1.1 The EU without a European Society

The European Union was set up in 1957 and established a common market, based on four freedoms and competition law. It laid down the structure of what has been termed, particularly by German lawyers, the European Economic Constitution.²⁶ What is missing in the Treaty is private law or, to put it in the language of ordoliberalism, the private law society. One needs to dig deep into the history of the EU to find the explanation. The Schuman Declaration of May 1950 is only 132 lines long.²⁷ Schuman refers to civilization but not to democracy.²⁸ The ‘peace through trade’ formula embraces a common European history, sparked by centuries’ long interconnectivity of states and commerce. Schuman implicitly presupposes the existence of a national private law, which is organizing trade. P. Pescatore²⁹ has analysed with masterly precision the differences between international law and the European law of integration. Without the existence and without deep reliance on the viability of nation states, their constitutions and their private law order, trade cannot be organized. The Schuman Declaration, and indeed the Treaty of Rome, presupposed the functionality of nation states, of their democratic constitutional legal order and of their private law orders. All that was needed in such a model were rules on jurisdiction and enforcement. Art. 220 of the Treaty of Rome paved the way, albeit in a very cautious language. The Brussels Convention was adopted in 1968 and turned into a success story, not least because Member States were prepared to grant the ecj final authority to interpret the Convention. However, the Treaty of Rome did not forestall the need for common rules on the applicable law. That is why the 1980 Rome Convention on the Law Applicable to Contractual Obligations had to be concluded outside the Treaty, in a separate international treaty. It never reached a similar importance, not least because the Member States were not ready to confer on the ecj a similar prominent role and because businesses are relying much more on arbitration than on courts.

Whilst the Member States relied on political conventions to build a legal framework for a European international private law, in order to define the competent court and to identify the applicable law, the ecj entered the legal arena with a big bang in the early 1960s already. The ecj³⁰ turned an international treaty into a ‘genuine legal order’, characterized by supremacy of EU law over national law and by the direct effect of EU law to the benefit of individual parties.³¹ Private parties, the holders of the rights and their recipients, are legally entitled to strike down national laws and regulations, which would hinder the four freedoms. This was a formidable invitation to turn private law conflicts into preliminary references to be decided by the ecj. The Court built a common market without quantitative restrictions and without barriers to trade. This was to the benefit of business, which enjoyed more space in the shaping of their private relations, and to that of citizens who benefitted from the opening up of the national markets to an ever more increasing choice. Not surprisingly, scholars read the four freedoms as approval of private autonomy as the underlying parameter of the EU legal order – a decisive step in legitimizing the emergence of a law-made European Society.³² The huge importance of the Court’s case law on market freedoms and competition law in the building of a ‘private law society’ in ordoliberal language has attracted amazingly little scholarly attention in research on European private law.³³ Pieter Van Cleynenbreugel and Xavier Miny³⁴ emphasize the ‘market access’ rhetoric, which works mostly to the benefit of business, but indirectly also to the benefit of consumers through the increased choice.

The social dimension of private law, ‘The Social’ to use the language of Duncan Kennedy,³⁵ did not really play a role at that early stage, at least not at the EU level. The European Economic Community had been established on the basis of a functional separation of powers between the eec and the Member States. The eec was granted enumerated powers only as far as they were needed to establish the Common Market to overcome economic nationalism. The making and the development of social welfare systems and of social justice was left to the Member States.³⁶ Re-distributive policies were to remain subject to national politics, with the exception of the Common Agricultural Policy (cap).³⁷ This does not mean that the European Union did not attempt to get involved into social matters and to give the emerging European private law, built around ‘market access’ and the two conventions on jurisdiction and the applicable law, a social twist. Legislative measures initiated by the European Commission could only pass with the unanimous agreement of the Member States in the Council, according to Art. 100 ec (now Art. 115 tfeu). The European Parliament had no decision-making power until 1986. Despite these tight restrictions, the European Regional Development Fund was set up in 1973 and started operating in 1975. In 1974, the European Commission developed a social policy programme³⁸ and, in 1975, a consumer policy programme.³⁹ Both were unanimously approved by the Council of Ministers and published in the EU Official Journal. Already at this early stage, a momentous course was set.

The EU is not looking at the European Society as a whole, but is concentrating on two social groups: workers and consumers. Society is split into different addressees with different interests and different rights and obligations. Quite a number of directives were adopted in both fields: in labour and non-discrimination law, Directive 75/117 on equal pay⁴⁰ and Directive 76/207 on equal access to employment,⁴¹ in consumer law Directive 85/374 on product liability, Directive 85/577 on doorstep selling⁴² and Directive 87/102 on consumer credit.⁴³ Those directives have been only the starting point for a much stronger move into social regulation after the adoption of the Single European Act in 1986.

1.2 The Short Flare-up of an Emerging European Society with a Social Face

The famous White Paper on the Completion of the Internal Market⁴⁴ developed under the presidency of Jacques Delors provided the ground for the adoption of the Single European Act. The Act has been a wonderful combination of French intellectualism and British pragmatism. The overall message addressed to the Member States was that the realization of the Internal Market could not be achieved without the establishment of minimum standards to protect workers and consumers. Looking back through today’s glasses, one may wonder how it was possible that Member States agreed to such a far-reaching paradigm change in the mid 1980s, which reshuffled the distribution of economic and social competences between the EU and Member States that underpinned the Treaty of Rome.

