A | The Court of Justice in 2023
The Court of Justice deals mainly with:
- requests for a preliminary ruling
When a national court is uncertain as to the interpretation or validity of an EU rule, it stays the proceedings before it and refers the matter to the Court of Justice. When the matter has been clarified by the Court of Justice’s decision, the national court is then in a position to settle the dispute before it. In cases calling for a response within a very short time (for example, in relation to asylum, border control, child abduction, and so forth), an urgent preliminary ruling procedure (‘PPU’) may be used;
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direct actions, which seek:
- the annulment of an EU act (‘action for annulment‘), or
- a declaration that a Member State is failing to comply with EU law (‘action for failure to fulfil obligations’). If the Member State does not comply with the judgment finding that it has failed to fulfil its obligations, a second action, known as an action for ‘twofold failure to fulfil obligations’, may result in the Court of Justice imposing a financial penalty on it;
- appeals, against decisions handed down by the General Court, on conclusion of which the Court of Justice may set aside the decision of the General Court;
- requests for an opinion on the compatibility with the Treaties of an agreement which the European Union envisages concluding with a non-member State or an international organisation (submitted by a Member State or by a European institution).
Activities and developments at the Court of Justice
The last months of 2023 were marked by the negotiations concerning the legislative request, made in November 2022 by the Court of Justice to the European Parliament and the Council, seeking, first, the transfer to the General Court of the Court of Justice’s jurisdiction to give preliminary rulings in six specific areas (value added tax, excise duties, the Customs Code, the tariff classification of goods under the Combined Nomenclature, compensation and assistance of passengers and the greenhouse gas emission allowance trading system) and, second, the expansion of the scope of the mechanism, which came into force in May 2019, for the determination as to whether appeals against decisions of the General Court are allowed to proceed. The goal of that legislative request is to ensure, in the interest of delivering high-quality justice for individuals within reasonable time limits, that the workload is better shared between the Court of Justice and the General Court; since July 2022, two Judges per Member State (54 in total) comprise the membership of the General Court.
The Court of Justice will thus be able to focus to a greater extent on the core tasks of the European Union’s supreme and constitutional court. As in recent years, the proceedings brought before the Court, whether by the preliminary ruling route or via direct actions (in particular, actions for failure to fulfil obligations), stand out because they concern sensitive matters, which regularly see the involvement of the Grand Chamber, such as the protection of the values of the rule of law in the context of national judicial reforms, asylum and immigration policy, data protection and the application of competition rules in the digital era, the fight against discrimination or environmental, energy and climate issues.
The partial transfer to the General Court of jurisdiction to give preliminary rulings will be founded on two basic principles, dictated by considerations of legal certainty, swift justice and transparency: the ‘one-stop shop’ principle, according to which every request for a preliminary ruling will still be made to the Court, which will determine whether or not a reference for a preliminary ruling falls, exclusively, within the scope of one or more of the aforementioned specific areas, and the principle that all references for a preliminary ruling relating exclusively to one or other of those specific areas are to be transferred in their entirety. If, however, a case does not fall exclusively within those areas, in particular if it raises separate questions concerning the interpretation of primary law or of the Charter of Fundamental Rights of the European Union, it will be dealt with by the Court of Justice.
Nevertheless, the transfer of a reference for a preliminary ruling to the General Court will always be without prejudice both to the option available to the General Court to refer the case to the Court of Justice if it considers that that case requires a decision of principle and to the possibility of the Court of Justice, exceptionally, reviewing the decision of the General Court where there is a serious risk of the unity or consistency of EU law being affected.
After several months of consideration and negotiations, a political agreement was reached on that legislative request in December 2023. Under that agreement, provision was made, inter alia, that the pleadings or written observations submitted by a party which participated in the preliminary ruling procedure will be published on the Court’s website within a reasonable period following the closure of the case, unless that party objects to such publication.
The exact timeline for the formal adoption of the amendments to the Statute of the Court of Justice of the European Union and the date on which those amendments will enter into force are not yet known definitively at the time of writing and some work still remains to be completed, in particular as regards the amendment of the Rules of Procedure of the Court of Justice and of the General Court required in order to implement that reform. However, the approval in principle opens the door to the arrangements for redefining the operation of the Courts of the European Union for the years ahead.
