EFTA Surveillance Authority (ESA) & Court

 

Author Definition

 

Definition

The EEA Agreement is a multilateral treaty based on a two pillar model concluded by the EU and its Member States and the EFTA States Iceland, Norway and Liechtenstein. The EFTA Surveillance Authority (“ESA”) and the European Commission apply EEA competition law. In state aid law, the ESA has sole jurisdiction in the EFTA pillar. The EFTA Court hears nullity actions against decisions of the ESA and renders preliminary rulings on references from national courts. The EFTA Court is the only court of general jurisdiction which has been referred to by the ECJ when interpreting EU law.

 

Commentary

General

The EEA Agreement’s goal is to extend the EU single market to the participating EFTA States. The treaty is based on a two pillar model. Originally planned for seven EFTA States, the EFTA pillar has since 1 May 1995 consisted of Iceland, Liechtenstein and Norway.

EEA law originates in the EU pillar and is incorporated by way of decision of the EEA Joint Committee. The EEA/EFTA States have no right of co-decision, but a right of co-determination (Art. 99 et seq. EEA). Importantly, they have their own independent Surveillance Authority, the ESA, which operates in parallel to the European Commission; they also have their own independent Court which acts in parallel to the Court of Justice of the European Union (“ECJ”). There is no EFTA Court of First Instance; thus the EFTA Court is also a court of fact.

The types of procedure in the EFTA pillar are essentially identical in substance to the ones in the EU pillar with certain differences in the preliminary ruling procedure (no written obligation on courts of last resort to refer; rulings are of sui generis character). The Commission and ESA have the right to participate in proceedings before each other’s courts.

The first basic principle of the EEA Agreement is homogeneity which comes in several forms. Written rules oblige the EFTA Court to follow relevant ECJ case law which predates the signature of the EEA Agreement (2 May 1992) and to take into account relevant subsequent ECJ case law. However, this does not exclude a certain degree of systemic competition. The EFTA Court has upheld liberal EFTA values even in cases where ECJ case law was to the contrary. Moreover, it has had to resolve novel legal questions in the majority of its cases. The dispute settlement mechanism (Article 105 EEA) has never been applied. In practice, conflicts are resolved through judicial dialogue (AG Trstenjak, C-300/10 Marques Almeida, fn. 25). In this process, both courts have occasionally given way.

The second basic principle of the EEA Agreement is reciprocity. The EEA States in both pillars must grant citizens and economic operators the same rights to do business. However, reciprocity also has a procedural dimension. It gives citizens and economic operators in both EEA pillars rights which can be enforced in court (AG Kokott in C-431/11 UK v Council, pt. 42). The EFTA Court has recognised general principles, i.a. State liability and conform interpretation, but not

direct effect or primacy. It has also acknowledged fundamental rights. The ECHR and the case law of the European Court of Human Rights are relevant in the latter regard (E-15/10 Posten Norge, para. 100; E-14/15 Holship, paras. 88-91). The ECtHR has for its part made reference to EFTA Court case law (Ástráðsson v. Iceland, no. 26374/18, paras. 75, 80, 140 et seq.).

Written competition law

Articles 53 and 54 EEA reproduce the cartel prohibition and the abuse prohibition of Articles 101 and 102 TFEU. As stated in Article 55 EEA, Articles 53 and 54 EEA are enforced by the Commission and ESA. According to the allocation of competences in Article 56 EEA, the Commission is responsible in most cases. Article 57 EEA gives the competence to control mergers, basically to the Commission. In Articles 61 to 64 EEA, the State aid rules of EU law have been taken over. In cases concerning the EEA/EFTA States, ESA is competent.

Competition practice and case law

In 26 years, ESA has issued three decisions imposing fines for violation of Article 54 EEA. (1) In Norway Post, the fine for abuse of a dominant position in the business-to-consumer parcel delivery market in Norway was reduced by the EFTA Court from EUR 12.89 million to EUR 11.11 million due to the excessive length of the administrative procedure. (2) In Color Line, which concerned the operation of a long-term exclusive harbour agreement concluded with a Municipality, the fine of EUR 18.81 million was not challenged. (3) In Telenor, ESA on 30 June 2020 imposed a fine of EUR 112 million for abuse of a dominant position by a pricing strategy that resulted in rivals making a loss when selling residential mobile broadband services on tablets and laptops. The case is currently pending before the EFTA Court (E-12/20).

The most significant competition law judgment is E-15/10 Norway Post where the EFTA Court held that ESA could not be granted a margin of discretion regarding complex economic appraisals and that competition law decisions that impose fines must be subject to full judicial review. In E-3/16 Ski taxi, the Court, unlike the ECJ in C-67/13 P Cartes Bancaires, adopted AG Wahl’s proposition that only conduct whose harmful nature is proven and easily identifiable, in the light of experience and economics, should be regarded as a restriction of competition by object (para. 61, see AG Wahl, pt. 56). In E-29/15 Sorpa, the Court found that municipal bodies are capable of abuse of dominance within the meaning of Article 54 EEA.

