European Union Law The European Union has existed for over half a century. Having started as the Europe of the Six in a very specific industrial sector, the Union today has 28 Member States and acts within almost all areas of social life. European law has come to influence almost all fields of national law, including administrative law, constitutional law, contract law, criminal law and even tort law; and it has also played a major role in the development of competition law, environmental law and employment law. What is the European Union? How does it work, and how does it produce European law? Written with exceptional clarity, European Union Law offers a classic textbook for students and practitioners of European law alike. Using a clear framework, it guides readers through all the core constitutional and substantive topics of EU law, and provides an overview of the most important internal and external policy areas of the European Union. Extracts from classic case law are complemented with extensive and critical discussion of the theoretical and practical aspects of the European Union and its law. Chapters are enriched with more than one hundred colour figures and tables, which clarify complex topics and illustrate relationships and processes. Suggestions for further reading direct students to significant pieces of academic literature for deeper self-study, and a companion website with full Lisbonised versions of the cases cited in the text completes the learning package. is Professor of European Law at Durham University and Visiting Professor at LUISS Università Guido Carli.
European Union Law ROBERT SCHÜTZE
University Printing House, Cambridge CB2 8BS, United Kingdom Cambridge University Press is part of the University of Cambridge. It furthers the University s mission by disseminating knowledge in the pursuit of education, learning and research at the highest international levels of excellence. Information on this title: /9781107416536 2015 This publication is in copyright. Subject to statutory exception and to the provisions of relevant collective licensing agreements, no reproduction of any part may take place without the written permission of Cambridge University Press. First published 2015 Printed in the United Kingdom by Bell and Bain Ltd A catalogue record for this publication is available from the British Library Library of Congress Cataloguing in Publication data Schütze, Robert. author. European Union law /. pages cm ISBN 978-1-107-07120-9 (hardback) 1. Law European Union countries. I. Title. KJE947.S383 2015 341.242 2 dc23 2014048001 ISBN 978-1-107-07120-9 Hardback ISBN 978-1-107-41653-6 Paperback Cambridge University Press has no responsibility for the persistence or accuracy of URLs for external or third-party internet websites referred to in this publication, and does not guarantee that any content on such websites is, or will remain, accurate or appropriate.
For my Students Past and Present
Summary Contents Part I Constitutional Foundations 1 1 Constitutional History: From Paris to Lisbon 3 2 Constitutional Nature: A Federation of States 43 3 European Law I: Nature Direct Effect 77 4 European Law II: Nature Supremacy/Pre-emption 117 5 Governmental Structure: Union Institutions I 147 6 Governmental Structure: Union Institutions II 185 Part II Governmental Powers 221 7 Legislative Powers: Competences and Procedures 223 8 External Powers: Competences and Procedures 263 9 Executive Powers: Competences and Procedures 302 10 Judicial Powers I: (Centralised) European Procedures 343 11 Judicial Powers II: (Decentralised) National Procedures 394 12 Judicial Powers III: EU Fundamental Rights 429 Part III Substantive Law A Internal Market 471 13 Free Movement of Goods I: Negative Integration 473 14 Free Movement of Goods II: Positive Integration 527 15 Free Movement of Persons: Workers and Beyond 572 16 Free Movement of Services and Capital 631 B Union Policies 683 17 Competition Law I: Private Undertakings 685 18 Competition Law II: State Interferences 749 19 Internal Policies: An Overview 797 20 External Policies: An Overview 859 Appendices 921 1. How to Find the EU Treaties 923 2. How to Find (and Read) EU Secondary Law 926 3. How to Find (and Read) EU Court Judgments 929 4. How to Find EU Academic Resources 933
Detailed Contents List of Illustrations List of Tables List of Cases List of Secondary Law Table of Equivalents List of Abbreviations Preface Acknowledgements xxiv xxvi xxviii lxxxvii cv cxi cxv cxvii Part I Constitutional Foundations 1 1 Constitutional History: From Paris to Lisbon 3 Introduction 3 1. From Paris to Rome: The European Coal and Steel Community 7 a. The (Supranational) Structure of the ECSC 8 b. The (Failed) European Defence Community 10 2. From Rome to Maastricht: The European (Economic) Community 12 a. Normative Supranationalism: The Nature of European Law 13 b. Decisional Supranationalism: The Governmental Structure 14 c. Intergovernmental Developments outside the EEC 18 d. Supranational and Intergovernmental Reforms through the Single European Act 20 3. From Maastricht to Nice: The (Old) European Union 22 a. The Temple Structure: The Three Pillars of the (Maastricht) Union 23 aa. The First Pillar: The European Communities 24 bb. The Second Pillar: Common Foreign and Security Policy 26 cc. The Third Pillar: Justice and Home Affairs 27 b. A Decade of Constitutional Bricolage : Amsterdam and Nice 27 aa. The Amsterdam Treaty: Dividing the Third Pillar 28 bb. The Nice Treaty: Limited Institutional Reform 30 4. From Nice to Lisbon: The (New) European Union 32 a. The (Failed) Constitutional Treaty: Formal Total Revision 33 b. The Lisbon Treaty: Substantive Total Revision 36