By the late 1970s, the European Union lacked any clear vision on its future. The 1985 Internal Market Programme broke the impasse. The European integration process seemed to provide evidence for Polanyi’s theory of the social embeddedness of the capitalist market.⁴⁵ The most obvious changes in the Single European Act were enlarged competences and the introduction of majority voting. Art. 100 a) Single European Act (Art. 114 tfeu) turned into the key instrument that legitimated and justified European secondary legislative measures both in labour and consumer law. Indeed, majority voting helped to unblock long-standing legislative projects that could not find unanimous agreement. The social forces in the Member States placed much hope on Art. 118 a) (Art. 153 tfeu) and, in particular, on Art. 118 b) (Art. 152 tfeu) that was meant to promote dialogue between social partners. The social drive reached its peak with the introduction of the Social Charter in 1989 and, in 2000, through the EU Charter on Fundamental Rights,⁴⁶ which integrated consumer policy though to a lesser extent than social rights. By the end of the millennium, ‘The Social’ had gained standing in the EU constitution. However, competence rules were either bound to the completion of the Internal Market or were wholly lacking.

The Single European Act of 1986 has been understood as a turn away from ordoliberalism. In the understanding of Mestmäcker, the sea has substituted the rule-based Treaty of Rome, built on the four freedoms and competition law, through a body of rules full of vague formulas and full of delegated competences that open up pathways for the politicization of the economic constitution.⁴⁷ Joerges⁴⁸ agrees with Mestmäcker that the sea has fundamentally changed the economic constitution and that the ordoliberal concept is fading away. His angle is very different, though, as he criticizes both the lack of a ‘social market economy’ (soziale Marktwirtschaft) and, more importantly, the missing connection between the economic constitution in the ordoliberal meaning and economic democracy,⁴⁹ to which I will come back in the second part of the contribution. Both do not deal explicitly with the private law dimension, with the move towards social regulation and the rise of labour and consumer law. The conflict over the economic design of the Internal Market exploded when the EU published in 1991 its draft directive on unfair terms in consumer contracts, which allowed for the judicial control of the price and the main performance. Politically influential German scholarship⁵⁰ used strong language to attack the proposal. Price control and the control of the main performance would set an end to the market economy. It is worth noting that the Common Market Law Review, certainly one of the most important voices in the European legal scholarship, opened the gateway for a discussion of a draft proposal, which is a rather unconventional practice. Not least due to the forceful critique, the EU amended its proposal and left Member States the choice of whether or not they want to allow judicial control of prices and the main performance.

Nevertheless, there remains until today a strong imbalance in the degree to which labour and consumer law were europeanized. Rödl⁵¹ concludes that, with regard to labour law and policy, the higher the social relevance, the lesser developed are the EU competences. The law on employment contracts and collective labour law remained, by and large, in the hands of the Member States, perhaps with the remarkable exception of non-discrimination law.⁵² This might be related to the difference between product and process regulation. The EU legal order is built on facilitating exchange of goods and services, but does not at least in principle touch upon the conditions under which the products and services are manufactured. The differences in the production costs form an integral part of the economies of scale which Member States may use as a competitive advantage. The picture looks different with regard to consumer law. The competence rules sufficed to ‘rescue’ consumer law, which had lost ground together with the decline of the welfare state.

In the 1990s the EU adopted a dense net of consumer private law rules, which could be read as the nucleus of a European consumer code, based on general rules, on rules on particular contracts and on liability and last but not least on enforcement.⁵³ The price paid was the shift from consumer protection law to consumer law ‘without protection’, or, to use Deakin and Wilkinson’s terminology, the shift towards the ‘law of the consumer market’.⁵⁴ In such a perspective, the consumer is, first and foremost, the responsible and circumspect observer of the market, who takes informed and responsible decisions, which enhance competition, and not the weaker market participant, in need of protective legislation. Whilst there are certainly variations in directives and regulations as well as in the ecj judgments,⁵⁵ the overall turn in EU consumer law shattered the social paradigm enshrined in the protection rhetoric.

1.3 The Move Towards Economic Efficiency

The Lisbon Council 2000 marked the break-even point in the further development of the European legal order in general, and the social in particular. It is here that the EU developed its rhetoric on the EU becoming “the most competitive and most dynamic knowledge-based economy”. The Lisbon Council 2000 must be regarded as the contemporary backbone of EU policy, at least the one that is favoured and advocated for by the European Commission in its ongoing attempts to use its limited competences in the field of private law to promote the building of a European society. Economic efficiency governs the shift from minimum to maximum harmonization in EU consumer law, underpins Open Method of Coordination (omc) in labour law and made its way via the ecj into competition law, albeit not coherently.⁵⁶

The ‘new economic approach’ is deeply anchored in the Lisbon Agenda. It puts competition law under pressure in its turn away from the control of market structure to output control of prospective results. As Marty suggests, the new economic approach in competition law should be understood as a move towards neoliberalism. The Lisbon Agenda requests a transformation of the welfare state, an adjustment of welfare measures to meet the challenges of increased international competition. Even Agriculture and Structural Funds shall now provide a fair return principle.⁵⁷ Under such a perspective, only one more step was needed to promote social inclusion instead of social distribution.⁵⁸ International competition puts pressure on the labour market, the threatening disintegration of which would have to be prevented by social inclusion. Such a policy turns against redistributing capital among the employed. The political objective is no longer to fight down injustices. The infamous Viking and Laval saga⁵⁹ fits all too well into such a broader scenario. The Commission’s Consumer Policy Strategy 2002–2006 transformed the Lisbon Agenda into a concrete mandate towards harmonization.⁶⁰ By 2019, in the pursuit of the so-called ‘Consumer Refit’,⁶¹ the European Commission had achieved its goal.⁶²

