Wilhelm Case

1
Wilhelm Case

• Article 81
• 1. The following shall be prohibited as
  incompatible with the common market all
  agreements between undertakings, decisions by
  associations of undertakings and concerted
  practices which may affect trade between Member
  States and which have as their object or effect
  the prevention, restriction or distortion of
  competition within the common market, . . .

2
Wilhelm Case (contd)

• Article 83
• 1. The appropriate regulations or directives to
  give effect to the principles set out in Articles
  81 and 82 shall be laid down by the Council,
  acting by a qualified majority on a proposal from
  the Commission and after consulting the European
  Parliament.
• 2. The regulations or directives referred to in
  paragraph 1 shall be designed in particular
• (e) to determine the relationship between
  national laws and the provisions contained in
  this section or adopted pursuant to this article.

3
Wilhelm Case (contd)

• Facts
• Commission began proceedings vs German dyestuff
  manufacturer under Article 81 and Regulation 17
• Later in same year German Cartel office fined
  these German firms
• German firms challenged in German Court
• Court referred questions to Court of Justice
  Can German Cartel office take action against
  conduct that is subject of Commission proceeding
• Jurisdiction
• of Court Article 234

4
Wilhelm Case (contd)

• Issue 1. Can German Cartel office take action
  against conduct that is subject of Commission
  proceeding?
• 2. Different result (i.e. double sanctions)
  based on same facts
• Decision 1. In principle can have parallel
  proceedings, but MS proceeding cannot prejudice
  uniform application throughout Common Market of
  the EC rules. EC rules have supremacy
• 2. Firms can be exposed to two sanctions
• Rationale

5
Subsidiarity

• Article 5 TEC
• In areas which do not fall within its exclusive
  competence, the Community shall take action, in
  accordance with the principle of subsidiarity,
  only if and in so far as the objectives of the
  proposed action cannot be sufficiently achieved
  by the Member States and can therefore, by reason
  of the scale or effects of the proposed action,
  be better achieved by the Community.
• Article 2 TEU
• The objectives of the Union shall be achieved as
  provided in this Treaty and in accordance with
  the conditions and the timetable set out therein
  while respecting the principle of subsidiarity as
  defined in Article 5 of the Treaty establishing
  the European Community.

6
Subsidiarity (contd)

• Protocol two aspects of subsidiarity
• Cannot be sufficiently achieved by Member States
  actions, and
• Can better be achieved by action on the part of
  the Community
• Guidelines
• Issue has transnational aspects
• Actions by Member States would conflict with
  Treaty
• Community action produces clear benefits

7
Subsidiarity Germany v. Parliament and Council
(p. 123)
Subsidiarity (Contd)

• Facts Directive requiring deposit guarantee
  system Germany objected
• Issue Did Parliament and Council fail to comply
  with Article 253 TEC because failed to address
  principle of subsidiarity (i.e. failed to state
  reason(s) why objective could not be achieved by
  MS action)
• Jurisdiction
• of Court Article 230 TEC

8
Subsidiarity (Contd)
RECALL Article 230 Jurisdiction of actions
brought by MS or any of the institutions on
grounds of (i) lack of competence, (ii)
infringement of an essential procedural
requirement, (iii) infringement of Treaty or rule
of law, (iv) misuse of powers

• Decision
• Preamble to Directive says (a) Commission prior
  Recommendation had not resulted in action by
  MSs that achieved the desired result thus, could
  not be achieved by MS action and (b)
  indispensable to ensure harmonized minimum level
  of deposit protection whenever deposits located
  in Community
• Per Court, Council found best achieved by
  Community action
• Directive was within subsidiarity principles and
  requirements of Article 253 met

9
Direct Concern - Art. 230 TEC

• Perrier and Vittel case, pp. 145/46
• Works council claimed takeover of Perrier by
  Nestle was anti-competitive
• Works council (union) representatives were
  affected individually by the decision approving
  takeover of Perrier by Nestle.
• BUT Works council not directly affected because
• Takeover not prejudice the works councils
  (unions) own rights and
• There were Community Legislative safeguards for
  the employees.

10
Direct Concern Perrier Case (contd)
Perrier Case (Contd)

• Need a direct causal link between the alleged
  attack on rights and the Commissions decision
• If employees rights violated in implementation,
  need to address to MS Courts under MS law.
• There is no standing to attack decision on
  merits BUT did have standing to attack based on
  improper procedure lost.

11
Article 230 TEC Lack of Competence(France v.
Commission, p. 156)

• Issue Does the Community have authority to take
  action?
• Issue Did the Community act within its
  authority?
• Decision - Commission made binding agreement with
  USA No authority per Court as needed to be
  adopted by Council with Parliament approval.

12
Articles 95 and 14 - TEC

• Article 95
• 1. By way of derogation from Article 94 and save
  where otherwise provided in this Treaty, the
  following provisions shall apply for the
  achievement of the objectives set out in Article
  14. The Council shall, acting in accordance with
  the procedure referred to in Article 251 . . .
  adopt the measures for the approximation of the
  provisions laid down by law, . . . which have
  as their object the establishment and functioning
  of the internal market.
• Article 14
• 2. The internal market shall comprise an area
  without internal frontiers in which the free
  movement of goods, persons, services and capital
  is ensured in accordance with the provisions of
  this Treaty

13
Article 47 - TEC

• 2. For the same purpose, the Council shall,
  acting in accordance with the procedure referred
  to in Article 251, issue directives for the
  coordination of the provisions laid down by law,
  regulation or administrative action in Member
  States concerning the taking-up and pursuit of
  activities as self-employed persons. . . .