In terms of the Court’s composition there was one development in 2023, connected with the departure of Advocate General Pitruzzella following his appointment as a judge of the Italian Constitutional Court.
Turning to the statistics for the past year, they once again show the continuation of the pattern of the Court of Justice’s activities witnessed in recent years. In 2023, 821 cases were brought before the Court of Justice, a slight increase on 2022, and 783 cases were closed, a fairly similar number to that in the past three years. The average duration of proceedings, all manner of cases combined, stood at 16.1 months, and there were 1 149 pending cases as of 31 December 2023.
Koen Lenaerts
President of the Court of Justice of the European Union
Members of the Court of Justice
The Court of Justice is composed of 27 Judges and 11 Advocates General.
The Judges and Advocates General are appointed by common accord of the governments of the Member States after consultation with a panel responsible for providing an opinion on prospective candidates’ suitability to perform the duties concerned. Judges are appointed for a term of office of six years, which is renewable.
They are chosen from among individuals whose independence is beyond doubt and who possess the qualifications required for appointment, in their respective countries, to the highest judicial offices, or who are of recognised competence.
The Judges perform their duties in a totally impartial and independent manner.
The Judges of the Court of Justice appoint, from amongst themselves, the President and Vice-President. The Judges and Advocates General appoint the Registrar for a term of office of six years.
The Advocates General are responsible for delivering, with complete impartiality and independence, an ‘opinion’ in the cases assigned to them. This opinion is not binding, but allows for an additional view to be provided on the subject matter of the dispute.
In 2023, no new Members were appointed to the Court of Justice.
K. Lenaerts
L. Bay Larsen
A. Arabadjiev
A. Prechal
K. Jürimäe
C. Lycourgos
E. Regan
M. Szpunar
T. von Danwitz
F. Biltgen
N.J. Cardoso da Silva Piçarra
Z. Csehi
O. Spineanu-Matei
J. Kokott
M. Ilešic
J.-C. Bonichot
M. Safjan
S. Rodin
M. Campos Sánchez-Bordona
P.G. Xuereb
L.S. Rossi
I. Jarukaitis
P. Pikamäe
A. Kumin
N. Jääskinen
N. Wahl
J. Richard de la Tour
A. Rantos
I. Ziemele
J. Passer
D. Gratsias
M.L. Arastey Sahún
A.M. Collins
M. Gavalec
N. Emiliou
T. Capeta
L. Medina
A. Calot Escobar
Order of Precedence as from 15 November 2023
B | The General Court in 2023
Proceedings may primarily be brought before the General Court, at first instance, in direct actions brought by natural or legal persons (individuals, companies, associations, and so forth), where they are directly and individually concerned, and by Member States against acts of the institutions, bodies, offices or agencies of the European Union, and in direct actions seeking compensation for damage caused by the institutions or their staff.
A large part of the litigation before it is economic in nature: intellectual property (EU trade marks and designs), competition, State aid, and banking and financial supervision.
The General Court also has jurisdiction to adjudicate in civil service disputes between the European Union and its staff.
The decisions of the General Court may be the subject of an appeal, limited to points of law, before the Court of Justice. In cases which have already been considered twice (by an independent board of appeal and then by the General Court), the Court of Justice will allow an appeal to proceed only if it raises an issue that is significant with respect to the unity, consistency or development of EU law.
Activities and developments at the General Court
Marc van der Woude
President of the General Court
In the course of 2023, the reform of the General Court which saw the number of its Judges double (Regulation (EU, Euratom) 2015/2422) came fully into effect, as can be seen from the Court’s judicial statistics. The General Court closed 904 cases and 868 new cases were brought (excluding 404 identical cases brought at the end of the year), thereby reducing the number of pending cases. Moreover, the average duration of proceedings was kept at a satisfactory level: 18.2 months on average, an indication that cases are being managed effectively.
