Tag Archive: European Commission


EU Visa Liberalization – Unequal Outsiders in the Eyes of the EU

Filed Under: Attorneys, European Union, Uncategorized by KBW — Leave a comment
November 12, 2012

Article 18 of the TFEU states that, “Any discrimination on the grounds of nationality shall be prohibited.”  A look at the EU’s recent decisions regarding visa restrictions for third-country nationals makes it clear, however, that this policy can be superseded by Article 77 of the TFEU which vests the European Parliament and the Council with decision-making power regarding the granting of visas to third country nationals. An example of this can be seen in the European Commission’s recent proposal to the European Parliament and Council to add sixteen island nations to the visa-free list, five countries from the Caribbean and eleven from the Pacific islands (see also).  This proposal would allow citizens with a valid passport from these nations to travel within the EU for a period of up to ninety days without the need for a visa.

EU Home Affairs Commissioner Cecilia Malmström and leader for this proposal articulated the rationale behind such measures: “To facilitate travelling for tourists willing to visit Europe, and to spend their time and money, is crucial for our economy, and this is particularly important in a time of crisis, like the one that we are experiencing now.”  A look at the numbers (see IP/12/1177) indicates just how important tourism is to the European Union economy – in 2011, tourism amounted to foreign visitor spending of over €330 billion in 2011 and is estimated to exceed €427 billion by 2022 under the current visa regulations.  Facilitation of tourism through liberalized visa regulations could potentially boost spending by as much as €60 billion.

While this proposal probably came as welcome news to the citizens on the visa-free list, one cannot imagine that all other countries would necessarily share the enthusiasm.  Citizens of Turkey have in the past felt particularly discriminated against by the EU’s visa regulations towards them and have previously petitioned the Commission to adopt a long-term plan to liberalize the EU-Turkey visa requirements. Currently, the visa regulations between the two countries are notably lopsided, with Turkey allowing entry to EU citizens through the simple purchase of a low-cost visa at the border but the EU requiring significantly more extensive documentation, such as airline reservations, proof of insurance and proof of income, and even then, does not ensure entry.  Given the size of the Turkish economy as compared to that of any of the newly proposed island states, it is apparent that economic stimulus was not the only factor at play in the Commission’s proposal.  The EU Commission’s silence with regard to Turkey in this most recent proposal speaks louder than words ever could – that equality and economy must at times yield more immediate concerns.

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Newly Revised EU Financial Regulation Emphasizes Fiscal Accountability in Member States

Filed Under: European Union by CJB — Leave a comment
October 30, 2012

In the midst of the ongoing reforms to the Eurozone in response to the economic crisis, the second, and newest, revision of the Financial Regulation was ushered into existence on October 27, 2012. The Financial Regulation governs core principles of the EU budget and expenditures of EU funds. It originated in 2002, but has been modified only once until now.

This most recent version was designed to simplify the process by which the EU funds European businesses, towns, individuals, students, and other recipients, as well as make the funding process more efficient and accessible by reducing the administrative burden.  Specifically, it promotes innovative measures such as EU trust funds, a greater emphasis on lump sums and flat rates in the grant program, the use of loans, equities, and guarantees to increase the impact of EU funds, and more advanced information technology.

More crucially, however, is the emphasis on fiscal and budgetary accountability. This newest revision of the Financial Regulation coincides with the unprecedented expansion of the Union’s authority over fiscal matters as a reaction to the Eurozone crisis. The destabilization of the Eurozone has led to a consolidation of power in EU institutions in an effort to resolve the crisis and prevent future recurrences, such as the European Stability Mechanism. Accordingly, an official European Commission press release published on Monday links the new Regulation with the crisis, stressing the need for more centralized oversight and accountability over the expenditure of EU funds. Thus, the new revisions correspond to a heightened sense of fiscal responsibility in the Union, such as the tentative plans to impose strict budget deficit limits on member states.  Reflecting this trend towards responsibility, the new Financial Regulation implements more thorough oversight on the budgetary management by the member states. Member states, who manage up to 80% of EU budget expenditure, must now produce annual management declarations which state that funds have been used correctly and are subject to independent audit.

