Competition Laid Down in Articles 81 and 82 of the Treaty, 2003 O.J. L 1, 1.Google Scholar

156 See, supra Section C.Google Scholar

157 Gormsen in the context of the Art. 102 guidelines (and the methodology for conditional rebates laid down therein), expresses the opinion that the CJEU could have taken the relevant provisions into consideration had it thought of them as enunciating a sensible approach. Gormsen, supra note 106, at 238.Google Scholar

158 The expression used by Scott & Trubek is “engage seriously with new governance”; we allow ourselves the freedom to supplant the term “new governance” for “soft law” because the latter is an expression or instrument of the former. See Scott & Trubek, supra note 151, at 12.Google Scholar

159 Tridimas, supra note 8, at 9.Google Scholar

160 See, supra Section C.II.Google Scholar

161 Miasik contends that, “Another way of applying general principles in judicial practice is to refer to them in order to inspire the judiciary to interpret [national] law in a manner compatible with a particular principle … the more applicants raise issues of general principles of law in their submissions to courts, the more valuable judgments dealing with those principles will be delivered.” See Miasik, Dawid, Application of General Principles of EC Law by Polish Courts—is the European Court of Justice Receiving a Positive Feedback?, in General Principles or EC Law in a Process of Development, 357, 382, 391 (Ulf Bernitz et al. eds., 2008).Google Scholar

162 See, supra Section C.Google Scholar

163 Tridimas, supra note 8, at 163; Usher, supra note 93, at 52–71; Raitio, supra note 127, at 54.Google Scholar

164 Hofmann, supra note 92, at 162; Usher, supra note 93, at 52. For a more detailed discussion of the difference, see Tridimas, supra note 8, at 170.Google Scholar

165 Tridimas, supra note 8, at 170.Google Scholar

166 Usher, John, General Principles and National Law—A Continuing Two-Way Process, in General Principles of EC law In the Process of Development, 393, 402 (Ulf Bernitz et al. eds., 2008).Google Scholar

167 August Töpfer & Co. GmbH v. Commission of the European Communities, CJEU Case C-112/77, 1978 E.C.R. 01019.Google Scholar

168 Tridimas, surpa note 8, at 163. For a similar argument, see also Raitio, supra note 126, at 59.Google Scholar

169 It is submitted by Raitio that, “The principle of legitimate expectations is primarily applicable to individual decisions, but it may in limited cases apply to the exercise of a more general power and thus to the EU legislation as well.” Raitio, supra note 126, at 54.Google Scholar

170 See, among others, Joined Cases Compagnie Industrielle Et Agricole Du Comté De Loheac and Others v. Council and Commission, CJEU Cases 54–60/76, 1997 E.C.R. I–00645; Mulder v. Minister Van Landbouw En Visserij, CJEU Case C-120/86, 1988 E.C.R. 02321; Von Deetzen v. HZA Hamburg-Jonas, CJEU Case C-170/86, 1988 E.C.R. 02355.Google Scholar

171 This problem is most acute in the abuse of dominance field under Art. 102 as noted by Gormsen, supra note 106, and numerous others.Google Scholar

172 Council Regulation (EC) No. 1/2003 of 16 Dec. 2002 on The Implementation of the Rules on Competition Laid Down in Articles 81 and 82 of the Treaty, 2003 O.J. L1, 1.Google Scholar

173 See Sharpston, supra note 20, at 110–12.Google Scholar

174 Id. at 142.Google Scholar

175 Community loyalty cannot create duties on its own but only together with another rule of community law or principle or objective of community policy which is to be promoted; the latter also needs to be sufficiently and precisely defined. See John Temple-Lang, Art. 10 EC—The Most important “General Principle” of Community Law, in General Principles or EC Law In the Process of Development, 75, 79, 86, 88 (Ulf Bernitz et al. eds., 2008). There are, however, signals that this situation might be changing in the future. Id. at 85.Google Scholar

176 Temple-Lang states that community loyalty is “the most important of the general principles because it is the legal basis of the obligation on all national courts and authorities to comply with all other general principles.” In this regard, it cannot stand on its own and needs to be always used together with another general principle, the latter defining the scope of application of the former. Id. at 77.Google Scholar

177 Gormley, supra note 123, at 312.Google Scholar

178 Commission Notice on the Co-Operation between the Commission and the Courts of the EU Member States in the Application of Arts. 81 and 82 EC of 27 Apr. 2004, 2004 O.J. (C 101/04); Commission Notice on the Enforcement of State Aid Law by National Courts of 9 Apr. 2009, 2009 O.J. (C 85/01).Google Scholar

