EU Law: Supremacy, Direct/Indirect Effect, State Liability
No cardsThis document explores the foundational principles of EU law, including its supremacy over national law, the doctrines of direct effect, indirect effect, and state liability. It details how these principles ensure the enforcement and consistency of EU law across member states, examining key cases from the European Court of Justice that have shaped these legal concepts. Finally, it outlines the conditions required for individuals to invoke these principles in national courts and claim damages for breaches of EU law by member states.
Chapter 1. European Institutions
The European Union functionsthrough a set of institutions, each with distinct roles and powers, as outlined in theTreaties.
The European Council
As per Article 15 TEU and Articles 235, 236 TFEU, the European Council serves as the supreme political authority of the EU.
Role: Deals with political issues and defines the general political direction and priorities of the EU; it has a non-legislative role.
Composition: Composed of the Heads of State or Government of the Member States.
Meetings: Known as European summits, typically held four times a year.
Role of the President
The Treaty of Lisbon created the role of the President of the European Council.
Election: Elected by the European Council by a qualified majority for a term of two and a half years; the position is full-time.
Responsibilities:
Works on the preparation and continuity of the European Council's work in close cooperation with the President of the Commission.
Reports to the European Parliament.
Is a member of the Commission (Article 15 TEU).
The Council
(Also known as the Councilof the European Union, or Council of Ministers) Defined in Article 16 TEU and Articles 237 to 243 TFEU, the Council is where national ministers from each EU country meet to adopt laws and coordinate policies.
Presidency: Held by each Member State for six months on a rotating basis. The presiding Member State sets the program and priorities for the upcoming period.
Members
Ministers from each Member State, whose composition changes based on the topics discussed (e.g., agriculture ministersfor agricultural policy).
The Council is chaired by the minister of the Member State holding the presidency.
Exception: The Foreign Affairs Council is chaired by the High Representative of the Union for Foreign Affairs and Security Policy, as per the Treaty of Lisbon.
Council members represent national interests.
Activity
Possesses the final power of decision on the adoption of secondary legislation, jointly with the European Parliament, where the ordinary legislative procedure applies.
Generally acts only on Commission proposals and can request the Commission to prepare draft legislation in any area.
Delegates power to the Commission to adopt regulations.
The work of the Council is prepared by the Committee of Permanent Representatives (COREPER), which then decides the agenda of the Council.
The Council Secretariat provides administrative support.
Voting
Voting procedures vary depending on the matter:
Unanimity: Limits legislative ability due to the possibility of vetoes. The Lisbon Treaty retained unanimity for:
Taxation
Social security
Common foreign and defense policy
Simple Majority
Qualified Majority Voting (QMV):
Extended by the Lisbon Treaty to prevent blocking.
Areas requiring QMV: Internal market, environment, agriculture, competition, consumer protection, immigration, asylum, judicial cooperation (criminal and civil matters).
Mechanism:
Requires at least 55% of Member States (15 states) to agree to a proposal, representing 65% of the EU population.
If the proposal does not come fromthe Commission or the High Representative, it requires 72% of the EU population.
A blocking minority requires at least four states, otherwise, QMV is reached.
Representation under QMV is based on Member States' population size, a debated topic due to country sizedisparities.
QMV often involves compromising, lobbying, and exchange of votes among ministers representing national interests.
The European Commission
As detailed in Article 17 TEU and Articles 244 to 250 TFEU, the Commission is the executive arm of the EU, responsible for proposing legislation, enforcing EU law, and implementing policies.
Members
Commissioners must be completely independent and not take instructions from their national governments.Member States must not influence them.
Appointment: Nominated by the European Council, followed by approval of the European Parliament.
Term: Appointed for five years and can be re-elected.
The European Parliament can censure the entire Commission (vote ofcensure) but cannot remove individual commissioners; that role falls to the Court of Justice for misconduct.
The President of the Commission can require a commissioner to resign.
President Appointment: Appointed by the European Council and elected by the Parliament.
Composition: One commissioner per Member State since the Lisbon Treaty (previously two or three). The President assigns portfolios/work tasks.
Policy Areas: Trade, competition, environment, among others.
Most Commissioners are based in Brussels, and their structure resembles administrative departments.
Role
Acts as the guardian of EU law, bringing action against Member States and even EU law itself.
Drafts policy, proposes legislation, and participates in discussions on framing decisions for the Council and Parliament.
Possesses an executive role,with delegated powers.
Manages the EU budget.
European Parliament
Outlined in Article 14 TEU and Articles 233 to 234 TFEU, the European Parliament is the EU's directly elected parliamentary institution.
Organization
Seats: Strasbourg, with a secretariat in Luxembourg. Committee meetings and some sessions are held in Brussels.
Members
Directly elected by citizens in Member States.
Maximam Seats: 750 members plus the President (total 751).
The Council, with the consent of Parliament, determines the number of Members based on population size and digressive proportionality.
Current Number: 705 members (since the UK's departure, which had 73 seats); subject to further enlargement.
Role
The Lisbon Treaty significantly increased its powers.
Previously, it had a consultative and advisory role with limited powers.
Current Powers:
Control over theexecutive through its right to approve the Commission and remove the entire Commission via a vote of censure.
Power to question Commissioners and reject the budget.
Co-legislator with the Council in the ordinary legislative procedure.
Court of Justice of the European Union (CJEU)
As per Article 19 TEU and Articles 251 to 257 TFEU, the CJEU ensures the uniform application and interpretation of EU law.
Composition: Comprises theCourt of Justice, the General Court, and specialized courts.
Role
Ensures compliance with EU law and interprets the Treaties.
Competent to issue preliminary rulings (Article 267 TFEU) by interpretingEU law.
Jurisdiction to review the legality of acts.
Not bound by its own decisions but strives to maintain harmony and consistency.
Plays a crucial role in establishing principles of EU law in cases related to free markets, state liability, and individual rights.
Composition
Judges: One judge per Member State; terms are six years, staggered with partial replacements. Appointments are supervised by former CJEU judges and national supreme court judges.
Advocates General (AGs): Eleven AGs, chosen by common accord of MemberStates' governments. They assist the Court by issuing opinions (non-binding but influential). The Court can issue judgments without an AG opinion if there are no new questions of law.
Sitting Arrangements:
Plenary Session: For cases of exceptional importance.
Most cases are heard by chambers of three to five judges.
European Central Bank (ECB)
The ECB is the central bank for the euro area, listed as an institution in Article 13 TEU. Itconducts monetary policy for the euro area and aims to maintain price stability.
