LA2024 EU law

Pre-exam update 2023

The current edition of the module guide was published in 2022.

The following developments should be noted.

CHAPTER 2: THE TREATIES AND THEIR SIGNIFICANCE

2.6 Multiple crises, new beginnings
Aside from Brexit, discussed in the preceding section, it is important to point out that the
European Union is currently at a turning point, following massive crises, such as the
COVID pandemic and the Ukraine war. While these have not led to Treaty changes, they
are currently nudging the European Union on a path towards more integration by
developing different competences that were not used that much before.
During the COVID pandemic, most of the internal market rules on free movement were put
on hold as Member States closed their borders to contain the spread of the virus. This
crisis, however, pushed the EU Member States to greater degrees of solidarity, although
the effects of many of the measures are yet to be seen. Among the actions undertaken,
the following are notable:
• The activation of the EU Civil Protection Mechanism. This was set up in October
2001 by the European Commission to strengthen cooperation between the EU
countries to improve prevention, preparedness and response to disasters.
Assistance can be requested through this mechanism and this was done during the
pandemic extensively, even though, initially, the EU failed to assist Italy.
• Vaccines and protective equipment procurement. By concluding Advance
Purchase Agreements with individual vaccine producers, the Commission secured
the right to buy a specified number of vaccine doses in a given timeframe and at a
given price.
• The creation of a new recovery fund, the Next Generation EU. This is
unprecedented, as it allows for some 800 bn EUR to be collected from the capital
markets and to be given to the Member States in form of grants. The legal basis
rests with Article 122 TFEU on financial solidarity, Articles 311 and 312 TFEU on
multiannual financial framework and own resources, and finally on Article 175 TFEU
on cohesion. It remains to be seen whether these changes are permanent or just
temporary. The EU has still no power of direct taxation and there might be
disagreement on the fund in the future from powerful Constitutional Courts.
• Last, but not least, the pandemic has fostered important discussions around the EU
competences in health. For instance, the EU has set up the European Health
Emergency preparedness and Response Authority (HERA), which has the mission
to prevent, detect and rapidly respond to health emergencies.

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On 24 February 2022, Russia invaded Ukraine and war started again on the European
continent. The European Union has flexed its defence and security muscle
unprecedentedly at this time, showing again solidarity.
First, several packages of sanctions were adopted, including, among others, a ban on
transactions with the Russian Central Bank, a ban on SWIFT transactions, a ban on
certain media outlets, as well as bans on energy, and multiple individual sanctions. The
legal basis of these sanctions, Article 29 TEU, provides that:
The Council shall adopt decisions which shall define the approach of the Union to a
particular matter of a geographical or thematic nature. Member States shall ensure that
their national policies conform to the Union positions.
Such decisions are proposed by the High Representative of the Union for Foreign Affairs
and Security Policy, and have to be voted by the CFSP Council in unanimity as per Article
31 TEU. The adoption of the multiple packages of sanctions, in a very short time span,
unanimously, shows therefore that when there is a will there is also a way (and solidarity)
in matters of security policy. In principle, matters falling under CFSP are not justiciable as
per Articles 24 TEU and 275 TFEU. However, in recent years, the Court has shown a very
narrow interpretation of these Articles, while judging on cases brought against the EU
sanctions regime. The Court has declared itself competent to both answer preliminary
reference questions on the validity of these measures (as per C-72/15 Rosneft) or decide
on damage claims (as per C-134/19 Bank Refah Kargaran).
A second initiative worth mentioning is the European Peace Facility, set up on the basis of
Article 21(2)(c) TEU. In principle, the EU budget can only be charged with the operating
expenditure for CFSP (Art 41(1) TEU), however, it was agreed that certain costs will be
shared by the Member States within the Facility (as per Council Decision 2021/509). While
this Peace Facility has been used on several occasions before the war, it allowed for the
first time to use the money to reimburse Member States for expenses of sending military
aid to Ukraine.
A third illustration of solidarity is the activation of the Temporary Protection Directive
2001/55/EC, which was the basis of the Council Decision 2022/382, which allowed
refugees from Ukraine to be received in the EU Member States and allowed them to work
and live there for a certain period. The Decision gives the migrants rights such as the right
to receive residence permits and visas, to access employment and self-employment, as
well as education, to obtain accommodation, subsistence, emergency care and essential
treatments. Access to courts is guaranteed in case of exclusion.
Fourth, one of the challenges faced by the EU today as a result of the war is that its
environmental transition to green energy is in question. Such transition was designed in a
world where gas was flowing in relatively unlimited supply, which is no longer the case.
Various legal measures are being taken at the moment in energy, a field of shared
competence a per Article 194 TFEU, which aim at reforming some of the EU directives in
energy, to set up a coordinate demand-reduction measures for gas, or emergency
interventions to address high energy prices.
Finally, the war might constitute a springboard for further enlargements of the European
Union. In the summer of 2022, EU leaders gave candidate status to Ukraine and Moldova.
This does not mean that the countries will become members in the near future, as the
process involves long and convoluted negotiations but it is hoped to offer supplementary
reassurance considering the Russian threat.
As a general reflection, as the EU is currently going through multiple crises, the Schuman
declaration still stands valid: ‘Europe will not be made all at once, or according to a single
plan. It will be built through concrete achievements which first create a de facto solidarity’.

