Part I
European Law: Creation
Content
1.
Union Competences: Teleological Interpretation
2.
General Competences of the Union
3.
The Doctrine of Implied (External) Powers
4.
Categories of Union Competences
When a sovereign parliament legislates, it need not ‘justify’ its acts. It is considered to enjoy a competence to do all things. This ‘omnipotence’ is seen as inherent in the idea of a ‘sovereign’ State. The European Union is however neither ‘sovereign’ nor a ‘State’. Its powers are not inherent powers. They must be conferred on it by the Member States in the European Treaties. This constitutional principle is called the ‘principle of conferral’. The Treaty on European Union defines it as follows:
Under the principle of conferral, the Union shall act only within the limits of the competences conferred upon it by the Member States in the Treaties to attain the objectives set out therein. Competences not conferred upon the Union in the Treaties remain with the Member States.
The Treaties employ the notion of competence in various provisions. But sadly, there is no positive definition of the concept. So what is a legislative competence? The best definition is this: a legislative competence is the material field within which an authority is entitled to legislate.
What are these material fields in which the Union is entitled to legislate? The Treaties do not enumerate the Union’s competences in a single list. Instead, the EU Treaties pursue a different technique: they attribute legislative competence for each and every Union activity in the respective Treaty title dealing with that activity. Each policy area contains a provision—sometimes more than one—on which Union legislation can be based. The various ‘Union policies and internal actions’ are set out in Part III of the TFEU (Table 3.1).
The Treaties here present a picture of thematically limited competences in distinct policy areas. This picture is however—partly—misleading. Three legal developments have significantly undermined the principle of conferral in the past; and these three developments have led to widespread accusations that the European Union’s competences are ‘unlimited’. What are they? First, there has been a rise of teleological interpretation, which will be discussed in Section 1. The Union’s competences are here interpreted in such a way that they potentially ‘spill over’ into other policy areas. This ‘spillover’ effect can be particularly observed with regard to a second development: the rise of the Union’s general competences. For in addition to its specific competences in specific areas, the Union enjoys two very general legislative competences that horizontally cut across the various policy titles within the Treaties. These two competences are Articles 114 and 352 TFEU and will be discussed in Section 2. Lastly, there is a third development that would qualify the principle of conferral significantly: the doctrine of implied external powers, which will be analysed in Section 3.
Importantly, not all Union competences thereby allow the Union to act to the same degree. Indeed, depending on the type of competence involved, the Union may or may not be permitted to interfere with national choices. What types of competences are thus recognized by the Treaties? Different competence categories were originally ‘discovered’ by the European Court of Justice, and the EU Treaties have today codified them. These competences categories will be discussed in Section 4.
Cases
Figures
Extra Materials
Useful websites
Further Reading
L. Azoulai (ed.), The Question of Competence in the European Union (Oxford University Press, 2014)
P. Craig, ‘Competence: Clarity, Conferral, Containment and Consideration’ (2004) 29 EL Rev 323
A. Dashwood, ‘The Limits of European Community Powers’ (1996) 21 EL Rev 113
T. Konstadinides, ‘Drawing the Line between Circumvention and Gap-filling: An Exploration of the Conceptual Limits of the Treaty’s Flexibility Clause’ (2012) 31 YEL 227
R. Schütze, ‘Lisbon and the Federal Order of Competences: A Prospective Analysis’ (2008) 33 EL Rev 709
S. Weatherill, ‘Competence Creep and Competence Control’ (2004) 23 YEL 1
D. Wyatt, ‘Community Competence to Regulate the Internal Market’ (Oxford University Faculty of Law Research Paper 9/2007)
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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