At the same time, the General Court consolidated its practice of referring more cases before extended compositions of its Chambers. In 2023, 13.6% of cases were closed by extended compositions of the Chambers and no fewer than 120 cases were referred to them. In certain cases of exceptional importance, the General Court automatically refers them to its Grand Chamber, which consists of 15 Judges. In particular, it was as the Grand Chamber that the General Court gave judgment in the case of Venezuela v Council concerning restrictive measures adopted by the Council of the European Union against Venezuelan undertakings and nationals (T‑65/18 RENV, see ‘A look back at the most important judgments of the year’). Four cases brought by four European organisations of judges concerning the Polish national recovery and resilience plan (T‑530/22 to T‑533/22) and two cases related to restrictive measures imposed by the European Union on Russia on account of the war in Ukraine (Cases T‑635/22 and T‑644/22) were also referred to the Grand Chamber.
These satisfying results are due in part to the stability of the Court’s composition. Only two Judges left office in 2023, namely Judge Frimodt Nielsen and Judge Valancius, who were replaced respectively by Judge Spangsberg Grønfeldt and Judge Kaleda. I would like to thank the departing Judges for their contribution to the proper administration of justice within the European Union. 2023 also saw the departure of Mr Coulon, Registrar at the General Court, after 18 years of commendable and loyal service, and the arrival of his successor, Mr Di Bucci. A conference on EU procedural law, which saw tributes paid and speeches made by senior figures, was organised to mark Mr Coulon’s departure.
Throughout 2023, the General Court continued its process of modernisation, seeking, inter alia, to improve the treatment of the biggest and most complex cases. Such cases, which are generally in the field of economic and financial law, call for a proactive and tailored approach both in terms of resource allocation and work scheduling. This approach, in which the parties’ representatives will be involved, will allow the duration of proceedings to be reduced and the parties’ expectations to be met through more targeted delivery.
In addition, looking ahead to the partial transfer of jurisdiction to give preliminary rulings in certain specific areas and the extension of the mechanism to determine whether appeals may proceed, and with a view to fully satisfying the legitimate expectations of individuals, the General Court has been working throughout 2023 on the developments needed in its organisational arrangements and on its future procedural rules.
Innovations in case-law
Savvas S. Papasavvas
Vice-President of the General Court
The nature of the litigation before the General Court is constantly evolving. Spurred on by the actions brought by individuals, every judgment adds a new brick to the wall of case-law. 2023 was no exception and saw the General Court tackling new issues in traditional fields as well as laying the groundwork in developing areas of litigation. It also provided the opportunity for the Grand Chamber to meet to consider a singular issue of common foreign and security policy.
Since its establishment, reviewing the application of competition rules has fallen within the purview of the General Court. It therefore has special expertise in that field. However, since the legal environment is in constant flux, in that area as in others, new issues arise continually for its consideration. This was the case in particular with the judgment of 24 May 2023, Meta Platforms Ireland v Commission (T‑451/20), in which the General Court examined, for the first time, the legality both of a request for information by search terms made pursuant to Regulation No 1/2003 and of a virtual data room procedure to handle documents containing sensitive personal data. This involved the General Court ensuring that the Commission had limited its request solely to the information needed to verify the suspected infringements which justified the Commission conducting its investigation (see the ‘Focus’ article).
Similarly, as familiar and circumscribed as they are, the rules governing the non-contractual liability of the European Union prompted interesting and hitherto unexamined questions. An action was brought before the General Court seeking damages for the material and non-material losses allegedly suffered by International Management Group (IMG) further to the leak to the press of an investigation report by the European Anti-Fraud Office (OLAF) into IMG’s legal status. The applicant alleged that the Commission, with which it had concluded a number of agreements, and OLAF had engaged in unlawful conduct. In response, in its judgment of 28 June 2023, IMG v Commission (T‑752/20), the General Court provided clarification on the conditions which must be met in order to establish a sufficiently serious breach of a rule of law which confers rights on individuals.
