Introduction

The protection of human rights is a central task of many modern constitutions. This protective task is principally transferred onto the judiciary and involves the judicial review of governmental action. The protection of human rights may be limited to judicial review of the executive. But in its expansive form, it extends to the review of parliamentary legislation. And where this is the case, human rights will set “substantive” limits within which democratic government must take place. The European Union follows this second constitutional tradition. It considers itself to be “founded on the values of respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights”. Human rights are thus given a “foundational” place in the Union. They are – literally – “fundamental” rights, which constitutionally limit the exercise of all Union competences.

What are the sources of human rights in the Union legal order? While there was no “Bill of Rights” in the original Treaties, three sources for European fundamental rights were subsequently developed. The European Court first began distilling general principles protecting fundamental rights from the constitutional traditions of the Member States. This unwritten bill of rights was inspired and informed by a second bill of rights: the European Convention on Human Rights. This external bill of rights was, decades later, matched by a written bill of rights specifically for the European Union: the Charter of Fundamental Rights.

European Law: Enforcement

This Part concentrates on the “enforcement” of European law in the courts. We shall see that European law establishes rights and obligations that directly affect individuals. The direct effect of European law in the national legal orders will be discussed in Chapter 5. Where a European norm is directly effective, it will also be “supreme” over national law. The “supremacy” of European law is the subject of Chapter 6. How will individuals enforce their “supreme” European rights? Chapters 7 and 8 look at the dual enforcement machinery within the Union legal order. Individuals will typically enforce their European rights in national courts. And in order to assist these courts in the interpretation and application of European law, the Union envisages a preliminary reference procedure. But the Union legal order has equally required national courts to provide effective remedies for the enforcement of European rights, and has even created a European remedy of state liability. Having the indirect enforcement of European law through the national courts discussed in Chapter 7, the direct enforcement of European law in the European Courts will be explored in Chapter 8.

1. Chapter 5 Direct effect

2. Chapter 6 (Legal) Supremacy

3. Chapter 7 National actions

4. Chapter 8 European actions

Introduction

The second pillar of European competition law focuses – in principle – on the behaviour of a single undertaking. Article 102 does not require the collusive behaviour of two or more economic actors. It can sanction the unilateral behaviour of a dominant undertaking where this behaviour amounts to a “market abuse”. The provision states:

The provision encapsulates a number of fundamental choices with regard to the European economic constitution. For by concentrating on a “dominant position within the internal market,” Article 102 goes beyond penalizing pure monopolies. In that respect it is wider than its American counterpart. But by insisting on market abuse, it is narrower than the American prohibition. For unlike the latter, Article 102 will not directly outlaw distorted market structures. Dominance is not itself prohibited – only the abuse of a dominant position. Once this abuse is however established it appears to be prohibited as such. For Article 102 has – unlike Article 101 – no “third paragraph” exempting abusive behaviour on the ground of its pro-competitive effects. However, like Article 101, the prohibition of market abuse will only apply where the abusive behaviour “may affect trade between Member States”. This jurisdictional condition indeed defines the scope of all European competition law.

Introduction

The inclusion of a Treaty chapter on competition stemmed from the “general agreement that the elimination of tariff barriers would not achieve its objectives if private agreements of economically powerful firms were permitted to be used to manipulate the flow of trade”. Originally, European competition law was thus primarily conceived as a functional complement of the European law governing the internal market. While the free movement provisions were to protect the internal market from public interferences, the rules on competition were designed to protect it from private power. This link between the internal market and European competition law continues to be textually anchored in the Treaties. For the principal provisions on European competition law are found in Chapter 1 of Title VII on “Common Rules on Competition, Taxation and Approximation of Laws”. The Chapter is thereby divided into two Sections – one dealing with classic competition law, that is: “[r]ules applying to undertakings”; the other with public interferences in the market through “[a]ids granted by States” to private undertakings. Chapters 11 and 12 of this book will deal with the Treaty’s section on undertakings.

The English word “undertaking” has traditionally not meant what the European Treaties want it to mean. The word is a translation from the German and French equivalents, and was deliberately chosen to avoid pre-existing meanings in British company law. According to the European Court, an undertaking is “every entity engaged in an economic activity, regardless of the legal status of the entity and the way in which it is financed”. This definition ties the notion of undertaking to an activity instead of the institutional form of the actor. This functional definition broadens the personal scope of the competition rules to include entities that may – formally – not be regarded as companies. However, by concentrating on economic activities, the Court has excluded activities of a public nature. The advantage of a functional definition is its flexibility; its disadvantage however is its uncertainty. For depending on its actions, an entity may or may not be an “undertaking” within the meaning of EU competition law.

Introduction

Since European law is directly applicable in the Member States, it must be applied alongside national law by national authorities. And since European law may have direct effect, it might come into conflict with national law in a specific situation.

Where two legislative wills come into conflict, each legal order must determine how these conflicts are to be resolved. The resolution of legislative conflicts requires a hierarchy of norms. Modern federal States typically resolve conflicts between federal and state legislation in favour of the former: federal law is supreme over State law. This “centralist solution” has become so engrained in our constitutional mentalities that we tend to forget that the “decentralized solution” is also possible: local law may reign supreme over central law. Supremacy and direct effect are thus not different sides of the same coin. While the supremacy of a norm implies its direct effect, the direct effect of a norm will not imply its supremacy. Each federal legal order must thus determine which law prevails. The simplest supremacy format is one that is absolute: all law from one legal order is superior to all law from the other. Absolute supremacy may however be given to the legal system of the smaller or the bigger political community. Between these two extremes lies a range of possible nuances.