Nullity Under Art. 101(2) TFEU
H.W. Micklitz and C. Sieburgh, Primary EU law and private law concepts, Antwerp, Intersentia, 2017
50 Pages Posted: 21 Jul 2017 Last revised: 8 May 2018
Date Written: July 18, 2017
The paper discusses the characteristics of the Article 101(2) TFEU nullity compared to the concepts of nullity in civil law in Belgium, the Netherlands, France and Germany as well as to the concept of non-bindingness in EU consumer law.
The Article 101(2) TFEU nullity is an autonomous EU private law sanction. It applies to agreements and decisions infringing Article 101(1) TFEU and not satisfying the requirements of Article 101(3) TFEU. In the case of concerted practices, the act of concertation is not a legal act so there is no need to declare it void. The validity of any legal acts concluded between one of the concerting undertakings and one or more third parties is not a matter of EU law, but of national law.
The nullity is automatic; this means that it applies ex lege, no prior court decision being required. The extent to which the Article 101(2) nullity may be invoked by national courts ex officio is disputed in legal scholarship. It seems to follow from the case law of the Court of Justice that such an obligation does exist, except where examination of the issue of breach of Article 101 would oblige them to abandon the passive role assigned to them by going beyond the ambit of the dispute defined by the parties themselves and relying on facts and circumstances other than those on which the party with an interest in the application of those provisions bases his claim. In particular, the duty of national courts to apply Article 101(2) ex officio does not seem to interfere with the rules of Article 2 Regulation 1/2003 regarding the burden of proof.
The absolute character of the nullity means that the null agreement or decision has no effects between the parties or regarding third parties.
Under EU law as opposed to Belgian and French law, the duty to apply Article 101(2) ex officio is rather related to the automatic character of the nullity than to the absolute character of the nullity.
The CJEU has recognized that the Article 101(2) nullity may have retroactive effects. This does not mean however that nullity always implies that the act is deemed never to have existed. The act only becomes null and void as of the moment it infringes Article 101(1) TFEU and does not satisfy the requirements of Article 101(3) TFEU. The question whether an act that at one point was null for this reason can revive later on, when it no longer infringes Article 101(1) TFEU or satisfies the requirements of Article 101(3) TFEU, is disputed.
It is standing case law of the CJEU that the automatic nullity provided for in Article 101(2) TFEU affects a contract in its entirety only if the clauses which are incompatible with Article 101(1) TFEU are not severable from the contract itself. Otherwise, the consequences of the nullity, in respect of all the other parts of the contract, are not a matter for Community law.
The CJEU has not laid down a criterion for severability itself. In case law and legal scholarship the dominant opinion seems to consider that severability is to be determined according to national rules. German scholars however regard the issue of severability as an issue of EU law. Only when the anticompetitive clause is severable from the remainder of the agreement they use §139 to determine whether the nullity is to be extended to the remainder of the contract. National legal systems generally accept the validity of severance clauses, although in Germany they only lead to a reversion of the burden of proof under §139 BGB.
According to the Court of Justice it is up to the national law to determine whether the parties may amend their contract in order to prevent it from being void, for example by replacing the void clause by one that is exempted under a block exemption regulation. The Court of Justice did not make an explicit statement about the power of national courts to amend an anticompetitive agreement. In my opinion, chances are significant that the Court would also leave this up to the national legal systems. Currently, Dutch law prohibits such judicial intervention. In Belgium, judicial conversion has long been prohibited, but recently the Belgian Supreme court accepted it, albeit not in a competition law related case. German case law and legal scholarship is divided about judicial conversion, but accepts the application of concrete modification clauses.
Although there are certain similarities between the nullity under Article 101(2) TFEU and the concept of non-bindingness under the UCTD, the Article 101(2) nullity and the UCTD’s non-bindingness are two distinct concepts which derive their characteristics from their own distinct purposes: the protection of free competition in the case of Article 101(2) and consumer protection in the case of the UCTD.
Keywords: EU competition law, European private law, nullity, non-bindingness, EU consumer law, voidness, Unfair contract terms directive, application ex officio, public policy, public order
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