European Law - UU - Additional practice exam (2)

Questions

Question 1 (25 points)

Within the context of EU legislation seeking to improve the air quality in Europe, France is required as from 1 February 2015 to implement standards on fine dust (PM10) and nitrogen dioxide (NO2) below the maximum threshold set at EU level. With a view to comply with these standards, the Community of Paris adopted an ‘Action Plan for Air Quality’. Next to certain specific measures to promote the use of more environmentally friendly transportation of goods, like the electric car, the Community of Paris also decided to prohibit diesel cars older than 9 years and petrol cars older than 13 years from accessing the city center as from December 2014. The Italian Bruno Maldini is the owner of a 24-hour-Oldtimer Service, established in the Italian community of Pisa. Demoulin is staggered by the plans of the Community of Utrecht, as his company regularly rents out oldtimers (cars which are more than 25 years old) for wedding ceremonies in the center of Paris. He therefore seeks advice from his lawyer to hear which arguments based on EU law and in particular the EU rules on free movement he can raise to challenge the Action Plan of the Community of Paris.

Which arguments could he raise before the District Court of Paris to challenge the decision of the Community of Paris? Please motivate your answer carefully by referring to relevant case law of the Court of Justice.

Question 2 (25 points)

Question 2a (10 points)

Students studying at a university in Estonia have to pay an enrollment fee of 3,000 euro per year if they follow an English language master in psychology. Students who follow a Estonian language master in this area pay 400 euro per year. Foreign students complain about this difference, they also want to pay the lower fee.

What arguments are useful to put forward by the students? (NB the assessment of the arguments is subject of b)

Question 2b (15 points)

What criteria will the Court of Justice use to give an answer to the ques whether this difference in fees is allowed? How will they be applied in this case?

Question 3 (25 points)

You may assume it regards an EU matter. Refer to the relevant articles and requirements while concluding which EU legislation is applicable and possibly holds grounds for infringement.

Question 3a (10 points)

Which (art. 19 TFEU-)directive is applicable to the situation whereby a same sex life partner of a deceased employee is refused access to the occupational scheme providing for survivors benefits?

Question 3b (10 points)

The benefit was refused based on the requirement that only a surviving spouse could apply for such benefit. National law reserved marriage solely to persons of different sex, but it had established life partnership with equivalent conditions. Elaborate on whether this national law is contrary to the principle of equal treatment in employment and occupation?

Question 3c (5 points)

What would be the legal grounds for a mother to call upon EU legislation to undo her voluntary redundancy after maltreatment by her employer because particular care needed to be given to her disabled child?

Question 4

The German Mr Marko Spitzenberger is employed by Appels & Peren, a fruit company in Monster (the Netherlands). Because of the fruit scandal Fruity goes bankrupt and it fires all its employers.

Explain for how long and on which legal grounds Mr Spitzenberger can stay in the Netherlands to look for a job. Please carefully motivate your answer. (10 points)

Question 5

Rapide is a French producer of cars which is established in Marseille. It produces two kinds of cars: cabriolets and family cars. Both types of cars are manufactured to be used on longer distances. The family cars are made of aluminums which can easily be produced through conventional methods. Cabriolets are supposed to have more engine power thanks to the motor and therefore require different materials. Due to the material involved, other production methods are required and Rapide has established a separate factory to produce the cabriolets.

Rapide sells its products through its own showrooms in France, Germany, Italy and Spain. Rapide-cars fulfill all safety requirements throughout Europe. However, additional costs for crossing the channel result in lower profits for Rapide. Rapide nonetheless managed to gain a considerable market share throughout the European Union.

On the combined market for cabriolets and family cars in France, Germany, Italy and Spain, Rapide has a market share of 40%. On the combined market for cabriolets and family cars in France and Germany, Rapide has a market share of 49%. When only the market for cabriolets is taken into consideration, Rapide has a market share of 48% in the area of the France and Germany. On the market for cabriolets in France, Germany, Italy and Spain, Rapide has a market share of 41%. On all those markets, Rapide’s biggest competitor Starcar has a market share of 16%.

