Tag Archives: schrems

The Plaumann test survived decades of challenges, including a decision of the Court of First Instance (Case T-177/01 Jégo-Quéré, see particularly paragraph 51) that tried to reform it but that was quashed in appeal by the Court of Justice. The Court of First Instance argued that denying legal standing to the applicants in this case meant they would have no right to an effective remedy, due to their particular circumstance. The Court of Justice, in appeal, did not give merit to this argument.

Some nuances have been added to the Plaumann test for different areas of law, but the essence remained the same. For instance, the Court detailed additional conditions for private parties that could be individually concerned by provisions of regulations imposing anti-dumping duties (see Cases T-112/14 to T-116/14, T-119/14 Molinos Rio de la Palata from 15 September 2016, paras 43 to 45). These conditions, however, apply subsequently to the Plaumann test (see para 40 from the Molinos Rio de la Plata cases).

Therefore, it will be extremely difficult, if not impossible, for the NGOs that initiated the actions for annulment of the Commission’s adequacy decision to meet the Plaumann test. If they will manage to do it, this will come with a change of settled case-law.

However, there is another line of argumentation that the NGOs could use and that would have more chances of success. They could use the third limb of Article 263(4), the one introduced in 2009 by the Treaty of Lisbon that allows challenges by private parties of regulatory acts which are of direct concern to them and which do not entail implementing measures.

This way, the applicants will not have to prove they are individually concerned by the act, so the Plaumann test will not be applicable. However, they will enter a new, almost uncharted field: regulatory acts which do not entail implementing measures.

They will have to prove that:

• the adequacy decision is a regulatory act;
• the adequacy decision is of direct concern to them;
• the adequacy decision does not entail any implementing measures.

1. Is the adequacy decision a regulatory act?

According to case-law following the entry into force of the Lisbon Treaty and the changes that were brought to Article 263(4), “the meaning of ‘regulatory act’ for the purposes of the fourth paragraph of Article 263 TFEU must be understood as covering all acts of general application apart from legislative acts” (Case T‑18/10 Inuit Tapiriit Kanatami and Others v Parliament and Council, 6 September 2011, para 56; Case T-262/10 Microban 25 October 2011, para 21).

In Microban, the Court found that the Commission Decision at issue was adopted “in the exercise of implementing powers and not in the exercise of legislative powers” (para 22), which confirmed its nature of a “regulatory act”. Further, the Court also took into account that “the contested decision is of general application in that it applies to objectively determined situations and it produces legal effects with respect to categories of persons envisaged in general and in the abstract” (para 23).

As the adequacy decision was adopted by the Commission in the exercise of implementing powers (following Directive 95/46), and as it is of general application, producing legal effects to categories of persons envisaged in general and in the abstract, it will most probably be classified as a “regulatory act” for the purposes of Article 263(4) TFEU.

However, there are two more conditions to be met cumulatively before the actions are declared admissible.

2. Are the applicants directly concerned by the act?

The Court uses several criteria to establish there is a “direct concern”.

The classic test the Court usually uses is the following: “firstly, the contested Community measure must directly affect the legal situation of the individual and, secondly, it must leave no discretion to its addressees, who are entrusted with the task of implementing it, such implementation being purely automatic and resulting from Community rules without the application of other intermediate rules” (Case C‑386/96 P Dreyfus v Commission, para 43, Joined Cases C‑445/07 P and C‑455/07 P Commission v Ente per le Ville vesuviane and Ente per le Ville vesuviane v Commission, para 45; Microban, para 27).

For instance, in Microban this test was met because the contested decision prohibited the marketing of materials containing triclosan. The applicants bought triclosan and used it to manufacture a product, which was further sold on for use in the manufacture of plastic materials. Therefore, the Court considered “the contested decision directly affects their legal position” (para 28).

On another hand, in a very recent case, the Court found that “no provision of the contested act is directly applicable to the applicants, in the sense that it would confer rights or impose obligations on them. Consequently, the contested act does not affect their legal position, and therefore the condition of direct concern, as referred to in the second and third situation referred to in the fourth paragraph of Article 263 TFEU, is not met” (Case T-600/15 Pesticide Action Network Europe, 28 September 2016, para 62).

