Something to feel proud of

I just came back from my holidays and found my copy of V Kosta, N Skoutaris and V P Tzevelekos (eds), The EU Accession to the ECHR (Oxford: Hart Publishing, 2014). The book is the reworked compilation of some of the papers presented at a conference in Brussels in November 2012, plus other interesting contributions. I also contribute a chapter on corporate fair trial rights  and competition law enforcement that was already available through SSRN. In the words of the editors:
Article 6 of the Treaty on European Union (TEU) provides that the EU will accede to the system of human rights protection of the European Convention on Human Rights (ECHR). Protocol No 9 in the Treaty of Lisbon opens the way for accession. This represents a major change in the relationship between two organisations that have co-operated closely in the past, though the ECHR has hitherto exercised only an indirect constitutional control over the EU legal order through scrutiny of EU Member States. The accession of the EU to the ECHR is expected to put an end to the informal dialogue, and allegedly also competition between the two regimes in Europe and to establish formal (both normative and institutional) hierarchies.

In this new era, some old problems will be solved and new ones will appear. Questions of autonomy and independence, of attribution and allocation of responsibility, of co-operation, and legal pluralism will all arise, with consequences for the protection of human rights in Europe.

This book seeks to understand how relations between the two organisations are likely to evolve after accession, and whether this new model will bring more coherence in European human rights protection. The book analyses from several different, yet interconnected, points of view and relevant practice the draft Accession Agreement, shedding light on future developments in the ECHR and beyond. Contributions in the book span classic public international law, EU law and the law of the ECHR, and are written by a mix of legal and non-legal experts from academia and practice.
Looking at the contents of the book, I am truly impressed. And it seems that I am not the only one:
"This book will be essential reading for all those interested in the future judicial and legal organisation of Europe. The editors, the contributors and the publishers are all to be warmly congratulated on a splendid achievement in legal scholarship" From the foreword by Francis G Jacobs.
This is definitely something to be proud of. I hope other research projects will be similarly succesful. 

Could Intel challenge its 1bn Euro fine on grounds of 'corporate human rights'?

After last week's General Court Judgment in Intel v Commission, T-286/09, EU:T:2014:475, the 2 month period for Intel to appeal the confirmation of its 1bn Euro fine before the Court of Justice of the EU on points of law is ticking. I guess that few doubts can be harboured as to the likelihood of such an appeal, given the very significant financial implications for the company. However, the more interesting question is whether Intel will eventually appeal the fine before the European Court of Human Rights on the basis that its 'corporate human rights' have been violated.
At first thought, the claims could be two-fold. On the one hand, Intel could argue procedural issues related to the enforcement and decision-making processes at the European Commission (art 6 ECHR, on fair trial). On the other hand, Intel could try to challenge the volume of the fine on the basis of the protection of its right to private property (art 1 protocol 1 ECHR, on property).
In my view, such an appeal would be undesirable, but it would at least offer the ultimate test case for the jurisdiction and actual ability of the Strasbourg court to deal with highly-complex (third) competition reviews. I have been arguing that due process rights in competition law enforcement against corporate defendants should be limited [“The EU’s Accession to the ECHR and Due Process Rights in EU Competition Law Matters: Nothing New Under the Sun?”, in Kosta, Skoutaris & Tzevelekos (eds), The Accession of the EU to the ECHR, Oxford, Hart Publishing, 2014, forthcoming] and, more generally, together with Francisco Marcos, that 'corporate human rights' should be limited if not totally abolished ["'Human Rights' Protection for Corporate Antitrust Defendants: Are We Not Going Overboard?" (February 2, 2014). University of Leicester School of Law Research Paper No. 14-04]. For previous entries in this blog, see here and here.
In a very timely fashion, the June 14(1) Antitrust Chronicle of Competition Policy International [Spring 2014, Volume 6 Number 1] "highlights a number of recent developments adding fuel to the fire: the ECtHR's ruling in Menarini and other cases, whether the concept of a "corporate human rights" principle should be applicable [... and] conclude(s) with an insightful discussion of impartiality" (including a summary of our thoughts, for which Francisco and myself are honoured and grateful).
Also in good time, these issues will be soon discussed at ASCOLA's conference on "Procedural fairness in competition proceedings", where Francisco will be presenting our paper. Hopefully, these discussions will shed light on the problems that the (excessive) protection of 'corporate human rights' can create. In our view, a reduction in the effectiveness of both competition law enforcement and human rights protection (for humans) itself.
In my personal view, all these debates (and the eventual Intel case before Strasbourg) should result in a significant restriction of corporate human rights protection, if not their abolition. I know that this is not a 'popular' position, so I expect heated debate in the coming months...

