Business Law In The EU PDF

BUSINESS LAW IN THE EU Revision Sheets Contents Unit 1 : Introduction............................................................................................................................................... 1 I....

BUSINESS LAW IN THE EU Revision Sheets Contents Unit 1 : Introduction............................................................................................................................................... 1 I. The EU in the World................................................................................................................................. 1 II. From the ECC to the EU: Setting the Context.......................................................................................... 1 III. Short history of the EU............................................................................................................................. 2 Unit 2: International Law........................................................................................................................................ 3 I. Introduction to International Law............................................................................................................. 3 II. The UN..................................................................................................................................................... 4 III. The WTO.................................................................................................................................................. 5 Unit 3: EU Institutional and Legal Framework...................................................................................................... 6 I. Institutions in the EU................................................................................................................................ 6 II. EU Expertise............................................................................................................................................ 6 III. The EU Decision-Making process............................................................................................................ 7 IV. EU Legal Sources..................................................................................................................................... 7 V. Brexit........................................................................................................................................................ 7 Unit 4: Customs Union........................................................................................................................................... 9 I. Regional Integration................................................................................................................................. 9 II. International Law and EU Customs Union............................................................................................... 9 III. The EU Customs Union......................................................................................................................... 10 Unit 5: EU Internal Market................................................................................................................................... 11 I. The EU Internal Market......................................................................................................................... 11 II. Roaming charges within the EU............................................................................................................. 12 Unit 6: Trade Policy: Trade Agreements............................................................................................................... 13 I. Common Commercial Policy................................................................................................................. 13 II. Multilateral Agreements: World Trade Organisation.............................................................................. 13 III. Generalised Scheme of Preferences (GSP)............................................................................................ 14 IV. EU international agreements.................................................................................................................. 14 Unit 7: Trade Policy: Trade Defence Instruments................................................................................................. 15 I. Trade defence instruments and business ethics...................................................................................... 15 Unit 8: Competition Policy: Antitrust................................................................................................................... 17 I. Introduction to Competition Policy........................................................................................................ 17 II. Antitrust procedures – anticompetitive agreements............................................................................... 17 III. Antitrust procedures – abuse of dominance........................................................................................... 18 IV. Leniency................................................................................................................................................. 18 Unit 9: Competition Policy: Mergers and State Aids............................................................................................ 19  I. Introduction to Competition Policy........................................................................................................ 19 II. Mergers overview................................................................................................................................... 19 III. State Aids Overview............................................................................................................................... 19 IV. Temporary Crisis and State Aids............................................................................................................ 20 Unit 10: IPRs: Classification and Copyrights....................................................................................................... 21 I. IPRs: Presentation.................................................................................................................................. 21 II. Failure to transpose copyright rules by certain MS................................................................................ 22 III. IP and Assignment Agreements.............................................................................................................. 22 Unit 11: IPRs: Industrial Property and Distinctive Signs..................................................................................... 23 I. IP and Distinctive Signs......................................................................................................................... 23 II. European Union Intellectual Property Office (EUIPO).......................................................................... 24 III. Patents v. Trade Secrets (EUIPO)........................................................................................................... 24 Unit 12: Unfair Competition................................................................................................................................. 25 I. Unfair Competition Background............................................................................................................ 25 II. Defining Unfair Competition Comparing Legal Systems...................................................................... 25 III. EU Directive on the Protection of Undisclosed Trade Secrets............................................................... 26 IV. Unfair Competition and Disclosure of Trade Secrets............................................................................. 26 Unit 13: Consumers Protection............................................................................................................................. 27 I. 50 years of Consumer Legislation in the EU.......................................................................................... 27 II. The EU Consumer Rights Directive....................................................................................................... 27 III. Consumer Sales and Guarantees............................................................................................................ 27 IV. Digital Contract Rules............................................................................................................................ 27 V. Loot Boxes in Digital Games Challenge................................................................................................ 28 Unit 14: Data Protection................................................................................................................................... 29 I. EU General Data Protection Regulation (GDPR).................................................................................. 29 II. Data Protection Enforcement – Directive on the Protection of Natural Persons.................................... 