Content of the course

1. Content of the course • EU law & internal market 1.1. EU 1.2. EU law 1.3. Free movement 1.4. State aid (106 & 107 TFEU) • EU Competition law (introduction) • Abuse of a dominant position (Art. 102 TFEU) • Restrictive multilateral practices (Art. 101 TFEU) • EU Merger control (the Merger Regulation)

2. 1.1. EU: general functions Over the years, the EU has acquired many different functions: economic + social + political + security In economic terms, the EU: • facilitates the creation of the internal market (IM) • co-ordinates the internal workings of the IM + tries to deal with policy & technical differences between MSs • supervises MSs so they don’t harm the IM & EU citizens from other MS • supports economic cohesion & economic progress mostly via EU funding mechanisms

3. EEC→EC→EU 1951 European Coal and Steel Community 1957 European Atomic Energy Community 1957 European Economic Community (EEC) ↓ 1992 EU → EEC renamed European Community EC + ECSC+ EURATOM = European Communities European Communities = I pillar of the EU Common Foreign and Security Policy = II pillar of the EU Justice and Home Affairs/Police and Judicial Co-operation in Criminal Matter = III pillar of the EU ↓ since 2007 there is only the EU (no more EC/pillars/Communities)

4. economic integration Economic integration was supposed to create a common market ↓ a single market since 1993 = Internal Market term used since about 2000 but now largely interchangeably with ‘single market’ 1/1/1993 - completion of the single market 1993 – creation of the Economic and Monetary Union (Maastricht) 1997 – physical borders eliminated in the Schengen area (Amsterdam) but some areas are still not integrated 2000-ish – single markets => internal market A further level of integration was talked about - home market (single currency, harmonised tax system, integrated infrastructure, complete freedom of movement for people) but it never moved forward

5. EU policy & law makers Overall policy directions & EU’s supervision: European Council (President of the European Council (currently Donald Tusk) + President of the Commission + national heads of states ≠ Council of Europe(unrelated to the structures of the EU) focused on human rights EU law making: • European Parliament (represents EU citizens) • the ‘Council’ of the EU also known as Council of Minister (made up of national politicians = members of MSs’ governments) 6 month rotational Presidency: current Austria from33 July to December 2018 ; followed by Romania, Finland and Croatia • European Commission(represents EU interests)current President Jean-Claude Juncker

6. European Commission sometimes called the government of the EU • Proposes EU laws • Enforce EU laws • Sets EU objectives (work programme) • Manages EU policies and BUDGET • Represent the EU internationally 28 MSs -> 28 Commissioners: 1 Pres, 7 Vice-Pres, 20 Comm President of the Commission -> elected by the European Parliament on proposal of the European Council (qualified majority) 23000 staff -> some work in administrative services (eg HR), the rest in 33 specialised departments known as DGs (Directorates-General) responsible for a particular policy area, headed by a Director-General, NOTE: DG COMP currently headed by Margaret Vestager ; DG IM by ElzbietaBienkowska

7. EU competences • EU has exclusive competence only in 6 areas Article 3 TFEU eg: Customs Union • shared competences with its MSs in most areas Article 4TFEU eg: Internal Market • supporting, co-ordinating, complementary competences in some areas Article 2(5) TFEU eg: education • many issues remain in the sole competence of MSs the EU can act only in areas specified in the Treaties

8. Management of: the customs union, made up of an internal free trade zone between members who apply the same European customs duties (taxes) to goods coming into the EU zone, regardless if they are being imported into Ireland or Estonia. the economic and monetary policy of EU exclusive competences ONLY the EU can legislate • customs union! (pre-condition for free movement of goods) • creation of competition laws necessary for the functioning of the internal market incl. EU state aid rules– DG IV for Competition has primary competence for ECL enforcement • monetary policy for the ‘Euro’ zone • a common position in international trade negotiations eg WTO trade rounds, as part of a common international trade policy • common fisheries policy • + some international agreements Article 3(2) TFEU R&D, space and humanitarian aid - no limitation on parallel actions by EU & MSs Article 4(3-4) TFEU

