Ana Filipa Ribeiro (master’s student in European Union Law at the School of Law of University of Minho and ENDE Research Grant Holder – ref. UMINHO/BIM/2026/33) and Renan Bendel Vaughan (master’s student in European Union Law at the School of Law of University of Minho and ENDE Research Grant Holder – ref. UMINHO/BIM/2026/40)

Setting the scene: a small model in a large problem

On 1 July 2026, the Portuguese Government presented AMALIA,^[1] the first open large language model (LLM) developed in European Portuguese, developed by a consortium of national universities and research institutions with an investment of 5.5 million euros funded under the Recovery and Resilience Plan.^[2] The Minister of State and Administrative Reform framed the launch as a deliberate choice for digital sovereignty and the country’s technological autonomy.^[3]

The moment is politically charged. On 3 June 2026, the European Commission adopted its Communication on European Tech Sovereignty, acknowledging that the European Union (EU) remains structurally dependent on external suppliers for more than 80% of its products, services, infrastructures, and intellectual property in the digital domain.^[4] On 7 July 2026, the Action Plan on Cybersecurity and Artificial Intelligence acknowledged, more explicitly, that “frontier capabilities are mainly developed outside of the EU, and their availability is often determined by non-transparent, foreign-led processes”.^[5]

The strategic salience of this moment is not contained within the Union’s normative framework. The NATO summit held in Ankara on 7 and 8 July 2026, although its official programme scarcely mentioned the issue, was shaped by access to frontier artificial intelligence (AI) models as an unofficial undercurrent of the discussions: the United States controls access to the most advanced AI capabilities and determines unilaterally which allies may obtain them, leaving European allies dependent on technology they do not govern and whose availability may be curtailed by an external political decision.^[6]

AMALIA emerges at this juncture, positioned explicitly against the dependence described in both instruments. The model builds on EuroLLM-9B, subsequently expanded and optimised for European Portuguese,^[7] and was trained within the EuroHPC network, including the MareNostrum 5 supercomputer and the national supercomputer Deucalion.^[8] Conceived to preserve European Portuguese, to safeguard citizens’ national data from the reach of third-country jurisdictions, and to be progressively integrated into the public administration,^[9] the Portuguese Government classifies AMALIA, in the light of Regulation (EU) 2024/1689 (the AI Act), as a general-purpose AI model without systemic risk.^[10] A project of this profile becomes fully legible only against the Union’s own acknowledgement of structural dependence.

Technological dependencies and new vulnerabilities 

European technological sovereignty^[11] is articulated across several layers, with computational capacity operating as a decisive constraint. EuroLLM-9B, the base on which AMALIA was developed, was pretrained on 400 NVIDIA H100 graphics processing units (GPUs) on the MareNostrum 5 supercomputer.^[12] The subsequent training of AMALIA used 256 NVIDIA H100 GPUs. Council Regulation (EU) 2026/150, adopted in January 2026 to enable the AI Gigafactories, states that the next generation of frontier models will require “at least, three to four times the number of the most advanced AI processors currently available in the most powerful AI factories” and that “the existing mechanisms currently provided for under Council Regulation (EU) 2021/1173 are not sufficient”.^[13] The insufficiency of European infrastructure is thus recorded in the very normative text that seeks to expand it.

A second layer is added to this one: energy. Data-centre electricity consumption in the Union accounts for around 3% of total demand and is projected to more than double by 2030.^[14] In advanced economies, the construction of a transmission line takes between four and eight years, while grid-connection queues range from three to ten years.^[15] The physical constraint precedes industrial-policy choices.

The Draghi Report documents the scale differential. 73% of the foundation models developed since 2017 are United States-based and 15% Chinese-based; in 2023, venture capital invested in AI in the Union amounted to eight billion dollars, against 68 billion dollars in the United States and 15 billion dollars in China.^[16] The dependence is structural, and it extends to the critical infrastructures into which AI will be progressively integrated.

The Union’s cybersecurity framework confronts this landscape through instruments that only partially overlap. The Action Plan on Cybersecurity and Artificial Intelligence identifies a precise set of risks specific to AI systems integrated into critical infrastructures: “data and model poisoning, adversarial attacks, and prompt injection”.^[17] The AI Act imposes obligations of robustness, accuracy, and cybersecurity on providers of high-risk AI systems, including resilience against adversarial attacks.^[18] Those obligations fall on the provider of the system; Directive (EU) 2022/2555 (NIS2) regulates the entity operating the infrastructure into which the system is integrated.^[19] The normative articulation between the two regimes has not been constructed.

The integration of AI into critical infrastructures generates a further tension that the existing framework is structurally unable to resolve at the external level: where the source of the threat is a State actor, the response shifts into the domain of the CFSP, where decision-making requires unanimity in the Council and where the Union’s capacity to respond depends on a political attribution decision that the existing mechanisms are not designed to deliver at the speed the nature of the threat demands.^[20] The instruments available were conceived for a threat typology that the Commission itself acknowledges to have been overtaken.

From research excellence to technological capacity

The development of AMALIA represents a significant achievement for Portugal’s artificial intelligence ecosystem and contributes to the European Union’s broader objective of strengthening technological capacity in strategically important sectors.^[21] More broadly, the project brings into focus a recurring weakness in the European innovation ecosystem, namely the limited capacity to transform publicly supported research into technological assets capable of sustained development and sustained operational deployment.^[22]

This difficulty is particularly pronounced in AI. Indeed, a large language model does not become a mature technological asset simply because the research objectives associated with its initial development have been achieved.^[23]Rather, its continued relevance depends on access to adequate computing resources, the retention of specialised technical expertise and the ability to adapt the model as technologies and user requirements evolve.^[24] Accordingly, maintenance, refinement and deployment form part of the continuing development of the technology.