x Detailed Contents Conclusion 39 Further Reading 41 2 Constitutional Nature: A Federation of States 43 Introduction 43 1. The American Tradition: Federalism as (Inter)national Law 45 a. Madisonian Federalism: Three Dimensions 45 b. The Mixed Constitution and the Sovereignty Question 48 2. The European Tradition: International versus National Law 50 a. Conceptual Polarisation: Confederation versus Federation 50 b. Early Criticism: The European Tradition and the (Missing) Federal Genus 53 3. The European Union in Light of the American Tradition 56 a. Foundational Dimension: Europe s Constitutional Treaties 56 b. Institutional Dimension: A European Union of States and People(s) 59 c. Functional Dimension: The Division of Powers in Europe 61 d. Overall Classification: The European Union on Federal Middle Ground 62 4. The European Union in Light of the European Tradition 62 a. The Sui Generis Theory : The Incomparable European Union 63 b. The International Law Theory: The Maastricht Decision 65 c. Europe s Statist Tradition Unearthed: Three Constitutional Denials 67 d. Excursus: Europe s Democratic Deficit as a False Problem? 71 Conclusion 73 Further Reading 76 3 European Law I: Nature Direct Effect 77 Introduction 77 1. Primary Union Law: The Effect of the Treaties 82 a. Direct Effect: From Strict to Lenient Test 84 b. The Dimensions of Direct Effect: Vertical and Horizontal Direct Effect 87 2. Direct Union Law: Regulations and Decisions 89 a. Regulations: The Legislative Instrument 89 aa. General Application in All Member States 90 bb. Direct Application and Direct Effect 91 b. Decisions: The Executive Instrument 93 aa. Specifically Addressed Decisions 93 bb. Non-addressed Decisions 95
Detailed Contents xi 3. Indirect Union Law: Directives 95 a. Direct Effect and Directives: Conditions and Limits 96 aa. The No-horizontal-direct-effect Rule 98 bb. The Limitation to the Rule: The Wide Definition of State (Actions) 100 cc. The Exception to the Rule: Incidental Horizontal Direct Effect 101 b. Indirect Effects through National and (Primary) European Law 103 aa. The Doctrine of Consistent Interpretation of National Law 103 bb. Indirect Effects through the Medium of European Law 105 4. External Union Law: International Agreements 109 a. The Conditions of Direct Effect 110 b. The Dimensions of Direct Effect 112 Conclusion 114 Further Reading 115 4 European Law II: Nature Supremacy/Pre-emption 117 Introduction 117 1. The European Perspective: Absolute Supremacy 118 a. The Absolute Scope of the Supremacy Principle 120 aa. Supremacy over Internal Laws of the Member States 120 bb. Supremacy over International Treaties of the Member States 122 b. The Executive Nature of Supremacy: Disapplication, Not Invalidation 124 2. The National Perspective: Relative Supremacy 127 a. Fundamental Rights Limits: The So-long Jurisprudence 129 b. Competences Limits: From Maastricht to Mangold 131 3. Legislative Pre-emption: Nature and Effect 134 a. Pre-emption Categories: The Relative Effects of Pre-emption 134 aa. Field Pre-emption 135 bb. Obstacle Pre-emption 136 cc. Rule Pre-emption 136 b. Modes of Pre-emption: Express and Implied Pre-emption 137 4. Constitutional Limits to Legislative Pre-emption 139 a. Union Instruments and their Pre-emptive Capacity 139 aa. The Pre-emptive Capacity of Regulations 139 bb. The Pre-emptive Capacity of Directives 141 cc. The Pre-emptive Capacity of International Agreements 142 b. Excursus: Competence Limits to Pre-emption 144 Conclusion 144 Further Reading 146
xii Detailed Contents 5 Governmental Structure: Union Institutions I 147 Introduction 147 1. The Separation-of-Powers Principle and the European Union 150 2. The European Parliament 154 a. Formation: Electing Parliament 155 aa. Parliament s Size and Composition 156 bb. Members of the European Parliament and Political Parties 158 b. Internal Structure: Parliamentary Organs 160 c. The Plenary: Decision-making and Voting 162 d. Parliamentary Powers 164 aa. Legislative Powers 164 bb. Budgetary Powers 165 cc. Supervisory Powers 166 dd. Elective Powers 167 3. The European Council 169 a. The President of the European Council 170 b. The European Council: Functions and Powers 172 4. The Council of Ministers 173 a. The Council: Composition and Configuration 173 b. Internal Structure and Organs 175 aa. The Presidency of the Council 175 bb. Coreper and Specialised Committees 176 cc. Excursus: The High Representative of Foreign Affairs and Security Policy 178 c. Decision-making and Voting 179 d. Functions and Powers 183 6 Governmental Structure: Union Institutions II 185 1. The Commission 185 a. Composition and Structure 186 aa. The President and his College 187 bb. The Commission s Administrative Organs 190 b. Decision-making within the Commission 190 c. Functions and Powers of the Commission 192 d. Excursus: European Agencies and the Commission 195 aa. European Agencies: Functions 196 bb. European Agencies: Structure 197 2. The Court of Justice of the European Union 198 a. Judicial Architecture: The European Court System 198 aa. The Court of Justice: Composition and Structure 199 bb. The General Court: Composition and Structure 201 cc. Excursus: The Advocates General 202 dd. The Specialised Court(s) : The Civil Service Tribunal 203 b. Judicial Procedure(s) 204
