Economic Law, Regulation and Compliance

The cost issue of regulation is a recurring issue. One can complain specifically, when companies are protesting about the "cost of regulation" or when the topic is taken as an object of study, through the cost / benefit calculation. A practical question of importance is whether there is a "legal question" or not. The "juridicity" of a question is defined by the fact that discussing about this question has an effect on the outcome of a case before a judge. This concrete definition, leaving the judge's power, binding nature of the rule (here the balance between cost and benefit) the effectiveness of its decision before the judge, its consideration by him in the decision he makes, has been proposed in France by Carbonnier. It is opposed to a definition of Law by the source, the author of the rule, which identifies law for example through Parliament Acts, because the text is adopted by the legislator, listed source of law. The first definition, more sociological, more flexible, giving the spotlight on judge better corresponds to a legal system which gives more room for ex post and for the judge. It is logical that we find more demonstrations of this conception in the common law systems. However, the issue of cost / benefit is being debated before the Supreme Court of the United States, about the latest environmental regulations, adopted by the Environment Protection Agency (EPA). It is a question of law. It is under the empire of the judge. For it is in this light that President Barack Obama in November 2014 asked a very costly regulation, and it was under his leadership that the Environmental Protection Agency has developed texts. Indeed, pollution of certain plants are the cause of asthma and laid in public health imperative to fight a regulation that results in a direct cost on firms. Indeed, some plants pollution is the cause of asthma and President Obama has asked public health imperative to combat by a regulation that results in a direct cost on the industry. The regulations adopted in 2012 they cost a $ 9 million, some claiming that future ones could result in billions of costs directly related to business The President emphasized by stating that the health of children was priceless. By challenging those of 2012 before the Supreme Court, in the case Michigan v. EPA, this is the other texts that conservative states and companies have in mind because it is the principle that is posed: : does A regulator have the right to take regulations very "expensive" when the advantage, however legitimate it is, is small-scale in terms of costs? The Supreme Court, having chosen to handle the case, listened to March 25, 2015, the arguments of each other and discussed the case. The question is the integration or not into the constitutional notion of "necessity of the law" of the "cost / benefit" calculation. This is a crucial point because the concept of "necessity of the law" is a common notion to the constitutions of many countries. However, not only the so-called judges "conservatives" as Justice Antonio Scalia, took position felt it was crazy not "consider" the cost of new regulations from the expected health benefits, but also Justice Stephen Breyer called "progressive," said "irrational" the environmental regulator has not taken in consideration such an imbalance between cost and benefit. It is true that Justice Breyer was formerly professor of competition law at Harvard. Judgment will be given in June.

To read more (in french).