Against this background, AMALIA also illustrates the institutional consequences of this requirement. As a publicly funded research initiative, its initial development was financed under the Recovery and Resilience Plan and organised within a defined funding period.^[25] Although this model is consistent with the requirements of research financing, it does not necessarily provide the organisational continuity required for long-term technological development. Accordingly, a research project may conclude once its contractual obligations have been fulfilled, whereas an AI system intended for continued operation requires ongoing monitoring, maintenance and institutional support throughout its lifecycle.^[26] A further phase extending until 2027 has since been announced, with additional funding for the evolution of the model and the development of sovereign infrastructure. Nevertheless, the longer-term organisational framework supporting AMALIA beyond that phase remains to be determined.

The central difficulty therefore concerns the transition from research to sustained technological activity. In practice, public investment may establish the scientific foundations of a project without securing the expertise, infrastructure and financing required after the research phase has ended.^[27] As a result, a project may retain considerable scientific value without becoming a durable technological capability.

In this context, AMALIA exemplifies the broader difficulty of converting publicly supported research into durable technological capacity. Although its development confirms the availability of scientific expertise, its long-term significance will depend on whether the model can be maintained and integrated into productive activity beyond successive funding cycles. This question is also relevant to technological sovereignty. In particular, such sovereignty depends on the existence of structures capable of retaining strategic expertise and sustaining the development of critical technologies.^[28] Where advanced research is produced without the capacity to support its subsequent deployment, dependence on external providers may therefore persist even when the underlying knowledge originates within Europe. Accordingly, European competitiveness depends on the conditions under which research outputs can develop into stable technological activity.^[29]

This assessment does not call into question the value of publicly funded research. Rather, it requires greater precision concerning the objectives assigned to different forms of public intervention. Finite project structures may be appropriate where the principal objective is scientific advancement or experimental development. Where public policy also seeks to establish strategic technological capacity, additional institutional arrangements are required. The applicable legal framework must therefore address both the allocation of research funding and the conditions under which the resulting technologies can be maintained, developed and deployed within the European economy.

The Union’s institutional response

The structural weaknesses identified above consequently raise a constitutional question concerning the role that Union law can realistically perform in strengthening European technological capacity. This question becomes particularly important where Europe’s competitiveness deficit cannot be addressed through research funding and public investment alone.

At first sight, the Treaties provide no direct answer. As noted above, they confer no autonomous horizontal competence allowing the Union to pursue technological sovereignty, industrial autonomy or strategic resilience as independent legal objectives.^[30] Moreover, under Article 4(2) TEU, national security remains the sole responsibility of the Member States. Accordingly, the strategic importance of AI cannot, by itself, justify Union action outside the system of competences established by the Treaties.^[31]

Nevertheless, the absence of an express competence does not render the Union institutionally irrelevant. Union action may be founded on another Treaty competence where the aim and content of the measure fall within its scope, even if the measure also produces effects in other policy fields.^[32] This dynamic is particularly relevant to artificial intelligence because the same technological capabilities may support both civilian and security-related uses. Consequently, a measure adopted on the basis of Article 114 TFEU may also shape the technological environment on which strategically important capabilities depend.^[33]

Within this constitutional framework, the internal market assumes particular significance, since it provides a central legal mechanism through which the Union may establish common conditions for the development and circulation of emerging technologies.^[34] The relevant constitutional objective remains the prevention of regulatory fragmentation capable of impairing the functioning of the internal market. Even so, the practical effects of harmonisation may extend to the broader conditions governing technological development.^[35]

In this regard, Article 114 TFEU provides the principal legal basis for this form of harmonising action. According to settled case law, that provision permits the approximation of national rules where existing differences obstruct the fundamental freedoms or directly affect the functioning of the internal market.^[36] Furthermore, it may support preventive harmonisation where future obstacles resulting from regulatory divergence are sufficiently likely and the measure is designed to prevent them.^[37] Its constitutional rationale therefore remains closely connected to market integration.

The Artificial Intelligence Act exemplifies this institutional model. Adopted under Articles 16 and 114 TFEU, it establishes harmonised rules intended to improve the functioning of the internal market while ensuring a high level of protection of health, safety and fundamental rights. In relation to high-risk AI systems, its requirements influence organisational and technical choices throughout the system’s lifecycle, thereby shaping the conditions under which artificial intelligence is designed and deployed in the Union.^[38]

However, this broader effect remains subject to the constitutional limits imposed by the Treaties. In particular, Article 2(3) of the Artificial Intelligence Act preserves Member State competences concerning national security and excludes systems placed on the market, put into service or used exclusively for military, defence or national security purposes. Furthermore, recital 24 clarifies that systems serving both excluded and non-excluded purposes fall within the scope of the Regulation.

Even within those limits, the boundary between civilian and strategic technological capacity may be difficult to maintain during the development phase. Indeed, foundation models, computing infrastructure and specialised expertise may support several forms of subsequent deployment.^[39] Consequently, legislation governing civilian artificial intelligence may indirectly (but inevitably) affect capabilities that also possess strategic relevance. Such effects nevertheless arise from the lawful exercise of internal market competences and do not alter the constitutional allocation of powers.

From this perspective, the internal market may contribute to technological capacity by reducing legal fragmentation, improving legal certainty and enabling technological activities to develop across national borders. However, harmonisation cannot replace the financing, infrastructure and industrial organisation required to sustain technological development. Its function is therefore to establish the legal conditions within which such capacity may emerge and expand.

Against this background, the simplification agenda raises a further question concerning the effect of regulatory reform on the common legal conditions established through internal market harmonisation. This question provides the basis for the following section.

Competitiveness, simplification, and the legal conditions of strategic autonomy 

The Commission’s diagnosis of Europe’s competitiveness deficit identifies three transformational imperatives: “closing the innovation gap”, “a joint roadmap for decarbonisation and competitiveness”, and “reducing excessive dependencies and increasing security”.^[40] None of them primarily attributes the problem to regulation. The Competitiveness Compass locates the root cause in Europe’s difficulty in converting scientific discoveries into marketable technologies and in integrating them into its industrial base.^[41] AMALIA illustrates the pattern: a high-quality scientific project whose deliverables-driven model keeps it at a distance from the industrial scale the Union identifies as strategically decisive.