Court of Auditors
The Court of Auditors, also listed in Article 13 TEU, audits the EU's finances and ensures sound financial management.
Chapter2. Sources of Law
The body of EU law is known as the Acquis Communautaire, encompassing all forms of law.
Types of EU Law
Treaties
The TEU and the TFEU constitute the primary sources of law, forming the foundation of the Union since the Lisbon Treaty (2007).
Includes various protocols and declarations annexed to the Treaties. Protocols are binding, while declarations are non-binding but may aid in interpreting EU law.
Secondary Legislation
Based on the Treaties, EU institutions enact or adopt secondary legislation in the form of regulations, directives, decisions, recommendations, and opinions. These acts complement or supplement Treaty provisions.
Distinction between Legislative and Non-Legislative Acts: Introduced by the Lisbon Treaty.
Legislative acts: Adopted under ordinary or special legislative procedures.
Non-legislative acts: Adopted by the Commission under delegated powers, corresponding to Articles 289 and 290 TFEU.
Regulations
The highest in the hierarchy of secondary legislation.
Defined in Article 288 TFEU as having "general application, it is binding in its entirety anddirectly applicable in all Member States."
Apply to all government institutions and individuals without needing national implementation.
Directives
Article 288 TFEU states that a directive is "binding as to the result to be achieved upon each Member State to which itis addressed, but leaving to the national authorities the choice of forms and methods."
Member States must implement directives into national law by adopting detailed measures, typically within a specified deadline.
Decisions
Addressed to specific Member States or individuals.
Example: Commission decisions addressed to businesses in competition law.
Recommendation and Opinions
These are not legally binding.
Case Law
Decisions by the CJEU are binding on Member States, including national courts.
Much of case law concerns the application of Treaties and secondary legislation.
The Court draws upon general principles, such as human and fundamental rights, equality, proportionality, and legal certainty, in its judgments.
General Principles of Law
The founding Treaties did not explicitlyrefer to the protection of human and fundamental rights.
The CJEU recognized such rights as part of the general principles of law in the case of Stauder v City of Ulm (1969), basing its decision on common constitutional traditions.
Thisarea of case law developed, leading to the drafting of the Charter of Fundamental Rights of the EU in December 2000.
The Charter initially was prescriptive but not legally binding until the Lisbon Treaty (2007) gave it legal effect, making it have the same value asthe Treaties (Article 6(1) TEU).
Under Protocol No. 30, Poland enjoys an opt-out, ensuring the Charter does not create additional rights beyond those in national law.
Article 6(3) TEU recognizes that fundamental rights guaranteedby the European Convention on Human Rights (ECHR) constitute general principles of Union law. Article 6(2) provides that the EU shall accede to the ECHR.
In 2014, the CJEU ruled that a draft accession agreement for the EU to the ECHRdid not provide sufficient protection for the EU's specific legal arrangements and the Court's exclusive jurisdiction. Negotiations for a new agreement relaunched in 2021.
General Principle of Equality
Also known as non-discrimination, this principle is pervasivein EU law and set out in many Treaties (e.g., equal pay in employment, non-discrimination on the basis of nationality).
Principle of Proportionality
Requires that actions or measures taken, whether by a Member State or an EU institution, go no further than necessaryto achieve their objectives.
Principle of Legal Certainty, Non-Retroactivity, and Legitimate Expectation
Legal Certainty: Implies that the distinction between lawful and unlawful should be reasonably clear.
Non-Retroactivity: Lawshould not impose penalties retroactively.
Legitimate Expectations: Law or actions must not breach the legitimate expectations of those affected by them.
International Agreements
The EU is legally entitled to enter into international agreements in all policy areas where it has competence, provided it isnecessary to achieve EU policy objectives.
Examples: Treaty agreements and association agreements with third countries.
Each of these agreements forms part of the Acquis Communautaire.
Law-Making Process
The legal ground for secondary legislation is derivedfrom the Treaties. It is enacted by EU institutions under powers conferred by the Treaties.
The legal basis for a legislative measure (a Treaty article) specifies the procedure and voting requirements in the Council.
Ordinary Legislative Procedure (OLP)
Articles 289 and 294 TFEU: Also known as the 'co-decision procedure'.
Involves two readings of a legislative proposal.
Parliament delivers its opinion and any amendments to the Council after the first reading. The Council may adopt it.
If notadopted, a second reading occurs where Parliament considers the Council's position and any proposed Council amendments. Changes usually require unanimity.
Options at second reading:
Parliament rejects the Council's position, and the measure is not adopted.
Parliament proposes furtheramendments, referred to the Council. If the Council approves, the measure is adopted.
As a last resort, a conciliation committee (MPs and Council members) meets to adopt a joint text.
The vast majority of measures are adopted via thisprocedure.
Special Legislative Procedure
Article 289(2) TFEU: The Council acts as the sole legislator, distinct from its co-legislative role with the European Parliament, on a legislative proposal made by the EU Commission.
Chapter 3. Supremacy, Direct Effect, Indirect Effect, and State Liability
These principles, developed by the CJEU, ensure the effectiveness of EU law within Member States.
§1. EU Law Sovereignty and Supremacy
Sovereignty
Originally, founding treaties were considered binding only as international obligations, allowing states to retain sovereignty.
The Van Gend en Loos v Nederlandse Administratie der Belastingen (1963) case overturned this. The CJEU declared that the Community constitutes "a new legal order in internationallaw for whose benefit the states have limited their sovereign rights within limited fields and transferred powers to the Community."
Costa v ENEL (1964) reaffirmed that "the EEC treaty has created its own legal system which became an integral part of the legal system of the Member States." MemberStates limited their sovereign rights and transferred powers to the Community within areas covered by the Treaties.
Supremacy
A consequence of sovereignty, supremacy means EU law takes precedence over conflicting national law.
Until recently, supremacy was a doctrine developed by the CJEU withoutexplicit Treaty reference. The Court repeatedly held that supremacy is implied.
Declaration 17 of the Lisbon Treaty explicitly mentions supremacy, subject to conditions laid down in case law.
In Costa (1964), the Court stated that by establishing a Community, Member States accepted a permanent limitation on their sovereign rights, creating a body of law binding on their nationals and themselves.
International Handelsgesellschaft GmbH (1970) further extended this, holding that EU law takes precedence over any type of national law, even national constitutional law.
Consequently, national courts must set aside national provisions that conflict with EU law.