Banking and financial cases rank highly in the list of developing areas of litigation. Specifically, the General Court is being called on to hear and adjudicate in a growing number of actions arising from the establishment of the Single Resolution Mechanism in 2014. That mechanism provides a framework to manage banking crises in connection with the resolution of the major banks in certain Member States. It relies in particular on the Single Resolution Board, which has the task of preparing for and carrying out the resolution of banks whose failure is likely or established. More specifically, by a series of judgments given on 22 November 2023, the General Court ruled for the first time on an application for annulment of a decision of the Single Resolution Board concerning the potential compensation of the shareholders and creditors affected following the resolution of a bank (Joined Cases T‑302/20, T‑303/20 and T‑307/20 Del Valle Ruíz and Others v SRB, and Cases T‑304/20 Molina Fernández v SRB, T‑330/20 ACMO and Others v SRB and T‑340/20 Galván Fernández-Guillén v SRB).
Lastly, how could I fail to mention, when considering the innovations in case-law which shaped the past year, the judgment of 13 September 2023, Venezuela v Council (T‑65/18 RENV, see ‘A look back at the most important judgments of the year’). Sitting as the Grand Chamber, the General Court ruled on the legality of restrictive measures imposed on a non-member State (here: Venezuela), on account of the continuing deterioration of democracy, the rule of law and human rights in that country. In so doing, the General Court was required to consider delicate issues connected with that non-member State’s right to be heard and the alleged violations of international law upon which that State relied.
Members of the General Court
The General Court is composed of two Judges from each Member State.
The Judges are chosen from among individuals whose independence is beyond doubt and who possess the qualifications required for appointment to the highest judicial offices. They are appointed by common accord of the governments of the Member States after consultation with a panel responsible for giving an opinion on candidates’ suitability. They are appointed for a term of office of six years, which is renewable. They appoint, from amongst themselves, the President and Vice-President for a period of three years, and appoint the Registrar for a term of office of six years.
The Judges perform their duties in a totally impartial and independent manner.
M. van der Woude
S.S. Papasavvas
D. Spielmann
A. Marcoulli
F. Schalin
R. da Silva Passos
J. Svenningsen
M.J. Costeira
K. Kowalik-Banczyk
A. Kornezov
L. Truchot
O. Porchia
M. Jaeger
H. Kanninen
J. Schwarcz
M. Kancheva
E. Buttigieg
V. Tomljenovic
S. Gervasoni
L. Madise
N Póltorak
I. Reine
P. Nihoul
U. Öberg
C. Mac Eochaidh
G. De Baere
R. Frendo
T.R. Pynnä
J.C. Laitenberger
R. Mastroianni
J. Martín y Pérez de Nanclares
G. Hesse
M. Sampol Pucurull
M. Stancu
P. Škvarilová-Pelzl
I. Nõmm
G. Steinfatt
R. Norkus
T. Perišin
D. Petrlík
M. Brkan
P. Zilgalvis
K. Kecsmár
I. Gâlea
I. Dimitrakopoulos
D. Kukovec
S. Kingston
T. Tóth
B. Ricziová
E. Tichy-Fisslberger
W. Valasidis
S. Verschuur
S.L. Kaleda
L. Spangsberg Grønfeldt
V. Di Bucci
Order of Precedence as from 27 September 2023
C | Case-law in 2023
- Focus Interaction between personal data protection and competition law
- Focus FIFA’s and UEFA’s regulatory powers and EU law
- Focus Personal data protection and combatting offences relating to competition between undertakings
- Focus Protection of European undertakings against US extraterritorial sanctions
- A look back at the most important judgments of the year
Focus
Interaction between personal data protection and competition law
Judgment in Meta Platforms and Others of 4 July 2023 (C‑252/21)
The German Federal Cartel Office prohibited the companies in the Meta group from making the use of the social network Facebook by its users in Germany subject to the processing of their ‘off-Facebook’ data without their consent. It took the view that the processing of the data at issue was inconsistent with the General Data Protection Regulation (GDPR) and therefore constituted an abuse by the Meta group of its dominant position.
After the matter was referred to it by a German court in the context of proceedings brought by the Meta group against that prohibition, the Court of Justice held that a competition authority of a Member State is entitled to find there to be an infringement of the GDPR in the context of an investigation into an abuse of a dominant position. It is, however, required to cooperate sincerely with the specific supervisory authorities established by that regulation. If the conduct examined has already been the subject of a decision by those authorities or by the Court, the competition authority is bound by their assessments relating to the GDPR.