The institutional response to this diagnosis is nevertheless structured around a different hypothesis: that regulatory agility is, in itself, an instrument of competitiveness. The April 2026 Better Regulation Communication formalises urgency as an autonomous procedural category, with differentiated procedures that dispense with impact assessment and public consultation where “the political context creating a need for urgent action” justifies it.^[42] In 2024, 85% of the legislative proposals were presented without an impact assessment – the highest figure recorded since 2014 and nearly double the average for the three preceding years.^[43] Although not every proposal legally required an impact assessment, the figure reflects a structural shift in the Commission’s approach to procedural obligations. Alemanno argues that the constitutional reach of the operation extends further still: Treaty obligations in relation to proportionality, participatory democracy, and the protection of fundamental rights are reclassified as instruments of discretionary management, adjustable to the political moment.^[44]

That displacement is constitutionally significant. Article 11(3) TEU imposes on the Commission an obligation to conduct “broad consultations with parties concerned”, a requirement that the Commission’s own Better Regulation guidelines acknowledge as binding.^[45] As regards Article 5(4) TEU, the Court clarified in Czech Republic v Parliament and Council that the absence of an impact assessment “cannot be regarded as a breach of the principle of proportionality” only where the EU legislature “is in a particular situation requiring it to be dispensed with and has sufficient information enabling it to assess the proportionality of an adopted measure”.^[46] In the Mobility Package judgments, the Grand Chamber partially annulled Regulation (EU) 2020/1055 precisely on the ground that the EU legislature had not demonstrated that it possessed sufficient information to assess the proportionality of the measures adopted.^[47] In a recommendation of November 2025, the European Ombudsman found maladministration in the preparation of the Omnibus packages, on the ground that the urgency invoked was not adequately reasoned, that the public consultation was inadequate, and that the necessary climate assessments had not been documented.^[48] In June 2026, the Ombudsman closed the inquiries following the Commission’s overall agreement to implement the recommendations, while noting that the effectiveness of the resulting measures remained to be assessed.^[49]

The question raised by this architecture is whether the institutional route chosen to pursue regulatory simplification is compatible with the procedural guarantees that Articles 5(4) and 11(3) TEU, read in the light of the Court’s case-law, render binding irrespective of the urgency claimed. The technological sovereignty that the Commission professes to pursue depends, in legal terms, on the very procedural guarantees that the simplification agenda is designed to attenuate.

Against this background, the simplification agenda, including the Omnibus packages, must be assessed in light of the institutional function of internal market legislation. Although the Commission presents simplification as a means of reducing burdens and strengthening legal certainty,^[50] reforms that narrow harmonised requirements or create unevenly applied exemptions may recreate regulatory fragmentation. For projects such as AMALIA, long-term development depends on predictable regulatory conditions capable of supporting deployment beyond the national context. Simplification should therefore be assessed according to whether it facilitates deployment across the internal market without weakening the coherence of the common regulatory framework.

The limits of the legal answer 

AMALIA reveals that European technological capacity depends on continuity between publicly supported research and deployment across the internal market, a transition sustained by the predictable legal conditions created through harmonisation. Accordingly, simplification must be assessed through its effects on that common framework, since procedural acceleration acquires strategic value only where it preserves the coherence required for technological activity to reach European scale. That assessment must account for what law cannot resolve on its own. The scale differential documented by the Draghi Report – in computing infrastructure, energy access, and venture capital – precedes legal choices and conditions their effects, rather than being a regulatory problem. The NATO summit in Ankara confirmed that access to frontier AI capabilities has become a dimension of transatlantic security architecture, with European allies dependent on technology they neither govern nor can replicate at the required speed. Technological sovereignty requires the material conditions – infrastructure, investment, and industrial organisation – that harmonisation alone cannot supply. The question ultimately left to the Union is whether technological sovereignty can be constructed through a legal order whose foundations are increasingly perceived as obstacles to speed.

^[1] AMALIA is the acronym for Agente Multimodal Automático de Linguagem com Inteligência Artificial, which may be translated as “Automatic Multimodal Language Agent powered by Artificial Intelligence.”. The scientific coordination of the AMALIA Project at the University of Minho is entrusted to Professor Paulo Novais, from the Department of Informatics of the School of Engineering, where he coordinates LASI (Associated Laboratory of Intelligent Systems), the largest associated laboratory dedicated to Artificial Intelligence in Portugal. He is also a Key Staff Member of the Jean Monnet Centre of Excellence “Digital citizenship and technological sustainability: achieving CFREU effectiveness in the digital decade” (CitDig), funded under the ERASMUS+ Programme.

^[2] Ministério do Ambiente e Reforma do Estado (MARE) and Ministério da Educação, Ciência e Inovação (MECI), Portugal apresenta o AMALIA, o primeiro modelo de linguagem aberto desenvolvido em português europeu, Comunicado (Lisbon, 1 July 2026), 1–4, accessed July 17, 2026, https://portugal.gov.pt/gc25/comunicacao/comunicados/portugal-apresenta-o-amalia-o-primeiro-modelo-de-linguagem-aberto-desenvolvido-em-portugues-europeu

^[3] Gonçalo Matias, Minister of State and Administrative Reform, quoted in MARE and MECI, Portugal apresenta o AMALIA, 2.

^[4] European Commission, Communication on European tech sovereignty, COM(2026) 503 final, 3 June 2026, 1, https://digital-strategy.ec.europa.eu/en/library/communication-european-tech-sovereignty-accompanied-eu-open-source-strategy.

^[5] European Commission, Action plan on cybersecurity and artificial intelligence, COM(2026) 577 final, 7 July 2026, 2, https://digital-strategy.ec.europa.eu/en/library/eu-action-plan-cybersecurity-and-artificial-intelligence.

^[6] NATO, The Ankara Summit declaration, 8 July 2026, accessed July 17, 2026, https://www.nato.int/en/about-us/official-texts-and-resources/official-texts/2026/07/08/the-ankara-summit-declaration. On AI capabilities as a priority at the summit, see LeAnne Noelani Howard, “Allies committed to $50 billion in defense industry deals”, in Atlantic Council, Eleven Takeaways from the NATO Summit in Ankara, 9 July 2026, accessed July 17, 2026, https://www.atlanticcouncil.org/dispatches/eleven-takeaways-from-the-nato-summit-in-ankara/.

