眾律國際法律事務所

Rules of intestacy in Spain(II)

As mentioned before, Spain’s succession law operates a system of forced heirship, which means that certain percentage of the deceased’s assets in Spain must be transferred to people closely related to the deceased. Only through disinheritance the testator can deprive a forced heir of the property that would otherwise receive under the Spanish law of succession.

According to the Spanish Civil Code, it is possible to disinherit a child, and it is regulated by article 848 and following of the code.

Nevertheless, in order to disinherit, exclude someone to the inheritance, some legal requirements are met and it is mandatory that the testator performs the disinheritance through a will, which must also include a valid legal ground on which it is founded.

Bellow are the grounds to disinherit in the Civil Code:

1. Specific reasons to disinherit descendants:

1. Children and descendants that have refused, without a legitimate reason, to support the parent or ascendant who disinherits him, and

2. Those who have mistreated the deceased in deed or seriously insulted him in speech.

3. The descendant who is sentenced in court for an attempt to take the life of the testator, his spouse, descendants or ascendants.

International Investment Treaty Arbitration

It was once a basic principle of international law that just a State could assert a claim against a different State when breaching its obligations to the first State’s nationals. However, the number of international treaty arbitration cases has grown dramatically in the past years, where foreign investors (individuals or legal entities) can claim against the “host States” where the investments where made. It is a very important factor in economic development, since it facilitates access to world markets, to worldwide distribution channels and other networks and it is a consequence from the phenomenon of globalization.

A country’s foreign investment climate is determined by the legal framework of foreign investment, which include, among others, stability of the legal conditions under an investor operates, the transparency of the system of local regulation and an effective system of dispute settlement. This last factor, an effective system of dispute settlement, is a particularly important one when it comes to legal protection of foreign investments.

In absence of other arrangements, a dispute between a foreign investor and a host State will usually be settled by the host State’s domestic courts. This fact is not an attractive option from the investor’s perspective for the following reasons: a) rightly or wrongly, the courts of the host State are not seen as sufficiently impartial in this kind of situations and b) the regular courts can often lack of the technical expertise required to solve complex international investment disputes.

Therefore, today direct arbitration between the host State and the foreign investor is the preferred option for this kind of disputes, and foreign investments enjoy international legal protection through a large number of investment treaties. There is as yet no single comprehensive treaty for the legal protection. Instead, there is a network of treaties which applies between two countries or among a number or countries.

In this context, Bilateral investment treaties (BITs) are international agreements between countries that provide companies and individuals with special rights and legal protections when they invest in a foreign country (the host State). BIT’s set out the terms and conditions for investment in one country by private companies and individuals of another country and are typically created to promote investment in the host State.

Investment treaties adopt an essentially private mode of adjudication dispute and that can make it a very similar figure to commercial arbitration, since both involve a claim by a private party before a tribunal of private arbitrators. However, notwithstanding the similarities, it would be a mistake to confuse both types of arbitration. Commercial arbitration originates an agreement between private parties to arbitrate disputes between both in a particular manner. The authority derives from the autonomy of every individual to chose and organize their own private affairs. On the other hand, investment arbitration originates in the authority of the state to use adjudication to solve disputes arising from the exercise of public authority. It is constituted by a sovereign act, as opposed to a private act.

Rules of intestacy in Spain

If Spanish law applies, in the event of being no will, when the will is null and void or has subsequently become invalid, legal intestate succession regime applies. For most of Spain, the law can be found in the Spanish Civil Code (1889), but some of the Autonomous Communities (six out of seventeen) have their own private law.

The Spanish Civil Code therefore establishes the general law, and articles 930 and follows establish a list of beneficiaries, identifying three categories of heirs: relatives (descendants, ascendants and collaterals), the surviving spouse and the State, and they are arranged in hierarchy of classes, which is summarized below: 

1. Descending direct line.
2. Ascending direct line.
3. Spouse.
4. Collateral relatives
5. The State.  

Under the principle of proximity of degree, the closest relatives exclude remote relatives (for example, a child excludes a grandchild and a parent excludes a grandparent), with the exception of the right of representation, in virtue of which the descendants of a predeceasing heir occupy that heir’s position. Also, relatives within the same degree inherit equally.