179 This is in line with Temple-Lang's argument that community loyalty is an underlying consideration of a vast array of Community actions, although the principle is usually not explicitly mentioned. See generally, Temple-Lang, supra note 175.Google Scholar

180 Temple-Lang, supra note 175, at 90, 97. The author submits that Community law is gradually developing a concept of laws which protect private rights and requiring these rights to be protected, when necessary, under Art. 4.3 TEU; this process, however, when fuelled by judicial output (case law), is slow, incremental and uncoordinated.Google Scholar

181 Id. at 101.Google Scholar

182 See generally, Gormley, supra note 123; Senden, supra note 9; Stefan, supra note 2. The principle could, however, produce a duty at least to motivate deviation from soft law provisions as advocated by AG Kokkot in her Expedia opinion. Expedia Inc., CJEU Case C-226/11.Google Scholar

183 See, supra Section D.l.l.b.Google Scholar

184 Klabbers, by citing Everling, endorses the view that Art. 10 EC might be just enough to give legal effect to soft law in view of the instruments’ “meaning within the context of the integration process at large and the goals of the Treaty in particular.” Klabbers, supra note 64, at 1016.Google Scholar

185 See Temple-Lang, supra note 175, at 85.Google Scholar

186 Id. at 111.Google Scholar

187 id. at 101.Google Scholar

188 Usher, supra note 93, at 12.Google Scholar

189 Tridimas, supra note 8, at 43, 45. In EU competition law, the principle of equality is seen as underlying the very basic premise of undistorted competition.Google Scholar

190 Id. at 44.Google Scholar

191 Formal equality is what EU economic integration (including the internal market and competition policies) strives to achieve. See De Burca & Craig, supra note 112, at 605.Google Scholar

192 See, infra Section D.II.Google Scholar

193 Raymond Louwage and Marie-Thérèse Louwage, Née Moriame, v. Commission of the European Communities, CJEU Case C-48/73, 1974 E.C.R. 00081.Google Scholar

194 Stefan (note 2), 220–21.Google Scholar

195 Id. at 219–25. The case of Expedia may serve as a recent example thereof. See Expedia Inc., CJEU C-226/11.Google Scholar

196 Stefan, supra note 2, at 201–25.Google Scholar

197 Werner Mangold v. Rüdiger Helm, CJEU Case C-144/04, 2005 E.C.R. I-09981.Google Scholar

198 Seda Kücükdeveci v. Swedex GmbH & Co. KG., CJEU Case C-555/07, 2010 E.C.R. I-00365.Google Scholar

199 Schiek, Dagmar, The ECJ Decision in Mangold: A Further Twist on Effects of Directives and Constitutional Relevance of Community Equality Legislation, 35 (3) Indus. L. J., 329, 333 (2006).Google Scholar

200 As a matter of EU Law (Article 288 TFEU), a Directive needs to be first implemented at the national level in order to produce legal effects and to be a source of rights and obligations for parties. Thus, a non-implemented Directive cannot create rights and obligations until implemented. In the period between adoption and implementation, however, Member States’ bodies are obliged not to take measures which might work counter to the objectives of the Directive. See Inter-Environnement Wallonie ASBL v Région wallonne, CJEU Case C-129/96, 1997 E.C.R. I-7411. For soft law, the only formal obligation that national organs have is to take utmost account of those instruments, following Grimaldi. Google Scholar

201 For an argument that Mangold is actually not a case where horizontal direct effect of Directives was further confirmed, see Schiek, supra note 199, at 337. Schiek argues that, “a Directive… having direct effect on a legislative activity that impacts on horizontal relations is not the same as a directive having horizontal effect itself.” While the argument is technically correct, the ultimate result of the judgment is nevertheless to create a situation in which the rights and obligations of two private parties (employer and employee) are de facto impacted by the non implemented Directive in question.Google Scholar

202 Finnemore & Toope, supra note 24, at 743.Google Scholar

203 Here we refer to the possibility of multi-party agreement secured at public consultations preceding the adoption of competition soft law.Google Scholar

204 Schauer, supra note 8, at 38.Google Scholar

205 Finnemore & Toope, supra note 24, at 749.Google Scholar

206 Scott & Sturm, supra note 36, at 570–75. See also Stefan, supra note 2, at 219–25.Google Scholar