Parody and the protection of fundamental rights under EU law: No laughing matter? (C-201/13)

In his Opinion of 22 May 2014 in case C-201/13 Deckmyn and Vrijheidsfonds (once again, not available in English), AG Cruz Villalon has assessed the concept of 'parody' under Art 5(3)(k) of Directive 2001/29/CE on the harmonisation of certain aspects of copyright and related rights in the information society (Copyright Directive). 

The Opinion is interesting because it concerns the degree to which fundamental rights' protection needs to be taken into consideration (as a matter of EU law) when making the relevant determination of the extension of the 'parodic' exception to copyright in a civil procedure. 

This is one of the myriad of cases in which the Court of Justice of the EU (CJEU) will soon be concerned with the EU Charter of Fundamental Rights and, consequently, the proposals on the integration/coordination of these issues that the AG puts forward may be interesting beyond the scope of application of the Copyright Directive.

In the case at hand, a political party used a parody of a comic to criticise the then mayor of Ghent (Belgium). In the parodied copy, the name of the original author (Vandersteen) was included, with a reference that indicated that the current version was a "free adaptation" of the original work made by a second author (Fre) -- both designs are reproduced below, as they appear on AG Cruz Villalon's Opinion (original on the right).


The controversy basically derived from the fact that the parody had a discriminatory or racist content and, consequently, the heirs of the original author and the companies that currently hold the rights to the exploitation of his works tried to prevent such a use of Vandersteen's comic. The claim was technically framed as a challenge to the proper use of the materials as a parody, given that it was not the original work that was being parodied, but Ghent's mayor of the time. According to the claimants, that use would not be covered by the exception under Art 5(3)(k) of Directive 2001/29/CE.

AG Cruz Villalon, anticipating potential criticisms to his Opinion on the interpretation of the concept of parody, establishes important limitations to the scope of his arguments, where he makes clear that they do not include any elements regarding the moral rights of the author, the "three-step" test that Art 5(5) of the Copyright Directive establishes as a balancing requirement between the exceptions therein regulated and the protected rights, or the caveat that Belgian law introduced to the fact that parody is only acceptable provided it is conducted "in observance of good manners".

After confirming that, in his view, the concept of 'parody' (for the purposes of the Copyright Directive) is an autonomous concept of EU Law (paras 32-39), the AG goes on to consider that "Parody is [...] structurally, 'imitation' and, functionally, 'burlesque'" (or mocking, para 48, own translation from Spanish), and provides a significant amount of details as to his interpretation of both these structural (paras 49-58) and functional (paras 59-70) requirements. In my view, the most interesting part of his Opinion concerns paras 71-88, where he engages in a discussion on the incidence of the protection of fundamental rights on the (acceptable) content of the parody. The difficult question to be answered is, basically, "To what extent can the interpretation of the scope of the exception for parody given by the civil judge be determined by the protection of fundamental rights?" (para 76, own translation from Spanish).

The AG approaches the issue both as a matter of principle and introducing an exception. As a matter of principle, the AG submits that "always under the assumption that parody effectively meets the requirements already mentioned, an interpretation of the notion of parody by the civil court should, as a matter of principle, favor the exercise of freedom of expression through this unique medium" (para 81, own translation from Spanish). However, given that freedom of expression is never unlimited, 
Considering the "presence" to be recognized to fundamental rights in the legal system as a whole, I understand that, in principle and from the narrow perspective of the concept of parody, a certain image cannot be excluded from this notion for the simple fact that the message is not shared by the author of the original work, or by the rejection that it may deserve from much of the public. Still, those deformations of the original work that, in the form or substance, convey a message radically contrary to the deepest convictions of society, and in which the European public space is ultimately built, and ultimately exists, should not be accepted as a parody, and the authors of the parodied work are entitled to enforce that restriction as well (para 85, own translation from Spanish, emphasis added).
Nonetheless, the final test proposed by the AG is rather mild and, in my view, is unnecessarily inconclusive, as he proposes the CJEU to find that "When interpreting the term 'parody', the civil court must be guided by the fundamental rights proclaimed in the Charter of Fundamental Rights of the European Union and proceed to the necessary balancing between those rights when the circumstances of the case at hand require".

I consider that the (self)restraint that AG Cruz Villalon shows in the final part of his Opinion in Deckmyn and Vrijheidsfonds is a clear indicator of the pusillanimous approach that we can expect the CJEU to adopt in cases like this one. Given that the concept of parody is a concept of EU law (for the purposed of the Copyright Directive, anyway) and that the CJEU holds the ultimate competence for the interpretation of the EU Charter [as coordinated with the European Convention on Human Rights and the case law of the European Court of Human Rights per art 52(3) EUCFR] the AG could have been more aggressive.