1. The primary claim to inherit lies with the direct descendants, without any distinctions resulting from gender, age or filiation of the deceased, with no limitation of degree, but subject to a usufruct of 1/3 of the estate to the surviving spouse (if any). Children inherit the whole estate in equal shares and in their own right, but grandchildren and other descendants can only inherit by representation, taking the share which would have fallen to a predeceasing parent.
2. In the absence of children and descendants of the deceased, his ascendants shall inherit, subject only to a usufruct of half of the estate in favour of surviving spouse. Father and mother shall inherit in equal shares, and in the event that only one of the parents survives, the surviving one shall inherit the whole estate from his child. In the absence of parents, the ascendants closest in degree will succeed. There is no limit of degree in the ascending line, nor is there representation in this case.
3. When the deceased passes away without ascendants or descendants, the spouse inherits all of the deceased’s property. To be heir as a spouse, it is necessary to have been still married at the time of the death, this way a claim on intestacy is defeated by nullity, divorce and separation, whether judicial or de facto.
4. In the absence of all of the above mentioned, the intestate estate passes to collateral relatives, beginning with siblings, who inherit equally, but also with the children of a predeceasing sibling taking the place of their parent.  
5. Finally, and in absence of descendants, ascendants, spouse or siblings, the deceased’s estate passes to the State, or in the case of Autonomous Communities with civil competence in this matter, to those Communities.

Types of wills in Spain

In accordance to Spanish Civil Code, Spanish wills may be common or special. The special ones are: military will maritime will and the will made in a foreign country. The common ones are: holographic, open and closed will.

Holographic will

A holographic will (testamento ológrafo) must be written entirely in the handwriting of the testator and shall be dated and signed by him or her in every page of the will. It must also be clearly drafted in order to ensure that the testator’s wishes are absolutely clear. No other formalities or witnesses are required.

On the death of the testator, it must be verified as genuine before a judge and the decedent’s handwriting is required to be authenticated by witnesses, who are the decedent’s closest relatives. Once it is verified, the judge will enforce the will’s contents.

Open will

Open will (testamento abierto) is the most common and suitable form of will for most people in Spain and it is a recorder document which contains the testator’s intentions as declared in the presence of a Notary Public.  Before a Notary Public the testator shall express, orally or in writing his last will to him. The Notary may request the presence of two witnesses, who must also be required in case the testator is blind or illiterate.

Forced heirship in Spain 

Firstly, it is important to note that the Spanish Civil Code recognises a quite limited testamentary freedom compared with other countries. Therefore, people closely related to the testator shall always receive a part of the estate, which is called “la legítima”. It is also possible to disinherit a child, but only in the cases explicitly enshrined in the Civil Code (such as denying maintenance, or seriously mistreated or slandered the parent or ancestor, see Articles 853 and 756).

Spain is divided in 17 different Autonomous Communities, and some of them have their local inheritance regulations. However, the following is according to the general Spanish inheritance law contained in the Civil Code.

The beneficiary of the reserved portion is called a forced heir and, according to the Article 807, the deceased’s spouse, descendants and – if there are no descendants – the parents or other ascendants of the deceased are entitled to the reserved portion.  The spouse is not entitled to receive the property of the estate, but the usufruct. This way, the spouse has the exclusive right to use the property until his/her death.

In general terms, when the testator is survived by his children and spouse, the estate shall be divided in three shares:

1. One third of the estate must be distributed in equal parts among the testator’s children.
2. One third must go to the children and grandchildren of the deceased, but he can decide whether to distribute it in equal or non-equal parts, or only give it to some of the heirs, or just to one of them. The testator’s widow or widower has the right to receive at least a usufruct of this portion of the estate (but it is very common in testamentary dispositions to include more than this portion).
3. The last third part can be disposed freely by the testator.

The Lifting of the Corporate Veil Doctrine in Spain

The most frequently used business entities in Spain are the Limited Liability Company (Sociedad de Responsabilidad Limitada) and Join Stock Company (Sociedad Anónima). In both cases, the liability is generally limited to the amount of the capital stock contributed by each of them.

Nevertheless, in exceptional cases, liability shall be sought from the shareholders in order to protect the interest of other third parties. Along with the provisions of the Corporate Enterprises Act, which is the basic legal text that regulates the different legal forms of capital companies envisaged in Spain, there is an important body of case law in the field of Corporate Law. In this context, in those exceptional circumstances where liability may be sought from shareholders to protect third parties, Spanish courts apply the Anglo-Saxon doctrine of “lifting the corporate veil”, as a reaction to misconduct by the shareholders while fraudulently sheltering behind the company’s legal personality.

