Subsidiarity between Law and Economics. Research Papers in Law, 1/2005

From the Introduction. The present contribution is an attempt to raise awareness between the 'trenches' by juxtaposing the two approaches to subsidiarity. Subsequently, I shall set out why, in economics, subsidiarity is embraced as a key principle in the design and working of the Union and how a functional subsidiarity test can be derived from this thinking. Throughout the paper, a range of illustrations and examples is provided in an attempt to show the practical applicability of a subsidiarity test. This does not mean, of course, that the application of the test can automatically "solve" all debates on whether subsidiarity is (not) violated. What it does mean, however, is that a careful methodology can be a significant help to e.g. national parliaments and the Brussels circuit, in particular, to discourage careless politicisation as much as possible and to render assessments of subsidiarity comparable throughout the Union. The latter virtue should be of interest to national parliaments in cooperating, within just six weeks, about a common stance in the case of a suspected violation of the principle. The structure of the paper is as follows. Section 2 gives a flavour of very different approaches and appreciation of the subsidiarity principle in European law and in the economics of multi-tier government. Section 3 elaborates on the economics of multi-tier government as a special instance of cost / benefit analysis of (de)centralisation in the three public economic functions of any government system. This culminates in a five-steps subsidiarity test and a brief discussion about its proper and improper application. Section 4 applies the test in a non-technical fashion to a range of issues of the "efficiency function" (i.e. allocation and markets) of the EU. After showing that the functional logic of subsidiarity may require liberalisation to be accompanied by various degrees of centralisation, a number of fairly detailed illustrations of how to deal with subsidiarity in the EU is provided. One illustration is about how the subsidiarity logic is misused by protagonists (labour in the internal market). A slightly different but frequently encountered aspect consists in the refusal to recognize that the EU (that is, some form of centralisation) offers a better solution than 25 national ones. A third range of issues, where the functional logic of subsidiarity could be useful, emerges when the boundaries of national competences are shifting due to more intense cross-border flows and developments. Other subsections are devoted to Union public goods and to the question whether the subsidiarity test might trace instances of EU decentralisation: a partial or complete shift of a policy or regulation to Member States. The paper refrains from an analysis of the application of the subsidiarity test to the other two public functions, namely, equity and macro-economic stabilisation.2 Section 5 argues that the use of a well-developed methodology of a functional subsidiarity test would be most useful for the national parliaments and even more so for their cooperation in case of a suspected violation of subsidiarity. Section 6 concludes.

European Criminal Law and General Principles of Union Law. Research Papers in Law, 5/2005

From the Introduction. The European Court of Justice, partly followed in this by the European legislator, has regulated Community law and policy through a set of general principles of law. For the Community legal order in the first pillar, general legal principles have developed from functional policy areas such as the internal market, the customs union, the monetary union, the common agricultural policy, the European competition policy, etc., which are of great importance for the quality and legitimacy of Community law. The principles in question are not so much general legal principles of an institutional character, such as the priority of Community law, direct effect or Community loyalty, but rather principles of law which shape the fundamental rights and basic rights of the citizen. I refer to the principle of legality, of nulla poena, the inviolability of the home, the nemo tenetur principle, due process, the rights of the defence, etc. Many of these legal principles have been elevated to primary Community law status by the European Court of Justice, often as a result of preliminary questions. Nevertheless, a considerable number of them have also been elaborated in the context of contentious proceedings before the Court of Justice, such as in the framework of European competition law and European public servants law.

Saving the Monopsony: Exclusivity, Innovation and Market Power in the Media Sector. Research Papers in Law, 7/2006

From the Introduction. The Media Sector has experienced a technological revolution in the last 15 years. Digital encoding of television signals made possible a more efficient use of the radiospectrum. Digital terrestrial television (hereinafter, “DTT”) allows now for the reception of a significant number of free-to-air channels.1 Moreover, the use of new transmission platforms (hereinafter,“platforms”), namely cable and direct-to-home satellite (hereinafter, “DTH”) paved the way for the arrival in Europe of pay-TV operators, which finance their activities mainly via subscription fees. This changing technological landscape is subject to further evolution in the near future, as incumbent telecommunications operators become increasingly interested in making available broadcasting content2 as part of their broadband offer and 3G mobile handsets can be used for the reception of TV signals....The present paper seeks to ascertain whether the Commission “regulatory approach” towards the exclusive sale of premium content is a sound one, in particular in view of the constant technological evolution outlined above. The assumptions underlying landmark Commission decisions will be compared with recent developments of the media sector in Italy. In the NewsCorp./Telepiù case, decided in 2003, the Commission imposed very strict conditions to allow the merger giving birth to Sky Italia, on the assumption that the operation created a lasting near-monopsony in the different upstream markets for the acquisition of premium intervened against the media conglomerate Mediaset (which controls, inter alia, the main three private free-to-air channels in Italy) for an alleged abuse of dominant position.17 In fact, and contrary to the forecasts made by the Commission, Mediaset was in a position to acquire the broadcasting rights of the main Italian football teams, thereby excluding the incumbent (and near-monopolist) pay-TV operator, Sky Italia. This may go to show that the reality of the sector is more complex and evolves faster than one may infer from the Commission practice, thus putting into question its stance regarding exclusivity. The experience of the evolution of the Italian media sector will be used as the starting point for the evaluation of alternative regulatory options.

