University of Amsterdam
Freedom to conduct business in the EU: content
and essence
Author: Mantas Razma 12749036 razma.mantas@gmail.com Supervisor:Prof. Dr. Marija Bartl Academic Year:
2019-2020
Submitted on 2020-07-21
ABSTRACT
Thesis is about fundamental right of the EU Charter of fundamental rights – freedom to conduct business. This thesis will argue that freedom to conduct business has no essence even though theoretical framework of EU fundamental rights and CJEU’s judgments presupposes differently. Freedom to conduct business has no essence due to its lack of origins, universal acknowledgement and susceptibility to one’s ideological views about market or pursued policy objectives. Moreover, CJEU’s case-law concerning this right is obscure and with tendencies to restrict this right when balancing with other fundamental rights. Also, instrumental application in conjunction with fundamental freedoms is prevalent. In the Thesis, chosen topic will be discussed in three aspects. First part will be devoted to general content of this right (foundations, scope, what it entails). Second part will be set for considerations about the notion of this rights essence. Firstly, general framework for the notion of essence will be discussed and then issues with the notion of the essence of freedom to conduct business will be addressed. In the third part, this right will be assessed in the light of the other fundamental rights with the concern of the outcomes balancing of respective rights and effect to the essence of freedom to conduct business.
ABSTRACT ... 2
ABBREVIATIONS ... 4
1. INTRODUCTION ... 5
CHAPTER 1 - CONTENT OF FREEDOM TO CONDUCT BUSINESS ... 8
1.1 Origins of freedom to conduct business in the EU ... 8
1.2 Content of freedom to conduct business ... 9
1.2.1 Freedom to exercise an economic or commercial activity ... 10
1.2.2 Freedom of contract ... 11
Freedom to determine the price of services ... 13
Ability to assert one’s interests effectively in a contractual process ... 14
Termination of contract ... 14
1.3 Free competition ... 15
1.4 Commercial secrets protection ... 15
1.5 Chapter 1 conclusions ... 16
CHAPTER 2 – THE ESSENCE OF FREEDOM TO CONDUCT BUSINESS ... 17
2.1 Is the freedom to conduct business a right or a principle ... 17
2.2 Framework of the concept of essence of a fundamental right ... 18
Absolute theory ... 20
Relative theory ... 21
2.2. The essence of Freedom to Conduct a business ... 22
Issues with the essence of freedom to conduct business ... 22
Formulation of the essence of Art. 16 in the case-law of the CJEU ... 24
2.3 Chapter 2 conclusions. ... 26
CHAPTER 3 – OTHER CHARTER RIGHTS IMPACT TO FREEDOM TO CONDUCT BUSINESS ... 27
3.1 Right to property (Art. 17) and right to work (Art. 15) ... 27
Intellectual property rights ... 28
3.2 Freedom of expression (Art. 11) ... 30
3.3 Consumer protection (Art. 38) ... 31
3.5 Workers’ rights (Chapter III and IV) ... 32
3.6 Chapter 3 conclusions ... 34
4. CONCLUSION ... 35
ABBREVIATIONS
Court of Justice of the European Union - CJEU European Court of Human Rights - (ECtHR) European Convention on Human Rights – ECHR
Charter of Fundamental Rights of the European Union – Charter European Union – EU
Treaty of European Union – TEU
Treaty on the Functioning of the European Union – TFEU Advocate General – AG
1. INTRODUCTION
This thesis is designated to analyze the content and the essence of freedom to conduct business in the EU and to evaluate how it is affected when balancing this right with other rights of the Charter. I will argue that this right has no unequivocal notion of essence due to its relativity and dependence upon pursued policy objectives, political orientations, and balancing with other fundamental rights.
Freedom to conduct business is defined by Charter’s explanations and by numerous CJEU judgements1 as a combination three separate rights 1) the freedom to exercise an economic or commercial activity, (2) freedom of contract, and (3) the right to free competition.2 CJEU has determined the material scope of this right as a “the right for any business to be able to freely use, within the limits of its liability for its acts, the economic, technical and financial resources available to it”.3 This should be considered in conjunction with the CJEU judgement in Nold where it was proclaimed that this right “in no respect be extended to protect mere commercial interests or opportunities the uncertainties of which are part of the very essence of economic activity”.4 Therefore, this right should not be perceived as an entitlement for a person to carry on his business activity in a lucrative or a completely unrestricted manner.
The concept of essence arises from the provisions of the Charter which state that any limitation of rights and freedoms must respect the essence of the right restricted and be proportionate.5 The notion of essence is thus, related to the principle of proportionality – which leads to debates how two concepts interrelate. Initially, there are two theories regarding the status of the essence of fundamental rights: absolute and relative theories. Their main distinction lies within the limits of application of the proportionality principle towards the proclaimed essence of a right. Absolute theory presupposes that every fundamental right of the Charter has a core and a peripheral part. The essence of the core
1 Case C-283/11 Sky Österreich [2013] ECLI:EU:C:2013:28 para 42; Case C‑101/12 Schaible [2013]
EU:C:2013:661 para 25; Case C-134/15 Lidl [2016] ECLI:EU:C:2016:498 para 28.
2 Peter Oliver, What Purpose Does Article 16 of the Charter Serve? (2013). General Principles of EU Law
and European Private Law" (Ed. Bernitz, Groussot and Schulyok, (Wolters Kluwer, 2013) 281-300. Available at SSRN: https://ssrn.com/abstract=2567786, 286.
3 Case C- 314/ 12, UPC Telekabel [2014] EU:C:2014:192, para 49. Manuel Kellerbauer, Marcus Klamert
and Jonathan Tomkin, The EU Treaties and the Charter of Fundamental Rights: a Commentary (Oxford University Press 2019) 2147.
4 Case 4-73 Nold, v Commission [1974] ECLI:EU:C:1974:51 para 14.
of the right cannot be tampered with as otherwise, the right would lose its meaning, or interests protected by relevant right would become obsolete. The peripheral part of a right can be inferred with the usage of the principle of proportionality by the court. Relative theory, on the other hand, perceives essence as a declaratory subject, enabling the principle of proportionality to assess every limitation and be potentially justified.6 Even though considerations about essence lead to practical difficulties, Absolute theory seems to prevail both in academic opinion and in the case-law of the CJEU.
However, even with the prevalence of the absolute theory, freedom to conduct business seems to lack essence due to a few significant reasons. Firstly, when considering the idea that fundamental rights initially embody a particular virtue or moral concern7, this right does not contain any such notion that would not be arbitrary in the current time. Classical laissez-faire market ideology that promulgated unrestricted freedom of contract and business activities, which is embodied in the US Supreme Court Lochner8 judgment was dismissed. The contractual and business activity field is no longer perceived as a purely autonomy-based, thus giving way to a “socialization” of this field that is not considered to be a mere exception.9 Therefore, classical origins can hardly help when determining the essence of this Charter right. Thus, this right is susceptible to someone's economic theory and in a democratic society with "reasonable pluralism" there are no rules of how arising conflicts related to initially, redistribution of wealth should be settled. These considerations along with this rights’ lack of historical background and universal recognition prove initial emptiness and relativity of freedom to conduct business when trying to determine any concrete notion of essence that would not be arbitrary.
