Birds' Eye View of EU Business Law Lecture PDF

04.09.24 Dr. Calum Alasdair Young BIRDS’ EYE VIEW OF EU BUSINESS LAW  Course Outline How does the EU affect the day-to-day functioning of businesses? What regulat...

04.09.24 Dr. Calum Alasdair Young BIRDS’ EYE VIEW OF EU BUSINESS LAW  Course Outline How does the EU affect the day-to-day functioning of businesses? What regulatory compliance issues will various stakeholders face? What are the main economic impacts the EU has? 2 Bird's eye view on EU business law - Young  Course Structure Part 1 – Internal Market Part 2 – Competition Law Part 3 – GDPR Part 4 – Labour Law 3 Bird's eye view on EU business law - Young  Learning Goals Analyse the legal foundations and history of European economic integration. Identify and analyse key concepts, legal provisions and CJEU landmark cases in the area of the EU internal market law to advise potential clients on matters related to the four freedoms (not just today). 4 Bird's eye view on EU business law - Young  Why do this? Internal Market is central to EU Law Not just legal but political and economic concepts ‘Identity’ of the EU CJEU’s teleological interpretation adds additional relevance to the ‘purpose’ of EU law Important for wider understanding of EU to know where it has been and is going 5 Bird's eye view on EU business law - Young  Structure of today Stages of economic integration Historical Development How integration takes place Types of market integration What is a market / what are consumers? 6 Bird's eye view on EU business law - Young  Stages of Economic Integration 1. Free Trade Area 2. Customs Union 3. Common Market 4. Economic Union 5. Economic and Monetary Union 7 Bird's eye view on EU business law - Young  Stages of Economic Integration – Free Trade Area States agree to remove all customs duties and quotas on trade passing between them. Quotas – numerical limits on the amount of X you can import/export Customs Duties – additional charges on imports/exports by nature of crossing a border 8 Bird's eye view on EU business law - Young  Stages of Economic Integration – Customs Union Tariffs and quotas are removed from between members AND States apply a common external tariff to goods entering the Customs Union No matter what state you import into, same tariffs. Follows on from free trade area, as avoids race to the bottom on tariffs/quotas 9 Bird's eye view on EU business law - Young  Stages of Economic Integration – Common Market Free movement of goods and services Free movement of labour, capital, and enterprise (factors of production) Aim is optimal allocation of resources and efficient production (Ricardo’s theory of Comparative Advantage) EU’s four freedoms of goods, capital, services, people 10 Bird's eye view on EU business law - Young  Stages of Market Integration – Economic Union Common Market and Customs Union Previous two stages combined 11 Bird's eye view on EU business law - Young  Stages of Market Integration – Economic and Monetary Union Complete Unification of Common and Monetary Policy Common currency Complete unification of monetary and fiscal policy Eurozone, but not quite at full unification of fiscal policy 12 Bird's eye view on EU business law - Young  Stages of Economic Integration Stages of economic integration (coloured according to their most integrated agreement): dark green is economic and monetary union; light green is economic union; blue is customs and monetary union; orange is customs union; pink is free trade area. 13 Bird's eye view on EU business law - Young  Methods of Market Integration – how do you make a common market? Difficult and elaborate construct to actually make exist Especially across multiple states Numerous contrasting and contradicting laws need to interact and have some sort of resolution 14 Bird's eye view on EU business law - Young  Methods of Market Integration – how do you make a common market? Multiple theoretical models of market integration About managing the balance between regulation/control and economic freedoms Theories do not fully exist in pure form anywhere Exists to varying degrees in varying ways Negative Integration – removing barriers Vs Positive Integration – creating new rules and institutions 15 Bird's eye view on EU business law - Young  Methods of Market Integration – how do you make a common market? Host Country Control Harmonised Model Home Country Control 16 Bird's eye view on EU business law - Young  Methods of Market Integration – Host Country Control Rules of the country where the economic activity takes place apply Usual model of economic interactions between states Eg. Local goods standards Eg. Local worker regulations EU internal market has gone beyond this, and includes some rules on non-discrimination 17 Bird's eye view on EU business law - Young  Models of Market Integration – Harmonised Model One set of rules for the whole economic market Set at a central point All products/services must comply with these rules, but can then be freely sold in the entire union (full harmonization) EU does harmonise, but Member States retain some discretion (minimum harmonization) Eg. Minimum product standards set by the EU 18 Bird's eye view on EU business law - Young  Methods of Market Integration – Home Country Control Rules that apply are the rules of the country where a product is produced not where it is sold Produced in country A, sold in country B, A’s rules apply Worker from C moves to country D, C’s rules apply Requires an extensive amount of mutual trust EU does not have absolute trust – exceptions exist that allow the host country to deny even where mutual recognition exists 19 Bird's eye view on EU business law - Young  Methods of Market Integration - Consequences Sovereignty – who has control? Institutional Consequences – who makes the rules? Welfare considerations – which rules best protect the people? Democratic Concerns – how can we democratically decide the rules? 20 Bird's eye view on EU business law - Young  Methods of Integration - Consequences Specialisation - optimal allocation of resources Interdependence – countries’ economies become reliant upon one another Common institutions – markets require rules, and thus institutions to democratically create them 21 Bird's eye view on EU business law - Young  WHAT HAPPENED IN THE EU? 22 Bird's eye view on EU business law - Young  Development of the Internal Market Original goals is to create economic interdependence to cement peace ‘Common Market’ – 1957 onwards Markets opened, but in a controlled fashion, number of exceptions ‘Harmonised Model’ – full harmonisation, eg. Chocolate Directive Issue- or sector-specific initiatives Started swiftly, but the pace definitely slowed 23 Bird's eye view on EU business law - Young  Development of the Internal Market Common Market greatly expanded by the Court (as we will see in upcoming lectures) Moved much more towards the home country model Commission pushed acceptance of the Court’s progress, in the face of Member State resistance In the 80s more centre-right European governments pushed for greater liberalisation 24 Bird's eye