30  Business Law in the EU Unit 1 : Introduction I. The EU in the World Population overview: In 2021, the population of the EU was equivalent to 5.7% of the world total. The pace of world’s growth population is projected to slow, as a matter of fact, EU’s share of the world population has declined since 1970 where it was at 10.4%. Labour market: The EU’s employment rate for people aged 15-64 years rose between 2010 and 2019 of 4.8 point for men and 6.6 point for women. Living conditions: The weighted average of the 27 member states of the EU for the at-risk of-poverty-rate was 16.5% in 2019. Gross Domestic Product: The EU’s share of world GDP fell from 15.9% in 2011 to 15% in 2014, and recovered to 15.6% in 2017, before declining to 14.8% in 2021. Economic structure: In 2020, 73.1% of gross value added in the EU came from services, followed by industry which represented 19.5% of the gross value added in 2020. Government debt: In the EU, it was equivalent to 87.9% of GDP at the end of 2021. FDI: Inward FDI stocks in the EU represented 29% of world total at the end of 2020. As for outward FDI stocks from the EU, they represented 34.2% of world stocks of outward FDI at the end of 2020. International trade – share of world trade: 31.4% of world export of goods in 2020 and 29.4% of imports. R&D: The unions gross domestic expenditure on R&D (GERD) was €311 billion in 2020, the EU’s R&D intensity was of 2.32% in 2020 (1.39% world average). GHG emissions: The EU’s share of world GHG emissions was 7.3% in 2019. As for the GHG emissions per capita, they were about 25% more important than the world’s average. II. From the ECC to the EU: Setting the Context European integration: The only attempts were through military force, (until 1952). The EU integration was the first unification without military force. After WWII: ▪ Overall consensus on objective needs: reconstruct cities and infrastructure, make devastated economies recover, learn the lessons from the past (contain the “German menace”, quit the vicious circle of nation- alism) ▪ Unique geopolitical situation: shift from hot to cold war, American economic and political aids (Marshall Plan), group of pioneers devoted to the European idea (Jean Monnet, Winston Churchill, Robert Schu- man, etc.) ▪ Supranational collaboration Inter-governmental institutions: common projects or policies based on voluntary cooperation. They do not limit sovereignty but are inefficient (veto). Supranational institutions: elected or appointed body is given authority to rule in certain fields above the national governments, management of common projects, programs or policies is delegated to this body. They limit sover- eignty but are efficient and work for the common interest of the community. European Coal and Steel Community (ECSC): first success in the route of cooperation (common market for steel and coal, 6 member states, high authority and a limited duration of 50 years) 1  Business Law in the EU ▪ In the 1950’s, coal and steel represented the fundamental resources of industrial development. ▪ Coal and steel had been the basis of German military power. ▪ Coal and steel are a good sector to start a new for of cooperation (“Monnet Method”) Rome Treaty: signed in 1957 by 6 member states, establishing the European Economic Community (single market, customs union, common policies). EURATOM treaty: signed in 1957 by 6 member states, establishing the European Atomic Energy Community (EURATOM) III. Short history of the EU 1945-59: Peace in Europe and the beginnings of cooperation (creation of the ECSC, Treaty of Rome, birth of European Parliament) 1960-69: Period of economic growth (further economic integration and beginnings of international cooperation) 1970-79: growing Community with new members joining: Denmark, Ireland, UK 1980-89: changing face of Europe and the collapse of communism (more countries joined, Erasmus programme, and start of a single market) 1990-99: Europe without frontiers (more expansion, launch of a single market, border-free travel, Euro) 2000-09: further expansion (12 new countries joined, Lisbon Treaty) 2010-19: challenging decade (financial crisis, Croation joined the EU, UK voted to leave) 2020-today: COVID-19, Russia’s war of aggression against Ukraine, fighting climate change 2  Business Law in the EU Unit 2: International Law I. Introduction to International Law Defining International Law: ▪ Until the period between the two World Wars: the law that governs the relations between states amongst each other. Only states could be subjects of international law (however, not an exact reflexion of reality, i.e.. Holy See) ▪ Since then: expansion of the scope of international law and emergence of actors other than states (inter- governmental organizations established by states, non-governmental organizations, etc.) International Law (American Law Institute): rules and principles of general application dealing with the conduct of states and of international organizations and with their relations Inter se, as well as with some of their relations with persons, whether natural or juridical. International law is still predominantly made and implemented by states as international organizations remain dependent upon these territorial entities and the willingness of their governments to support them. General international law: rules and principles that are applicable to a large number of states, on the basis of either customary international law or multilateral treaties. Universal international law: when they become binding upon all states. Regional international law: applies only to certain groups of states, such as, for example, certain rules on diplo- matic asylum recognized only by South American states, or the law of the EU. Particular international law: rules which are binding upon two or a few states only. International comity: widespread practice observed between states without any sense of legal obligation. Universal international law is often challenged as the states in existence today are heterogenous in terms of mili- tary, political and economic power, territorial size and population, political structure, and cultural and ideological orientation. This diversity affects the interpretation and operation of international law to a considerable extent. Characteristics of International law: international law is primarily concerned with the legal regulation of the in- ternational intercourse of states which are organized as territorial entities, limited in number and consider as ‘sov- ereign’ and ‘equal’. ▪ Horizontal system without supreme authority, centralization of the use of force, and a differentiation of the three basic functions of law-making, law-determination, and law enforcement. A state violating an international obligation is responsible for the wrongful act towards the injured state. The injured state can raise an international claim which it may pursue on the basis of special remedies, if available, or by resorting to third-party mediation or conciliation, arbitration, or judicial proceedings. In the end, however, self- help is predominant in international law. Self help: may take the form of war (not lawful except for self-defence), countermeasures (retorsion, reprisals) Retorsion: lawful act designed to injure the wrongdoing state (cutting off economic aid, etc.) Reprisals: normally illegal acts which are rendered legal by a prior illegal act committed by the other state, they should be proportionate to the original wrong. 3  Business Law in the EU International organizations with specialized functions may exercise an effective control over their members (IMF may exclude a state of the Fund). International community: states are members of it and considered equal and sovereign, International organizations are also members. The main objective of international law is to regulate the relations between States, and between States and I.O.. international law attributes obligations and rights. Characteristics: absence of a supreme authority as a law-making body, to ensure the application of the law, to ensure the punishment in case of infringements. Resulting in the authorisation of countermeasures in case of violation of international law. Legal sources: customary international law, international treaties. International disputes solution: mediation or conciliation, arbitration, judicial proceedings. States may not accept the jurisdiction of an international court. Rule of law: situation in which the laws of a country are obeyed by everyone. Jus cogens: principle of international law that is based on values taken to be fundamental to the international community and that cannot be set aside. Mediation: non-binding intervention between parties to promote resolution of a grievance, reconciliation, settle- ment, or compromise. Conciliation: settlement of a dispute by mutual, friendly, and often private agreement with avoiding litigation as objective. Arbitration: process of resolving a dispute or a grievance outside the court system by presenting it to an impartial third party or a panel for a binding decision. II. The UN UN: international organization founded in 1945, 193 member states. General assembly of the UN: main policy-making organ of the organization. It comprises all member states and provides a unique forum for multilateral discussion of international issues covered by the Charter of the UN. It appoints the Secretary-General, elects the non-permanent members of the Security Council, approves the UN budget. Security council: maintain international peace and security, investigate disputes, recommend methods to settle disputes, formulate plans for the establishment of a system to regulate armaments, determine existence of threats to peace, call on members to apply measures not involving the use of force to prevent/stop aggressions, take military action against an aggressor, recommend the admission of new members, exercise the trusteeship functions of the UN, recommend a Secretary-General, elect the judges of the International Court of Justice (with the As- sembly). Security council voting system: each member has a vote, the creators of the UN were granted the special status of Permanent Member States at the Security Council, as well as the ‘right to veto’. International Court of Justice: settles disputes of a legal nature that are submitted by States in accordance with international law. Only states may apply to and appear before the ICJ. 4  Business Law in the EU III. The WTO WTO: only global international organization dealing with the rules of trade between nations. Its goals are to help producers of goods and services, exporters, and importers conduct their business. The WTO is run by its member governments. All major decisions are made by the membership as whole, either by ministers or by their ambassadors or delegates. A Secretariat coordinates the activities to ensure that negotia- tions progress smoothly and that the rules of international trade are correctly applied and enforced. 