9. Shared competences Article 2(2) TFEU MSs can act to the extent that the EU has not acted with respect to shared competences • Internal market • social policy • cohesion • agriculture and some issues concerning fisheries • environment • consumer protection • transport • trans-European networks • energy • area of freedom, security & justice • common safety for public health

10. EU principles: competences Art. 5 (1) TEU: The limits of [EU] competences are governed by the principle of conferral. The use of [EU] competences is governed by the principles of subsydiarityand proportionality. • Art. 5 (2) TEU CONFERAL: existing EU competences were given to it by MSs (= ‘attributed’ competences) => the EXISTENCE of EU competences depends on MSs • Art. 5(3) TEU & Art. 5(4) TEU: imposes a duty on the EU to use SUBSYDIARITY & PRPORTIONALITY with respect to the way in which the EU EXERCISES its competences

11. subsydiarity & proportionality Art. 5 (3) TEU SUBSYDIARITY: in areas of shared competences, the EU [acts only IF and IN SO FAR as the sought] objectives of the proposed action cannot be sufficiently achieved by MSs, either at central level or at regional and local level, but can rather, by reason of the scale or effects of the proposed action, be better achieved at EU level(than at national/local level). Art. 5 (4) TEU PROPORTIONALITY: the content + form of EU action shall not exceed what is necessary to achieve the objectives of the Treaties. Three-part test: 1) is the measure suitable to achieve a legitimate aim, 2) is it necessary to achieve that aim or are less restrictive means available, and 3) does it have an excessive effect on the applicant's interests

12. EU principles: other Art. 2 TEU LEGAL CERTAINTY + EQUALITY BEFORE THE LAW + FUNDAMENTAL HUMAR RIGHTS The [EU] is founded on the values of respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities. These values are common to the Member States in a society in which pluralism, non-discrimination, tolerance, justice, solidarity and equality between women and men prevail. • Art. 15 TFEU TRANSPARENCY(1) In order to promote good governance and ensure the participation of civil society, [EU institutions etc] shall conduct their work as openly as possible. [...] Any citizen of the Union, and any natural or legal person residing or having its registered office. [ = all EU entities], shall have a right of access to documents of the Union's institutions

13. 1.2. EU law – application vs. enforcement • EU law must be complied with (APPLIED) by those entities to which it is applicable = entities ‘subject’ to EU law • EU law can be applicable to (addressed to): • MSs and/or the EU (its institutions) • INDIVIDUALS(people and/or companies/associations etc) • If those subject to EU law do not apply it (not at all, not well enough, not in the prescribed time frame or manner) EU law can be ENFORCED(its application will be ‘forced upon’ them) bycompetent public authorities or sometimes even private parties(public enforcement vs. private enforcement) • Enforcement can take place before the EU Commission & EU Courts as well as before national courts of EU MSs

14. EU Law: supremacy EU LAW is a (supranational) legal system which applies (+ is enforced) alongside the laws of its 28 MSs According to the EU courts (but that rules is not stated in the TFEU/TEU!), if a conflict arises between EU and MS law, EU law overrides (takes precedence over) MSs’ laws = Supremacy/Primacy of EU law) NOTE: National courts tend to accept this principle but on the basis of their own constitutions rather than on the basis of CJEU jurisdiction. Some, eg Poland, expressly reject this rule with respect to their national constitution

15. Direct effect EU law has direct effect in its MSs = direct effect of EU Law DIRECT EFFECT – EU law can grant rights/ impose duties without ‘implementation’ into MSs laws – if its rules are precise, clear & unconditional Full direct effect contains: Horizontal direct effect: individuals/companies can rely on EU rules against each other (some rules in the Treaties + EU Regulations if they are precise, clear & unconditional). Vertical direct effect – individuals/companies can rely on EU rules against MSs if they were adversely affected by failure to comply/ failure to implement/ bad implementation (rest of Treaties; EU Regulations; Directives + Decisions addressed to MSs )