With or without you...judging politically in the field of Area of Freedom, Security and Justice? Research Papers in Law, 3/2007

From the Introduction. The study of the European Court of Justice’s (ECJ) case law of the regarding the Area of Freedom Security and Justice (AFSJ) is fascinating in many ways.1 First, almost the totality of the relevant case law is extremely recent, thereby marking the first ‘foundational’ steps in this field of law. This is the result of the fact that the AFSJ was set up by the Treaty of Amsterdam in 1997 and only entered into force in May 1999.2 Second, as the AFSJ is a new field of EU competence, it sets afresh all the fundamental questions – both political and legal – triggered by European integration, namely in terms of: a) distribution of powers between the Union and its member states, b) attribution of competences between the various EU Institutions, c) direct effect and supremacy of EU rules, d) scope of competence of the ECJ, and e) measure of the protection given to fundamental rights. The above questions beg for answers which should take into account both the extremely sensible fields of law upon which the AFSJ is anchored, and the EU’s highly inconvenient three-pillar institutional framework.3 Third, and as a consequence of the above, the vast majority of the ECJ’s judgments relating to the AFSJ are a) delivered by the Full Court or, at least, the Grand Chamber, b) with the intervention of great many member states and c) often obscure in content. This is due to the fact that the Court is called upon to set the foundational rules in a new field of EU law, often trying to accommodate divergent considerations, not all of which are strictly legal.4 Fourth, the case law of the Court relating to the AFSJ, touches upon a vast variety of topics which are not necessarily related to one another. This is why it is essential to limit the scope of this study. The content of, and steering for, the AFSJ were given by the Tampere European Council, in October 1999. According to the Tampere Conclusions, the AFSJ should consist of four key elements: a) a common immigration and asylum policy, b) judicial cooperation in both civil and penal matters, c) action against criminality and d) external action of the EU in all the above fields. Moreover, the AFSJ is to a large extent based on the Schengen acquis. The latter has been ‘communautarised’5 by the Treaty of Amsterdam and further ‘ventilated’ between the first and third pillars by decisions 1999/435 and 1999/436.6 Judicial cooperation in civil matters, mainly by means of international conventions (such as the Rome Convention of 1981 on the law applicable to contractual obligations) and regulations (such as (EC) 44/20017 and (EC) 1348/20008) also form part of the AFSJ. However, the relevant case law of the ECJ will not be examined in the present contribution.9 Similarly, the judgments of the Court delivered in the course of Article 226 EC proceedings against member states, will be omitted.10 Even after setting aside the above case law and notwithstanding the fact that the AFSJ only dates as far back as May 1999, the judgments of the ECJ are numerous. A simple (if not simplistic) categorisation may be between, on the one hand, judgments which concern the institutional setting of the AFSJ (para. 2) and, on the other, judgments which are related to some substantive AFSJ policy (para. 3).

Environmental judgements by the Court of Justice and their duration. Research Papers in Law, 4/2008

From the Introduction. Little attention is paid, until now, to the duration of environmental procedures under Articles 226 and 228 EC Treaty, though these procedures are the only instrument at the disposal of the European Commission to enforce the application of EC environmental law1. Indeed, the Commission itself has no possibility to impose a fine or a penalty payment against a Member State, or to withhold sums under the Structural Funds, where a Member State persistently infringes Community environmental law. Rather, the Commission is obliged to first issue a Letter of Formal Notice against a Member State which infringes Community law. Where the infringement is not repaired, the Commission may issue a Reasoned Opinion against the Member State, and if also this does not lead to the compliance with EC law, it may appeal to the Court of Justice2.

Competition law proceedings before the European Commission and the right to a fair trial: no need for reform? Research Papers in Law, 5/2008

From the Introduction. This paper will thus show that, given the rapid "criminalisation" of competition law proceedings, sanctions should in principle be imposed at first instance I. Sanctions imposed by the Commission in competition proceedings are "criminal charges" within the meaning of Article 6 ECHR by an independent and impartial tribunal fulfilling all the conditions of Article 6 ECHR (part I). Or at the very least, these sanctions should be subject to full jurisdictional review by an independent and impartial tribunal in order to comply with Article 6 ECHR and to cure the defects of the administrative procedure (part II). It is doubtful however whether such a full jurisdictional review, as it is understood by the ECtHR, is available at Community-level in antitrust cases.

