European Law - News March 2024
European Law - News March 2024.pdf
content:
Banking Law: Active-Passive Method for Prepayment Penalties in Residential Real Estate Loan Agreements in Compliance with European Law
State Aid Law / Cogeneration
Developments in Semiconductors ("European Chips Act")
Truck Cartel
Distance Selling of Pharmaceuticals
in brief: Miscellaneous
contact:
lawyer
Dr. Thomas M. Grupp
Maître en droit (Aix-Marseille III)
phone.: +49 (0) 711/22744-69
tg@haver-mailaender.de
European Law - News March 2024
European Law - News March 2024.pdf
content:
Banking Law: Active-Passive Method for Prepayment Penalties in Residential Real Estate Loan Agreements in Compliance with European Law
State Aid Law / Cogeneration
Developments in Semiconductors ("European Chips Act")
Truck Cartel
Distance Selling of Pharmaceuticals
in brief: Miscellaneous
contact:
lawyer
Dr. Thomas M. Grupp
Maître en droit (Aix-Marseille III)
phone.: +49 (0) 711/22744-69
tg@haver-mailaender.de
European Law-News December 2023
Content:
Contact:
Rechtsanwalt
Dr. Thomas M. Grupp
Maître en droit (Aix-Marseille III)
Tel.: +49 (0) 711/22744-69
tg@haver-mailaender.de
European Law-News July 2023
Content:
Contact:
Rechtsanwalt
Dr. Thomas M. Grupp
Maître en droit (Aix-Marseille III)
Tel.: +49 (0) 711/22744-69
tg@haver-mailaender.de
European Law-News May 2023
Content: Competition law (Vertical Block Exemption Regulation for the motor vehicle sector, Revised Guidelines), banking law (common deposit guarantee, bank resolution), regulation of the markets for crypto assets, data protection law (dismissal of data protection officers), State aid law (combined heat and power).
(1) Competition law – Vertical Block Exemption Regulation for the motor vehicle sec-tor extended and revision of the Supplementary Guidelines
The European Commission has extended the Vertical Motor Vehicle Block Exemption Regulation (Regulation (EU) No. 461/2010) for five years until 31 May 2028 (Regulation (EU) 2023/822 of 17 April 2023). In addition, the Supplementary Guidelines were revised. This is intended to provide the motor vehicle industry with greater certainty as to how vertical agreements are to be legally assessed against the background of EU competition law.
Above all, the technical development with a stronger digitalisation of cars has brought with it that in future much more attention is to be paid to vehicle-generated data. Not only car manufacturers should be able to access such data, but also independent market participants such as independent repairers, spare parts manufacturers, automobile clubs, etc. for the delivery of services, for repairs, for maintenance or e.g. for the production of spare parts or tools. The access of independent market participants to technical information has therefore been expanded to access essential inputs, which above all also include vehicle-generated data.
When considering withholding on security grounds a particular item that is essential for repair and maintenance from other market participants, a proportionality test must first be carried out.
More detailed guidance on the European Commission's standard of review can now also be found in the revised Guidelines for agreements containing so-called hardcore restrictions as serious restrictions of competition. The text of the revised Guidelines is primarily based on likelihood considerations.
(2) Banking law: Reform of crisis mechanism in the banking sector and European de-posit insurance framework
The European Commission is once again attempting to complete the Banking Union in the EU. To this end, it presented a package on 18 April 2023 to reform crisis management in the banking sector and deposit insurance framework. The European Bank Recovery and Resolution Directive (2014/59/EU), the European Single Resolution Mechanism Regulation (806/2014) and the European Deposit Guarantee Schemes Directive (2014/49/EU) are to be formally amended.
From the European Commission's point of view, medium-sized and smaller banks were resolved too rarely across Europe because it was resorted too often to mechanisms that were outside the harmonised resolution framework. This approach is to be changed in the future.
In Germany, savings banks and cooperative banks in particular are alarmed as to whether this will question the tried and tested three-pillar model and their own institutional protection schemes. In a questions and answers catalogue, the European Commission states:
"The most sustainable way to reduce the risk of shortfalls in national deposit guarantee schemes remains the mutualisation of such schemes at a pan-European level as it would increase the resilience of funds against significant depletion events. The current rules provide for the possibility for national deposit guarantee schemes to voluntarily lend to each other, but in the absence of a political agreement to establish a European Deposit Insurance Scheme, today's reform cannot fully avoid the risk of shortfalls in national deposit guarantee schemes. According to the ECB, every Member State has at least one medium-sized or smaller bank for which a reimbursement of covered deposits would fully deplete the national deposit guarantee scheme. Therefore, pay-outs in case of liquidation presents the biggest danger of shortfalls for deposit guarantee schemes.“
In a joint Declaration and Call for Action, institutional protection schemes of the banking industry from Austria, Germany, Italy, Poland and Spain immediately expressed their view and their postulations. For the further negotiations on the legislative package, they demand that the functionality of their systems be maintained even in the event of a reform of the crisis mechanism. In line with the subsidiarity principle, which is also expressly recognised and justiciable under EU law, they demand that the current prerogative of their institutional protection schemes mesures having priority over actions of a resolution authority ist maintained. In addition, when applying preventive measures, a distinction must be made between pure Deposit Guarantee Schemes and those Deposit Guarantee Schemes that are recognised as institutional protection schemes under EU law. For the latter, the current provisions on the use of funds from the financing of deposit guarantee schemes should be maintained (Art. 11 of the Deposit Guarantee Schemes Directive).
