research@hec - Issue #17 - (Page VII)

mendation for Member States to introduce it into their national lists. The Court “took into consideration” this EU recommendation in its decision. It’s a part of European norms: European Courts insist on the distinction between “rules of law (règles de droit) and rules of practice (règles de conduite).” Their decisions cannot be directly based on soft law. “For instance, the Court always stresses the fact that the guidelines do not constitute the legal basis that determines the amount of fines,” says Oana Stefan. Furthermore, soft law cannot depart from hard law or previous case law: “The Courts treat soft law as an integral part […] of the body of European norms ...” Soft law is quoted to reinforce an argument, in footnotes, as part of the description of the legal framework invoked in a case. The creation of legal hybrids : Using the hybridity model recently developed in EU legal studies, Oana Stefan shows that “Courts have created ex post hybridity, the merging of soft and hard law that was not consciously planned by regulators, but evolved as a response to existing needs during the application of norms to concrete cases.” The Courts can decide to apply soft law, combining it with principles such as human rights, legal certainty, legitimate expectations, etc. … This combination of soft and constitutional principles produces legal hybrids. WHAT DOES THIS LEGAL PRACTICE CHANGE? • On the individual level: for European courts, the mere existence of notices creates legitimate expectations: for instance, companies “are entitled to assume that they are allowed to conclude agreements” satisfying the de minimis notice criteria. • On the Commission level: It has to respect its own notices and guidelines. The courts have even annulled decisions from the Commission because PRACTICAL APPLICATIONS Oana Stefan sees several advantages in soft law: “it can be rapidly adopted and changed, it promotes flexibility and accommodates variation in regulatory preferences.” • In-house counsels and lawyers can use soft law instruments both as a sword and a shield. Companies can, for example, rely on soft law in order to claim reductions in fines or even exoneration from liability. • A warning: The use of soft law is common at the European level, but not necessarily at the national level. There are reasons to believe that not all national courts will rely on EU soft law when judging on competition cases. These discrepancies might mean that companies placed in similar situations could face significantly different decisions depending on the country whose courts they face. they failed to comply with soft law. To depart from notices, it has to justify its action “in a satisfactory way.” • On national courts: With their new role in competition law, “it would be difficult for national courts to ignore the soft law instruments in which the European Commission explains and further develops certain provisions of hard law,” notes Oana Stefan. • On hard law: soft law can be used to grant direct effect to a hard law provision. One notice, for example, enables individuals to bring competition cases in front of their national courts and invoke EU hard law. Moreover, soft law can be used as a criterion to review an act of hard law: In BASF, Stefan explains, a decision of the Commission was considered to be ”vitiated of illegality” because of the misapplication of the Leniency Notice. I law z METHODOLOGY Oana Stefan based her study of the instruments of European soft law on 570 documents from the EU’s online databases of official documents: judgments and orders of the Luxembourg courts, as well as opinions of Advocates General. Keywords and summary sections were used to select documents relating to competition or state aid. Cases dealing with structural funds were not included, unless they related specifically to state aid. This research covers some taxation cases with a substantial state-aid dimension. The research covers a timeframe ranging from October 1953 to July 2010. Based on an interview with Oana Andreea Stefan and her paper “European Competition Soft Law in European Courts: A Matter of Hard Principles?”, European Law Journal, November 2008. october-november 2010 • research@hec VII

Table of Contents for the Digital Edition of research@hec - Issue #17

Cover & Contents
How to Find Good Crisis Leaders before Trouble Strikes
Impact of Social Movements on Financial Institutions
European Law: The Impact of Soft Law on the Courts
The Economic Impact of Academic Entrepreneurship

research@hec - Issue #17