Already introduced in the 1999 Treaty of Amsterdam, the omc⁶³ later became identified as a major tool to achieve ‘social inclusion’. The omc operates in those areas of social policy where the European Union has no competences. It does not produce binding results. The exclusion of judicial review through the ecj was vital for its acceptability in the negotiations on the Lisbon Treaty. There is a rich academic debate on the success or failure of the omc, on its practical effects, on the role and function of Member States, the European Commission and on ngos, and, last but not least, on the impact of the omc on European integration ‘without law’.⁶⁴ Overall scepticism prevails.

Through the 2002 White Paper on European Governance, the European Commission generalized the overall idea behind the omc to use political cooperation outside treaty competences. The debate reached the European Civil Code project in that leading academics promoted omc as a possible alternative to the European Civil Code project.⁶⁵ One of the key figures was the late Advocate General Walter van Gerven who initiated the Ius Commune project. Contrary to the prevailing opinion that favoured top-down regulation via the adoption of a European Civil Code or something similar, the Ius Commune project advocated a bottom-up approach, through convergence via denser co-operation and exchange between courts beyond national borders.⁶⁶ A whole series of textbooks have been published, none of which received funding from the European Commission.⁶⁷ The politics behind the Ius Commune Project clashed with the political agenda of the European Commission. In private law ‘governance’ never found political support.⁶⁸

The last document that underpins the further development of European private law is the Charter on Fundamental Rights. The Charter is meant to counterbalance the efficiency paradigm through the values enshrined in fundamental and human rights. The integration of the Charter into the Treaty of Lisbon boosted the preparedness to give whatever conflict came before it a human rights and fundamental rights outlook. Today, more than 50% of all ecj cases are said to contain a reference to the Charter.⁶⁹ The ongoing ‘constitutionalization’ of European private law⁷⁰ through fundamental and human rights has led to a fierce academic debate on its added value to promote social rights and social justice.⁷¹ So far the ecj has used the fundamental rights rhetoric only if the European private law acquis failed to get to grips with a larger economic and social conflict, such as the impact of the Lehman Brothers crisis and the Euro crisis on consumer finance – but not on social security and labour law.⁷²

1.4 European Private Law and the European Society

There is no doubt that the EU is affecting the European Society through private law harmonization by means of secondary EU law. But what kind of European Society is the EU producing, factually and normatively? The factual side refers to the effects of EU private law on the people. Let us imagine that the European Commission would cast a qualitative study to interview people in Europe. The answer might look very different depending not only on the addressees: business, workers, consumers, but also on the context – the economic and social environment – into which such a survey would be put. The members of the European University Institute who are enjoying the benefits of mobility can hardly be compared to workers who lost their jobs through the relocation of the product site due to lower labour costs. The case law of the ecj provides an insight into the multi-faceted reality of EU litigation. Normatively, the answer might be easier, just be pulling together the bits and pieces of European private law.

There seems to be unanimity in scholarship that the opening up of national markets through the ecj via the four freedoms and competition law unfolded the strongest impact on national societies and the European Society. Whilst litigation is seemingly one between a private party and a nation state, fighting over national rules as barriers to trade, there is usually a private law conflict behind.⁷³ Doing away with non-tariff barriers to trade promoted the consumption society, one of a nearly unlimited choice of products for European consumers. The key player in granting access to the European market has been the European Court of Justice, as it has been emphasized by Pieter Van Cleynenbreugel and Xavier Miny.⁷⁴ The Member States accepted the opening of the market and the need to adapt their legislation. Overall market access has increased business freedoms and consumer choice. Secondary EU law provides for a second layer, a rather strong way to cushion the negative effects on consumers and discriminatory effects on the workers. However, secondary EU law did not lead to a similar dense net to the protection of workers’ rights against competition over the economies of scale. The result is the dominance of a consumption society, in which working conditions and workers’ rights are largely ignored by the EU and left to the Member States.

The European Society the EU is promoting and that the ecj is implementing through market access is one where consumption seems to be the ultimate objective to promote growth. Neither the EU institutions nor the Member States care much about the societal impact of lifting barriers to trade and eliminating legislation that provided benefits to smes:⁷⁵ the vanishing of small shops in cities already from the 1970s on, the ever-growing number of malls which empty cities, the equal treatment of online and offline business which accelerates the decline of small shops, the collateral damage which occurs through the opening of markets, with EU citizens and non-EU citizens suffering from physical harm without there being European-wide acceptable liability standards. The pip saga on defective breast implants or the defective heart valves demonstrates paradigmatically that the unconditional market access even for potentially dangerous products such as medical devices and vaccines is not compensated for by appropriate means of market closure.⁷⁶

In Cowan,⁷⁷ the ecj had recognized that also recipients of services might invoke the right to strike down national legislation that establishes barriers to trade. However, those recipients, the consumers and customers, did not make use of this pathway in any systematic manner. There are quite a number of discriminatory national rules that consumers as potential service recipients might like to strike down. Cowan involved discriminatory compensation of only French victims of violence in the subway. Other cases dealt with discriminatory admission fees to museums.⁷⁸ Lifting roaming fees and reducing geo-blocking bolstered consumer rights. Quite often, the rationale of market access works in reverse: companies suffer from competitive disadvantages through restrictive legislation whereas consumers, customers or even broader citizens tend to call for legislative intervention so as to provide for better protection, which limits the freedom to do business.

