Limits of Law in the Multilevel System: Explaining the European Commission's Toleration of Noncompliance Concerning Pharmaceutical Parallel Trade*

• Published date: 01 July 2022
• Author: Yaning Zhang
• Date: 01 July 2022
• DOI: http://doi.org/10.1111/jcms.13295

Limits of Law in the Multilevel System: Explaining the

European Commission’s Toleration of Noncompliance

Concerning Pharmaceutical Parallel Trade*

YANING ZHANG

Berlin Graduate School for Global and Transregional Studies, Freie Universität Berlin, Berlin

Abstract

This article aims to explain the under-researched phenomenon of why the European Commission

(the Commission), as ‘guardian of the Treaties’, tolerates member states’noncompliance with the

EU law. While major accounts of selective enforcement depict the Commission as a self-serving

political entrepreneur, this paper assumes that it is a trustee guardian of EU treaties that aims to

safeguard the stability and integrity of the EU legal order. For this purpose, the Commission is

theorized to strategically utilize toleration of noncompliance to evade jurisdiction overlap and

norm collision. Relying on the detailed tracing of the Commission’s enforcement leniency towards

Slovakia regarding pharmaceutical parallel trade, this illustrative case study indicates that tolera-

tion of noncompliance is a necessary evil for the Commission and other stakeholders to navigate

through a legal and political impasse. And it simultaneously preserves the delicate integrity of

the existing legal order of EU free movement law.

Keywords: European Commission; toleration of noncompliance; jurisdiction overlap; norm collision;

pharmaceutical parallel trade

Introduction

Noncompliance is commonly believed to be a legal disease that compromises the effec-

tiveness of governance and erodes commitment to collective rules. Naturally, it needs

to be eradicated by rigorous surveillance and stringent enforcement. But when it comes

to the EU, it is no news that the Commission pursues legal infractions selectively and stra-

tegically (Conant, 2002; Hartlapp and Falkner, 2009). This article aims to explain why the

Commission on some occasions tolerates member states’noncompliance.

From a strictly legal perspective, infringements of EU law can only be verified through

adjudications by the Court of Justice of the EU (the Court). But given the fact that the ma-

jority of infringement cases are settled at the pre-litigation stage, toleration of noncompli-

ance would remain an inscrutable phenomenon by the application of this strict legal

standard. In addition, the aim of this article is not to assess the actual legality of contested

national measures. It is of little relevance whether or not the Court actually perceives

*

The author would like to thank Markus Jachtenfuchs, Mark Dawson, Miriam Hartlapp, Tanja Börzel, Christian

Freudlsperger, Wiebke Rabe and the participants of the panel ‘Politics in the European Commission’at the 2020 ECPR

annual conference and the 2021 ETH Zürich-Hertie School workshop for their valuable comments on the earlier versions

of this paper. This research is funded by China Scholarship Council (CSC 201707650004) and is part of the Cluster of

Excellence ’Contestations of the Liberal Script’(EXC 2055, Project-ID: 390715649), funded by German Research

Foundation (DFG). The author is also grateful for the constructive comments from anonymous referees. All errors

remain the author’s alone.

JCMS 2022 Volume 60. Number 4. pp. 1001–1018 DOI: 10.1111/jcms.13295

© 2021 The Authors. JCMS: Journal of Common Market Studies published by University Association for Contemporary European Studies and John Wile y& Sons

Ltd.

This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium,

provided the original work is properly cited.

contested national measures as breaches of EU law. Rather, this article aims to investigate

the enforcement strategy of the Commission. Thus, toleration of noncompliance is de-

fined as instances where the Commission consciously turns a blind eye to contested na-

tional measures, even though said measures are considered illegal by the Commission

and remain unrectified.

1

The core theoretical argument of this research is that toleration of noncompliance

could provide the Commission with the flexibility needed to evade the functional limits

of law within the EU multilevel system. Specifically, by assuming that the Commission’s

enforcement decisions aim to safeguard EU legal order, the author contends that toleration

of noncompliance could help to evade jurisdiction overlap and norm collision and could

thus maintain the stability and integrity of EU law.

This research does not intend to provide a covering-law theory that claims a general

applicability to all instances of toleration of noncompliance. Rather, the main objec-

tives are to open up new research avenues on tolerated noncompliance, and to demon-

strate the theoretical feasibility of the proposed argument. To pursue these objectives,

this research focuses on a typical policy issue, pharmaceutical parallel export

(Toshkov, 2016, p. 294). This business model perfectly embodies the jurisdiction over-

lap and norm collision that are inherent in the European pharmaceutical regulatory sys-

tem. Furthermore, among the three cases of tolerated noncompliance concerning this

specific policy issue, I further zoom in on the infringement proceeding against

Slovakia due to its representativeness and due to the availability of comprehensive em-

pirical evidence.

The enquiry into the infringement proceeding against Slovakia relies upon the

within-case process tracing, which examines the congruence between the theorized en-

forcement rationale of the Commission and the actual enforcement motivations that

played out in the Slovak case. Empirical materials are collected from three sources: (1)

internal infringement documents of the Commission, to which the author has been

granted access; (2) eyewitness accounts by six Commission officials from four depart-

ments, who were directly involved in the related enforcement process; (3) supplementary

policy papers from EU institutions, and governmental data from Slovakia.

The findings of the case study make both conceptual and theoretical contributions. By

showing the role of enforcement leniency in evading functional limits of the multilevel

legal system, this case study indicates that noncompliance is not per se a malady of the

rule of law. On the contrary, toleration of noncompliance under certain conditions might

be a necessary evil for the stability and integrity of a multilevel legal order. Moreover, the

seemingly contradictory combination of the centralized legal monitoring system and un-

fettered enforcement discretion carried out by the Commission is also evocative of the no-

tion of institutional equilibrium, argued by comparative federalists.

I. Toleration of Noncompliance: A Phenomenon Stays under the Academic Radar

As an important aspect of compliance research, toleration of noncompliance surprisingly

receives scant academic attention. Among the small number of works on the subject, most

1

In contrast, amicable settlements of the infringement cases usually entail some degree of behavioural changes from the

member state in question, for example, a partial rectification of noncompliance (Andersen, 2012, p. 18).

Yaning Zhang1002

© 2021 The Authors. JCMS: Journal of Common Market Studies published by University Association for Contemporary European Studies and John Wile y& Sons

Ltd.