Also, important to consider is that CJEU case-law does not elaborate on the essence of this right and generally is obscure with only a few judgements that cryptically determine the breach of this right's essence (most notably Alemo Herron10). Moreover, the case-law of the CJEU allows very broad interferences with this right, arising from objectives of general interest pursued by the European Union and interests protected with other fundamental rights. Thus, the principle of proportionality is extensively used when considering interferences with this right, which leads to the conclusion that no concrete notion of this right can even be developed.
6 Maja Brkan, 'The Concept Of Essence Of Fundamental Rights In The EU Legal Order: Peeling The Onion
To Its Core' (2018) 336.
7 Eduardo Gill-Pedro, 'Freedom to Conduct Business in EU Law: Freedom from Interference or Freedom
from Domination' (2017) 9 Eur J Legal Stud 103, 1.
8 Lochner v. New York, 198 U.S. 45 (1905).
9 Chantal Mak, Fundamental Rights In European Contract Law (Kluwer Law International 2008), 294-295. 10 Case C-426/11 Alemo-Herron and Others [2013] ECLI:EU:C:2013:521.
Another important aspect proving this rights relativity is its application in the conflicts with other fundamental rights of the Charter. Cases where fundamental rights are applied show particular political issues, do not have a “one right answer” and thus are likely to be affected by judges' own political opinions.11 Judgements of the CJEU seem to initially allow broad interferences with the freedom to conduct business and this right prevails only in a very limited amount of circumstances usually when applied in conjunction with other fundamental rights. This can be seen in cases where freedom to conduct business was balanced with the rights of workers, right of freedom of expression, right to intellectual property rights, and consumer protection.12 This affirms that every time this right is applied, detailed considerations of this rights’ restrictions and balancing of interests must be concluded.
The thesis is structured as follows. In the first chapter, I outline the content and origins of this right. In the second chapter, I outline the importance of the concept of essence and two main theories of how essence relates to the principle of proportionality. Then I will consider the essence of freedom to conduct business and issues with the development of any concrete notion. In the third chapter, I will analyze how the freedom to conduct business interacts with other fundamental rights and how its notion of essence is affected by balancing with the respective fundamental rights. I draw consequences that due to intrinsic emptiness this right will remain a secondary right with limited application that only prevails when applied in conjunction with other fundamental rights (like right to privacy or property, right to work).
11 Chantal Mak, Fundamental Rights In European Contract Law (Kluwer Law International 2008) 294. 12 Freedom to conduct business: exploring the dimensions of a fundamental right. (n.d.). Human
CHAPTER 1 - CONTENT OF FREEDOM TO CONDUCT BUSINESS
1.1 Origins of freedom to conduct business in the EU
Charter is considered to be the embodiment of the shared laws, principles, and values of successive generations of constituent MS, defining the EU’s identity.13Seemingly, part of this shared legal culture heritage is also a fundamental right – freedom to conduct business. Although, when looking contextually, this right was not previously recognized in the ECHR, on which the vast majority of Charter's provisions are based. There are no explicit parallels to freedom to conduct business in international human rights law instruments, even though the ECtHR has recognized elements of the right in the ECHR and some relation with the freedom of expression (Article 10 of the ECHR, freedom of “commercial” expression), also, the European Social Charter, guarantees the right to work (Article 1) and the right to earn living.14 Nonetheless this seems to be too remote and untenable for actual origins of this right. European Union Agency for Fundamental Rights attribute this right with MS constitutional traditions, since a substantial number of MS constitutions acknowledge this right in the same way as the Charter.15 22 of MS constitutions have the acknowledged this right in some form during the 20th century, some for the process of transition to parliamentary democracy, or as a return to a free market economy.16 However, before the enactment of the Charter, this right arised in the case-law of CJEU in the 1980s and achieved the status of a general principle of European Union law.17 Moreover, Charter’s explanations sees this right as a codification (or “housekeeping” as X. Groussot et al. named it) of the pre-existing case-law of the CJEU.18 Also, M. Bartl and C. Leone note political aspects related to inclusion of Art. 16 as this right was included as a counterbalance to social rights (principles) of the Charter.19 This along with the position held by the Charter’s explanations seems like the most liable genesis of this right.
13 Manuel Kellerbauer, Marcus Klamert and Jonathan Tomkin, The EU Treaties and the Charter of
Fundamental Rights: a Commentary (Oxford University Press 2019) 7.
14 “Freedom to Conduct a Business: Exploring the Dimensions of a Fundamental Right” (European Union
Agency for Fundamental Rights August 5, 2015) <https://fra.europa.eu/en/publication/2015/freedom-conduct-business-exploring-dimensions-fundamental-right> accessed May 15, 2020 10.
15 Opinion of AG in Case C-426/11 Alemo-Herron and Others [2013] ECLI:EU:C:2013:82 footnote 27. 16 ibid 25-26.
17 ibid para 48.
18 Xavier Groussot, Gunnar Thor Petursson and Justin Pierce, 'Weak Right, Strong Court - The Freedom To
Conduct Business And The EU Charter Of Fundamental Rights' [2014] SSRN Electronic Journal 4 and Explanations relating to the Charter of Fundamental Rights [2007] C 303/02 explanation on art 16.
19 Marija Bartl and Candida Leone, 'Minimum Harmonisation After Alemo-Herron: The Janus Face Of EU
1.2 Content of freedom to conduct business
Article 16 of the proclaims that “the freedom to conduct business in accordance with Union law and national laws and practices is recognized”. AG Cruz Villalón defines that this right is supposed to ensure certain minimum conditions for economic activity in the internal market, and for that, it can act as a limit on the actions of the EU and the actions of the MS when they apply EU law.20 E. Gill-Pedro states that under this right persons are enabled to conduct their business within the legal limits as a legally enforceable right that allows to challenge any measure which precludes lawful business activities.21 However, CJEU also extended the capacity of this right not only to the ability of challenging EU measures but also national ones as well.22 Nonetheless, such claims are rarely successful when considering related CJEU case law as this right does not provide very distinct capacities. Some envision the material scope of this is right in the case-law of the CJEU as “the right for any business to be able to freely use, within the limits of its liability for its own acts, the economic, technical and financial resources available to it”.23 Such notion enables quite limited protective or transformative capacities.
When delving into the content of this right, a good starting point seems to be Official explanations of the Charter. Article 6 of TEU states that Charter shall be interpreted with due regard to the Official explanations of it (similar provision is also included in the Charter).24 Explanations are not binding authentic interpretations, but they are seen as highly valuable interpretative aids followed by the CJEU.25 Explanations states that freedom to conduct business is primarily based on Court of Justice case-law which has previously recognized freedom to exercise an economic or commercial activity and freedom of contract and Article 119(1) and (3) of the TFEU, which recognizes free
20 Opinion of AG in Case C-426/11 Alemo-Herron and Others [2013] ECLI:EU:C:2013:82 para 50. 21 Eduardo Gill-Pedro, 'Freedom to Conduct Business in EU Law: Freedom from Interference
or Freedom from Domination' (2017) 9 Eur J Legal Stud 103, 112-113.
