Law Assignment Analyzing European Law Cases

Question

Task: Write a law assignment addressing the following parts:
A. You are the legal counsel for Inzo BV headquartered in the Netherlands. Inzo is a manufacturer of mobile telephones and supplies its products throughout the European Union. Inzo supplies more than 80% of the mobiles sold in the EU. Inzo offers huge discounts to customers of competitors only if they agree to switch to Inzo’s mobile. Your boss, the CEO, does not know very much about EU Law, whether it is important and how it affects Inzo. Before expanding the product line further, she feels she needs to obtain more information which she can share with the management. She has requested a consultation with you.

You are tasked to:
1. What are the legal impacts as far as consumers in the EU are concerned and how these could potentially impact the business to ensure that the company is well equipped and not vulnerable to any legal actions
2. Advise the CEO, which in your view are the two most important EU institutions and provide three reasons for your choices and also explain how these institutions indirectly or directly affect the operations of the business.
3. Present to the CEO which judicial options there are for competitors to question your business model. Take into consideration for this the national legal process as well as the European one.
B. You are the legal counsel for Wittenborg United head-quartered in the Netherlands. Wittenborg United is a football club that is competing in the Dutch second tier. Four of the clubs players (including the captain) will be out of contract starting from 1st of January. They already started negotiating contract offers with other clubs. They want to be at their new clubs starting from 2 nd of January. The owner of the club doesn’t want to let them go without financial compensation, no matter that their contract is expiring. The owner of the club, and club CEO does not know very much about EU Law, whether it is important and how it affects Wittenborg United.

She has requested a consultation with you.
You are tasked to:

4. What are the two most important of the four freedoms of EU Law for the company in question? In your answer, please provide relevant examples and case law to show why you believe they are important.
5. Can the club keep them or request financial compensation since the club has invested in the players for the last several years.

Answer

Answer 1.
In this question of law assignment, advice needs to be given to the CEO of Inzo Mobiles regarding the legal impact on the consumers in the European Union for the purpose of making sure that the company is in a position to understand the potential impact and does not have to face any legal actions.

As a result of the Consumer Rights Directive, consumers in the EU have the same high standards of protection. It harmonizes and aligns national consumer legislation, for example, on the information customers need to be given when they acquire products, services, or digital content, and on their right to cancel online transactions, wherever they shop in the European Union (EU).

A "consumer" and "merchant" are both covered by the directive. Member States are not allowed to vary from the directive's rules unless they are explicitly allowed to do so in the directive itself. Part of the 'Review of EU Consumer Law' package, Directive (EU) 2019/2161, amends the directive. It focuses on improving enforcement and modernization of Union consumer protection standards. To describe the EU as a single market without internal boundaries, one term is used: the European Single Market (sometimes known as the Internal Market). Increased access to goods and services and stronger consumer safeguards provided by EU consumer legislation are two benefits consumers in EU member states enjoy as a result of the Single Market. The 18th of October saw the publication of Decree-Law 84/2021, which strengthened consumer rights by adopting a legal framework that provides significant modifications to the guarantee of products. Digital content and service contracts will be better protected under this new law, which includes unique safeguards in this area (BancoEspañol de Crédito SA v Camino, 2012).

Consumer rights are prioritized in accordance with a Decree-Law 84/2021 order of precedence, which specifies the criteria and procedures for applying each remedy.When a product's non-conformity is discovered within 30 days after delivery, the customer will have the option to reject the item and request a replacement or repudiate the agreement under the new framework.

The contract's termination obligations have been reinforced and new ones have been added. As a general rule, repairs and replacements should not take more than 30 days. New legislation provides for an extended six-month guarantee period for moveable goods that are repaired by the consumer, up to a maximum of four repairs (RWE AG v Verbraucherzentrale NRW eV, 2013).

Answer 2.
In this part of the question, the CEO has to be given advice regarding the two most significant institutions of the European Union and the reasons why these institutions are considered as being the most important. At the same time, it also needs to be explained how these two institutions are going to affect the operations of the company. In economics and politics, the EUis a unique union. In the wake of World War II, the European Union was born. Countries that trade with one another become increasingly economically interconnected, increasing the likelihood of peaceful coexistence. This was the initial goal. There are 27 European countries that make up the European Union (EU).

The two most important institutions in the European Union are:-
The European Commission: The European Commission is the pillar of the EU. Proposing legislation in accordance with the Treaties, implementing the decisions made by the Council, and ensuring that Member States adhere to EU law are all responsibilities of the European Parliament.

The Member nations nominate the President of the Commission, and he or she assigns the various Commissioner positions. EU countries are represented by one commissioner each, for a total of 28 commissioners in total. Each one is in charge of a particular area of policy. EU interests should be their primary concern rather than their own. Their term is set at five years.

Various Departments (or DGs) report to each Commissioner and are headed by a Director-General. Directorates and Units are subdivided inside DGs.

The European Parliament: Among the EU's many institutions, only the European Parliament is chosen by popular vote. The European Parliament is made up of 751 members representing the 28 member states of the European Union. Since 1979, they've been chosen for a four-year term. Unlike the Council of the EU, the European Parliament is unable to propose new legislation, but it does have legislative power in conjunction with that body. The European Commission, as the EU's executive wing, is answerable to the European Parliament for thebudget of the Union. While there is a lot of information on consumer rights available on the internet, this material is scattered throughout multiple EU and national sources [1], according to research for the European Parliament. The Your Europe portal is a key tool for bringing together many sources of consumer policy information and making it easier for users to find what they're looking for. Regulation (EU) 2018/1724 provides a single digital gateway for information.

