The Transformation of Private Law Through Competition

Date01 September 2016
Published date01 September 2016
The Transformation of Private Law Through
Hans-W. Micklitz*
Abstract: Thispaper traces the changing role of competition and its effects on privatelaw in
three differentstages of the Internal Market project:(1) the promotion of competition in the
original Internal Market both via contracts (competitive contract law) and through compe-
tition among legal orders (Common European Sales Law); (2) the suspension of competi-
tion in the face of nancial crisis; and (3) the revitalisation of competition in the Digital
Single Market. Private law broadly understood as regu latory private lawis being
deployed to achievecompeting, if not conicting,policy goals. At this stage, it is not possible,
nor would it be desirable, t o provide a coherent account of these phenomena. Clear- cut
overarching values cannot be identied either. Transformation through competition is just
another take on European experimentalism.
I Introduction: Clarication and Argument
The development of European private law follows the changing policy patterns of the
European Union (EU) itself. The most stable policy frame is the Internal Market project
which has paved the wayfor the development of different forms of European private law.
The completion of the Inter nal Market is driven through competition and regulation
under the overall design of economic efciency. The crisis in 2008/2009 has added a
new layer to the debate. The Banking Union project, achieved largely through
secondary EU law, has reache d dimensions which come close to a revision of the
European Constitution. Instead of competition and efciency, the Banking Union is
driven by nancial stability as the overarching principle. It seems that nancial transac-
tions are being put into an ever tighter jacket, which restricts the private autonomy of
creditors and debtors. Last but not least, the European Commission just launched its
new Digital Single Market Strategy which enhances regulatory competition between the
rules on digital transactions and the rules on analog transactions.
Before I go into a deeper analysis of the relationship between changing policy patterns
and European private law, there is a need to clarify what I mean by transformation,
private law,andcompetition.
The overall theoretical background to the concept of
transformationis taken from the changing role and function of the nation state, for
which the European project could be taken as a blueprint and a laboratory.
* Professor of EconomicLaw at European UniversityInstitute in Florence, Italy.The author acknowledges the
support of theERC project on European Regulatory PrivateLaw ERC Grant Agreementno. [269722].
See G. Comparato,Public policythrough privatelaw, introductionto a debate on Europeanregulatory private
law, in this issue.
H.-W.Micklitz, Review articleon the philosophical foundations of EuropeanUnion law,(2013)32Yearbook
of EuropeanLaw, 538-554.
European LawJournal, Vol. 22, No. 5, September 2016,pp. 627643.
© 2017 John Wiley& Sons Ltd. 9600 Garsington Road,Oxford, OX4 2DQ, UK
and 350 Main Street,Malden, MA 02148, USA
interrelateddrivers behind the transformation of both the stateand private law are: (1) the
internationalisation of the economy together with its nancialisation;
(2) advancements
in digital technologies;
and (3) the borderless society in which therights, duties and even
identities of citizens are no longer bound and shaped by the nation state alone.
Private law is understoodas being an integral part of economiclaw.
In this perspective,
traditional private law (the grand codications and the common law) and regulatory pri-
vate law have to be kept distinct. Regulatory private law in Europe has emerged from
three waves of regulation: the regulatory state in the late 19th to early 20th centuries,
the welfare state in the second half of the 20th century, and the third wave triggered by
the Single EuropeanAct, which submitted private lawto the project of completing the In-
ternal Market.
The Internal Market project paved the way for adopting consumer con-
tract law directives and gave rise to the antidiscrimination principle.
It also promoted
the liberalisation and privatisation of former public services, an area now understood as
the eld of regulatedmarkets, including telecommunication, postal services, energy (elec-
tricity and gas), transport (airlines, railways, ships, and buses) and health carehere re-
ferred to as the silos. Financial services have to be added to the regulated markets,
although due to the nancialisation of the economy, they enjoy a particularstatus, which
heavily impacts the other regulated markets.
The third clarication refers to the use of competitionin relation to private law. Here,
the inuences of ordoliberalism have left their imprint on the EU until today.
(or private law society) can only unfold within a competi-
tive environment that has to be shaped via public law (competition law) and compliance
guaranteed by national competition authorities to tame private power. The EU operates
via regulation, and the EUs regulatory private law creates frictions in both directions,
both toward competition law and traditional private law. It might be used to promote
competition or to restrict competition. In this article, I aim to demonstrate how the
EUs grip on competition and private law varies among three projects: the Internal
Market (where competition is promoted), the Banking Union (where competit ion is
R. J. Shiller,The New Financial Order,Risk inthe 21st Century (Princeton,2003). For a forceful critiquesee J.
Vogl, Das Gespenstdes Kapitals (Diaphanes, 2010/2011).
See the Communicationfrom the Commission to the European Parliament,the Council, the European Eco-
nomic and Social Committee and the Committee of the Regions, A Digital Sing le Market Strategy for
Europe, COM (2015) 192 nal, availableat
H.-W. Micklitz and Y. Svetiev, The transformation of private law, in H.-W. Micklitz, Y. Svetiev and G.
Comparato(eds.), European Regulatory Private LawThe Paradigm Tested,(2014)4EUI Working Paper
Series, 69-97, available at http://cadmus.e 31137/LAW_2014_04_ERPL_
L. Raiser, Funktionswandel des Privatrechts (Mohr Siebeck, 1 971); Funktionswandel der
Privatrechtsinstitutionen :Festschrift f. Ludwig Raiser zu m 70.Geburtstag (Mohr Siebeck, 1974). F. Baur,
H.-D. Assmann, G. Brüggemeier, D. Hart and Ch . Joerges (eds.), Wirtschaftsrecht als Kritik des
Privatrechtrechts, (Äthenäum, 1980).
H.-W. Micklitz‚‘The visible hand of European priva tel aw,(2009)28Cambridge Yearbook of European Law,
R. Münch,European Governmentality:TheLiberal Drift of MultilevelGovernance (Routledge, 2010);N. Reich,
General Principles of EU Civil Law (Intersentia, 2013).
D. J. Gerber,Constitutionalizingthe economy: Germanneo liberals, competitionlaw and the newEurope,
(1994) 42 AmericanJournal of ComparativeLaw,25-84.
Usefulfor non-German readers,St. Grundmann, Regulatorycompetitionin European companylaw some
differentgenius?, in G. Ferrarini,K. Hopt, E. Wymmeersch(eds.), Capital Marketsin the Age of the Euro
Cross-BorderTransactions, ListedCompanies and Regulation (Kluwer, 2002), at 561-595.
The Transformation of Private LawSeptember 2016
© 2017 John Wiley& Sons Ltd.628

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