22 Eduardo Gill-Pedro, 'Freedom to Conduct Business in EU Law: Freedom from Interference
or Freedom from Domination' (2017) 9 Eur J Legal Stud 103, 116.
23 Case C- 314/ 12, UPC Telekabel [2014] EU:C:2014:192, para 49. Manuel Kellerbauer, Marcus Klamert
and Jonathan Tomkin, The EU Treaties and the Charter of Fundamental Rights: a Commentary (Oxford University Press 2019) 2147.
24 Consolidated Version of the Treaty on European Union [2008] OJ C115/13. Charter of Fundamental Rights
of the European Union [2012] OJ C 326/02 art. 6(1), art. 52(7).
25 Manuel Kellerbauer, Marcus Klamert and Jonathan Tomkin , The EU Treaties and the Charter of
competition. Thus, this right is a bundle of three discrete rights: (1) the freedom to exercise an economic or commercial activity, (2) freedom of contract, and (3) the right to free competition.26
1.2.1 Freedom to exercise an economic or commercial activity
Official explanations of the Charter acknowledge that Nold [1974]27 and SpA Eridiana and others [1979]28 cases dealt with this element of freedom to conduct business. Nold case concerned lawfulness of the Commission decision, which has left applicant without its status as a wholesaler and allegedly jeopardized both the profitability and free development of his business activity, endangering its existence.29 In its decision CJEU noted that such rights must be viewed in the light of their social function. Rights of this nature are prone to limitations by public interest considerations and subject to a certain limit justified by the overall objectives pursued by the community, with the condition that the substance of such right is left untouched.30 Then, CJEU determined that no particular undertaking can expect that its mere commercial interests or opportunities will be protected as such uncertainties are part of the very essence of economic activity.31 This judgement brought freedom to conduct business in the EU law. Key takeaway seems the affirmation that freedom to conduct business cannot provide protection for particular commercial interests and has to be aligned with public policies, objects pursued by the community, and its social function, thus significant limitations to this right are allowed. However, limitations cannot impinge on the very substance of this right.32 Nold gave general notions about the freedom to conduct business, which was continuously reiterated in subsequent case-law.33
Another landmark case is SpA Eridania and others. This was a case concerning the allocation and alteration of the basic quotas of sugar which were altered by the contested Italian government decree. Question regarding right to conduct business concerned whether the power to alter basic quotas does not jeopardize sugar producers' possibility to carry on
26 Peter Oliver, What Purpose Does Article 16 of the Charter Serve? (2013). General Principles of EU Law
and European Private Law" (Ed. Bernitz, Groussot and Schulyok, (Wolters Kluwer, 2013) 281-300. Available at SSRN: https://ssrn.com/abstract=2567786, 286.
27 Case 4-73 Nold, v Commission [1974] ECLI:EU:C:1974:51 28 Case 230/78 SpA Eridiana and others [1979] ECLI:EU:C:1979:216 29 Case 4-73 Nold, v Commission [1974] ECLI:EU:C:1974:51 para 12. 30 ibid paras 13-14.
31 ibid para 14. 32 Ibid para 14.
33 Oliver, Peter J, What Purpose Does Article 16 of the Charter Serve? (2013). General Principles of EU
Law and European Private Law"(Ed. Bernitz, Groussot and Schulyok, (Wolters Kluwer, 2013) 281-300. Available at SSRN: https://ssrn.com/abstract=2567786 288
of economic activity and, in that way, impinge on their fundamental rights.34 CJEU firstly analyzed the nature of basic quotas. Quotas were determined to be guarantees for producers in the common organization of the market, which the production quantities and are essential feature of organization of the market that affects its development.35 Therefore, it was decided that an undertaking cannot claim a vested right in the maintenance of an previous advantage as an infringement of a fundamental right.36 Court also acknowledged the need to ensure a fair standard of living for the agricultural community and to increase agricultural productivity, stabilize markets, ensure the availability of supplies, and ensure that supplies reach consumers at reasonable prices.37 This judgment similarly to Nold, firstly affirmed limitations on the right to conduct business, the need to balance application of such right to the benefit of public policy, other objects pursued by the community and social needs.
In both cases, this fundamental right was used by the applicants as a possible measure to strike down legislation or elements of it, which allegedly hampered the profitability of a particular economic activity which applicants had taken on. Both attempts were unsuccessful as the even though CJEU have affirmed the rights existence, it also took other interests as more significant. Founding case-law also give means to significant limitations of this right, nevertheless the apodictic notion of this rights essence was also acknowledged.
1.2.2 Freedom of contract
Art. 16 protects freedom of contract. Official explanations of the Charter acknowledge Sukkerfabriken Nykøbing38 and Spain v Commission39 for freedom of contract foundation.
Sukkerfabriken Nykøbing case concerned Denmark’s national organization of the sugar market and quotas allocation. Co-operative (Sukkerfabriken Nykøbing) claimed that the regulatory measures taken up by Danish government which determined initially members' prior cultivation quotas was unlawful.40 Since case dealt with a Regulation41 for agricultural field, it was referred to the CJEU. When assessing this Regulation, CJEU concluded that because of possible difficulties in the conclusion of inter-trade agreements concerning conditions for the delivery of sugar-beet, relevant Regulation is intended to
34 Case 230/78 SpA Eridiana and others [1979] ECLI:EU:C:1979:216 para 20. 35 ibid para 21.
36 ibid para 22. 37 ibid para 31.
38 Case 151/78 Sukkerfabriken Nykøbing [1979] ECLI:EU:C:1979:4. 39 Case 240/97 Spain v Commission [1999] ECLI:EU:C:1999:479. 40 Case 151/78 Sukkerfabriken Nykøbing [1979] ECLI:EU:C:1979:4, 3-4.
41 Regulation (EEC) No 3330/74 of the Council of 19 December 1974 on the common organization of the
entitle MS in the cases defined by the regulation to intervene based on their powers and following the procedures of their legal systems while respecting the freedom of contract, and if restrictions on it would be imposed rules and information would be detailed.42 This decision acknowledged freedom of contract and noted that restrictions on it must be detailed and justified.
Spain v Commission, concerned export refunds arising from the price difference between international trade and the EU that was available43. MS had to monitor the application of this possibility. Problems arose as the Commission claimed that a change of the date in a contract adopted after its conclusion in order to secure an advantage deriving from a change of price constitutes fraud since it enables to receive aid to which would not have been entitled previously, as the contractual price is at that time lower than the minimum price in force.44 Nevertheless, the Kingdom of Spain had noted that it is the parties alone decide the date of their final agreement regarding the purchase price of the goods. In the present case, they cannot be criticized for having set the date of the contracts according to the legal conditions for the allocation of Community aid, since that date was not later than the time of performance of the contracts and the change was not designed to achieve a result contrary to Community law.45 CJEU observed that the right of parties to amend contracts concluded by them is based on the principle of contractual freedom and cannot, therefore, be limited in the absence of Community rules imposing specific restrictions in that regard.46 This judgment affirmed contractual freedom but also, allowed its limitations in favour of particular Community rules still cannot be intact. Besides, traditional contractual freedom limitations such as fraud were also noted as a possible restriction.47
Foundational case-law concerning freedom of contract seem to give out a restricted notion: contractual freedom is fine until it starts to intersect with EU policy objectives or any other similar limitations. In the further developments of case-law CJEU have affirmed and extended various aspects of freedom of contract, such as 1) freedom to choose whom
42 ibid par 18-21.