February 17, 2015, as the previous "Contrat de Régulation Économique" (Economie Regulatory Contract), the firm Aéroport de Paris (ADP)  has made available on its site to all "for consultation" the draft  "Contrat de Régulation Economique ("Economic Regulatory Contract)  for the period 2016 -2020. Published in the wake of the meeting of the Board of ADP, the text is presented as a tool "for the Paris place", especially for air transport. This shows that the document is primarily intended for investors and financial markets, the document being placed on the company website in the section for the "investors". This illustrates the evolution from the traditional "contrats de plan" (plan contracts). But then, who are the parties to these types of contract? Indeed, the very term "Regulatory contract"  is new in public Law. It appears as a sort of  modernization of "plan contract." The Conseil d'État (French State Council) finally admitted the contractual nature of these planning contracts. In these contracts, are parties were the State and the company in charge of a public service. Because here the contract is an instrument of "economic regulation" the open public consultation draft rather expresses a global conception of  ADP, the company which manages the Paris airports,  for the future of the development of critical infrastructure that is the airport as the heart of global development of air transport. The enterprise manager of the airport in the heart of the contract (rather than the State) in setting objectives for the coming four years is the letter and spirit of the French law of 20 April 2005 about Airports, which put the apparatus of this "Contrat de Régulation Economique" in place. In this, the infrastructure manager is set by law as a "regulator of second degree", as can be a financial market enterprise. The company that manages and develops the Paris airports undoubtedly belongs to the category of " critical firms", as well it manages the future of the sector and helps to keep France a place in the world. More, A.D.P. behaves like a Regulator, since it is carrying out the "public consultation", the consultation paper prepared by it,  being placed on its site and developing its ambitions for the sector and for France. But A.D.P. also expressed as a financial and economic actor, emphasizing the competitive environment,  demanding in passing more stability and clarity in the regulation in which it moves … That is why the consultation mechanism provided by the law must be more complex. Indeed, ADP can not be judge and jury. Therefore if the project raises observations, they must be formuled not to ADP but to the Ministries of Aviation and Economy, within a month. They shall communicate theiir content to ADP . Then the Commission consultative aéroportaire (French Airport Consultative Committee) will be consulted. At the end of this process, the "Contrat de Régulation Economique" will be signed. Seing the end of the process, it remains in line with the plan contracts, since it remains the Economic Regulatory Contract is signed between the State and the essential infrastructure manager. But the consultation process shows firstly investors are the first recipients of the statements made by a privatized company presenting its draft primarily in terms of competitive context and international development and secondly the airlines that use daily services of the airports are also directly involved by theses questions of tarification. Airlines protest against the increase in the money that will be asked. This will be imposed, since it is tarification and princing public policy. We are in unilateral rules. But it is indeed a "price" they feel to pay, they also heard a speech referring to competition in what the mechanism is presented as a "contract". But then, does it take to admit that these "contracts for economic regulation" are not between two parties that are the state and the regulator of second degree that is the infrastructure manager but must be three, the State, the infrastructure manager and "stakeholders" that are mainly airlines? This practical difficulty is much to the fact that the qualification of "contract" is difficult to justify in proceeding in which prevail unilateral mechanisms.

 Bank and Competition do not mix. It is not so much that the banks would act as repeat offenders on which the competition authorities should raise the tone by increasingly heavy penalties so that the competitive lesson is finally heard. It is rather two orders confronting each other, two incomprehensions face to face. Indeed, the banks find it appropriate to agree in order for the banking system to function. Moreover, governments demand them political behavior by financing the economy when the economy does not rely on financial markets. Hence, how would they themselves behave in a market consisting of selfish behavior and aggression towards their counterparts? If we plunge into this melting pot of incomprehension that engenders the violent clash between the banks, which evoke their mission, even their duty, and the competition authorities which avail themselves of theirs, we run into the pitfall of the definition even of what a bank is. It can be estimated that a bank is a provider of various services, operating in competing markets. In this perspective, the law ensures the proper functioning, the authorities that keep the efficiency of the markets seizing the banks that carry out their activities. But if we choose to insist that banks are what make the economy work and strengthen the social bond, then they are an integral part of their own system: the banking system. Moreover, the latter is an essential element of society, a perspective in which competition is merely contiguous. The more Europe manages to build banking Europe, the more it elaborates a mechanism for resolving difficulties, the more the bank is above all a matter of State and not of financial markets. In what is the political course of the history of peoples, competition ceases to be its first measure. It is therefore necessary to start from the undisputed existence of banking markets and the competitive mechanism which the law correlates with (I)). But the scale of the resistance reveals that it seems to have intentionally or not to have passed on the elementary and the essential: the very definition of what is a bank II. If it is accepted that the bank is the operator of the banking system, which fuels the economy as a whole, then competition law has only an adjacent role and can not constitute its backbone (III). The European Banking Union is demonstrating this.  

