EU Single Market &
Competition Law
Dr Janja Hojnik
Brief introduction into EU law
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The EU institutions
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7 institutions
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The political “institutional triangle”
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plus three non-political institutions
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EU Court
Court of Auditors
European Central Bank
2 advisory committees
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EC Commission
Council of EU + European Council
The European Parliament
Economic and Social Committee (ECOSOC)
Committee of Regions (COR)
30 agencies and decentralised bodies
University of Maribor - Faculty of Law
EU institutions & interests
representation
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Commission:
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Council:
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economic and social actors interest
Committee of Regions:
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interests of European Peoples
Economic and Social Committee:
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MS (governments)’ interests
European Parliament:
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interests of the EU
interests of local authorities
University of Maribor - Faculty of Law
‘The Flow of Powers’
©www.news.bbc.co.uk
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University of Maribor - Faculty of Law
Brussels – the capital of the EU?
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University of Maribor - Faculty of Law
EU Legal Sources
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Primary sources:
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Secondary sources:
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Treaty on European Union
Treaty on Functioning of EU
Charter of the EU on fundamental rights
General principles of EU law
International treaties
Regulations
Directives
Decisions
Recommendations and opinions…
Case-law of the EU Court of Justice
Nature of EU Law
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PRINCIPLES OF SUPREMACY AND
AUTONOMY
PRINCIPLE OF DIRECT EFFECT
PRINCIPLE OF STATE LIABILITY FOR
DAMAGES
Economic liberalisation
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What are it’s advantages?
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What are it’s disadvantages?
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Why are EU Member States not satisfied with
WTO membership only?
Basic Elements of the Stages
of Economic Integration
Free Trade Agreement
(FTA)
Customs Union (CU)
Common Market (CM)
Economic Union (EU)
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Zero tariffs between
member countries and
reduced non-tariff
barriers
FTA + common external
tariff
CU + free movement of
capital and labour, some
policy harmonization
CM + common economic
policies and institutions
INTERNAL MARKET
Free movement
of goods
Free movement
of persons
Free movement
of capital
Free movement of services
& freedom of establishment
- FOUR FREEDOMS
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EU-2012
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FOUNDAMENTAL PRINCIPLES
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2.
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3.
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The principle of non-discrimination:
Art 18 TFEU prohibits "any discrimination on grounds of nationality“; it
is prohibited to treat imported goods differently to domestic goods etc.
Discrimination is understood as meaning different treatment, on
the basis of nationality, under the same circumstances and vice
versa;
Mutual recognition (derives from the case law)
The principle claims that the legislation of another Member State is
equivalent in its effects to domestic legislation
This principle was laid down by the Court of Justice in the Cassis de
Dijon judgment.
Although this principle of mutual recognition applies chiefly to products,
it has also had an impact on the other freedoms, particularly those
involving the performance of services, where it underlies the concept of
the recognition of diplomas.
EU legislation (in addition to the principle of mutual
recognition):
Treaty provisions, regulations and directives.
FREE MOVEMENT OF GOODS
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Obstacles to Inter-State Movement
of Goods
1.
2.
3.
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Custom duties and charges having equivalent
effect (Arts. 28-33))
Discriminatory taxation (Art. 110)
Quantitative restrictions on imports and
exports (quotas) and all measures having
equivalent effect (Arts. 34-36)
Quantitative Restrictions and MEE
(Articles 34 and 35 TFEU)
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Quantitative restrictions on imports and
all measures having equivalent effect
shall be prohibited between Member
States.
Procureur du Roi v. Dassonville (case 8/74):
seminal case that establishes:
- Dassonville formula: All trading rules
enacted by MS which are capable of hindering,
directly or indirectly, actually or potentially,
intra-Community trade are to be considered as
measures having an effect equivalent to
quantitative restrictions
Categories of Measures Possibly Caught in Violation of
Art. 34 by the Dassonville Formula
1. Discriminatory measures on the ground of nationality –
applying only to imports or differently than to national products
(German Quality Products case C-325/00); it is not only
discrimination alone but also discriminatory effect
2. Non-discriminatory measures: so-called product
requirements, related to the production and marketing of goods
that apply without distinction to both foreign and domestic
goods but it is usually more burdensome for foreign
companies/goods (Casis de Dijon case 120/78)
3. Selling arrangements: category created by Keck case C267/91 related to socio-economic measures as to how goods
should be sold (manner of sale) – WHERE; WHEN; HOW
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Cassis Principles:
1. Mutual Recognition:
There is no valid reason why, provided that goods have been
lawfully produced and marketed in one MS, they should not
be introduced into any other MS.