Amministrazione delle Finanze dello Stato v Simmenthal (1978) ruled that national procedural rules must not interfere with EU rights, even if the right is not definitively established.
Factortame (1990) affirmed that national courts must suspend the application of national law when it contradicts EU law, even during trials. However, national constitutions might retain supremacy in some areas.
§2. Incorporation of EU Law
The method of incorporating EU law into national legal systems depends on whether a Member State follows a monist or dualist view.
Monist System (e.g., France): EU law becomes binding upon ratification, withoutneeding further national implementing measures.
Dualist System (e.g., UK): EU law is not binding until incorporated by domestic statutes.
§3. Principle of Direct Effect, Indirect Effect, and State Liability
Through these doctrines, the CJEUhas established a framework through which supremacy is accorded to EU law within Member States.
The Principle of Direct Effect
Not explicitly in the Treaties, this principle was developed by the CJEU.
Direct effect: EU law creates not only obligations for Member States butalso rights and obligations for individuals, which can be invoked before national courts.
Implications:
National courts must apply EU law for the benefit of individuals and businesses, provided certain conditions are met.
EU law takes priority over conflicting national law.
National courtsmust invalidate national measures that conflict with directly effective provisions of EU law.
Article 288 TFEU lists regulations, directives, decisions, recommendations, and opinions as acts to exercise Union's competences.
Not all directly applicable EU provisions are necessarilydirectly effective, and vice-versa.
A) Direct Effect of Treaty Provisions
The Principle of Direct Effect of Treaties
Van Gend en Loos (1963): The CJEU created the principle of directeffect, allowing national court invocation of Treaty articles by citizens.
The Court declared that "treaties are more than agreements creating only mutual obligations between the contracting parties (Member States). Community not only impose obligations on the individuals but also gives them legal rights." This shows that treaties can create rights and obligations forindividuals.
Conditions for Application
In Van Gend en Loos, the Court held that Article 30 TFEU contained a "clear and unconditional prohibition whose implementation required no legislative intervention by the MemberStates."
Original conditions for direct effect:
The measure must be sufficiently clear and precise.
The measure must be unconditional (no exceptions).
The implementation of the measure must not depend on any implementing measures by Member States.
However, in Defrenne v Sabena (1976), the third condition was removed. Now, to be directly effective, a measure only needs to be:
Clear and precise.
Unconditional.
Vertical and Horizontal Direct Effects
Vertical Effect: Relationship between individuals and the government. Established by Van Gend en Loos (1963), allowing individuals to invoke treaties against states.
Horizontal Effect: Relationship between individuals. Established by Defrenne v Sabena (1976), stating that treaties can have a horizontal direct effect.
Treaties can have both vertical and horizontal direct effects.
Conclusions
Numerous Treaty articles have since been held to be vertically and horizontally effective, including:
Articles 34, 35 TFEU (free movement of goods).
Articles 45, 49, 56 TFEU (free movement of workers, rights of establishment, and service provision).
Articles 101, 102 TFEU (competition law).
A) Direct Effect of Regulations
Article 288 TFEU: "Regulations shall have general application, binding on all Member States and directly applicable in all Member States."
"Direct applicability" means automatic incorporation into the national system without the need for further enactment.
Politi v Italian Ministry of Finance (1971): Regulations can have vertical and horizontal effects if they meet the revised conditions from Van Gend en Loos and Defrenne:
Clear, precise.
Unconditional.
A) Direct Effect of Directives
Principle
Article 288 TFEU: "A directive shall be binding, as to the result to be achieved, upon each Member State to which it is addressed, but shall leave to the national authorities the choice of form and methods of applicability."
Unlike Treaties, directives require national implementation before a deadline.
Initially, it was thought directives could not have direct effect due to their imprecision.
Van Duyn (1974): The CJEU ruled that directives can have direct effect. A Dutch national relied on a directive to challenge her denied work permit in the UK.
Público Ministerio v Ratti (1979): AMember State's obligation to implement a directive becomes absolute only after the deadline has expired. Thus, a directive can only have direct effect after the deadline has passed.
Vertical, Horizontal Direct Effects
Directives can have vertical direct effect (Van Duyn, 1974).
However, Marshall (1986) held that directives could only have direct effect vertically against the state or a public authority, and never horizontally.
Thiswas confirmed in cases like Faccini Dori and Mangold, but criticized for creating instability and disparate treatment (e.g., an employee could challenge a public employer but not a private one).
To remedy this, the Court developed other doctrines andbroadly interpreted the notion of "public body" or "emanation of the state" for vertical effect.
Foster v British Gas (1990) devised a test for a public body:
Body made responsible by the state for providing a public service.
Under state control.
Possesses special powers for that purpose beyond those applicable to individuals.
Farrell (2007) clarified that these criteria are alternative, not cumulative. Thus, a directive can have directeffect even if the body attacked does not meet all three requirements, expanding opportunities for claims against state entities.
Indirect Effect
I) The Principle
National law must be interpreted in accordance with relevant EU law.
Von Colson (1984): Created this principle, noting directives' inability for horizontal effect and the resulting unfair distinctions.
Marshall (1986): Further highlighted the issue of horizontal direct effect, leading the CJEU to a new solution: "measuresmust be sufficiently effective to achieve the objectives of the directive."
Article 4 TEU: Member States must take all appropriate measures to fulfill their EU obligations.
Ratti (1979): For indirect reliance on directives, the transposition deadline must havepassed, or an attempt at implementation must have been made by the Member State, even if defective.
Indirect effect allows individuals and businesses who cannot rely on direct effect to still rely on a directive.
Which National Law Does Indirect Effect Concern?
Marleasing (1990): Extended the scope of Von Colson. It ruled that national courts must, as far as possible, interpret national law (whether adopted before or after a directive) in light of the wording and purpose of the directive.
Thecase involved Spanish company law contradicting an unimplemented company law directive, and parties were private companies, preventing direct effect.
This expanded the duty of consistent interpretation to all national law.
I) Limits of Indirect Effect
Marleasing (1990) introduced the wording "as far as possible," limiting indirect effect.
Wagner Miret (1993): The CJEU held that Spanish provisions could not be interpreted in line with a directive to allow senior management staff compensation, as national law clearly excluded them.
Faccini Dori (1994): Indirect effect does not extend to contra legem interpretation (where national law is clear and cannot be reinterpreted without complete distortion). In such cases, the remedy is state liability.
An Italian claimant tried to cancel a language course contract, relying on an unimplemented EU directive about pull-off periods for consumers.
