On 6 September 2012, AG Kokott issued her Opinion in case C‑226/11 Expedia Inc. The case is about the effects of soft law instruments adopted by the European Commission on other competition authorities and courts entrusted with the enforcement of EU Competition Law. Or, as the AG shortly puts it, the CJEU must decide if the notices of the European Commission in the field of competition law are binding on the national competition authorities and the national courts.
The question has arisen in relation to the ‘de minimis notice’, in which the Commission sets out the circumstances under which it presumes that there is an appreciable restriction of competition within the meaning of Article 101 TFEU. Given the narrow scope of the question (ie whether the de minimis notice is binding), it is odd that the case has actually gone through, since the notice itself clearly indicates that "[a]lthough not binding on them, this notice also intends to give guidance to the courts and authorities of the Member States in their application of Article [101 TFEU]" (para. 4, emhasis added).
The answer should almost be automatic: "No, it is not binding". However, since most domestic EU rules (directly or indirectly, expressly or implicitly, willingly or reluctantly) incorporate the corpus of Commission's competition notices, the question becomes trickier than a mere literalist approach to the (originally) soft law instruments would suggest.
Therefore, as clearly indicated by the AG, given that the case affects the 'enforcement thresholds' for EU Competition rules, it can be seen as a matter involving the delineation of the scope of application of EU Competition Law: "The Court’s reply to the question referred will to a large extent determine the scope which the national competition authorities and courts will have in the future when applying Article 101 TFEU" (AG Kokott in C-226/11, at para 5).
However, the general framework in which the reference for a preliminary ruling by the French Cour de Cassation has been assessed by AG Kokott in Expedia relates to the broader topic of the legal nature and effects of soft law instruments in the area of EU Competition Law (and, more generally, on the topic of 'soft EU Law', although in most other policy areas it is much less used)--which oddly enough (and probably not unexpectedly), are in a fast and steep 'hardening' process that might as well end up equating them to full EU legislative instruments, at least in terms of their legal effects.
This topic is a personal favourite of mine, and one which is due to raise a myriad of cases in the decentralised system of (private) EU Competition Law enforcement (as discussed in Sánchez Graells, A., 'Soft Law and the Private Enforcement of the EU Competition Rules' in JL Velasco San Pedro (ed), Private Enforcement of Competition Law, Valladolid, Lex nova, 2011, p. 507-520, http://ssrn.com/abstract=1639851).
Even if the wording of her opinion seems to adjust to the natural, automatic answer already hinted at: "it must be concluded that the de minimis notice is not, of itself, intended to produce binding legal effects" (see AG Kokott in C-226/11, at paras. 26 to 34), actually, her position is almost the opposite. In my reading of her opinion, AG Kokott basically submits to the CJEU that Commission's notices are (somehow) binding on the national competition authorities and the national courts in that they must take them in due account when conducting competition analysis, but that authorities and courts can depart from the content of the notices as long as they prove in some way that the content of the notice is inadequate (in the case at hand)--which brings an onus of proof to the picture that seems to tilt the standard position to the Commission's soft law instruments indeed having (initial) binding effects.
This is a rather creative and flexible solution (which circumvents the standard position that soft law instruments cannot generate binding legal effects), for sure, but one that leaves many questions unanswered and that merits some further thought. In that regard, it is interesting to see how the AG reached her conclusion.
According to AG Kokott,
35. Although the de minimis notice has no binding legal effects, as I have just shown, it would be a mistake to regard it as of no importance at all in law for proceedings concerning cartels. Publications like the de minimis notice are in the nature of ‘soft law’ the relative importance (sic) of which in cartel proceedings, at the European and the national levels, should not be underestimated [...]
38. The Commission’s leading role, firmly anchored in the system of Regulation No 1/2003, in framing European competition policy would be undermined if the authorities and courts of the Member States simply ignored a competition policy notice issued by the Commission. It therefore follows from the duty of sincere cooperation which applies to all the Member States (Article 10 EC, now Article 4(3) TEU) that the national authorities and courts must take due account of the Commission’s competition policy notices, such as the de minimis notice, when exercising their powers under Regulation No 1/2003 [...]
39. [...] even though no binding requirements concerning the competition-law assessment of agreements between undertakings arise for national competition authorities and courts from the Commission’s de minimis notice, those authorities and courts must nevertheless consider the Commission’s assessment, as set out in the notice, of what constitutes an appreciable restriction of competition and must give reasons which can be judicially reviewed for any divergences (AG Kokott in C-226/11, at paras. 35-39, references omitted and emphasis added).
In my view, this is quite an amazing exercise of saying one thing and the opposite in the space of less than 10 paragraphs. Reading the conclusion suggested by AG Kokott, one is left scratching his head and thinking "so, no legal effects, huh?":
Consequently the national competition authorities and courts are free to proceed against agreements between undertakings below the thresholds of the de minimis notice, provided that they have taken due account of the Commission’s guidance in the notice and that, in the particular case, there is evidence, other than the market shares of the undertakings concerned, which suggests that the effect on competition is appreciable (AG Kokott in C-226/11, at para. 43, emphasis added).I think that this is a very dangerous step that follows the rocky path of attaching (soft!) legal effects to soft law instruments, and I sincerely hope that the CJEU will only follow the position advanced by AG Kokott in paragraphs 26 to 34 of her Opinion in Expedia. More specifically, the preferable answer to the reference for a preliminary ruling by the French Cour de Cassation would be very short: "[a]s the Court has found in another connection, Commission notices in the area of EU competition law do not have binding legal effect for national authorities and courts. That is so also in the present case with regard to the de minimis notice" (AG Kokott in C-226/11, at para. 26). Any other answer will open a Pandora's box.