43 Council Regulation (EEC) No 2601/69 of 18 December 1969, as amended inter alia by Council Regulation
(EEC) No 2483/75 of 29 September 1975 OJ 1975 L 254 and by Council Regulation (EEC) No 1123/89 of 27 April 1989 OJ 1989 L 118.
44 Case 240/97 Spain v Commission [1999] ECLI:EU:C:1999:479, para 98. 45 ibid para 97.
46 Case 240/97 Spain v Commission [1999] ECLI:EU:C:1999:479, para 99. 47 ibid para 100.
to do business with, 2) the ability to assert one's interests effectively in a contractual process, 3) to determine the price of a service and the termination of the contract.48 Freedom to choose whom to do business with
One of the judgments where this right was enshrined is Neu.49 CJEU in proceedings dealt
with an analysis of whether the principle of freedom to choose whom to do business with allows a MS to reduce the individual additional production quota of a producer indefinitely. Case concerned milk quota regime and its allocation in Luxembourg.50 AG’s opinion, in this case was that the actual freedom to change contractors, can be justified in this situation, and that principle to choose contractual partners does not appear in CJEU case-law.51 He also reiterated that the right to property and the freedom to pursue a trade or profession is not an unfettered prerogative, and must be viewed in the light of the social function, and can be restricted if there is no disproportionate and intolerable interference to the very substance them.52 CJEU determined that that the freedom to pursue a trade or profession includes freedom to choose who to do business with.53 Initially provision in question was not deemed invalid but was reinterpreted in a particular way, that is more favourable to the relevant right.54
Freedom to determine the price of services
In Commission v Belgium55 Commission had started proceedings against Belgium for the breach of Communities' fiscal immunity by indirectly imposing a real estate tax on the buildings that they vacate on Brussels.56 CJEU determined that, where that tax is passed on by virtue of a contractual provision in the lease, it must reflect the intention of the contracting parties, since the inclusion of such a provision falls within the scope of their
48 Manuel Kellerbauer, Marcus Klamert and Jonathan Tomkin , The EU Treaties and the Charter of
Fundamental Rights: a Commentary (Oxford University Press 2019) 2148.
49 Joined cases C-90/90 and C-91/90 Jean Neu and others v Secrétaire d'Etat à l'Agriculture et à la
Viticulture [1991] ECLI:EU:C:1991:303.
50 ibid para 3.
51 Opinion of AG in Case C-91/90 Jean Neu and others v Secrétaire d'Etat à l'Agriculture et à la Viticulture
[1991] ECLI:EU:C:1991:182, para 18.
52 ibid para 19. Case 265/87 Schrader [1989] ECLI:EU:C:1989:303, para 15. 53 ibid para 13.
54 Peter Oliver, What Purpose Does Article 16 of the Charter Serve? (2013). General Principles of EU Law
and European Private Law" (Ed. Bernitz, Groussot and Schulyok, (Wolters Kluwer, 2013) 281-300. Available at SSRN: https://ssrn.com/abstract=2567786 289.
55 Case C‑437/04 Commission v. Belgium [2007] ECLI:EU:C:2007:178
freedom of contract.57 In F-TEX, CJEU affirmed freedom to determine a price of service amongst the liquidator and the assignee concerning the consideration paid by the assignee in the form of a fixed sum or a percentage of any sums recovered.58
Ability to assert one’s interests effectively in a contractual process
This aspect of freedom of contract was exemplified in Alemo-Herron decision.59 The case dealt with terms of employment contracts that were part of a collective agreement and whether the buyer of the company is bounded by them even when he had not taken part in their negotiations previously. CJEU examined Directive60 relevant for the proceedings in a way that allows the transferee to be able to assert its interests effectively and to negotiate the aspects determining changes in the working conditions.61 CJEU dismissed primary goal of the aforementioned Directive – employee interests protection in negotiations by referring to freedom of contract.62 Also MS courts competence was bypassed even though there were mostly national law assessment aspects.63 CJEU conclusions in this decision affirming the aforementioned element of contractual freedom could be considered highly arbitrary. Termination of contract
In AGET Iraklis case, MS intervention in order to ensure the job security of workers was assessed with the limits of freedom to conduct business.64 Greek authorities refused to allow collective redundancies. CJEU when assessing the impact of such decision on the freedom to conduct business firstly referred to Alemo-Herron, acknowledging undertaking need to be able to assert its interests effectively in a contractual process.65 CJEU stated that such regime of collective redundancies constitutes interference with the freedom of contract.66 But then, it was noted that proportional limitations may be imposed on the freedom to conduct business as long as they are provided for by law, respect the essence
57 Case C‑437/04 Commission v. Belgium [2007] ECLI:EU:C:2007:178, para 51. 58 Case C‑213/10 F-TEX [2012] ECLI:EU:C:2012:215, para 45.
59Manuel Kellerbauer, Marcus Klamert and Jonathan Tomkin , The EU Treaties and the Charter of Fundamental Rights: a Commentary (Oxford University Press 2019) 2148.
60 Council Directive 2001/23/EC of 12 March 2001 on the approximation of the laws of the Member States
relating to the safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts of undertakings or businesses OJ L 82.
61 Case C-426/11 Alemo-Herron and Others [2013] ECLI:EU:C:2013:521, para 33.
62 Eduardo Gill-Pedro, 'Freedom to Conduct Business in EU Law: Freedom from Interference
or Freedom from Domination' (2017) 9 Eur J Legal Stud 103, 112-113 128-129, reference 91.
63 Opinion of AG in Case C-426/11 Alemo-Herron and Others [2013] ECLI:EU:C:2013:82 paras 55-57. 64 Opinion of AG in Case C‑201/15 AGET Iraklis [2016] ECLI:EU:C:2016:429 para 1 and Manuel
Kellerbauer, Marcus Klamert and Jonathan Tomkin , The EU Treaties and the Charter of Fundamental
Rights: a Commentary (Oxford University Press 2019) 2148.
65 Case C‑201/15 AGET Iraklis [2016] ECLI:EU:C:2016:972 para 68. 66 ibid para 69.
and are necessary and genuinely meet objectives of general interest recognized by the EU.67 Thus, as national measures only provides framework for collective redundancies, it cannot unjustifiably impinge freedom to conduct business.68 Therefore, even though earlier Alemo-Herron decision was dissmised69 deregulatory power of Art. 16 was kept.