In C-67/96 Albany, the ECJ held that collective agreements aimed to improve the working conditions and thus were beyond the scope of European competition law.. AG Jacobs had concluded that in virtually all legal systems, including US law, collective agreements were to some extent sheltered from competition law, but that such immunity was not unlimited. The EFTA Court chose to base its E-8/00 LO ruling on AG Jacobs’ opinion. It held that provisions of collective agreements prima facie fall outside the scope of Article 53 EEA. If, however, the national court finds that they do not, in fact, pursue the apparent objectives, “they may, in the light of the objectives actually pursued, fall within the scope of Article 53 EEA” (para. 75).

In E-14/15 Holship, the EFTA Court in essence declared dockworkers’priority right to load and unload vessels in Norwegian ports incompatible with EEA competition law and the right of freedom of establishment. The ECtHR has found no violation of Article 11 ECRH (45487/17, Norwegian Confederation of Trade Unions (LO) and Norwegian Transport Workers’ Union (NTF) v Norway).

E-18/14 Wow Air was about the interpretation of Regulation EEC 95/93 on common rules for the allocation of slots at EEA airports. The President granted the accelerated preliminary reference procedure stating that “[t]o guarantee fair and effective competition is one of the most important goals of the EEA Agreement. Effective competition benefits both consumers and competitors and contributes to the common good. In the case at hand, Iceland’s special geographic situation must be taken into account with Keflavík essentially being the only international airport in the country.” (Para. 7.)

In E-8/13 Abelia the EFTA Court held that an in-house counsel cannot generally be denied the right of audience. It must be assessed on a case by case basis whether they are independent or not. In doing so, the EFTA Ct. deliberately deviated from ECJ C-422/11 P and C-423/11 P Prezes. In C-515/17 P and C-561/17 P Uniwersytet Wrocławski, the ECJ’s Grand Chamber held on 4 February 2020 that a lecturer who legally represents a university with which he or she is associated is an independent legal counsel.

In E-14/11 DB Schenker I, the Court restricted the presumption underlying the ECJ’s case law that access to documents is not to be granted in antitrust, merger and State aid cases, to the latter two. At para. 132, it held that “specific policy considerations arise in requests for access to documents as part of follow-on damages cases brought before national courts concerning Articles 53 and 54 EEA. The private enforcement of these provisions ought to be encouraged, as it can make a significant contribution to the maintenance of effective competition in the EEA [...] While pursuing his private interest, a plaintiff in such proceedings contributes at the same time to the protection of the public interest.”

State aid practice and case law

ESA and the EFTA Court have generally followed the Commission’s practice and the Union courts’ case law Two points may be mentioned:

(1) As regards locus standi of a beneficiary of aid or a competitor of a beneficiary to challenge a State aid decision by ESA, the EFTA Court was quite liberal in the early days (E-2/94 Scottish Salmon Growers). However, in E-2/02 Bellona, the Court deduced from the homogeneity principle that the “Plaumann formula” of the ECJ (25/62) also applied in the EFTA pillar of the EEA and denied Bellona, an environmental foundation, locus standi. The Court stuck to this approach in later cases (E-1/17 Konkurrenten II).

(2) Regarding the substance of State aid law, the EFTA Court held in E-4/97 Husbanken II that the financing of the Norwegian State Housing bank was an undertaking. The EFTA Court basically opted for full review of ESA’s decision.

 

Bibliography

Eric Barbier de la Serre A lesson on judicial review from the other European Court in Luxembourg, Kluwer Competition Law Blog 27 April, 2012.

Carl Baudenbacher, Judicial Independence. Memoirs of a European Judge, Springer 2019, Chapters 3, 16, 17, 21.

Michael-James Clifton, Applying Competition Law and the View Ahead: 25 Years of the EFTA Court, in: Five Years of the Treaty on the Eurasian Economic Union: the role of the Court. International Conference (19-20 September 2019, Minsk) A. Bugaeva (Ed.) Minsk, Medison, 2020, 144 et seq.

Philipp Speitler, Judicial Homogeneity as a Fundamental Principle of the EEA, in: Carl Baudenbacher, Ed., The Fundamental Principles of EEA Law: EEA-ities, Springer, 2017.

John Temple Lang, Competition Law: The Brussels Perspective, in: Baudenbacher, Ed., The Handbook of EEA Law, Springer, 2016, 523 et seq.

This article is being reviewed by the Editors of the Dictionary.

Author

Quotation

Carl Baudenbacher, EFTA Surveillance Authority (ESA) & Court , Global Dictionary of Competition Law, Concurrences, Art. N° 101604

Visites 331

Publisher Concurrences

Date 1 January 1900

Number of pages 500

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