In any case, according to the EU's plans, the coverage level of € 100,000 per person and institution for deposit protection should remain, and in exceptional cases, for example in the case of certain events such as inheritance, it should also extend beyond this. Public institutions such as schools and hospitals should also be able to benefit from depositor protection.
(3) Crypto Assets: EU-wide regulation of the markets for crypto assets (Markets in Crypto Assets – MiCA)
On 20 April 2023, the European Parliament adopted a regulatory framework in the form of a European Regulation for crypto assets, including cryptocurrencies, in its first reading. The regulatory instrument is known as Markets in Crypto Assets = MiCA. If approved by the Council and promulgated in the Official Journal of the EU, it will realize the application of EU-wide rules for crypto assets that are not already covered by the existing rules in the financial services sector. According to the envisaged regulations, crypto securities transactions are to be regulated and greater transparency is to take effect. In particular, regulations on supervision, consumer protection and environmental protection are envisaged. The fight against crime and money laundering in particular are an essential goal of the planned regulations. In order to create an incentive to limit energy consumption in the creation and use of cryptocurrencies as much as possible, an obligation for important service providers to disclose their energy consumption is planned. Transactions by issuers and traders of cryptocurrencies will be monitored in accordance with the new regulations. Various service providers in the crypto sector will need a licence, but will then be able to operate across national borders throughout the EU. The intended regulation can be expected to enter into force in June 2023.
(4) Data protection law: European Court of Justice, judgment of 9 February 2023, C-453/21 (X-FAB Dresden GmbH & Co. KG ./. FC): Dismissal of data protection officers
In Germany a case before the European Court of Justice (ECJ) concerning the dismissal of data protection officers attracted a lot of attention. The background to the referral by the German Federal Labour Court was that, according to Article 38 (3) sentence 2 of the European General Data Protection Regulation (GDPR), a data protection officer "may not be dismissed or disadvantaged by the controller or processor for the performance of his or his duties". In national German law, Section 6 (4) sentence 1 of the Federal Data Protection Act (BDSG) refers in a more restrictive manner to the fact that the dismissal of the data protection officer is only permissible in accordance with Section 626 of the German Civil Code (BGB), i.e. there would have to be an important reason in the sense of this stipulation, on which an immediate termination of an employment relationship can be based according to the BGB. This is the case if there are facts on the basis of which the dismissing party, taking into account all circumstances of the individual case and weighing the interests of both contracting parties, cannot reasonably be expected to continue the activity of the data protection officer(s) until the expiry of the notice period or until the agreed termination of the appointment relationship. The ECJ ruled in its judgment of 9 February 2023 that the European law standard of Art. 38 (3) sentence 2 GDPR does not preclude a stricter national standard, provided that the national standard does not impair the achievement of the objectives of the GDPR. This, in turn, must be ensured by a national court.
In addition, the ECJ commented on the understanding of Art. 38(6) GDPR. According to this, the data protection officer(s) may perform other tasks and duties. The controller or processor must ensure that such tasks and duties do not lead to a conflict of interest. According to the ECJ, a "conflict of interest" may exist if a data protection officer is entrusted with other tasks or duties which would lead him to determine the purposes and means of the processing of personal data at the controller or its processor. Again, this is to be examined in more detail by the courts of the Member States.
(5) State aid law: Pending proceedings before the (European) General Court, Case T-409/21: Federal Republic of Germany ./. European Commission concerning cogeneration
By decision of 3 June 2021, the European Commission had approved various amendments to the Combined Heat and Power Act (KWKG) notified by Germany - possibly as a precautionary measure - (State aid SA.56826 (2020/N) - Germany - Reform 2020 of the support scheme for combined heat and power and State aid SA.53308 (2019/N) - Germany - Amendment of the support scheme for existing CHP plants (§ 13 KWKG)).
The Federal Republic of Germany then brought an action for annulment before the General Court of the EU against this decision insofar as „a) the support to the production of CHP electricity in new, modernised and retrofitted highly efficient CHP installations, (b) the support to energy-efficient district heating/cooling networks, (c) the support to heat/cooling storage facilities, (d) the support to the production of CHP electricity in existing highly efficient gas-fired CHP installations in the district heating sector, and (e) the reduced CHP surcharge for hydrogen producers are considered to be qualified as State aid under German Combined Heat and Power Law (Kraft-Wärme-Koppelungs-Gesetz, KWKG) 2020.“
Oral proceedings in the case were held before the General Court on 4 May 2023. Germany is of the opinion that the Commission misinterpreted and misapplied Article 107(1) of the Treaty on the Functioning of the EU. According to this provision, unless the European Treaties provide otherwise, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods is incompatible with the internal market insofar as it affects trade between Member States.