5  Business Law in the EU Unit 3: EU Institutional and Legal Framework I. Institutions in the EU European Commission (Brussels, Belgium): composed of 27 commissioners (8 vice-presidents and 18 commis- sioners responsible of a portfolio) as well as of civil servants (divided into directorates general). The commission- ers cannot receive instructions from the member states. It proposes legislative acts to the Parliament and the Council, manages the EU’s budget and allocates fundings, enforces EU law and represents the EU in the interna- tional community. The members are assigned responsibility for specific policy areas by the president. European Parliament (Strasbourg, France): only directly-elected body of the EU (705 members), all its members are elected for 5-year terms. The system for elections is proportional, based on population. It decides on the adop- tion of the EU legislative acts, jointly with the council, it supervises other institutions to avoid misuse of power and approves the EU’s annual budget with the Council. The Parliament has legislative, budgetary and supervisory powers. Council of the European Union (Brussels, Belgium and Luxembourg): composed of national ministers from each member states, its presidency rotates every 6 months among member states. This European institution is in charge of adopting the EU legislative acts and requires a double majority. It negotiates and adopts EU laws, coordinates member states’ policies, develops the EU’s common foreign and security policy, concludes international agree- ments and adopts the EU budget. European Council (Strasbourg, France): composed of heads of State or Governments of the Member States, it defines the general political direction and the priorities of the EU. Its members meet 4 times a year and decisions require consensus. European Court of Justice (Luxembourg): it is composed of two courts, the General Court – which deals with cases brought forward by natural or legal persons, member states – and the Court of Justice- which deals with appeals on points of law against judgments of the General Court, preliminary ruling requests from national lower courts, cases brought by Member States or EU institutions. The ECJ interprets the law, enforces the law, annuls EU legal acts, ensures the EU takes actions and sanctions EU institutions European court of human rights (Strasbourg, France) II. EU Expertise Approach: supranational integration approach with two principles (subsidiarity principle: acceptance of centrali- sation only if the EU welfare would not decrease. And proportionality principle: the EU action shall be propor- tionate to the objective established) 6  Business Law in the EU EU’s exclusive competences (Art. 3 TFEU) : customs union, competition policy, monetary policy, conservation of marine biological resources, common commercial policy, conclusion of certain international agreements. EU’s shared competences (Art. 4 TFEU): internal market, social policy, economic social and territorial cohesion, agriculture and fisheries, environment, consumer protection, transport, energy, area of freedom security and jus- tice, common safety. Competences to support the actions of the MS (Art 6 TFEU): protection and improvement of human health, in- dustry, culture, tourism, education, vocational training, youth and support, civil protection, administrative coop- eration. III. The EU Decision-Making process Proposal: the draft is made by the Commis- sion. Discussion and vote: made by the Council and the European Parliament, it follows an ordinary legislative procedure. IV. EU Le- gal Sources Primary law: comes from the Union Treaties Secondary law: unilateral acts (legislative – regulations, directives, decisions , non-legislative – delegated acts, implementing acts, atypical – communications and recommendations), conventions and agreements (international agreements, agreements between EU member states, interinstitutional agreements. Regulations: addressing all Member States, natural and legal persons, they are directly applicable and binding in their entirety Directive: addressing all or specific Member States, they are binding with respect to the intended result (directly applicable only under particular circumstances) Decision: addressing all or specific Member States or specific individuals, they are directly applicable and binding in their entirety Supplementary law: Court of Justice case law (jurisprudence), International law, General principles of law (pri- macy of the EU law, principle of direct effect) Primacy of the EU law: any national provision in conflict with the EU Law shall not be applied Principle of direct effect: individuals can immediately invoke a European provision that has direct effect before a national or European court, under certain conditions. V. Brexit Member of the EEC since 1973, the UK has voted in 2016 a referendum in favour to withdraw from the EU. The UK’s withdrawal from the union took place in 2020. Ireland represented a great part of the talks of the Brexit as Northern Ireland and the country of Ireland share a frontier; some people believed that the issue of this shared frontier was an excuse to keep the UK in the European customs union. 7  Business Law in the EU Withdrawal: “the act or process of taking something away so that it is no longer available, or of someone stopping being involved in an activity. Vienna Convention on the Law of the Treaties (Art 54): “The termination of a treaty or the withdrawal of a party may take place: (a) in conformity with the provisions of the treaty; or (b) At any time by consent of all the parties after consultation with the other contracting States”. Treaty on the European Union (Art 50): “Any Member State may decide to withdraw from the Union in accord- ance with its own constitutional requirements”. 8  Business Law in the EU Unit 4: Customs Union I. Regional Integration Removal of Inner Tar- Institution of Common Free Movement of Peo- Type of Association iffs Outer Tariffs ple and Capital Free Trade Area Yes No No Customs Union Yes Yes No Economic Union Yes Yes Yes Free Trade Customs Common Economic Political More Less Integrated Area Union Market Union Union Integrated II. International Law and EU Customs Union The Brexit raised questions about the role of the Customs Union in the future EU-UK relationships, as a matter of fact, the Customs union was historically a ‘tool of peace’. TFEU (Art 28): the union ‘shall comprise a customs union which shall cover all trade in goods’ Eu customs and foreign trade law have been shaped primarily by the provisions of the WTO, in particular the GATT, but also by the Trade Facilitation Agreement (TFA), the World Customs Organisation (WCO), the SAFE Framework of Standards to Secure and Facilitate Global Trade. TFEU (Art 3(1)(a)): Customs Union is an exclusive competence of the EU TFEU (Art 3(1)(e)): The Union additionally has exclusive competence for the conclusion of an international agreement when its conclusion is provided for in a legislative act of the Union or is necessary to enable the Union to exercise its internal competence. TFEU (Art 2(1)): exclusive competence means that ‘only the Union may legislate and adopt legally binding acts’ while member states must refrain from doing so unless ‘they are empowered by the Union for the implementation of Union acts’. Harmonisation: ‘the alignment of national formalities, procedures, operations and documents with international conventions, standards and practices’ Standardisation: ‘process of developing internationally agreed formats for practices and procedures, documents and information’ International conventions and instruments aiming to eliminate trade barriers in the field of customs legislation: International Convention on the Harmonized Commodity Description and Coding System, Revised International Convention on the Simplification and Harmonisation of Customs Procedures, the SAFE Framework and the Framework on Standards on Cross-border E-Commerce. The EU has adopted relevant international instruments to govern the EU Customs Union. The EU has followed a patter of seeking to achieve high global standardisation of import and export rules in order to facilitate cross-border trade”. There is also a high degree of international harmonisation of EU legislation gov- erning the Customs Union. 9  Business Law in the EU Certain areas remain not influenced by international standards such as provisions governing infringements and sanctions, appeal procedures, provisions on the occurrence of customs debts and provisions relating to the col- lecting of customs duties. III. The EU Customs Union The EU Customs Union allows goods to move freely internally by controlling their external import and export. It is managed by national customs services of Member States acting as if they were one. Customs are mainly involved with commercial traffic although they also check passengers for illegal or dangerous goods (drugs, guns, etc.). Import duties collected by customs represented around 13% of the EU budget in 2018. The EU being the world’s largest trading block (15% of world trade), it allows Member States to gain weight in negotiations. Treaty of Rome (1957): the customs union is an essential foundation of the community. Customs’ role has shifted from mainly collecting duties to ensuring safety and security control. 