Jean-Michel Roy is a professor of philosophy and epistemology at the Ecole Normale Supérieure Lyon (ENS-Lyon). He provides academic guidance for the Master Recherche en Sciences Cognitives at the Ecole Normale Supérieur de Paris (ENS-Cachan). (...)
On 18th of September 2020, the European Economic and Social Committee (EESC) published a report about the impact of Rule of Law on Economic Growth.
The EESC defines the Rule of Law as the obligation to "all public powers act within the constraints laid down by law, in accordance with the values of democracy and fundamental rights, and under the control of independent and impartial courts". According to the Committee, the Rule of Law thus defined is favorable and even necessary to a durable economic growth especially because instability of regulations, absence of guarantee of labor and property rights, discrimination or non-application of contracts poorly favors or are detrimental for investments and economic agents' productive activities. The EESC observes by the way that countries which respect the Rule of Law grow more rapidly than those which do not respect it. The Committee also insists on the destructive effect of corruption which destroys public services, public action, public institutions on the long run and confidence, increasing inequalities.
Although EESC approves the actions of European Commission to advance Rule of Law in the Union, it however invites the Commission to continue its efforts by giving a more important place to jurisdictions and by protecting better media freedom in a context of rising autocratic forces in Eastern Europe.
We can learn three lessons from this report:
The common interest of European Union States to guarantee the Rule of Law. Indeed, Rule of Law is not only written in article 2 of TFEU and has been consecrated by CJEU case law, it is also a condition of economic progress.
The fight against corruption must be the object of a redoubled effort. In this perspective, Compliance Law is able to offer appropriate innovating legal tools.
To a definition of Regulation and Compliance Law as a simple process of application of mechanical legal rules, it is necessary to substitute a definition of Regulation and Compliance Law based on the notion of "monumental goals" and people protection. In this perspective, these branches of Law would prove to be powerful tools in the service of the advancement of the rule of law in the European space.
In The Journal of Regulation the summaries’ translation are done by the Editors and not by the authors
ENGLISH
Several German representatives for regional data protection demanded that Facebook complies with EU and German law. Two major complaints concern Facebook’s facial recognition software and its "Like"-button.
FRENCH
Plusieursreprésentants de l’Allemagnepour la protection desdonnées régionales ont exigé queFacebookrespecteles droits allemand et de l’Union Européenne. Les deuxprincipaux reproches concernentle logicielde reconnaissance facialede Facebooket de son"Like"button.
SPANISH
Varios representantes alemanes de la protección de data regional demandaron que Facebook cumpla con la leyes europeas y alemanas. Dos quejas principales conciernen el software de reconocimiento facial de Facebook y su tecla “Like.”
ITALIAN
Diversi rappresentanti tedeschi per la protezione di dati regionali hanno richiesto a Facebook di conformarsi con la legislazione tedesca ed europea. I due reclami principali riguradano il sistema di riconocimento del viso di Facebook e la sua funzione “Mi piace”.
This particular statutory provision shows the proximity between Regulation and Governance, nearby sometimes believed limited to the sphere of banking and finance.
This is designed especially for managers of transport networks which are often subsidiaries of incumbents production and energy sales, economic and legal integration that the law does not prohibit even though it requires independence transport network managers. This independence must be de facto and not de jure, which is a higher requirement than mere legal autonomy of companies, the result of the requirements of "governance", the operator is obliged not to exercise the rights and powers its parent company status yet gives a regular basis so that the first principle of independence of the network manager is preserved.
The relationship between the controlling shareholder and its subsidiary are governed by "codes of conduct" in the mandatory order of the independence of management and decision making of the subsidiary. In a 90-page reportthe regulator sets the constraints so that this goal leads in effect on the parent company, beyond corporate law.
However, the regulator is very severe. It believes that the way in which subsidiaries present themselves to consumers mark such similarity with their parent that these third parties can't identify them as independent of them. According to the regulator, consumers therefore don't identify them as carriers or distributors of energy also offered by competitors of their parent.
Thus, the regulator considers it necessary that these subsidiaries will change their brands, logos and legal designation, eg ERDF ceases to have a name so close to EDF.
The implicit question is the legal effect of such reproaches and suggestions, if the companies aren't listening. The report discusses the prospect to bring the question before their independent body able to impose sanctions. But the case will be difficult because the principle of independence meets the principle of freedom and the terms of the interference between regulatory law and corporate law aren't yet clearly established.