Detailed Contents xiii c. Judicial Reasoning: Methods of Interpretation 206 d. Jurisdiction and Judicial Powers 207 3. The European Central Bank 209 a. The Special Status of the ECB 209 b. Organs and Administrative Structure 211 c. Internal Divisions and Decision-making 213 d. Functions and Powers 214 4. The Court of Auditors 216 Conclusion 218 Further Reading 219 Part II Governmental Powers 221 7 Legislative Powers: Competences and Procedures 223 Introduction 223 1. The Scope of Union Competences 224 a. Teleological Interpretation 225 b. The General Competences of the Union 229 aa. The Harmonisation Competence: Article 114 229 bb. The Residual Competence: Article 352 231 2. The Categories of Union Competences 235 a. Exclusive Competences: Article 3 237 b. Shared Competences: Article 4 238 aa. General Considerations 238 bb. Minimum Standard Competences 240 c. Coordinating Competences: Article 5 241 d. Complementary Competences: Article 6 242 3. Legislative Procedures: Ordinary and Special 243 a. The Ordinary Legislative Procedure 245 aa. Constitutional Text: Formal Procedure 245 bb. Constitutional Practice: Informal Trilogues 249 b. The Special Legislative Procedures 251 4. The Principle of Subsidiarity 252 a. Procedural Standard: Subsidiarity as a Political Safeguard of Federalism 253 b. Substantive Standard: Subsidiarity as a Judicial Safeguard of Federalism 256 Conclusion 259 Further Reading 261 8 External Powers: Competences and Procedures 263 Introduction 263 1. The External Competences of the Union 265 a. The Common Foreign and Security Policy 267 b. The Union s Special External Powers 268
xiv Detailed Contents c. The Residual Treaty Power: From ERTA to Article 216 270 aa. ERTA and the Doctrine of Implied Powers 270 bb. Article 216: Codifying ERTA? 272 d. The Relationship between the CFSP and the Special Competences 273 2. The Nature of External Competences 276 a. The Sui Generis Nature of the CFSP Competence 276 b. Article 3(2): Subsequently Exclusive Treaty Powers 278 aa. Three Lines of Exclusivity: Codifying Constitutional Practice? 278 bb. Subsequent Exclusivity: A Critical Analysis 279 3. External Decision-making Procedures 280 a. The Specificity of CFSP Decision-making Procedures 281 aa. Institutional Actors and Institutional Balance 281 bb. Voting Arrangements in the Council 282 b. The Union s (Ordinary) Treaty-making Procedure 283 aa. Initiation and Negotiation 284 bb. Signing and Conclusion 286 cc. Modification, Suspension (and Termination) 288 dd. Union Succession to Member State Agreements 289 4. Sharing External Power: Constitutional Safeguards of Federalism 290 a. Mixed Agreements: An International and Political Safeguard 291 b. The Duty of Cooperation: An Internal and Judicial Safeguard 293 aa. Member States as Trustees of the Union 295 bb. Reversed Subsidiarity: Restrictions on the Exercise of Shared State Power 296 Conclusion 298 Further Reading 300 9 Executive Powers: Competences and Procedures 302 Introduction 302 1. Governmental Powers: The Union s Dual Executive 304 a. The Legal Instruments of Political Leadership 305 b. The Informal Procedure(s) of Government 307 2. Law-making Powers: Delegated and Implementing Acts 309 a. The Delegation of Legislative Power: Article 290 311 aa. Judicial Safeguards: Constitutional Limits to Delegated Acts 313 bb. Political Safeguards: Control Rights of the Union Legislator 315 b. The Conferral of Executive Power: Article 291 318 aa. The Scope of Article 291 318 bb. Constitutional Safeguards for Implementing Legislation 321 c. Excursus: Delegating Implementing Power to Agencies 324 3. Administrative Powers I: Centralised Enforcement 327 a. The Scope of the Union s Administrative Powers 328 b. Administrative Powers and the Subsidiarity Principle 331
Detailed Contents xv 4. Administrative Powers II: Decentralised Enforcement 334 a. The Effects of National Administrative Acts 335 b. National Administrative Autonomy (and its Limits) 336 Conclusion 340 Further Reading 341 10 Judicial Powers I: (Centralised) European Procedures 343 Introduction 343 1. Annulment Powers: Judicial Review 347 a. The Existence of a Reviewable Act 349 b. Legitimate Grounds for Review 350 aa. Formal and Substantive Grounds 351 bb. In Particular: The Proportionality Principle 352 c. Legal Standing before the European Court 354 aa. The Rome Formulation and its Judicial Interpretation 355 bb. The Lisbon Formulation and its Interpretative Problems 359 d. The Indirect Review of European Law 363 aa. Collateral Review: The Plea of Illegality 363 bb. Indirect Review through Preliminary Rulings 364 2. Remedial Powers: Liability Actions 365 a. Procedural Conditions: From Dependent to Independent Action 366 b. Substantive Conditions: From Schöppenstedt to Bergaderm 368 3. Adjudicatory Powers I: Enforcement Actions 370 a. Enforcement Actions against Member States 371 aa. The Procedural Conditions under Article 258 371 bb. Judicial Enforcement through Financial Sanctions 373 b. Enforcement Actions against the Union: Failure to Act 375 4. Adjudicatory Powers II: Preliminary Rulings 377 a. Paragraph 1: The Jurisdiction of the European Court 378 b. Paragraph 2: The Conditions for a Preliminary Ruling 380 aa. Who : National Courts and Tribunals 380 bb. What : Necessary Questions 382 c. Paragraph 3: The Obligation to Refer and Acte Clair 385 d. The Legal Nature of Preliminary Rulings 388 Conclusion 391 Further Reading 392 11 Judicial Powers II: (Decentralised) National Procedures 394 Introduction 394 1. The (Consistent) Interpretation Principle 399 2. The Equivalence Principle 401 a. Non-discrimination: Extending National Remedies to European Actions 401 b. Similar Actions: The Equivalence Test 402