The social regulation, be it consumer, labour or non-discrimination law, is meant to compensate for the potential risks the consumers, the workers and the discriminated are suffering from the consumption society. By way of secondary EU law, adopted on the initiative of the European Commission with the support of the majority of the Member States, the EU created a dense network of European rules, which need not be rolled out again. The addressees of these rules are not European citizens, but citizens as consumers or workers or those suffering from discrimination. It is therefore not surprising that the European Commission merged consumption society with citizenship and created the citizen consumer, the citizen worker, the citizen employer.⁷⁹

The regulatory approach is fully in line with the open market rationale, but it tends to segment the society. If citizens do not fall into the respective legal category, they remain outside the scope of application and might suffer from potential disadvantages – or not. That is why the notions of consumer, worker or the non-discriminated are one of the legal and political battlefields. It is far from being clear how far the full harmonization approach reaches when it comes to the definition of the addressee. Legal uncertainty and disagreement exist among the Member States as to whether smes, precarious workers, collective entities, non-profit organizations are covered by the notion of consumer.⁸⁰ Horizontal rules on consumer contract law are complemented by vertical ones in the regulated market of banking and finance, energy, telecommunication and transport. In the aftermath of the Single European Act, the EU liberalized and privatized state monopolies established competitive markets and turned the former customer of public services into the recipient of a market service. Gradually, those regulatory silos were complemented by particular private law rules to the benefit of business and the new consumers. In such a perspective, there are horizontal silos which address particular groups in the society – the consumer, the customer, the worker, the discriminated – and vertical silos which contain a full set of rules following the rationale of the respective regulated market. The result is not only a high degree of complexity and non-transparency of rules but an ever more divided and compartmentalized European Society. For sure, there are also countermovements. Telecom regulation facilitated inter-connectivity of national societies closer together and helps to build a European ’communication’ society.

Before and after 1990 the European Commission relied mainly on secondary EU law and its instigative power to build a European Society. The European Society is being understood as an object, which has to be formed and shaped through law. There are few attempts to activate civil society organizations to look after the interests of the citizens. Shortly after the decision at the Copenhagen Summit to encourage former communist countries in Central and Eastern Europe to join the EU, the European Commission undertook a serious effort to involve non-governmental organizations in the building of a European Society through collective law enforcement.⁸¹ The short flirt with non-governmental organizations was quickly replaced by a trust in national administrative bodies – what became known as ‘agentification’.⁸² To be clear, the European Commission also co-funds the Bureau Européen des Organisations des Consommateurs (beuc), an umbrella organization established by national consumer organizations. beuc is involved in law making and co-ordinates law enforcement at the national level. The Directive 2018/1828 on Representative Actions enables Member States to grant beuc legal standing in cross-border litigation.⁸³ However, statutory enforcement agencies remain the primary addressee of political and legal action.

There is one outstanding exception in b2b relations which seems to function as a kind of a substitute for the failed attempt to elaborate a European Civil Code or at least a Common European sales law. The cooperation between the EU and the European Standard Organisations (esos) Comité Européen de Normalisation (cen), Comité européen de normalisation en électronique et en électrotechnique (cenelec) and European Telecommunications Standards Institute (etsi). In 1985 the European Commission adopted the New Approach, which became the New Legislative Framework (nlf) in 2012.⁸⁴ Similarly, in 1985, the European Commission and the esos concluded a Memorandum of Agreement, under which the European Commission may request the elaboration of a standard and where the Standard Bodies may ask for a financial contribution.

The regulatory mechanism gained momentum under the heading of ‘co-regulation’. The EU legislature defines binding legal requirements in secondary EU law, which are concretized through non-binding technical standards elaborated by the European Standard Bodies. Compliance with European technical standards documented through the ce mark, however, ensures access to the Internal Market. The European Commission has granted non-governmental organizations the status of an observer.⁸⁵ The five current EU proposals on the legal framework of a digital economy and a digital society rely heavily on technical standards which have to take into account the Charter of Fundamental Rights. The ever denser net of existing and future technical standards could be understood as a contractual underground on which businesses are building their economic transactions across Europe and which are, legally speaking, coming ever closer to a new form of standard terms.⁸⁶

1.5 The European Commission, the EU Legislature and the Managed Civil Society

It looks as if the European Commission and the ecj have a different concept of and approach to the European Society. The European Commission speaks via secondary EU law predominantly to national societies in Member States and to the imaginary of a European Society, which should be created through a common platform of rules, whereas the European Court of Justice speaks, through the preliminary reference procedure, first and foremost to the individual in the imaginary European Society and secondly to the national individual behind the litigation.

In an EU-driven full harmonization perspective, national societies have to serve the rationale of the Internal Market.⁸⁷ Those societies should be enabled to form a European Society through the use of fully harmonized rights and remedies. The individual vanishes in the imaginary of a European Society. It is not so important what the individual thinks and does, but whether the overall long-term effect complies with the objective of the Internal Market rationale.