As is known, under Corporate Law, a corporation is specifically referred to as a legal person, subject of rights, duties and capable of being part of contracts, owning real property and having the ability to sue and be sued. Generally, when forming a company, it offers limited liability to its shareholders, like in the case of the Spanish Limited Liability and Join Stock Company, which means that a shareholder may only lose what he has contributed as shares to the entity, and nothing more, since a registered company is a separate legal entity distinct from its shareholders, and therefore, it shall be treated as any other person with its own responsibility.

The case of Salomon V. Salomon & Co (U.K. 1897) is the foundational case and precedence for this doctrine of corporate personality.

Facts of the case: Mr Aaron Salomon was a British leader merchant who had a boot manufacturing business which he decided to incorporate into a private limited company. By 1892, Mr Salomon decided to incorporate his business as a Limited Liability Company, Salomon & Co. At that time, the legal requirement for incorporation was that at least seven persons had to subscribe as shareholders, so he designated his wife, daughter and four sons as shareholders. Two of the sons became directors and Mr Salomon himself was managing director. Mr Salomon owned 20,001 (of one pound each) shares of the 20,007 (the remaining six where shared individually between his family). Mr Salomon sold his business to the new corporation for almost 39,000 pounds, of which 10,000 was a debt to him. Thus, he was the company’s principal shareholder and creditor simultaneously.

When the company went into liquidation, the liquidator argued that the debentures used by Mr Salomon as security for the debt were invalid on the grounds of fraud, and the Judge accepted this argument, ruling that since Mr Salomon had created this company solely to transfer his business, the company was in reality his agent and he as principal was liable for debts to unsecured creditors.

The Determination of Injury in the WTO Antidumping agreement

Determination of injury consists on determining whether the dumped imports have caused material injury. It shall be based on positive evidence and involve an objective examination of:

1. the volume of the dumped imports: the authorities investigating shall consider whether there has been a significant increase in dumped imports, either when it comes to absolute terms or relative to production or consumption in the importing country.
2. the effect of the dumped imports on prices in the domestic market for like products: the investigating authorities shall consider whether there has been a significant price undercutting by the dumped imports in comparison with the price of the like product in the importing country.
3. the consequent impact of these imports on domestic producers of such products, which shall include an evaluation of all the relevant economic factors and indices, having a bearing on the state of the industry and including actual and potential decline in sales, profits, output, market share, productivity, return on investments, utilization of capacity, factors affecting domestic prices, etc.

Material injury: demonstration

As mentioned above, the determination of material injury must be based on positive evidence and also involve and objective examination of dumped imports. It must be demonstrated that the dumped imports are causing injury within the meaning of the Agreement. The demonstration of a causal relationship shall be based on an examination of all relevant evidence before the authorities, who shall also examine any known factors other than the dumped imports which at the same time are injuring the domestic industry.

With respect to cases where injury is threatened by dumped imports, the application of anti-dumping measures shall be considered and decided with special care.

Definition of domestic industry

The authorities shall identify the domestic industry before addressing the injury issues. In general, in accordance to Article 4:

Antidumping International Agreements: WTO Antidumping agreement.

Although trade liberalization is the main goal of trade policy, and although antidumping rules are generally considered as restrictive to trade, some regulations still grant Governments power to impose anti-dumping measures when conditions are met. According to the Word Trade Organization (WTO), dumping is “a situation of international price discrimination, where the price of a product when sold in the importing country is less than the price of that product in the market of exporting country”. If it injures the domestic producers in the importing country, authorities may impose antidumping duties to offset the effects of the dumpling, since it is an unfair trade practice which keeps competitors out of a particular market.

International antidumping rules are provided by:

1. Article VI of the General Agreement on Tariffs and Trade (GATT 1947).
2. Agreement on Implementation of Article VI of the General Agreement on Tariff and Trade 1994 (Antidumping Agreement under the WTO), which was concluded in 1994 as a result of the Uruguay Round.

The WTO Agreement is the successor to the GATT Agreement, but provisions of Article VI are not replaced but it: Article VI is implemented and interpreted by the WTO Agreement. Since 1947 GATT, the rules of international trading system have authorized countries to establish national antidumping statutes and implement antidumping trade restrictions. Under the agreement, a national government shall undertake an investigation and consider substantial economic evidence before it can impose definitive antidumping measures that restricts imports. The investigating authority is instructed to consider different factors when making the decision, but the most important among them are whether two important legal criteria have been met: that a domestic industry suffers material injury, and that this injury is the result of dumped imports.