The fact that the Financial Regulation has only been modified twice subsequent to its adoption indicates that changes to it do not come lightly or frivolously. As evident from the contemporaneous economic climate, as well as the content of the Regulation, the Commission deliberately crafted these changes as a reaction to the Eurozone crisis. They signify a larger shift in the EU framework to a more economic centralized authority where member states must further delegate sovereignty over economic matters to EU institutions in order to guarantee the future stability of the EU.

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Microsoft Exploring the Limits of Antitrust

Filed Under: Uncategorized by BJL — Leave a comment
October 28, 2012

The battle of the best Internet browser continues not only in the United States, but in the European Union as well.  Microsoft’s campaign to conquer the browser industry in Europe has been halted by EU antitrust laws.  Microsoft has made it difficult for customers to choose other browsers while using their Windows operating system.  Its dominant position in the market concerned the European Commission back in 2009.  The EU “suspected Microsoft of using its dominant market position to foist its Internet Explorer browser on users.”  Microsoft and the European Commission has come to a legal settlement in which “Microsoft agreed to create a screen where users could choose among competitors’ browsers”.

The European Union’s power to govern antitrust, internationally and intranationally is derived from the Treaty on the Functioning of the European Union.  Under Article 101, “agreements between two or more independent market operators which restrict competition are prohibited”.  The second article governing antitrust is Article 102.  Article 102 states that, “firms holding a dominant position on a determined market to abuse that position are prohibited.”  Article 102 governs here as Microsoft’s dominant position was used to abuse that position by denying competitive browsers the opportunity to compete.

Microsoft has failed to meet the requirements of the settlement.  In the three years since the settlement many computers still did not contain the display option between different browsers.  Microsoft claimed a technical error was responsible for the failure; this excuse is an almost acceptable response due to Window’s history of poor performance.

On October 21, 2012 The EU filed a formal complaint against Microsoft for its failure to abide by the settlement.  Microsoft has given a public apology upholding its position that this failure was the result of a technical malfunction and that it will do everything in its power to abide by the settlement.  Unfortunately for Microsoft this is insufficient to the requirements of the settlement.  Microsoft now has four weeks to answer the accusation made by the EU.  If its defense is inadequate, “The company could face a fine of up to 10% of its annual revenue if found in breach of antitrust law.”

The European Union and the European Commission have shown that they are serious when dealing with antitrust laws.  A compromise was created in an effort to show leniency and fairness to Microsoft.  The elements of the settlement were almost insultingly not complied with, and now Microsoft is facing the sterner side of justice.

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Faulty Breast Implants Lead to Increase in EU Medical Device Regulation

Filed Under: Uncategorized by LCR — Leave a comment
October 2, 2012

The European Union recently decided to place stricter regulations on medical devices after hundreds of thousands of women worldwide received below standard silicone implants made by the French company Poly Implant Prothese (PIP). This silicone-based scandal was partly due to lax EU safety regulations that had done little to scrutinize the 80 national ad hoc agencies that were monitoring medical devices. When compromised, the implants had been known to cause inflammation to body tissues. The implants were made of a cheaper material that had not been approved for medical use, and were rupturing at a rate that was double the industry average.

EU health commissioner John Dalli submitted a proposal that encompassed what was learned from the PIP scandal and would also include the addition of a scrutiny panel, which would monitor the assessments made by the various national agencies. Dalli further mentioned that the panel would have the ability to “pick out medical devices on certain risk-based criteria to decide whether to go into an in-depth analysis of the processes.” In addition to the aforementioned proposed changes, there is also a proposal to expand the legal definition of medical devices to include breast and other aesthetic implants.

There are differing opinions regarding the proposed increase of medical device regulations. Serge Bernasconi, the chief executive of Ecumed, an industry body that represents nearly 22,500 medical technologies in Europe, argued that the regulations that were already in place were more than sufficient and provided a “high level of safety” for patients without causing a delay that would deny them access to life saving technologies. He further argued that by implementing such regulations would effectively stifle European innovation and research to other countries that do not have such regulations, thereby also causing harm to patients.

On the other hand, it is argued by the European Consumer Organisation (also known as BEUC) that the proposed regulations are not going to be strict enough and medical devices should have to undergo the same process as pharmaceutical products. The head of BEUC, Monique Goyens, contends that there is an imbalance regarding the levels of protections afforded to a patient based on whether they “have an artificial heart valve or take medicine for diabetes.” This idea was addressed in a press release made by the European Commission, it was stated that medical devices should not be confused with medicinal products. The distinct difference between the two is that medical devices have a physical principal mode of action. In other words it can serve as a physical barrier or replace support to organs or bodily functions, etc.