The Court ruled that while national courts should try to interpret national law to give effect to a directive, if impossible without distorting national legislation, compensation for breachof EU law is the appropriate remedy.
Indirect effect does not always enable rights contained within a directive to be enforced.
Despite limitations, the national court's duty to interpret national law consistently with EU law is strong.
Some argue indirecteffect gives horizontal direct effect to directives "by the back door," but Marleasing confirmed its limitations.
When indirect effect is not possible, state liability offers another remedy.
State Liability
I) Principle
Provides aright to damages when a Member State has breached EU law, causing loss to the claimant. This principle is not limited to cases involving directives.
Francovich (1991): This case established the principle.
Italy failed to implement a directive guaranteeingfunds for unpaid wages in insolvency. The directive was not directly effective.
The Court ruled that the full effectiveness of EU law would be impaired if individuals could not obtain redress. Under Article 4 TEU, Member States must fulfill EU obligations, including compensating individuals for losses caused by their breaches.
Francovich could sue Italy directly for its failure to implement the directive.
I) Conditions
A) Conditions to Seek Damages for Non-Implementation of a Directive
As set out in Francovich (1991), where a Member State fails to implement a directive, a right to damages arises if three conditions are met:
The directive must entail the grant of rights to individuals.
It must be possible to identify the content of those rights from the directive.
There must be a causal link between the Member State's failure and the loss suffered by the claimant.
The conditions for damages for other breaches of EU law were clarified in two joint cases:
Brasserie du Pêcheur (1996): A French brewery sought damages from Germany over "beer purity law" breaching free movement of goods.
Factortame 3 (1996): Spanish fishermen sought damages from the UK for national legislation breaching their right of establishment.
The CJEU held that individuals should be able to obtain redress for direct state infringement of an EU provision, regardless of which state organ was responsible (legislative, executive, etc.).
A) Conditions for Other Breaches of EU Law
The Courtadded that the conditions for damages depend on the nature of the breach. Where EU law allows Member States wide discretion, a right to damages arises if:
The rule of law infringed must be intended to confer rights on individuals.
The breach must be sufficiently serious.
There mustbe a direct causal link between the breach and the damage.
"Sufficiently Serious Breach" Test: The CJEU created "the decisive test" to determine if the state gravely and manifestly disregarded the limits of its discretion. Factors for national courts toconsider include:
Clarity and precision of the rule breached.
Measure of discretion left to national or EU authorities.
Whether the infringement was intentional or involuntary.
If excusable or not.
Contribution of an EU institution's positionto the omission.
Adoption or retention of national measures contrary to EU law.
Factortame 3 (1996): The House of Lords (as a national court) applied these conditions and found the UK's adoption of the Merchant Shipping Act to be a serious breach of "clear and unambiguous EU legislation."
Dillenkofer (1996): Non-implementation of a directive can, in itself, constitute a sufficiently serious breach. The Court stated that state liability isa case-by-case matter and that the three conditions from Factortame are sufficient.
I) Expansion of State Liability
British Telecommunications (1996): The UK incorrectly implemented a directive, butno damages were awarded because the directive's provisions were unclear and the error was excusable, thus not a `sufficiently serious breach`. State liability can still arise from incorrect application.
Hedley Lomas (1996): The UK Ministry of Agriculture refused exportlicenses for live animals to Spain. The CJEU held that this was a breach of Treaty provisions on free movement of goods, constituting a `sufficiently serious breach` because the UK had no margin of appreciation. State liability can arise from acts of any branch of government (administrative act).
Köbler (2003): Extended state liability to decisions of a court of last resort. An Austrian professor was denied a pay increase, arguing incorrect EU law interpretation. The CJEU ruled that an erroneous interpretation by a court of last resort can give rise to state liability, specifically for "intentional fault and serious misconduct."
Traghetti (2006): Further extended state liability to include manifest errors of interpretation by a court of last instance, though `manifest error` remains somewhat vague.
Indirect Effect
I) The Principle
National law must be interpreted in line with EU law.
Von Colson (1984): Directives incapable of horizontal effect, thus creating unfair distinctions.
Marshall (1986): Confirmed horizontaleffect cannot be applied for directives. This led to a new solution: "measures must be sufficiently effective to achieve the objectives of the directive."
Article 4 TEU: Member states must take all appropriate measures to fulfill EU obligations.
Ratti (1979): For indirect reliance, the directive's transposition deadline must have passed, or an implementation attempt must have been made.
Indirect effect allows individuals and businesses who cannot use direct effect to still rely on a directive.
Which National Law Does Indirect Effect Concern?
Marleasing (1990): Extended Von Colson's scope, ruling national courts must interpret national law (pre- or post-directive) in light of the directive's wording and purpose.
I) Limits of Indirect Effect
Marleasing (1990): The phrase "as far as possible" limits indirect effect.
Wagner Miret (1993): National law could not be interpreted to include senior management staff for compensation if they were explicitly excluded by national provisions.
Faccini Dori (1994): Indirect effect does not sanction contra legem interpretation. If interpretation is impossible without distorting national law, state liability is the remedy.
Indirect effect doesn't always guarantee enforcement of directiverights.
Despite limitations, the national court's duty of compatible interpretation is strong.
While indirect effect might resemble horizontal direct effect for directives, Marleasing sets clear bounds.
When indirect effect fails, state liability is the final recourse.
Chapter 4. Preliminary Ruling (Renvoi Préjudiciel)
Article 267 TFEU establishes a separation of functions between national courts and the CJEU.
Types of References
Discretionary References:National courts may choose to refer.
Mandatory References: National courts must refer in certain circumstances.
Structure of Article 267 TFEU
Section 1: Deals with theCJEU's jurisdiction regarding interpretation and validity of EU law.
Section 2: Addresses the discretion of national courts to refer.
Section 3: Mandates referral for courts of last resort.
Section I. Jurisdiction of CJEU
Article 267 TFEU grants the CJEU jurisdiction to deliver preliminary rulings on:
The validity of EU law.
The interpretation of EU law.
Main goal: To ensure EU lawhas the same meaning and effect across all Member States.
When a national court needs a decision on an EU law question to give judgment, it may refer. A court of last resort is not forced to refer if the question is not necessary (Cilfit, 1982).
The CJEU may decline a reference if it deems it irrelevant, hypothetical, or lacking sufficient information (Irish Creamery, 1981).
Procedure: The national court refers a question of EU law. The CJEU interprets or rules on validity, then refers thecase back to the national court.