Research on the EU regime of risk regulation for pharmaceuticals and foodstuffs based on an institutionalist approach to supranational risk regulation.
But, and the Compliance Mechanism has often been brought closer to the contractual mechanism, this is only relevant if both parties are willing to do so. This is technically true, for example for the Deferred Prosecution, which requires explicit consent. This is true in a more general sense that the company wants to choose itself how to structure its organization to achieve the goals politically pursued by the State. Conversely, the compliance mechanisms work if the State is willing to admit the economic logic of the global private players and / or, if there are possible breaches, not to pursue its investigations and close the file it has opened, at a price more or less high.
But just say No.
As in contractual matters, the first freedom is negative and depends on the ability to say No.
The State can do it. But the company can do it too.
The company sets out in a warning to the market that it is the object of a requirement on the part of the German Motor Authority (Kraftfahrt-Bundesamt) of an allegation of fraud, by the installation of a software, aimed at misleading instruments for measuring emissions of greenhouse gases on cars using diesel.
It is therefore an environmental compliance mechanism that would have been intentionally countered.
On this allegation, the Regulator both warns the company of what it considers to be a fact, ie compliance fraud, and attaches it to an immediate measure, namely the removal of the circulation of 42,000 vehicles sold or proposed by Daimler with such a device.
And the firm answers : "No".
_____
Which is probably only beginning, since a No ends the dialogue of Ex Ante to project in the Ex Post sanction procedures, calls 6 observations:
1. No doubt Daimler, a German car manufacturing company, has it in mind in this allegation of fraud calculating pollution of its diesel cars what happened to his competitor Volkswagen: namely a multi-billion dollar fine, for lack of compliance in a similar hypothesis (so-called dieselgate). The strategic choice that is then made depends on education through the experience of the company, which benefits as such from a previous case that has had a very significant cost. Thus educated, the question is to measure the risk taken to refuse any cooperation, when the company can anticipate that it will still result in such an amount ....
2. In addition, we find the difficulty of the distinction of Ex Ante and Ex Post. Indeed, saying No will involve for the company a cost of confrontation with the Regulator, then the peripheral jurisdictions or review courts. But in Germany, the Government itself, concerning a bank threatened with compliance proceedings and almost summoned by the US regulator to pay "of its own free will" a transactional fine, felt that this was not normal, because it must be the judges who punish, after a contradictory procedure with due process and after established facts.
3. However, this is only an allegation, of probable assertions, of what legally allows to continue, but which does not allow to condemn. The confusion between the burden of proof, which presupposes the obligation to prove the facts before being able to sanction, and the burden of the allegation, which only supposes to articulate plausibility before being able to prosecute, is very damaging, particularly if we are committed to the principles of Repressive Law, such as the presumption of innocence and the due process. This distinction between these two probationary charges is at the heart of the probatory system in the Compliance Law. Because Compliance Law always looks for more efficiency, tends to go from the first to the second, to give the Regulator more power, since businesses are so powerful ....
4. But the first question then arises: what is the nature no so much of the future measure to be feared, namely a sanction that could be taken later, against Daimler, if the breach is proven, or which will not be applied to the firm if the breach is not established; but what is the nature of the measure immediately taken, namely the return of 42,000 vehicles?
This may seem like an Ex Ante measurement. Indeed, the Compliance assumes non-polluting cars. The Regulator may have indications that these cars are polluting and that the manufacturer has not made the necessary arrangements for them to be less polluting (Compliance) or even organized so that this failure is not detected ( Compliance fraud).
This allegation suggests that there is a risk that thiese cars will polluting. They must immediately be removed from circulation for the quality of the environment. Here and now. The question of sanctions will arise after that, having its procedural apparatus of guarantees for the company that will be pursued. But see the situation on the side of the company: having to withdraw 42,000 vehicles from the market is a great damage and what is often called in Repressive Law a "security measure" taken while the evidence is not yet met could deserve a requalification in sanction. Jurisprudence is both abundant and nuanced on this issue of qualification.
5. So to withdraw these cars, it is for the company to admit that it is guilty, to increase itself the punishment. And if at this game, taken from the "cost-benefit", as much for the company immediately assert to the market that this requirement of Regulation is unfounded in Law, that the alleged facts are not exacts, and that all this the judges will decide. It is sure at all whether these statements by the company are true or false, but before a Tribunal no one thinks they are true prima facie, they are only allegations.