The Court also ruled on the question of whether the processing of ‘sensitive’ data, which is in principle prohibited by the GDPR, may exceptionally be permitted in cases in which those data were manifestly made public by the data subject. It held that the mere fact that a user visits websites or apps which may reveal sensitive data, such as racial or ethnic origin, political opinions, religious beliefs or sexual orientation, does not mean that that user manifestly makes public his or her data within the meaning of the GDPR. The same applies where a user enters information or clicks or taps on integrated buttons, unless he or she has explicitly made the choice beforehand to make those data publicly accessible to an unlimited number of persons.
The fact that the network operator holds a dominant position does not prevent the user from being able validly and freely to consent to the processing of his or her data. However, since that dominant position may affect users’ freedom of choice, it is an important factor in determining whether that consent was in fact validly given. The Court adds that it is for the operator to prove that such consent exists.
GDPR
The General Data Protection Regulation (GDPR) standardises and establishes a framework under EU law for the protection of personal data under a single system.
The GDPR imposes obligations on any body, whether public or private, where it collects personal data in the territory of the European Union. Bodies which fail to comply with the GDPR obligations open themselves up to different types of penalties.
In the digital age, through the GDPR the European Union enshrines many rights for individuals, such as the right to information, the right to be forgotten and the right to access personal data collected or to have those data deleted, which contribute to strengthening the protection of their privacy. Those rules are regarded as being the strictest in the world in the field of data protection.
‘Off-Facebook’ data
Meta Platforms Ireland operates the online social network Facebook within the European Union. By registering with Facebook, its users accept the general terms drawn up by that company, which contain the data and cookies policies. According to those policies, Meta Platforms Ireland collects data about user activities on and off the social network and links the data with the Facebook accounts of the users concerned. Those data, also known as ‘off-Facebook’ data, concern, inter alia, visits to third-party web pages and apps as well as the use of other online services belonging to the Meta group (including Instagram and WhatsApp). The collection of those data allows the advertising messages intended for Facebook users to be personalised.
Focus
FIFA’s and UEFA’s regulatory powers and EU law
Judgment in European Superleague Company of 21 December 2023 (C‑333/21)
FIFA and UEFA are international football federations which provide the framework for professional football in Europe. They adopted rules which confer on them the power to authorise European interclub football competitions and to exploit the various related media rights. UEFA also organises competitions between European clubs such as, for example, the Champions League.
Twelve European football clubs wanted to set up a new football competition project: the ‘Super League’. That project is liable to affect the conduct of UEFA’s interclub competitions and the exploitation of the related media rights. FIFA and UEFA opposed the project and threatened to impose sanctions on any clubs and players which decided to participate in it.
The undertaking responsible for the project, European Superleague Company, challenged the FIFA and UEFA rules before a Madrid court, which submitted questions to the Court of Justice about the compatibility of those rules with EU law, which prohibits barriers to free competition and to the freedom to provide services.
In line with its ‘Bosman’ case-law, the Court observed that the organisation of sporting competitions and the exploitation of the related media rights constitute economic activities which come within the scope of EU law.
It held that the regulatory and control powers and the power to impose sanctions enjoyed by FIFA and UEFA in connection with the organisation of potentially competing football competitions, such as the Super League project, must be exercised in a transparent, objective, non-discriminatory and proportionate manner, failing which those powers infringe EU competition law and the freedom to provide services.
Furthermore, the Court took the view that the FIFA and UEFA rules on the exploitation of media rights could run counter to EU competition law if they do not benefit the different stakeholders in football, for example, by ensuring a ‘solidarity redistribution’ of the income generated. The Court found that those rules were likely to be detrimental to European football clubs, to undertakings operating on the media markets and to both consumers and television viewers by preventing them from benefiting from potentially innovative and interesting new competitions.
The ‘Bosman’ case-law
In its historic judgment in Bosman of 15 December 1995 (C‑415/93), the Court held that sport is, as a general rule, an economic activity falling within the scope of EU law. It also took the view that the free movement of workers precludes:
- nationality clauses adopted by sporting federations under which sports clubs may field only a limited number of professional players who are nationals of other Member States; and
- transfer clauses laid down by those federations under which a professional player who is a national of one Member State may not, on the expiry of his contract with a club, be employed by a club of another Member State unless the latter club has paid a fee to the former club.