16. Primary EU law • 1951 Treaty establishing the European Coal and Steel Community: ECSC Treaty (Paris) • 1957 Treaty establishing the European Atomic Energy Community: EAEC Treaty (Rome) • 1957 Treaty establishing the European Economic Community (EEC Treaty = Rome Treaty) → renamed in 1992 = Treaty on the European Community (TEC) = → renamed in 2007 = Treaty on the Functioning of the European Union (TFEU) • 1992 Treaty on the European Union (TEU) Major amendments: Treaty of Amsterdam (renumbered) 1995 Treaty of Niece (mainly institutions) 2001 Treaty of Lisbon 13/12/07 signed, 1/12/09 entry into force

17. CURRENT Primary EU law Treaty on European Union (TEU) • 1992 Maastricht Treaty as amended by the Lisbon Treaty • EU decision-making, foreign and security policy, institutions Treaty on the Functioning of the European Union (TFEU) • EEC Treaty, re-named in 1992 TEC, amended/renamed in Lisbon • EU substantive law incl. freedoms, competition rules Charter of Fundamental Rights • gained primary EU law status with the entry into force of the Lisbon Treaty (originally from Niece 2000) [special protocol for Poland/UK]

18. Secondary legislation Secondary EU law = legal acts issued by EU institutions on the basis of the Treaties on all matters within the EU competence BINDING: • Regulations • Directive • Decisions  NON-BINDING (soft law) : • Recommendations • Opinions • Notices & Guidelines

19. EU Regulations • hard to create (difficult legislative process) and so, not as many as other types of legislative acts • obligatory in all their elements • directly applicable at least vertically (can also have horizontal direct effect) • self-executing contain their own procedural rules (no transposition) Eg: Regulation 1/2003 on the implementation of Article 81 & 82 TEC [now 101 & 102 TFEU] (procedural); Merger Regulation of 2004 (material & procedural)

20. EU Directives • addressed to all MSs (aside from agriculture) • only binding to their addresses • require MSs to achieve a particular goal/result without dictating the means to do so • have a timetable for implementation = transposition • if a MS fails to properly implement a Directive = fails to achieve its goals (eg: fails to issue appropriate national rules, new rules do not comply with the Directive; the MS fails to enforce its rules) the Commission may initiate legal action against a MS before the EUCJ • vertical direct effect (individuals/companies vs. MSs) after the date of transposition has passed Eg: Television without Frontiers Directive TWFD 1989

21. EU Decisions • binds only its addressee (MS, companies or individuals) • the legislative procedure for their adoption varies depending on the subject • Commission can issue decisions single handily in some areas, such as competition policy • Common uses: competition matters & day-to-day agricultural matters (eg setting prices) • can have a very strong impact on the IM despite being ‘binding’ to its addresses only Eg: action for non-compliance against a MS

22. Soft law • Recommendation= non-binding act; negotiated and voted on according to the appropriate procedure; carry a lot of political weight • Opinion = to ensure the proper functioning and development of the common market, the Commission can formulate recommendations or deliver opinions on matters dealt with in this Treaty, if it expressively so provides or if the Commission considers it necessary.  • Other:Communication/Notices/Guidelines = closely resembles Recommendation but not cited in the Treaty

23. EU judiciary (courts) Court of Justice of the EU = 1) Court of Justice [CJ] (ex European Court of Justice = ECJ) 2) General Court [GC] (ex Court of First Instance = CFI) + 3) Civil Service Tribunal Key roles of CJEU:1st & 2nd instance courts binding interpretation of EU law (mostly through ‘preliminary questions’ sent by national courts facing problems with the interpretation of EU law)

24. acquis ‘Acquis communautaire’ = all of EU law Constantly evolving binding body of common rights and obligations: • content, principles and political objectives of the TFEU & TEU; • legislation adopted pursuant to the TFEU & TEU and the case law of the Court of Justice; • declarations and resolutions adopted by the EU: • instruments under the Common Foreign and Security Policy; • international agreements concluded by the EU and those entered into by the MSs among themselves within the sphere of the EU's activities. Applies in parallel to the entirety of the legal regimes of the 28 EU Member States (MSs)

25. Internal Market & TFEU Article 26 TFEU 1. The Union shall adopt measures with the aim of establishing or ensuring the functioning of the IM... 2. The IM shall comprise an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured... + (3) Protocol No27: ‘ON THE INTERNAL MARKET AND COMPETITION’: the Internal Market ... includes a system ensuring that competition is not distorted, ... to this end, the [EU] shall, if necessary, take action under the provisions of the Treaties... Internal market= the (EU) market without internal barriers + the law of the Internal Market

