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The 16th of all EU-r rights: the right to conduct a business and how the Charter contributes

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12 January 2021
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© Courtesy of Miloladesign -

Imagine standing in your supermarket, eyeing the shelves and wanting to buy a bit of poultry, just like you usually do. As a customer, you like being able to see the price of your pre-packaged fresh meat indicated not only on the labels affixed to the shelves but also directly on the packaging of the product. Now put yourself in the shoes of the shop-owner? Then, you might think otherwise and actually be rather annoyed if the authorities required that you spend additional money to add product information to the product label. But, can such an annoyance be construed a violation of the fundamental right to conduct a business?

Article 16 is an interesting facet of the Charter. Other human rights catalogues do not explicitly list this specific right – it is normally just a silent subform of the right to property.1 It apears that the introduction of many social rights in the text of the Charter, triggered the urge amongst some of the mothers and fathers of the Charter, to counter-balance this social dimension of the Charter with some new economic provisions.2 It is even suggested that the introduction of Article 16 was the political price the social democrats had to pay for the conservatives to agree to the introduction of a right to strike in Article 28.3

The Charter right in action

Coming back to the story of the labelling of poultry in the supermarket: The Court of Justice concluded in a case that concerned one of the biggest discount supermarket chains - one with thousands of shops spread all over the EU, that the respective labelling obligation laid down in EU legislation does not violate Article 16 of the Charter.4 In fact, the Court has consistently stressed that the freedom to conduct a business is not an absolute right, but “must be considered in relation to its social function” and consequently, economic activities may be subject to a broad range of interventions on the part of public authorities where they are in the public interest and proportional to the aims pursued.5

Whereas the cases brought to the CJEU have hardly led the Court to identify a violation of Article 16, the Court has clarified the content of Article 16. The Court explains that the freedom to conduct a business includes three dimensions, namely “the right to engage in an economic or commercial activity, freedom of contract and free competition.6

How EU law and policies promote the right to conduct a business:

  • An EU Directive combats late payment in commercial transactions, in order to ensure the proper functioning of the internal market and the competitiveness of undertakings (Directive 2011/7/EU of 16.2.2011).
  • In its SME Strategy for a sustainable and digital Europe (COM(2020) 103 final, 10.3.2020) the European Commission announced a series of initiatives which address the needs of SMEs (small and medium enterprises) and include the establishment of a high level “EU SME Envoy” who will, amongst others, raise awareness on SME-related aspects in a regular dialogue with the Regulatory Scrutiny Board (a board that provides quality control and support for Commission impact assessments and evaluations at early stages of the EU legislative process).

What do Member States constitutions say?

While the “freedom to conduct a business” is hardly reflected in national constitutions as such, its main components are. Most national constitutions cover the freedom of economic activity (free choice of profession, access to trade and other economic activities, related training etc) and many cover the right to free competition. However hardly any constitution explicitly refers to the freedom of contract.7

In some constitutions economic freedom is tied to a responsibility to society. The Greek constitution underlines that “[p]rivate economic activity shall not be permitted to develop at the expense of freedom and human dignity, or to the detriment of the national economy”.8 The Hungarian constitution also couples right to “engage in entrepreneurial activities” with the following: “Everyone shall be obliged to contribute to the enrichment of the community through his or her work, in accordance with his or her abilities and potential.9 The Irish constitution obliges the State “to secure that private entreprise shall be so conducted … as to protect the public against unjust exploitation10 and the Italian constitution stresses that private economic activities may not be carried out in a manner that violates the common goood, liberty and human dignity.11 A counterbalancing linkage to consumer rights is to be found in the constitutions of Bulgaria12 and Lithuania.12

So what?

While governments face the challenge of striking a balance between worker protection and labour market flexibility, social rights and economic rights are not a zero-sum game.1 The case law developed so far, does not justify any fears that, with the introduction of Article 16 the Charter has given precedence to the interest of the business community at the cost of our social rights. Quite the contrary, it appears more constructive to look at Article 16 as an additional vehicle to push important policy goals, such as employment, innovation and social inclusion for instance, by means of the promotion of entrepreneurship among various underrepresented population groups including women, migrants and people with disabilities.15 Interested in knowing more? Well, here you are: ‘All EU-r rights‘, stay tuned!

1: Under the European Convention of Human Rights, Art. 1 of the Additional Protocol the term “possessions” has an autonomous meaning which is not limited to ownership of physical goods but covers also other rights and interests, see e.g. ECtHR, Iatridis v. Greece, application 31107/96, judgment of 25.3.1999.
2: See Gabriel N. Toggenburg, Die Geburtsstunde der EU-Grundrechtecharta: ein Gespräch mit dem Konventsmitglied Heinrich Neisser, in P. Hilpold et al (eds.), Rechtsstaatlichkeit und Solidarität in Österreich und in Europa, Facultas 2021 (forthcoming).
3: Stefan Barriga, Die Entstehung der Charta der Grundrechte der Europäischen Union, Nomos 2003, p. 100.
4: CJEU, Case C 134/15, 30.6.2016.
5: CJEU, Case C 544/10, 6.9.2-12, para 54.
6: CJEU, Case T-251/18, 10.3.2020, para 149.
7: See table 2 in FRA (2015), Freedom to conduct a business: exploring the dimensions of a fundamental right, on p. 28. In Bulgaria, Estonia and Portugal the constitutions also establish an explicit right to establish cooperatives or other forms of association for the pursuit of economic activities. See Art. 19 (4) of the Bulgarian constitution, Art. 31 of the Estonian constitution, Art. 61(2) of the Portuguese constitution. The constitution of Croatia explicitly protects foreign investment (Art 49: “Foreign investors shall be guaranteed free transfer and repatriation of profits and invested capital.”).
8: Art. 106 (2) of the Greek constitution.
9: Art. XII of the Fundamental law of Hungary.
10: Art. 45.3. (2) of the Irish constitution.
11: Art. 41 of the Italian constitution.
12: Art. 19 (2) of the Bulgarian constitution: “The State shall establish and guarantee equal legal conditions for economic activity to all citizens and legal entities by preventing any abuse of a monopoly status and unfair competition, and by protecting the consumer”.
13: Art. 46 of the Lithuanian constitution: “The State shall defend the interests of the consumer”.
14: See also World Bank Group, Doing Business 2020 - Comparing Business Regulation in 190 Economies, p. 58. Note that in the “Ease of doing business ranking” on page 4 there are, amongst the first 20 countries, 6 EU Member States (DK, SE, LT, EST, LV, FI).

Gabriel Toggenburg

Gabriel N. Toggenburg is an Honorary Professor for European Union and Human Rights Law at the University of Graz, Austria. He worked as a Senior Researcher for Eurac Research in Bolzano/Bozen (Italy) from 1998 to 2008. Since 2009, he has been working for the European Union. All views expressed are his own and cannot be attributed to his current or former employers. His blog series “All EU-r rights” published on EUreka! aims at making the EU Charter of Fundamental Rights better known. He is grateful for the honour to have every blog entry introduced by a piece of art by Miloladesign. An annotated list of all Charter rights is available.Gabriel N. Toggenburg is an [Honorary Professor] for European Union and Human Rights Law at the University of Graz, Austria. He worked as a Senior Researcher for Eurac Research in Bolzano/Bozen (Italy) from 1998 to 2008. Since 2009, he has been working for the European Union. All views expressed are his own and cannot be attributed to his current or former employers. His blog series “All EU-r rights” published on EUreka! aims at making the EU Charter of Fundamental Rights better known. He is grateful for the honour to have every blog entry introduced by a piece of art by Miloladesign. An annotated list of all Charter rights is available here.

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