Answer 3.
The CEO of the company needs to be briefly explained the judicial options that may be available to the competitors of the company regarding the business model of the company. In this regard the national legal processes as well as the legal options available under the EU need to be considered.
EU competition law infringement investigations are a primary responsibility of the Commission in Brussels. The European Commission may collect evidence using informal or formaldemands for information or on-site searches of premises if an infringement is suspected and the necessary standard of proof is met. For the sake of clarity, Article 101 of the TFEU forbids agreements between independent businesses that are intended to obstruct, restrict, or distort competition, and that may have an impact on trade between the EU's member states. Agreements that are deemed to be anti-competitive may, however, be excused from the prohibitions if they meet the requirements for exemption (FNV Kunsten v Staat der, 2014).

Most serious anti-competitive agreements are those that have an anti-competitive purpose or "object." This includes "cartel"-like arrangements between competitors to fix pricing, share consumers or markets, limit output or investment, or rig bids in response to an invitation to tender. Information-sharing agreements between competitors are also viewed as major violations. If a distributor is forced to sell products at prices set by its supplier, or if the distributor is prohibited from making cross-border sales within the EU (known as a "export ban"), these arrangements are also regarded major infringements of EU law. The penalties for violating such agreements are severe, and they are rarely exempt from them. Keep in mind that in some Member States, cartel activity is also illegal. It is possible for an agreement to infringe even if its stated purpose is not anti-competitive but its effect on the market-place is nonetheless anti-competitive, even if that is not the parties' actual intent. Some examples of these agreements include non-competition clauses in a distribution deal, or cooperative arrangements between competitors about product standardizations or joint production. Competition concerns can typically be addressed by changing the terms of the agreement in cases where certain types of infringements are exempted or if an investigation is begun.'

Answer 4.
In order to deal with this question, the four most important freedoms provided to the company under the EU law need to be discussed. The significance of these freedoms also needs to be explained by giving examples of the relevant case law.

Even if an agreement's declared objective is not anti-competitive, its effect on the market is nonetheless anti-competitive, even if that is not the parties' actual intent, it is possible that an agreement violate. Cooperative agreements between competitors about product standardizations or collaborative production are examples of these partnerships. Competition concerns can be addressed by amending the terms of the agreement in circumstances where particular types of infringements are excused or if an investigation is started.' EU legislation is progressively affecting the scope of freedom of contract as a result of the rising EU participation in regulating private conduct and relationships between private parties. Because of these difficulties with national private law systems, the European model of freedom of contract is shaped first and foremost by an internal market justification, which sparks tensions in national private law systems (Meca-Medina v Commission, 2006). When it comes to legal systems across Europe, freedom of contract isn't always viewed in exactly the same way. However the shift from form to substance in the late 20th century impacted all major European legal systems. When it comes to the conflict between EU laws and Member State private law systems, it is crucial that we comprehend the difference between conventional 'formal' and modern ‘substantive’ freedom of contract.

Beyond primary European legislation, free movement legislation affects contract freedom as well. Today, it is widely accepted that fundamental freedoms can have far-reaching consequences for private-party relationships. There are two ways in which fundamental freedoms can affect private law relationships that are worth mentioning in this context, but doing so would go beyond the scope of this contribution.<

In addition, private actors can influence the enjoyment of fundamental freedoms. Private parties in one Member State may be compelled to seek legal protection when their actions obstruct the free exercise of their rights to mobility in another Member State. 'Direct horizontal effect' and 'positive obligations' have been used by the CJEU to address this type of issue. Thus, private parties are governed by EU law in the same way that Member States are and can directly use these freedoms when they are involved in a dispute with one other. When it comes to contracts, this means they can be voided or damages can be sought if they are in conflict with fundamental freedoms. When it comes to basic freedoms, there has been a gradual expansion of direct horizontal effect by the CJEU. It's possible that in Fra.bo, the horizontal impact was expanded to include products movement as well as people movement and freedom to supply services,44 albeit this hasn't been shown conclusively.

Answer 5:
It needs to be seen in this question if the law allows the club to keep these players or to seek financial compensation as the club has made the investment in these periods for the last many years. For this purpose the principles of the law of contract need to be explained.
Damages are a form of compensation provided to the party who has suffered loss as a result of a violation of competition law. Compensation is the sum of money sought by the claimant in connection with the anticompetitive conduct that harmed her firm. In the event of a violation of a competition law, damages are awarded to make up for the overcharging and lost earnings as well as interest. Occasionally, damages can even pay for non-material harm, such as the loss of a chance to win (JavicoInt AG v YvesSA, 1998).
It is the right of the party who suffers breach of contract to be compensated for any losses or damages resulting from such a breach, which the parties knew at the time of making their agreement would be likely to result from such a breach, or which the parties reasonably anticipated would result from such a breach. Any loss or harm resulting from the breach, however remote or indirect, will not be covered by this type of compensation.

References
FNV KunstenInformatie en Media v Staat der Nederlanden (2014) C-413/1
Javico International and Javico AG v Yves Saint Laurent Parfums SA [1998] ECR I-1983
Meca-Medina and Majcen v Commission [2006] ECR I-6991, C 519/04 P
BancoEspañol de Crédito SA v Camino (2012) Law assignmentCase C-618/10
RWE AG v Verbraucherzentrale NRW eV (2013) C-92/11
Directive (EU) 2019/2161 of November 27, 2019