2. The Rule of Reason:
Certain measures, even if within Dassonville formula, will not
breach Art. 28 if they are necessary (proportionality) to
satisfy mandatory requirement (objective justification)
relating in particular to the effectiveness of fiscal supervision,
the protection of public health, the fairness of commercial
transactions and the defence of the consumer.
After Cassis:
Gilli & Andres, 788/79 – apple vinegar
Walter Rau, 261/81 – margarine & butter
Drei Glocken, 407/85 – grano duro
Commission v Italy, C-14/00 – chocolate
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Exceptions to Free Movement of Goods
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Article 36 TFEU:
The provisions of Articles 34 and 35 shall not preclude
prohibitions or restrictions on imports, exports or goods in
transit justified on grounds of
- public morality, public policy or public security;
- the protection of health and life of humans, animals or plants;
- the protection of national treasures possessing artistic,
historic or archaeological value; or
- the protection of industrial and commercial property.
Cassis Principle of Objective Justification
excuses non-discriminatory rules as long as they are
proportionate and justified;
non-exhaustive list of justifications;
see: Danish Bottles 302/86
Questions for discussion:
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Is FMG breached in case a Member State prohibits
importation of pornographic magazines?
Is FMG breached in case a state trade association
promotes buying national products?
Is FMG breached in case a Member State requires all the
bycicles on its territory should be in line with that
Member State’s technical provisions?
Is FMG breached in case a Member State prohibits
Sunday trading?
Is FMG breached in case a Member State prohibits
advertisements of alcohol?
Is FMG breached in case a Dutch mayor prohibits other
EU-nationals from attending coffee-shops?
FREE MOVEMENT OF WORKERS
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Article 45 TFEU
1. Freedom of movement for workers shall be secured within the Union.
2. Such freedom of movement shall entail the abolition of any discrimination
based on nationality between workers of the Member States as regards
employment, remuneration and other conditions of work and
employment.
3. It shall entail the right, subject to limitations justified on grounds of public
policy, public security or public health:
(a) to accept offers of employment actually made;
(b) to move freely within the territory of Member States for this purpose;
(c) to stay in a Member State for the purpose of employment in
accordance with the provisions governing the employment of nationals of
that State laid down by law, regulation or administrative action;
(d) to remain in the territory of a Member State after having been
employed in that State, subject to conditions which shall be embodied in
regulations to be drawn up by the Commission.
4. The provisions of this Article shall not apply to employment in the public
service.
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Who derives rights from Art 45 TFEU
and the secondary legislation
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Workers
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Their family members
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‘parasite rights’
spouse + descendants till the age of 21
unmarried partner (Reed, 59/85)
divorced spouse (Diatta, 267/83)
supported ancestors of the worker and spouse
other family members – if supported by the
worker and lived in common house-hold
not need to be EU citizens
Material scope of the freedom
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Accept actual job offers
Right to enter and reside in another MS
(Directive 2004/38)
Free movement within the MS for job search
purposes
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Non-discriminatory chances for employment
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Work conditions, social rights, tax benefits
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Right of education
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Retirement and right to stay in the MS.
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Justifications for barriers to move
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Discriminatory measures – justifications in Art 45:
 Public policy, security and health
 Public service
Non-discriminatory measures – objective
justifications (rule of reason)
 Protection of consumers…
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European Citizenship
Article 20 TFEU
1. Citizenship of the Union is hereby established. Every person holding the
nationality of a Member State shall be a citizen of the Union. Citizenship
of the Union shall be additional to and not replace national citizenship.