xvi Detailed Contents 3. The Effectiveness Principle 404 a. The Historical Evolution of the Effectiveness Standard 404 aa. First Period: Judicial Restraint 405 bb. Second Period: Judicial Intervention 406 cc. Third Period: Judicial Balance 408 b. Procedural Limits to the Invocability of European Law 410 4. The Liability Principle 413 a. State Liability: The Francovich Doctrine 414 aa. The Three Conditions for State Liability 417 bb. State Liability for Judicial Breaches of European Law 420 b. Private Liability: The Courage Doctrine 422 Conclusion 425 Further Reading 426 12 Judicial Powers III: EU Fundamental Rights 429 Introduction 430 1. The Unwritten Bill of Rights: Human Rights as General Principles 431 a. The Birth of EU Fundamental Rights 432 aa. The European Standard An Autonomous Standard 434 bb. Limitations, and Limitations on Limitations 437 b. United Nations Law: External Limits to European Human Rights? 439 2. The Written Bill of Rights: The Charter of Fundamental Rights 442 a. The Charter: Structure and Content 443 aa. (Hard) Rights and (Soft) Principles 444 bb. Limitations, and Limitations on Limitations 446 b. Relations with the European Treaties (and the European Convention) 448 3. The External Bill of Rights: The European Convention on Human Rights 450 a. The Convention Standard for Union Acts 452 aa. Before Accession: (Limited) Indirect Review of Union Acts 452 bb. After Accession: (Full) Direct Review of Union Acts 454 b. Union Accession to the European Convention: Constitutional Preconditions 455 4. The Incorporation Doctrine : EU Fundamental Rights and National Law 457 a. Incorporation and General Principles: Implementation and Derogation 457 b. Incorporation and the Charter of Fundamental Rights 460 aa. General Rules for All Member States 460 bb. Special Rules for Poland and the United Kingdom 464
Detailed Contents xvii c. Incorporation and the European Convention on Human Rights? 466 d. Excursus: Incorporation and Individuals Human Rights and Private Actions 467 Conclusion 468 Further Reading 469 Part III Substantive Law A Internal Market 471 13 Free Movement of Goods I: Negative Integration 473 Introduction 474 1. Negative Integration: Jurisdictional Questions 475 a. Personal Scope: State Measures and Private Party Actions 477 b. Material Scope: Discrimination and Restriction Tests 480 c. Constitutional Limits I: De Minimis and Remoteness 483 d. Constitutional Limits II: Purely Internal Situations 484 2. Fiscal Barriers: Customs Duties and Discriminatory Taxation 486 a. Fiscal Barriers I: Customs Duties and Equivalent Charges 486 aa. Article 30: An Absolute Prohibition 487 bb. Objective Justifications 490 b. Fiscal Barriers II: Discriminatory Taxation 492 aa. Paragraph 1: Discrimination against Similar Foreign Goods 494 bb. Paragraph 2: Protection against Competing Foreign Goods 496 3. Regulatory Barriers I: Prohibitions 499 a. Quantitative Restrictions on Imports: Article 34 499 aa. First Period: Dassonville and Trading Rules 500 bb. Second Period: Cassis and Product Requirements 502 cc. Third Period: Keck and Selling Arrangements 504 dd. Fourth Period: Italian Trailers and Consumer Restrictions 506 b. Quantitative Restrictions on Exports: Article 35 508 4. Regulatory Barriers II: Justifications 510 a. General Aspects I: Grounds of Justification 510 b. General Aspects II: Proportionality of National Standards 514 c. In Particular: Consumer Protection and European Standards 516 d. In Particular: Intellectual Property Justifications 518 aa. (Il)legitimate Exercises : The Specific Subject Matter Doctrine 519 bb. The Exhaustion of Rights Doctrine 520 cc. Trade Marks and the Question of Consumer Confusion 522 Conclusion 523 Further Reading 524
xviii Detailed Contents 14 Free Movement of Goods II: Positive Integration 527 Introduction 527 1. Harmonisation Competences I: General Competences 529 a. The Concept of Approximation or Harmonisation 531 b. The Establishment or Functioning of the Internal Market 534 c. Relationship to Other Competences: Article 114(2) and Beyond 538 d. Opting Up : The Derogations in Article 114(4) and (5) 540 2. Harmonisation Competences II: Special Competences 543 a. Tax Harmonisation: In Particular, Article 113 543 b. Intellectual Property Harmonisation: In Particular, Article 118 546 3. Harmonisation Methods: Old and New Approaches 548 a. Harmonisation Methods and Pre-emption Types 550 b. Harmonisation under the Old Approach 552 c. Harmonisation under the New Approach 556 aa. Cassis de Dijon and the New Strategy 556 bb. The New Approach and Horizontal Legislation 558 4. In Particular: The Common Agricultural Policy 561 a. The Old CAP: Vertical Harmonisation 563 aa. Product Support through Common Prices 563 bb. Legislative Pre-emption through Common Market Organisations 565 b. The New CAP: Towards Horizontal Harmonisation 567 Conclusion 569 Further Reading 570 15 Free Movement of Persons: Workers and Beyond 572 Introduction 573 1. Free Movement of Workers 575 a. Personal Scope I: Workers and Quasi-workers 577 aa. Employment: A Minimalist Definition 577 bb. Beyond Employment: Former Workers and Job-seekers 579 b. Personal Scope II: Family Members 581 c. Material Scope: Discrimination and Beyond 583 d. Positive Integration: National Social Security Systems 586 aa. National Coordination: Regulation 883/2004 588 bb. In Particular: The Single Legislation Principle 590 2. Establishment I: Natural Persons 591 a. Negative Integration under Article 49 592 aa. Personal Scope: Self-employed Persons 592 bb. Material Scope: Discrimination and Beyond 593 b. Positive Integration: Mutual Recognition of Professional Qualifications 596