14
Article 152 - TEC

• 1. A high level of human health protection shall
  be ensured in the definition and implementation
  of all Community policies and activities.
• The Council, acting in accordance with the
  procedure referred to in Article 251 . . .
  shall contribute to the achievement of the
  objectives referred to in this article through
  adopting
• (c) incentive measures designed to protect
  and improve human health, excluding any
  harmonization of the laws and regulations of the
  Member States.

15
Lack of Competence (contd)
(Germany v. Parliament and Council, p. 156)

• Facts Directive purported to harmonize MS
  laws, regulations, etc. with respect to
  advertising and sponsorship of tobacco products.
  Directive in effect banned all advertising and
  sponsorship. Germany challenged
• Court Jurisdiction Art 230, TEC
• Issue 1. Was Council/Parliament competent to
  adopt such a directive under Article 95 of TEC
  and also Article 47 (right of establishment) and
  Article 55 (freedom to provide services)?

16
Lack of Competence (contd)
(Germany v. Parliament and Council, p. 156)

• 2. Did the Directive actually contribute to
  eliminating obstacles to free movement of goods,
  freedom to provide services, or remove
  distortions to competition (s 95 108)
• Decisions 1. No. Directive too broad
• 2. No
• Rationale ?

17
Article 230 - TEC Infringement of an Essential
Procedural Safeguard

• Germany v. Commission p. 161
• Decision of Commission annulled because draft of
  decision and other papers sent only in English
  and not in German as well.

18
Article 81 - TEC

• 1. The following shall be prohibited as
  incompatible with the common market all
  agreements between undertakings, decisions by
  associations of undertakings and concerted
  practices which may affect trade between Member
  States and which have as their object or effect
  the prevention, restriction or distortion of
  competition within the common market, . . .
• 3. The provisions of paragraph 1 may, however, be
  declared inapplicable in the case of
• -- any agreement or category of agreements
  between undertakings, . . . which contributes
  to improving the production or distribution of
  goods or to promoting technical or economic
  progress, while allowing consumers a fair share
  of the resulting benefit, . . .

19
Essential Procedural Safeguard (contd)

• Transocean Marine Paint Assn. v. Commission, p.
  162
• Facts
• Commission approved renewal exception to
  competition law subject to a new condition, which
  had not been noticed to Association.
• Issues
• Issue 1 The extent of Commission discretion
  under Article 81(3).
• Issue 2 What was the essential procedural
  safeguard?
• Issue 3 Did Commission violate an essential
  procedural safeguard?

20
Essential Procedural Safeguard (contd)

• Transocean Marine Paint Assn. v. Commission, p.
  162
• Decision
• Issue 1 Broad.
• Issue 2 Right to be heard
• Issue 3 Yes
• Rationale ?

21
Article 230 TECInfringement of the Treaty

• Standard of Review
• Clearly erroneous
• Manifestly abusive

22
Article 137 (Social Provisions) - TEC
Infringement of the Treaty (contd)

• 2. To this end, the Council
• (a) may adopt measures designed to encourage
  cooperation between Member States through
  initiatives aimed at improving knowledge,
  developing exchanges of information and beset
  practices, promoting innovative approaches and
  evaluating experiences, excluding any
  harmonization of the laws and regulations of the
  Member States

23
Article 137 TEC (contd)
Infringement of the Treaty (contd)

• (b) may adopt, in the fields referred to in
  paragraph 1(a) to (i), by means of directives,
  minimum requirements for gradual implementation,
  having regard to the conditions and technical
  rules obtaining in each of the Member States.
  Such directives shall avoid imposing
  administrative, financial and legal constraints
  in a way which would hold back the creation and
  development of small and medium-sized
  undertakings.

24
Infringement of the Treaty (contd)

• UK v. Council, p. 175 (working time directive)
• UK arguments
• Proportionability What is it?
• What are the arguments of the UK?
• How is proportionability reviewed by the Court of
  Justice?
• What are the arguments of the UK?
• How does Court address these arguments?

25
Infringement of the Treaty (contd)

• Equal Treatment
• Bergman and Gross Farm (skimmed milk case), p.
  179
• Facts
• Jurisdiction
• Issue
• Decision
• Rationale

26
Infringement of the Treaty (contd)

• Legal Certainty Legitimate Expectation
• Mulden v. Minister, p. 183
• Facts Regulations
• Stop production for 5 years
• Attempt to restart in 1984
• Denied 1984 quarter to be based on 1983
  production and he had no production prior year
• Jurisdiction Article 234, TEC

27
Article 230 TEC

• Misuse of Powers Subjective v. Objective
• Giuffride v. Council, p. 187
• Basis for finding misuse of powers
• Note 3, Booss, et al. v. Commission, p. 188
• Issue 1 Qualifications
• Issue 2 Reserved places