The press release further illustrates the proposed changes in regulations to include: clearer rights and responsibilities for manufacturers, better traceability of devices, an adaptation of general health and safety requirements, and a creation of a Medical Device Coordination Group.With these changes, the independent assessment agencies will be provided with more power to monitor the medical devices, including the ability to make unannounced inspections of factories and regular product testing. Because of this increase in power, the EU governments will have to provide better supervision of their agencies.

This proposed legislation is unlikely to occur for two more years, due to the process of needing to be approved jointly by EU governments and lawmakers.

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Ebooks and the Agency Model

Filed Under: Uncategorized by KLJ — Leave a comment
October 1, 2012

The European Commission announced on September 19, 2012 that the publishers Hachette Livre, HarperCollins, Macmillan and Simon & Schuster (the Four Publishers), and the retailer Apple violated European law (Pearson is under investigation). The Four publishers and Apple were using an agency model to sell ebooks, “engaging in a concerted practice with the object of raising retail prices of ebooks”, or precluding ebook discounts.

The EC argues that the Four Publishers and Apple are violating Article 101 of the Treaty on the Functioning of the European Union (TFEU) and Article 53 of the European Economic Area (EEA) Agreement. Article 101 of TFEU prohibits any cartels/agreements that inhibit free competition in the European Economic Area. Article 53 of the EEA Agreement prohibits “concerted practices which may affect trade between Contracting Parties” and prohibits “the prevention, restriction, or distortion of completion.” Article 53 of the EEA also says that an individual/company cannot directly or indirectly fix purchase or selling prices.

The agency model allows the publishers, instead of retailers, to decide how much the public pays for a product and the retailer receives a percentage of that price. A retailer has the choice as to whether or not the retailer wants to enter into an agency agreement with a publisher; retailers who don’t enter into an agency agreement set the price of the product themselves.

The EC and the Four Publishers and Apple have made agreements to address the EC’s “competition concerns”. The effects of the agreements are the ending of the agency agreement between the Four Publishers and Apple and that retailers of ebooks will be able to lower the prices of the ebooks that they sell, if they like, for at least two years. In response to the new agreements, in the UK, ebook prices are expected to fall.

The Four Publishers and Apple do not think that they have violated any laws or competition regulations, but they consented to the agreements to ease the competition concerns of the EC. The agreements are “a major victory for Amazon and its philosophy of low prices”, Phillip Jones, editor of The Bookseller, said to The Guardian. “It looks to me that we’ll see renewed discounting on the big ebooks from the major publishers … with minimal restraints on what the big e-bookseller can do with price. Good news for ebook readers in search of a bargain, not great news for publishers, and pretty worrying news for high street bookshops.”

According to The Guardian, Hachette Livre believes that its choice to enter into agency agreements was the best decisions for the book industry as a whole. But, Hachette Livre decided that a legal proceeding against the European Commission would be too “disruptive” to its business. Their main commitment is to their authors and readers and Hachette Livre believes that following the agreements of the EC was the best way to maintain a productive business.

 

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Proposed Expansion of European Central Bank Power

Filed Under: Uncategorized by VB — Leave a comment
September 18, 2012

The European Commission has called for a mass overhaul of the current banking system in the Eurozone. It involves the European Central Bank being allowed to monitor banks in each of the 17 countries that use the euro. This in an attempt to deal with the monetary crisis in the Eurozone.

The European Central Bank (ECB) was created in 1998 prior to the adoption of the euro as common currency for Europe.The ECB’s current role is setting interest rates and printing money, but this proposition would expand its power to allowing the institution to monitor banks more closely in their everyday business practices.  There are staunch supporters as well as those who oppose this proposal for many different reasons.

The opposition includes some non-Eurozone countries that are concerned with the effect that this banking union would have on their banks. For instance Sweden and Denmark are concerned with having to bail out weak Eurozone banks or having to relinquish some of their power to run their own banks. These non-eurozone countries do not want to weaken “national supervision”, and this banking union proposal has caused some countries to re-consider adopting the euro as currency. Moreover some EU officials are apprehensive about the ECB being able to dictate the direction of banking policy and legislation surrounding those policies, and whether or not expanding the powers will actually help.   Some member states want to “keep them {ECB} at arms length as it’s none of their business”.