Putting such an approach to the extreme, national private law orders must lose importance in the legislative process. This is indeed what can be observed. The way in which the European Commission understands and interprets efficiency does not leave much room for societal realities of a heterogenous European society. The strong focus on European Society building through fully harmonized private law rules runs the risk to transform the imaginary of a European Society into a fiction, disconnected from societal realities.⁸⁸ The Better Regulation Approach requires to base new legislation not only on an efficiency but also on an effectiveness test. The economic rationale – efficiency – should then be complemented by the societal rationale – effectiveness. Measuring societal effectiveness is much more complicated than measuring economic efficiency, at least in the way the European Commission does. Ideally, effectiveness requires a two-tier approach, looking into the impact of the envisaged legislative project on the national societies and the impact on the individual. The methodological tools are societal indicators⁸⁹ and case studies. The former rely on quantification, the latter on qualification. In practice, the EU has downgraded the effectiveness test to a rhetoric tool that does not allow to draw conclusions on what the envisaged European private law rules mean for the national societies and the individual. The result is not only a rather crude efficiency-based focus but also an idealized view on the imaginary of a homogenous European Society.

1.6 The ecj and the Managed Civil Society

How is the ecj dealing with the societal dimension? Is the ecj speaking in the preliminary reference procedure to a European Society or to the individual or to both? And to whom exactly is the ecj speaking – is it the national society where the case is coming from, the national societies of all Member States, the European society – or is it, much narrower, a particular community – the societal entourage of the respective case? I will not open that box and instead speak of societal sub-groups.⁹⁰

The preliminary reference procedure has been subject to extensive empirical and theoretical research. What matters is the double perspective: the national referring court is seeking an answer which could help it to decide the national conflict at issue (the vertical dimension). The ecj, though, has no jurisdiction to make a final judgment; it speaks to the other EU institutions, Member States, their governments, their courts, practicing lawyers, European legal scholarship and the people, the European citizen (the horizontal dimension). The ecj finds itself constantly oscillating between the two – trying to be ‘useful’ for the referring court and developing the EU law far beyond the concrete individual circumstances.⁹¹ In order to understand the Court’s attitude, it is necessary to draw a distinction between references, which affect primary and secondary EU law and which address the individual or a societal sub-group as a collectivity.⁹²

The key difference between primary and secondary EU law is horizontal direct effect. Contrary to primary EU law, the parties to a private law conflict base their rights and remedies on EU directives. The difference matters when it comes to potential effects on the European society. There is a certain bias between claims of businesses, who are the prime actors in conflicts dealing with the four freedoms and competition law, and claims of workers, consumers and the discriminated in the realm of secondary EU law. Crudely speaking, it looks as if the primary EU law society is one which affects primarily the individual businessperson, whereas the secondary EU law society is that where the ecj re-installs the individual ex post, thereby correcting the European Commission and the EU legislature, which rely mainly on the collectivity of the societal sub-groups in need of protection. This requires a clarification of the ‘individual’ and the ‘collectivity’ before the ecj.

I have argued elsewhere that the individual before the ecj is a ‘mandataire’, using Demogue’s terminology, representing the collective interests of a particular societal group.⁹³ Such an understanding blurs the line between the individual-individual and the individual-mandataire. The difference between primary and secondary EU law matters. Whilst the individual in a classical market freedom conflict could – but does not have to – be a ‘mandataire’, due to the direct effect of the market freedoms, an ecj judgment affects without further ado the two (or more) private parties standing behind the conflict. The same rationale applies wherever the ecj has given primary EU law direct effect. Outside the market freedoms, the direct effect of Art. 157 tfeu on equal pay is certainly the most prominent extension of EU law into private law. Secondary EU law contains more leeway for national courts to concretize the vertical effect of the ecj judgment on the two conflicting parties, standing behind the conflict. The result is again a certain bias in the way the ecj addresses societal sub-groups. In primary EU conflicts, the individual person, the businessperson or the discriminated stands side by side with governments and national courts. If the conflict turns around the interpretation of a secondary EU conflict, the mandataire dominates. The individual-individual takes a back seat. Somewhat overstatedly, one might argue that the Court speaks, in primary EU conflicts, to a societal subgroup composed of individuals, whereas, in secondary EU conflicts, the Court speaks to the collectivity of all consumers, in line with the legislative intention. However, Candida Leone convincingly demonstrated that the ecj is about to re-establish the individual autonomy of the consumer in particular ex post factum,⁹⁴ thereby counterbalancing the instrumentalization of consumer law for regulatory purposes.

The other even more complicated issue is the handling of collective entities as plaintiffs. In particular, environmental organizations have undertaken several attempts to use Art. 263 tfeu as an appropriate basis to claim the annulment of unlawful decisions. The restrictive interpretation of Art. 263 tfeu which bars civil society organizations from getting access to the court as a legal entity which represents social interests has been subject to extensive debate. The only way of civil society organizations to bring cases before the ecj is via the preliminary reference procedure. Whether that is possible or not depends on national procedural law. But even in the realm of national law, the ecj set boundaries when EU rules on jurisdiction are affected. In Schrems⁹⁵ the ecj refused the plaintiff to act also on behalf of other potentially affected customers who had assigned their rights to him so as to give more weight to the complaint against the Irish Data Protection Authorities. The ecj offers a certain way out by way of public interest litigation, where the societal sub-groups of consumers, workers or environmentalists choose the appropriate plaintiff, who fulfils the national standing requirements or who may benefit from a right or remedy under secondary EU law directly.⁹⁶ Via the rather restrictive approach, it looks as if the ecj is primarily speaking to the respective national societies from which the conflict originates. The vertical ‘silosization’ reduces the potential cross-border effect on other national societies.