^[7] MARE and MECI, Portugal apresenta o AMALIA, 9 (Q&A no. 29).

^[8] MARE and MECI, Portugal apresenta o AMALIA, 3.

^[9] MARE and MECI, Portugal apresenta o AMALIA, 2.

^[10] MARE and MECI, Portugal apresenta o AMALIA, 5 (Q&A no. 9). Regulation (EU) 2024/1689 of the European Parliament and of the Council of 13 June 2024 laying down harmonised rules on artificial intelligence (Artificial Intelligence Act), OJ L 2024/1689, 12 July 2024, http://data.europa.eu/eli/reg/2024/1689/oj.

^[11] See European Commission, Communication on European tech sovereignty, defining technological sovereignty by reference to Europe’s ability to develop and control key technologies while reducing external dependence. The concept of technological capacity is used in this article as an analytical category describing the institutional conditions required for sustained technological development and deployment. See also European Commission, “State of the digital decade 2026”, accessed July 19, 2026, https://digital-strategy.ec.europa.eu/en/policies/2026-state-digital-decade-package, emphasising funding continuity and Europe’s capacity to develop and deploy critical technologies. 

^[12] Pedro Henrique Martins et al., “EuroLLM: Multilingual Language Models for Europe”, arXiv, 2024, 5, accessed July 17, 2026, https://doi.org/10.48550/arXiv.2409.16235.

^[13] Council Regulation (EU) 2026/150 of 16 January 2026 amending Regulation (EU) 2021/1173 on establishing the European High Performance Computing Joint Undertaking, OJ L 2026/150, 19 January 2026, recital 6, http://data.europa.eu/eli/reg/2026/150/oj.

^[14] Agnieszka Widuto, AI and the energy sector, EPRS Briefing PE 775.859 (Brussels: European Parliamentary Research Service, July 2025), 1–3, accessed July 17, 2026, https://www.europarl.europa.eu/thinktank/en/document/EPRS_BRI(2025)775859.

^[15] Widuto, AI and the energy sector, 5.

^[16] Mario Draghi, The future of European competitiveness: a competitiveness strategy for Europe, Part B (Brussels: European Commission, 2024), 79, https://commission.europa.eu/topics/competitiveness/draghi-report_en.

^[17] European Commission, Action plan on cybersecurity and artificial intelligence, 7.

^[18] Regulation (EU) 2024/1689, Article 15.

^[19] Directive (EU) 2022/2555 of the European Parliament and of the Council of 14 December 2022 on measures for a high common level of cybersecurity across the Union (NIS2), OJ L 333, 27 December 2022, Article 21, http://data.europa.eu/eli/dir/2022/2555/2022-12-27.

^[20] Articles 24(1) and 31(1) TEU (unanimity requirement for CFSP decisions); Article 215 TFEU (restrictive measures). See also Council Decision (CFSP) 2019/797 of 17 May 2019 concerning restrictive measures against cyber-attacks threatening the Union or its Member States, OJ L 129I, 17 May 2019, http://data.europa.eu/eli/dec/2019/797/2026-05-13; Council Regulation (EU) 2019/796 of 17 May 2019 concerning restrictive measures against cyber-attacks threatening the Union or its Member States, OJ L 129I, 17 May 2019, http://data.europa.eu/eli/reg/2019/796/2026-05-13.

^[21] This objective is also reflected in the Commission’s Frontier AI Grand Challenge, won in June 2026 by the EUROPA consortium, led by Domyn. The consortium was selected to develop an openly available European frontier AI model covering all 24 official EU languages and exceeding 400 billion parameters. The initiative was presented as part of the Union’s ambition to develop advanced AI capabilities on European terms. See European Commission, Commission Selects EUROPA consortium as the winner of the Frontier AI Grand Challenge (19 June 2026), accessed July 19, 2026, https://digital-strategy.ec.europa.eu/en/news/commission-selects-europa-consortium-winner-frontier-ai-grand-challenge-project-build-european-open. See Pedro Madeira Froufe, “Ter ou não ter ‘fome’”, Correio do Minho (18 July 2026), accessed July 19, 2026, https://www.correiodominho.pt/cronicas/ter-ou-nao-ter-fome/18260. 

^[22] Draghi identifies the need to improve “the pipeline from innovation to commercialisation” and to remove the barriers preventing innovative companies from growing and attracting finance. Mario Draghi, The future of European competitiveness: a competitiveness strategy for Europe, Part A (Brussels: European Commission, 2024), 18, https://commission.europa.eu/topics/competitiveness/draghi-report_en.

^[23] As Bommasani et al. observe, foundation models are “unfinished intermediate objects” that require subsequent adaptation for downstream applications, underscoring that their initial development does not exhaust their technological lifecycle. Rishi Bommasani et al., On the opportunities and risks of foundation models (Stanford, CA: Stanford University, Center for Research on Foundation Models, 2021), 5, accessed July 17, 2026, https://crfm.stanford.edu/report.html.

^[24] Ping Song, Adegboyega Ojo, and Edward Curry, “Trustworthy requirements for foundation models—A comprehensive survey and roadmap”, Engineering Applications of Artificial Intelligence (2025): 5, accessed July 17, 2026, https://doi.org/10.1016/j.engappai.2025.113111.

^[25] Portuguese Government states that AMALIA was financed through the Recovery and Resilience Plan, developed by public entities and implemented according to an 18-month timetable providing for successive beta, base and multimodal versions. See Portuguese Government, “Modelo de Linguagem em Grande Escala para a língua portuguesa” (29 November 2024), accessed July 17, 2026, https://portugal.gov.pt/gc24/comunicacao/noticias/modelo-de-linguagem-em-grande-escala-para-a-lingua-portuguesa.

