Download Private Delegation in EU Law

Private Delegation in EU Law
Agnieszka Janczuk-Gorywoda
TILEC
From White Paper on European Governance (2001)
through Inter-institutional Agreement on Better
Law-making 2003 …
“The Commission will: * Promote greater use of different policy tools
(… co-regulatory mechanisms).”
“Co-regulation combines binding legislative and regulatory action with
actions taken by the actors most concerned, drawing on their practical
expertise.”
• Inter-institutional Agreement on Better Law-making 2003
“Use of alternative methods of regulation
16. The three Institutions recall the Community's obligation to legislate
only where it is necessary, in accordance with the Protocol on the
application of the principles of subsidiarity and proportionality. They
recognise the need to use, in suitable cases or where the Treaty does
not specifically require the use of a legal instrument, alternative
regulation mechanisms.”
–  self- and co-regulation
… to Better Regulation Guidelines (2015)
• “When designing the policy options, always consider:
…
• Alternative policy instruments: e.g. non-regulatory alternatives;
self- or co-regulation; market-based solutions, regulatory
alternatives; international standards26, and their mix;”
• “The Commission may decide that a "soft" policy instrument is
preferable to a pure legislative approach (although thiese may
be combined). This may include voluntary agreements or other
forms of self-co-regulatory action which are described more
fully in the tool on policy instruments. In such cases, there will
also be a need to monitor the performance of such approaches
against the policy/legislative principles underpinning them25,
the commitments made by the parties and the objectives of the
initiative.”
Delegation
• Conditional grant of authority from a principal to an
agent that empowers the latter to act on behalf of the
former (Hawkins, Lake, Nielson, Tierney (2006)
–  the agent has the discretion how to pursue the
principal’s objectives
–  The agent can also have autonomy which is the possible
range of actions the agent can take contrary to the
principal’s interests
• Delegation in law:
• = an authoritative decision, formalised as a matter of public
law, that a) transfers policy making authority away from the
established, representative organs (those that are directly or
indirectly elected, or are appointed by elected politicians) to b)
a public non-majoritarian institution (Curtin 2005).
Delegation: Core issues
– Core issue in delegation: control over the possible
opportunism by agent
– When delegation from public authorities to private
actors:
• How to ensure effective check on power that
private actors receive?
– Who decides on the level of risk that society in
general or particular groups of society will have to
bear and on the risk distribution? When should
this be the public authority and not private actors?
Which Form of Accountability
• Private delegation does bring important benefits
but without adequate controls over delegated
powers they are likely not to be realized
• Political accountability
• Market process
• Judicial scrutiny
•  Not really applicable to private delegation by
EU law or institutions
Free Movement Provision
• Horizontal effect
• Market partitioning necessary
– (unless personal discrimination)
• Market partitioning not very likely (although
possible) by EU-level private delegation
Competition Law
• Member States cannot adopt measures that
will remove the effectiveness (effet utile) of
Articles 101 and 102 TFEU.
• The Court has developed effet utile doctrine to
prevent Member States from ‘rendering the
competition rules ineffective’ by taking private
anticompetitive behaviour under their
umbrella.
• Functional approach
Case C-113/07 P SELEX
• When Eurocontrol formally adopts standards, making them
binding on its member states, it is performing a ‘legislative
activity’ which is ‘directly connected with the exercise of
public authority’ and thus outside the scope of competition
law
• “The preparation and production of technical standards
plays a direct role in attaining the Eurocontrol’s objective …
which is to achieve harmonisation and integration with the
aim of establishing a uniform European air traffic
management system. Those activities form an integral part
of the task of technical standardisation entrusted to
Eurocontrol by the contracting parties in the context of
cooperation among States with a view to maintaining and
developing the safety of air navigation, which constitute
public powers.”
EMC Development
• CEN is not an association of undertakings
because its members are national
standardization bodies and so it “has to be
considered a body entrusted with the general
economic interest”.