I. THE GHOST OF CHRISTMAS PAST: THE CONSIDERATION OF STAKEHOLDERS IN THE COMPANY THROUGH THE CONTINENTAL LAW A. OBSTACLE BORN […]

I propose to reflect on how the legal system requires companies to take into account the interests of those who aren't shareholders, for example the interests of employees and even the interests of those who don't yet exist, for example the interests of future generations, or interests that are traceable to group interests, for example the interests of "minorities" or interest that can't be attached to anyone in particular, such as interest of the Planet. It's like in the fairy tales. Dream or nightmare. The future will tell. The evolution of the law can be presented in three parts as souvenirs or wishes Christmas, which remain under each other like so many open roads choices and decisions for legislators and judges. Let slip into the clothes of the legendary usurer and talk about the first ghost of the three Christmas that made him famous: "Christmas past." At a time when the company built on the partnership agreement served the interests of the shareholders, the French judicial courts had  taken into account the interests of employees and the interest of the environment by Tort Law. The generality of this branch of law has allowed such judicial policy. It was much easier to build than Procedural Law opened the doors of the courthouse, for example by allowing works commitees to access the court for an expert analyse, to make their voices heard in moments of transformation of the company. The evolution of Law in favor of stakeholders has therefore taken form Ex post but in an imperative way. The "Christmas Present" comes from Financial Law. Influenced by economic thinking. A French author could say he prefers no translate "skateholders" because French Corporate Law is influenced directly be this economic theory now¹Trebulle, F.-G., Stakeholders Theory et droit des sociétés, 2006. He wrote that the French translation of "stakeholders" by "parties prenantes" is not convincing and prefers to keep the original term..  Laws require listed companies they and they alone to inform the market about what they have done and will do spontaneously in favor of employees, "minorities", diversity policy or the environment, and probably more generally in favor of the social group and the planet. These recent laws aren't prescriptive : they oblige to inform. By an feedback effect, they are an incentive for responsible investors, responsible shareholders, Legislator hoping that the company is rationally selfishness for "well" performing towards stakeholders at the end of the day. There are no legal sanctions, the European Commission referring to self-regulation. Calculation or ethical share the causal role, an issue to which the law doesn't lend relevance.   The "Christmas yet to come" is already showing its premises. An author writes Corporate Social Responsibity is "irresistible"²Malecki, C., L'irrésistible montée en puissance de la RSE : les impulsions européennes et françaises de l'année 2013,  2013.This article begins by : "Toujours plus ! (Always more!)".… It will be to turn these legal standards of information into legal norms with binding effect: laws require companies, not just listed companies but everyone to take into account the interests of employees, "minorities", environmental issues and future generations. Not only to inform what is done, but to oblige to do.This is the challenge, for example, the composition of the boards, or more radically the rewriting of Article 1833 of the Code civil (French Civil Code). Like any future, such rewriting promises possible changes, which converge to an increased power of the judge The question for the future is: "who will decide the consistency of these interests and will make the balance?". At less, it might be a "coregulation³Berns, T., Docquir, P.-F., Frydman, B., Hennebel, L and Lewkowicz, G., Responsabilités des entreprises et corégulation, 2007." between State and companies. At the end, it might be a transformation of companies into new legislators through soft law. Fairy tale or nightmare ?  

If one admits that Regulation is identified by the balancing of the principle of competition with another principle, a-competitive or anti-competitive, then peace is destined to slip into this technical definition of Regulation . So, it is possible to conceive relagulating of trade in terms of peace. Indeed, if we consider that liberalism has links with competition, we can instead consider economic mechanisms which are "colored" by the concern for social justice, equitable distribution of wealth. For example the construction of infrastructure for the future common good can be interpreted as being relied on the concept of peace, conceived as Kantian project. Organized in this sensee, the regulation belongs to the public international law. But we can design a system in a more economic perspective, more for the right business. Thus, the example "oil against food" program that you can just read it as a regulation of commerce, shows this sort of trade regulation is built to engender peace negatively  preventing build up war chests and allowing the citizens to be transformed in consumers.Furthermore, when the limitation of the rights of creditors had been done ​​by CERDI , it had been on behalf of the right of States to exercise a power expressly to "regulate" its money in disfavor th creditors but to bring peace through devaluation so that citizens can remain consumers. Can we go further? Can we go beyond casuistry?