26. EU law of the internal market 1) Free movement rules (addressed to MSs & the EU) • Art. 28-37 TFEU (goods) • Art. 45-55 TFEU (people: • workers (also addressed to individuals) • establishment • Art. 56-62 TFEU (services) • Art. 63-66 TFEU (capital) 2) SGEI & State aid rules (addressed to MSs) • Art. 106 TFEU (ex 86 TEC) • Art. 107 TFEU (ex 87 TEC) 3) EU Competition law (addressed to all economic entities) • Art. 101 (ex 81 TEC) • Art. 102 (ex 82 TEC) • Merger Regulation 2004

27. 1.3. free movement Free movement of GOODSArticle 28-37 TFUE Free movement of PEOPLEcontains: free movement of workersArticle 45-48 TFUE freedom of establishmentArticle 49-55 TFUE Free movement of SERVICESArticle 56-62 TFUE Free movement of CAPITALArticle 63-66 TFUE These rules apply to CROSS-BORDER RELATIONS only -> purely national situations are not covered

28. Non-discrimination Art. 18 The 4 freedoms of the IM(lex specialis)areclosely related to the general EU principle of non-discrimination due to nationality(lex generalis) Article 18 TFEU: Within the scope of application of the Treaties, and without prejudice to any special provisions contained therein, any discrimination on grounds of nationality shall be prohibited. but … MSs can apply reverse discrimination (treat their ‘own’ worse than those from other MSs)

29. Assessment of discrimination Assessing the accordance of national provisions with EU ‘free movement’ principles: 1) look for ‘harmonisation’ = acts of secondary EU law on specific issues such as a given industry sector or even given business activity eg Television without Frontiers Directive 2) If no harmonisation, apply TFEU rules on the 4 freedoms of the IM – see if the given activity falls under free movement of ‘goods’, ‘people’ or ‘capital’ and, last, ‘services’ 3) If not applicable, apply Article 18 TFEU (general prohibition of discrimination on grounds of nationality)

30. 1.3.1. Free movement of goods What does the right cover? • EU GOODS • GOODS CIRCULATING LEGALLY IN THE EU Who does the obligation apply to? • MSs • EU What obligations does the right encompass? • CUSTOMS UNION; • CUSTOMS DUTIES & SIMILAR; • DISCRIMINATORY/PROTECTIONIST TAXATION; • QUANTITATIVE RESTRICTIONS & SIMILAR What are the limitations? • ART.36 TFEU • MANDATORY REQUIREMENTS (CASSIS)

31. What does the right cover? Functional definition of GOODS: • anything that can be traded • with commercial value • physical items: bananas, whiskey, vitamins, DVDs, artwork • incorporeal goods: water, electricity, gas, transmission rights, patents but ≠ transmission of electricity or television broadcasting = services • goods with negative value: waste Free movement of goods covers only: 1)Article 28 TFEU:goods originating in the EU(its MSs) - made completely inside the EU or made from ingredients/commponents in free circulation in the EU 2)Article 29 TFEU:goods from 3rd countries already in freecirculation in a MSs(legally introduced onto a MS market) Council Regulation 2913/92 – contains specific rules on the qualification of ‘goods’ incl. those that were processed rather than created in the EU – general rule states that decisive is the place of last economically important processing

32. Who does the obligation apply to? Free movement rules impose major obligations on • MSsand its organs/representatives = all those that are related to the exercise of public power such as: border forces, tax offices or local governments • Actions of MSs organs, administration, government and its representatives – binding and non-binding; legal and ‘factual’ eg Italian art case • Inaction of MSs eg Spanish strawberries case • the EU and its organs

33. What does this rule cover? 1) Creation of the customs union(did not happen until 1/1/1970 (controls until 1993) Regulation 2913/92 establishing the Community Customs Tariff 2) Prohibition of new customs duties and charges with equal effects 3) Prohibition of discriminatory & protective taxation=> what is/is not similar 4) Prohibition of quantity restrictions and measures of equal effect