And before a Court, a Regulator appears to have to bear a burden of proof in so far as he has to defend the order he has issued, to prove the breach which he asserts exists, which justifies the exercise he made of his powers. The fact that he exercises his power for the general interest and impartially does not diminish this burden of proof.
6. By saying "No", Daimler wants to recover this classic Law, often set aside by Compliance Law, classic Law based on burden of proof, means of proof, and prohibition of punitive measures - except imminent and future imminente and very serious damages - before 'behavior could be sanctioned following a sanction procedure.
Admittedly, one would be tempted to make an analogy with the current situation of Boeing whose aircraft are grounded by the Regulator in that he considers that they do not meet the conditions of safety, which the aircraft manufacturer denies , Ex Ante measurement that resembles the retraction measure of the market that constitutes the recall request of cars here operated.
But the analogy does not work on two points. Firstly, flight activity is a regulated activity that can only be exercised with the Ex Ante authorization of several Regulators, which is not the case for offering to sell cars or to drive with. This is where Regulatory Law and Compliance Law, which often come together, here stand out.Secundly, the very possibility that planes of which it is not excluded that they are not sure is enough, as a precaution, to prohibit their shift. Here (about the cars and the measure of the pollution by them), it is not the safety of the person that is at stake, and probably not even the overall goal of the environment, but the fraud with respect to the obligation to obey Compliance. Why force the withdrawal of 42,000 vehicles? If not to punish? In an exemplary way, to remind in advance and all that it costs not to obey the Compliance? And there, the company says: "I want a judge".
In its thesis, the author shows the legal side of the opening to competition in the telecommunications, postal services and energy sectors. The analysis is conducted at European level and not at national States level. The author not only highlights the decisive role of the European Commission, which obtained the consent of the national bodies through co-regulation, but the book highlights a distinct European institutional dynamics. This takes the form of European sectoral agencies, which could become in the future regulators. Strengthening European can in the future, according to the author, take the form either of a even stronger involvement of the European Commission, or a consecration of these European sectoral agencies emerging.
This is currently the great battle and no one knows the outcome.
By its jugdment Grande Stevens of 4 March 2014, the European Court of Human Rights held that a state can't punish a person for a criminal penalty and administrative penalty for the same fact, criticized in market matters.
In the movement of the "dialogue of judges," the Conseil d'Etat (French State Council) asked 27 July 2014 the Conseil constitutionnel (French Constitutional Counci) l the question of compliance from this addition to the French Constitution for financial penalty in the use of public funds. By a decision of 24 October 2014, the Constitutional Council considered that this combination was consistent with the Constitution, mainly because the administrative sanction would be a "different kind" as punishment, because each pursues a different objective.
In turn, by a judgment of 17 December 2014, the Cour de cassation (French Judicial Supreme Court) decided to refer to the Constitutional Council two priority issues of constitutionality.
The presentation of the problem by the Cour de Cassation is the following. By its terms, it shows the hostility of the Court of Cassation to the doctrine hitherto developed by the State Council and the Constitutional Council.
First, the interpretation of French law provides penal proceedings against a person for facts on which it has been exonerated by the financial regulator by the Sanctions Committee thereof. This may contradict the constitutional principle of res judicata, as incurred administrative penalties are comparable to penal sanctions.
Second, this possibility could also contradict the constitutional principles of equality, necessity of criminal law and respect of non bis in idem mechanism.
Certainly, cleverly, the Supreme Court asks not accumulated penalties but of double jeopardy, which when one went out to "turn" the other.
Will the Constitutional Council get easier in accordance with European design without recant ? For example, it could estimate that the cumulative sentences is eligible as soon as proportionality is respected, but the extinction of a case before a judge removes the ability to exercise the other?
Or shouLawopen the wound? Finally decide to open rather multiple sides bear claw blows?
The Finance Committee of the Senate works to think in a more consistent way sanctioning powers of financial regulators need. Indeed, sanctions are tools that must be thought at first hand according to the goals that must be provided in the second part in relation to other tools the financial regulator has, in the third part in relation to the purposes and powers other authorities are responsible and have (supervisory authorities, European bodies, foreign and international judges, professional authorities).
It is in this overall vision that this storm that exceeds the glass of water must be replaced.
René Sève is a graduate of the Ecole Normale Supérieure, holds an agrégation in philosophy, and a doctorate degree in Law. He also has advanced postgraduate degrees in Philosophy, Social Psychology, and Law. (...)