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CHAPTER 5: THE FOUNDATIONAL PRINCIPLES OF EU LAW

5.4.3 Liability for other breaches of Union law
A new case is worth mentioning here C-278/20 Commission v Spain ECLI:EU:C:2022:503.
In this case the Court partially annulled Spanish rules on how compensation for loss of
harm caused by public authorities could be obtained.
The Court considered that the Spanish rules infringed the principle of effectiveness
because they made it impossible or excessively difficult for individuals to obtain redress in
case of infringement of EU law. These rules required, for instance, that individuals could
have been compensated only if there was a prior ECJ decision declaring the harmful
Spanish legal act contrary to EU law. Individuals could claim state liability only after
unsuccessfully challenging in Court a harmful administrative act based on national law
contravening EU law (however, as we have seen in other cases discussed in this chapter,
violations of EU law by national legislative acts can be harmful).
The Court also considered national legislation that allowed individuals to obtain
compensation for breaches of national legislation under less stringent conditions than
compensation for breaches of EU law. Under Spanish law, if individuals claim damages
because of an infringement of EU law, they must comply with the Francovich/Brasserie
requirements: that the rule of EU law conferred rights, that the infringement is sufficiently
serious and that there is a causal link between the infringement and the damage suffered.
However, if individuals claim damages because of an infringement of the Spanish
Constitution, they do not need to prove that the infringement was sufficiently serious. The
Commission argued in the case that this is contrary to the principle of equivalence,
according to which the remedy for the Union law right should be no less favourable than
those relating to similar domestic claims (see Section 5.3.1 of the module guide).
However, the Court disagreed because :
the principle of equivalence seeks to set limits on the procedural autonomy enjoyed by the
Member States when they implement EU law and when the latter does not make provision
in that regard. It therefore follows that, as regards State liability for infringement of EU law,
that principle is intended to apply only where that liability is established on the basis of EU
law and, therefore, where the relevant conditions… are satisfied. (para. 178)
Spain was thus free to impose less stringent conditions to claim damages because of the
infringement of national law and this was not against the principle of equivalence.
The judgment narrows the scope of the application of the principle of equivalence with
regards to Francovich State liability, in order to be respectful of the principle of procedural
autonomy on matters that do not fall in the ambit of EU law.

CHAPTER 7: SERVICES AND ESTABLISHMENT

7.3 The Services Directive
Beyond the Services Directive, we need to note the current ambitious initiatives to create a
digital single market, which have an important impact on the free movement of services.
For example, in relation to e-commerce, existing legal frameworks such as the Electronic
Commerce Directive 2000/31/EC, dating back to the beginning of the Millennium, are
outdated and do not appear to correspond to current business models for digital services.
This creates a risk for the EU digital space to become fragmented and open to
protectionism within the various national markets, a danger that was highlighted recently in
the case of composite services within the sharing economy.

