The EU's Private Law in the Regulated Sectors: Competitive Market Handmaiden or Institutional Platform?

• DOI: http://doi.org/10.1111/eulj.12200
• Author: Yane Svetiev
• Date: 01 September 2016
• Published date: 01 September 2016

The EU’s Private Law in the Regulated

Sectors: Competitive Market Handmaiden or

Institutional Platform?

Yane Svetiev*

Abstract: The article contests the claim thatEU private law is narrowly circumscribed by a

market rationality. Such a claim tracks broader criticism of EU functional legal integration,

although it tends to obscure the underlying transformative pressures onprivate law and

regulation and the role EU law plays in coping with such pressures. To offer a number of

counter-narratives, the article draws on examples from the regulated sectors, including

telecommunications and energy, to reveal their experimentalist features. These suggest that

EU private lawis constructed through a processof error-corrections,which allows for mutual

adjustmentof instruments and hybridisationof EU and local policy goals. The processresults

in more f‌inely grained assemblages of autonomy and regulation to respond to concrete

problems or newly salient policy goals, so that markets are understood as socialinstitutions

that are always works-in-progress rather than convergence points. Thus, EUprivate law

provides a platform for transnational market-building through innovating institutions that

promote variousnormative and policy commitmentsdespite the interdependenciesthat could

undermine them.

I Introduction

The diff‌icultiesfaced in coping with the Eurozonecrisis, as well as disunity in theresponse

to signif‌icant refugee arrivals at its borders, have reinforced doubts about the problem-

solving capacities of the European Union. The growing scepticism regarding the present

state and policies of the EU detected in public debate and the decline in the EU’s global

stature as an architecture for effective and legitimate transnational governance had been

foreshadowed by souring scholarly assessments of the EU’s longer-term effort at

constructing and regulating the internal market. EU law scholarship had once lauded

the contribution of EU legal integration in providing a framework for deliberative disci-

pline over national policy-making not only in the Member States,

1

but also beyond

* Bocconi University and Europea n University Institute. The author acknowledges the support of the ERC

project on European Regulatory Private Law and the helpful comments from Hans-W. Micklitz, Marta

Cantero-Gamito, Guendalina Catti-de Gasperi, Lucila de Almeida, Fernando Gómez, Liam McHugh,

Thomas Wilhelmsson and the ELJ, as we ll as the research assistance of Giacomo Tagiuri, with the usual

disclaimer.The article was written as partof the ERC funded project on EuropeanRegulatory Private Law.

1

E.g. C. Joerges and J. Neyer, ‘From IntergovernmentalBargaining to DeliberativePolitical Processes’,(1997)3

European Law Journal,273–299;cf. C. Joerges,and F. Rödl, ‘InformalPolitics,Formalised Law andthe “Social

Def‌icit”of EuropeanIntegration: Ref‌lections afterthe Judgments of the ECJ in Viking and Laval’, (2009) 15

European Law Journal,1–19 (reinterpreting internalmarket constructionas a Polanyian disembeddingmove).

European LawJournal, Vol. 22, No. 5, September 2016,pp. 659–680.

© 2017 John Wiley& Sons Ltd. 9600 Garsington Road,Oxford, OX4 2DQ, UK

and 350 Main Street,Malden, MA 02148, USA

through the EU’s enlargement, neighbourhood and external policies.

2

Notwithstanding

concerns about the enlargement of EU competencies over time, the creationand

regulation of the internal market had long been viewed as a success, enhancing the EU’s

output legitimacy within and establishing the EU as a credible market regulator without.

3

The sceptical turn in EU law scholarship involves re-evaluating the very premises and

legal foundationsof the internal market project. Suchscepticism appears so profound that

it leads to doubtsabout the possibility of reformthat would set the internal marketproject

on a more sustainable path,

4

without revolutionary changes in the basis, documents and

objectives of EU integration by either drastically scaling up the ambition of the

European project

5

or consciously going in reverse.

6

When it comes to the internal market project—the focus of this article—the re-evalua-

tion of EU efforts at market-construction and regulation involves a set of interrelated

claims. The principal claim is that the EU has been a driver of economisation through

the constructionof markets around competitiveprinciples, a process that ineluctablyleads

to the elimination of national market regulation and social protection, which are both

product and source of democratic solidarity and cohesion. As such, apart from being an

economising force,the EU’s market-building project is also seen as a homogenisingforce

because it favours negative integration, reducing available justif‌ications for national

democratic policy-making and, in turn, evenundermining national identities and cultures

as ref‌lecting particular ‘ways of life’.

7

Such effectsare said to be the result of at least threefeatures now encoded in EU market

construction, which are extremely diff‌icult to reverse through gradualist tinkering and

without radical change in both the mechanisms of EU integration and the sources of its

legitimacy.

8

First, EU legal integration has focusedon the creation of markets built upon

competitive principles to favour cross-border trade and establishment, supported by free

movement and competition law that eliminate local regulatory barriers. Secondly, EU

law’s competitive strictures are no longer seen to accommodate national policy-making

rooted in social or uniquely local policy concerns. Negative integration is so deeply

entrenched in the jurisprudence of the European Court of Justice (CJEU) that it makes

EU law unable to accommodate national regulatory autonomy, or to provide a frame-

work for protection, let alone enhancement, of socio-economic rights at EU level. This

outcome does not necessarily ref‌lect a market bias on the part of the CJEU, but rather

the constraints of judicial decision-making on the basis of precedent and the limits of

judicial remedies in protecting positive versus negative rights.

9

Finally, the CJEU’s

impetus towards negative integration is unlikely to be legislatively reversed. This is

2

S. Lavenex, ‘Concentriccircles of f‌lexible “European”integration:A typology of EU externalgovernancerela-

tions’,(2011)9Comparative European Politics,372–393.

3

A. Bradford,‘The Brussels Effect’, (2012)107 Northwestern UniversityLaw Review,1–68.

4

G. Davies, ‘Democracy and Legitimacyin the Shadow of Purposive Competence’, (2015) 21 European Law

Journal,2–22.

5

A. Somek, ‘Europe:Political, Not Cosmopolitan’, (2014) 20 European Law Journal,142–163.

6

G. Majone, Rethinking theUnion of Europe Post Crisis: Has European IntegrationGone Too Far? (Cambridge

UniversityPress, 2014).

7

G. Davies, ‘Internal Market Adjudicationand the Quality of Life in Europe’,(2014)21Columbia Journal of

European Law,289–328.

8

Davies, above, n. 4.

9

F. Scharpf, ‘The Asymmetry of European Integration, or Why the EU Cannot be a “Social Market Econ-

omy”?’,(2010)8Socio-Economic Review,211–250.

EU Private Law in the Regulated SectorsSeptember 2016

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