Detailed Contents xix 3. Horizontal Rules: Citizenship and General Justifications 598 a. European Citizenship: A Third Source of Movement Rights 599 b. Citizenship Directive: Substantive Content 602 aa. Residency Rights for Union Citizens (and their Families) 602 bb. Beyond Residency: Equal Treatment 604 c. Horizontal Limitations: Public Policy Justifications 605 d. In Particular: The Public Service Exception 607 4. Establishment II: Companies 610 a. Personal Scope: The Definition of Companies 611 aa. Home State Restrictions and Daily Mail 613 bb. Host State Restrictions and Centros 614 b. Material Scope: Primary and Secondary Establishment 616 aa. Primary Establishment: A Discrimination Test? 617 bb. Secondary Establishment: A Restriction Test 619 c. Letter-box Companies : The Doctrine of Abuse of Rights 620 d. Positive Integration: Article 50(2)(g) and Beyond 624 aa. Harmonisation: Company Law Directives 624 bb. In Particular: European Corporate Forms 626 Conclusion 628 Further Reading 629 16 Free Movement of Services and Capital 631 Introduction 631 1. Services I: General Regime 633 a. Negative Integration: The Prohibition in Article 56 634 aa. Personal Scope I: Beneficiaries and Addressees 634 bb. Personal Scope II: The Concept of Services 636 cc. Material Scope: Discrimination and Beyond 640 b. Positive Integration: The Services Directive 642 2. Services II: Special Regimes 646 a. Service Providers and Posted Workers 646 b. Service Recipients and Public Services 650 3. Capital I: Scope and Nature 654 a. The Direct Effect of Article 63 656 b. The (Elusive) Concept of Capital 659 c. Capital Restrictions: Discrimination and Beyond 661 aa. Non-discriminatory Capital Restrictions 661 bb. Direct Taxation: A Discrimination Test? 664 d. External Limits: Capital and the Other Freedoms 666 aa. Relationship to the Freedom of Establishment 667 bb. Relationship to the Free Movement of Services 669 4. Capital II: Justifications (and Derogations) 670 a. Express Justifications I: Tax Discriminations under Article 65(1)(a) 671
xx Detailed Contents b. Express Justifications II: Article 65(1)(b) 673 c. Implied Justifications: Imperative Requirements 675 d. Special Derogations for Third-country Restrictions 676 aa. Special Grounds of Justification 677 bb. Special Standard(s) of Justification 678 Conclusion 680 Further Reading 681 B Union Policies 683 17 Competition Law I: Private Undertakings 685 Introduction 686 1. Cartels I: Jurisdictional Aspects 688 a. The Concept of Undertaking 689 b. The Single Economic Unit Doctrine 691 c. Forms of Collusion: Agreements and Beyond 693 aa. Agreements I: Horizontal and Vertical Agreements 693 bb. Agreements II: Tacit Acquiescence versus Unilateral Conduct 695 cc. Concerted Practices and Parallel Conduct 697 d. (Potential) Effect on Trade between Member States 699 2. Cartels II: Substantive Aspects 701 a. Restrictions of Competition: Anti-competitive Object or Effect 701 aa. Two Dimensions: Inter-brand and Intra-brand Competition 702 bb. Restrictions by Object: European Per Se Rules 703 cc. Restrictions by Effect: A European Rule of Reason? 705 dd. Non-appreciable Restrictions: The De Minimis Rule 707 b. Article 101(3): Exemptions through Pro-competitive Effects 708 aa. Direct Exemptions under Article 101(3) 709 bb. Exemptions by Category: Block Exemption Regulations 710 c. In Particular: (Horizontal) Cooperation Agreements 713 d. In Particular: (Vertical) Distribution Agreements 714 aa. Exclusive and Selective Distribution Agreements 714 bb. Vertical Block Exemption Regulation 716 3. Dominant Undertaking(s): Market Abuse 717 a. The Market : Product and Geographic Dimensions 718 b. Market Dominance 720 aa. General Considerations 720 bb. Collective Dominance 722 c. Abuse of Market Dominance 724 aa. Article 102[2](a) and Predatory Pricing 726 bb. Article 102[2](b) and Refusal to Supply 727 cc. Article 102[2](c) and Discretionary Pricing 729 dd. Article 102[2](d) and Tying or Bundling 730
Detailed Contents xxi d. Objective Justification: Apparently Abusive Behaviour? 732 4. EU Merger Control 734 a. Judicial Origins: Merger Control by Other Means 735 b. Legislative Foundations: The EU Merger Regulation 737 aa. Jurisdictional Scope: The Union Dimension 738 bb. Substantive Compatibility: Dominance and SIEC Tests 741 cc. Merger Defences: Objective Justifications? 744 dd. National Derogations: Public Policy Justifications 745 Conclusion 746 Further Reading 747 18 Competition Law II: State Interferences 749 Introduction 750 1. Public Undertakings and Public Services 751 a. Public Undertakings (and Undertakings with Special Rights) 752 b. Services of General Economic Interest 755 aa. Public Service Definition(s): BUPA 757 bb. Public Service Obstruction(s): Corbeau 758 2. State Aid I: Jurisdictional Aspects 760 a. The Concept of State Aid 761 aa. State Aid and State Resources Alternative or Cumulative Conditions? 763 bb. The (Wide) Concept of State Resources 765 cc. Economic Advantage versus Economic Compensation 767 b. Selectivity of the Aid 770 aa. Material Dimension: Selectivity as Special Favours 770 bb. Geographic Dimension: National or Regional Frame? 772 3. State Aid II: Substantive Aspects 774 a. Automatic Justifications: Article 107(2) 774 b. Discretionary Justifications: Article 107(3) 776 c. In Particular: Regional Aid 778 4. Enforcing EU Competition Law 781 a. Enforcement through the States: Articles 101 and 102 782 aa. Public Enforcement: From Centralised to Decentralised System 782 bb. Private Enforcement: The Role of the (National) Courts 787 b. Enforcement against the States: State Aid 788 aa. New Aid : Powers of the Commission 790 bb. Unlawful Aid : Powers of the Commission (and National Courts) 792 Conclusion 794 Further Reading 795 19 Internal Policies: An Overview 797 Introduction 798 1. Economic and Monetary Policy 799