view on EU business law - Young  Development of the Internal Market Single European Act (1987) Internal market - ‘an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured’ QMV replaced unanimity in single market legislation Much easier to harmonise 25 Bird's eye view on EU business law - Young  Development of the Internal Market No need for the EU to legislate where mutual recognition exists (see home country control) Exceptions still exist for Member States Harmonisation focused on instances where national rules survive application of the Treaty the Court 26 Bird's eye view on EU business law - Young  Development of the Internal Market Advantages and disadvantages Realistic, abandoned goal of complete harmonization Workable, functional, and developing Incomplete, national governments remain guardians But also loss of control by national governments Regulatory Competition 27 Bird's eye view on EU business law - Young  Eurozone 20 Member States participate in Monetary Union Expanded since founding 11 in 1999 Common monetary policy More detail to come in future lectures 28 Bird's eye view on EU business law - Young  BREAK 29 Bird's eye view on EU business law - Young  What is a market? What are consumers? What does the internal market mean in practice? How do we define it? What powers exist to regulate it? How does it affect consumers? 30 Bird's eye view on EU business law - Young  What is a market – Article 26 TFEU 1. The Union shall adopt measures with the aim of establishing or ensuring the functioning of the internal market, in accordance with the relevant provisions of the Treaties. 2. The internal market shall comprise an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured in accordance with the provisions of the Treaties. 3. The Council, on a proposal from the Commission, shall determine the guidelines and conditions necessary to ensure balanced progress in all the sectors concerned. 31 Bird's eye view on EU business law - Young  What is a market – Article 26 TFEU 1. The Union shall adopt measures with the aim of establishing or ensuring the functioning of the internal market, in accordance with the relevant provisions of the Treaties. Ongoing obligation and task, not to be ‘completed’ at any point Gives power to legislate 32 Bird's eye view on EU business law - Young  What is a market – Article 26 2. The internal market shall comprise an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured in accordance with the provisions of the Treaties. Defines the internal market Area without ‘internal frontiers’ is simple enough ‘Free movement of goods, persons, services and capital’ is trickier 33 Bird's eye view on EU business law - Young  What is a market – internal market What does this actually mean in EU Law? ‘Internal market’ ‘Four freedoms’ Free movement of goods Free movement of people (workers) Freedom of establishment and the provision of services Free movement of capital 34 Bird's eye view on EU business law - Young  Free movement of goods Goods can move around the EU without barriers No custom duties on the border No unfair taxation No quotas No restrictions on size, shape, packaging etc Basically, no restrictions within the EU without a good reason (see the next few weeks) 35 Bird's eye view on EU business law - Young  Free movement of workers and EU citizens Began by focusing on the free movement of workers, over time developed into broader citizenship EU citizens can easily go from one EU country to another for family, study or work purposes EU citizens do not need a visa to relocate to another EU Member State Entitled to treatment under similar conditions 36 Bird's eye view on EU business law - Young  Free movement of services and right of establishment One company registered in the EU Member State can provide services in another EU Member States without arranging additional permissions People can move for the purpose of providing services A company or a self-employed person can fully move their business to another EU Member State (right of establishment) 37 Bird's eye view on EU business law - Young  Free movement of capital Prohibits all restrictions on the movement of capital and payments between Member States, as well as between Member States and third countries Free movement of money Eurozone 38 Bird's eye view on EU business law - Young  How is it regulated? Article 114 TFEU – legal basis 1. Save where otherwise provided in the Treaties, the following provisions shall apply for the achievement of the objectives set out in Article 26. The European Parliament and the Council shall, acting in accordance with the ordinary legislative procedure and after consulting the Economic and Social Committee, adopt the measures for the approximation of the provisions laid down by law, regulation or administrative action in Member States which have as their object the establishment and functioning of the internal market. 39 Bird's eye view on EU business law - Young  What is a market? Power to regulate the function of the internal market Harmonise regulations Different types of instrument Most commonly-used legal basis, yet residual (save where otherwise provided) Very broad But not fiscal provisions or workers rights 40 Bird's eye view on EU business law - Young  What is a market – Tobacco Advertising I Not a general power to regulate economy Must be to establish the internal market or improve its functioning Measure must eliminate obstacles to trade or deal with appreciable distortions of competition Usage must be connected to national laws Developed further in cases such as ENISA and Swedish Match 41 Bird's eye view on EU business law - Young  What are consumers? Article 169 TFEU ‘In order to promote the interests of consumers and to ensure a high level of consumer protection, the Union shall contribute to protecting the health, safety and economic interests of consumers, as well as to promoting their right to information, education and to organise themselves in order to safeguard their interests.’ Rarely used compared to Article 114 TEU and supporting competence nature 42 Bird's eye view on EU business law - Young  What are consumers? Natural friction between free movement and consumer protection National consumer rules can impede free movement and be subject to harmonization Multiple examples relating to cherished national products (most notably the Beer Purity Law) 43 Bird's eye view on EU business law - Young  What are consumers? ‘Market Citizens’ – those who engage in economic activity Market values potentially prioritised over other values Number of cases in which market freedoms clash with other social values 44 Bird's eye view on EU business law - Young  Conclusion Multiple stages of Market Integration EU is a real, existing example of multiple of the later stages, but in a complex non-theoretical form Internal Market is defined by Article 26 and regulated using Article 114 TFEU 45 Bird's eye view on EU business law - Young  Workshop Read Tobacco Advertising I fully and carefully 46 Bird's eye view on EU business law - Young  QUESTIONS? 47 Bird's eye view on EU business law - Young