1.3 Free competition
In Article 119(1) and (3) of the TFEU, there is recognition of free competition, which is also considered as the element of Art. 16.70 According to some, it is because the aim of Article 16 coincides with the aim of competition law, which is not a limitation on the right to the economic initiative, but rather, it is a tool designed to foster this right, without which there would be no market freedom.71 Article 119 TFEU is in Title VIII of the Treaty, which concerns economic and monetary policy.72 This article acknowledges the principle of an open market economy with free competition.73 Art. 119(3) expands on this provision by
noting the need to follow the guidance of the principle of "stable prices, sound public finances, and monetary conditions and a sustainable balance of payments.74
1.4 Commercial secrets protection
In Interseroh, protection of business secrets was affirmed as a general principle of the EU and reiterated that protection of business secrets falls within the protection of Art. 15(1); 16; 17 of the Charter.75 Thus, it can be partially included in the content of Art. 16, nonetheless it is perceived that it can also be protected by the right to property and occupation, in a better way.
67 ibid para 70. 68 ibid paras 83; 89. 69 Ibid paras 87-88.
70 Peter Oliver, What Purpose Does Article 16 of the Charter Serve? (2013). General Principles of EU Law
and European Private Law"(Ed. Bernitz, Groussot and Schulyok, (Wolters Kluwer, 2013) 281-300. Available at SSRN: https://ssrn.com/abstract=2567786 31.
71 Usai Andrea, “The Freedom to Conduct a Business in the EU, Its Limitations and Its Role in the
European Legal Order: A New Engine for Deeper and Stronger Economic, Social, and Political Integration” (2013) 14 German Law Journal 1867 11.
72 Peter Oliver, 'What Purpose Does Article 16 Of The Charter Serve?' (Papers.ssrn.com, 2020)
<https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2567786> accessed 23 May 2020 287.
73 Consolidated version of the Treaty on the Functioning of the European Union [2012] OJ C 326, art.
119(1)
74 ibid art. 119(3).
1.5 Chapter 1 conclusions
Freedom to conduct business originates from early CJEU case-law that dealt with particular issues in the right to property. As a Charter right it constitutes a bundle of rights, from which the most articulated is freedom of contract. Foundational case-law have similar characteristics of typically being that a person restricted by some EU measure tries to use freedom of contract/freedom to conduct business and CJEU initially will focus more on the measure and its aims rather than on the actual limitation of the contractual freedom.76 Claims were mostly unsuccessful and even though elements and capacities of this right were reaffirmed in some judgements, this rights susceptibility to limitations for many other interests in EU are still prevalent as foundational judgements provide restricted applicability for individual mere commercial interests protection.
76 Eduardo Gill-Pedro, 'Freedom to Conduct Business in EU Law: Freedom from Interference or Freedom
CHAPTER 2 – THE ESSENCE OF FREEDOM TO CONDUCT
BUSINESS
2.1 Is the freedom to conduct business a right or a principle?
Charter contains two types of measures: rights and principles. Rights must be respected, and principles must be observed.77 That in itself is not informative on the actual meaning of the distinction between these two categories. Moreover, the Charter does not determine which exact provisions contain rights and which principles, although Charter’s explanations give out some examples of provisions-principles and determine that a provision can contain both the elements of rights and principles.78 Nevertheless, Charter also contains other provision that determines the actual application of the principles. As Art. 52(5) determines:
“The provisions of this Charter which contain principles may be implemented by legislative and executive acts taken by institutions, bodies, offices, and agencies of the Union, and by acts of Member States when they are implementing Union law, in the exercise of their respective powers. They shall be judicially cognizable only in the interpretation of such acts and in the ruling on their legality.”79
There are no definition of a right in the Charter.80 However, there are arguments that the definition and then application of rights is presupposed. Rights contain a subjective entitlement for the right holder with a corresponding obligation resting on the public bodies, private parties and they can be relied upon before a court without the requirement for further steps as to their enactment, whereas principles cannot.81 Principles do not allow for direct claims for positive action by the EU institutions or MS authorities.82 The reasons why the Charter contains these two distinct categories are because in the implementation stage, there was reluctance amongst MS to give social rights the same amount of power as to the civil and political rights, and thus intermediary form for them was chosen.83
77 Charter of Fundamental Rights of the European Union [2012] OJ C 326/02 art 51(1)
78 Explanations relating to the Charter of Fundamental Rights [2007] C 303/02 explanation on art 52. 79 Charter of Fundamental Rights of the European Union [2012] OJ C 326/02 art. 52(5).
80 Tobias Lock, 'Rights And Principles In The EU Charter Of Fundamental Rights' (Papers.ssrn.com, 2020)
<https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3447798> accessed 23 May 2020 3.
81 Manuel Kellerbauer, Marcus Klamert and Jonathan Tomkin , The EU Treaties and the Charter of
Fundamental Rights: a Commentary (Oxford University Press 2019) 2257.
82 Explanations relating to the Charter of Fundamental Rights [2007] C 303/02 explanation on Art. 52. 83 Tobias Lock, 'Rights And Principles In The EU Charter Of Fundamental Rights' (Papers.ssrn.com, 2020)
There were considerations whether Art. 16 contain a principle instead of a right.84 Art. 16 has vague wording, is interrelated with the right to work and property, and is rarely successful in usage, which assumes its inherent weakness. However, some assume that Art. 16 interrelation with rights to property and freedom to pursue occupation does lead to the conclusion that it is a right.85 Moreover, this provision is placed in the II Title "Freedoms" which contains rights.86 Also, this right was and can be relied on by entities that carry on business activities, and CJEU, in its case-law deal with it as a right that is subject to broad interventions but with an exemption on the right to free competition as it is not enforceable as such.87 Therefore it can be considered that Art. 16 contains rights of freedom of contract and business activities, but the element of free competition is deemed to be a principle.
2.2 Framework of the concept of essence of a fundamental right
In order to properly comprehend fundamental rights application by courts and other institutions, it is essential to comprehend the concept of the essence of a fundamental right. Analysis of the notion of the essence should start from the provisions of the Charter. Article 52(1) puts it: “Any limitation on the exercise of the rights and freedoms recognized by this Charter must be provided for by law and respect the essence of those rights and freedoms. Subject to the principle of proportionality, limitations may be made justifiable if they are necessary and genuinely meet objectives of general interest recognized by the Union or the need to protect the rights and freedoms of others.”88
This provision sets that the only justifiable interference with the right given in the Charter must be provided for by law, must respect the essence of the right restricted and be proportionate, which entails that it must serve a legitimate aim, be suitable to achieve that aim, and be the least restrictive measure available, and be proportionate.89 In this thesis, particular interest will be based on the notion of the essence as the analysis of such notion grants the comprehension of the particular right. The official explanations determines, that
84 Peter Oliver, 'What Purpose Does Article 16 Of The Charter Serve?' (Papers.ssrn.com, 2020)
<https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2567786> accessed 23 May 2020 295.
85 Xavier Groussot, Gunnar Thor Petursson and Justin Pierce, 'Weak Right, Strong Court - The Freedom To
Conduct Business And The EU Charter Of Fundamental Rights' [2014] SSRN Electronic Journal 6.
86 “Freedom to Conduct a Business: Exploring the Dimensions of a Fundamental Right” (European Union
Agency for Fundamental Rights August 5, 2015) <https://fra.europa.eu/en/publication/2015/freedom-conduct-business-exploring-dimensions-fundamental-right> accessed May 15, 2020 9.
87 Peter Oliver, 'What Purpose Does Article 16 Of The Charter Serve?' (Papers.ssrn.com, 2020)
<https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2567786> accessed 23 May 2020 41-42.