Taiwan filed an application for a GATT membership status in January 1990. In 1995, when the WTO was established, the application was transformed into the accession application for the WTO membership. Taiwan became the 144^th member of the WTO in 2002.

Basic principles of the Antidumping agreement

The Agreement ensures that WTO members will not apply antidumping measures arbitrarily. Antidumping measures are unilateral remedies that the government of the importing country may apply after a throughout investigation has determined that the product is, in fact, being dumped, and that sales of the dumped product are causing material injury to a domestic industry that produces a like product.

WTO members can impose antidumping measures only if, after investigation in accordance with the Agreement, a determination meets the following requirements:

Notion of ‘consumer’ in EU Law

The notion of consumer is a key concept delimiting the application of consumer protection laws. Despite being phrased in different ways, the majority of definitions of ‘consumer’ found in the EU legislation include a common core, for example:

Spanish labour law: overview

The Spanish Labour Code, called ‘Worker’s Statute’ (Estatuto de los Trabajadores) is the main rule in the Spanish system, which regulates the main and basic conditions in a labour relationship. However, Collective Bargaining Agreements also contain an important number of provisions which govern employment relations in Spain. Moreover, Spanish employment law also includes international treaties incorporated into the Spanish legal system, EU regulations of direct applicability as a EU Member State, case law from the European Court of Justice and European Court of Human Rights and recommendations and resolutions of the International Organisations of which Spain is a member.

Employers and employees are free to negotiate the terms and conditions of their employment relationship, but the ‘Workers Statute’ regulates the minimum working conditions, which mainly are:

Working hours: Normal working hours in Spain must average 40 hours per week maximum of actual work, calculated on annual basis. The actual number of normal working hours should never exceed of 9 hours per day, unless a Collective Bargaining Agreement establishes a different distribution. Employees under 18 years of age may never work more than 8 hours of actual work per day. This distribution shall always respect the minimum daily and weekly rest periods.

Overtime: Overtime cannot exceed 80 hours per year, unless the Collective Bargaining prescribes something different. It is legally banned for minors to work overtime and the worker must be compensated, either in cash or by paid time off.

Rest periods: The standard weekly uninterrupted rest is one and a half days, although it can vary from one occupation to another one. Also, at least 12 hours must elapse between the end of one working day and the start of the following working day.

Holiday: Once employees have been continuously employed for one year, they are entitled to a minimum of 30 days of paid vacation per year. This can be improved by contract or collective agreement and cannot be replaced by financial compensation. In addition, there are 14 public nonworking days per year, which may differ slightly by region. Subject to notice and subsequent justification to the company, workers may take paid time off for some reasons, such as:

-Marriage: 15 calendar days.

-Birth of child: 2 calendar days.

A new EU General Data Protection Regulation is agreed

A new EU General Data Protection Regulation (GDPR) has been agreed. It takes the form of a Regulation, which will replace the current Directive 95/45/EC and will be directly applicable in all the EU Member States with no need of implementing national legislation. Its provisions will be directly applicable two years after the date of release (April 14^th 2016). The process of agreeing the GDPR has so far been a long a complex one, but finally after several years of drafting and discussions it is now officially EU law.

Some of the most important provisions of the GDPR are the following:

