Why the Open Method of Coordination (OMC) is bad for you: a letter to the EU. Research Papers in Law, 5/2006

From the Introduction. The aim of the present “letter” is to provoke, rather than to prove. It is intended to further stimulate the – already well engaged – scientific dialogue on the open method of coordination (OMC).1 This explains why some of the arguments put forward are not entirely new, while others are overstretched. This contribution, belated as it is entering into the debate, has the benefit of some hindsight. This hindsight is based on three factors (in chronological order): a) the fact that the author has participated himself as a member of a national delegation in one of the OMC-induced benchmarking exercises (only to see the final evaluation report getting lost in the Labyrinth of the national bureaucracy, despite the fact that it contained an overall favorable assessment), as well as in a OECD led exercise of coordination, concerning regulatory reform; b) the extremely rich and knowledgeable academic input, offering a very promising theoretical background for the OMC; and c) some recent empirical research as to the efficiency of the OMC, the accounts of which are, to say the least, ambiguous. This recent empirical research grounds the basic assumption of the present paper: that the OMC has only restricted, if not negligible, direct effects in the short term, while it may have some indirect effects in the medium-long term (2). On the basis of this assumption a series of arguments against the current “spread” of the OMC will be put forward (3). Some proposals on how to neutralize some of the shortfalls of the OMC will follow (4).

The EU essential facilities doctrine. Research Papers in Law, 6/2006

Introduction. The essential facilities doctrine may be seen as the ‘extra weight’ which is put onto the balance, in order to give precedence to the maintenance of competition over the complete contractual freedom of undertakings controlling an important and unique facility. The main purpose of the doctrine is to impose upon such ‘dominant’ undertakings the duty to negotiate and/or give access to the facility, against a reasonable fee, to other undertakings, which cannot pursue their own activity (and therefore will perish) without access to such a facility. This very simple description of the content of the doctrine underlines its limitations: through the imposition of a duty to negotiate or contractual obligations, the rule tends to compensate for the weaknesses of the competitive structure of a market, which are due to the existence of some essential facility. In other words, the doctrine does not by itself provide a definitive solution to the lack of competition, but tends to contractually maintain or even create some competition.1 The doctrine of essential facilities originates in the US antitrust case law of the Circuit and District Courts, but has never been officially acknowledged by the Supreme Court. It has been further developed and hotly debated by scholars in the US, both from a legal and from an economic viewpoint. In the EU, the essential facilities doctrine was openly introduced by the Commission during the early 1990s, but has received only limited and indirect support by the Court of First Instance (the CFI) and the European Court of Justice (the ECJ). It also indirectly inspired the legislation concerning the deregulation of traditional ‘natural’ monopolies. The judicial origin of the doctrine, combined with the hesitant application by the appeal courts, both in the US and the EU, cast uncertainty not only on the precise scope of the doctrine, but also on the issue of its very existence. These questions receive a particular light within the EU context, where the doctrine is called upon to play a different role from its US counterpart. In order to address the above issues, we will first pretend that an EU essential facility doctrine does indeed exist and we shall try to identify the scope and content thereof, through its main applications (Section 1). Subsequently, we will try to answer the question whether such a doctrine should exist at all in the EU (Section 2).

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.

The Italian Merck Case. Research Papers in Law, 1/2007

From the Introduction. Regulation 1768/921 created supplementary protection certificates (hereinafter, ‘SPCs’) for medicinal products (hereinafter, “pharmaceuticals”) protected by patents. SPCs afford the same exclusive rights as those conferred by patents once these expire and may be granted for a maximum of five years.2 Italy enacted similar legislation in 1991, the most salient difference between both texts being that, pursuant to Law No. 349/91,3 holders of Italian patents for pharmaceuticals could be granted supplementary protection for a maximum period of 18 years after the expiration of the patent. Following the enactment of Regulation 1768/92, SPCs granted by the Italian authorities were brought in line with the period provided for in that text. However, pharmaceuticals for which supplementary protection was sought in the lapse between the adoption of Law No. 349/91 and Regulation 1768/92 (around 400 products) continued to enjoy the protection provided for in the former text.4 Several steps were taken by the Italian authorities to progressively reduce the length of protection granted to these products.

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).

The AstraZeneca Case. Research Papers in Law, 4/2007

Introduction. On June 2005, after a five year investigation, the Commission imposed a 60 millions euros fine on AstraZeneca (hereinafter AZ) for having abused its dominant position in several Member States in the market for proton-pump inhibitors (PPI)2. It was alleged that AZ misused the patent system and procedures for marketing pharmaceuticals to block or delay the entry of generic competitors and parallel traders to its ulcer drug Losec3. This decision is a seminal one. The political and legal importance of the CFI judgment that will review the case (and the ECJ appeal that is likely to follow) cannot be understated. On the one hand the incentive to innovate and to undertake R&D is at stake, on the other, the uncertain boundaries between competition and intellectual property law should once again be explored. In contrast to the US, where many cases concerning the abuse of regulatory and governmental procedures have already been dealt with competition authorities and courts, it is the first time in Europe that such conduct is subject to scrutiny through an anti-trust lens. Moreover, following the appeal brought by AZ against the Commission decision, the CFI will be confronted for the first time with an abuse of a dominant position in the pharmaceutical sector, which explains why this judgment is eagerly anticipated4.