Question 5a

Does Rapide hold a dominant position under Article 102 TFEU? You do not need to discuss the other elements of Article 102 TFEU yet. (10 points)

Assume that Rapide has a dominant position on the market for cabriolets in France and Germany. To strengthen its position in Italy and Spain, Rapide decides to lower its prices to such an extent that it hardly makes a profit. Furthermore, Rapide decides to set up a repair-business in their showrooms in France and Germany. Cabriolets are henceforth only to be sold with maintenance and service agreements, compelling customers to let their cars being repaired by Rapide shops only.

Question 5b

Does the behaviour of Rover lead to an infringement of Article 102 TFEU? (15 points)

Answers

Question 1 (25 points)

The crucial point in this case is that Mr Maldini cannot rent out his classic cars for weddings in the centre of Paris as a result of the measures adopted by the Community of Paris. The point of departure is the renting out of classic cars, which constitutes a service within the meaning of Articles 56 and 57 TFEU.

EU legislation setting certain thresholds, however, this legislation does not exclude the applicability of the Treaty provisions on free movement. Article 56 TFEU applies to services provided for remuneration (see also Art. 57 TFEU): this is the case as Mr Maldini rents out his classic cars for a certain amount of money. Article 56 TFEU will only apply if there is a cross-border provision of services. As Mr Demoulin is established in Belgium and he provides services in the Netherlands, this condition is fulfilled.

Demoulin can invoke Article 56 TFEU before the national court as this provision has (vertical) direct effect. The Community of Utrecht is the addressee, and belongs the the state.

Article 56 TFEU prohibits discriminatory and non-discriminatory restrictions, ie measures that apply without distinction but affect market access (see also Alpine Investments). The fact that it here concerns a measure that applies only to certain cars is irrelevant for the assessment of whether this measure constitutes a restriction. The Keck-judgment cannot be applied to services (see also Alpine Investments).

It is therefore crucial to examine whether a justification ground can be invoked by the Community of Paris. As it concerns a non-discriminatory restriction, the Community can take recourse to both the Treaty exceptions and the ‘rule of reason’. The Treaty exception that may be of interest here, is the protection of public health (article 62 Jo 52 TFEU). But stringent conditions apply. There must be a causal link between the measure adopted and the aim pursued, and the proportionality principle must be complied with. The rule of reason (mandatory requirements) constitutes an open group of exception grounds, inter alia the protection of the environment or consumers, which could be particularly relevant to this case. At least the proportionality principle must be complied with: the measure must be suitable to attain the aims pursued and no less restrictive means are available.

Question 2 (25 points)

Question 2a

The students can invoke article 20 TFEU (European citizenship) in connection with article 18 TFEU claiming that they are indirectly discriminated against. Since they are (in general) not able to study in Estonia they have to rely on the English language course. So this rule affects mainly foreign students and can thus be seen as indirectly discriminating on ground of nationality. (10 points).

Question 2b

The Court will require that the measure is in the general interest, that it is adequate and that the measure is proportional. The question whether the criteria are satisfied depends on the arguments put forward by the university. (15 points) It may be that it is more expensive to recruit and pay English speaking teachers and materials (books for the library), and for that purpose it is adequate to require those who follow the course to pay for this. Whether the difference in fee is proportional depends on the calculation of the actual difference in costs of the masters.

Question 3 (25 points)

Question 3a (10 points)

Directive 2000/78/EC
Art. 1 (purpose): combating discrimination on grounds of ‘sexual orientation’ as regards employment and occupation.
Art. 3 (scope): it applies to all persons,
par. 1 sub c employment and working conditions, including dismissals and pay.
par. 3 it does not regard a payment made by a state scheme, as it regards an occupational scheme
(relevant is whether the benefit can be classified as pay: deriving from the employment relationship of the deceased partner/funded exclusively by the workers/employers).
Yes, directive is applicable.

Question 3b 10 points

EU law does not oblige Member States to allow or recognise same-sex partnerships or marriages. It does oblige Member States to treat same-sex couples equally to opposite sex couples when national law treats registered (life-) partnerships as equivalent to marriage. (Requirement occupational scheme: one should have concluded under sub a that Directive 2000/78/EC is applicable)
Art. 2 par. 2 sub a: direct discrimination if one person is treated less favourably than another is, has been or would be treated in a comparable situation. Based on the information provided (‘it had established life partnership with equivalent conditions’) one can argue that it regards direct discrimination. Direct discrimination is forbidden. Differential treatment can only be justified on the exceptions provided for in legislation (closed system). Legitimate objective? Art. 2 par. 5: will not be successful. Refusal is contrary to EU law.