88 Charter of Fundamental Rights of the European Union [2012] OJ C 326/02 art 52(1).
89 Manuel Kellerbauer, Marcus Klamert and Jonathan Tomkin , The EU Treaties and the Charter of
when analyzing the possible restrictions of the current fundamental rights it must be “<...> restrictions may be imposed on the exercise of fundamental rights, in particular in the context of a common organization of the market, provided that those restrictions, in fact, <…> do not constitute, concerning the aim pursued, disproportionate and unreasonable interference undermining the very substance of those rights”90. There is no difference between the usage of “essence” to “very substance of the right” and both terms are interchangeable.91 The notion of the essence emerged from previous CJEU case-law, one of which is the previously aforementioned Nold92.
The concept of essence can be traced back to particular EU MS constitutional traditions and is mainly used as part of general clauses regulating restrictions of fundamental rights.93 Exemplary jurisdictions that have a distinct notion of the essence of fundamental rights could be Germany, Portugal, and Spain.94 Initially, there was consensus to include the concept of the essence in the Charter, although many were uncertain as to the meaning of this notion. That had led to this notion being changed several times, later even disappearing from the text, but eventually it was inserted.95 The concept of essence is defined as a rights absolute, inalienable core that cannot be impeded, otherwise, right will lose its societal value.96 This concept creates difficulties as there are competing views about it, also it is practically difficult to determine its definition.97 This is evident when considering difficulties in the implementation phase of the Charter when, as mentioned, this norm was changed numerous times, also by considering its perplexing meaning. Notion of essence can be read in connection with the concept of proportionality, which also leads to debates. Doctrine is divided regarding the question of the interrelation of the concept of the essence with the principle of proportionality. The question is whether essence should be recognized as an independent concept which cannot be subject to proportionality balancing, or whether all breaches of fundamental rights that cannot be justified can be viewed as disproportional, that is to say, in terms of proportionality and disproportionality
90 Case C-292/97 Karlsson and Others [2000] ECLI:EU:C:2000:202, para 45.
91 Koen Lenaerts, 'Limits On Limitations: The Essence Of Fundamental Rights In The EU' (Cambridge.org,
2019) <https://www.cambridge.org/core/services/aop-cambridge
core/content/view/3071D1A8FB881031F8E3F6D5799959BD/S2071832219000622a.pdf/limits_on_limitati ons_the_essence_of_fundamental_rights_in_the_eu.pdf> accessed 23 May 2020 780.
92 Case 4-73 Nold, v Commission [1974] ECLI:EU:C:1974:51
93 Maja Brkan, 'The Concept Of Essence Of Fundamental Rights In The EU Legal Order: Peeling The
Onion To Its Core' (2018) 333.
94 ibid 341.
95 ibid, pg. 334-335. 96 ibid 333.
97 Manuel Kellerbauer, Marcus Klamert and Jonathan Tomkin , The EU Treaties and the Charter of
(absolute and relative theories).98 Nonetheless, such proportionality considerations do not apply to absolute rights, that are also protected by ECHR such as Human dignity.99
Absolute theory
In Absolute theory, the essence of a right is a separate concept build upon a premise that the core of a right can under no circumstances be limited, meaning that the overriding reasons that could potentially justify such interference do not exist, so the principle of proportionality does not apply.100 It means that such determination of the essence helps not diminish its value, and to protect it, whereas the interpretation would strip the constitutional provision guaranteeing the protection of the essence of its independent scope of application.101 Anything within the core of right cannot be limited and is protected to the full extent of its scope. Proportionality applies only to what is not included in the core. Such an approach arises from German constitutional tradition.102 This approach splits right to its essential content, which is based on values and principles that the right is meant to advance and the peripheral part of it that can be affected by intervention with the proportionality principle.103 For such determination, A. Barak suggest two tests: objective and subjective. According to the objective test, the question of the right's core is determined from the legal system viewpoint as a whole, while considering the potential victims of the limitation. The right's core is affected in cases where the right loses much of its significance to all or the vast majority of a given community. In a subjective test, the question of the right's core is determined from the viewpoint of the victim – the limited person. According to this approach, the right's core is limited when the right has lost its significance concerning the specific individual.104 And if there would be proportionality principle interventions to the core of the right, this might amend the right and thus diminish it's need in total.105
98 Maja Brkan, 'The Concept Of Essence Of Fundamental Rights In The EU Legal Order: Peeling The
Onion To Its Core' (2018) 335.
99 Manuel Kellerbauer, Marcus Klamert and Jonathan Tomkin , The EU Treaties and the Charter of
Fundamental Rights: a Commentary (Oxford University Press 2019) 2249
100 Maja Brkan, 'The Concept Of Essence Of Fundamental Rights In The EU Legal Order: Peeling The
Onion To Its Core' (2018) 335.
101 ibid 336.
102 Aharon Barak, Proportionality: Constitutional Rights And Their Limitations (Cambridge University
Press 2012) 496.
103 ibid 497. 104 ibid 497.
105 Aharon Barak, Proportionality: Constitutional Rights And Their Limitations (Cambridge University
Relative theory
In Relative theory, the notion of essence has mere a declaratory nature, and all interferences with fundamental rights can be assessed through the principle of proportionality and can hence be potentially justified.106 The relative theory seems to give practical advantages as it does not lead to cryptic and definite notions regarding non-absolute rights. The determination of the essence of a right poses immense practical difficulties and calls into question the absolute theory as it may prove impossible to determine the core of a right without referencing a (putative) balancing of interests.107 When looking at the case-law in which CJEU has referred to the essence, it can be acknowledged that genuine motivations and analysis of the likely essence of a right is usually non-existent, the court tends just apodictically to note the breach of essence. It seems that the degree or extent of the absolute dimension of constitutional rights is limited due to their abstractness. Rights refer to the abstract subject matter, leave a great many things open, and require concretization. This concretization is achieved through proportionality analysis.108 It can be further added that the core of a right could be founded by the application of the proportionality test.109
The absolute theory seems to prevail based on academics’ opinions and CJEU case-law since it refers mostly to the “very substance of a right” and in a few judgments “essence” of it. As was noted earlier, these two definitions used by the court can be used interchangeably. The absolute theory seems to be more in line with the wording of the provision of 52(1) of the Charter.110 Moreover, Art. 52(4) acknowledges the requirement to interpret and implement fundamental rights in line with particular constitutional traditions of MS and as was noted, many opt for the absolute theory of fundamental rights. Concerns about the difficulty in finding essence must be duly noted as the normative conceptualization of it is not an easy task, in particular, due to an outward absence of a coherent methodological tool that helps to define such a concept or outline its application in practice.111 Nonetheless, it seems beneficial for such a question to use the idea that the
106 Maja Brkan, 'The Concept Of Essence Of Fundamental Rights In The EU Legal Order: Peeling The
Onion To Its Core' (2018) 336.
107 Manuel Kellerbauer, Marcus Klamert and Jonathan Tomkin , The EU Treaties and the Charter of
Fundamental Rights: a Commentary (Oxford University Press 2019) 2251.