1. Broader scope. In addition to applying to data controllers and processors established in the EU, he GDPR will also apply to those that are established outside the EU whose processing activities relate to the offering of goods or services to individuals in the EU or to the monitoring of EU individuals’ behaviour. 
2. Revised definition of personal data. Under the GDPR, information is treated as personal data whenever individuals can be identified by online identifiers, location data or identification numbers. This way, location data, IP addresses and online identifiers will constitute personal data in most cases as this can be used to identify individuals, specially when combined with unique identifiers.
3. Accountability obligations. Companies will have to implement appropriate privacy policies and robust security measures, perform data protection impact assessments in certain cases and appoint a data protection officer under some specific conditions. On the other hand, the GDPR places onerous accountability obligations on data controllers to demonstrate compliance, such as (i) maintain certain documentation, (ii) conduct a data protection impact assessment for more risky processing or (iii) implement data protection by design and by default.
4. New obligations. GDPR imposes additional obligations on data processors, controllers and joint controllers. On the other hand, direct obligations will be imposed on data processors for the security of personal data.
5. Data breach notification. Data controllers will be required to notify any data breach to the supervisory authority within 72h of discovery, unless they can show the breach is unlikely to pose any risk to individuals.
6. One stop shop. For companies active in various EU countries, the GDPR will allow them to have a central point of enforcement through the one-stop mechanism. This way, the supervisory authority of the main establishment will act as the lead supervisory authority, supervising all the processing activities throughout the EU.
7. Higher standard for consent. Under GDPR, consent must be unambiguous and communicated by a statement or clear affirmative action. Consent must be freely given, specific and informed or showed either by a statement or a clear affirmative which signifies agreement to the processing. It can be withdrawn and it must be explicit for sensitive data. The new Regulation also provides specific protection in the context of children’s personal data by strengthening the validity conditions of children’s consent.
8. Sanctions. Supervisory authorities will be given significantly more powers to enforce compliance with the GDPR. They will have the power to impose fines for some infringements up to 4% of annual worldwide turnover.
9. International transfers. The GDPR maintains the general prohibition of data transfers to countries outside the EU that do not provide an adequate level of data protection, and stricter conditions will apply for obtaining an “adequate” status.
10. Rights of individuals. The GDPR will expand the rights of individuals. For example, individuals can require the erasure of their personal data without undue delay by the data controller in certain situations (the right to be forgotten). On the other hand, it will strengthen the protection of individuals against possible negative effects of profiling by providing them with the right not be subject to automated decision making, which produces legal effects concerning the individual or significantly affects the individual.

References:

Position of the Council at first reading

http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CONSIL:ST_5419_2016_INIT&from=EN

EU Council press release:

http://www.consilium.europa.eu/en/press/press-releases/2016/04/08-data-protection-reform-first-reading/

Application for customs action at the EU border

In the last few decades, counterfeiting and piracy have become widespread, affecting almost every country in the world and a wide range of industries. Regulation 608/2013 concerning customs enforcement of intellectual property rights and repealing Council Regulation provides prevention to the import and export of counterfeit goods, allowing customs authorities to suspend the introduction of goods into de EU if they are suspected of infringing and IP right.  In addition, the national trademark acts of the EU states set out stipulations regarding border seizures.

The Regulation provides two types of custom actions in case of suspected counterfeit:

1. ex-officio actions which only occur in exceptional cases (3% of EU-wide customs actions)
2. actions based on earlier filed application for action.

In both cases the competent customs authorities will detain the goods and notify the IP holder or his representative, and confirm the counterfeit. If the infringement is confirmed, the Customs will not release the goods.

The application may be submitted only with respect to intellectual property rights based on Union law and producing effects throughout the Union, which means that only Community IP rights owners can file a Union application. The application shall be submitted with the competent customs office in a Member State requesting action pursuant to the Regulation by the customs authorities of that State, and will be taken in the state where the application is submitted and also in other states referred to in the application.

The application must contain information on the IP rights to be enforced, as well as listing the technical and administrative contact persons. Also, it must contain specific and technical data on the authentic goods. The applicant must also assume liability for all costs resulting from the detention (destruction, storage) and also in case the alleged infringement proves to be unfounded.

Once the application is successfully filed and granted, the custom authorities will proceed to the seizure of any suspected infringing goods in the relevant territory and will notify the right holder accordingly, who must confirm the likeliness of infringement. Afterwards, the custom authorities have the power to destroy the infringing goods at the expense of the right holder, provided that the owner or the declarant of the seized goods does not oppose to the destruction within ten working days from the notification of the seizure.

On the other hand, in case the counterparty objects to the destruction, the right holder must negotiate a settlement agreement and enforce its IP rights according to the applicable national law.

The EU Merger Control: Jurisdictional Matters

Combination of forces resulting from a concentration may reduce competition, and that is why the European Union Merger Regulation provides a mechanism for the control of concentrations between undertakings. EU merger control is governed by Regulation (EC) 139/2004 on the control of concentrations between undertakings (Merger Regulation). This regulation complements Articles 101 and 102 of the Treaty on Functioning of the European Union and has subject to limited exceptions, exclusive jurisdiction within the EU over “concentrations” that have a so-called “Community dimension”.