Specifically, contrary to the arguments put forward by the European Commisison, Germany considers that the fiscal nature of a surcharge of itself does not imply the funds raised having the characteristic of State resources.
In addition, neither the KWKG levy under the KWKG 2020 nor the surcharges paid to the plant operators by the network operators constitute a tax within the meaning of the ECJ case law.
Furthermore, Germany assumes that resources received by the transmission system operators are not under public control and are thus not at the disposal of the State.
The decision from Luxembourg is eagerly awaited, as the questions raised are of a more fundamental nature and, in view of the frequent amendments to the KWKG and other norms in energy law, can have a not inconsiderable impact on how far-reaching national scope is here for subsidy measures without running the risk of infringing European law.
Contact:
Rechtsanwalt
Dr. Thomas M. Grupp
Maître en droit (Aix-Marseille III)
Tel.: +49 (0) 711/22744-69
tg@haver-mailaender.de
European Law-News June 2022
Content: Competition law (entry into force of the new vertical block exemption regulations on 1st June 2022; consultation process on horizontal block exemption regulations; liberalisation of the electricity market)
(1) Competition law - New Vertical Block Exemption Regulation and new Vertical Guidelines as well as public consultation on horizontal exemptions
Article 101 paragraph 1 of the Treaty on the Functioning of the EU (TFEU) provides, inter alia, for the prohibition of agreements between undertakings which restrict competition. Paragraph 3 provides for exceptions to this rule, in particular if they contribute to improving the production or distribution of goods or to promoting technical or economic progress without eliminating competition, while allowing consumers a fair share of the resulting benefit. There is a difference to be made between vertical and horizontal agreements:
A. Vertical Agreements
According to the relevant EU definition, a vertical agreement is an agreement or concerted practice between two or more undertakings, each of which operates, for the purposes of the agreement or the concerted practice, at a different level of the production or distribution chain, and relating to the conditions under which the parties may purchase, sell or resell certain goods or services.
In order to specify the rules for vertical agreements, the European Commission published the long-awaited new Block Exemption Regulation for Vertical Agreements ("Vertical Block Exemption Regulation", VBER) on 10 May 2022. With this regulation, the previous Regulation was replaced as of 1st June 2022. The new VBER is accompanied by new Vertical Guidelines. The new rules and the new interpretation instruments are intended to take especially the increasing e-commerce into account.
The new rules were preceded by an evaluation process and a public consultation. For the contractual practice, the revised VBER and the new Vertical Guidelines now result in the following essential innovations:
• In dual distribution, when a supplier sells goods not only through independent distributors, but also directly to end customers in competition with them, an exchange of information remains permissible under certain conditions, but with greater restrictions than before. This also applies to hybrid platforms. On the other hand, an extension of the exemption for dual distribution to wholesalers and importers is now also to be taken into consideration.
• Restrictions with regard to an exemption can also be identified in relation to so-called parity obligations. Parity clauses oblige sellers to offer their contracting parties terms that are equal to or better than the terms of third party distribution channels (such as other platforms) and/or the terms of the seller's direct distribution channels (such as its websites). In such cases, too, it is no longer possible to consistently invoke a VBER exemption; the facts must then be examined individually under Article 101 TFEU.
• On the other hand, a VBER exemption can be considered to a greater extent than before with regard to certain restrictions on the possibility of a buyer to actively approach individual customers (active selling).
• In addition, dual pricing systems are no longer simply considered as hardcore restrictions, e.g. in cases where different wholesale prices are charged to the same distributor for internet and terrestrial distribution and different criteria are set for online and offline distribution in selective distribution systems.
Further details and groups of cases can be found in the Vertical Guidelines as well as in a Summary Note of the European Commission (Internet link: https://ec.europa.eu/competition-policy/system/files/2022-05/explanatory_note_VBER_and_Guidelines_2022.pdf).
B. Horizontal Agreements
Horizontal agreements, on the other hand, concern the relationship between companies at the same level of production or distribution. With regard to such horizontal agreements, on 1 March 2022 the European Commission invited interested parties to submit their comments by 26 April 2022 on two draft revised Horizontal Block Exemption Regulations (HBERs) - one for research and development (R&D BER) and the other for specialisation agreements (Specialisation). In addition, the Horizontal Guidelines are to be revised. According to the European Commission, companies should be enabled to cooperate more easily in areas such as R&D and production through clearer formulations and the inclusion of new explanations as well as a slight extension of the scope of application of the Specialisation HBER.
