El Common Market It is one of the greatest achievements of the community integration project. Founded on the free movement of goods, capital, people and services between the different Member States of the European Union, the Internal Market creates a space of shared prosperity unique in the world.
Its origins can be traced back to 1958. Under Article 8 of the Treaty of the European Economic Community, a transition period with which to prepare the ground. This allowed, around 1970, to make a first assessment of the opportunity of a single European market. Certain drawbacks were confirmed: the death of Bretton Woods, the failed attempt to launch an economic union and the oil crisis did not contribute at all to creating a favorable environment. However, two historical files made it possible to make way and relaunch the project. In 1979, the Cassis of Dijon affair elevated the principle of mutual recognition to the hardest core of the acquis communautaire, and six years later, the Delors White Paper proposed a battery of measures, 279 in total, and a date: December 31, 1992.
It is in these coordinates that Delors' words must be located, when he said that (mutatis mutandis) that the market would not be a “big bang at midnight.” He Single European Act (1986) also contributed to the achievement of this objective, advocating legislative harmonization that also sought to reaffirm deadlines and dates. However, it was the Amsterdam Summit, in 1997, which gave greater impetus to the single market, strengthening the necessary economic dynamism at the European level and establishing a legal recourse against non-compliant Member States. The road was smoothed, and in 2011, the first Single Market Act, which would be followed by a second in 2012 to strengthen mobility conditions, consumer and user protection, digitalization and social cohesion, as well as other aspects related to transport, energy or telecommunications. In short, an entire regulatory framework that was intended to guarantee non-discrimination, progressivity, equivalence in access conditions and mutual recognition between community partners. Or in other words, free movement and free competition.
A. The free movement of goods
By commodity It should be understood as any good valued in money and susceptible to commercial transaction, whether it is original, if it is produced in a Member State through the appropriate transformation process; or free circulation, that is, produced in a third State and affected by customs regulations.
The free movement of goods has four objectives:
- Eliminate customs documentation in intra-community exchanges;
- Redefine the rules for the circulation of products;
- Strengthen external borders; and
- Promote administrative cooperation between Member States.
Thus, the construction of a shared space for the free transit of goods involves two extremes. extra ad, the adoption of a common customs tariff and, ad intra, the prohibition of customs duties and equivalent taxes (physical barriers) and of quantitative restrictions or measures having equivalent effect (technical barriers). This was achieved in two phases: a first that sought the creation of a customs union (July 1, 1968) and, after the publication of the Delors White Paper, another for the effective removal of physical barriers (January 1, 1993). ).
The Customs Union defined competencies community and national. The European Union would be responsible for developing customs policy, coordinating national administrations, consulting the private sector, negotiating with the WTO and setting tariff quotas, while the Member States would limit themselves to applying Community law and sanctioning customs violations.
In this way, a custom tariff policy was achieved, based on a harmonized nomenclature that, in turn, was linked to the figures adopted by the World Customs Organization. However, there were not a few shortcomings that were presented: the approval of discriminatory taxes, State commercial monopolies, the abusive use of exceptions to the free circulation of goods or excessive business competition, even today, represent a burden for the Internal Market; and the existence of anomalies such as customs warehouses, temporary admissions, processing regimes or the regime for processing goods under control also distort, to a certain extent, the intended free transit.
B. The free movement of capital
The configuration of the free circulation of capital also went through two stages. At first, a merely formal liberalization, a process that was promoted by the Treaty of Rome and by a battery of directives that were adopted between 1960 and 1962. The material liberalization would occur later, with the Program for the liberalization of capital movements, the Single European Act and Directives 85/566 and 88/361 of the European Economic Community. Currently, the legal regime for the free transit of capital is included in Chapter IV of Title III (Part 3) of the Treaty of the European Union, on Capital and Payments, apart from the provisions incorporated into the Functioning Treaty.
Once again, there is a demarcation of competencies. The European Union is responsible for prohibiting restrictions on capital and payments, establishing them for third States, approving information, supervision and inspection provisions and, finally, adopting safeguard measures to protect the Economic and Monetary Union. Member States, for their part, may adopt justified measures to prevent infringements of autonomous law, activate public order and establish declaratory procedures for the purposes of administrative or statistical information.
C. Free movement of people
La free movement of people seeks to facilitate workers and entrepreneurs in the development of their economic activity in any Member State. It is developed in articles 45 and following of the Treaty of Functioning, in Regulation (EEC) 1612/1968 and in the 2004 / 38 / CE Directive, and consists of a right to move and reside freely that assists every European citizen (and that extends to their family) to work or carry out a permanent economic activity, as long as sufficient resources are proven.
The EURES Network, the coordination of national Social Security systems at community level or the anti-discrimination measures that have been approved from Brussels are essential to guarantee the free movement of workers. So much so, that around 1997, the Veil Report It advocated a constant updating of the instruments attached to the free movement of workers. Thanks to this, a solid regulatory framework is currently being consolidated that ranges from health care to pensions. However, there are important challenges to cover: working on cooperation, training and social protection is imperative to perfect the scope of this freedom.