In Europe there are two levels of merger control: (1) EU merger control for transactions with a “Community dimension” and (2) national merger control for those transactions which do not meet the EC Merger Regulation criteria, but qualify for investigation under the national law of individual Member States.

For the application of the EC Merger Regulation, as noted above, it applies to “concentrations” with a “Community dimension”:

Definition of concentration. In Accordance to Article 3 of the EU Merger Regulation concentration is deemed to arise where a change of control on a lasting basis results from:

• The merger of two or more previously independent undertakings or parts of undertakings;
• The acquisition, by one or more undertakings, whether by purchase of securities or assets, by contract or by any other means, of control of the whole parts of one or more other undertakings; or
• The creation or extension of a joint venture performing on a lasting basis all the functions of an autonomous economic entity.

In this context, the decisive factor is the criterion of gaining control of one or more undertakings. Article 3 (2) defines control as the ability to exercise “decisive influence” over an undertaking, in particular, trough the ownership or right to use all or part of its assets or the existence of contracts conferring decisive influence on the composition, voting or other commercial decisions of the undertaking.

Community Dimension. A concentration has a Community dimension if the following criteria are met (Article 1):

1. the combined aggregate worldwide turnover of all the undertakings concerned is more then EUR 5000 million; and
2. the aggregate Community-wide turnover of each of at least two of the undertakings concerned is more then EUR 250 million.

Where these thresholds are not met, the secondary thresholds apply and are satisfied if:

1. the combined aggregate worldwide turnover of all the undertakings concerned is more than EUR 2500 million;
2. in each of at least three Member States, the combined aggregate turnover of all the undertakings concerned is more than EUR 100 million;
3. in each of at least three Member States included for the purpose of point (b), the aggregate turnover of each of at least two of the undertakings concerned is more than EUR 25 million; and
4. the aggregate Community-wide turnover of each of at least two of the undertakings concerned is more than EUR 100 million.

The Community dimension test does not require the parties to the concentration to have any links with the EU other than the requisite turnover. Therefore, it is not necessary that the agreement shall be signed or performed in the territory of the EU, but only that the concentration has a substantial effect in the Community.

The EU Merger Control: Jurisdictional Matters

Combination of forces resulting from a concentration may reduce competition, and that is why the European Union Merger Regulation provides a mechanism for the control of concentrations between undertakings. EU merger control is governed by Regulation (EC) 139/2004 on the control of concentrations between undertakings (Merger Regulation). This regulation complements Articles 101 and 102 of the Treaty on Functioning of the European Union and has subject to limited exceptions, exclusive jurisdiction within the EU over “concentrations” that have a so-called “Community dimension”.

In Europe there are two levels of merger control: (1) EU merger control for transactions with a “Community dimension” and (2) national merger control for those transactions which do not meet the EC Merger Regulation criteria, but qualify for investigation under the national law of individual Member States.

For the application of the EC Merger Regulation, as noted above, it applies to “concentrations” with a “Community dimension”:

Definition of concentration. In Accordance to Article 3 of the EU Merger Regulation concentration is deemed to arise where a change of control on a lasting basis results from:

• The merger of two or more previously independent undertakings or parts of undertakings;
• The acquisition, by one or more undertakings, whether by purchase of securities or assets, by contract or by any other means, of control of the whole parts of one or more other undertakings; or
• The creation or extension of a joint venture performing on a lasting basis all the functions of an autonomous economic entity.

In this context, the decisive factor is the criterion of gaining control of one or more undertakings. Article 3 (2) defines control as the ability to exercise “decisive influence” over an undertaking, in particular, trough the ownership or right to use all or part of its assets or the existence of contracts conferring decisive influence on the composition, voting or other commercial decisions of the undertaking.

Community Dimension. A concentration has a Community dimension if the following criteria are met (Article 1):

1. the combined aggregate worldwide turnover of all the undertakings concerned is more then EUR 5000 million; and
2. the aggregate Community-wide turnover of each of at least two of the undertakings concerned is more then EUR 250 million.

Where these thresholds are not met, the secondary thresholds apply and are satisfied if:

1. the combined aggregate worldwide turnover of all the undertakings concerned is more than EUR 2500 million;
2. in each of at least three Member States, the combined aggregate turnover of all the undertakings concerned is more than EUR 100 million;
3. in each of at least three Member States included for the purpose of point (b), the aggregate turnover of each of at least two of the undertakings concerned is more than EUR 25 million; and
4. the aggregate Community-wide turnover of each of at least two of the undertakings concerned is more than EUR 100 million.