R&D agreements that concern completely new products, technologies and processes and R&D efforts that are directed towards a specific objective but not yet concretely directed towards a product or technology are, according to the EU Commission's plans, only to be exempted from the EU competition rules if there are sufficient comparable competing R&D efforts. The assessment of the pursuit of sustainability goals in agreements is to be included in a new chapter. The explanations, especially on the sensitive issue of data exchange, are also to be reworded. It remains to be seen which modifications or additions will be made to the regulatory texts before they become effective.
(2) Competition law - market liberalisation: Judgment of the ECJ of 12 May 2022, Case C 377/20 (Servizio Elettrico Nazionale)
In this case, questions from Italy were submitted to the ECJ against the background of a gradual liberalisation of the electricity market there. In a first step, a distinction was made between customers of the protected market, which mainly includes private individuals and smaller companies, and other customers. The protected market was a regulated system with special price protection. In a second step, the customers of the protected market were to be able to participate in the free market.
In the course of liberalisation, the generation and distribution activities of the former electricity monopoly ENEL were unbundled, with different phases of the distribution process being assigned to different subsidiaries. Following an investigation, the Italian antitrust authority found abuse of a dominant position by subsidiaries, coordinated by their parent company ENEL, over a certain period of time and imposed a joint and several fine. The allegation made was that one of the subsidiaries had attempted to transfer its customers from the protected market area to another subsidiary operating on the free market in an anticompetitive manner. ENEL and the two subsidiaries brought an action and, on appeal, the Italian Council of State referred questions relating to exclusionary practices to the ECJ.
The ECJ considered the interest protected by Article 102 TFEU to be in the well-being of consumers against the background of the prohibition of abuse of a dominant position laid down therein. A competition authority had to prove that conduct by an undertaking in a dominant position was likely to interfere with a structure of effective competition through the use of means or resources which differed from those of normal competition. The possibility of the suitability to restrict competition must also be proven. However, the burden of proof does not go so far as to include proof that the conduct complained of is capable of causing direct harm to consumers. The dominant undertaking, on the other hand, can prove that any exclusionary effect from its conduct is offset or even outweighed by positive effects on consumers.
From the ECJ's point of view, the assessment of an abusive exclusionary practice by an undertaking in a dominant position must be made on the basis of the suitability of that practice to produce anti-competitive effects. In contrast, a competition authority does not have to prove the intention of the undertaking in question to displace its competitors by means other than competition on the merits.
In the event of the loss of a statutory monopoly, an undertaking must refrain throughout the market liberalisation from resorting to such means as it had at its disposal by virtue of its pre-vious monopoly and which are not available to its competitors.
Finally, the ECJ also had to deal with the question of the extent to which the conduct of a subsidiary can be attributed to the parent company: If there is a dominant position of one or more subsidiaries belonging to an economic unit and this position is abused, the existence of this unit is sufficient for the presumption that the parent company is also responsible for this abuse. Here, a presumption effect takes place if at least almost the entire capital of these subsidiaries was directly or indirectly held by the parent company at the relevant time.
Ihr Ansprechpartner:
Rechtsanwalt
Dr. Thomas M. Grupp
Maître en droit (Aix-Marseille III)
Tel.: +49 (0) 711/22744-69
tg@haver-mailaender.de
European Law-News June/July 2021
(1) European antitrust law: Unannounced inspections by the European Commission at the premises of a German garment company on 22nd June 2021
In the event of suspected EU antitrust law violations, the Commission may carry out unannounced inspections. According to a press release, the Commission was prompted to do so on 22nd June 2021 on the premises of a German garment company. Until proven otherwise, the presumption of innocence applies to the company. It has the right to defend itself and to be heard in the course of proceedings. There is no fixed deadline by which the investigations must be completed. Now that COVID-19 figures are declining, it cannot be ruled out that in the future the Commission will once again increasingly take such measures should there be reason for suspicions of behaviour contrary to antitrust law. Companies ought to pay attention to strict compliance with antitrust regulations and, if necessary, involve relevant expertise from an early stage onwards.
(2) Liability for anticompetitive conduct: Opinion of Advocate General Pitruzzella in Sumal, S. L. v Mercedes Benz Trucks España S. L., Case C-882/19, of 15th April 2021
In the "Sumal" case pending before the ECJ, Advocate General Pitruzzella commented on the question of the extent to which a subsidiary can be obliged to compensate for damage caused by the parent company’s anticompetitive conduct as the sole addressee of the fine imposed by the Commission. The Advocate General took the so-called theory of economic unity as a starting point and considered, on the one hand, the conditions that would be decisive for an ascending liability of the parent company for the anticompetitive behaviour of its subsidiaries. In addition to an economic unity, a determining influence of the parent company is required. However, the subsidiary does not exercise such a determining influence in the scenario of liability on the parent company's conduct. Nevertheless, the determining influence is a necessary prerequisite for the existence of an economic unit. Liability of the subsidiary could now be considered if the activity of the subsidiary was, to a certain extent, necessary for the realisation of the anticompetitive behaviour, for example, because it sold cartel-involved goods. For a descending liability, the subsidiary had to be active in the same field in which the parent company had engaged in the anticompetitive conduct and made it possible to specify the effects of the infringement by its market conduct. The subsidiary and parent company were then jointly and severally liable. The injured party had the choice of which company to claim against. The decision of the ECJ is currently being awaited.