Que reste-t-il de la directive sur les services? = What remains of the Services Directive? Research Papers in Law, 5/2007

No abstract.

Legal Aspects in Establishing the Internal Market for services. Research Papers in Law, 6/2007

Introduction. The internal market for services is one of the objectives set by the founding fathers of the EC back in 1957. It is only in the last ten-fifteen years, however, that this aspect of the internal market has seriously attracted the attention of the EC legislature and judiciary.1 With the exception of some sector-specific directives dating back in the late ‘80s, it is only with the deregulation of network industries, the development of electronic communications and the spread of financial services, in the ‘90s that substantial bits of legislation got adopted in the field of services. Similarly, the European Court of Justice (ECJ, the Court) left the principles established in Van Binsbergen back in 1973, hibernate for a long time before fully applying them in Säger and constantly thereafter.2 Ever since, the Court’s case law in this field has grown so important that it has become the compulsory starting point for any study concerning the (horizontal) regulation of the internal market in services. The limits inherent to negative integration and to the casuistic approach pursued by judiciary decisions have prompted the need for a general legislative text to be adopted for services in the internal market. This text, however, hotly debated both at the political and at the legal level, has ended up in little more than a complex restatement of the Court’s case law. It may be, however, that this ‘little more’ is not that little. In view of the ever expanding application of the Treaty rules on services, promoted by the ECJ (para. 1),3 the Directive certainly appears to be a limited regulatory attempt (para. 2). This, however, does not mean that the Directive is a toothless, or useless regulatory instrument (conclusion: para. 3).

Current Problems of Social Europe. Research Papers in Law, 7/2007

From the Introduction. The main difficulty of Theology lies in the fact that the very existence of its subject-matter, God, may be put into question. Talking about Social Europe has something of a theological dimension. The aim of this article is to contribute into the debate, by putting into perspective some of the latest manifestations of social Europe. The need for the pursuance of social policies at the European level is now more pressing than ever (para 2). The EU, however, as it now stands, is the direct evolutionary result of the predominantly economic entity created back in 1957. This explains that the social policies pursued at the European level are piecemeal and often impregnated with market concerns (para. 3). From an instrumental point of view, EU social policy is being pursued concomitantly by secondary legislation (hard law) in the fields where the EU does have the relevant competences and by softer means of cooperation (soft law) in several other fields. Hard law has given the occasion to the European Court of Justice (ECJ), in a series of recent judgments, of putting to the fore the concept of a ‘social market’ (para. 4). Soft cooperation has been formalised into the infamous Lisbon Strategy and has been the main object of experimentation with the open method of coordination (OMC) (para. 5). The advances achieved in the above ways, however, do not offer firm answers to basic questions concerning the future development of the European social identity (para. 6)

Casual but Smart: The Court’s new clothes in the Area of Freedom Security and Justice (AFSJ) after the Lisbon Treaty. Research Papers in Law, 2/2008

Introduction. Unintended as it was, the European Court of Justice (ECJ, the Court, the Court of the EU) has played an extremely important role in the construction of the Area of Freedom Security and Justice (AFSJ). The AFSJ was set up by the Treaty of Amsterdam in 1997 and only entered into force in May 1999. The fact that this is a new field of EU competence, poses 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) extent of the protection given to fundamental rights. The above questions have prompted judicial solutions which 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.1 The ECJ is the body whose institutional role is to benefit most from this upcoming ‘depilarisation’, possibly more than that of the European Parliament. This structure is on the verge of being abandoned, provided the Treaty of Lisbon enters into force.2 However spectacular this formal boost of the Court’s competence, the changes in real terms are not going to be that dramatic. This apparent contradiction is explained, to a large extent, by the fact that the Court has in many ways ‘provoked’, or even ‘anticipated’, the depilarisation of its own jurisdictional role, already under the existing three-pillar structure. Simply put, under the new – post Treaty of Lisbon – regime, the Court will have full jurisdiction over all AFSJ matters, as those are going to be fully integrated in what is now the first pillar. Some limitations will continue to apply, however, while a special AFSJ procedure will be institutionalised. Indeed, if we look into the new Treaty we may identify general modifications to the Court’s structure and jurisdiction affecting the AFSJ (section 2), modifications in the field of the AFSJ stemming from the abolition of the pillar structure (section 3) and, finally, some rules specifically applicable to the AFSJ (section 4).