10  Business Law in the EU Unit 5: EU Internal Market I. The EU Internal Market Main achievements of the Internal Market: withdrawal of all inner barriers and enactment of the free movements on goods, people, services and capital. First step (July 1968): elimination of the custom barriers within the EU, establishment of a common external tariff. Second step (1986-1993): taking away barriers other than customs through the harmonisation of technical rules in several sectors and the principle of mutual recognition of national standards in the remaining sectors. FREE MOVEMENT OF GOODS: Duties: prohibition between Member States of duties on imports and exports, prohibition between Member States of charges having equivalent effect, endorsement of a common external tariff on relations with third countries, and free circulation of the products coming from a third country. Quantitative restrictions: prohibition of quantitative restrictions on imports/exports and measures having equiva- lent effect between Member States. Exceptions to quantitative restriction: public order/policy/security, protection of health and safety of all the living, protection of national treasures, protection of industrial and commercial property. FREE MOVEMENT OF SERVICES: Services: activities of industrial nature, of commercial attributes, of craftsmen, of professions. Prohibition of re- strictions on freedom to provide services (even without the establishment of branches). Freedom of establishment: allows a steady and continuous economic activity in one or several Member States. Free movement of professionals: mutual recognition of professional qualifications. Services Directive: enables an economic operator to provide services in a member state other than the one where he is established. Business environment: harmonisation of the rules relating to company law, corporate governance, accounting and auditing, public procurements, etc. FREE MOVEMENT OF PERSONS: Workers: to accepts consistent job offers, to move freely within Member States, to stay in a Member State for the sole purpose of employment, to remain on the land of a Member State after having been employed, limitations remain on health and safety, human rights and public order. Internal aspect: to cancel all obstacles for free movement. Possibility to re-establish controls on former borders in case of a state emergency. External aspect: strengthen controls on external borders with common rules for delivering visas and for asylum and immigration, the Schengen Information System (SIS), and the FRONTEX (European Agency for operational cooperation on border control) Schengen Convention (1985): 23 EU members and 4 non-EU Members. Temporary reintroductions of border control: exceptional measures respecting the principle of proportionality, in case of a serious threat to public policy or internal security, it is a measure of last resort (extreme measure) which is limited in time 11  Business Law in the EU Free movement of Capital: all restrictions on the movements of capital between Member States and between Member States and third countries shall be prohibited. Classification: FDI, real estate investments or purchases, securities investments (shares, bonds, bills, puts, calls, etc.), granting of loans and credits, other operations with financial institutions. II. Roaming charges within the EU Aims of this regulation: - Ensure a ‘roam like at home’ service by regulating roaming service conditions and wholesale access to public mobile communication networks - Increase transparency and improve access to information on charges - Increase transparency for users of non-regulated roaming services - Ensure access to emergency services free of charge and increase transparency about access to emergency services Key principles: - Extend roaming at national rates until 2032 - Wholesale roaming access (mobile network operators must meet all reasonable requests for wholesale roaming access, mobile network operators may refuse requests for wholesale roaming access on the basis of objective criteria) - Providing regulated retail roaming services (no surcharges should be applied to the domestic retail price to customers in any EU Member State for calls, SMS messages, using internet connection, downloading or uploading data) - Wholesale charges for regulated roaming services (limits on calls, SMS messages, data if customers roam more than allowed under the fair use policy the operator may apply a surcharge) - Transparency (customers must be informed about the quality of roaming services, the types of services that may be subject to increased charges, etc. - Fair use: limit applied by providers to prevent customers using roaming services for purposes other than periodic travel. - Reaching emergency services abroad (this should be free of charge) 12  Business Law in the EU Unit 6: Trade Policy: Trade Agreements I. Common Commercial Policy TFEU (Art. 3.1): provisions are an exclusive competence of the EU TFEU (Art. 3.2): conclusions of international agreements are an exclusive competence of the EU TFEU (Art. 207): EU rules on trade policy Trade policy: progressive abolition of restrictions for international trade and FDI EU exports: generally, no restrictions although exceptions may occur (i.e. dual-use items) EU imports: generally, no restrictions although exceptions may occur (anti-dumping measures, subsidies measures, safeguard measures) Important elements of EU trade policy: common external tariff, multilateral/preferential agreements. Procedure for international agreements: negotiations include taxes, quotas, authorisations to provide services, cut- ting bureaucracy… Commissions makes The Commission presents recommendations to the and publishes the trade Council and Parliament Council concerning the agreement to the Council consult the draft to potential conclusion of an and the European approve it or not international agreement Parliament The Commission regularly The Council authorises the Once approved: the reports to the European Commission to open Council signs and ratifies Parliament (Democratic Negotiations to conclude the agreement on behalf of Supervision) and to the the trade agreement the EU Committee The Council of EU appoints The Commission conducts a committee to assist the negotiations Commission Dual-use items: goods, software and technologies normally used for civilian purposes but which may be used in military applications, or may contribute to the proliferation of Weapons of Mass Destruction. The export, transit, and brokering of such items is controlled by the EU and may be restricted (need for authorisations and licenses) II. Multilateral Agreements: World Trade Organisation Multilateral agreements: negotiated within the WTO, they represent 98% of world trade and their decisions are made by consensus. Their objectives are the reduction of custom duties. WTO dispute settlement body Principles against discrimination (GATT): ▪ Most-favoured-nation treatment (Art.1): any advantage granted by a contracting party to another country should be accorded to all other contracting parties 13  Business Law in the EU ▪ National treatment (Art.3): Imported products shall receive the same treatment as national ones in terms of laws, regulations and requirements which would affect sales, offering for sales, purchase, distribution, and use. ▪ Customs unions, free trade areas conditions (Art.24): They should facilitate trade but not raise barriers to the trade of other (non-member) contracting parties. ▪ Economic Partnership Agreements (EPA): variety of arrangements that favour member-parties over non- members by extending tariff and non-tariff preferences. III. Generalised Scheme of Preferences (GSP) GSP: created following UNCTAD recommendations (1971), and reformed with a focus on developing countries (2014). EU’s GSP offers: ▪ Standard GSP: partial or full removal of duties on two-thirds of tariff lines for low GDP countries. ▪ GSP+: special incentive arrangement for sustainable development and good governance. It slashed tariffs to 0% for vulnerable low- and lower-middle-income countries. ▪ Everything But Arms (EBA): special arrangement for the least developed countries providing duty-free, quota-free access for all products except arms and ammunitions. IV. EU international agreements EU bilateral agreements: South Korea, Mexico, etc. EEA: Iceland, Norway, Liechtenstein Bilateral customs union: Andorra, San Marino, Turkey Southern Neighbourhood EU-UK Trade and Cooperation Agreement: preferential arrangements in various areas which was signed in 2020, it regards free trade arrangements, citizen’s security partnerships and a governance framework. EU-US trade deal (2015 – not signed): Transatlantic Trade and Investment Partnership (TTIP), it had the aim to create a free-trade area and harmonize standards 14  Business Law in the EU Unit 7: Trade Policy: Trade Defence Instruments I. Trade defence instruments and business ethics Trade policy: progressive abolition of restrictions for international trade and FDI Safeguard measures: for situations in which an EU industry is affected by an unforeseen, sharp and sudden in- crease of imports. Anti-subsidy (countervailing) measures: if an imported product has received State aids, the EU may impose coun- tervailing duties to neutralise the benefit of such a subsidy Anti-dumping measures: producers of a third country sell in Europe at a price lower than the price on their own market or under their production costs; the EU may impose antidumping duties to neutralise the difference in prices. Liberalist approach: trade defence is an obstacle to trade, countries should avoid/reduce trade defence measures (WTO) Protectionism approach: international rules on competition are not established, trade defence measures are the only instruments to reduce unfair trade practices. Safeguard measures: erga omnes measures “against imports from the rest of the world” which apply to all coun- tries without discrimination although countries with