(3) State aid law: Judgment of the European General Court in Dansk Erhverv v. Commission of 9th June 2021, Case T-47/19 (Non-charging of a deposit on drinks packaging in border areas)
If beverages in one-way packaging are sold in the border area exclusively to customers in Denmark with the obligation to consume them and to dispose of their packaging outside Germany, authorities in Schleswig-Holstein and Mecklenburg-Vorpommern held the view that there should be no obligation for border shops to charge a deposit contrary to other cases. A Danish trade association considered this to be granting unlawful aid incompatible with the internal market. However, the European Commission did not uphold the complaint lodged by the association, so the association brought an action for annulment before the European General Court. In a judgement of 9th June 2021, the (first-instance) Court declared the Commission's decision null and void. In particular, the Court objected to the fact that the Commission had denied the condition relating to "State resources" required for aid without examining whether interpretive difficulties on which it relied were only temporary and inherent in the gradual clarification of the rules.
(4) State aid law: Judgment of the European General Court in Ryanair ./. European Commission of 9th June 2021, Case T-665/20 (compensation for Condor)
The judgment on state aid law of 9th June 2021 at the initiative of Ryanair concerning com-pensation granted to Condor contains detailed guidance on the circumstances under which aid may be granted to compensate damage caused by natural disasters or other extraordinary events. Aid measures must be suitable to make up for the damage caused by exceptional occurrences and the amount of compensation must be limited to what is necessary to rectify the damage suffered by the beneficiaries of the measure in question. In addition, there must be a causal link between the damage caused by the event in question and the occurrence of other causes, which must be specifically examined. The Commission must explain its decisions in detail so that this is comprehensible. In the specific case, the General Court found this was not the case with regard to essential aspects.
(5) Product liability law: Judgment of the European Court of Justice of 10th June 2021, Case C-65/20 - Krone-Verlag (herbalist Benedikt)
A reference for a preliminary ruling was made to the European Court of Justice from Vienna on whether a daily newspaper that published an inaccurate health recommendation by an independent newspaper columnist in a daily column can be sued on the basis that it distributed a defective product within the meaning of the Directive on liability for defective products (85/374/EEC). In the Austrian case in question, a reader of the Kronen-Zeitung had claimed that she had suffered damage to her health by following the recommendation of the "herbalist Benedikt". Instead of applying grated horseradish poultices for rheumatic pain according to the article of two to five hours, two to five minutes would have been correct. The ECJ denied liability without fault of the newspaper publisher. A copy of a printed newspaper was not to be regarded as a defective product within the meaning of the Directive on liability for defective products, because it was not a question of a defect inherent in the physical product itself, but of an alleged defect in the intellectual content, in this specific case in relation to a service. However, this did not mean that other rules of contractual or non-contractual liability could not be applicable, which, like liability for hidden defects or for fault, were based on other grounds.
(6) Foreign currency loans for consumers: judgments of the European Court of Justice in BNP Paribas Personal Finance of 10th June 2021, Cases C-776/19; C-777/19; C-778/19; C-779/19; C-780/19; C-781/19; C-782/19
The facts of these judgments date back to 2008 and 2009. At the time, consumers had taken out mortgage loans with BNP Paribas Personal Finance to purchase real estate or shares in real estate companies. The loans were denominated in Swiss francs but repayable in Euros. Although the foreign exchange risk was not explicitly mentioned in the loan agreements, it could be indirectly foreseen. After consumers had difficulties with the payment of the monthly instalments, they took legal action in France. One of the key questions was whether clauses in the loan agreements that exposed consumers to an unlimited foreign exchange risk were to be regarded as unfair within the meaning of the Directive on unfair terms in consumer contracts (Directive 93/13/EEC). If this were the case, they would not be binding and would be regarded as non-existent from the beginning.
The ECJ held, following a request for a preliminary ruling by the Tribunal de grande instance de Paris, that a consumer's application for a declaration of unfairness of a contractual term is not subject to a limitation period, because in the case of an unfair term it is to be regarded as never having existed. However, from the ECJ's point of view, a limitation period may be provided for by national legislation for an action claiming reimbursement resulting from such a finding of unfairness. However, the limitation period for the repayment must not have been already expired before the consumer had the opportunity to become aware of the unfairness of such a term
From the ECJ's point of view, the requirement of transparency is not satisfied by providing the consumer with a lot of information upon conclusion of the contract if it is based on the hypothesis that the exchange rate between the account currency and the payment currency will remain stable throughout the term of the contract. Given the knowledge of the professional party to the contract of the foreseeable economic context and the better means available to the professional party to foresee the foreign exchange risk and a significant risk relating to foreign exchange variations, the ECJ states that such clauses may cause a significant imbalance in the parties‘ rights and obligations arising under the loan agreement, to the detriment of the consumer.
