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Effects of European Soft Law at National Administrative Courts Loyola University Chicago International Law Review Volume 14 Issue 1 Article 2 2016 Effects of European Soft Law at National Administrative Courts Andras Kovacs Tihamer Toth Anna Forgacs Follow this and additional works at: https://lawecommons.luc.edu/lucilr Part of the International Law Commons Recommended Citation Andras Kovacs , Tihamer Toth & Anna Forgacs Effects of European Soft Law at National Administrative Courts, 14 Loy. U. Chi. Int'l L. Rev. 1 (2016). Available at: https://lawecommons.luc.edu/lucilr/vol14/iss1/2 This Feature Article is brought to you for free and open access by LAW eCommons. It has been accepted for inclusion in Loyola University Chicago International Law Review by an authorized editor of LAW eCommons. For more information, please contact [email protected]. EFFECTS OF EUROPEAN SOFT LAW AT NATIONAL ADMINISTRATIVE COURTS Andras Kovacs, Tihamer Toth, Anna Forgacs* 1. The Definition and the Legal Nature of Soft Law ............... 2 1.1. Hard and Soft Law . .................................. 2 1.2. The Formal Classification of EU Soft Law Instruments ..... 3 1.2.1. Official Soft Laws: Recommendations and Opinions.. 3 1.2.2. Unofficial Soft Laws .. .......................... 3 1.3. Exploring the Legal Nature of Soft Law ................... 4 1.3.1. Is Soft Law Legitimized by Courts .................. 4 1.3.2. To Deviate or Not to Deviate: That is the Question... 7 2. The Application of EU Soft Law in National Administrative Courts .............................................. 9 2.1. Telecommunications................................. 9 2.1.1. Regulatory Institutions in Europe ................... 9 2.1.2. The Scope of Regulations: the Process of Identifying Significant Market Players ....................... 10 2.1.3. A Dutch Case Study of the 2009/396/EC Recommendation .............................. 13 2.1.4. A Hungarian Case Study of the 2009/396/EC Recommendation .............................. 16 2.1.5. National Law, and National Judgment Conflicting with EU Soft Law ................................. 18 2.1.6. Re-establishing the Non-binding Nature of Recommendations at National Level ................ 19 2.2. The Example of EU Competition Soft Law ................ 20 2.2.1. Types of EU Soft law in Competition Law ........... 20 2.2.2. The Subject Matter and Wording of Communications. 21 2.2.3. EU Communications Applied by the Competition Council of the Hungarian Competition Authority (GVH) ..................................... 23 2.2.4. The Attitude of Hungarian Judges ................. 26 3. Conclusions .......................................... 27 Introduction The aim of this article is to analyze the extent to which soft law issued by the European Union ("EU") Commission is 'hardened' in administrative court proce- dures at a Member State level, whether national courts recognize the legal effects of soft law, and whether national courts can properly deal with the coexistence of * The authors are Andras Kovacs, Tihamer Toth, and Anna Forgacs. The authors would like to thank to Em6 Vdrnay and Sebastian Ishiguro for their comments. Volume 14, Issue 1 Loyola University Chicago International Law Review 1 Effects of European Soft Law at National Administrative Courts soft and hard law.' References to EU soft law instruments at national level are most common in administrative law cases, especially in cases involving competi- tion law, regulated markets, environmental law, and consumer protection law. 2 Most of our professional experience with EU soft law derives from Hungarian administrative law jurisprudence, however, we will examine similar cases from other EU Member States for comparison. The first part of the study provides a brief overview of the definition, classifi- cation and legal effect of various EU soft law instruments, while the second part explores whether formal and informal soft law instruments produce different le- gal and practical effects through an examination of telecommunication regulatory cases and experience gained in EU competition law enforcement. We will ob- serve the extent to which law enforcers and judges can deviate from soft law norms. These sector specific insights will lead us to conclude that EU soft law is practically treated as binding law before national administrative courts. Finally, we suggest that the constitutional problems arising from this hardened role of EU soft law in national administrative courts could be cured by extending and improving the preliminary ruling procedure. 