The handling of collective agreements through the ecj deserves special treatment, not least because of the broad societal effects that result from collective private regulation and collective private action. Collective agreements/action may unfold horizontal direct effect of primary EU law. Walrave, decided in 1974, set the tone.⁹⁷ In Bosman⁹⁸ Angonese,⁹⁹ Viking, Laval, Olympique Lyonnais,¹⁰⁰ the ecj recognized the direct applicability of Art. 39 (Art. 45 tfeu), the freedom of movement for workers, respectively freedom of establishment in Viking, Art. 43 (Art. 49 tfeu), and freedom of services in Laval, Art. 49 (Art. 56 tfeu). There is a direct line from Walrave to Bosman, Agnonese, even Viking, Laval and Aget Iraklis,¹⁰¹ finally Olympique Lyonnais in that the ecj took a critical stand against collective agreements/action with the help of Articles 39, 49, 56 tfeu, against the fierce resistance business associations and trade unions. The key argument has been laid down in Wouters.¹⁰²

The more EU law broadened the horizontal direct effect, the more obvious the societal dimension showed up. What Bosman, Angonese¹⁰³ and Olympique Lyonnais¹⁰⁴ have in common is that workers mobilize the free movement rights in order to strike down collective private agreements, which are either established by private organizations that bear a quasi-statutory character (Bosman, Olympique Lyonnais) or by the states themselves (Angonese). Viking, Laval, Aget Iraklis and Alemo Herron¹⁰⁵ also fit into that picture, although their perspective is different.¹⁰⁶ There the freedom of establishment is invoked by companies to challenge collective agreements or collective activities such as a strike.¹⁰⁷ In particular Viking and Laval led to an outcry in the protagonists of labour lawyers and trade unions. The opening of the labour market without setting EU wide substantive standards for the protection of worker rights enables competition between the different Member States’ social policies to the detriment of workers.¹⁰⁸

The impact differs considerably in the concerned parts of the European Society. On the one hand, there is Bosman which changed the world not only of football but of team sports far beyond the EU.¹⁰⁹ The impact is huge and is paradigmatic for EU law, which opens up markets to establish a transnational, if not international, professional sports, but which does not take into account the unintended long-term impact on the society as a whole. The society has to adapt to the societal consequences for good or for bad. Viking, Laval and Aget Iraklis, on the other hand, worked as a barrier to the development of a transnational sub-group of workers. Instead, the judgments function as deterrence for trade unions as the ecj is seen as a body which endangers the status quo of collective worker rights instead of promoting them.¹¹⁰ Again it looks as if there is no such thing as a European society, but different strands around different economic sectors and policy fields.

1.7 Intermediate Thoughts

What would the researchers at the eui say to the ‘efficient, constitutionalized and collectively managed’ European city, to the pressure the European Commission exercises through full harmonization that outplays the individual, and to the European Court of Justice who is about to bring in the individual and be it through the backdoor and ex post? I guess they would join forces with the political intention of the European Commission, provided they subscribe to the political goal it wants to achieve. They might even sympathize with a European Commission which is much harsher and much more consequential in realizing social protection for all, the workers, the consumers and the discriminated. At the same time, though, they would defend their individual decision-making power and, whilst supporting the collective goal which is good for the European society, they would insist on the ‘right’ to opt out of the mandatory regime if their own preferences deviate from the political goal. I sympathize with my researchers and earlier spoke of the two souls in my chest.¹¹¹ Therefore, I share the concern for the position of the individual and a private law which leaves spaces for individual rights and individual responsibilities. Let us see whether and to what extent the different theories cope with that duality.

2.1 Common Heritage and the European Society

Is there still a connection between the common heritage and the European Society? When it comes to legalism, the answer seems to be evident. The EU is the model type of an institution acting through law. The 1985 New Approach, which preceded the Single European Act and which forestalled to some extent the new design of the Treaty,¹¹⁵ has set a new tone, not only via co-regulation, but also through the design of secondary EU law which combines ‘general requirements’ and ‘non-binding standards’.

This is not the place to engage into the democratic deficiency of EU law making. My concern is a different one. The new approach introduced the distinction between a rather broad guidance through mandatory EU law and a complementary private regulation, which concretizes the binding ‘general requirements’. Over the decades, secondary EU law is not only getting ever more comprehensive in terms of recitals and articles, it is also getting ever more vague. It suffices to compare for instance the Directive 85/577/eec on doorstep selling to the Directive 2011/83/EU on consumer rights. The language seems to have changed from a rule-based approach to a programme-based approach. Many pieces of secondary EU law, in particular in the field of regulated markets, resemble much more policy programmes than ‘law’. In so far one might assume that the New Approach unfolded effects far beyond co-regulation in the field of technical standards. The burden to concretize the programmatic language is left to the ecj, through the preliminary reference procedure, and to the European Commission, via the publication of guidelines that are meant to put flesh to the bones. The ecj is facing the difficulty to ‘make sense out of nonsense’,¹¹⁶ turning policy programmes into law. The European Commission is providing guidance on the interpretation of EU private law rules through examples and sometimes through opening up innovative paths of where the law should go.¹¹⁷ One might feel reminded of Wolf Biermann’s song on the Legende vom Sozialistischen Gang (something like the legend of the socialist course).¹¹⁸