(7) Individual arbitration agreements: Opinion of Advocate General Kokott, 22nd April 2021, Case C-109/20
In her opinion regarding the case Republic of Poland v PL Holdings Sàrl, Advocate General Kokott had to deal with the question to what extent the so-called Achmea case law of the ECJ regarding a general arbitration clause in investment agreements between Member States for the benefit of investors should also apply to an individual arbitration agreement between an EU Member State and an investor. Specifically, the ECJ had decided in Achmea (judgment of 6th March 2018, case C-284/16) that arbitration clauses in favour of investors in investment agreements between Member States are incompatible with the EU law. On the other hand, the Advocate General demonstrates in her current opinion that the ECJ accepts rules on commercial arbitration based on private autonomy, at least to a certain extent (judgments Nordsee C-102/81 and Eco Swiss C-126/97), if the EU rules concerned are not of a fundamental nature. In contrast, the Advocate General does not regard the current case between a Member State and a private investor as a trade dispute of the same order, but emphasises the connection with the exercise of sovereign powers. As a result, she argues in favour of full range EU legal control and thus for an application of the Achmea principles to the case constellations now under consideration. It remains to be seen whether the ECJ will follow this Advocate General’s Opinion.
(8) European data protection law: New GDPR standard contractual clauses
The European Commission has adopted new standard contractual clauses, which were published in the Official Journal on 4th June 2021 (OJEU L 199, p. 18 et seq.). In particular, these include model clauses for the transfer of personal data to third countries (p. 31 et seq.) - a topic that has once again received special attention, especially following the ECJ ruling in Schrems II of 16 July 2020 (Case C-311/18), when the ECJ no longer considered the transfer of personal data to the USA to be permissible on the basis of the so-called Privacy Shield. There is now an 18-month transition period to replace contracts from the past. Four modules are available, in particular Module I (transfers from controller to controller), Module II (transfers from controller to processor), Module III (transfers from processor to processor), Module IV (transfers from processor to controller). However, the Conference of Independent Data Protection Authorities of the Federation and the Länder (DSK) assumes in a communication of 21st June 2021, as does the European Data Protection Committee (EDPC), that despite these new EU standard contractual clauses an examination of the legal situation in the third country is necessary. Additional supplementary measures may be needed, too.
(9) Company data protection officer: Order (for reference) of the Federal Labour Court of 27th April 2021, ref. no. 9 AZR 383/19 (A) to the European Court of Justice
The German Federal Labour Court (Bundesarbeitsgericht) was confronted with the question whether a company data protection officer who is also works council chairman was entitled to be dismissed from his office as data protection officer given the entry into force of the European General Data Protection Regulation (GDPR). From the perspective of German law, an important reason is required for dismissal. In contrast, the requirements under European law, Article 38 (3) sent. 2 GDPR, are more generous and only prevent a dismissal if it is made because of the performance of the data protection officer's duties. The Federal Labour Court did not see any good cause for dismissal under German law and would therefore now like to know from the ECJ whether these national regulations are applicable alongside the European regulation and whether the possibility of dismissing a data protection officer may thus be restricted compared to regulations under EU law. Should the ECJ agree, the question also arises from the Federal Labour Court's point of view as to whether the offices of works council chairperson and data protection officer may be exercised in a company in personal union or whether there instead is a conflict of interest within the meaning of Article 38 (6) sent. 2 of the GDPR.
(10) Primacy of EU law over national law or exceeding of competences? Communication of the Commission of 9th June 2021 on the initiation of infringement proceedings against Germany due to the ECB ruling of the Federal Constitutional Court
The European Commission has initiated infringement proceedings against Germany pursuant to a notification issued on 9th June 2021. Germany has two months to reply to the Commission. The background of this is the ruling of the Federal Constitutional Court of 5th May 2020, in which the highest German court partially classified the European Central Bank's government bond purchase programme, which had been approved by the ECJ, as unconstitutional and in this respect denied its legal effect in Germany. The Commission accuses Germany of having violated the principle of the primacy of EU law and, in particular, of not having complied with the principles of autonomy, primacy, effectiveness, and uniform application of Union law. The Constitutional Court, on the other hand, claims to examine within the framework of its jurisdiction whether EU institutions, bodies, and agencies exceed the limits of their competences (so-called "ultra vires" doctrine). Such limits result, in its view, also in the eyes of the ECJ, from the so-called "principle of conferred powers". According to this principle, laid down in Art. 5 TEU, the EU 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. All competences not conferred on the EU in the Treaties remain with the Member States. The delimitation can prove very difficult in individual cases and gives room for many additional legal opinions, provided the unlikely case that the infringement proceedings cannot resolve the differences of opinion between the national and European levels once and for all.