^[26] EU-funded research projects operate within grant agreements that define their duration and contractual obligations. By contrast, OECD and NIST guidance treats monitoring and maintenance as continuing aspects of the AI-system lifecycle. See European Research Executive Agency, “Horizon Europe – Grants & Reporting”, accessed July 17, 2026, https://rea.ec.europa.eu/horizon-europe-grants-reporting_en?prefLang=en; OECD, Recommendation of the Council on Artificial Intelligence, OECD/LEGAL/0449 (2019 and amended on 2024), 8, accessed July 17, 2026, https://legalinstruments.oecd.org/en/instruments/oecd-legal-0449; NIST, Artificial Intelligence Risk Management Framework 1.0 (2023), 38, accessed July, 17, 2026, https://www.nist.gov/itl/ai-risk-management-framework

^[27] Randolph Beard et al., “A valley of death in the innovation sequence: an economic investigation” (2009), in Research Evaluation 343, “executive summary”, accessed July 18, 2026, http://dx.doi.org/10.2139/ssrn.1093006, arguing that a gap may arise where public expenditure supports early-stage research without sufficient regard to the investment decisions required during the subsequent stages of innovation.

^[28] See Francesco Crespi et al., “European technological sovereignty: an emerging framework for policy strategy” (2021), Intereconomics(Springer, Heidelberg, Vol. 56, Issue 6), 349 and 353, accessed July 17, 2026, https://doi.org/10.1007/s10272-021-1013-6, arguing that scientific and technological capacities require corresponding capabilities for their economic exploitation and that technological sovereignty depends on consistent investment in critical technologies. The reference to institutional structures capable of retaining strategic expertise is the authors’ analysis.

^[29] Draghi, The future of European competitiveness, Part A, 7.

^[30] Articles 2 to 6 TFEU (a contrario).

^[31] However, it is important to note that Article 4(2) TEU does not establish a general exclusion from the scope of Union law for measures connected with national security. The European Court of Justice has held that “the mere fact that a decision taken by a competent national authority concerns State security cannot result in European Union law being inapplicable”. See Judgment CJEU ZZ v Secretary of State for the Home Department, 4 June 2013, case C-300/11, ECLI:EU:C:2013:363, para. 38; see also Judgment CJEU Privacy International, 6 October 2020, case C-623/17, ECLI:EU:C:2020:790, para. 44.

^[32] See Judgment CJEU European Parliament v Council, case C-490/10, 6 September 2012, ECLI:EU:C:2012:525, paras. 44-46, confirming that the appropriate legal basis must be determined by reference to the aim and content of the measure and that an incidental objective does not alter the legal basis required by its predominant purpose. See also Judgment CJEU Philip Morris Brands and Others, 4 May 2016, case C-547/14, ECLI:EU:C:2016:325, para. 60, holding that Article 114 TFEU may be relied upon where its conditions are satisfied even when the protection of public health is a decisive factor in the legislative choices made. These judgments support the proposition that the lawful exercise of a conferred competence may produce effects extending beyond its principal regulatory field.

^[33] See European Commission, White paper on options for enhancing support for research and development involving technologies with dual-use potential (24 January 2024), COM(2024) 27 final, 1, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:52024DC0027, defining dual-use research by reference to software and technology capable of being used for both civil and military purposes. See also Regulation (EU) 2024/1689, recital 24, which recognises that the same AI system may serve both excluded security-related purposes and civilian uses.

^[34] See Articles 26(2) and 114(1) TFEU. In the field of artificial intelligence, recital 1 of Regulation (EU) 2024/1689 expressly refers to “a uniform legal framework” for the development and marketing of AI systems, while recital 8 links harmonised rules to their free movement within the internal market.

^[35] Regulation (EU) 2024/1689, recitals 1, 3 and 8, which link the prevention of regulatory fragmentation to a uniform framework governing the development and use of AI systems. 

^[36] See Judgment Philip Morris Brands, paras. 57–58. The Court held that Article 114(1) TFEU authorises measures approximating national provisions whose object is the establishment and functioning of the internal market. Although the mere existence of disparities between national rules is insufficient, recourse to Article 114 TFEU is justified where those differences obstruct the fundamental freedoms and thereby directly affect the functioning of the internal market.

^[37] See Judgment CJEU Poland v European Parliament and Council, 4 May 2016, case C-358/14, ECLI:EU:C:2016:323, para. 33, holding that Article 114 TFEU may be used to prevent future obstacles to trade resulting from divergences in national laws, provided that the emergence of those obstacles is likely and the measure is designed to prevent them.

^[38] See Regulation (EU) 2024/1689, Articles 1(1)–(2), 9 and 72, and Annex IV.

^[39] This corresponds to the concept of dual use, which refers to technologies capable of serving both civilian and military purposes. See Regulation (EU) 2021/821, Article 2(1); and Jane Vaynman and Tristan A Volpe, “Dual use deception: how technology shapes cooperation in international relations”, International Organization, 77(3) (2023): 599, accessed July 17, 2026, https://doi.org/10.1017/S0020818323000140. The concept is used here in an analytical sense and does not imply that every technology mentioned falls within the product scope of Regulation (EU) 2021/821.

^[40] European Commission, A competitiveness compass for the EU: Communication from the Commission to the European Parliament, the European Council, the Council, the European Economic and Social Committee and the Committee of the Regions, COM(2025) 30 final (Brussels: European Commission, 29 January 2025), https://commission.europa.eu/topics/competitiveness/competitiveness-compass_en, 3.

^[41] European Commission, A competitiveness compass for the EU, 1.

^[42] European Commission, A simpler, clearer and better enforced EU Rulebook, COM(2026) 380 final, 28 April 2026, https://commission.europa.eu/publications/simpler-clearer-and-better-enforced-eu-rulebook_en; Alberto Alemanno, “Deregulating better regulation: the constitutional stakes of the Commission’s 2026 reform”, Verfassungsblog, 29 April 2026, accessed July 17, 2026, https://doi.org/10.59704/640336d7bff5903b.