34. customs union Article 28 TFEU: The EU shall comprise a customs union which shall cover all trade in goods and which shall involve the prohibition between MSs of customs duties on imports and exports and of all charges having equivalent effect, and the adoption of a common customs tariff... No internal customs duties & eqivalent charges Common EU customs tariff – Regulation 2913/92 establishing the Community Customs Tariff No physical and legal barriers to move goods in the EU NOTE: EU has no customs administration of its own (and until recently had no EU border authorities; Regulation 2016/1624 establishing the European Border and Coast Guard Agency (Frontex) created Frontex due to the deepening emmigrant crisis) 34

35. customs duties/equicalent charges Customs duties standstil until 31/12/1969 Since 1/1/1970 - MS must eliminate all forms of fiscal measures hindering free movement of EU goods Article 30 TFEU: MSs are prohibited from imposing/must eliminate existingcustom duties & charges with equivalent effects– covering import & export taxes custom duties & charges with equivalent effects= • one-sided by a MS • fiscal (monetary) measure • for cross-border movement of goods (import/export) Eg Case 7/68 Com v. Italy (statistical levy for export of art goods)

36. Internal taxation Article 110 TFEU:MSs are prohibited from imposing/must eliminate existinginternal discriminatory or protectionistic taxation = MSs are not allowed to internally tax similar goods differently just because they originate elsewhere in the EU SIMILARITY • can be classified the same way for customs, taxation or statistical reasons • Fulfil the same customer requirements ie can be used interchangeably Eg: Case 170/79 European Commission v. UK – wine v. beer Case 168/78 Commission v. France – wiskey v.cognac 36

37. quantity restrictions • Articles 34-37 TFEU: MSs are prohibited from imposing /must eliminate existingquantity restrictions or equivalent measures which stop imports from within the EU, make them more difficult or more expensive = eliminate/ limit size, scale, value, time frame of imports (& exports) • MS INACTION or MS ACTION Eg: Case 178/84 Com v. Germany - German beer case based on rules from 1516 37

38. MEQR What are measures equivalent to quantity restrictions ? • All trading rules which can hinder, directly or indirectly, actually or potentially internal trade = all NON-FISCAL physical and technical TRADE BARRIERS DassonvilleCase 8/74 (Scottish whiskey) –> Definition of ‘measure equivalent to quantity restrictions’ (MEQR) is extremely wide and contains any national measures that are discriminative in legal and/or actual terms

39. What are the limitations? Article 36 TFEU: allowsMS to prohibit/restrict free movement for the following reasons: • public morality, public policy or public security • health & life of humans, animals or plants • protection of national treasures • protection of industrial and commercial property Restrictionscan be discriminatory(apply only to foreign goods) or not(apply to all goods foreign and domestic) buttheycannot amount to arbitrary discrimination or a disguised trade restriction = must be NECESSARY + ADEQUATE + PROPORTIONATE Eg Case 121/85 Conegate (Love-Love Dollcase) Case C-97/97 DitlevBluhme (Danishbeecase)

40. Mandatory requirements Cassis de DijonCase120/78: it is sometimes justifiable to restrict free movement of goods for other reasons than those specified in the TFEUsuch as consumers but ... the restriction in this case were not justified!!! ECJ clarified in Cassis that aMEQR can be justified by, for example (open list, other issues can be added): • public health • effectiveness of taxation • fairness of commercial transaction • consumer protection = the so-called MANDATORY REQUIREMENTS but only if truly needed and applied in a non-discriminatory manner to all EU goods (national and goods from other MSs) (this limitations is thus less severe than the restrictions based on Art 36 TFEU which can cover also discriminatory restrictions)

41. 1.3.2. Free movement of people Free movement of people comprises: Free movement of workers + Freedom of establishment • EU citizens are free to workin the entire EU on the same conditions as ‘locals’ = prohibition of discrimination with respect to employment and starting up of a business • Free movement of people does NOT apply to activities connected with the exercise of state powers • Free movement of people can be limited by MSs for reasons of public policy, security and health • In order for the free movement of people to be effective, the EU issues many acts of secondary legation (harmonisation initiatives) concerned with social security measures, benefits and recognition of qualification