Parties to a case do not have a right to reference; Article 267 TFEU is not an appeal procedure but a mechanism for obtaining authoritative rulings.
Effect of Preliminary Ruling
International Chemical Corporation (1981): All national courts and tribunals are bound by CJEU rulings on validity.
The binding effect does not prevent national courts from seeking further guidance. The CJEU can depart from its previous rulings, especially in cases with different facts.
The CJEUinterprets and rules on the validity of EU law, except for expressly excluded areas (e.g., common foreign and security policy).
It has no jurisdiction over national law interpretations or compatibility with EU law, though in practice the distinction from EU law interpretation can be blurred.
British Telecommunications (1996): UK's incorrect directive implementation was not a sufficiently serious breach as the directive was unclear and the error excusable, and the Commission had not challenged it.
English High Court, Reed (2002): High Court refused to accept a CJEUconclusion because the CJEU overstepped its jurisdiction under Article 267, dictating facts rather than interpreting law. This case highlights the separation of powers between the CJEU and national courts.
Notion of "Court or Tribunal": Article 267defines what bodies can make a reference.
Broekmeulen (1991): An appeals committee was considered a "court or tribunal" for lacking appeals to ordinary courts and operating with public authority consent, delivering final decisions after an adversarial process.
Dorsch Consult (1997): Factors for determining "court or tribunal": established by law/permanent, inter partes procedure, applies rules of law/independent, compulsory jurisdiction.
CJEU has accepted references from administrative tribunals, professional disciplinary bodies,tax adjudicators, and insurance officers.
Reasons for Refusing References: The CJEU has become less receptive to references, imposing limits by assessing eligibility.
No genuine dispute between parties: Foglia 1 (1980) and Foglia 2 (1981) refused jurisdiction where parties engineered a challenge, viewing it as an advisory opinion on hypothetical questions.
Hypothetical or irrelevant questions: Meilicke (1992) declined aruling on a German academic's challenge when there was no evidence of relevance.
Wightman (2018): CJEU rejected UK arguments that revocability of Article 50 TEU was hypothetical, ruling it admissible as a "genuine and live issue ofconsiderable practical importance."
Insufficient legal or factual information: Telemarsicabruzzo (1993) and Criminal Proceedings (1995) refused jurisdiction due to lack of facts or legal context.
SECTION II. Obligation to Refer
Article 267 §3: Courts of a Member State "against whose decision there is no judicial remedy under national law" shall refer questions of interpretation or validity to the CJEU.
This applies to courts of final appeal or last resort.
Two Theories on Article 267 §3 Interpretation:
Concrete Theory: Obligation to refer applies if there is no right to appeal in that particular case (Costa, 1964).
Abstract Theory: Obligation applies only to courts at the highest position in the national system whose decisions are never subject to appeal.
Costa (1964): Chosen the concrete theory, stating national courts without judicial remedy must refer.
UK Context
Initially, the UK Court of Appeal's position was debated. An appeal to the House of Lords (now Supreme Court) requiring leave was seen as a judicial remedy, meaning a lower court was not a "court of last resort."
CILFIT (1982): A court of last resort has the same discretion as other national courts on whether a ruling is necessary. Therefore, no obligation to refer if the question is not relevant, if the CJEU has ruled on the point before, or if the correct interpretation is so obvious as toleave no reasonable doubt (acte clair).
Main Exceptions to the Obligation to Refer
Precedent (Costa, 1964): If the CJEU has already ruled on a question and the facts/issues are identical, anational court of last resort is not obliged to refer.
Cilfit (1982): Extended this, stating that prior rulings on similar points, even if not strictly identical, can remove the obligation. However, national courts can still refer if they deem it appropriate.
Doctrine of Acte Clair (Clear Act)
Applies when an EU law provision's interpretation is "so obvious as to leave no scope for reasonable doubts." No referral is needed then.
Cilfit's Criteria for Acte Clair (narrow scope):
National courts must be convinced the matter is equally obvious to other MS courts and the CJEU.
EU law uses its own terminology and must be placed in context, which might differ from national legal contexts.
National courts sometimes interpret acte clair loosely, carrying risks. Köbler (2003) held that State liability could arise if a national court manifestly failed its **Article 267 §3** obligation by misapplying acte clair.
Traghetti (2006) discussed manifest errors of interpretation by a court of last instance.
ECHR, Dhabbhi (2009) ruled that refusal to refer by a court of last instance without reasons breaches the right to afair trial (Article 6 ECHR).
National courts should refer if there is any doubt to avoid state liability.
Section 3. The Discretion to Refer
References on Validity and Interpretation of EU Law
Article 267 §2: Grants discretion to national courts to refer questions of interpretation or validity of EU law if it's "necessary" for judgment.
Lower national courts can still make their own conclusions on EU law.
The system ensures necessary EU law questions are ultimately referred at the final appeal stage.
References on Validity
If a decision on the validity of EU law is needed, national courts have no power to declare EU law invalid (Foto-Frost, 1987). The question must be referred.
National courts can grant interim relief (e.g., suspending a national measure) when challenging the validity of underlying EU measures (Zuckerfabrik Süderdithmarschen, 1991).
References in Relation to Interpretation of EU Law
The CJEU provides guidance on interpretation, but such guidance does not limita national court's discretion under Article 267.
How Discretion is Exercised by National Courts
I) Relevance
Dzodzi v Belgium (1990): National courts determine the relevance of referredquestions.
CJEU will refuse hypothetical or insufficiently factual questions. There is a presumption that national court questions are relevant.
I) Acte Clair
If a relevant EU law provision is clear, no reference is necessary (Cilfit).
Cilfit criteria are hard to meet due to EU law's unique terminology and context.
The CJEU has advantages (knowledge of EU law, multilingual resources) that national courts lack.
UK courts have been advisedto refer if there is any real doubt (Sir Thomas MR, 1993).
MB and Secretary of State for Work and Pensions (2016): UK Supreme Court referred a question on applying an equal treatment directive due to disagreement among judges, indicating itwas not acte clair.
I) Previous Rulings
Prior CJEU rulings may justify not referring but do not preclude a new reference (Costa).
National courts may refer again if they deem it desirable.
I) Rules of Precedent in Member States
National rules of precedent do not affect the discretion to refer. A lower court can still refer, even if a higher national court has ruled on the EU law provision.
After the Preliminary Ruling
The case returns to the national court, which applies the guidance from the CJEU.
The national court makes the final decision; the CJEU does not apply the interpretation to the specific case.
Timing and Case Load: CJEU takes about 20 months toanswer a question.