108 Robert Alexy, 'The Absolute And The Relative Dimension Of Constitutional Rights' (2016) 37 Oxford
Journal of Legal Studies 34.
109 Aharon Barak, Proportionality: Constitutional Rights And Their Limitations (Cambridge University
Press 2012) 498.
110 Manuel Kellerbauer, Marcus Klamert and Jonathan Tomkin , The EU Treaties and the Charter of
Fundamental Rights: a Commentary (Oxford University Press 2019) 2251.
111 Maja Brkan, 'The Concept Of Essence Of Fundamental Rights In The EU Legal Order: Peeling The
right has a moral concern or a virtue that it enacts.112 Such virtue can be seen through the use of the other EU instruments and possible limitations of the non-core part of the right to help determine its pure essence in the EU context.
2.2. The essence of Freedom to Conduct a business
Issues with the essence of freedom to conduct business
There are significant reasons that leads to the conclusion that Art. 16 has no essence. One of them is that freedom to conduct business was never a validated part of the core of civil and political rights. For example, related rights such as the right property, have a long history113 and universal recognition.114 Freedom to conduct business, on the other hand, lacks such history and is more contingent then the right to property.115 However, historically idea of “pure” notion of contractual freedom (hence, of freedom to conduct business) was prevalent in classical private law period, where notions of formal party autonomy, freedom of contract and the absolute character of private property were considered to be crucial elements in the laissez-faire market ideology in the 19th century.116 Example of contractual freedom understood in that way could come from USA Supreme Court case-law which is best resembled in Lochner v. New York.117 There, right to liberty of contract was invoked to dismiss a maximum hours law for bakers, and judiciary used market freedom ethos disregarding that it was a matter of political dispute whether an unregulated market was always the best policy.118 This decision and judicial principles that lead to it initially fell from grace as the assumptions underlying about how individuals relate to one another in a free market and the possibility of class-neutral exercises of state power members started to seem increasingly biased and detached from reality.119 Initially, the pursuit of “pure” notion of freedom of contract (and extending it, the essence of freedom
112 Eduardo Gill-Pedro, 'Freedom to Conduct Business in EU Law: Freedom from Interference or Freedom
from Domination' (2017) 9 Eur J Legal Stud 103, 1.
113 John Locke, Two Treatises Of Government (Cambridge University Press 1988).
114 Council of Europe, Protocol 1 to the European Convention for the Protection of Human Rights and
Fundamental Freedoms, 20 March 1952, ETS 9, available at:
https://www.refworld.org/docid/3ae6b38317.html [accessed 23 May 2020].
115 Marija Bartl and Candida Leone, 'Minimum Harmonisation After Alemo-Herron: The Janus Face Of EU
Fundamental Rights Review' (2015) 11 European Constitutional Law Review 149.
116 Mensch B, 'Freedom Of Contract As Ideology On JSTOR' (Jstor.org, 2020)
<https://www.jstor.org/stable/1228540> accessed 23 April 2020 757.
117 Lochner v. New York, 198 U.S. 45 (1905).
118 Gillman H, Constitution Besieged (Duke University Press 1993) 19. 119 ibid 195.
to conduct business) is constructed with the regulators’ selective coercion. This coercion determines preferable outcomes and the framework in which they arise, therefore “pure” notion of contractual (business) freedom was and is never true as B. Mensch suggest.120 Now, it can be affirmed that the classical liberal freedom of contract notions were dismissed throughout the time, for the favor of more paternalistic/social considerations.121
This right is also highly susceptible to ideological predispositions. Right to conduct business have the capacity for implications related to particular market order or material wealth redistribution. Arrangements that apportion wealth in the community can be greatly altered by the regulator, and it is difficult to measure relevant interests, with no rules of how unavoidable redistribution conflicts should be settled. Principles of “justice” do not suffice in finding solutions to these unavoidable conflicts122 as there is no generally accepted procedure for objectively measuring the justice of a legal rule (the philosopher's stone).123 Moreover, there are many different well-established but mutually incompatible theories: corrective justice, utilitarian, egalitarian, libertarian, positivist, discourse, post-modern, or neo-pragmatist theories, but none of the yield the complete answer to the questions concerning private law that are on the table in Europe today.124 Also, it can be affirmed that the difference of opinions of various interest groups/stakeholders is a regular outcome in every democratic society, especially when it comes to the redistribution of wealth. So-called “Reasonable pluralism” is a permanent condition of modern democracies, and that the only way to overcome this diversity would be through the oppressive use of power.125 Moreover, economic analysis of law don’t help, as it is based on controversial normative assumptions without significant empirical data and is substituted with the normatively biased empirical assumption that most of the time individuals are rationally pursuing the increase of their wealth.126 Thus, with so many sound theories giving solutions and with opinion pluralism in society, there are significant issues in giving essence to freedom to conduct business, which as a right depends on the individual understanding of
120Betty Mensch, 'Freedom Of Contract As Ideology On JSTOR' (Jstor.org, 2020)
<https://www.jstor.org/stable/1228540> accessed 23 April 2020 764.
121 Good example of such EU case law can be Case C-415/11 Aziz [2013] ECLI:EU:C:2013:164.
122 R. L. Hale. Coercion and Distribution in a Supposedly Non-Coercive State. Political Science Quarterly,
Vol. 38, No. 3 (Sep., 1923) pp. 470-494, 493.
123 Martijn Willem Hesselink, CFR & Social Justice (München: Sellier European Law Publishers 2008) 19. 124 ibid 20.
125 Martijn Willem Hesselink, 'The Justice Dimensions Of The Relationship Between Fundamental Rights
And Private Law' [2015] SSRN Electronic Journal 180.
the relation between market and society.127 Only, relative and arbitrary outcomes are possible.
Formulation of the essence of Art. 16 in the case-law of the CJEU
It seems, that there are issues with the establishment of a concrete notion of the essence of Art. 16. M. Bartl and C. Leone criticizes this right for its conceptual emptiness which the lack of definition at the EU level, and the extensive interference allowed by the very case law of the CJEU shows.128 Indeed, CJEU has hardly developed any concrete case-law on the essence of Art. 16. Current case-case-law can even be considered implausible due to the compendious wording of the judgments that deal with the freedom to conduct business and their laconic and limited analysis of this right. The only judgment of CJEU that squarely addressed this was Alemo-Herron, where breach of the essence of freedom to conduct business was found. Still, this judgment have failed to give any significant insights into essence of Art. 16. Moreover, it unjustifiably deviates from the previous case-law about freedom to economic activity, thus, is untenable.129
More so, CJEU’s instrumentalist tendencies seems to arise in Art. 16 application. A. Usai argues that the central aspect of this right in the EU legal order is to foster social, economic, and political integration and to make MS law more market-orientated and protecting the benefits that the free market gives.130 When considering the freedom to conduct a business in this light, obvious referral should be made to fundamental freedoms of the EU. Free movement law could be described as a prohibition on restrictions on contracts with an interstate element however, it does not embody principle of contractual freedom.131 Then again, free movement provisions are perceived as transformative and political, and for their goals, contractual freedom can be employed.132 Elements of such preference can be seen in CJEU case-law. In Sokoll-Seebacher Article 16 was considered to refer to Article 49 TFEU, which guarantees the freedom of establishment and assessed
127 Marija Bartl and Candida Leone, 'Minimum Harmonisation After Alemo-Herron: The Janus Face Of EU
Fundamental Rights Review' (2015) 11 European Constitutional Law Review 149.