The Court and sport
Since the judgment in Bosman, the Court has had the opportunity on several occasions to rule on the conditions governing sport in the light of the economic law of the European Union:
- the nationality clauses at issue in the judgment in Bosman relating to sportsmen and -women who are nationals of the Member States likewise cannot be applied to sportsmen and -women from a State with which the European Union has concluded an association agreement or a partnership agreement (judgments in Deutscher Handballbund of 8 May 2003 (C‑438/00), and in Simutenkov of 12 April 2005 (C‑265/03));
- the International Olympic Committee’s anti-doping rules fall within the scope of EU competition law but are not contrary to it because they are necessary in order to ensure that sporting competitions are conducted properly (judgment in Meca-Medina and Majcen v Commission of 18 July 2006 (C‑519/04 P));
- football clubs may require payment of a commensurate training fee for the young players which they have trained if those players wish to sign their first professional contract with a club in another Member State (judgment in Olympique Lyonnais of 16 March 2010 (C‑325/08)).
Focus
Personal data protection and combatting offences relating to competition between undertakings
Judgment in Meta Platforms Ireland v Commission of 24 May 2023 (T‑451/20)
The Commission’s powers of investigation
The European Union’s competition rules prohibit agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which could prevent, restrict or distort competition within the internal market (Article 101 of the Treaty on the Functioning of the EU (TFEU)). They also prohibit undertakings holding a dominant position on a market from abusing that position, for example by applying unfair prices, limiting production or refusing to innovate to the detriment of consumers (Article 102 TFEU).
EU Regulation No 1/2003 plays a crucial role in the implementation of competition rules. It entrusts the European Commission with broad powers of investigation. The Commission may, inter alia, carry out inspections and question any person who may have useful information.
In 2020, in the context of an investigation into suspected anticompetitive behaviour by the Facebook group in its use of personal data and in the management of its social network platform, the Commission required Meta Platforms Ireland to provide it with all documents prepared or received by three of its executives containing one or more specific terms.
Those terms included, inter alia, ‘big question’, ‘for free’, ‘not good for us’ and ‘shut* down’.
If it failed to communicate that information, Meta would be subject to a potential penalty payment of EUR 8 million per day.
Before the General Court of the European Union, Meta challenged the legality of the request for information made by the European Commission. According to Meta, such search terms were manifestly too vague and too general and were indicative of a wide-scale ‘fishing expedition’.
At the same time, Meta submitted an application for interim measures seeking the suspension of the Commission’s request pending the General Court’s judgment on the substance of the case.
On 29 October 2020, the President of the General Court ruled on the application for interim relief. He ordered the suspension of the European Commission’s decision until a specific procedure was put in place for the production of the documents requested which were unconnected with Meta’s commercial activities and which contained sensitive personal data (‘the protected documents’). Subsequent to that order, the Commission put in place a virtual data room procedure in respect of those protected documents. Under that procedure, the documents could be placed on the file only after having been examined in that virtual room by a limited number of members of the team responsible for the investigation and Meta’s lawyers.
On 24 May 2023, the General Court ruled on the substance of the case. It dismissed Meta’s action in its entirety.
In its judgment, the General Court pointed to the broad powers of investigation of the European Commission to review whether undertakings comply with competition rules. In that context, the use of specific search terms may prove useful.
META
Meta is a multinational technology company which has its registered office in the United States. Alongside Instagram and WhatsApp, one of its flagship products is its social network Facebook, which allows registered users to create profiles, upload photos and videos, send messages and keep in contact with other people. Meta also offers an online classified advertisement service, called Facebook Marketplace, which enables users to buy and sell goods.
Interim relief
The purpose of an application for interim measures is to obtain the immediate suspension of the operation of an act of an institution, pending the handling of the action and the final judgment. In order for such an interim measure to be ordered by the President of the General Court, the action must not appear, at first sight, to be without reasonable substance. The applicant must also show that, if operation were not suspended, it would suffer serious and irreparable harm. Finally, the decision must strike a balance between the applicant’s interest, on the one hand, and the interests of the other parties and the public interest, on the other.