The Community dimension test does not require the parties to the concentration to have any links with the EU other than the requisite turnover. Therefore, it is not necessary that the agreement shall be signed or performed in the territory of the EU, but only that the concentration has a substantial effect in the Community.

Anti-cartel enforcement in the EU law

Collusive practices allow undertakings to exert market power they would not otherwise have, artificially restricting competition and increasing prices. On this context, a cartel is considered as a group of similar, independent companies which join together to fix prices, limit production or share markets or customers between them. Instead of competing between each other, cartels members rely on their agreements, which reduces their incentives to provide new and better products and services at competitive prices. This does not only affect other business, but also consumers.

Accordingly, secret cartels can be seen as a direct assault on the principles of competition law and they are known as one of the most harmful of the different kind of anticompetitive conducts. The main EU law provision on cartels is represented by article 101 TFEU, which deals with restrictive agreements and practices of a group of undertakings, so-called cartels. Undertakings which are not located in the EU, but which have an effect on Europe are also affected by EU anticompetitive law.

The European Commission is the main enforcer of the law against cartels in the EU. The Commission’s powers are established by Regulation 1/2003, which gives the Commission extensive investigatory powers.

Fines

The principal sanction available to the Commission is the imposition of fines on the companies engaging in cartel activities. The Commission has no powers to impose criminal sanctions on individuals involved or administrative sanctions to on firm’s managers, in contrast to national laws. In this context, the Commission has a wide discretion in setting the level of fines on companies, within the limits of Regulation 1/2003, which establishes that fines may not exceed 10 per cent of the firm’s turnover in the financial year preceding the decision. Nevertheless, there has been a clear trend towards increasing fines for hard-core cartels in recent years. The largest fine imposed on a single company is over 893 million euros.

Leniency

Abuse of Dominance in the EU Competition law (Article 102 TFEU)

As mentioned in previous articles, competition law exists to ensure competition in a free market and is believed to bring efficiency, low prices and innovation. Article 102 of the Treaty on Functioning of the European Union (TFEU), together with Article 101 TFEU, promotes this competitiveness and are meant to prevent anti-competitive behaviour. In particular, a company can restrict competition if it is very strong on a given market. A dominant position is not itself anticompetitive, but if the company exploits this position to eliminate competition its behaviour can be considered abusive. The Article states:

Any abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it shall be prohibited as incompatible with the internal market in so far as it may affect trade between Member States.

Therefore, for Article 102 to be applicable four requirements must be met: (1) one or more undertakings must be in a dominant position, (2) such position must be held within the common market or substantial part of it. (3) There must be abuse, and (4) this must have an effect on inter-State trade.

Definition of ‘Dominant Position’

In one of the most important ‘abuse of dominance’ cases, Hoffman-La Roche, the European Court of Justice gave the definition of dominant position: “[The dominant position] relates to a position of economic strength enjoyed by an undertaking, which enables it to prevent effective competition being maintained on the relevant market by affording it the power to behave to an appreciable extent independently of its competitors, its customers and ultimately of the consumers”. The process employed by the Commission to assess dominance of a undertaking follows a two-stage procedure:

1. Evaluation of the market on which the undertaking is operating (‘the Relevant Market’). Competition takes place on markets, so that’s why it is necessary to determine the behaviour and status of the undertaking in the ‘relevant market’. In order to define it, the Commission has to define:

• Product/Service Market. Refers to the material scope of the market, the main products or services delimiting the relevant market.
• Geographic Market. A geographic delimitation is also necessary to define the relevant market (which may be EU-wide, national or even local).
• Temporal Market. It is less important, but it can also influence the relevant market and market positions.

2. The undertakings position on this particular market. Once the relevant market has been determined, the Commission must decide at what point the undertaking has sufficient power over this market to be considered as “dominant”. Generally, market share is the principal element to assess dominance, since only companies which have won a large part of one market can be deemed to be in a dominant position. Usually, a company is unlikely to be dominant if it has a market share of less than 40%.  However, market share is not determinative and other factor indicating dominance can also be taken into account, such as the existence of any barriers to entry and the extent of any countervailing buyer power.