xxii Detailed Contents a. Economic Policy: Coordinating the Member States 802 aa. The Stability and Growth Pact and Beyond 802 bb. Financial Assistance: Prohibitions and Permissions 805 b. Euro-membership: Differential Integration 807 c. Monetary Policy: Price Stability 810 d. Supervisory Function: Financial Stability 813 2. Social Policy 816 a. Social Policy: Competence and Procedure 817 aa. Union Legislation: Article 153 Scope and Nature 817 bb. Private Legislation : Agreements between Social Partners 819 b. Employment Legislation I: Protection at Work 822 aa. General Principles 822 bb. Atypical Work 824 c. Employment Legislation II: Protection against Dismissal 826 d. In Particular: The Equal Pay Principle 828 aa. Pay Discrimination: Direct and Indirect 830 bb. Beyond Pay: Equal Treatment and Positive Action 832 3. Consumer Protection 833 a. Forming Contracts: The Consumer Rights and Sales Directives 837 b. Policing Contracts: The Unfair Terms Directive 839 c. Policing Business: The Unfair Commercial Practices Directive 841 d. Sanctioning Business: The Product Liability Directive 843 4. (Regional and) Cohesion Policy 846 a. The European Regional Development Fund 849 aa. Objectives and Regions 849 bb. Administrative Principles and Implementation 852 b. The Cohesion Fund 854 Conclusion 856 Further Reading 857 20 External Policies: An Overview 859 Introduction 860 1. Common Commercial Policy 861 a. The Union s CCP Competence: Scope and Nature 863 b. Decision-making and Treaty-making Procedure(s) 868 c. Tariff and Trade Agreements: Multilateral and Bilateral 869 aa. The WTO Agreement: Structure and Content 869 bb. Bilateral Trade Agreements of the Union 871 d. (Autonomous) Liberalisation and Protection Measures 871 2. Development Cooperation 875 a. Development Policy: General Relations 876 aa. (Indirect) Development Cooperation under the Common Commercial Policy 876 bb. From Trade to Aid: Direct Development Policy 879
Detailed Contents xxiii i. Constitutional Foundations: The Development Cooperation Competence 879 ii. Legislative Foundations: The Development Cooperation Instrument 882 b. Development Policy: Special Relations 883 aa. Associating ACP Countries: From Lomé to Cotonou 885 bb. The European Development Fund 887 3. Common Foreign and Security Policy 888 a. CFSP: Constitutional Foundations 889 aa. Competence(s), Instruments, Procedures 889 bb. Institutional Infrastructure 891 b. Union Strategies : Words for the World 894 c. From Words to Actions I: CSDP Missions 895 d. From Words to Actions II: Restrictive Measures 898 aa. Restrictive Measures: Competence and Procedure 898 bb. Counter-terrorism Measures and Judicial Review 900 4. Association and Accession 902 a. Constitutional Association: Overseas Countries and Territories 902 b. Contractual Association: Article 217 903 aa. Bilateral Association: The Customs Union with Turkey 904 bb. EFTA Association: The European Economic Area 907 c. Special Association(s): The European Neighbourhood Policy 910 d. Accession: The Union s Enlargement Policy 913 aa. Pre-accession: Eligibility and Admissibility 914 bb. Accession Agreements: Procedural and Substantive Aspects 916 Conclusion 917 Further Reading 918 Appendices 921 1. How to Find the EU Treaties 923 2. How to Find (and Read) EU Secondary Law 926 3. How to Find (and Read) EU Court Judgments 929 4. How to Find EU Academic Resources 933 Index 935
Illustrations 1.1 Historical Evolution of the Union 6 1.2 Pillar Structure of the Old (Maastricht) Union 24 1.3 Dual Treaty Basis before and after Lisbon 36 2.1 Modes of States Integration 49 3.1 Monism and Dualism 78 3.2 Direct Effect 81 3.3 Direct Applicability, Direct Effect and Private Party Actions 89 3.4 Indirect Effect 108 4.1 Pre-emption Types: Field, Obstacle, Rule Pre-emption 135 5.1 Separation of Power Models 151 5.2 Distribution of Seats in the European Parliament (Political Parties) 161 5.3 European Council President: Donald Tusk 171 5.4 Preparatory Committees to the Council 178 6.1 European Commission President: Jean-Claude Juncker 188 6.2 Internal Commission Structure 191 6.3 Structure of the Court of Justice of the European Union 199 6.4 ECJ Chambers 201 6.5 Structure of the European Central Bank 212 7.1 General and Special Competences 234 7.2 Competence Types 237 7.3 Structure of the Union Legislator 245 7.4 Ordinary Legislative Procedure under Article 294 247 7.5 Declining Democratic Representation 250 7.6 Early Agreements through Trilogues 251 8.1 Relationships among Union External Competences 275 9.1 Unitary and Dual Executive 305 9.2 Types of Executive Acts 311 9.3 Comitology as defined by Regulation 182/2011 323 9.4 Federal Enforcement Models 327 10.1 European Court: Powers (Flowchart) 347 10.2 Plaumann Test 358 10.3 Types of Acts under Article 263(4) 361 10.4 Preliminary Rulings under Article 267 383 11.1 Judicial Federalism in Comparative Perspective 396 11.2 Limits on National Procedural Autonomy 398 11.3 Standards of Effectiveness 405 12.1 Inspiration Theory versus Incorporation Theory 436 12.2 Principles and Rights within the Charter 445