In my view, the AG should have clearly proposed that the CJEU interpreted that the concept of parody does not include 'those deformations of the original work that, in the form or substance, convey a message radically contrary to the deepest convictions of society' and, in particular, those that are racist, xenophobic or, in any other way, attempt against cultural, religious and linguistic diversity as protected in Article 22 of the EU Charter. Such a finding would still require the domestic courts of the Member States to determine whether, on the basis of the facts and circumstances of a given case, the intended parody is or not covered by the EU concept. However, the message would be much stronger and the CJEU would be effectively acting as a constitutional court for Europe, at least as the protection of the rights recognised in the EU Charter is concerned.

On the contrary, by deferring all judgment and providing no clear indication as to the way the balance is likely to tilt, the AG (and the CJEU if they follow the 'soft, self-restrained' approach in Deckmyn and Vrijheidsfonds) would once more be refusing to exercise their function as a constitutional court and, in my view, would indicate that all the fuss and complicated negotiations of the (prior involvement mechanism in order to authorise) accession of the EU to the European Convention of Human Rights would have been unnecessary and superficial, given their lack of commitment to a substantive and effective enforcement of the necessary protections of fundamental rights in the EU (for a critical assessment of the process and mechanisms involved in the accession, see the various contributions to Tzevelekos et al, The EU Accession to the ECHR).

From this perspective, I will be eagerly awaiting the CJEU's final ruling in Deckmyn and Vrijheidsfonds, although I must say that I do not hold high expectations and I would bet that they will follow the approach suggested by the AG (maybe including one or two 'strong' obiter dicta but) refusing to provide a clear indication of the way the balance of fundamental rights should tilt. 

Let's hope the wait is over soon.

#CJEU incorrectly analyses 'State imputability' and gives green light to (pseudo)fiscal #Stateaid schemes (C-677/11)

In its Judgment of 30 May 2013 in case C-677/11 Doux Élevages and Coopérative agricole UKL-AREE  the Court of Justice of the European Union (CJEU) has carried on with its line of case law in C-345/02 Pearle and Others and stressed that, according to Art 107(1) TFEU, State aid cannot exist if the economic advantage under analysis is not funded by 'State resources' and there is no 'imputability to the State'.

In the case at hand CIDEF, a French agricultural inter-trade organisation (for poultry), introduced the levying of a 'cotisation volontaire obligatoire' (sic) (CVO) for the purposes of financing common activities decided on by that organisation. The contribution was initially introduced in 2007 as a voluntary measure for the members of CIDEF, but it was extended to all traders in the sector on a compulsory basis in 2009 by a tacit Ministerial decision to accept that extension (see press release).

Two complainants challenged the extension of the CVO on the basis that making it a mandatory payment for all traders in the sector (ie going beyond the group of members of CIDEF) involved State aid. The French Conseil d’État referred the matter to the CJEU for a preliminary ruling, which has decided that there is no element of State aid in the mandatory extension of the CVO to all traders in the industry concerned.