Case C-613/14 Elliot
• Harmonised standards produced upon a mandate from
the Commission and whose reference number were
published in the Official Journal of the EU “form part of
EU law”
– Likewise: General Court in Case T-474/15 Global Garden
Products: “the decisions relating to the publication of
harmonised standards are legal acts against which an
action for annulment may be brought”
• Essentially that Court confirmed that ESOs are
performing delegated powers when adopting
harmonised standards upon a mandate from the
Commission and implicitly confirmed the legality of this
delegation
• So outside the scope of competition law?
Judicial accountability: Meroni
• “The consequences resulting from a delegation of powers
are very different depending on whether it involves clearly
defined executive powers the exercise of which can,
therefore, be subject to strict review in the light of objective
criteria determined by the delegating authority, or whether
it involves a discretionary power, implying a wide margin of
discretion which may, according to the use which is made of
it, make possible the execution of actual economic policy.”
• “A delegation of the first kind cannot appreciably alter the
consequences involved in the exercise of the powers
concerned, whereas a delegation of the second kind, since it
replaces the choices of the delegator by the choices of the
delegate, brings about an actual transfer of responsability.”
• ‘[a] delegation of powers [to a private body] which implies a
wide margin of discretion ... cannot be considered as
compatible with the requirements of The treaty.’
Case T-107/06 Inet Hellas
• “It is clear from all the foregoing that
Regulation No 733/2002 gives the registry the
power to refuse the registration of a second
level domain and that, contrary to the
applicant’s assertion, it is not a power
delegated to EURid by the Commission.
Therefore, Meroni v High Authority, …, is
devoid of any relevance in the present case.”
What about implicit/informal delegation?
• “powers cannot be presumed to have been
delegated and that, even when empowered to
delegate its powers, the delegating authority
must take an express decision to that effect”
So what remains?
DIR Film International
• Decisions of a private delegate attributed to the
delegating institution (here the Commission) because
the content of decisions taken by the private delegate
subject ‘in practice’ to the prior agreement of the
Commission’s representatives
• So the Commission was responsible for their content
and could be called upon to defend them in court
•  Following Elliott: The Commission may be held
responsible for harmonised standards produced by ESOs
upon the mandate from the Commission
• But in many another instances, there would not be a
sufficient level of control of private actions by the public
institution
Free Movement and Competition Law
• Free movement: Market Access
• Competition law: exerts pressure on
governance design of EU private delegates
even if it has not “bitten” yet
– EMC Development: Openness, transparency and
non-discrimination are the necessary benchmarks
• Reluctance to scrutinise substance of standards
– Implicit delegation: SEPA
Principles of Better Self- and Co-regulation
• Initially developed for Corporate Social
Responsibility
• Referred to in Better Regulation Guidelines 2015
• “Loosely” applied by the Commission when it
delegates development of implementing powers
to private parties
–
–
–
–
–
–
Concept
Participation
Openness
Good Faith
Objectives
Legal Compliance
- Implementation
- Iterative improvements
- Monitoring
- Evaluation
- Resolving disagreements
- Financing
C-219/15 Schmitt v TÜV
• Private parties are enlisted by the European legislator to
achieve its policy goals
– Of course, the ECJ secured itself a safe escape from this statement with the
clause “it is apparent from powers cannot be presumed to have been delegated
and that, even when empowered to delegate its powers, the delegating
authority must take an express decision to that effectthe wording and overall
scheme of the Directive 93/42
• The Court made it clear that – if EU law is silent – it is up to
national law to determine the question of liability for (a failure
to) achieving that goal vis-à-vis third parties
– Reference to Paul and others only makes it more explicit that it is a
particular EU legislative act and national law that shall determine the
question of liability
• But the Court also explicitly said that EU law enlisting private
actors may give rise to liability on the part of enlisted private
body vis-à-vis third parties
Road not taken
• Meroni was about the failure to attach procedural duties to the
private delegate
• The Court could have imposed those duties
• But it remains open
Conclusion
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•
•
•
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Private delegation in EU law proliferating
Unclear legal framework
Difference between legislative and regulatory delegation
Difference between formal and informal delegation
Strict understanding of Meroni was likely an incentive for the
Commission to rely on inofrmal delegation
• Commission likely to be held responsible for private delegates
when it exerts “control” over their actions
• Complementarity between public and private liability