Contact:
Rechtsanwalt
Dr. Thomas M. Grupp
Maître en droit (Aix-Marseille III)
Tel.: +49 (0) 711/22744-69
tg@haver-mailaender.de
European Law-News March 2021
(1) EU antitrust: Commission fines PC video games industry € 7.8 million for violating geo-blocking ban
The European Commission has imposed fines of € 7.8 million on Valve, the operator of the online PC gaming platform "Steam", and five publishers of PC video games (Bandai Namco, Capcom, Focus Home, Koch Media and ZeniMax). It accuses the companies of contractually having restricted the cross-border sale of games over a certain period in breach of EU antitrust law. Specifically, Valve and the publishers, according to the Commission, unlawfully fore-closed the EEA market by entering into bilateral agreements to geo-block certain video games.
According to the Commission, geo-blocked Steam activation keys prevented on the one hand the activation of certain video games in various EU/EEA Member States. On the other hand, four of the five publishers (Bandai, Focus Home, Koch Media and ZeniMax) had bilateral licensing and distribution agreements with some of their video game suppliers in the EEA – except for Valve – restricting cross-border sales within the EEA. The Commission considers that such practices prevented consumers from playing video games purchased in individual EEA Member States on physical media in other EEA countries; activation codes could only be unlocked within certain national borders, thus violating the geo-blocking prohibition. The geo-blocking practices concerned around 100 video games. It was announced that at least Valve wants to defend itself against the Commission's decision for various reasons. Among other items, the fines had been reduced by 10 to 15 % for the publishers, but not for Valve. Valve refutes the accusation that, unlike the publishers, it did not cooperate with the Commission. Court proceedings may have to decide on the extent of cooperation with the authorities, as well as on the liability of platform providers if geo-blocking is carried out via their platforms.
(2) Judgment of the ECJ of 3 February 2021 (C-555/19) on the prohibition of regional advertising in national television programmes
It is not often that the ECJ does not (comprehensively) follow the Advocate General's Opinion. In its judgment of 3 February 2021 in Fussl Modestraße Mayr v. SevenOne Media GmbH and others, the ECJ now emphasised more strongly than the Advocate General that the prohibition in Germany laid down in the State Media Treaty on showing advertising only regionally in German television programmes broadcasted nationwide may violate EU law. Thus, a violation of the freedom to provide services comes into question. Here, it must be examined whether the ban is at all appropriate and necessary. This also corresponds to the Advocate General's approach. Unlike the Advocate General, however, the ECJ also saw the possibility of unlawful unequal treatment of television broadcasters and advertising providers on the internet. The Advocate General, on the other hand, rejected such comparability and regarded it as meaningless. It is now the task of the Regional Court of Stuttgart to decide the case taking into account the preliminary ruling of the ECJ.
(3) Judgment of the ECJ of 20 January 2021 (C-619/19) on access to environmental information regarding "Stuttgart 21"
The ECJ also recently delivered its judgment in another Stuttgart case. The case concerns claims for disclosure of information in connection with the police action in 2010 on the occasion of tree logging for the railway project „Stuttgart 21“. An applicant had requested access to various documents from the State Ministry of Baden-Württemberg, ultimately relying on the European Environmental Directive.
An exception to the right to information under environmental law is provided for under EU Directive law and national transposition law if there are merely "internal communications". The ECJ now regards that „the term ‘internal communications’ covers all information which circulates within a public authority and which, on the date of the access request, has not left that authority’s internal sphere – as the case may be, after being received by that authority, provided that it was not or should not have been made available to the public before it was so received.“
The ECJ considers that the applicability of the exception to the right of access to environmental information provided for such internal communications is not limited in time. However, it could only be applied during the period in which the protection of the requested information was justified. This is to be included in a balancing of interests. It is now up to the national courts to decide the case.
(4) Decision of the German Federal Supreme Court (BGH) of 11 February 2021, Case No. I ZR 241/19 regarding the duty of internet traders to inform about manufacturers' warranties
The starting point of this case, which was decided in the previous instances by the LG Bochum and the OLG Hamm, is the sale of pocket knives via the internet platform Amazon. Specifically, the question arises to what extent, in addition to a reference to an existing manufacturer's warranty, the consumer's statutory rights must also be pointed out in this context. While the Regional Court had dismissed the claim, the Court of Appeal affirmed the complaint against the defendant trader. The relevant German provisions, in particular § 312d BGB (regarding distance contracts), § 479 BGB (regarding guarantee declarations) and Art. 246a § 1 para. 1 sentence 1 no. 9 EGBGB (specifying which information must be provided to consumers) transpose EU Directive law. The German Supreme Court has therefore decided to submit relevant questions of interpretation to the ECJ for a preliminary ruling. The ECJ will thus have to rule on the interpretation of Art. 6 (1) (m) of the Consumer Rights Directive 2011/83/EU. Such a decision may be of farreaching significance for internet traders.