When it comes to ‘personalism’, the difference between private law which addresses ‘the person’ as a legal subject and private law which addresses particular sub-groups plays a role. The type of private law the EU creates is a status-related law which lacks the generality Wieacker had in mind and which grants the person the key position in the legal system. ‘Intellectualism’ would have required to invest into the conceptualization of EU private law and to upgrade the existing body of EU rules to a ‘system’.¹¹⁹ It is hard to see how the law of the regulated market or consumer, labour and non-discrimination law could be understood as a ‘system’. The EU is regulating ad hoc, reacting to ‘problems’ – most of the time market failures – but ever more prominently to foster much broader political projects such as sustainability and digitalization. The timid attempt of the European Commission to elaborate a kind of a more systematic approach to consumer law evaporated at an early stage in the legislative procedure of what later became the Consumer Rights Directive 2011/83/ec. What remains though is the elaboration of the ‘Academic Draft Common Frame of Reference’ (Academic dcfr) – a model of what should have been turned into a European Civil Code, if we had followed the spirit of the drafters. One might understand the Academic dcfr as the masterpiece of European intellectualism, merging the different strands within the European Member States and synthesizing the ‘common heritage’ in a common body of rules.

In my understanding, Wieacker’s common heritage could not carry the project. The major problem resulted from its backwards-orientated character. It did not take into account the particularities of a civil code that is not tied to a nation state but to a supranational body, which could at best be understood as a quasi-state. In order to develop a European Civil Code, much more would have been needed than just to stretch Europe’s common heritage into Europe’s open future. Hugh Collins¹²⁰ has designed an alternative: European private law, this is his claim, should and could be elaborated through a bottom-up approach, by business and civil society organizations.

2.2 Private Law Society and the European Society

The private law society has to be shielded against power abuse, be it private or public power. The image of the private law society sounds idealistic and has been criticized, not only due to its formalistic understanding of equality and the unequal bargaining power, but also due to its ‘authoritarian liberalism’.¹²³ Franz Böhm instead insists on the moral supremacy of the private law society, in which individuals are regarded as the prime holders of responsibility for the societal order. The participants of the eui seminar 2017 might have subscribed to the strong insistence of the need to guarantee equality and the opportunities private law offers in realizing plans and dreams. The formula ‘private autonomy must not contain any title to command and control’, points into the opposite direction, though. It seems to suggest that Franz Böhm rejects mandatory law as means to balance out the differences in status between employee and employer, between consumer and supplier, between the discriminated and the discriminator.

However, a different understanding is also possible. Böhm could be read so as to reject private power/control (it refers only to private autonomy) or ‘private government’, but not the possibility of generally binding rules adopted through public, democratic processes (volonté générale) to be legitimate and non-dominating. Stefan Grundmann¹²⁴ has tried to further develop the model of the private law society along these lines, in particular with regard to regulatory means that shield private parties against private and public power. Mandatory law is a major tool for the EU legislature. It is therefore comprehensible that law and economics join forces with traditional ordoliberals so as to problematize the extensive use of mandatory law in European private law.¹²⁵ The second interference into the private law society – the new approach/new legislative framework type of regulation – is more difficult to match with the private law society. Franz Böhm is, first and foremost, relying on the individual; he is, however, ready to admit that the state has to interfere when it comes to establishing associations that pursue the common good. The European Standard Bodies as well as the National Standard Bodies are financing the standardization process via contributions of members and the sale of copyright protected technical standards. The EU provides funds in case the European Commission requests the development of a harmonized standard. Such a model seems rather far away from the private law society Böhm had in mind.

Karl-Heinz Ladeur¹²⁶ has filled the blind spot – the collective dimension – of the private law society through his research on the long-standing tradition of human cooperation in the liberal society. The focus on collective liberalism demonstrates the leeway of the self-organizing power of the private law society as well as the trust in the unfolding of the private law society’s own rationality. There is a certain affinity with Franz Böhm when Ladeur defends the rationality of the private law society against the one-sided focus of constitutional theory/law on the ‘rationality of the public’ (Rationalität des Öffentlichen). This goes along with Zingales, who highlighted the mismatch between ordoliberals’ trust in the rational behaviour of market participants and their distrust in the irrational political behaviour of the very same persons. Zingales compares the market and the state, whereas Ladeur looks into the private law society.¹²⁷ If we take the research on politicization of the civil society into account, it looks as if the market is the beacon of rationality, whereas the state and the society suggest the contrary.