^[43] Council of the European Union, Handling of impact assessments within the Council – Annual report covering the period January-December 2024, IA 13/MERTENS 2/POLGEN 16/BETREGS 7, Brussels, 8 April 2025, 14, accessed July 18, 2026, https://www.parlament.gv.at/gegenstand/XXVIII/EU/17052; Alberto Alemanno, “Codifying better regulation: constitutional requirements and reform proposals”, Submission to the European Commission Call for Evidence on the Communication on Better Regulation, HEC Paris Research Paper No. LAW-2026-1591, February 2026, 7, accessed July 17, 2026, http://dx.doi.org/10.2139/ssrn.6168211.

^[44] Alemanno, “Deregulating better regulation”.

^[45] Treaty on European Union, Article 11(3); European Commission, A simpler, clearer and better enforced EU Rulebook, 6–10; Alemanno, “Codifying better regulation”, 4–5, 10; Alemanno, “Deregulating better regulation”.

^[46] Judgment CJEU, Czech Republic v European Parliament and Council, 3 December 2019, case C-482/17, ECLI:EU:C:2019:1035, para. 85.

^[47] Judgment CJEU, Republic of Lithuania and Others v European Parliament and Council (“Mobility Package”), 4 October 2024, joined cases C-541/20 to C-555/20, ECLI:EU:C:2024:818, paras. 150–153.

^[48] European Ombudsman (Teresa Anjinho), Recommendation on the European Commission’s compliance with ‘Better Regulation’ rules and other procedural requirements in preparing legislative proposals that it considered to be urgent, cases 983/2025/MAS (“Omnibus”), 2031/2024/VB (“migration”) and 1379/2024/MIK (“CAP”), 25 November 2025, conclusion, accessed July 17, 2026, https://www.ombudsman.europa.eu/en/recommendation/en/215920.

^[49] European Ombudsman (Teresa Anjinho), Decision on the European Commission’s compliance with Its ‘Better Regulation’ rules and other procedural requirements in preparing legislative proposals that it considered to be urgent, cases 983/2025/MIK (“Omnibus”), 2031/2024/VB (“migration”) and 1379/2024/MIK (‘CAP’), 23 June 2026, conclusion, accessed July 19, 2026, https://www.ombudsman.europa.eu/en/decision/en/228151. The Ombudsman closed the inquiries following the Commission’s overall agreement to implement the recommendations, while noting that the effectiveness of the measures adopted remained to be assessed.

^[50] European Commission, A simpler, clearer and better enforced EU Rulebook, 2, linking streamlined procedures to greater legal certainty and identifying enforcement of the single market rulebook as a strategic priority. 

Picture credit: by http://www.kaboompics.com on pexels.com.

Professor Kees Groenendijk, Radboud University, Emeritus and Professor Elspeth Guild, University of Liverpool

Photo credit: Dietmar Rabich / Wikimedia Commons / “Münster, Stadtweinhaus, Beflaggung Ukraine und EU -- 2022 -- 0219” / CC BY-SA 4.0

On 3 March 2022 the EU legislator, for the first time, opened a temporary protection scheme under Directive 2001/55 for those fleeing the Russian invasion of Ukraine. While the Directive limits the duration of any scheme to three years maximum, the EU legislator has already extended the scheme to five years and is currently reflecting on where to go next. The validity of the extra extension has already been considered by Peers, Ineli-Ciger and others and for the moment the Court of Justice has yet to be asked. 

In the meantime, the war in Ukraine continues. Some have assessed that at the current rate of progress, it would take Russia centuries and tens of millions of deaths to succeed in occupying Ukraine. It seems that Ukrainian attacks in Russia are causing havoc and the Ukrainian military is holding up and diversifying its strategy. There is little or no news about any peace negotiations. Last year Eurostat advised that 4.31 million non-EU citizens who fled Ukraine as a consequence of the Russian war of aggression against Ukraine had a temporary protection status in the EU. The number is unlikely to have diminished since then. Many of these people arrived in the EU soon after the opening of the scheme and will soon have been resident in the EU for five years.

In this blog, we examine the pressing need for a common EU approach to providing a durable status to those who are in the EU and address some of the issues which are being expressed by some Member States and EU institutions. In 2023, we examined the nature of the temporary protection scheme and the challenges for the Member States. In our contribution to Govaere and Graben The Impact of War (in Ukraine) on the EU Hart, 2025) we examined the options available to the EU legislator and Member States regarding the long term status of beneficiaries of the Temporary Protection scheme. At that time we strongly recommended that there would need to be an EU wide scheme to bring these persons into a stable and permanent status. We proposed a number of options, from the most liberal – a modified free movement of persons regime with Ukraine in the context of the EU-Ukraine enlargement procedures to the most limited a special scheme limited to those who are already reaching the end of the scheme’s life span. 

What we did not expect at the time of writing was that the EU legislator would simply continue to extend the scheme notwithstanding the express limit in the directive to three years. But this has been the policy option for the moment. 

In September 2025, a Council Recommendation proposed that there be a transition into national or EU legal statuses for those currently benefitting from temporary protection. Few, however, have managed to do so. problem is the numbers. In 2024, according to Eurostat  the Member States managed to issue 3.5 million first residence permits to non-EU citizens. Adding 4.31 million applications to change status or be issued a new permit in a different status would undoubtedly cause consternation to the officials charged with the task. Further, as we argued before, unless there is a common EU status for temporary protection beneficiaries any differences in treatment could result in them moving among the Member States in search of greater stability.

In one of the most important destination states for temporary protection beneficiaries the following information is available: according to the Central Alien’s Registration a total of 1,346,200 displaced persons from Ukraine were living in Germany on 30 April 2026, more than 96% having Ukrainian nationality. 88% received a residence permit for temporary protection under Directive 2001/5 and §24 of the Aufenthaltsgesetz, 7% applied for that residence permit but their applications are still pending, and 2% applied for international protection. The remaining 3% did not apply for either temporary or international protection. According to the same source, 467,100 displaced persons from Ukraine who came to Germany between February 2022 and 31 December 2025, were no longer living in Germany at that date (or have otherwise disappeared from the register). Thus, a quarter of the displaced persons who came to Germany after the Russian war of aggression no longer live in that member state. Apparently, few displaced persons received a national or an EU-residence permit instead or in addition to their temporary protection status.