(5) Decision of the OLG Frankfurt a. M. of 11 February 2021, Ref. 26 SchH 2/20, on an invalid arbitration clause in intra-Union investment disputes
Referring to the Achmea jurisprudence of the ECJ, the Frankfurt Court of Appeal (OLG), in a decision of 11 February 2021, declared arbitration proceedings initiated against the Republic of Croatia at the request of an Austrian and a Croatian bank to be inadmissible. The basis for these arbitration proceedings was found in a bilateral investment protection agreement under international law (so-called Bilateral Investment Treaty, BIT). The OLG saw an adverse effect on the autonomy of EU law if an arbitral decision in an investment dispute between some EU Member States may affect EU law. The ECJ had already made a corresponding landmark decision on 6 March 2018 in the Achmea case (C - 284/16). However, these considerations are not readily transferable to commercial arbitration, which, in contrast, is based on private autonomy.
(6) European Council adopts package of measures for the recovery of capital markets (amendments to MiFID II, Prospectus Regulation)
On 15 February 2021, the European Council adopted amendments to the Markets in Financial Instruments Directive (MiFID II) and to the Prospectus Regulation, which are to be promul-gated in the Official Journal shortly. The Member States will then have nine months to transpose the Directive into national law; the Regulation will be binding in the Member States without further transposition on the 20th day after its publication. The measures aim to make it easier for companies to recapitalise on the financial markets after the COVID 19 pandemic. With the approved amendments to the MiFID II provisions, on the one hand, information obligations are to be simplified, but on the other hand, investor protection is to be safeguarded. Among other things, it is planned that, for example, professional investors will have to be provided with less information on costs and fees. In addition, investor information in paper form is to be eliminated. However, retail investors, if they so wish, are exempt from this.
Furthermore, the Prospectus Regulation provides for the introduction of an "EU reconstruction prospectus", a kind of short prospectus for simplified and more cost-effective capital raising. This is intended to enable issuers to carry out capital increases of up to 150% of the admitted shares by the end of 2022. The prospectus, excluding the summary, must not exceed 30 A4 pages and should contain abbreviated information.
(7) COVID 19 aid for companies in the trade fair and congress industry
Compensation can be paid to companies in the trade fair and congress industry that have suffered damage due to the Corona pandemic. For this purpose, the European Commission has approved a federal aid scheme amounting to € 642 million under EU state aid law. Eligibility is given if the relevant companies have suffered a loss of profit in the period between 1 March 2020 and 31 December 2020 and this loss is related to the relevant measures taken by the German Federal States (Länder) in this period to curb the spread of the virus pandemic.
(8) COVID 19 pandemic: Vaccine contract between the European Commission and Sanofi - GSK published
The vaccine contract ("Advance Purchase Agreement") between the European Commission and Sanofi - GSK of September 2020 was published in February 2021 and is accessible via the internet at https://ec.europa.eu/info/sites/info/files/apa_with_sanofi_gsk.pdf. However, sensitive passages have been sanitized.
(9) Telecommunications law: infringement proceedings against 24 Member States
On 4 February 2021, the Commission opened infringement proceedings against Germany and 23 other EU Member States. The Commission alleges that the States have failed to transpose the new provisions of the European Electronic Communications Code (Directive EU 2018/1972) on time. The Code aims to modernise the regulatory framework in the field of telecommunications. It aims to achieve a high standard for communication services, especially in the 5G network area, to strengthen consumer rights and to take into account the needs of certain social groups such as disabled or elderly people. Above all, the focus of the new regu-lations is on enabling effective competition.
To this end, the Commission adopted additional legislation in December 2020, such as a new delegated Regulation setting uniform maximum call termination charges across the European Union.
(10) BREXIT and EU data protection law: Data flows to the United Kingdom
On 21 February 2021, the EU Commission initiated the procedure for the adoption of adequacy decisions concerning the transfer of personal data to the United Kingdom (UK). According to the Commission, it has thoroughly examined the law and practice of personal data protection in the UK, including access to data by public authorities. It concluded that the existing level of protection in the UK is essentially equivalent to that of the European Data Protection Regulation (GDPR). The European Data Protection Committee now has the opportunity to give its opinion. The proposal is still subject to the approval of the representatives of the EU Member States before the adequacy decisions can be adopted. After four years, the level of data protection in the UK is to be re-examined. With the expiry of the BREXIT transition period on 31 December 2020, the UK has in principle become a third country within the meaning of the GDPR. However, a special transitional period under data protection law, which was agreed in the trade and cooperation agreement between the EU and the UK in December 2020, is currently still running until 30 June 2021. It remains to be seen, however, if this path is followed as outlined, how a court will ultimately assess such an approach. After all, only on 16 July 2020, in the so-called Schrems II ruling (Case C-311/18), the ECJ declared the Privacy Shield mechanism found by the European Commission with the United States to be insufficient. The main point of examination could be the access rights of (security) authorities to data.
Contact (Legal notice on the website: https://www.haver-mailaender.de/en/impressum
Rechtsanwalt
Dr. Thomas M. Grupp
Maître en droit (Aix-Marseille III)
Tel.: +49 (0) 711/22744-69
tg@haver-mailaender.de