In contrast some support the expansion of the ECB’s power because of the institutions budgetary reforms and steadfastness during the fiscal crisis.  For instance,  Jörg Asmussen believes that ECB’s approach was necessary but that there must be controls subject to parliamentary and judicial review, and that it’s difficult to have a common currency without common fiscal policies. In addition France’s Financial Minister, Pierre Moscovici, does not think issues surrounding the banking union will prevent the legislation from being passed before the end of this year.

Either way the heads of European Parliament and Council have to approve this legislation before any major changes can take effect, and it seems that this will be a hard fought battle whatever the outcome may be in the end.

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The EU and Boardroom Gender Quotas

Filed Under: Uncategorized by BJK — Leave a comment
September 10, 2012

The EU plans to issue a proposal next month that would require European companies to appoint women to 40 percent of seats on supervisory boards by 2020. The proposal was made by Viviane Reding, the European Union justice commissioner. The law would apply to all listed companies with more than 250 employees and annual sales of more than 50 million euros ($63 million). Companies that fail to comply with the quotas will be subject to sanctions including fines and could be excluded from state aid and contracts. In 2011, Reding gave European companies a final opportunity to improve their records of gender imbalance in top management positions but there has been only marginal improvement.

In brief, the EU proposal aims to combat the significant gender imbalance that is still seen in many boardrooms across the EU. Specifically, the European Commission issued a report that demonstrated that just 13.7 percent of board seats in the EU belong to women. Furthermore, the report showed that there was only a 1.9 percentage point increase between October 2010 and January 2012. The report also noted that varying rates of improvement have led to highly divergent results within the EU. The legislation requires the approval from the EU’s 27 governments and the European Parliament to take effect.

The gender quota proposal has faced fierce criticism, mainly from conservative politicians and some major technology and manufacturing companies. France, the Netherlands, Italy and Spain have already introduced national quotas. However, Sweden and the United Kingdom are generally opposed to the proposal. For example, Marina Yannakoudakis, a Conservative member of the European Parliament who represents London, argues that the measure is “bad for genuine equality.” Yannakoudakis argues, “Imposing strict quotas, which are both arbitrary and artificial, cuts across the freedom of businesses to make their own decisions and the freedom of women to succeed on merit.”

It will be interesting to see how the EU faces challenges that the plan violates Article 16 of the EU Charter of Fundamental Rights which provides the freedom to conduct a business. However, one unnamed EU official notes that “companies would retain the freedom to choose among the best qualified executive directors to run day-to-day aspects of a business.” Another argument that opponents may consider is that the gender quota plan violates Article 21, a provision that explicitly prohibits any discrimination on the grounds of sex. However, this possible challenge will likely be rejected because Article 23 provides that “the principle of equality shall not prevent the maintenance or adoption of measures providing for specific advantages in favour of the under-represented sex.”

Supporters of the EU measure contend that now is the time to act and that self-regulation has not addressed the gender imbalance. Supporters argue that mandatory quotas are the only way to effectively address the systematic problem of women being underrepresented in management positions. Certain factors support the use of quotas, including: (1) women now have higher graduation rates than men in Europe but their professional careers continue to fall behind those of men; (2) women represent a growing underused pool of qualified workers, thus are an untapped potential for a poor economy; and (3) studies suggest a strong link between gender balance and professional performance. Indeed, supporters often cite Norway as a model of success for the advancement of women in business since the country instituted gender quotas several years ago. Before the Norwegian gender quota was put into effect, women occupied only 7 percent of seats on supervisory boards. Women in Norway now make up 42 percent of the board seats.

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The Future of the EU and the Euro

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November 16, 2011

According to German government sources, German Chancellor Angela Merkel seeks further reform of the Lisbon Treaty (“Treaty”).  Just last month, Merkel convinced her fellow European heads of state to explore the possibility of further economic integration within the EU.   One possible way of accomplishing this further integration, according to Merkel, is through limited Treaty changes.  The central theme of her proposed Treaty changes is to grant the EU institutions greater control over Member State budgets.