The reasoning of the CJEU indeed follows its previous line of case law in the area of State aid and adopts a very narrow approach to the concept of economic advantages 'granted by a Member State or through State resources'. On the point of the involvement of State resources, the CJEU finds that
the contributions [...] are made by private‑sector economic operatorswhether members or non-members of the inter‑trade organisation involved – which are engaged in economic activity on the markets concerned. That mechanism does not involve any direct or indirect transfer of State resources, the sums provided by the payment of those contributions do not go through the State budget or through another public body and the State does not relinquish any resources, in whatever form (such as taxes, duties, charges and so on), which, under national legislation, should have been paid into the State budget. The contributions remain private in nature throughout their lifecycle and, in order to collect those contributions in the event of non‑payment, the inter-trade organisation must follow the normal civil or commercial judicial process, not having any State prerogatives (C-677/11 at para 32, emphasis added).
This should come as no big surprise, since this has become the standard position in the case law of the CJEU (ie that if the State 'does not touch' and 'should not have touched' the money, it cannot constitute a 'State resource'). However, one may wonder why the Court has not addressed the point of the (pseudo)fiscal nature of the imposition of a contribution (ie a levy) on undertakings that do not belong to the private organisation charging it. In the absence of a voluntarily established association (via membership), the prerogative of the inter-trade association to require payments from undertakings surely goes beyond the sphere of powers created by private law (taxation is one of the very exclusive powers of the State). In that regard, the reasoning followed by the CJEU on the point of 'imputability to the State' requires some close scrutiny. The Court finds that
35 […] Article 107(1) TFEU covers all the financial means by which the public authorities may actually support undertakings, irrespective of whether or not those means are permanent assets of the public sector. Therefore, even if the sums corresponding to the measure in question are not permanently held by the Treasury, the fact that they constantly remain under public control, and therefore available to the competent national authorities, is sufficient for them to be categorised as State resources (see [C‑482/99 France v Commission (2002) ECR I‑4397], paragraph 37 and the case-law cited).
36 In the case in the main proceedings, the conditions laid down by the Court in paragraph 37 of the judgment in France v Commission are not met. It is clear that the national authorities cannot actually use the resources resulting from the [CVOs] to support certain undertakings. It is the inter-trade organisation that decides how to use those resources, which are entirely dedicated to pursuing objectives determined by that organisation. Likewise, those resources are not constantly under public control and are not available to State authorities.
37 Any influence that the Member State may exercise over the functioning of the inter-trade organisation by means of its decision extending an inter-trade agreement to all traders in an industry is not capable of altering the findings made in paragraph 36 of this judgment.
38 It is clear from the case-file submitted to the Court that the legislation at issue in the main proceedings does not confer upon the competent authority the power to direct or influence the administration of the funds. Moreover, as the Advocate General noted in point 71 of his Opinion, according to the case-law of the competent national courts, the provisions of the Rural Code governing the extension of an agreement introducing the levying of contributions within an inter-trade organisation do not permit public authorities to exercise control over CVOs except to check their validity and lawfulness.
39 Regarding that control, it should be noted that Article L. 632-3 of the Rural Code does not permit making the extension of an agreement dependent upon the pursuit of political objectives which are specific, fixed and defined by the public authorities, given that that article non‑exhaustively lists the very general and varied objectives that an inter-trade agreement must promote in order to be capable of being extended by the competent administrative authority. That conclusion cannot be undermined by the obligation imposed by Article L. 632-8-I of that code to inform the authorities of the way in which CVOs have been used.
40 Moreover, there is nothing in the case-file submitted to the Court permitting it to consider that the initiative for imposing the CVOs originated with the public authorities rather than the inter-trade organisation. It is important to emphasise, as the Advocate General observed in point 90 of his Opinion, that the State was simply acting as a ‘vehicle’ in order to make the contributions introduced by the inter-trade organisations compulsory, for the purposes of pursuing the objectives established by those organisations.
41 Thus, neither the State’s power to recognise an inter-trade organisation under Article L. 632-1 of the Rural Code, nor the power of that State to extend an inter‑trade agreement to all the traders in an industry under Articles L. 632-3 and 632-4 of that code permit the conclusion that the activities carried out by the inter‑trade organisation are imputable to the State (sic) (C-677/11 at paras 35 to 41, emphasis added).
The reasoning followed by the CJEU could not be more puzzling, particularly at para 41, which to me seems plainly wrong. Given the literal tenor of Art 107(1) TFEU, which sets that the prohibition of State aid covers 'any aid granted by a Member State or through State resources in any form whatsoever' it is clear that the analysis of the 'imputability to the State' must cover the aid measure and not the activities of the beneficiary of such measure. 

Therefore, the conclusion reached in para 41 of C-677/11 is simply a non sequitur. After having recognised that 'the State was simply (sic) acting as a ‘vehicle’ in order to make the contributions introduced by the inter-trade organisations compulsory, for the purposes of pursuing the objectives established by those organisations' (para 40), it is an illogical step to conclude that such (vehicular) intervention is not imputable to the State. In my opinion, this plainly makes no sense.

The implications of the Judgment in Doux Élevages are likely to be far fetched, since they open the door to a floodgate of (pseudo)fiscal measures designed by Member States (by indirect influence to the relevant inter-trade or similar organisations, which should not be readily proven, see para 40 ab initio) to compensate for the stricter (?) controls on aid directly granted by public authorities. 

The only remaining hope at this point is that, under the relevant constitutional law of the Member States, such (pseudo)fiscal levies are considered unconstitutional limitations to the right to property, since the State is the only entity vested with powers to extract money payments not voluntarily accepted, at least as a general implication of the membership of an association (as was the case in Pearle, although any element of mandatory membership obviously would grant the same conclusion). And, consequently, this (pseudo)fiscal structure  that allows non-State entities to extract mandatory payments can be seen as an excessive restriction of the right to property under some Member States constitutional law (such as in Spain, for instance).

Maybe with the accession of the EU to the European Convention on Human Rights and a (stronger) duty to protect the right to property under Art 1 Protocol No. 1 ECHR (which includes rules on taxation not mentioned in the right to property recognised in Art 17 of the Charter of Fundamental Rights of the EU), the CJEU will need to revisit this line of case law.