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Composite services have both an ‘online’ and an ‘offline’ element such as, for instance,
those provided by companies such as Uber or Airbnb. The legislative framework
distinguishes between the so-called ‘information society services’ (that can be provided
cross-border freely, with Member States prohibited, in principle, from introducing systems
of authorisation) and the ‘material’ service actually provided (which, depending on its
nature, might not be subject to free movement of services at all, or for which a system of
authorisation could be put in place, etc.). Determining what is the prevailing element in the
case of composite services is thus indicative of the applicable legal basis and has massive
consequences on the liberalisation of certain activities. For instance, in C-434/15
Asociación Profesional Elite Taxi and C-320/16 Uber France, the Court held that an
intermediation service such as Uber, which connects by smartphone application and for
remuneration, non-professional drivers using their own vehicle with persons who wish to
make urban journeys, must be regarded as being inherently linked to a transport service.
The consequence was that Article 56 does not apply to such operations and it is for the
Member States to regulate the conditions under which such services are to be provided in
conformity with the general rules of the Treaty on the Functioning of the EU (see Article 58
TFEU). Conversely, services provided by intermediaries such as Airbnb that connect,
through electronic platforms for remuneration, potential guests with potential hosts of
accommodation services were considered to fall under the definition of ‘information society
service’. Unlike Uber, the service provided by Airbnb (Case C-390/18) was considered
independent from the accommodation service facilitated by the platform.
The main difficulty with these cases is that there is a web of legal provisions that can be of
relevance, all with different conditions of applicability and entailing different legal
consequences for the traders. Given their outdated nature, these provisions are no longer
suitable to protect individuals and the markets against abuse. In this context, a welcome
initiative is the Digital Services Act Package, introduced by the European Commission in
December 2020. The ambition is to put in place a modern legal framework ensuring at the
same time the safety of users online and the growth of innovative digital business. The
package consists of the Digital Services Act and the Digital Markets Act:
• The Digital Services Act (Regulation (EU) 2022/2065) provides for obligations for all
digital services connecting consumers to goods, services or content, as well as
procedures for the protection of human rights and the rule of law. While it does
modernise the e-commerce Directive, it only repeals it in part.
• The Digital Markets Act (Regulation (EU) 2022/1925) imposes boundaries to the
behaviour of internet ‘giants’, preventing these digital gatekeeper platforms from
engaging in unfair practices.

7.5 Derogations from the freedom of establishment

C-391/20 Cilevičs EU:C:2022:638
The case concerns an Estonian law requiring from public higher education providers to
teach exclusively in Estonian, with some exceptions. The Court noted that, even though
the teaching content and the organisation of educational system falls into the ambit of
national competence, the Member States have to observe Union law, in particular, the
freedom of establishment. It concluded that the Estonian constituted a restriction to this
freedom, as it rendered more difficult for foreign higher education providers to establish
themselves in Estonia given that they would have been obliged to teach in the official
language of that country. The Court went on to analyse justifications and noted that the
objective to stimulate the development and practice of EU’s official languages could
constitute a valid overriding reason in the public interest. The respect of national identities
also includes the respect of official languages of the Member States and this is an area

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where Member States enjoy discretion (but only to the extent that this does not undermine
Treaty freedoms). On proportionality, the Court noted that the measure was suitable to the
objective pursued as it was coherent and allowed exceptions compatible with international
cooperation in education. The Court looked at the necessity of the measure and, applying
a strict test, concluded that, because the measures allowed for certain exceptions, it was
not excessive. However, a measure that would impose teaching in an official language,
with no exceptions, would fail the proportionality test and would not be able to be justified
on grounds of defence and promotion of the national language.

CHAPTER 10: COMPETITION POLICY

10.4 Article 102 TFEU
An important case to consider is Case T-604/18 Google Android ECLI:EU:T:2022:541. The
case is important not only because it largely confirms (with changes) a decision of the
European Commission through which record-breaking fines were established but because
it strengthens the enforcement of competition law in the digital sphere.
The case was brought by Google against a Commission decision imposing a 4.34 bn EUR
fine for various abusive practices, such as:
• Tying the Google search app to the Play Store
• Tying Chrome to the Play store and search app
• Prohibiting original equipment manufacturers who installed Play Store and the
Google Search app from selling devices running on alternative Android versions
• Giving incentives to original equipment manufacturers and mobile network
operators to exclusively pre-install Google Search on devices.
The judgment is complex and we can only reflect here on a limited number of aspects.
First, answering to Google’s argument that the Commission did not consider the
competitive pressure from Apple in its assessment, the General Court noted that Android
and iOS are not in the same market. In so doing, the Court confirmed the Commission’s
assessment based on the small but significant non-transitory decrease in quality of the OS
(SSNDQ test). According to this test, which was never used before, consumers were found
unlikely to switch to Apple in case of such decrease in quality.
Second, the decision acknowledges that the release of software in open source can fall
under the ambit of competition rules. The General Court confirmed that Google could not
limit the original equipment manufacturers from distributing devices with open-source
versions of Android not approved by Google.
Third, the General Court was not convinced by the arguments of the Commission in
relation to the exclusivity rebates. It considered that the way in which the Commission
used economic models was not entirely rigorous. This goes on to illustrate that the
Commission is bound by a high standard of proof whenever it concludes on infringement
of competition rules.