2. Citizens of the Union shall enjoy the rights and be subject to the duties
provided for in the Treaties. They shall have, inter alia:
(a) the right to move and reside freely within the territory of the Member
States;
(b) the right to vote and to stand as candidates in elections to the
European Parliament and in municipal elections in their Member State of
residence, under the same conditions as nationals of that State;
(c) the right to enjoy, in the territory of a third country in which the
Member State of which they are nationals is not represented, the
protection of the diplomatic and consular authorities of any Member State
on the same conditions as the nationals of that State;
(d) the right to petition the European Parliament, to apply to the
European Ombudsman, and to address the institutions and advisory
bodies of the Union in any of the Treaty languages and to obtain a reply
in the same language.
These rights shall be exercised in accordance with the conditions and limits
defined by the Treaties and by the measures adopted thereunder.
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Questions for discussion!
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Does an employer breach FMW rules if he
requires from the employees language
proficiency?
Is there a freedom of movement of poor people
in the EU?
FREE MOVEMENT OF SERVICES
AND
FREEDOM OF ESTABLISHMENT
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2 ways of movement for
self-employed:
-They can move on the territory of another MS with
the purpose to perform economic activity on
permanent basis by establishing there (Art 49 TFEU)
FREEDOM OF ESTABLISHMENT
They can go for fixed period of time to another MS
with the purpose of performing a service for
appropriate payment and after that they return on the
territory of the MS of establishment (Art 56 TFEU)
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FREE PROVISION OF SERVICES
Why is the distinction relevant?
“the essential aspect of the difference between temporary provision
of services or provisional activity at one hand and establishment
on the other is, that a person providing a service is not bound
by competences and control of the national authorities of the
state, where such service is performed.”
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A-G in Van Binsbergen, 33/74
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ASPECTS OF THE DISTINCTION:
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RECOGNITION OF PROFESSIONAL QUALIFICATIONS
REGISTRATION, PERMISSION TO PERFORM
SOCIAL AND TAX BENEFITS
Freedom of establishment
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Primary
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Secondary
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Self-employed persons
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Companies
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BARRIERS TO SINGLE MARKET
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Requirement of nationality
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Non-recognition of professional qualifications
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Single business unit requirement
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Knowledge of language
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Limiting access to social benefits
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Limiting access to various infrastracture (more
advantageous loans for nationals; limited access
to real estate)
Other barriers to free movement.
Justifying barriers to FE and FPS
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Legitimate reason
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public authority, public policy, security, health
Other reasons recognised in the Court’s case law
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Human rights, rights of workers etc (Viking, Laval…)
Fraudolent activity (Centros)
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Proportional measure
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Individualized measure
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Proof of fraudolent purpose case by case (Centros)
Questions for discussion!
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Is FMS breached if a Member States requires all
their notaries public to have that MS
nationality?
Is FMS breached if a Member States prohibits
provision of gambling services from other MSs?
FREE MOVEMENT OF CAPITAL
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FREE MOVEMENT OF CAPITAL
Article 63 TFEU
1. Within the framework of the provisions set out
in this Chapter, all restrictions on the
movement of capital between Member States
and between Member States and third
countries shall be prohibited.
2. Within the framework of the provisions set out
in this Chapter, all restrictions on payments
between Member States and between Member
States and third countries shall be prohibited.
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Meaning of ‘capital’
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Directive 88/361/EEC for the implementation of Article 56 –
Anex I:
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DIRECT INVESTMENTS
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INVESTMENTS IN REAL ESTATE
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OPERATIONS IN SECURITIES
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OPERATIONS IN UNITS OF COLLECTIVE INVESTMENT
UNDERTAKINGS
OPERATIONS IN CURRENT AND DEPOSIT ACCOUNTS WITH
FINANCIAL INSTITUTIONS
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FINANCIAL LOANS AND CREDITS
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PERSONAL CAPITAL MOVEMENTS
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PHYSICAL IMPORT AND EXPORT OF FINANCIAL ASSETS
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Etc.
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Removing barriers to FMC between MS:
1) discriminatory;
2) non-discriminatory.
Removing barriers to FMC between MS and third
countries:
- Art 64(1) TFEU: The provisions of Article 63 shall be
without prejudice to the application to third countries
of any restrictions which exist on 31 December 1993
under national or Community law adopted
in respect of the movement of capital to or from third
countries
- EU Court in case A, C-101/05: despite both aspects of
FMC being included in the same sentence these freedom
in fact includes two principles with distinct logic and
different interpretation of justifiable exceptions.