List of Illustrations xxv 12.3 Relationship between the Union s Three Bills of Rights 469 13.1 Fiscal Barriers: Summary (Flowchart) 498 13.2 Regulatory Barriers: Summary (Flowchart) 511 14.1 Dual and Cooperative Federalism 549 15.1 Free Movement of Persons: Summary (Flowchart) 576 15.2 Citizenship Provisions - Coverage 601 15.3 Justifications: Summary (Flowchart) 610 17.1 Horizontal and Vertical Agreements 694 17.2 Elements of Article 101 Summary (Flowchart) 712 17.3 Forms of Joint Ventures 713 17.4 Market Structures 722 17.5 Scope of the 1989 Merger Regulation 742 17.6 Merger Tests: Old and New 743 18.1 Elements of Article 107 Summary (Flowchart) 762 18.2 Polish Regional Aid Map 781 18.3 European Competition Network 785 19.1 Inflation Rate within the Eurozone 812 19.2 Social Policy Competence Nature(s) 819 19.3 Structure of the UCP Directive 843 19.4 Cohesion Policy: National Distribution 848 19.5 Structural Funds Eligibility 851 19.6 Cohesion Policy: Implementation Pyramid 853 19.7 Cohesion Fund: Eligibility 855 20.1 CCP Competence Scope and Nature 867 20.2 CFSP Institutional (Sub)Structure 893 20.3 European Neighbourhood 911
Tables 1.1 Structure of the TEU and TFEU 38 5.1 Treaty Provisions on the Institutions 149 5.2 Union Institutions Correlating to Governmental Functions 154 5.3 Distribution of Seats in the European Parliament (Member States) 157 5.4 Standing Committees of the European Parliament 162 5.5 Council Configurations 174 5.6 Weighted Votes System within the Council 180 5.7 Member State Population Sizes 182 6.1 Commission College: Portfolios 189 6.2 (Selected) European Agencies and Decentralised Bodies 196 7.1 Union Policies and Internal Actions 226 8.1 Union External Policies 267 10.1 Judicial Competences and Procedures 346 12.1 Structure of the EU Charter 444 13.1 Internal Market Overview 475 13.2 Free Movement of Goods Details 476 13.3 Market Models and Tests 483 13.4 Justificatory Grounds 513 14.1 Harmonisation Competences 528 14.2 Harmonisation Measures (Selection) 537 14.3 Corporate Tax Rates National Differences 545 14.4 Treaty Title on Agriculture 562 14.5 Common Market Organisations 564 15.1 Free Movement of Persons Overview 574 15.2 Regulation 883/2004 Structure 589 15.3 Directive 2005/36 Structure 597 15.4 Family Members and Other Beneficiaries 604 15.5 EU Company Law Directives (Historical Selection) 626 16.1 Internal Market Overview 633 16.2 Services Provisions Overview 635 16.3 Services Directive Chapter IV 644 16.4 Capital Provisions Overview 656 16.5 Capital Nomenclature 660 16.6 Justification Grounds: General and Special 680 17.1 Competition Rules Overview 688 17.2 Block Exemption Regulations (Selection) 711 17.3 EU Merger Regulation Structure 738
List of Tables xxvii 18.1 Competition Rules Overview 750 18.2 Formal and Informal State Aid Measures (Selection) 778 18.3 Regulation 1/2003 Structure 787 19.1 Internal Policies Overview 798 19.2 Treaty Title on EMU Overview 801 19.3 Differential Integration within EMU 810 19.4 Social Policy Provisions Overview 817 19.5 EU Collective Agreements (Selection) 820 19.6 EU Consumer Measures (Selection) 836 19.7 Cohesion Policy Provisions Overview 847 20.1 External Policies Overview 861 20.2 WTO Annexes 870 20.3 EU Autonomous Measures 872 20.4 DCI Programmes and Budget 883 20.5 EDF Budget Allocation 888 20.6 EU Missions Selection 897 20.7 Enlargement Waves 914 21.1 European Treaties Chronology 924 21.2 European Council Decisions Amending the Treaties 925 21.3 Consolidated Versions of the European Treaties 925 21.4 Main Academic Journals: General and Specific 933 21.5 European Union Law: Specialised Textbooks 934
Table of Cases Contents 1. Court of Justice of the European Union xxviii (a) European Court of Justice: Cases (numerical) xxviii (b) European Court of Justice: Cases (alphabetical) liv (c) European Court of Justice: Opinions (numerical) lxxxiii (d) General Court: Cases (numerical) lxxxiv 2. Other jurisdictions lxxxv (a) European Court of Human Rights: Cases (chronological) lxxxv (b) European Free Trade Association (EFTA): Cases (chronological) lxxxv (c) German Constitutional Court: Cases (chronological) lxxxv (d) United States Supreme Court: Cases (chronological) lxxxvi 1. Court of Justice of the European Union (a) European Court of Justice: Cases (numerical) 8/55, Fédération Charbonnière de Belgique v High Authority of the ECSC, [1955] ECR (English Special Edition) 245 227, 352 9/56, Meroni & Co., Industrie Metallurgische, SpA v High Authority of the European Coal and Steel Community, [1958] ECR 133 324 6 1/58, Stork & Cie v High Authority of the European Coal and Steel Community, [1958] ECR (English Special Edition) 17 432 20/59, Italy v High Authority, [1960] ECR 325 371 30/59, De Gezamenlijke Steenkolenmijnen in Limburg v High Authority of the European Coal and Steel Community, [1961] ECR 1, 235, 765 36/59, 37/59, 38/59 and 40/59, Geitling Ruhrkohlen-Verkaufsgesellschaft mbh, Mausegatt Ruhrkohlen-Verkaufsgesellschaft mbh and I. Nold KG v High Authority of the European Coal and Steel Community, [1959] ECR (English Special Edition) 423 433 6/60, Humblet v Belgium, [1960] ECR (English Special Edition) 559 414 10/61, Commission v Italy, [1962] ECR 1 123 13/61, Kledingverkoopbedrijf de Geus en Uitdenbogerd v Bosch, [1962] ECR 45 782, 787 2/62 and 3/62, Commission v Luxembourg and Belgium, [1962] ECR 425 487 16/62 and 17/62, Confédération nationale des producteurs de fruits et légumes and others v Council, [1962] ECR 471 90, 355 25/62, Plaumann v Commission, [1963] ECR 95 357 8, 360 3, 366