1. The Definition and the Legal Nature of Soft Law 1.1. Hard and Soft Law When law enforcers, especially judges in the courts of EU Member States, come to decide cases, they are accustomed to considering various legal document involving: (hard) law, soft law, and sometimes other official policy documents that do not even reach the level of soft law. Obviously, these documents may vary in their impact on the decision they make. Whilst trying to avoid the deli- cate issue of defining hard law, we will focus on the role which soft law plays in judicial procedures involving the review of administrative decisions at a national level. Soft law has its origins in international law, where it can have two meanings.3 On the one hand, in a formalistic way, soft law is not a source of international law, although regulated individuals follow it as if it was law. On the other hand, it is acknowledged as a source of law, but without normative content; meaning that neither rights nor obligations may be conferred by it.4 For the purposes of this paper, we will focus on the distinctive features be- tween hard and soft law from the perspective of national judicial decisions. In referring to soft law, we mean non-binding legal norms that usually cannot be I See OANA A. STEFAN, SoFr LAW IN COURT: COMPETITION LAW, STATE AID AND THE COURT OF JUSTICE OF THE EUROPEAN UNION 242 (2013), for further research topics and recommendation. 2 See, for example, id. at 162-65, 275-324, these fields of administrative law are largely determined by EU substantive rules; additionally, in some of these fields, the Commission has strong competences in law enforcement (e.g. competition law). 3 Laszlo Blutman, In the Trap of a Legal Metaphor: InternationalSoft Law, 59 INT'L & COMP. L.Q. 605, 606 (2010) (starting our inquiry with recalling international legal principles is reasonable, since EU law, although it had evolved into a separate legal order, has its origins in international law). 4 Id.; LORI F. DAMROSCH ET AL., INTERNATIONAL LAW CASES AND MATERIALS 34 (4th ed. 2001). 2 Loyola University Chicago International Law Review Volume 14, Issue I Effects of European Soft Law at National Administrative Courts enforced through judicial proceedings. This does not mean, however, that they do not have a role in judicial proceedings.5 This interpretation is also supported by EU law, since Article 263 of the Treaty on the Functioning of the European Union (TFEU) explicitly excludes non-binding legal acts (recommendations and opinions) under Article 288 from the scope of the European Court of Justice's (ECJ) authority.6 1.2. The Formal Classification of EU Soft Law Instruments 1.2.1. Official Soft Laws: Recommendations and Opinions An obvious method of classifying EU soft law instruments is to inquire whether the given document was adopted in a form recognized by the TFEU itself. Accordingly, an act that was not adopted through an officially recognized procedure cannot become an official source of law. Article 288 of the TFEU mentions recommendations and opinions as legal acts of the EU. These are adopted in a regulated procedure by certain institutions based on the delegation of authority in the TFEU. Their soft law nature derives from the fact that according to the TFEU, they shall have no binding force. In this article we will focus on recommendations, as the application of this type of official soft law is prevalent both in the ECJ's and the national courts' jurispru- dence. By contrast, opinions possess features of individualized documents relat- ing to a specific legislative, accession or other decision, thus their legal effect on third parties is not obvious. 7 1.2.2. Unofficial Soft Laws The various types of annual reports, published legislative agendas, white books, green books, or guidelines to the interpretation of hard law provisions, notices, communications, etc. all constitute documents that are not official legal acts under the TFEU, yet they may have normative content. Since their creation is not regulated, their title is somewhat arbitrary, even though EU institutions 5 See infra Section 2.2.2, for example, in competition law procedures soft law documents read in conjunction with legal principles may even create rights for third parties that courts should protect. 6 See, e.g., Francis Snyder, The Effectiveness of European Community Law: Institutions, Processes, Tools and Techniques, 56 Moo. L. REV. 19, 32 (1993); Linda Senden, Soft Post-LegislativeRulemaking: A Time for More Stringent Control, 19 EUR. L. J. 57, 57 (2013) (noting that although soft law has no legally binding force, it nonetheless may produce practical effects); Christine Chinkin, Normative Devel- opment in the InternationalLegal System, in COMMITMENT AND COMPLIANCE: THE ROLE OF NON-BIND- ING NORMS IN THE INTERNATIONAL LEGAL SYSTEM 23, 30 (Dinah Shelton ed., 2003) (arguing as an element of the definition of soft law that soft laws are based solely upon voluntary adherence, or rely upon non-juridical means of enforcement); STEFAN, supra note 1, at 242-43. 7 See Commission Opinion on the Application for Accession to the European Union by the Republic of Croatia, COM (2011) 667 final (Oct. 12, 2011); see also Commission Opinion of 30.9.2011 on the Requests for the Amendment of the Statute of the Court of Justice of the European Union, Presented by the Court, COM (2011) 596 final (Sep. 30, 2011); Commission Opinion on the Request from the United Kingdom to Accept Regulation (EC) No. 593/2008 of the European Parliament and the Council of 17 June 2008 on the Law Applicable to Contractual Obligations (Rome I), COM (2008) 730 final (Nov.
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