low import shares can be excluded. Stringent conditions on increase of imports: unpredictable, severe, and sudden. Temporary breathing space to make necessary adjustments for the domestic industry. Measures shall not be against the EU interest. Safeguard measures in the EU: GATT, Agreement on Safeguards, EU regulation 2015/478 (imports from WTO countries), EU regulation 2015/755 (imports from non-WTO countries) Anti-subsidy measures: endowments distort competition by making subsidized goods artificially competitive. To apply the measures the imports must benefit from a subsidy, there is injury suffered by the EU industry, there is a causal link between the injury and the subsidised imports and the imposition of measures is not against the Union’s interest. Anti-subsidy measures: GATT+ Agreement on subsidies and countervailing measures, EU Regulation 2016/1037 (protection against subsidised imports from non-EU countries) Dumping: a company exports a product to the EU at prices lower than the normal value of the product on its own domestic market. Anti-dumping measures requirements: dumping, injury caused to the EU industry, causal link between the injury and the dumped imports. Other requirement is that all stakeholder interests are to be considered that revolve around producers. Antidumping measures: GATT+ Anti-dumping agreement, EU regulation 2016/1036 (protection against dumped imports from non-EU countries) The “Lesser Duty Rule”: in the countervailing investigations, the rate of duty for each case is based on the amount of subsidy, unless a lower rate would remove the injury. In the anti-dumping investigations, the rate of duty for each case is based on the dumping margin unless a lower rate would remove the injury. Measures may be provisional or definitive: measures end after 5 years, unless a specific expiry review in initiated. - Provisional: during investigations, they may be imposed in critical circumstances and if a preliminary determination provides clear evidence of harm of obstructive harm - Definitive: at the end of the investigation measures, if applicable 15  Business Law in the EU Countervailing and anti-dumping measures take different forms: - Ad valorem duty: percentage of the net, free at EU frontier - Specific duty: fixed value for a certain amount of goods - Variable duty: minimum import price (importers in the EU do not pay an anti-dumping duty if the foreign exporter’s export price to the EU is higher than the minimum import price) Duties: paid by the importer and collected by the customs of the EU country of arrival. The commission monitors import volumes and prices of all products subject to measures, in order to identify and to react to circumvention and other irregularities. Commission: 1. Receives a valid complaint from an EU industry 2. Decides to launch an investigation within 45 days 3. Publishes a Notice of Initiation in the EU’s Official Journal, detailing the product under investigation, the country(ies) to be investigated, the rights and obligations of interested parties to the proceeding, and the deadlines which will apply 4. Sends a questionnaire to exporters, Union producers, importers, users. Circumvention: conduct undertaken by exporters in order to evade antidumping duties imposed by importing countries (ineffectiveness of trade defence measures, waste of time and resources both for public authorities and stakeholders) 1987: EU adopts the first anti-circumvention regulation against Japanese’s practices of “screwdriver type assem- bly” 1988: the US adopts anti-circumvention provisions in the Trade Act WTO’s position: no new anti-circumvention rules in anti-dumping laws should conflict its own rules. WTO agreements lack anti-circumvention rules, Member states of WTO may provide their own regulatory regime Trans-shipment: shipping goods to an intermediate destination (no direct link between the initial and final coun- tries, if the intended port of entry is blocked) Trans-loading: change the means of transport Nature of circumvention practices: transhipment and/or assembly operations, importation of the slightly modified product concerned. Transhipment is the most frequent practice, the large majority of EU investigations terminates with the extension of the duties, and although in certain sectors circumvention is recurring, it is not a growing practice. 16  Business Law in the EU Unit 8: Competition Policy: Antitrust I. Introduction to Competition Policy Objective: enable the proper functioning of the EU’s internal market. TFEU prevents restrictions on and distor- tions of competition (abuse of dominant positions, anti-competitive agreements, etc.). Key instrument for achiev- ing free, dynamic and functioning internal market and promoting general economic welfare. Competition drives innovation and long-term economic growth. EU competition policy includes: rules on antitrust (to avoid cartels or abuse of dominance), merger control (avoid- ing distortions of competition), State aid (prevent preferential treatment), public undertakings and services. Comprehensive ban on anti-competitive agreements – TFEU (Art.101): collusion between companies distorts the level playing field and causes harm to consumers and other businesses, therefore they may be prohibited unless they improve the production or distribution of goods. Prohibition of abuse of a dominant position – TFEU (Art.102): dominant position is a ‘position of economic strength enjoyed by an undertaking which enables it to prevent effective competition being maintained on the relevant market by giving it the power to behave to an appreciable extent independently of its competitors, cus- tomers and ultimately of its consumers’. II. Antitrust procedures – anticompetitive agreements TFEU (Art.101) Cases: 1. A complaint, the opening of an own-initiative investigation, or a leniency application from one of the participants to a cartel may start a case. The first firm to provide evidence sufficient for the Commission to launch an inspection or find an infringement receives full exemption from its fine. 2. Investigation: Commission’s investigative powers include sending information requests to companies, enter the premises of companies, examine records related to the business, take copies of records, seal the business premises and records during an inspection, question members of staff or company representa- tives regarding the subject-matter and purpose of the inspection. 3. Commission may decide to pursue the case as a matter of priority and conduct in-depth investigation, or close the investigation. 4. Statement of objections and prohibition decision: the statement of objection details the Commission’s concerns, it is sent to the companies concerned. The parties are rights of defence and may reply to the SO within a certain delay or request an oral hearing. 5. The Commission drafts a decision prohibiting the identified infringement. The draft is submitted to the Advisory Committee. 5.2 Commitment decision (Art.9): the Commission does not conclude on the existence of an infringement, but voices its competition concerns allowing parties to come forward with commitments to address these concerns. 6. Fines: aims at punishment and deterrence, they reflect the duration and gravity of the infringement. 7. Appeal: the EU General Court may cancel, increase or reduce the fine imposed by the Commission. another appeal may be done before the ECJ (the Commission can also be an appellant). Settlement: they may be rejected by the Commission, they allow the Commission to adopt a faster, more stream- lined decision and to allocate resources to other cases. Victim’s claims for damages: any citizen/business which suffers harm as a result of a breach of the EU competition rules is entitled to claim compensation from the party who caused it. 17  Business Law in the EU III. Antitrust procedures – abuse of dominance TFEU (Art.102) 1. Assess dominance: define the relevant market (product market, geographic market), market shares (if less than 40%, unlikely to be dominant), barriers to entry 2. Assess an abuse: the dominant company should ensure its conduct does not distort competition (exclusive purchasing, predation, etc.) 3. Investigation: the Commission’s investigative powers include sending information requests to compa- nies, enter the premises of the companies, examine and take copies of records related to the business, seal the business premises and records, question staff or company representatives. 4. The Commission may decide to pursue the case as a matter of priority and conduct an in-depth investi- gation or close it. 5. Statement of objections and prohibition decision: the Commission may issue a SO, the companies are allowed to exercise their rights to defence. 6. The Commission examines the parties’ arguments and may abandon its initial objections and therefore close the case. If no objection, the Commission drafts a decision prohibiting the identified infringement and submits the draft to the Advisory Committee. 7. Fines 8. Right of appeal Victim’s claims for damages are possible. Commitment decisions are possible. IV. Leniency Leniency programme (2006 Notice on Immunity): companies that provide sufficient information about a cartel in which they have participated may receive full or partial immunity from fines. It helps the Commission to discover secret cartels and obtain insider evidence of infringements. 