In response to Meta’s argument that an investigation using search terms constituted interference with the privacy of the employees concerned, the General Court considered that it was an appropriate measure for achieving objectives of general interest, namely the maintenance of the system of competition intended by the Treaties of the European Union.
The General Court pointed in that regard to the accompanying measures which had been adopted. The protected documents had to be transmitted to the Commission on a separate electronic medium and placed in a virtual data room. That room was accessible only to a limited number of members of the team responsible for the investigation. The documents to be placed on the file were selected in the presence of Meta’s lawyers. In the event of continuing disagreement as to the classification of a document, arbitration took place.
Case T‑452/20
On the same date the Commission adopted, in respect of Meta Platforms Ireland, a request for information in the context of its parallel investigation into certain practices relating to the Facebook Marketplace platform. The action for annulment brought by Meta Platforms Ireland against that decision was dismissed by the General Court in its judgment of the same day in Case T‑452/20.
Meta has lodged appeals before the Court of Justice against the judgments in Cases T‑451/20 and T‑452/20 of the General Court (pending Cases C‑497/23 P and C‑496/23 P).
Focus
Protection of European undertakings against US extraterritorial sanctions
Judgment in IFIC Holding v Commission of 12 July 2023 (T‑8/21)
The extraterritorial effect of laws adopted by third States
Legislation is extraterritorial where its effect extends beyond the borders of the State which adopted it. The European Union’s Blocking Statute (Council Regulation (EC) No 2271/96) protects EU traders against the extraterritorial application of the laws of third countries. The European Union adopted that statute in 1996 in order to protect European undertakings whose commercial activities with Cuba, Iran or Libya were targeted by the United States.
In 2018, in response to the United States’ withdrawal from the Iran nuclear deal, the European Union updated its Blocking Statute to include in it the newly reimposed extraterritorial US sanctions. That step was taken in the context of the EU’s support for the continued and full implementation of the Iran nuclear deal, in particular by supporting the commercial and economic ties between the European Union and Iran.
In 2018, the United States withdrew from the Iran nuclear deal, the aim of which was to control the Iranian nuclear programme in return for the lifting of economic sanctions against Iran. As a result of that withdrawal, the United States reimposed sanctions on Iran and on a list of persons whose assets had been frozen. It was also, once again, prohibited from trading with any person or entity included on the list drawn up by the US authorities. That prohibition likewise applied to undertakings outside the United States, including European undertakings.
In response to that reintroduction of sanctions, the European Union updated its ‘Blocking’ Statute in order to protect the interests of EU undertakings. Thus, to protect European undertakings against the effects of the extraterritorial application of the US sanctions, those undertakings were prohibited from complying with those sanctions unless authorised by the European Commission. It should be noted that such authorisation may be granted where non-compliance with the foreign sanctions could seriously damage the interests of the undertaking concerned or those of the European Union.
IFIC Holding AG is a German company owned indirectly by the Iranian State, which was added to the list in 2018. Following that listing, Clearstream Banking AG, the only securities deposit bank authorised in Germany, interrupted payment to IFIC of the dividends due the latter from various German undertakings in which it holds stakes, and blocked them on a separate account.
Further, Clearstream requested that the Commission authorise it to comply with the US sanctions concerning IFIC’s securities or funds. Initially, the Commission granted that authorisation, in April 2020, for 12 months, and then renewed it in 2021 and 2022. IFIC contested those decisions by bringing an action for annulment before the General Court.
The General Court dismissed IFIC’s action, thus authorising Clearstream Banking AG to comply with the US sanctions imposed on Iran. The General Court took the view that, while the Commission was required to take into consideration the interests of the undertaking requesting the authorisation (Clearstream), it was not obliged to take account of the interests of the listed undertaking (IFIC) or to explore other less onerous alternatives for it. It also considered that the objectives pursued by the European Union in the context of extraterritorial sanctions imposed by a third country justified the limitation of IFIC’s right to be heard in the course of the decision-making process prior to the Commission granting its authorisation.