Definition of ‘Abusive Conduct’

As mentioned above, holding a dominant position is not itself unlawful. However, where a company has a dominant position, it will be in breach of the EU competition if it “abuses” of that position. Article 102 includes a non-exhaustive list of examples of abusive conduct:

• directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;
• limiting production, markets or technical development to the prejudice of consumers;
• applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;
• making the conclusion of contracts subject to acceptance by other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.

2016年04月19日
印度K&K(Khurana & Khurana, Advocates & IP Attorneys)專利法律事務所 Tarun Khurana,Patent attorney至本所參訪！！

與本所討論印度、台灣及國際專利制度與趨勢！

Arbitration and Mediation

Arbitration and mediation are two forms of alternative dispute resolution (ADR), where “alternative” means alternative to court litigation. In this context, ADR is commonly defined as any process or procedure for resolving a dispute other than adjudication by a judge in a statutory court. They are not the only kind of dispute resolution processes, but they are the most common, specially is arbitration, which is more and more used in many jurisdictions around the world, specially is in an international context. Mediation, on the other hand, is not so practised.

Both arbitration and mediation have the same goal in mind, which is a fair resolution of the issues in question, and they are both private dispute resolution procedures based on party agreement, but they differ in a number of important aspects. As a general idea, under mediation, the parties communicate with a neutral third party who makes a non-binding recommendation, meanwhile under arbitration, both parties commit to conform to the third party recommendation.

Voluntary processes

Most arbitrations take place pursuant to an agreement between the parties. However, it is not voluntary in the sense that once the parties have validly agreed to submit a dispute to arbitration, the process from that point becomes compulsory. Thereafter the determination of all issues, procedural or otherwise, is in the hands of the arbitrator.

On the other hand, mediation is a voluntary process which depends on the continuing cooperation of both parties, who can unilaterally withdraw from the procedure at anytime. Some jurisdictions order compulsory mediation, but no result can be imposed on them without their mutual consent. In this fundamental respect, mediation differs from arbitration.

Limited liability for free Wi-Fi access

In case C-484/14 Tobias McFadden v Sony Music Entertainment Germany GmbH the Court of the European Union (CJEU) was called on by the Regional Court in Munich to clarify whether a professional operating a public and free of charge Wi-Fi network, in the course of business, may be held liable for copyright infringements committed by users of that free network. Last March 16, 2016 Advocate General Szpunar delivered his opinion in this case.

The facts. It follows a case concerning Tobias McFadden, who operates a business where he offers a free Wi-Fi network accessible to the public. In 2010, a musical work (the rights were owned by Sony Music) was unlawfully offered for downloading via that Internet connection. Munich’s Regional Court took the view that, although Tobias McFadden was not the actual party responsible for infringing the copyright, he was indirectly liable, since his Wi-Fi network had not been made secure. The Court had some doubts as to whether the E-Commerce Directive precludes such indirect liability and referred some questions to the CJEU.

The Directive. Article 12 of the Directive 2003/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (‘Directive on electronic commerce’) exempts the intermediate provider from civil liability for the transmission of the information if (a) he does not initiate the transfer, (b) he does not select the receiver of the information and (c) he does not select or modify the information contained in the transmission.

Munich Regional Court believes that these three conditions are met, and therefore the liability should be limited, but is also uncertain as to whether Mr Mc Fadden is considered as a provider for the purpose of the Directive.

The key issue in this case is whether the Directive provides “mere conduit” protections to providers of open wi-fi hotspots, or whether they should be required password protection in order to enjoy the protection from liability for the copyright infringing actions of their customers.

Natural disaster concept from an International Law point of view

It is known that natural disasters have inflicted heavy cost in human and material resources throughout history. Taiwan’s location makes it a very vulnerable area frequently suffering from natural disasters, and as climate change increases, also the likelihood of them will become more intense and unpredictable. When this happens, international cooperation is essential to meet the humanitarian needs of the affected communities. Therefore, in the past few years, International Law has devoted more attention to prevention, response and recovery from this kind of issues.

Nowadays a disaster is open to a range of different interpretations, that is why we have to analyse, from a legal point of view, whenare wereally facing a disaster and when will the international organizations and other non-Governmental organizations provide assistance to those who have been affected by natural disasters.

International Law Commission

“Disaster means a calamitous event or series of events resulting in widespread loss of life, great human suffering and distress, or large-scale material or environmental damage, thereby seriously disrupting the functioning of society.”