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CHAPTER 11: FREE MOVEMENT OF PERSONS AND

CITIZENSHIP
11.5 Citizenship and free movement rights
The following cases should be considered.
C-118/20 Wiener Landesregierung ECLI:EU:C:2022:34
This case concerned JY, an Estonian national residing in Austria, who applied for Austrian
nationality. She was assured by the authorities that she would be granted that nationality if
she could prove, within two years, that she had relinquished her Estonian nationality and
she made the necessary steps as a result. However, the Austrian authorities finally
rejected her application for Austrian nationality, which meant that she became stateless.
The rejection was based on the grounds that she committed several administrative
offences, such as drink driving.
The Grand Chamber of the Court of Justice considered that the matter fell under EU law
as, when the assurance was revoked, JY was stateless and had lost her EU citizenship.
However, losing EU citizenship was not voluntary and was done within the context of her
upcoming application for Austrian naturalisation. JY was therefore in a situation where she
was deprived of her rights attaching to the status of EU citizen as per Article 20.
Furthermore, she complied with the cross-border element provided for in Article 21(1)
TFEU as she had moved from Estonia to Austria, where she was seeking naturalisation.
The Court concluded that the Austrian authorities were required to determine whether their
decision to revoke the assurance to grant citizenship was compatible with the principle of
proportionality. Or, that requirement was not satisfied if the decision was based on
administrative traffic offences that, under Austrian law, only give rise to a fine. Indeed,
there was little evidence that JY represented a genuine, present and sufficiently serious
threat affecting one of the fundamental interests of society or a threat to public security in
Austria.
C-673/20 Préfet du Gers ECLI:EU:C:2022:449
This case concerned EP, a British national residing in France since 1984 and married to a
French citizen. Following the entry into force of the Withdrawal Agreement, she was
removed from the electoral roll and could not take part in municipal elections in France. EP
argued that she lost all her political rights as, given she has resided abroad for more than
15 years, she was barred, by British law, from taking part in elections in the UK as well.
The national Court asked the ECJ whether British nationals who, like EP, transferred their
residence to a Member State before the end of the transition period laid down in the
Withdrawal Agreement continue to benefit from the status of citizen of the Union. If that is
not the case, that court asks the Court of Justice to assess, in particular in the light of the
principle of proportionality, the validity of the Withdrawal Agreement.
The Court of Justice replied that British nationals residing abroad no longer enjoy the
status of citizen of the Union, nor the right to vote and to stand as a candidate in municipal
elections in their Member State of residence. This is because citizenship of the Union
requires possession of the nationality of a Member State. The mere exercise of free
movement rights before Brexit does not enable individuals to preserve their status as EU
citizens. Losing rights is thus the automatic consequence of the sole sovereign decision
taken by the United Kingdom to withdraw from the European Union. In this context, the
Court upheld the legality of the Withdrawal Agreement, confirming that the lack of voting
rights in local elections in the Withdrawal Agreement has no impact on the validity of that
agreement.

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CHAPTER 12: EU HUMAN RIGHTS

12.2.1 Challenges to EU legislation
The rule of law backsliding in the European Union is a fast-evolving field. As mentioned in
the module guide, the EU was threatening to withhold billions of Euros from Poland for
recovery after the pandemic. However, with the backdrop of the war in Ukraine and
through a highly contested move, in June 2022, the European Commission gave a green
light to Poland’s recovery and resilience plan under the Next Generation EU program.
The EU conditionality regulation 2020/2092 eventually became operational in 2022. This
regulation empowers the Commission to take a number of budgetary measures, such as a
suspension of payments in a situation where ‘breaches of the principles of the rule of law
in a Member State affect or seriously risk affecting the sound financial management of the
Union budget or the protection of the financial interests of the Union in a sufficiently direct
way’ (Article 4). The Regulation was proposed in 2018 and adopted in 2020 but the
implementation took two years as it was decided, by the European Council to delay
enforcement pending judicial review introduced by Poland and Hungary (C-156/21 and C-
157/21) and pending the adoption of further guidance by the Commission (C(2022) 1382
final). The Conditionality Regulation has been triggered by the Commission against
Hungary in 2022 and, at the time of writing, the EU institutions are looking into freezing
some 7.5 bn EUR from Hungary’s regular EU payments. In September 2022, the
European Parliament declared that Hungary can no longer be considered a full
democracy.

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