Public Procurement Law and Health care: From Theory to Practice. Research Paper in Law, 2/2010

From the Introduction. This contribution will focus on the core question if, how and to what extent the EU procurement rules and principles (may) affect the national health care systems. We start our analysis by summarizing the applicable EU public procurement legislation, principles and soft law and its exact scope in relation to health care. (section 2). Subsequently, we turn to the parties in a contract, subject to procurement rules in the field of health care, addressing both the definition of contracting authorities and relevant case law (section 3). This will then lead to an analysis of possible justifications for not holding a tender procedure in the field of health care (section 4). Finally, we illustrate the impact of EU public procurement rules on health care by analysing a Dutch case study, in which the question whether public hospitals in the Netherlands qualify as contracting authorities in terms of the Public Sector Directive stood central (section 5). Our conclusions will follow in section 6.

Patenting Strategies of the EU Pharmaceutical Industry -Crossroad between Patent Law and Competition Policy. Research Papers in Law, 1/2011

From the Introduction. The pharmaceutical sector inquiry carried out by the European Commission in 2008 provides a useful framework for assessing the relationship between the patent system on the one hand and competition policy and law on the other hand. The pharmaceutical market is not only specifically regulated. It is also influenced by the special characteristics of the patent system which enables pharmaceutical companies engaged in research activities to enter into additional arrangements to cope with the competitive pressures of early patent application and the delays in drug approval. Patents appear difficult to reconcile with the need for sufficient and adequate access to medicines, which is why competition expectations imposed on the pharmaceutical sector are very high. The patent system and competition law are interacting components of the market, into which they must both be integrated. This can result in competition law taking a very strict view on the pharmaceutical industry by establishing strict functional performance standards for the reliance on intellectual property rights protection granted by patent law. This is in particular because in this sector the potential welfare losses are not likely to be of only monetary nature. In brief, the more inefficiencies the patent system produces, the greater the risk of an expansive application of competition law in this field. The aim of the present study is to offer a critical and objective view on the use or abuse of patents and defensive strategies in the pharmaceutical industry. It shall also seek to establish whether patents as presently regulated offer an appropriate degree of protection of intellectual property held by the economic operators in the pharmaceutical sector and whether there is a need or, for that matter, scope for improvement. A useful starting point for the present study is provided by the pharmaceutical sector competition inquiry (hereafter “the sector inquiry”) carried out by the European Commission during the first half of 2008. On 8 July 2008, the Commission adopted its Final Report pursuant to Article 17 of Regulation 1/2003 EC, revealing a series of “antitrust shortcomings” that would require further investigation1.

Decentralisation of EC Competition Law Enforcement and General Principles of Community Law. Research Papers in Law, 4/2004

From the Introduction. By virtue of Council Regulation No. 1/2003, as of 1st May 2004 the full application of EC competition law will be entrusted to national competition authorities (hereinafter NCAs) and national courts. The bold reform of EC competition law enforcement adheres to the system of executive federalism1 which characterises the EC legal system. The repartition of competences within the Community allocates implementation of Community law mainly at Member States level. Pursuant to Article 10 EC, they are responsible for the implementation of the measures which have been adopted at Community level for the achievement of the objectives specified in the EC Treaty. Consequently, the attainment of the Community objectives depends very much upon the cooperation of national authorities, which act in accordance with their own national procedural rules.2 The various national procedural rules present themselves as conduits through which Community law is implemented and enforced. While as a rule Community law is not designed to alter national procedural rules, the Community legal order cannot afford to leave national procedural rules untouched when they are liable to hamper the effective application of Community law....For reason of space, this contribution intends only to highlight some aspects of Regulation No. 1/2003 with regard to which general principles of Community law are able to condition national procedural rules.

Mass Surveillance of Personal Data by EU Member States and its Compatibility with EU Law. CEPS Liberty and Security in Europe No. 61, 6 November 2013

In the wake of the disclosures surrounding PRISM and other US surveillance programmes, this paper assesses the large-scale surveillance practices by a selection of EU member states: the UK, Sweden, France, Germany and the Netherlands. Given the large-scale nature of these practices, which represent a reconfiguration of traditional intelligence gathering, the paper contends that an analysis of European surveillance programmes cannot be reduced to a question of the balance between data protection versus national security, but has to be framed in terms of collective freedoms and democracy. It finds that four of the five EU member states selected for in-depth examination are engaging in some form of large-scale interception and surveillance of communication data, and identifies parallels and discrepancies between these programmes and the NSA-run operations. The paper argues that these programmes do not stand outside the realm of EU intervention but can be analysed from an EU law perspective via i) an understanding of national security in a democratic rule of law framework where fundamental human rights and judicial oversight constitute key norms; ii) the risks posed to the internal security of the Union as a whole as well as the privacy of EU citizens as data owners and iii) the potential spillover into the activities and responsibilities of EU agencies. The paper then presents a set of policy recommendations to the European Parliament.

