Part I
European Law: Creation
Content
1.
The ‘Ordinary’ Legislative Procedure
2.
The ‘Special’ Legislative Procedures
3.
The Principle of Subsidiarity
4.
Excursus: The (Ordinary) Treaty-Making Procedure
Each society needs common rules and mechanisms for their production. Legislation here refers to the making of laws (legis). But what is legislation? American constitutionalism defines legislation as an act adopted by ‘Congress’. Behind this bicameral legislator stands a legislative procedure. This legal procedure links the House of Representatives and the Senate. German constitutionalism also adopts such a procedural definition of legislative power. However, unlike many national legal orders, the EU Treaties expressly distinguish two types of legislative procedures: an ordinary legislative procedure and special legislative procedures. Article 289 TFEU here states:
European ‘legislation’ is thus—formally—defined as an act adopted by the bicameral Union legislator: the Parliament and the Council. According to the ordinary legislative procedure, the Parliament and the Council act as co-legislators with symmetric procedural rights. European legislation is here seen as the product of a ‘joint adoption’ by both institutions.
But the Treaties also recognize special legislative procedures (Figure 2.1). The defining characteristic of these special procedures is that they abandon the institutional equality between the Parliament and the Council. Logically, then, Article 289(2) TFEU recognizes two variants. In the first variant, the European Parliament acts as the dominant institution, with the mere ‘participation’ of the Council in the form of ‘consent’. The second variant inverts this relationship. The Council is here the dominant institution, with the Parliament either participating through its ‘consent’, or in the form of ‘consultation’.
Having analysed the various Union institutions in Chapter 1, this chapter explores their interaction in the creation of European (secondary) law. Sections 1 and 2 respectively discuss the ordinary and special legislative procedures in more detail. Section 3 looks at the principle of subsidiarity—an EU constitutional principle that was designed to prevent the Union legislator
from exercising its competences where the Member States would be able to achieve the desirable social aim themselves. Within the Union legal order, this principle has been primarily understood as a procedural safeguard that—indirectly—involves the national parliaments prior to the adoption of a legislative act. Finally, Section 4 looks at the procedure for the conclusion of international agreements. These agreements, while not formally concluded under a legislative procedure, nonetheless constitute a rich (external) source of European secondary law.
Cases
Figures
Extra Materials
Useful videos
Useful websites
Further Reading
L. Buonanno and N. Nugent, Policies and Policy Processes of the European Union (Palgrave, 2013)
I. Cooper, ‘The Watchdogs of Subsidiarity: National Parliaments and the Logic of Arguing in the EU’ (2006) 44 Journal of Common Market Studies 281
F. Fabbrini and K. Grant, ‘“Yellow Card, but no Foul”: The Role of the National Parliaments under the Subsidiary Protocol and the Commission Proposal for an EU Regulation on the Right to Strike’ (2013) 50 CML Rev 115
S. Hix and B. Høyland, The Political System of the European Union (Palgrave, 2005)
B. Kohler-Koch and B. Rittberger, Debating the Democratic Legitimacy of the European Union (Rowman & Littlefield Publishers, 2007)
C. Reh et al., ‘The Informal Politics of Legislation: Explaining Secluded Decision Making in the European Union’ (2013) 49 Comparative Political Studies 1112
Content
1.
Past: Britain as an ‘Awkward Partner’?
2.
Present: Withdrawing under Article 50 TEU
3.
Future I: (Possible) Trade Agreements with the Union
4.
Future II: A ‘Hard’ Brexit and the ‘WTO Model’
The British exit from the European Union (‘Brexit’) has occupied the Union for much of the last four years. For the first time since its founding, a Member States decided to deliberately dissociate itself from European integration in an attempt to regain sovereignty and independence.
Why and how did this happen; and may it happen to other Member States of the Union? With several severe crises afflicting the Union in the past decade—especially the financial and the migration crises—the question of whether Brexit constitutes an isolated case or a signal for an era of European disintegration has legitimately been posed.
This chapter, however, seeks to pursue a less ambitious task: it aims to explore the past, present, and future of the British exit decision. Section 1 begins by offering a brief historical overview of the past tensions between the United Kingdom and the European Union in an attempt to better explain the ‘special’ unease with which the United Kingdom viewed European integration. A former imperial and global power, its political self-understanding indeed differed from the very beginning from that of other Member States. Section 2 explores the ‘present’ withdrawal process under Article 50 TEU and the ‘Withdrawal Agreement’. Section 3 tries to look into the future by analysing four possible EU-UK trade relationship options. Will both parties decide to create a common customs union or will they conclude a ‘Canada Plus’ agreement? A future trade deal is currently being negotiated; yet the option of a ‘hard Brexit’ remains. This option is discussed in Section 4.
Figures
Content
1.
The “Market”: Product and Geographic Dimensions
3
1. The “Market”: Product and Geographic Dimensions 3
2.
Market Dominance
5
2. Market Dominance 5
(a) General Considerations
5
(b) Collective Dominance
8
3.
Abuse of Market Dominance
10
3. Abuse of Market Dominance 10
(a) Article 102 [2] (a) and “predatory pricing”
(a) Article 102 [2] (a) and “predatory pricing” 12
12
(b) Article 102 [2] (b) and “refusal to supply”
(b) Article 102 [2] (b) and “refusal to supply” 14
14
(c) Article 102 [2] (c) and “discretionary pricing”
(c) Article 102 [2] (c) and “discretionary pricing” 16
16
(d) Article 102 [2] (d) and “tying or bundling”
(d) Article 102 [2] (d) and “tying or bundling” 18
18
4.
Objective Justification: Apparently Abusive Behaviour?
20
4. Objective Justification: Apparently Abusive Behaviour? 20
The second pillar of EU competition law focuses on the – bad – behaviour of a single undertaking. For Article 102 does not require the collusive behaviour of two or more economic actors. It sanctions the unilateral behaviour of a dominant undertaking where this behaviour amounts to a “market abuse”. The provision states:
Any abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it shall be prohibited as incompatible with the internal market in so far as it may affect trade between Member States. Such abuse may, in particular, consist in:
(a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;
(b) limiting production, markets or technical development to the prejudice of consumers;
(c) applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;
(d) making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.
Article 102 encapsulates a number of fundamental choices with regard to the Union’s economic constitution. For by concentrating on a “dominant position within the internal market”, it goes beyond pure monopolies and is thus wider than its American counterpart.1 But by insisting on market abuse, it is also narrower than the American equivalent. For unlike the latter, Article 102 will not directly outlaw market structures. Dominance is not itself prohibited – only the abuse of a dominant position.
Like Article 101, the prohibition of market abuse will however only apply where an abusive behaviour “may affect trade between Member States”. Yet when this abuse is shown to have Union-wide effects it appears to be prohibited as such. For Article 102 has – unlike Article 101 – no “third paragraph” exempting abusive behaviour on the ground of its pro-competitive effects.
In sum: a violation of Article 102 implies the satisfaction of only three criteria. First, we must establish what the “market” is in which the undertaking operates. Second, the undertaking must be “dominant” within that market. And third, the undertaking must have “abused” its dominance.4 All three aspects will be discussed below (a–c). Finally, we will analyse whether the Union legal order has – despite the absence of an express exemption – allowed for “objective justifications” of abusive conduct (d).
Chapter "Competition Law II: Abuse"
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