Part III
European Law: Substance
Content
1.
Fiscal Barriers I: Customs Duties
2.
Fiscal Barriers II: Discriminatory Internal Taxation
3.
Regulatory Barriers: Quantitative Restrictions
4.
Justifying Regulatory Barriers: Article 36 and Mandatory Requirements
How can the Union create a ‘single’ internal market out of ‘diverse’ national markets? To create an internal market, the EU Treaties pursue a dual strategy: negative and positive integration. The Union is first charged to ‘free’ the internal market from unjustified national barriers to trade in goods; and, in order to do so, the Treaties contain a number of constitutional prohibitions ‘negating’ illegitimate obstacles to intra-Union trade. This strategy of negative integration is complemented by a—second—strategy of positive integration. The Union is here charged to adopt positive legislation to remove obstacles to intra-Union trade arising from diverse national laws. For that purpose, the Treaties confer a number of legislative competences that allow the Union to ‘harmonize’ national laws in the internal market. The most general and famous provision here is Article 114, which entitles the Union to adopt harmonization measures that ‘have as their object the establishment and functioning of the internal market’. This chapter explores the Union’s negative integration tools in the context of the free movement of goods, while the next chapter investigates the Union harmonization competences.
What is the ‘negative integration’ regime governing goods? In order to create an internal market in goods, the Union insists that illegal barriers to intra-Union trade must be removed. Its constitutional regime is, however, split over two sites in Part III of the TFEU (see Table 9.1). It finds its principal place in Title II governing the free movement of goods, which is complemented by a chapter on ‘Tax Provisions’ in Title VII. Within these two sites, we find three important prohibitions. Section 1 examines the prohibition on customs duties. These are fiscal duties charged when goods cross national borders. Section 2 moves to the second type of fiscal charge: discriminatory taxes imposed on foreign goods. Section 3 then investigates the legality of regulatory restrictions to the free movement of goods. Regulatory restrictions are not, unlike fiscal duties, pecuniary charges. They simply ‘regulate’ access to the national market by—for example—establishing product or labelling requirements. Finally, Section 4 will look at possible justifications for regulatory restrictions to trade in goods.
Cases
Figures
Extra Materials
Useful videos
Useful websites
Further Reading
C. Barnard, The Substantive Law of the EU: The Four Freedoms (Oxford University Press, 2013)
D. Chalmers, ‘Free Movement of Goods within the European Community: An Unhealthy Addiction to Scotch Whisky?’ (1993) 42 ICLQ 269
A. Easson, ‘Cheaper Wine or Dearer Beer? Article 95 Again’ (1984) 9 EL Rev 57
P. Oliver (ed.), Oliver on Free Movement of Goods in the European Union (Hart, 2010)
M. Poiares Maduro, We the Court (Hart, 1998)
N. Nic Shuibhne, ‘The Free Movement of Goods and Article 28 EC: An Evolving Framework’ (2002) 27 EL Rev 408
E. Spaventa, ‘Leaving Keck Behind? The Free Movement of Goods after the Rulings in Commission v. Italy and Mickelsson and Roos’ (2009) 34 EL Rev 914
F. Weiss and C. Kaupa, European Union Internal Market Law (Cambridge University Press, 2014)
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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