18  Business Law in the EU Unit 9: Competition Policy: Mergers and State Aids I. Introduction to Competition Policy Merger control – EC Merger Regulation (EC) No.139/2004: concentrations which would significantly affect com- petition in the internal market or in a substantial part of it must be declared incompatible with the common market. Prohibition of State aid – TFEU (Art.107): prohibition of state aid that could grant selective advantages to certain companies. They may be allowed by specific overarching policy objectives (addressing serious economic disturb- ances i.e. COVID aid), member States must however notify the Commission. Public services of general economic interest – Charter of Fundamental Rights of the European Union (Art.36): SGEIs are subject to specific rules in the context of the State aid framework. Enforcement: essential to ensure the achievement of the competition policy objectives. The Commission ensures the correct application of the rules, national antitrust authorities an courts have an enforced role (Council Regula- tion (EC) No 1/2003, Directive (EU) 2019/1). 2014 – Actions for Damages Directive adopted. Parliament’s role: scrutiny of the executive. The Commissioner for Competition appears several times a year before Parliament’s Committee on Economic and Monetary Affairs to explain the approach taken and discuss individual decisions. Parliament is also involved during the consultation procedure (in the adoption of competition policy legislation). II. Mergers overview Mergers pros/cons: mergers can bring benefits to the economy (increased efficiency providing higher-quality goods), but they also can reduce competition and risk harming customers (strengthens dominant players and may lead to higher prices, reduced choices, or less innovation). EU merger control rules: apply to all mergers no matter where in the world merging companies have their regis- tered office, headquarters, activities or production (as companies, even outside the EU impact the EU markets). Turnovers exceeding specified thresholds in terms of sales, the proposed merger must be notified to the European Commission (national competition authorities in the EU may also review the merger). EU Merger Regulation (Art. 22): the European Commission may also examine mergers which are referred to it from the national competition authorities Approval/Prohibition of proposed mergers: the Commission considers whether they can be expected to signifi- cantly impede effective competition in the EU if they do not, they are approved unconditionally, if they do they may be prohibited or commitments are proposed to the companies to remove the impediments. Conditional approvals: during the merger review process companies can propose/negotiate solutions with the Commission. parties can therefore commit to taking action to correct the potential impediments. III. State Aids Overview Art. 107 – TFEU: generally prohibits State aid unless exceptionally justified. State aid: advantage in any form whatsoever conferred by national public authorities to undertakings on a selective basis. It does not include subsidies granted to individuals or general measures open to all enterprises. State aid measure features (prohibited unless exceptions): there has been an intervention by the State or through State resources which can take a variety of forms, the intervention gives the recipient an advantage on a selective basis, as a result competition has been or may be distorted, and the intervention is likely to affect trade between Member States. 19  Business Law in the EU Verifying State Aid: the State aid control requires prior notification before the measure is put into effect (unless exceptions). Preliminary investigation: the Commission has 20 working days to decide whether; there is no aid within the meaning of the EU rules, the aid is compatible with EU rules, or serious doubts remain as to the compatibility with EU rules (leading to an in-depth investigation). Sector inquiries: launched in situations where State aid measures may distort competition, or where existing aid measures are no longer compatible with the regulatory framework. Complaints: companies and consumers can lodge complaints with the Commission. Transparency: citizens and companies can easily access information about awarded aids. The transparency re- quirements promote accountability of granting authorities and they reduce asymmetries on the market for state aid. IV. Temporary Crisis and State Aids 20 Nov. 2023: Commission amended the Temporary Crisis and Transition Framework. the Commission adopted a limited prolongation of the provisions enabling member states to continue to grant limited amount of aid (to cover winter heating period, aid to compensate for high energy prices, etc.). 13 March 2022: Temporary Crisis Framework to enable Member States to support the economy in the context of Russia’s invasion of Ukraine (compensations for damages directly suffered, etc.) Etc. 20  Business Law in the EU Unit 10: IPRs: Classification and Copyrights I. IPRs: Presentation Property: the right to earn the fruits (fructus), use (usus), or disposal (abusus) of something – ownership. The property may be of tangible or intangible nature. Intellectual Property (IP): result of creativity, exclusive rights on immaterial objects. Intellectual Property Rights (IPRs): promote innovation assuring to the creators the exploitation of their works. These rights may be conflicting with the objectives of other policies (trade/competition policy) or the access to knowledge in society. Scientific progress implies: constant expansion of IPRs, new challenges (privacy, ethic and social sensitive issues, etc.) Legal sources: - Internatinoal level: international agreements establishing common principles. - Supranational level: harmonisation process of the EU – the internal market requires the removal of con- flicts between the national legislations and the coordination of IP, competition and free movement of goods. - National level: e.g. French IPR code (1992) Classification: - Literary and Artistic Works: copyrights (author’s rights), related rights. - Industrial Property: exclusive rights of exploitation (patents – protect the function –, Industrial designs – protect the appearance), identification signs (trademarks, geographical indications). Copyrights: to promote the creative process (protect the author’s personality, assure the author full exploitation of their work). They are referred to as copyrights in common law and to the criterion of utility, in civil law, they refer to the author’s rights and to the criterion of right and justice. - The IP is protected until 70 years after the death of the author in EU (50 years at least for signees of the Berne Convention). - Copyright protection starts from the moment the work is created. - Legal protection: 1. The existence of a creative activity of the human intellect (originality), 2. The exist- ence of a mean of communication (form), if provided by the domestic legislation. Original work: - In terms of mode/form - Original/derivative character: (Berne Convention Art.2.3) “translations, adaptations, arrangements of music and other alterations of a literary or artistic work shall be protected as original works without prejudice to the copyright in the original work”. - Destination/worthiness: good or bad works (subjective), for cultural or commercial objectives. Berne Convention (Art.1): “the countries to which this Convention applies constitute a Union for the protection of the rights of authors in their literary and artistic works”. Berne Convention (Art.2): “the expression “literary and artistic works” shall include every production in the lit- erary, scientific and artistic domain, whatever may be the mode or form of this expression”. Authorship: the author is the physical person who conceives and executes the work, not the moral person (except for corporations which may own author’s rights to some extent) 21  Business Law in the EU Economic exploitation rights: rights of reproduction, communication to the public, translation, adaptation, distri- bution, and resale. Moral rights: rights of authorship, integrity and divulgation. Limitation of rights: when third parties are allowed to use the protected work in certain situations and for certain purposes. Licence: the licensor who owns the IP agrees to let it be used and the licensee receives the right to use the IP in exchange of payment (flat fee or royalty). Exceptions to copyrights: allow beneficiaries to use protected material without authorisation from the rightshold- ers. The EU copyright rules set out an exhaustive list of exceptions to rights. II. Failure to transpose copyright rules by certain MS Bulgaria, Denmark, Finland, Latvia, Poland and Portugal were concerned by a failure to notify complete transpo- sition measures on copyright and related rights in the Digital Single Market (Directive (EU) 2019/790). The new copyright directive: to fit the new way creative content is produced, distributed and accessed online. It concerns the relationships between copyright holders and online platforms and the remuneration of individual artists and creators. III. IP and Assignment Agreements IP risks specific to commercialisation activities: nature of the product/services, confidentiality, legal/financial matters, business reputation. IP assignment: transfer of ownership of an IP right (patent, trademark, copyright) form one party (assignor) to another party (assignee), making the assignee the owner of the IP right. 