Question 3c 5 points

Art. 19 TFEU/Directive 2000/78/EC
Art. 1: on the grounds of disability (the purpose of which is to combat all forms of discrimination, not only regarding a particular category of person), art. 3: all persons, dismissals.
Art. 2 para. 3 harassment is a form of discrimination; when unwanted conduct related to any of the grounds referred to in art. 1 takes place with the purpose or effect of violating the dignity of a person and of creating an intimidating, hostile, degrading, humiliating or offensive environment. Directive 2000/78/EC however does not have horizontal direct effect.

Question 4

Mr. Spitzenberger was a worker as he was working under the direction of another person, he received remuneration and his activities were effective and genuine (Lawrie-Blum). In his capacity as a former worker and a present work-seeker article 45(a) and (d) TFEU is applicable to him.

European Union Law, page 367.

There is however harmonisation which governs the period that Mr. Spitzenberger can legally reside in another Member State: Directive 2004/38/EC. This directive is applicable because Mr. Spitzenberger is a Union Citizen in the sense of Art. 2(1) and because he is residing in another than his own Member State (Art. 3(1)).

According to Art. 7(3)(b) of the Directive Mr. Spitzenberger can – as a former worker and a present work-seeker – retain his status as a worker under Art. 7(1)(a) (provided that he is in the Netherlands for more than 3 months). According to Art. 7(3)(c) Mr. Spitzenberger can retain the worker status for no less than 6 months.

According to Art. 14(2) workers under Art. 7 can stay as long as they meet the conditions as set out in that article. For Mr. Spitzenberger this means that he can stay as long as he is registered as a job-seeker with the relevant employment office.

At the moment that Mr. Spitzenberger does not meet the conditions as set out in Art. 7 anymore, he may still not be expelled from the Netherlands as long as he can show that he has sufficient resources and comprehensive sickness insurance (Art. 7(1)(b)). Also, according to Art. 14(4)(b) he may even not be expelled if he does not suit the requirements of Art. 7(1)(b) as long as he can provide evidence that he is continuing to seek employment and that hey has a genuine chance of being engaged.

Question 5

Question 5a

Before you can apply market shares, you will always have to address what the relevant market is.

Therefore we start with the relevant market.

• Defining the relevant market:
  • Product market:
• Either just cabriolets alone or family cars and cabriolets together?
  • Address demand side: consumer’s perspective: are the cars interchangeable? (could be argued both ways)
  • Address supply side: for a producer it is hard to switch
• Geographical market:
  • Address the legal criterion that has to be applied
  • Apply the legal criterion: transportation costs could be taken into account, however practice has shown that Rapide did manage to gain a large market share (could thus be argued both ways)
• Dominant position:
  • Market share: On every possible market – depending on your conclusion about what the relevant market is – Rapide has a market share between 40 and 49%. This is not enough for the AKZO-threshold (50%+) to be applicable and therefore other factors have to be used to establish dominance.
• Other factors:
  • The biggest competitor has a share of 16%, which is much smaller.
  • Rapide sells cars through its own showrooms: the company has a sales network (cf. §48 HLR).

Question 5b

• Undertaking
  • Rapide is an undertaking, as it is engaged in an economic activity. It offers cars on the market (Höfner).
• Abuse
  • The sales of cars with the maintenance and service agreements constitutes tying, article 102(2) TFEU, (cf. Microsoft). This is exclusionary abuse, as it harms competitors: it’s harder for competing repair shops to repair rover bikes.
• Effect on trade between Member States
  • The behaviour of Rapide has an effect on trade between Member States. The tying makes entry of repair shops to the France and Germany more difficult and therefore forecloses the market. Moreover, this requirement is fairly easily met, as the effect on trade can be direct or indirect, actual or potential (Grundig/Consten).
• Objective justification
  • Objective justification might in theory be possible, but not in this particular case.
• Conclusion
  • As all the elements of article 102 TFEU are fulfilled, there is an infringement of Article 102 TFEU.