In light of these pressing issues and the difficulty which the EU legislator is having with the question, we are now revisiting the subject with a view to providing a clear action plan to provide these people with security while assuaging concerns of some Member States.

When the EU legislator first addressed the issue of security of residence for third country nationals resident in the EU it adopted a directive in 2003. Having commissioned research on the normal period of residence Member States require for third country nationals to spend in a state before enjoying security of residence, the EU legislator alighted on the period of five years as the most appropriate to ensure genuine integration and fair treatment to resident third country nationals. The same time period should be applicable also to temporary protection beneficiaries on the basis of the same arguments.

In light of the difficulties of the EU legislator to adapt any existing measure to resolve the pressing need to provide certainty and security of residence of Ukraine temporary protection beneficiaries we now propose the following course of action.

The Proposal and Adoption of a new EU legal instrument

The Commission should propose a new legal instrument based on Article 79(2)(a) and (b) TFEU consisting of the following five essential elements:

1. Beneficiaries of temporary protection from Ukraine who have resided legally in an EU Member State for five years retain the rights they acquired under Directive 2001/55/EC or under national law in that Member State. The transition should be fully automatic.

2. Member States may not introduce new restrictions on the right of residence, the access to (self-)employment, and access to general and vocational education applicable to the persons referred to in point 1.

3. Member States may withdraw a right of residence acquired under point 1 only on the exclusion grounds listed in Article 28 of Directive 2001/55/EC, the grounds relating to public policy, public security or public health listed in Article 27 of Directive 2004/38/EC, or in case the person has not been present in the territory of the European Union for a period of 12 consecutive months (cfr. Article 9(1)(c) of Directive 2003/109/EC).

After five years of lawful residence (and employment during part of those five years) termination of residence on economic grounds is no longer permitted. [cfr. for third-country nationals with an EU long-term residence permit, according to Article 12(2) of Directive 2003/109/EC, and for Union citizens, according to Article 16(4) of Directive 2004/38/EC.]

4. In case of the loss of the right of residence pursuant to point 3, the rights under Directive 2001/55/EC are reacquired. In case the temporary protection for beneficiaries from Ukraine has come to an end,  the national law of the Member State shall apply to the third country nationals mentioned in the first sentence.

5. Member States have the right to adopt or maintain more favorable provisions.

Three Main Aims

Establishing an almost uniform transitional residence status at EU level, as long as no other more stable and durable residence status is acquired under EU or national law, would serve three aims: (1) granting secure residence rights would on the one hand promote the integration of those wanting to remain in their Member State of residence and (2) on the other hand support the voluntary return of those considering return to Ukraine by explicitly allowing for absence from the EU up to twelve months. (3) The third aim is the reduction of administrative burden through the quasi-automatic acquisition of durable  residence rights after five years of temporary protection.

The majority of temporary protection beneficiaries from Ukraine entered their host Member States in 2022. By 2027, these individuals will have resided legally in that Member State for five years on the basis of Directive 2001/55/EC. From mid-2027, the abovementioned transitional EU residence status should will be acquired gradually and automatically on the basis of EU law without an application or a decision by an administrative authority. The likelihood of large numbers of asylum procedures and the associated burden on asylum authorities and, potentially, the courts will be reduced, whilst the continued protection needs remain guaranteed at the level provided in Directive 2001/55/EC. The second sentence of Article 8(1) of that directive, concerning documents to be issued, will continue to apply, pursuant to point 1. 

Further Explanation

The proposed regulation utilizes elements of the residence status of third-country nationals with an EU long-term residence permit under Directive 2003/109/EC and the status of EU citizens under Directive 2004/38/EC. The proposed scheme also serves Ukraine's interests regarding the voluntary return of Ukrainian citizens and represents a preferential treatment of Ukrainian citizens under EU migration law, compatible with Ukraine’s status of candidate member state, without requiring Ukraine's membership in the European Union or establishing EU citizenship for Ukrainian citizens. The scheme does not provide for more intra-EU mobility with this durable residence right than under the Temporary Protection Directive before acquisition of the EU-long term residents’ permit or Union citizenship.

The scheme clarifies that, after five years of lawful residence in a Member State, deportation to Ukraine is only possible in exceptional individual cases and that the war refugees and their families are part of Europe. Individual review by immigration authorities only in cases of loss of the durable residence right. Reunification with family members from Ukraine or family members living in other Member States would be governed by Article 15 of Directive 2001/55/EC, the Family Reunification Directive 2003/86/EC, or, in case those the relevant provisions of those two instruments are not applicable, by national law. Pursuant to point 1 of the proposed new instrument, the right to apply for asylum, confirmed in Article 17 TPD will continue to apply to persons with the new EU status. This transitional scheme would also apply to third-country nationals without Ukraine’s citizenship who acquired temporary protection under Directive 2001/55/EC.

At present, war refugees granted temporary protection under Directive 2001/55/EC are excluded from the personal scope of the EU Long-Term Residence Directive 2003/109/EC, the Blue Card Directive 2021/1883/EU, the Single Permit Directive 2024/1233/EU, and the Students and Researchers Directive 2016/801/EU. The proposed new EU-status is not mentioned in Articles 2 or 3 of these four directives. The exclusion clause in those four directives no longer obstructs access to employment and social inclusion in Member States on the basis of those directives. The previous residence on the basis of Directive 2001/55 counts as lawful residence for the application of those four directives.

One final remark

As long as the Russian war of aggression in Ukraine continues, Directive 2001/55/EC should be extended for (a) new war refugees from Ukraine, and (b) war refugees from Ukraine who have resided in a Member State for less than five years and are, hence not yet covered by the transitional scheme.

Ana Cardoso (PhD candidate & Master’s in European Union Law at the School of Law of University of Minho. FCT research scholarship holder – 2025.06747.BD.) and Gonçalo Martins de Matos (PhD candidate & Master’s in Judiciary Law at the School of Law of the University of Minho)

In March 2026, the Portuguese Parliament started a rollback of the protection of trans and intersex persons in the country, by repealing Law no. 38/2018 of the 7^th of August,[1] and introducing several bills that – if approved – will mean a major regression on LGBTIQA+[2] people’s rights.[3] As we come out of Pride Month, we must ask if Portugal’s recent position is compatible with the foundational values of the EU and recent developments of the jurisprudence of the Court of Justice of the European Union (“CJEU”).