128 ibid 150.
129 Manuel Kellerbauer, Marcus Klamert and Jonathan Tomkin, The EU Treaties and the Charter of
Fundamental Rights: a Commentary (Oxford University Press 2019), 2148.
130 Andrea Usai, 'The Freedom To Conduct A Business In The EU, Its Limitations And Its Role In The
European Legal Order: A New Engine For Deeper And Stronger Economic, Social, And Political Integration' (2013) 14 German Law Journal 1882, 1888.
131 Gareth Davies, 'Freedom Of Contract And The Horizontal Effect Of Free Movement Law'
(Papers.ssrn.com, 2020) <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2247257> accessed 30 April 2020, 809.
132 Gareth Davies, 'Freedom Of Contract And The Horizontal Effect Of Free Movement Law'
(Papers.ssrn.com, 2020) <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2247257> accessed 30 April 2020, 827.
with regard to it alone.133 This relation between Art. 16 and freedom of establishment. was also affirmed in PI v Landespolizeidirektion Tirol.134 Moreover, CJEU in PI v Landespolizeidirektion Tirol found that a restriction on the freedom of establishment for the purposes of Article 49 TFEU, also entails a limitation to the freedom to conduct a business,.135 Thus, even though application of fundamental freedoms expands power of freedom of contract the initial instrumental application of it by the CJEU136 proves its relativity.
Another important aspect that show this rights relativity is its application with significant restrictions. Freedom to conduct business is subject to the general limitation clause of Article 52(1) of the Charter, and CJEU highlights social function of this right.137 This allows restrictions on the exercise of this right, when those restrictions correspond to objectives of general interest pursued by the EU and do not constitute a disproportionate and intolerable interference.138 Such approach seems to be in line with MS constitutional traditions in which as C. Mak notes, freedom of contract has been said to find protection as an unwritten fundamental right with intrinsic weight that does not require formal acknowledgement of being “fundamental”, as in contract law cases the judges weigh interests rather than rights. More so, in many jurisdictions this principle is limited in differentiating levels.139 One of the key EU goals is the creation of a sustainable social market, accordingly to the wording of Article 3(3) of TEU. As AG has acknowledged in Deutsches Weintor, the freedom to conduct business must be considered concerning its social function. 140 Therefore, as S. Weatherhill acknowledges, weakness of freedom to conduct business should be appreciated and requires taking into account other rights and principles that might restrict it,141 thus, affirming that Art. 16 should be understood not as a tool that emptily targets legislation aiming to even out an imbalance in the power relationship between parties to a contract, but as a form of “regulated autonomy”.142 Therefore, this right is only applicable with only extensive use of proportionality principle
133 Case C‑367/12, Sokoll-Seebacher [2014], EU:C:2014:68, para 22.
134 Case C-230/18, PI v Landespolizeidirektion Tirol [2019], ECLI:EU:C:2019:383, para 55. 135 Ibid para 65.
136Gareth Davies, 'Freedom Of Contract And The Horizontal Effect Of Free Movement Law'
(Papers.ssrn.com, 2020) <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2247257> accessed 30 April 2020, 826.
137 Manuel Kellerbauer, Marcus Klamert and Jonathan Tomkin , The EU Treaties and the Charter of
Fundamental Rights: a Commentary (Oxford University Press 2019) 2148.
138 Opinion of AG in Case C-544/10 Deutsches Weintor [2012] ECLI:EU:C:2012:189, para 66, 70. 139 Chantal Mak, Fundamental Rights In European Contract Law (Kluwer Law International 2008) 42-43. 140 Case C- 544/ 10 Deutsches Weintor [2012] EU:C:2012:526, para 54.
141 Stephen Weatherill, 'Use And Abuse Of The EU’s Charter Of Fundamental Rights: On The Improper
Veneration Of ‘Freedom Of Contract’.' (2014) 10 European Review of Contract Law 180.
142 Manuel Kellerbauer, Marcus Klamert and Jonathan Tomkin , The EU Treaties and the Charter of
which requires balancing of interests. When considering such broad limitations it can be stated is no means for any essence notion of Art. 16.
2.3 Chapter 2 conclusions.
Even though absolute theory perseverance suggests that there is a core for every fundamental right of the Charter, and there is a body of case-law that refers to the “essence” or "very substance" of Art. 16 it does not possess it. Philosophical relativity of this right, its dependence on the particular political agenda and of developments in CJEU case-law create substantial issues when trying to determine any notion of essence of this right and leads to the conclusion that this right has no essence.
CHAPTER 3 – OTHER CHARTER RIGHTS IMPACT TO
FREEDOM TO CONDUCT BUSINESS
C. Mak argues that fundamental rights, bridge the gap between politics and law. Argumentation based on these rights translates policy choices into law, whereas the fact that such argumentation has its basis in enacted rules makes it legal as well.143 Thus, cases involving fundamental rights show political issues, and do not have a “one right answer” and are likely to be affected by judges' own political opinions.144 Other fundamental rights of the Charter serve as a legitimate interests limiting freedom to conduct business.145 Thus such case-law where other fundamental rights are balanced with freedom to conduct business helps to determine the actual substance of this right and affirm its relativity. View that the scope of the freedom to conduct a business is also determined by its need to be balanced with the other Charter’s rights is also taken by the EU Agency of Fundamental Rights. Examples of such balancing are the rights of workers, freedom of expression, intellectual property rights, consumer protection.146
3.1 Right to property (Art. 17) and right to work (Art. 15)
Art. 16 is very closely related both to Art. 15 (Right to work) and Art. 17 (Right to property) as it can be considered both of the aforementioned rights lex specialis.147 In the early case law of the CJEU these rights were mostly considered together.148 In one example, it was acknowledged that both freedom to pursue an occupation and freedom to conduct business are recognized as a general principles of EU law that coincide.149 Both rights are subject to the similar limitations in relation to their social function with allowed restrictions that correspond to objectives of general interest of the EU not constituting, a disproportionate and intolerable interference, of very substance of those rights.150
143 Chantal Mak, Fundamental Rights In European Contract Law (Kluwer Law International 2008), 294. 144 ibid 294.
145Manuel Kellerbauer, Marcus Klamert and Jonathan Tomkin, The EU Treaties and the Charter of Fundamental Rights: a Commentary (Oxford University Press 2019) 2148
146Freedom to conduct a business: exploring the dimensions of a fundamental right. (n.d.). Human Rights
Documents Online. doi: 10.1163/2210-7975_hrd-9992-2015012 24.
147 ibid 2147.
148 Case 4-73 Nold, v Commission [1974] ECLI:EU:C:1974:51.
149 Opinion of AG in Case C-544/10 Deutsches Weintor [2012] ECLI:EU:C:2012:189 para 64. 150 Peter Oliver, 'What Purpose Does Article 16 Of The Charter Serve?' (Papers.ssrn.com, 2020)