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Question for discussion!
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Is FMC breached by guaranteeing golden
shares to EU Member States?
Close relation of FMC with EMU
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3 stages;
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5 basic conditions;
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17 MS;
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Benefits and costs of
participating in the euro-zone.
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Euro crisis –
political debate No. 1 in Europe…
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From a war to the United
States of Europe
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Rostowski: "You know,
after all these political
shocks, economic shocks,
it is very rare indeed that
in the next 10 years we
could avoid a war."
UBS: "historically, monetary unions do
not break up without civil war or some
other form of authoritarian reaction".
How have we come this far?
• From the financial and economic crisis
to the sovereign debt crisis in the EU
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EMU – the first monetary union of
independant states…
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Rating S&P's Europa 06-2011
Saving euro
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Short-term – by capital injections
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Long-term – by creating a fiscal union
At the precipice of unbridled
challenges, the Euro will soldier
on. Why?
…Because it must!
M. Davies
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EU COMPETITION LAW
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Discussion questions:
What are the aims of rules on competition?
What are the benefits of an undistorted
competition?
Why is EU regulating competition?
Who can hinder competition on the EU
market?
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Article 101 TFEU
1. The following shall be prohibited as incompatible with
the common market: all agreements between undertakings,
decisions by associations of undertakings and concerted
practices which may affect trade between Member States
and which have as their object or effect the prevention,
restriction or distortion of competition within the common
market, and in particular those which:
(a) directly or indirectly fix purchase or selling prices or any
other trading conditions;
(b) limit or control production, markets, technical
development, or investment;
(c) share markets or sources of supply;
(d) apply dissimilar conditions to equivalent transactions
with other trading parties, thereby placing them at a
competitive disadvantage;
(e) make the conclusion of contracts subject to acceptance
by the other parties of supplementary obligations which, by
their nature or according to commercial usage, have no
connection with the subject of such contracts.
2. Any agreements or decisions prohibited pursuant to this
article shall be automatically void.
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3. The provisions of paragraph 1 may, however, be declared
inapplicable in the case of:
- any agreement or category of agreements between
undertakings,
- any decision or category of decisions by associations of
undertakings,
- any concerted practice or category of concerted practices,
which contributes to improving the production or distribution of
goods or to promoting technical or economic progress, while
allowing consumers a fair share of the resulting benefit, and
which does not:
(a) impose on the undertakings concerned restrictions which
are not indispensable to the attainment of these objectives;
(b) afford such undertakings the possibility of eliminating
competition in respect of a substantial part of the products in
question.
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Article 102 TFEU
Any abuse by one or more undertakings of a dominant position
within the common market or in a substantial part of it shall be
prohibited as incompatible with the common market in so far as
it may affect trade between Member States. Such abuse may, in
particular, consist in:
(a) directly or indirectly imposing unfair purchase or selling prices
or other unfair trading conditions;
(b) limiting production, markets or technical development to the
prejudice of consumers;
(c) applying dissimilar conditions to equivalent transactions with
other trading parties, thereby placing them at a competitive
disadvantage;
(d) making the conclusion of contracts subject to acceptance by the
other parties of supplementary obligations which, by their
nature or according to commercial usage, have no connection
with the subject of such contracts.
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Article 107 TFEU
1. Save as otherwise provided in the Treaties, any aid granted by
a Member State or through State resources in any form
whatsoever which distorts or threatens to distort competition by
favouring certain undertakings or the production of certain goods
shall, in so far as it affects trade between Member States, be
incompatible with the internal market.
2. The following shall be compatible with the internal market:
(a) aid having a social character, granted to individual consumers,
provided that such aid is granted without discrimination related to
the origin of the products concerned;
(b) aid to make good the damage caused by natural disasters or
exceptional occurrences;
(c) aid granted to the economy of certain areas of the Federal
Republic of Germany affected by the division of Germany, in so
far as such aid is required in order to compensate for the
economic disadvantages caused by that division. Five years after
the entry into force of the Treaty of Lisbon, the Council, acting on
a proposal from the Commission, may adopt a decision repealing
this point.
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Thank you for your attention!
Contact: janja.hojnik@um.si
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