42. 1.3.2. Free movement of ‘workers’ Whohas the right? • MIGRATING WORKERS • JOB SEEKERS Whatdoes the rightcover? • NO DISCRIMINATIONIN GETTING A JOB, PAY or OTHER CONDITIONS Whatare the limits? • PUBLIC POLICY, SECURITY & HEALTH • EXERCISE OF STATE AUTHORITY is not covered at all Whatare the guarantees? • FULL DIRECT EFFECT! 42

43. Who has the right? WORKERS = employees and JOB SEEKERS • wide definition including part-timers, students etc; employed on any legal basis; scale of work and pay is relevant but not determinant; the ‘PAY’ does not have to be monetary • pursues an effective and genuine economic activity,cannot be marginal or ancillary,for someone else & under supervision Families (spouses + dependents): right to employment & education – generally same rights as EU workers for those who are also EU citizents – less rights for non EU family members

44. What does the right cover? (a) get a job & look fora job (job seeking) (b) move freely for work - the only condition here is to have an ID (in the past: show ID) (c) stay in the MS for a job (same rules as ‘locals’) • Short term stay [<3 months] no obligations for person or MS • Long term stay [>3 months] for all with the status of a worker – might need to register • Indefinite stay [> 5 years] for all with a status of worker in that MS and their families (d) remain after the job ended All those rights are to be applied under the non-discrimination on the basis of nationality rule!

45. What can justify a limitation? Article 45(3) TFEU: Free movement of workers can be restricted on grounds of • public policy & public security due to personal conduct not economic reasons • or public healthonly due to listed conditions eg TB Article 45(4) TFEU:Free movement of workers does not apply to activities connected withthe exercise of state powers (where ‘allegiance to the state’ is needed to safeguard public interests of the state) EG: Case 41/74 Van Duyn : Case 115 & 116/81 Adoui and Cornuaille v. Belgium

46. What are the guarantees? Article 45(2):Prohibition of discrimination of workers due to nationality in the EU has FULL DIRECT EFFECT The free movement of workers rule gives a direct right to individuals to sue not only a MS for the action/inaction of all its representatives but also to sue PRIVATE EMPLOYERS/potential employers if they have discriminated against them (in favour of a ‘local’ person!!! 46

47. Additional guarantees In order for the free movement of people to be effective it was necessary to • coordinate social security measures – especially pensions & benefits – for workers and their families as well as those retired & self-employed persons (Article 48 TFEU) • Introduce territorial jurisdiction • Apply equal treatment rules (non-discrimination) • Allow accumulation of employment time for pensions/benefits • Harmonised recognition of professional qualification: Dir 2005/36/EC of 7/9/05 on the recognition of professional qualifications

48. 1.3.2. Freedom of establishment Whohas the right? • EU INDIVIDUALS • FIRMS FROM ALL EU MSs Whatdoes the rightcover? • FREEDOM TO SET UP AN ECONOMIC ACTIVITY IN ALL MSs Whatare the limits? • PUBLIC POLICY, SECURITY & HEALTH • EXERCISE OF PUBLIC AUTHORITY is not covered at all Whatare the guarantees? • PROHIBITION OF DIRECT/ INDIRECT DISCRIMINATION 48

49. Who has the right? • EU INDIVIDUALS!!! • COMPANIES & FIRMS established in an EU MSs according to the laws of which they were formed + having their registered office, central administration or principal place of business within the Union (companies or firms created under civil or commercial law, including cooperative societies, and other legal persons governed by public or private law) NOTE: non-profit-making organisationssuch as trade unions or charities are NOT seen as companies Primary freedom of establishment = start an economic activity where ever you want in the EU (a company = move HQ) Secondary freedom of establishment = keep existing activity in an EU MS and open up a branch in another MS

50. What type of economic activity? Freedom to set up/move to a different MS of an economic activity carried out in a stable and continuous way in one/more MS in the form of: • setting-up of agencies, branches or subsidiaries • self-employment • setting up/managing undertakings • + ANCILIARY RIGHTS eg: buy properties, apply for concessions This rule applies to cross border moves only Applicable laws of the MS of establishment :companies established in a MS cannot transfer their central management/control to another while retaining their ‘original’ status