The preliminary ruling mechanism is generally considered the veritable keystone of the EU legal and judicial system.
The Court of Justice has held (van Gend & Loos, 1963; Costa, 1964; Opinion 2/13, 2014) that the founding EU Treaties established a new legal order for the benefit of which the Member States have limited their sovereign rights.
To ensure that the specific characteristics and the autonomy of that legal order are preserved, the Treaties have established a judicial system designed to secure consistency and uniformity in the interpretation of EU law. It is for the national courts and tribunals and for the Court of Justice to ensure full application of EU law and to provide legal certainty and judicial protection for individuals under that law (Opinion 2/13).
The preliminary reference procedure is governed by Article 267 TFEU (ex-Article 177 EEC and ex-Article 234 EC). It sets up a dialogue between the Court of Justice and the courts and tribunals of Member States, which is crucial to achieving the Treaties’ objectives and ultimately to furthering the integration process.
The EU judicial system is therefore not a pure federal system as conceived in other countries such as Germany or the USA. There is no hierarchy between national courts and the Court of Justice (but rather a relation of judicial cooperation) and there are no EU courts in charge of applying EU law in the Member States.
The latter task falls to the national courts by virtue of the direct effect recognised to EU law provisions, such as Articles 101 and 102 TFEU (Article 6 of Regulation 1/2003), in cooperation with the Court of Justice. The preliminary ruling procedure is the privileged instrument of such cooperation.
To that effect, Article 267 TFEU empowers the Court of Justice to give preliminary rulings on the interpretation of EU law and on the validity of acts of the institutions, bodies, offices, and agencies of the Union. Any court or tribunal of a Member State is entitled to refer questions for preliminary ruling to the Court of Justice. However, if an issue concerning the validity or the interpretation of EU law is raised before a court or tribunal against whose decisions there is no judicial remedy under national law, that court or tribunal must bring the matter before the Court of Justice. The Court’s case-law (Foto-Frost, 1987) has extended that obligation to any court or tribunal whenever it has doubts as to the validity of an act of the institutions: it may not make a finding of invalidity itself, but musk seek a preliminary ruling thereon from the Court of Justice.
Difficulties of application
In competition matters, Regulation 1/2003 lays down rules (Articles 3, 11-16) applicable to the relationship between Articles 101 and 102 TFEU and national competition laws, as well as to cooperation between the Commission, national authorities, and national courts.
The EU Courts case-law offers examples of doubts and difficulties that may arise in the functioning of such a complex system.
First, it is not impossible for the same situation to fall within the scope of both Community and national competition law, even if they consider restrictive practices from different points of view.
In those circumstances, the fact that a national court is dealing with a dispute under national competition law should not prevent it from making a reference to the Court on the interpretation of EU law, when it considers that a conflict between Community law and national law can arise (Oscar Bronner, 1998).
Secondly, as stated in recital 22 of Regulation 1/2003, in a system of parallel powers, conflicting decisions must be avoided. In this regard, the Court of Justice held (Delimitis, 1991; Masterfoods) that national courts shall avoid taking decisions which conflict with those taken or envisaged by the Commission in the application of Articles 101 and 102 TFEU. The Court stated (Commission v BASF, 1994; Masterfoods) that acts of the EU institutions are presumed to be lawful until such time they are annulled (by the competent EU Courts, either the Court of Justice or the General Court) or withdrawn.
Consequently, when the outcome of a dispute before a national court depends on the validity of a Commission decision that has been challenged before the EU courts, it follows from the obligation of sincere cooperation under Article 4(3) TEU that the national court must stay proceedings pending final judgment in the action for annulment, unless it considers that a question to the Court of Justice on the validity of the Commission decision is warranted.
Thirdly, a similar (but somehow more complex) situation may happen within the field of State aid, when both the Member State which granted the aid, and the aid recipient may challenge before the EU courts the legality of a Commission decision declaring the aid incompatible with the internal market. However, unlike the Member State concerned, the aid recipient may bring such an action only when it meets the admissibility criteria under Article 263(4) TFEU.
In that case, it follows from the Court’s case-law in TWD (1994) and Georgsmarienhütte (2018) that the beneficiary of the aid cannot rely on the invalidity of the Commission decision in an action before a national court for annulment of a decision of national authorities implementing that Commission decision, unless it has challenged that decision directly before the EU courts within the prescribed period, failing which the Court of Justice will declare inadmissible any question concerning the validity of the Commission’s decision.
In fact, the preliminary ruling procedure is not the suitable framework to engage in full judicial review of EU acts, particularly in technical and complex fields such as State aid (Georgsmarienhütte). Unlike the action for annulment, the preliminary ruling procedure is not adversarial and does not allow private parties other than the parties to the main proceedings to intervene.
Who can refer a question for a preliminary ruling?
Only a court or tribunal of a Member State can refer a question for preliminary ruling to the Court of Justice. In order to determine whether a body making a reference is a court or tribunal for the purposes of Article 267 TFEU, the Court takes account of a number of factors, such as whether (i) the body is established by law, (ii) it is permanent, (iii) its jurisdiction is compulsory, (iv) its procedure is inter partes, (v) it applies rules of law, (vi) it is independent and whether (vii) it is called upon to give judgment in proceedings intended to lead to a decision of a judicial nature.
It has been debated whether certain national competition authorities satisfied those conditions. In Dirección General de Defensa de la Competencia/Asociación Española de Banca Privada (1992), the Court of Justice accepted a reference for a preliminary ruling on the interpretation of Article 214 EEC and Regulation No 17 from the Tribunal de Defensa de la Competencia (Tribunal for the Defence of Competition) without even questioning the latter’s quality to do so.
Conversely, in Syfait a.o. (2005), the Court refused to recognize that quality to the Epitropi Antagonismou (Greek Competition Commission) for not satisfying the requested criteria.
Importance in competition matters
Notwithstanding the abovementioned shortcomings, important issues of competition law have been clarified (or caused controversy…) through preliminary rulings. Classic or modern cases include, in addition to those already cited, Pronuptia (1986), Corbeau (1993); Almelo (1994); IMS Health (2004); Courage v Crehan (2001); Post Danmark I (2012) and II (2015); Budapest Bank (2020).