Modifications to Court rules of procedure: expedited hearings for urgent cases, identical orders for previously answered questions.
Discussions to reduce case load: restricting referencing power to courts of last resort, removing obligation to refer except for "sufficiently important" questions, creating decentralized regionalcourts.
Treaty of Nice: Gave the General Court power to give preliminary rulings, though it doesn't currently use Article 250 jurisdiction.
Brexit and Implications
Initially, UK courts were reluctant to refer but later increased their referrals.
After the end of the transition period (Dec. 31, 2020), the preliminary ruling system has limited relevance for UK courts.
UK courts retain power to refer questions on Part 2 of the Withdrawal Agreement for 8 years (until 2028), concerningEU citizens' rights in the UK.
Chapter 5. Direct Action Against EU Act
Direct Actions in the CJEU
Articles 258 to 260 TFEU: Enforcement proceedings against Member States for breaches.
Article263 TFEU: Judicial review (action for annulment) of EU acts. A successful action leads to annulment.
Article 265 TFEU: Actions against EU institutions for failure to act.
Article 267 TFEU: Canbe invoked to challenge the underlying regulation of a contested act.
Article 340 TFEU: Allows individuals to recover damages from the EU for losses.
Articles 258 to 260 TFEU: Enforcement Against Member States
Article 4 TEU: Member States must fulfill their EU obligations.
Enforcement mechanisms:
Article 258: By the European Commission (principal mechanism historically, now complemented by direct effect, indirect effect, state liability).
Article259: By another Member State.
Article 260: Requires Member States to comply with CJEU judgments.
Enforcement Action Against Member States Through Commission (Article 258 TFEU)
I) What Constitutes a Breach?
No explicit definition, but CJEU held breaches can be acts or failures to act.
Common examples:
Failure to implement directives or implementing them incorrectly (Commission v Belgium, 1987,on water production directive).
Breaches of the Treaty (Commission v France, "Spanish strawberries," 1997, for failing to prevent violent protests against imported goods). France was held responsible for breaching Article 4 TEU by failing to take adequate preventive actions.
I) How Does the Commission Discover Breaches?
Commission conducts investigations, receives complaints from private parties, or reports from other Member States.
Individuals or companies cannot force the Commission to act (Star FoodCompany v Commission, 1989), as it has discretion. This discretion has been criticized for reducing EU law enforcement effectiveness.
The Commission doesn't have to inform complainants about the status of proceedings.
Notion of Member State
Nationalgovernments are defendants under Article 258, but action can be brought against any state agency (legislative, executive) responsible for the failure (Commission v Belgium, 1970, holding Belgium responsible for its parliament's failure to amend tax legislation).
I) Administrative Stage (Article 258)
Informal approach: Commission raises the matter informally; if resolved, procedure stops.
Formal procedure:
Letter of notice: Commission outlines beliefs of infringement. MemberState given reasonable time to respond.
Discussions: Attempts to reach a settlement.
Reasoned opinion: If no settlement, Commission issues an opinion with grounds of complaint, specifying a time limit for the Member State to end infringement. (Commission v France, 2001, allowed a very short response time for France regarding beef imports, as views were already known).
Documents in this stage (formal notices, reasoned opinions) are not binding and cannot be challenged under Article 263TFEU.
I) Judicial Procedure (Article 258)
If the Member State doesn't comply after the reasoned opinion deadline, the Commission can initiate proceedings before the CJEU.
The Commission cannot add new issues that were not inthe reasoned opinion during the judicial stage.
Interested Member States can intervene; individuals cannot.
I) Interim Measures
To prevent ongoing harm, Articles 278 and 279 TFEU allow:
Article 278: Suspension orders (temporarily suspending infringing national measures).
Article 279: Orders for interim measures.
Commission v UK (1989): CJEU ordered suspension of partsof the UK Merchant Shipping Act pending judgment in Article 258 proceedings.
Article 260 TFEU: Compliance with Judgments
Requires Member States to comply with CJEU judgments. If non-compliant, the Commission can bring the case to the Courtagain after observations.
I) Penalties
The TEU amended Article 260 TFEU to allow the Commission to recommend a lump sum or penalty payment. The CJEU can impose any penalties it wishes, not bound by Commission recommendations.
Penalties can be a dual financial penalty (lump sum, penalty payment, or both).
If a Member State complies by judgment date, a penalty payment isn't obligatory, but a lump sum can still be ordered for serious and persistent breaches.
Enforcement Action AgainstMember States by Member State (Article 259 TFEU)
A Member State can bring action against another for non-compliance with EU obligations. This is rare due to political reasons, as the Commission is preferred.
Procedure:
Complaintbrought before the Commission.
Commission requests submissions from both states and issues a reasoned opinion, aiming for settlement.
Commission can take over the action, reverting to Article 258.
Judicial Review of Acts Adopted by EU Institutions (Article 263 TFEU): Actions for Annulment
If successful, the act is made void. Reviewed by the CJEU.
Grounds: Lack of competence, infringement of essential procedural requirement, infringement of Treaties/rule of law, misuse of power.
Applicants:
Privileged: Member States, European Parliament, Council, Commission have automatic right of access (unlimited).
Semi-privileged: Court of Auditors, ECB, Committee of the Regions can bring actions to protect their prerogatives.
Non-privileged: Natural or legal persons (individuals, companies) have limited access.
Challenges from non-privileged applicants are heard first in the General Court, with limited appeal to the CJEU.
Which Acts Can Be Challenged?
Article 263 allows review of legal acts (decisions, regulations, directives) and resolutions intended to produce legal effects vis-à-vis third parties.
The TEU extended reviewable acts to "acts of bodies, offices or agencies of the Union intended to producelegal effects vis-à-vis third parties."
Commission v IBM (1981): Defined reviewable act as "any measure the legal effect of which are binding on the applicant and capable of affecting the interests of the applicant by bringing about a distinct change in his legal position."
The definition can be unclear, leading to controversial decisions (e.g., IBM vs SFEI, where the Court sometimes refused or allowed challenging Commission letters).
Time Limit
Actions must be brought within two months of anact's publication, notification, or factual knowledge by the applicant.
Standing (Qualité à Agir)
Defined as the right to bring legal challenge; depends on applicant status.
I) The Standing of Non-Privileged Applicants
Lisbon Treaty amended provisions for non-privileged applicants.
Article 263: "Any natural person or legal person may institute proceedings against an act addressed to that person or which is of direct and individual concern to them and against a regulatory act which is of direct concern tothem and does not entail (imply) implementing measures."