Action for annulment
An action for annulment seeks the annulment of acts of the institutions of the European Union that are contrary to EU law. The Member States, the EU institutions and individuals may, under certain conditions, bring an action for annulment before the Court of Justice or the General Court. If the action is well founded, the act is annulled. The institution concerned must then fill any legal vacuum created by the annulment of the act.
Bank Melli Iran (C‑124/20)
In another case, BMI, a bank owned by the Iranian state, relied on the Blocking Statute before the German courts to contest the application of US sanctions in Germany. The Court of Justice, in the first case referred to it in connection with the European Union’s Blocking Statute, held that the prohibition laid down in EU law on complying with sanctions imposed by the United States against Iran could be relied on before national courts in the context of civil proceedings.
A look back at the most important judgments of the year
Consumers
EU consumer policy seeks to protect the health, safety and economic and legal interests of consumers, wherever they live, travel to or buy from within the European Union.
The Court of Justice: Guaranteeing the Rights of EU Consumers
Environment
The European Union is committed to preserving and improving the quality of the environment and to protecting human health. Its policies are based on the precautionary and preventive principles and on the ‘polluter pays’ principle.
The Court of Justice and the Environment
Personal data
The European Union has set out rules forming a solid and coherent foundation for the protection of personal data. In order to be lawful, the processing and storage of such data must satisfy the conditions laid down in legislation, and in particular be limited to what is strictly necessary and not disproportionately undermine the right to privacy.
The Court of Justice in the Digital World
Equal treatment and labour law
There are more than 240 million workers in the European Union. A large number of citizens therefore benefit directly from the provisions of European labour law, which sets minimum standards for working and employment conditions and thus supplements the policies of the Member States.
The Court of Justice: guaranteeing equal treatment and protecting minority rights
The Court of Justice in the Workplace – protecting the rights of workers
EU citizenship
Anyone who is a national of an EU Member State is automatically a citizen of the European Union. Citizenship of the European Union is in addition to and does not replace national citizenship. Citizens of the European Union enjoy specific rights guaranteed by the EU Treaties.
Migration
The European Union has adopted a body of rules in order to establish an effective, humanitarian and safe European migration policy. The Common European Asylum System lays down minimum standards applicable to the treatment of all asylum seekers and to the processing of their applications throughout the European Union.
Rule of law
The Charter of Fundamental Rights of the European Union, like the Treaty on European Union, refers expressly to the rule of law, which is one of the values common to the Member States. The independence and impartiality of courts is a key aspect of the rule of law.
Upholding the rule of law in the EU
Intellectual property
The rules adopted by the European Union to protect intellectual property (copyright) and industrial property (trade mark law, protection of designs) improve the competitiveness of undertakings by fostering an environment conducive to creativity and innovation.
Intellectual Property at the General Court
Restrictive measures and foreign policy
Restrictive measures or ‘sanctions’ are an essential tool in the European Union’s common foreign and security policy in order to protect its values, fundamental interests and security. The purpose of sanctions is to encourage a change of policy or conduct on the part of the persons or entities concerned.
Trade policy
Trade policy is an exclusive EU competence. The European Union legislates on trade matters and concludes international trade agreements. By acting together with one voice on the global stage, the EU puts itself in a strong position when it comes to international trade.
Tax rulings
Direct taxes fall, in principle, within the competence of the Member States. Nevertheless, such taxes must comply with basic EU rules, such as the prohibition on State aid. Thus, the legality of tax rulings issued in Member States under which undertakings benefit from special tax treatment is scrutinised by the European Union.
Competition
The European Union applies rules to protect free competition. Practices which have as their object or effect the prevention, restriction or distortion of competition within the internal market are prohibited and may be sanctioned by fines.
Access to documents
Transparency in public life is a key principle of the European Union. Any EU citizen or legal person may, in principle, access the documents of the institutions. However, in certain cases, that access may be refused where such a refusal is justified.
The Research and Documentation Directorate offers legal professionals, as part of its Collection of Summaries, a ‘Yearly selection of major judgments’ and a ‘Monthly Case-Law Digest’ of the Court of Justice and the General Court.