This control would be distributed among three of the EU Institutions: the Commission, Council, and the ECJ.  The Commission’s role would be strengthened through closer monitoring of Member States under the excessive deficit procedure.  Furthermore, the Member State would submit its draft national budget to the Commission who would then forward the budge to the Council with its recommendations.  The Council would then adopt an opinion on the budget before its adoption by the Member State’s legislative body.  However under TFEU Art. 288, a Council opinion is not binding on the Member State.  Merkel has also suggested the ECJ should monitor the Stability and Growth Pact (“SGP”) obligations that lead to the excessive deficit procedure.  Under this proposal, the ECJ would have the power to review the Member  State’s budget and possibly declare it null and void.

Merkel’s suggestion to grant the ECJ power to declare Member State’s budgets null and void has not been included in her proposals at the EU Summit.  The furthest EU involvement in Member State budgets under the current proposals involves modification of the Treaty to include sanctions for SGP breaches.  This could largely be attributed to a recent ruling by the German Constitutional Court on challenges to the Euro Rescue Package.  In its September 7th ruling, the Court found the current rescue package constitutional.  Yet the Court cautioned that the German Constitution requires full budget sovereignty be maintained through approval by the German Bundestag’s Budget Committee.  It is surprising that Merkel would even suggest such EU intervention into national sovereignty because it seems to be in direct conflict with her own nation’s constitution.  However with the current European debt crisis spreading that in turn leads to more requests for contributions from Germany, she could be just voicing the rising frustration of her countrymen and women.

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The NCAA, College Sports, Student Athletes, and Improper Benefits: Analyzing the Issue from an EU Context

Filed Under: Uncategorized by aviswa4 — Leave a comment
September 16, 2011

Recently, Yahoo Sports published an investigational report on Nevin Shapiro, a former booster with the University of Miami,  for giving “improper benefits” to at least seventy two student-athletes, high school recruits, and coaches for eight years. The article states that the administration knew about the recurrent infractions and yet, turned a blind eye to the problem citing Mr. Shapiro’s major contributions to the athletic department as the main reason. In a summer in which the National Collegiate Athletic Association (NCAA) is investigating a number of major athletic programs for violations, the enormity of the Miami situation strengthens the calls for NCAA reform. Yet, there is no consensus on specific reforms, where opinions run the gamut from enacting harsher penalties for repeat violators to paying student athletes for their services. But questions remain as to whether the NCAA needs major reform and what would be the consequences of reform.  If we look across the Atlantic, does the EU have a model that the US could copy or adapt in its search for reform?

The NCAA is an organization of higher education institutions and conferences of these institutions, whose policy is to maintain “a clear line of demarcation between intercollegiate athletics and professional sports”. Each NCAA Division is led by a presidential committee comprised of university presidents, whose goal is to “promote and develop educational leadership, physical fitness, athletics excellence and athletics participation as a recreational pursuit”. As delegated by its constitution, the NCAA is a supra-governing entity whose functions have been handed over by member universities and conferences, which historically have not been able to effectively discharge these functions alone.  Sports scandals seem ubiquitous in the U.S. Yet, in Europe, where sports seem just as popular, scandals seem nearly unheard of. So,  how does the EU regulate sport?

Before delving into the regulations, an understanding of sports in the EU warrants an introduction. As in the United States, universities in the EU do field teams in various athletic competitions but there is a low emphasis placed on the priority of the competition.  On par with the high level university competition in American football and basketball,  private teams/clubs in major sports such as football have developed a tiered professional feeder system. The clubs recruit  and contract with adolescents with professional potential, develop their talents, and possibly implement the recruits into their professional team. This system displays similarities to feeder systems we see in Major League Baseball and the National Hockey League .