22  Business Law in the EU Unit 11: IPRs: Industrial Property and Distinctive Signs I. IP and Distinctive Signs Classification of industrial property: exclusive rights of exploitation (patent, industrial designs), identification signs (trademarks, geographical indications) Patent: implicit contract between the creator and the society as a whole, a monopoly (20 years) applies, and after this delay, the invention has to become public. (legal aspect – forbidding counterfeiting – and economic aspects – monopoly of exploitation, brand image) Secret invention: trade-off between costs and benefits, major concerns about counterfeiting, relevant know-how that is easy to keep secret. Rights conferred by a patent: prevent others from making, using, offering for sale, selling or importing infringing products in the country where the patent was granted, sell its rights or enter licensing contracts. Offices to apply for patents: National patent offices, European Patent Office (UK is still a member of the EPO), Patent Cooperation Treaty. Patent conditions: 1. New invention, 2. Consequence of a creative activity, 3. That can have an industrial applica- tion. (discoveries, theories or mathematical formulae are not patentable unless they are put into a practical context) Trade secret: information that is not generally known or cannot be easily discovered, that has a business/commer- cial/economic value because the information is not generally known, that is subject to reasonable efforts to main- tain secrecy. Means of protection: - Practical: limited access to information, “need to know”, encryption of data, monitored entry to locations. - Contractual: restrictive covenants in employment contracts, non-disclosure agreements. Fair, Reasonable, and Non-Discriminatory (FRAND) Licensing Agreements: an industrial group that sets com- mon standards for its particular industry to ensure compatibility and interoperability of devices manufactured by different companies is called a standard-setting organization. A standard-setting organization must obtain permis- sion from the patent holder to include a patented technology in its standard/ - Fair: licensing terms that are not anti-competitive and that would not be considered unlawful if imposed by a dominant firm in their relative market. - Reasonable: must reward the licensor with adequate compensation for contributing its essential patents to a standard. - Non-discriminatory: licensors shall treat each licensee in a similar manner. Design: outward appearance of the whole product or a part of it (lines, colours, shapes, textures, contours, mate- rials, ornamentation). Functions (utilities of the product) are not part of the design. Registering identification signs: national level (France: INPI), international level (WIPO), EU level (EUIPO). Requirements for protection: novelty, individual character. EU design system: - Without registration: no application procedure, no cost, protection against copying, protection for 3 years. - With registration: application at the EUIPO, fees payable to the EUIPO, full protection, lasts a min. 5 years and max 25 years. - No fee refund. 23  Business Law in the EU Characteristics: the right can be transferred, the authorisation of the creator is necessary for the exploitation, except for non-commercial use, experiments, and teaching. Trademark; any sign which distinguishes the goods and services of one undertaking (company or organisation) from those of another. They serve to indicate the commercial source or origin of the products and services they relate to. - Registration: national (Fr: INPI), International (WIPO), EU (EUIPO) Scope of Trademark Protection: - Exclusive right: principle of specialty (rights applies only to the goods and services for which the trade- mark is registered), principle of territoriality (only apply in the territory of registration) - Potentially perpetual: 10 years and can be renewed every 10 years. - Risk of losing the protection if: no usage after five years, found to be invalid. Trademark VS brand: IP includes counterfeiting trademark infringement whereas the brand has no IP rights (unfair competition passing off) Brand legal protection: need for proof of a breach of duty of care, a damage, and a causal link between the breach and the damage. It can be remedied through injunctions or damages and interests. Geographical indications: identify a good as originating from the territory of a country/region/locality of that territory, where a given quality, reputation or other characteristic of the good is essentially attributable to its geo- graphical origin. II. European Union Intellectual Property Office (EUIPO) EUIPO: EU agency responsible for managing the EU trade marks (EUTMs), the registered Community designs (RCDs), the geographical indications (GIs) for craft and industrial products and the European and international cooperation in the field of IP. European Observatory on Infringements of IPRs: raises public awareness, delivers training, develops systems and provides evidence-based data on IP protection and enforcement. III. Patents v. Trade Secrets (EUIPO) Innovation (Oslo Manual): “the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organisational method in business practices, workplace organisation or external relations”. “the minimum requirement for an innovation is that the product, process, marketing method or organisational method must be new (or significantly improved) to the firm. This includes products, processes and methods that firms are the first to develop and those that have been adopted from other firms or organisations.” Perfectly competitive market assumption: no producer has market power, there is no product differentiations and all firms have immediate and perfect access to the same technologies -> low innovation rate (exclusive market power over inventions encourages R&D investments). TRIPS Agreement: aims at reducing distortions and impediments to international trade by providing adequate standards and principles concerning the availability, scope and use of trade-related intellectual property rights as well as effective and appropriate means for their enforcement. Trade secrets: can be technical in nature (designs, prototypes, processes, etc.) or commercial (customer/supplier lists, business methods and strategies, cost/price information) 24  Business Law in the EU Unit 12: Unfair Competition I. Unfair Competition Background France: French Code Civil on unfair competition (Art.1382 & 1383): not derived from any special legislation, announces a general principle in cases where intentionally/negligently, damage is inflicted upon another person or their prop- erty. Art.1382: any person who causes injury to another by any act whatsoever is obligated to compensate such other person for the injury sustained. Art.1383: a person is responsible in damages not only for those acts which he has actually committed but also for any damage caused by his negligence or imprudence. Statute of March, 1791: “every person shall be free to engage in such business or to exercise such profession, art or trade, as he shall see fit”. -> put an end to guild domination and governmental interference with production. Concept of propriété industrielle (industrial property) : comprised industrial property rights and the broader con- cept of protecting the relationship between a merchant and his clientele. Early recognition of the principle not to abuse competitive freedom by borrowing from or taking advantage of the success of a commercial competitors. Achalandage: “good will”, the sum of all relations created between a business man and his customers. Concurrence Déloyale: covered “all manoeuvres that cause prejudice to the name of a property, to the renown of a merchandise, or in lessening the custom due to rivals in business”. In the US: unfair competition has long be considered as a branch of trade-mark law. II. Defining Unfair Competition Comparing Legal Systems Unfair competition: conduct by a market participant which gains or seeks to gain an advantage over its rivals through misleading, deceptive, dishonest, fraudulent, coercive or unconscionable conduct in trade or commerce. 1883 Paris Convention for the Protection of IP: “the repression of unfair competition” constituted by “any act of competition contrary to honest practices in industrial or commercial matters”. Prohibitions required for: false allegations discrediting a competitor, misleading the public as to the nature/manufacturing process/characteris- tics/suitability/quantity of the goods. Australia (Australian Consumer Law Sections 33, 34): prohibit conduct by a corporation in trade or commerce that is liable to mislead the public about the nature, manufacturing process, characteristics, suitability for purpose or quality of goods or services. ACL section 18: prohibits misleading or deceptive conduct and specific forms of false of misleading conduct or unfair practices are prohibited and subject to penalty. Unfair Commercial Practices Directive (2005/29/EC) – EU : regulates unfair trading practices, standards of be- haviour required of traders. Proscribed conduct: general prohibition of unfair business to consumer commercial practices (Art.3&5) Uniform Deceptive Trade Practices Act – USA: prohibits 1. False representations that goods or services have certain characteristics, ingredients, uses, benefits or quantities; 2. False representations that goods or services are new or original; 3. False representations that goods/services are for a particular grade, standard, quality. Federal Trade Commission Act (Section 5(a)) – USA: “unfair methods of competition” and “unfair or deceptive acts or practices in or affecting commerce … are … declared unlawful.” 