Ladeur does not only insist on the potential of the private law society, he criticizes the state for interfering ever deeper into the private law society. The welfare state, his argument goes, could not and should not have an imaginary of the private law society. He defends the Eigen-rationality of the private law society. If the state relies on ‘public democratic rationality’, it will try to ‘steer’ the private law society into the politically intended direction. His plea points to a very different form of interaction between the private law society and the democratic institutions.¹²⁸ The stock-taking of European private law seems to provide evidence to Ladeur’s analysis. EU law has divided the European Society into status-related vertical and horizontal silos, sub-entities within the society, composed of those concerned in the respective legal field. The move towards economic efficiency and full harmonization looks like an attempt to create a homogenous European Society – through law, which suffers, however, from the lack of a broader civic dimension. The extension of the New Approach/New Legislative Framework to the digital economy in the Digital Service Act (dsa), Data Governance Act (dga) and Artificial Intelligence Act (aia) documents a new quality of interference into the European Society, as the Standard Bodies would have to respect fundamental rights. The Sachzwanglogik (inherent compulsory constraints) would even justify the call for a kind of Standardization Governance Act. Such a piece of secondary EU law would have to establish an institutional framework, which secures the involvement of civil society organizations in the making of technical standards.¹²⁹ One might wonder what the consequences are. Schweitzer considers thinking about private law built around markets, which would mean to elaborate a digital private law, which differs from traditional private law issues that remain in the realm of the national private law order. This might go along with her ‘structural principles’ governing the private law society.¹³⁰ However, whereas Schweitzer relies on the proportionality principle to strike the right balance between freedom of contract and legitimate statutory intervention into markets, Ladeur argues that the proportionality principle is devaluating autonomy and freedom as constitutionally protected individual rights.¹³¹

The very last scenario on the role and function of co-regulation is just another variant of ‘my two souls’. In regard to the tension we discussed in that seminar at the eui: on the one hand, I tend to defend the need to put the individual back into a prominent position and to underpin the Eigen-rationality of the civil society; on the other hand, I share Ladeur’s reservations against statutory power that aims at creating a new society with a new type of a ‘person’. If any such a move is to develop, it is from the bottom up. However, I am in favour of limiting self-regulation beyond competition law through statutory regulation. When it comes to the future of European private law, a ‘Standardization Governance Act’ is needed in order to ensure the participation of civil society organizations in the building of the new contractual underground, even if such a piece of law would strongly interfere into the Eigen-rationality of the European Society.¹³²

2.3 Democracy, Ordo-Liberalism and the European Society

What is the link between ordoliberalism, democracy and the European Society? The question requires to look into the history, the origins of ordoliberalism and the positioning of the key thinkers during national socialist times. Alessandro Somma¹³³ argues that Franz Böhm had sympathized with the Nazis, whereas Walter Eucken was clearly opposed to national socialism and was organizing a lecture series on the freedom of science.¹³⁴ Elias Deutscher¹³⁵ sheds a very different light on the origins of ordoliberalism, which is all too often understood as a mere reaction to the politically promoted concentration of power by the Nazi regime.¹³⁶ Ordoliberalism, this is Deutscher’s argument, was more than just a response to the negative experience of the Nazi regime. Ordoliberals are said to propose a comprehensive theory of how to deal with instances of concentrated economic power and to reconcile economy, society and democracy – and this theory would have relevance until today and should not be merely reduced to a reaction against fascism/Nazism.

The early 20th century is characterized by a huge uprise in industrialization, technology and economic power, which heavily affected the society and triggered a political debate on how to bring together economy, democracy and society into balance.¹³⁷ From the left-wing side, advocates promoted the idea of ‘economic democracy’ – the democratization of the economy through the participation of workers in the decision-making process. This would have ended up in a different economy, one where the owners of the companies are no longer autonomous. From the more conservative side, advocates underlined the importance of a liberal private law society, which could, however, only unfold once the economic power of companies will be tamed through effective competition, controlled and exercised through statutory authorities.

Deutscher dives into the history of US and EU competition law so as to demonstrate that ordoliberals, in a similar vein as the proponents of a competition-democracy nexus in the US, grounded the idea that there is a link between competition and democracy in the concept of economic liberty as non-domination. Böhm had famously argued that the market could be conceived as a democratic place where the participants are constantly voting through their individual transaction decisions.¹³⁸ Deutscher goes further in that economic liberty as non-domination calls for anchoring the market order in a democratic constitution, which can be found in the Sherman Act and in the Treaty of Rome. When economic liberty is linked to Kelsen’s pure theory of law and his understanding of ‘private law rights as political democratic participation’,¹³⁹ the argument gains considerable momentum far beyond ordoliberalism. It discloses the potential of the private law society as a political institution, something ordoliberals might find difficult to deal with as they draw a clear line between the private and the public. I will come back to that issue in the conclusion.

Although Kelsen strongly sympathized with the idea of economic democracy, he did not accept that economic democracy should be imposed via the constitution. According to him, values have to be negotiated in the democratic process. Böhm would have probably not accepted such a consequence. The market order, with its two components, the private law society and competition law, is to be shielded against statutory intervention even when legitimized through a democratic process. The democratic foundations of ordoliberalism would then be rather narrow and limited to economic liberty (be it individual or, in Ladeur’s sense, collective), which should be constitutionally guaranteed and defended. One might therefore understand the ordoliberal concept as value-loaded, depending on what is to be understood as ‘value’. Grundmann and Deutscher, on the other hand, would argue that ordoliberalism, correctly understood, allows for statutory intervention as along as it is democratically legitimated and principled.¹⁴⁰ However, even the extended interpretation of ordoliberalism regarding the democratically legitimated statutory intervention seems to be miles away from the private law and the private law society ordoliberals advocate. In any case, such a private law is certainly not the collectively managed European society, which I have described and analysed in the first part.