D. Free circulation of services
La free movement of servicesLastly, it seeks to facilitate the provision of services between Member States. The main norm would be the Bolkestein Directive, which is transposed into our system through the Umbrella and Bus laws, and basically seeks the liberalization of paid services. Transport, banking and insurance are outside its material scope, however, in what remains, it increases the ratio of recipients, provides quality controls and commits to administrative cooperation by establishing a single window criterion. The regime of responsible declarations and (prior) communications is also the result of this directive.
A different issue is freedom of establishment, generally associated with the latter. Freedom of establishment seeks the effective exercise of a specific economic activity through permanent installations in the different Member States. It is regulated in articles 49 et seq. of the Operating Treaty, including in its personal scope natural and legal persons (for profit), without prejudice to special regimes. This regulation is what allows distinguishing main establishments from secondary ones, while assessing the reasons for activating public order and anti-discrimination guidelines.
Its similarities with the free movement of services, Postgraduate Course , are clear: in both cases we are talking about independent economic activities; Both natural and legal persons are covered; Strict conditions of interpretation are established and rules of equal treatment are established. However, the differences are notable. Moving to another Member State and the desire to permanently reside there are the criteria that ultimately allow one freedom to be distinguished from another.
European competition law
In order to guarantee these freedoms, the Law has been observing the creation of a new branch in its foliage: European Competition Law. The hard core of the discipline is found in articles 3 b) of the Treaty of the European Union and 101 – 109 of the Functioning Treaty, which limit the principle of free competition.
There are exceptions to the rule, of course. The first section of article 101 provides exclusions such as improving production or distribution, promoting technical and economic progress or equitable benefit sharing. But it is really a fairly rigid rule, which is linked to the community acquis and the aims of the European project. In this sense, we must not lose sight of what is established by the Article 3 of the Lisbon Treaty in section 3:
The Union will establish an internal market. It will work towards the sustainable development of Europe based on balanced economic growth and price stability, in a highly competitive social market economy. (...)
To achieve this objective, community regulation is bifurcated, and distinguishes a series of provisions applicable to companies (articles 101 to 106 of the Functioning Treaty) and others applicable to Member States (articles 107 to 109). Let's focus our attention on the first block.
In it, up to three figures are distinguished that distort free competition. A first is the abuse of dominant position, understood as the economic power held by a company and that allows it to bias the market regime. Price setting, control of production processes, the way of distributing supply sources, the imposition of supplementary contractual clauses or the application of unequal conditions for equivalent services are some examples.
Another notable figure would be business concentration. If the European economic model tends towards perfect competition, what business concentrations do is divert the trajectory towards oligopoly, towards a cartel. It is about depositing economic power not in one, but in several companies, which divide the market by quotas, distorting competition once again. Transaction procedures are common.
Finally, we should refer to the anti-competitive contest of wills, which pivots on a vertical agreement with which products are transferred from the factory to the user. There are very specific exceptions:
- Distribution by manufacturer;
- Distribution by subsidiary;
- Agency contract; and
- Commission contract.
This is in regards to the private sector. The provisions applicable to the public sector additionally incorporate two other impact figures.
The most verbose is the public aid. As a general rule, public aid is declared incompatible with the internal market. However, article 107 of the Functioning Treaty includes two exceptions: aid immediate effect of section 2 (social, compensatory, extraordinary); and the of medium effect in section 3, if the European Commission, with a wide margin of appreciation, declares the aid compatible.
In any case, if the aid (read: loan, subsidy, tax relief, etc.) affects trade by “distorting competition and favoring a company”, it must be declared. incompatible with the internal market.
To these we should add the exclusive rights that nationals of a Member State can be recognised. Covered in article 106 of the Operating Treaty, they are subject to competition law to open new market areas.
To fight against these scourges, it is essential cooperation between the European Commission and Member States. Regulation 1/2003 introduced a responsible declaration regime and mechanisms for the exchange of information in order to verify infringements, request provisional measures, make commitments or promptly disapply community regulations, the opportunity for such action having been previously verified.
An equally powerful weapon is compensation, compensation in case of non-compliance. Not only because it makes it possible to compensate for the damage caused, but also because it guarantees the application of Union law and, in theory, discourages other behavior that is harmful to competition. Litigation is high in this field, and the fines that have been imposed are substantial. The following graph serves as an example, which shows and figures the largest sanctions imposed for unfair competition.
The importance of the European Competition Policy.
Graduated in Law and Public Administration and Management from the University of Seville, I found my vocation for International Relations a few years ago, which led me to pursue a postgraduate degree in Diplomacy at the Barcelona Center for International Studies. I like international politics, languages and, above all, writing; I have published on several occasions on legal topics, but now I seek to do so in this field, underlining the philosophical (and even moralizing) function of the discipline. I promise it will be mild, do you follow me?