25  Business Law in the EU III. EU Directive on the Protection of Undisclosed Trade Secrets Directive (EU) 2016/943: Lawful acquisition, use and disclosure of trade secrets (Art.3): - if the secret is obtained through independent discovery/creation, observation/study/disassembly/testing of a product/object that has been made to the public or that is lawfully in the possession of the acquirer of the information, exercise of the right of workers or representatives to information and consultation, any other practice in conformity with honest commercial practices. - The acquisition/use/disclosure of a trade secret is lawful to the extent that it is required/allowed by Union or national law. Unlawful acquisition, use and disclosure of trade secrets (Art.4): - MS should ensure that trade secret holders are entitled to apply for measures provided in the Directive to prevent, or obtain redress for the unlawful acquisition/use/disclosure of trade secrets. - Trade secrets are unlawful if: unauthorised access to, appropriation of, or copying of any documents/ob- jects/materials/substances/electronic files containing the trade secret lawfully under the control of the trade secret holder frow which it is deduced; any other conduct considered contrary to honest commercial practices. - Unlawful use/disclosure of a trade secret: if carried out without the consent of the trade secret holder by a person either having acquired the trade secret unlawfully, or being in breach of a confidentiality agree- ment or any other duty not to disclose the secret, or being in breach of a contractual or any other duty to limit the use of the trade secret. - If the person at the time of the acquisition/use/disclosure, knew that the trade secret had been obtained from a person who was using/disclosing the secret unlawfully. - production/offering/placing on the market/importation/export/storage of infringing goods is unlawful where the person carrying out these activities knew that the trade secret was used unlawfully. Exceptions (Art.5): - exercising the right to freedom of expression and information as set out in the Charter, including respect of freedom and pluralism of the media. - Revealing misconduct, wrongdoing or illegal activity, provided that the respondent acted for the purpose of protecting the general public interest. - Disclosure by workers to their representatives as part of the legitimate exercise by those representatives of their functions in accordance with Union/national law, provided that such disclosure was necessary for that exercise. - For the purpose of protecting a legitimate interest recognised by Union/national law. IV. Unfair Competition and Disclosure of Trade Secrets To win a theft of trade secrets claim: proof that the information stolen is (1) not publicly known, (2) has commer- cial value, and (3) that you took measures to keep it secret. 26  Business Law in the EU Unit 13: Consumers Protection I. 50 years of Consumer Legislation in the EU Five consumer rights: (1) right to health protection and safety, (2) the right to protection of economic interests, (3) the right to damages, (4) the right to information and education, (5) the right to representation. 1972: EU founding members identify consumer protection as a right. 1979: free circulation of consumer goods in the EU becomes a reality, and with it the need for shared consumer rights. 2001: general product safety law set Europe-wide standards for product safety. 2004: passenger rights rules protect travellers in the EU when trips are cancelled or delayed. 2005: unfair commercial practices law protects consumers from misleading ads and aggressive marketing. 2022: the European Commission proposes laws to protect consumers during the shift to a greener society. II. The EU Consumer Rights Directive Consumer protection legislation guarantees: right to be treated fairly when buying goods at the supermarket, pay- ing the bill with the energy supplier or downloading music for everyone. Charter of Fundamental Rights & European treaties: guarantee a high level of consumer protection in the EU. They cover domestic and cross-border trade, combat unfair practices and give consumers the right to cancel the purchases they made online. EU Consumer Rights Directive: strengthens consumer rights by giving consumers the same rights across the EU, while striking the right balance between consumer protection and business competitiveness. New consumer rules: align and harmonise national consumer rules in areas such as the information consumers need to get before purchase, rights to cancel online purchases wherever they are in the EU. Strengthen consumer rights (higher level of protection on- and off-line). Helping shoppers: no more cost-traps (mandatory confirmation of online shoppers before they are charged), no more pre-ticked boxes (avoid paying for unwanted services), no unannounced charges, no charging more for credit card payments than it costs to provide that option, traders operating hotlines for consumer complaints/questions cannot charge more than the basic rate for such calls. Refunds: extension from the minimum of 7 days to 14 days (from the day the good is received) to pull out of a distance purchase, traders must refund consumers within 14 days of cancellation, standard EU forms are provided for purchase cancellation. III. Consumer Sales and Guarantees Directive (EU) 2019/771: the seller is liable to the consumer for any lack of conformity which exists at the time when the goods were delivered and which becomes apparent within two years of that time. Directive (EU) 2019/770: gives consumers the right to remedy when digital content or a digital service is faulty. IV. Digital Contract Rules Directive (EU) 2019/770: on certain aspects concerning contracts for the supply of digital content and digital services Directive (EU) 2019/771: on certain aspects concerning contracts for the sale of goods entered into application. 27  Business Law in the EU New directives: - will protect consumers when digital content and digital services are faulty, giving them the right to: ask the trader to fix the problem, and if the problem persists get a price reduction or terminate the contract and get a refund. - Goods will have to be in conformity with what is agreed and what the consumer could reasonably expect. V. Loot Boxes in Digital Games Challenge Loot boxes and gambling: concerns that loot boxes may be an unregulated form of quasi-gambling. 2020 EU Parliament-commissioned study : recommended that loot boxes and in-game purchasing systems should be regulated from a “consumer protection” perspective. Randomised loot box: intangible, virtual, intrinsically worthless item. Consumer protection applied to loot boxes: justified by reasons of psychological risks and potential harms, espe- cially to children. Player protection approach: suggests a wider focus, encouraging examination of alternative regulatory solutions. It would take into considerations such as regulations on health and safety, AI, financial regulation, data protection and self-regulatory initiatives. 28  Business Law in the EU Unit 14: Data Protection I. EU General Data Protection Regulation (GDPR) GDPR: put into effect on May 25, 2018, it is the toughest privacy and security law in the world which imposes obligations onto organizations anywhere, so long as they target/collect data related to people in the EU. Right to privacy – European Convention on Human Rights (1950): “Everyone has the right to respect for his private and family life, his home and his correspondence.” European Data Protection Directive 1995: established minimum data privacy and security standards, upon which each member state based its own implementing law. Fines: very high. Personal data: any information relating to an individual who can be directly or indirectly identified. Data processing: any action performed on data, whether automated or manual. Data subject: person whose data is processed. Data controller: person deciding why and how personal data will be processed. Data processor: third party that processes personal data on behalf of a data controller. Data protection principles (GDPR): (1) lawfulness, fairness and transparency, (2) purpose limitation, (3) data minimization, (4) accuracy, (5) storage limitation, (6) integrity and confidentiality, (7) accountability. Accountability: GDPR says data controllers should be able to demonstrate they are GDPR compliant. Data security: need to handle data securely by implementing ‘appropriate technical and organizational measures’. Data protection by design and by default: every activity in organizations must “by design and by default” consider data protection. (Art.25 GDPR) data protection principles should be considered in the design of any new product or activity. Art.6 GDPR: don’t even think about touching somebody’s personal data – don’t collect it, don’t store it, don’t sell it to advertisers – unless you can justify it. Consent: (1) it must be “freely given, specific, informed and unambiguous”, (2) requests for consent must be “clearly distinguishable from the other matters” and presented in “clear and plain language”, (3) data subjects can withdraw previously given consent whenever they want, and you have to honour their decision. (4) children under 13 can only give consent with permission from their parent (5) you need to keep documentary evidence of consent. Data protection officers: appointed if (1) you are a public authority other than a court acting in a judicial capacity (2) your core activities require you to monitor people systematically and regularly on a large scale (3) your core activities are large-scale processing of special categories of data listed under Art.9 of the GDPR or data relating to criminal convictions and offenses mentioned in Art.10. Data subjects’ privacy rights: right to be informed, right of access, right to rectification, right to erasure, right to restrict processing, right to data portability, right to object, rights in relation to automated decision making and profiling. 29  Business Law in the EU II. Data Protection Enforcement – Directive on the Protection of Natural Persons Responsibilities of data controllers: designation of a DPO, requirement to carry out an impact assessment where a type of processing is likely to result in a high risk to data subjects’ rights, supervisory authorities can be the same as those established under the general data protection regulation. European Data Protection Board (EDPB): adopted three dispute resolution decisions on the basis of Art.65 GDPR concerning Meta Platforms Ireland Limited platforms). The EDPB settles the question of whether or not the processing of personal data for the performance of a con- tract is a suitable legal basis for behavioural advertising. 30