Independent Discretion or Democratic Legitimisation? The Relations between National Regulatory Authorities and National Parliaments under EU Regulatory Framework for Network‐Bound Sectors

• Date: 01 November 2012
• Published date: 01 November 2012
• DOI: http://doi.org/10.1111/eulj.12004
• Author: Marek Szydło

Independent Discretion or Democratic

Legitimisation? The Relations between

National Regulatory Authorities

and National Parliaments under

EU Regulatory Framework for

Network-Bound Sectors

Marek Szydło*

Abstract: The European legislator, being supported in that regard by the Court of Justice,

confers upon national regulatory authorities (NRAs) the exercise of the most important

tasks concerned with the regulation of the network-bound sectors, while at the same time

guarantees NRAs a far-reaching independence in exercising of their discretionary powers

and shielding NRAs against other public authorities, including national parliaments.

This, in turn, raises many doubts from the perspective of some essential constitutional

principles of the Member States, such as, among others, ‘the domain of the law,’ which

reserves the regulation of issues sensitive to the citizens as an exclusive parliament’s

prerogative. It is submitted in this article that national parliaments should play a much

more active role in regulating the network-bound sectors. The main point is to strengthen

the protection of fundamental rights of regulated parties and create the real democratic

legitimisation of NRAs, while not undermining those regulatory objectives that are

already accorded at the EU level.

I Introduction

Wide discretionary powers and a far-reaching independence in their exercising are the

core elements characterising the status of national regulatory authorities (NRAs)

under the EU regulatory framework for network-bound sectors (electronic commu-

nications, energy, postal, railway). The said discretionary powers, which in legal terms

take the form of administrative discretion in a strict sense, interpretation of general

clauses and margin of appreciation with regard to subsumption guarantee NRAs the

essential scope of leeway during the process of interpreting and applying legal rules

that are in force in regulated sectors. By using these discretionary powers, NRAs

influence the legal position of undertakings in the sectors concerned in order to realise

* Professor of public economic law, University of Wrocław, Poland.

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European Law Journal, Vol. 18, No. 6, November 2012, pp. 793–820.

© 2012 Blackwell Publishing Ltd., 9600 Garsington Road, Oxford, OX4 2DQ, UK

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a number of economic and social policy goals. Since the goals in question, especially

when they are simultaneously taken into account by NRAs in a given factual

situation, very often turn out to be in conflict with one another,1the NRAs, while

interpreting and applying the relevant legal rules, must weigh these goals on a case-

by-case basis and seek that way the most acceptable solutions. This, in turn, addi-

tionally reinforces the NRAs’ discretionary powers that become much more extensive

than is the case with most of the typical administrative authorities.

At the same time, the EU legislator has opted to shield NRAs against any (external)

influence of other national authorities, in particular by requiring the independence of

NRAs (that must be ensured by Member States), and—which is one of the manifes-

tations of the said independence—by prohibiting NRAs to seek or take instructions

from any other body in relation to the exercise of the tasks assigned to them.2Such

a shielding of NRAs is rather an unusual legal phenomenon among the ordinary

administrative authorities, since the latter are typically placed within the settled struc-

ture of administrative hierarchy, being subject to instructions and commands coming

from higher levels of that hierarchy. What is more, taking into account the content of

EU Directives, there are good reasons to believe that the EU legislator has intended

to ensure the independence of NRAs also from the legislative powers of national

parliaments. Namely, while enacting legal rules, the latter should not interfere with

NRAs’ discretionary powers and must not influence the exercise of tasks assigned to

the authorities concerned. Such a conclusion was lastly confirmed by the Court of

Justice of the EU (CJEU) in Commission v. Germany.3The Court disqualified there

such statutory provisions enacted by the German parliament which restricted the

exercise of discretionary powers by the NRA in the electronic communications

(Bundesnetzagentur), and which reflected on some policy choices made by the national

parliament, recognised by the latter as binding for Bundesnetzagentur. According to

the Court, the German rules in question were non-compliant with the EU regulatory

framework for electronic communications that confers the task of regulating markets

on NRAs, and not on the national legislature.

However, the fact of depriving national parliaments of the possibility to exert

legislative influence on NRAs’ regulatory activities raises many doubts from the

perspective of some essential constitutional principles and other constitutional

arrangements of the Member States concerned. Such principles include, among others,

1eg the infrastructure-based competition on wholesale markets versus competition of service providers

on downstream markets; short-term versus long-term security of supply; addressing the needs of specific

social groups versus non-discriminatory treatment of all users.

2Art 3 of Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 on a

common regulatory framework for electronic communications networks and services (Framework Direc-

tive), OJ L 108, 24.4.2002, 33, amended by Directive 2009/140/EC of the European Parliament and of the

Council of 25 November 2009 amending Directives 2002/21/EC on a common regulatory framework for

electronic communications networks and services, 2002/19/EC on access to, and interconnection of,

electronic communications networks and associated facilities, and 2002/20/EC on the authorisation

of electronic communications networks and services, OJ L 337, 18.12.2009, 37; Art 35 of Directive

2009/72/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for

the internal market in electricity and repealing Directive 2003/54/EC, OJ L 211, 14.8.2009, 55; Art 39 of

Directive 2009/73/EC of the European Parliament and of the Council of 13 July 2009 concerning

common rules for the internal market in natural gas and repealing Directive 2003/55/EC, OJ L 211,

14.8.2009, 94.

3Case C-424/07, Commission v Germany [2009] ECR I-11431.

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