Non-privileged applicants can challenge:
Act addressed to the applicant (e.g., Commission decisions on competition law breaches). No admissibility issue.
Act addressed to another person which is ofdirect and individual concern to the applicant.
Regulatory act which is of direct concern to the applicant and does not entail implementing measures.
1. Direct Concern
Applicant must show a direct link/unbroken chain of causation betweenthe act and sustained damage.
No direct link if the measure allows Member State discretion in implementation, as applicant is affected by implementation, not the act itself (Municipality of Differdange, 1984).
Piraiki-Patraiki v Commission (1985): French authorities had discretion to impose quotas on Greek cotton, but their choice not to was "purely theoretical." Thus, direct concern was established.
2. Individual Concern
Requirement applied restrictively, making ithard to prove, leading to controversy and challenges to the Plaumann test.
Plaumann (1963): Persons are individually concerned only if the decision affects them "by reason of certain attributes which are peculiar to them OR by reason ofcircumstances from which they are differentiated from all other persons." The decision must distinguish them individually like it distinguished the original addressee.
Plaumann was not individually concerned because his commercial activity could be taken up by anyone.
However, Piraiki-Patraiki vCommission (1985): Mere fact that applicant exported to France wasn't enough. Being distinguished by having entered into contracts for product sales before the decision was sufficient. This created a "closed class" of affected persons.
Pressure to change Plaumann test (UPA, 2002), with Advocate General proposing a new test ("substantial adverse effect on applicant's interests"), but the Court reaffirmed Plaumann.
Jégo-Quéré v Commission (2002/2004): General Court suggested an individual should be concerned if a regulation affects their "legal position in a matter which is both definite and immediate by restricting this right or imposing obligations on him." CJEU again reaffirmed Plaumann.
A) Regulatory Act Which Isof Direct Concern to the Applicant and Which Does Not Entail Implementing Measures
Uncertainties Before the Lisbon Treaty
Under Article 230 EC, challenging a regulation required showing it was a "decision in the form of a regulation" (a"decision disguised" requirement), creating uncertainty.
After the Lisbon Treaty
This requirement was removed, but Article 263 TFEU introduced uncertainty regarding "regulatory act."
Definitions:
Broad: Includes legislative and non-legislative acts, leading to more liberal standing.
Narrow: Confined to non-legislative regulations, making standing harder.
Recent Case Law Clarified
Inuit (2013): Confirmed limited access for citizens and narrow interpretation of "regulatory act" as all acts of general application except legislative acts.
"Implementing measures" are interpreted restrictively to avoid relaxing standing rules under Article 263,fourth paragraph.
TNL Sugar v Commission (2015): The Court rejected the argument that granting certificates by Member States didn't count as implementing measures, confirming that such decisions were implementing measures under Article 263.
Grounds for Annulment
Set out in Article 263, these grounds may overlap.
I) Lack of Competence
The institution adopting the measure lackedthe necessary power.
Germany v European Parliament and Commission (2000): A directive regulating tobacco advertising (as a public health measure) was annulled because it was adopted under a Treaty article concerning internal market, not health.
I) Infringementof an Essential Procedural Requirement
Roquette Frères v Council (1980): Annulment was based on failure to consult Parliament before adopting a measure, as required by the Treaty.
I) Infringement of the Treaty or of Any Rule Relatingto the Application of the Treaty
A broad ground covering any infringement of EU law, including general principles like non-discrimination, proportionality, and fundamental human rights.
Transocean Marine Paint v Commission (1974): Annulment based on the principle ofnatural justice.
I) Misuse of Powers
Adopting a measure for a purpose other than that intended by the Treaty provision forming its legal base.
United Kingdom of Great Britain and Northern Ireland v Council (1996): UKargued the Working Time Directive was wrongly based on a health and safety article (Article 153 TFEU). The Court disagreed.
Effect of Annulment
If grounds are established, the challenged measure is declared void, and the institution must take stepsto comply with the judgment.
Action for Failure to Act (Article 265)
Allows privileged and non-privileged applicants to challenge inaction by EU institutions (including ECB, bodies, offices, agencies) when they have a duty to act.
European Parliament v Council (1985): Parliament challenged Council's failure to implement a common transport policy (Article 90 TFEU) and ensure freedom to provide transport services. Parliament was successful on the latter due to clear obligation.
Initially, strict standing requirements for non-privileged applicants.
Bethell v Commission (1982): Lord Bethell's action for Commission's failure to act on airline competition breaches was inadmissible because he was not an addressee of the potential act.
Requirements have since beenrelaxed (T-Port, 1996), applying Article 263 TFEU standing rules: applicant must show direct and individual concern by the potential act.
Action is admissible only if the institution was first called upon to act and failed to define its position withintwo months.
If failure to act is declared, Article 266 applies, requiring the institutions to take necessary measures.
Relationship Between Article 263 and 265: Illegal Actions and Illegal Inaction
Eridaniav Commission (1969): Commission's refusal to revoke decisions was an act (Article 263), not a failure to act (Article 265). Article 265 should not bypass Article 263 limitations, especially the two-month time limit.
These two articles offer alternative pleadings for different scenarios (illegal actions vs. illegal inaction).
Article 277 TFEU (Plea of Illegality)
Can be invoked during other proceedings.
Any party (privileged or non-privileged) can challenge an act of general application even after the Article 263 two-month time limit has lapsed.
Allows challenging the underlying regulation on which a decision (being annulled under Article 263) is based.
Grounds for review are identical to Article 263; if successful, it results in a declaration of inapplicability.
Recovery of Damages (Article 340 TFEU)
An independent form of action; applicants don't need to secure anannulment first.
Provides damages for individuals who suffered losses due to EU action.
For non-contractual liability: "the Union shall in accordance with the principle common with the law of the Member States make good any damage caused by its institutions or by its officials in the performance oftheir duties."
2 Forms of Applications:
Cases of damages by EU officials:
Sayage v Leduc (1968): EU liable for "acts of its servants which, by virtue of an internal anddirect relationship are the necessary extension of the tasks entrusted to the EU."
Cases related to an act of EU institution:
Three elements for recovery, listed in Lütticke v Commission (1971):
Damage.
Causation.
Wrongful and illegal act.
I) Wrongful and Illegal Act
A) Original Approach (Schöppenstedt, 1971)
Distinguished between legislative and administrative acts.
Administrative act: Liability could be established on illegality alone (Adams v Commission, 1985, for negligence in disclosing informant's identity).