This case concerned an action brought by an environmental NGO and different associations of beekepeers that challenged an Implementing Regulation approving the use of a substance called sulfoxaflor as pesticide. The Court dismissed all the arguments brought forward by the applicants to prove they were directly concerned by this act: starting with a claim that it touched the right of property and the right to conduct business of the beekeepers – due to the harmful effect of sulfoxaflor on bees, to the claim that the applicants participated in the decision making process for the Implementing Regulation, to the claim that refusing their legal standing breached their right to environmental protection under Article 37 of the Charter and their right to effective judicial remedy under Article 47 of the Charter (see paras 46 to 50).

Thus, it will not be easy to argue that the adequacy decision is of direct concern to the applicants. For instance, it could be argued that the decision primarily impacts the legal situation of controllers (and not that of data subjects) who are allowed to transfer personal data pursuant to this decision.

However, it will neither be impossible to argue the direct concern of data subjects, represented by the applicant NGOs. A first argument, perhaps of a general nature, would be that the purpose of the Decision is to establish that companies adhering to the Privacy Shield ensure an adequate level of protection of personal data with the level of protection afforded in the EU, having the consequence that transfers of personal data to those companies will automatically take place, without any further safeguard and without any additional scrutiny or authorisation. Therefore, it affects the legal situation of individuals in the EU whose data are transferred, as they will not be able to oppose the transfer before it takes place.

An objective argument could be the recognition of the rights of the data subject in Annex II of the Decision (the Privacy Shield Principles) – admitting therefore that the Decision, through its Annex, grants rights to individuals represented by the applicants.

Another argument could also be the finding of the Court in Schrems that legislation allowing mass-surveillance and access to content of communications touches the essence of the fundamental right to private life as enshrined in Article 7 of the Charter (see Schrems C-362/14, paras 93 and 94). Therefore, a regulatory act that has as direct consequence transfers of personal data to a legal system that allows such a fundamental breach of Article 7 of the Charter as directly affecting the legal situation of data subjects represented by the applicant NGOs. But for the Court to take this argument into account would mean to acknowledge the existence of mass-surveillance and access to content of communications in the US, at the time when the decision was adopted.

3. Does the adequacy decision entail implementing measures?

This will be the most difficult criterion to be met. The case-law of the Court regarding what can constitute implementing measures is very strict (from the point of view of granting legal standing), in the sense that the Court applies the concept of “implementing measures” for the purposes of Article 263(4) TFEU lato sensu.

For instance, in a landmark judgment in this area, T & L Sugars (case C-456/13, 28 April 2015), concerning an implementing regulation, “the measures at the Member States’ level consisted of receiving applications from economic operators, checking their admissibility, submitting them to the Commission and then issuing licences on the basis of the allocation coefficients fixed by the Commission” (as summarised here). So, even if AG Cruz Villalón “concluded that such non-substantive, or ‘ancillary’, measures […] by the national authorities […] in the exercise of a circumscribed power” or a “purely administrative activity” are not implementing measures (Opinion in Case C-456/13 P, T & L Sugars, para. 31 and 34)” (2), the Court found that “the decisions of the national authorities granting such certificates, which apply the coefficients fixed by Implementing Regulation No 393/2011 to the operators concerned, and the decisions refusing such certificates in full or in part therefore constitute implementing measures” (para 40).

Article 5 of the Privacy Shield adequacy decision states that “Member States shall take all the measures necessary to comply with this Decision”. Therefore, it allows further administrative measures by the Member States. But what are those measures in practice? Could the Court consider they are ancillary enough so as not to amount to “implementing measures”?

On another hand, it is also clear that before the adequacy decision takes effect, a US company must go through an administrative procedure which could amount to a certification procedure similar to the one in the T&L Sugars case. But in this case, will it matter that the alleged “implementing measures” must be taken by a third country and not by a Member State?

Conclusion