Global Solutions, Local Damages: A Critical Study in Judicial Councils in Central and Eastern Europe. Research Paper in Law 07/2013

This article examines why, how, and with what results have judicial councils spread under the influence of European institutions throughout Central and Eastern Europe in the course of the last twenty years. It first traces back how the judicial councils, themselves just one possible form of administration of courts, have emerged as the recommended universal solution Europe-wide and internationally. Second, it discusses how has this model been exported under the patronage of European and international institutions to transition countries in Central and Eastern Europe. Assessing, thirdly, the reality of the functioning of such new judicial councils in these countries, in particular in Slovakia and Hungary, with the Czech Republic without a judicial council providing a counter-example, it is suggested that their impact on further judicial and legal transition has been either questionable or outright disastrous. This brings, eventually, into question the legitimacy as well as the bare reasonableness of the entire process of European/international standards setting and their later marketing or in reality rather imposition onto the countries in transition.

Disclosure of Leniency Materials: A Bridge between Public and Private Enforcement of Antitrust Law. Research Paper in Law 08/2013, December

The disclosure of leniency materials held by competition authorities has recently been under the spot. On the one hand, these documents could greatly help cartel victims to prove the damage and the causation link when filing damage actions against cartelists. On the other hand, future cartelists could be deterred from applying for leniency since damage actions could be brought as a result of the information submitted by themselves. Neither the current legislation nor the case law have attained yet to sufficiently clarify how to deal with this clash of interests. Our approach obviously attempts to strike a balance between both interests. But not only that. We see the current debate as a great opportunity to boost the private enforcement of antitrust law through the positive spillovers of leniency programmes. We hence propose to build a bridge between the public and the private enforcement by enabling a partial disclosure of the documents.

The Triangular Relationship between Fundamental Rights, Democracy and the Rule of Law in the EU: Towards an EU Copenhagen Mechanism. CEPS Paperbacks. November 2013

This study examines the protection of fundamental rights, democracy and rule of law in the European Union, and the challenges that arise in reflecting on ways to strengthen EU competences in these contested terrains. It provides a ‘state of play’ and critical account of EU-level policy and legal mechanisms assessing the relationship between rule of law, democracy and fundamental rights in the member states of the Union. The cross-cutting challenges affecting their uses, effective implementation and practical operability constitute a central point of the analysis. The study argues that the relationship between rule of law, democracy and fundamental rights is co-constitutive. Any future rule of law-related policy discussion in the EU should start from an understanding of the triangular relationship between these dimensions from the perspective of ‘democratic rule of law with fundamental rights’, i.e. the legally based rule of a democratic state that delivers fundamental rights. The three criteria are inherently and indivisibly interconnected, and interdependent on each of the others, and they cannot be separated without inflicting profound damage to the whole and changing its essential shape and configuration.

Reflections on quasi-loss of nationality in comparative, international and European perspective. CEPS Liberty and Security in Europe No. 66/August 2014

This paper focuses on situations in which a person is said never to have had the nationality of a country, even though (s)he assumed (and in many cases the authorities of the country concerned shared that assumption) that (s)he possessed that nationality. Contrary to situations of loss of nationality, where something is taken away that had existed, quasi-loss involves situations in which nationality was never acquired. This contribution seeks to examine whether a person should under certain circumstances be protected against quasi-loss of nationality. In order to do so, the paper first maps out situations of quasi-loss in EU member states, describing typical cases in which a person never acquired the nationality of the country, although (s)he was at some time considered as a national. Drawing on this taxonomy, the paper attempts to uncover whether national, European and international laws offer some protection, and if yes, to which extent, for situations of quasi-loss. It concludes with outlining best practices which Member States should comply with in handling such situations.

Law and Foreign Direct Investment. IES WORKING PAPER 4/2011

In this paper we examine the effect of law on foreign direct investment outflows with a specific interest in the relationship between international investment law and domestic private property laws. Our results indicate that FDI investor is indifferent to host country property rights, hence shareholder protection by law is not a significant determinant of FDI outflows. We argue that FDI, in contrast with other types of capital flows, can effectively mitigate the agency problem through majority ownership and control, hence reduce exposure to ex-post expropriation by the affiliate. On the other hand, FDI investor remains exposed to risk of expropriation by the host government and is strongly sensitive to the enforcement of law in the host country. In contrast with recent literature we conclude that there are no causal relationship between bilateral investment treaties and FDI.