Legislative act (involving economic policy choices): Stricter test, liability arose only for "a sufficiently flagrant violation of a superior rule of law for the protection of the individual."
"Superior rule of law" included treaties and general principles (equality, proportionality, legal certainty, legitimate expectation).
Applicant must show a `sufficiently serious breach`: institution `manifestly and gravely disregarded a limit on its powers`.
HNL (1978): Court assessed effects of a regulation (superstock of milk) and found only limitedimpact compared to market fluctuations, despite its annulment for being discriminatory.
Amylum (1979): Insufficiently serious breach, even though a regulation imposing levies on glucose led to company liquidation, as it wasn't "verging on the arbitrary."
Reasons for strict test: To protect legislative functions.
1. Modern Approach (Bergaderm, 2000)
Aligned principles of state liability and EU liability, reiterating Brasserie du Pêcheur and Factortame 3 conditions.
Bergaderm's conditions for EU liability:
Infringed rule intended to confer rights on individuals.
Breachsufficiently serious.
Direct causal link between breach and damage.
Key changes:
No longer required a "superior rule of law," just a "rule intended to confer rights."
No need to look at institution's conduct.
Test for `sufficiently serious breach` depends on the degree of discretion granted to an institution (not arbitrariness/damage seriousness).
Factors like clarity, excusability, and intentionality of the breach (from Brasserie du Pêcheur) are applied.
No distinction between administrative and legislative acts.
I) Damages
Applicant must prove quantifiable loss exceeding normal economic risks.
HNL case: Losses didn't exceed market fluctuation,so no damages.
Both personal/property and economic loss can constitute damage.
No compensation for speculative loss.
Obligation to mitigate loss; damages reduced if applicant contributed to loss.
I) Causation
Causal link between wrongful act anddamages.
Must be a `sufficiently direct consequence` of the institution's breach.
Court assesses proximity and remoteness.
Dumortier Frères v Council (1979): Even if unlawful conduct exacerbated difficulties, itwas not a `sufficiently direct consequence` to establish liability.
Time Limit for Article 340 Proceedings
Must be brought within 5 years of the materialization of the breach (Article 46, Statute of the Court).
ConcurrentLiability
Refers to liability of national authorities and EU institutions.
When loss results from EU legislation implemented by national authorities, an applicant might sue national authorities in national courts or EU institutions in the CJEU, or both.
National courts have jurisdiction for damages againstnational authorities. Actions against EU institutions must be brought before the General Court.
Krohn (1986): Any national cause of action must be exhausted before CJEU proceedings if national actions can result in compensation.
The Four Freedoms of the EU
The Free Movement of Goods
The TFEU prohibits restrictions on trade between Member States.
Article 30 TFEU: Prohibits tariffs (customs duties).
Article 34 TFEU:Prohibits quantitative restrictions (e.g., quotas) and "measures having equivalent effect."
Article 110 TFEU: Prohibits discriminatory national taxation. Indirect taxation may be justified on objective grounds in some cases.
Article 36 TFEU: Allowsderogations from free trade for specific reasons (e.g., public morality, public policy, public security, protection of health and life of humans, animals or plants, protection of national treasures, protection of industrial and commercial property).
Cassis de Dijon (1979): Introducedthe "mutual recognition" principle and held that measures satisfying certain "mandatory requirements" (e.g., consumer protection, environmental protection) do not breach Article 34 TFEU, provided they are proportionate to their objective.
The Free Movement of Persons
One of the four freedoms, originally based on economic status, expanded by the 2004 Citizenship Directive.
Natural Persons:
Initially, free movement rights granted to economically active individuals: workers, self-employed (establishment), and serviceproviders.
Non-discrimination: The general principle of non-discrimination on grounds of nationality applies within the Treaty's scope. These provisions are now in the TFEU.
Secondary Legislation: Extended rights to family members, students, retired people, and those with independent means.
2004 Citizenship Directive: Consolidated legislation and clarified rights of Union citizens and their family members.
Union Citizenship: Introduced by the TEU, it is the fundamental status of nationals of Member States, including the right to move andreside freely in other Member States (now in TFEU).
Limits: Subject to Treaty and secondary legislation limitations. Member States can impose restrictions on grounds of public policy, public security, or public health (interpreted restrictively by the CJEU to protect the principle).
Brexit Consequences: As of Jan 2020 (and end of transition Dec 2020), free movement rights between UK and EU no longer apply. EU citizens residing in UK before/during transition could apply for residence (deadline June 2021).
Freedom of Establishment
Article 49 TFEU concerns permanent or semi-permanent settlement of economic persons (legal persons and self-employed individuals).
Member States cannot discriminate between companies based on nationality.
Fundamental right to equal treatment, prohibiting direct or indirect discrimination.
Freedom to Provide and Receive Services
Articles 56 and 57 TFEU govern situations where a company provides or receives services from/to another Member State.
These are services for remuneration (not "free" services).
Includes the right of equal treatment, with the same prohibition on direct and indirect discrimination and measures that hinder the exercise of the right.
Exceptions: Member States can justify restrictions based on:
Public security, public policy, and public health (Articles 52 and 62 TFEU).
Official authority exception (Articles 51 and 62 TFEU).
Competition Law
Articles 101 and 102 TFEU prohibit anti-competitive businesspractices that threaten the internal market, harm consumers/SMEs, or reduce business efficiency.
Article 101:
101(1): Prohibits agreements between undertakings, decisions by associations of undertakings, and concertedpractices that may affect trade between Member States and have the object or effect of preventing, restricting, or distorting competition.
101(2): Prohibited agreements are automatically void.
101(3): Permits individual exceptions if an agreement has beneficial effects,restrictions are proportionate, and there's no substantial elimination of competition. These can be individual (legal exceptions) or cover categories (block exemptions, e.g., Regulation 330/2010).
Article 102:
Prohibits abusive conduct by businesses with substantial market power, targeting unilateral actions by dominant businesses.
Aims to prevent dominant positions from affecting trade between Member States.
These articles are enforced by the European Commission, national competition authorities, and national courts underRegulation 1/2003.
Businesses don't need to be in the EU to be subject to EU jurisdiction; they just need a potential impact on trade between Member States.
Economic impact of undertakings is a key consideration.
Consequences of Brexit
Pending cases on Dec 31, 2020, fall under CJEU jurisdiction until complete.
Commission can bring proceedings against the UK for actions/inactions before end of transition period within 4 years after the transition period (Article of the Withdrawal Agreement).
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