Table of Cases xxix 26/62, Van Gend en Loos v Netherlands Inland Revenue Administration, [1963] ECR (English Special Edition) 1 79, 82 4, 87, 97, 203, 207, 394 28/62 to 30/62, Da Costa and others v Netherlands Inland Revenue Administration, [1963] ECR 31 379, 386 7 31/62 and 33/62, Lütticke and others v Commission, [1962] ECR 501 366 75/63, Hoekstra (née Unger) v Bestuur der Bedrijfsvereniging voor Detailhandel en Ambachten, [1964] ECR 177 379, 577 90/63 and 91/63, Commission v Luxembourg and Belgium, [1964] ECR English Special Edition 625 57, 373 6/64, Costa v ENEL, [1964] ECR 614 14, 75, 120, 235, 379, 383, 385, 746 56/64 and 58/64, Établissements Consten SàRL and Grundig-Verkaufs-GmbH v Commission, [1966] ECR 299 519, 694, 699, 702, 703, 704, 714 18/65 and 35/65, Gutmann v Commission, [1965] ECR 103 352 56/65, Société Technique Minière v Maschinenbau Ulm, [1965] ECR 235 700, 702 3, 705, 707, 714 57/65, Lütticke GmbH v Hauptzollamt Sarrelouis, [1966] ECR 205 493, 494 27/67, Fink-Frucht GmbH v Hauptzollamt München-Landsbergerstrasse, [1967] ECR 223 476, 494 34/67, Firma Gebrüder Luck v Hauptzollamt Köln-Rheinau, [1968] ECR 245 125 6 6/68, Zuckerfabrik Watenstedt GmbH v Council, [1968] ECR 409 90 7/68, Commission v Italy (Art Treasures), [1968] ECR 423 487, 491, 511 13/68, Salgoil v Italian Ministry of Foreign Trade, [1968] ECR 453 86 24/68, Commission v Italy (Statistical Levy), [1969] ECR 193 483, 488, 491 2/69, Sociaal Fonds voor de Diamantarbeiders v S.A. Ch. Brachfeld & Sons and Chougol Diamond Co., [1969] ECR 211 488, 491 5/69, Völk v Vervaecke, [1969] ECR 295 700, 707 9/69, Sayag et al. v Leduc et al., [1969] ECR 329 367 29/69, Stauder v City of Ulm, [1969] ECR 419 433, 435 40/69, Hauptzollamt Hamburg Oberelbe v Bollmann, [1970] ECR 69 140 41/69, ACF Chemiefarma v Commission, [1979] ECR 661 693, 703 48/69, Imperial Chemical Industries v Commission, [1972] ECR 619 697, 703 64/69, Compagnie Française commerciale et financière v Commission, [1970] ECR 221 90 74/69, Hauptzollamt Bremen-Freihafen v Waren-Import-Gesellschaft Krohn & Co., [1970] ECR 451 337 9/70, Grad v Finanzamt Traunstein, [1970] ECR 825 94 11/70, Internationale Handelsgesellschaft mbh v Einfuhr- und Vorratsstelle für Getreide und Futtermittel, [1979] ECR 1125 57, 121, 129 30, 433 15/70, Chevallery v Commission, [1970] ECR 975 376 22/70, Commission v Council (ERTA), [1971] ECR 263 270 1, 279, 350, 351 25/70, Einfuhr- und Vorratsstelle für Getreide und Futtermittel v Köster et Berodt & Co., [1970] ECR 1161 313, 322 39/70, Norddeutsches Vieh- und Fleischkontor GmbH v Hauptzollamt Hamburg-St Annen, [1971] ECR 49 337, 395
xxx Table of Cases 41/70 to 44/70, International Fruit Company and others v Commission, [1971] ECR 411 90, 355 80/70, Defrenne v Belgian State, [1971] ECR 445, 830 5/71, Schöppenstedt v Council, [1971] ECR 975 367, 368, 370 22/71, Béguelin Import Co. v S.A.G.L. Import Export, [1971] ECR 949 692 48/71, Commission v Italy, [1978] ECR 629 125 6 1/72, Frilli v Belgium, [1972] ECR 457 588 6/72, Europemballage and Continental Can v Commission, [1973] ECR 215 717, 718, 725, 735, 742 18/72, Granaria v Produktschap voor Veevoeder, [1972] ECR 1163, 140 21/72 to 24/72, International Fruit Company NV and others v Produktschap voor Groenten en Fruit, [1972] ECR 1219 110, 112, 289, 336 30/72, Commission v Italy, [1973] ECR 161 373 39/72, Commission v Italy, [1973] ECR 101 140 48/72, Brasserie de Haecht v Wilkin-Janssen (II), [1973] ECR 77 700 63/72 to 69/72, Werhahn Hansamühle and others v Council, [1973] ECR 1229 368 76/72, Michel S. v Fonds national de reclassement social des handicaps, [1973] ECR 457 585 77/72, Capolongo v Azienda Agricole, [1973] ECR 611 476, 489 2/73, Geddo v Ente Nazionale Risi, [1973] ECR 865 500 4/73, Nold v Commission, [1974] ECR 491 433, 434, 435, 437, 438 6/73 and 7/73, Istituto Chemioterapico Italiano and Commercial Solvents Corporation v Commission, [1974] ECR 223 725, 728 34/73, Fratelli Variola SpA v Amministrazione delle Finanze dello Stato, [1973] ECR 981 91 39/73, Rewe-Zentralfinanz egmbh v Direktor der Landwirtschaftskammer Westfalen-Lippe, [1973] ECR 1039 492 40/73 to 48/73, 50/73, 54/73 to 56/73, 111/73, 113/73 and 114/73, Coöperatieve Vereniging Suiker Unie UA and others v Commission, [1975] ECR 1663, 698, 703, 720 120/73, Lorenz v Germany, [1973] ECR 1471 791, 793 127/73, Belgische Radio en Televisie (BRT) and others v SABAM and others, [1974] ECR 313 720, 783, 787 152/73, Sotgiu v Deutsche Bundespost, [1974] ECR 153 584, 608, 609 155/73, Sacchi, [1974] ECR 409 651, 753 166/73, Rheinmühlen-Düsseldorf, [1974] ECR 33 382 167/73, Commission v France, [1974] ECR 359 576 169/73, Compagnie Continentale France v Council, [1975] ECR 117 367 181/73, Haegemann v Belgium, [1974] ECR 449 109, 378 192/73, Van Zuylen frères v Hag AG, [1974] ECR 731 511, 522 2/74, Reyners v Belgium, [1974] ECR 631 86, 476, 592, 594, 607, 608 8/74, Procureur du Roi v Dassonville, [1974] ECR 837 476, 500, 501, 503, 504 9/74, Casagrande v Landeshauptstadt München, [1974] ECR 773 228 9, 582