So with this understanding, how does the EU regulate sport? Prior to the entry into force of the Lisbon Treaty, the EU had no explicit powers to regulate athletics. But, the European Court of Justice (ECJ) disagreed that sport was autonomous from EU oversight and viewed sport as being encompassed within the Treaty as an economic activity (See Walrave and Koch, Case 36/74 [1974] ECR 1405). In Union Royale Belge des Sociétés de Football Association ASBL v Jean-Marc Bosman, the ECJ recognized the fundamental right of movement of athletes in sport by invalidating a rule preventing a footballer from transferring to another club after his contract had expired without the consent of the original club (Case C-415/93 [1995] ECR I-4921). Yet, the ECJ has recognized that a sport does present a unique situation, where latitude must be given to the regulatory bodies in order to maintain effective competition and fairness in its administration. In Deliége v Ligue de Judo, the ECJ reasoned that when a national federation for a sport selects individuals for international competition, it may hurt the economic interests of those who were not selected but rules and criteria for selection are necessary in high level international competition (Cases C-51/96 & C-191/97 [2000] ECR I-2549). In Meca-Medina and Majcen v Commission, the ECJ upheld a two year ban on two swimmers for failing a drug test stating that even though the intent of a regulation is not economic, the true test is whether it exerts economic effects (Case C-519/04 P [2006] ECR I-6991). Yet, the ECJ recognized the special characteristic of sports by recognizing that adverse effects of doping penalties are inherent in the necessity of maintaining fairness in competition.

As of December 1, 2009, the Treaty on European Union (TEU) and the Treaty on the Functioning of the European Union (TFEU) granted sports formal status. Specifically, Article 165 of the TFEU stated that the EU “shall contribute to the promotion of European sporting issues, while taking account of the specific nature of sport, its structures based on voluntary activity and its social and educational function.” Article 165(2) aims to “develop[] the European dimension in sport, by promoting fairness and openness in sporting competitions and cooperation between bodies responsible for sports, and by protecting the physical and moral integrity of sportsmen and sportswomen, especially the youngest sportsmen and sportswomen.”

Being enabled by the rules as set forth by the treaties and the ECJ, the European Commission for sports published in 2007 a white paper containing a number of actions and justifications intended to guide its activities related to sports. This white paper presents an analysis of the broad impact that sports has on the EU and raises a number of issues of concern in sports such as the fundamental freedom of movement and the protection of minors.

What impact do these rules have on sport in the EU? It appears that controversies and regulations involving sports are placed under a balancing test, where the athletic economic and non-economic interests are weighed against the interest for fairness and openness in competition as well as the social functions that sport serves. These interests are not necessarily antagonistic and the uniqueness of sport does require a level of understanding that goes beyond economic effects, even though economic effects do play a strong role into the equation.

So within this paradigm, how would the EU handle the NCAA’s current predicament? Where should the balance lie between the economic interest of a student-athlete and the maintenance of fairness and openness in competition? Would the EU disagree with the NCAA absolute prohibition on “benefits” being given to student-athletes or would the EU view this as a protection on the interests of students from individuals such as Mr. Shapiro? We have to remember that the face of college sports has changed to a large extent, where major industries have developed around collegiate sports. One commentator claims that amateur college sport is now packaged and sold in a “professional” wrapping and potential reforms to the NCAA should account for this. How would the EU view this analysis? To this extent, what impact should the universities’ economic effects play into this balancing test? In particular, does a booster for a university inherently create a conflict of interest? Would forcing an athlete into a particular league violate the internal market of the EU or is this a protection of the moral integrity of the student-athletes? In the end, the NCAA system of regulation and sports regulation within the EU do not harmonize together in their specific function but from a policy context, a fresh look from another point of view may present new insight into a particularly complex problem.

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Recent Proposal To Strengthen the Schengen Area

Filed Under: Uncategorized by cmasse6 — Leave a comment
September 16, 2011

The Schengen area, which became effective in 1995, ensures that community citizens are afforded freedom of movement between Member States. The area creates one external border for immigration checks into the area using harmonized rules.  Internal border checks have been abolished in these areas.

Earlier this year, conflict arose when Italy gave travel papers and residence permits to Tunisian migrants. As a result, France placed police on the shared border with Italy and began to perform checks.  This created a debate about freedom of movement, and whether the border checks were in conflict with the goal of the Schengen area.

In response to the controversy, members of the European Commission will discuss a proposal on Friday, September 16, 2011 which will provide authorization for Member States to police borders for five days during emergencies only. It would also provide authorization for the European Commission to remove police borders after emergency action taken by Member States. Advocates of the proposal argue it would protect freedom of movement principles by restricting visceral national reactions and providing for a more measured and collective response.

Original members of the European community France and Germany, along with a newer member, Spain, issued a statement in opposition to the proposal. The concern raised in the  statement focuses on national sovereignty with respect to national security. The statement advocated the position that national security decisions should be localized with the Member States and their governmental processes.

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