The potential rollback of rights being discussed in Portugal is not dissimilar from the Hungarian legislation that targeted LGBTIQA+ rights and which gave rise to the recently delivered Judgment C-769/22 Commission v. Hungary.[4] Following an infringement procedure filed against Hungary, the CJEU was called upon to rule on the conformity of that legislation with the fundamental values of the EU. Beyond the issues relating to the specific EU law provisions applicable, the main question underlying this infringement procedure was the consideration of a breach of Article 2 TEU as a self-standing ground for finding an infringement of EU law, i.e. granting justiciability to Article 2.[5] 

The CJEU found that the values set out in Article 2 TEU “lay down legally binding horizontal obligations within the Union and define the very identity of the Union as a common legal order”,[6] which is why, considering the principle of mutual trust, no Member State is to exercise its powers in a way that would go against those values. These were accepted on a reciprocal basis by the Member States, have freely and voluntarily been subscribed, and mean an obligation of respect and promotion.[7] In that sense, the CJEU ruled that “Such stigmatisation and marginalisation, which is tantamount to establishing, maintaining or reinforcing the social ‘invisibility’ of some members of society, runs counter to the values of respect for human dignity, equality, and respect for human rights, including the rights of persons belonging to minorities, as referred to in Article 2 TEU”.[8]

In Portugal, the recently repealed Law no. 38/2018 aimed to respond to societal worries when it came to the protection of trans persons – specifically those of the LGBTIQA+ community – as well as follow the 2015 recommendations on this issue of the European Commissioner for Human Rights.[9] This law protected the right to self-determination and expression of sex/gender characteristics – as a corollary of the fundamental right to free personality development –, stating that all persons were free and equal in dignity and rights, and establishing a State-obligation to create the necessary conditions for the full and effective exercise of the right to self-determination.

It also allowed for minors, between the ages of 16 to 18 years-old, to legally change their name and sex in legal documents as long as they complied with some basic requirements:  (i) the request had to be made by their legal guardians, (ii) there had to be a face-to-face hearing of the applicant to assess their express, free and informed consent, (iii) a medical or psychological report attesting exclusively to the minor’s express, free and informed consent, (iv) and the decision had to take into account the best interests of the minor.[10] This issue is at the centre of the discourse around the recent repeal.

Back in 2021, when Hungary introduced the legislation that led to the infringement procedure discussed above, Portugal was presiding over the Council, and decided to maintain a neutral position on the matter, arguing the need for institutional impartiality, something that was highly contested in Portuguese civil society – and some could argue, an early indication of the path now being followed –, as this was a question of the protection of fundamental rights.[11]

Currently, Law no. 7/2011 of the 15^th of March is back in force, awaiting the approval of new legislation on the matter of the legal recognition of trans identities. At the time, this law had been a milestone in the history of trans rights in Portugal, creating the first legal procedure for changing sex and first name on the civil registry.[12] However, for today’s standards, it is not enough. First, Articles 2 and 3 require a diagnosis of “gender identity disorder” to make this change possible, leading to excessive medicalisation of trans identities. Secondly, it does not make any provisions when it comes to young people. These were some of the reasons at the basis of European Commissioner for Human Rights’ recommendations, which led to its substitution by Law no. 38/2018.

When it comes to the current state of things, the parties belonging to the coalition that currently forms the Portuguese government presented legislative proposals. On one hand, PSD argues for the reintroduction of the requirement for a mandatory medical report in order for a change of sex and name in the civil registry to happen. This report would need to include a diagnosis of “gender incongruence” and would be prepared by a specialised multidisciplinary clinical team and signed by at least one specialist doctor and psychologist. This from the age of 16, but before that age the requirement is a specialised medical evaluation and the informed and express consent of those holding parental responsibilities or legal guardianship.[13]

More conservatively, the other party in the coalition – CDS-PP – proposed a bill that prohibits puberty blockers and/or hormone therapy in the treatment of gender dysphoria before 18 years of age in order to “protect the integrity of children”, thus not truly recognising adolescents’ capacity to decide on issues relating to their own sexual or gender identity.[14]

The Chega party went further, by introducing new articles for the “protection of children and young people”, providing for a ban on the inclusion of gender ideology in program content in educational establishments for children under 18, determining that parents or legal guardians should be solely responsible for education in this field.[15]

In the Judgment C-769/22, the European Commission already contested this argument, namely in paragraphs 102 through 105. It did so specifically by arguing that the right of parents to oversee the education of their children and taking into account their religious and philosophical convictions as provided for in Article 14(3) of the Charter of Fundamental Rights of the European Union cannot be interpreted in a way that justifies Member States to adopt legislation that discriminates and jeopardises the right to free speech and the human dignity of third persons, including minors.[16]

Additionally, the use of the word “children” to refer to young people under 18-years-old does not seem to be happenstance. The Law no. 38/2018 provided allowances for what are truly adolescents, meaning young people old enough not only to understand but also to discuss complex issues in depth, including those of a medical nature; this has been the general experience of healthcare professionals. It does not seem erroneous for this to apply to sexual health care and the legal change of identification documents, provided the adolescent shows capacity.[17]

These proposals are now under analysis at the Comissão de Assuntos Constitucionais, Direitos, Liberdades e Garantias, the body responsible for debating and overseeing matters related to, amongst others, the interpretation of the Constitution and fundamental rights.[18]

Although PSD and Chega consider the 2011 system “balanced”, several organisations advocating for transgender and intersex people have challenged the proposals, which they describe as a step backwards, and opinions from clinicians that the projects in question constitute a setback and are not based on substantiated scientific evidence are unanimous.[19]

If the proposed changes are adopted by the Portuguese parliament, the resulting legal regime will have effectively backslid to an inferior level of fundamental rights protection than the current one. That alone would be enough to trigger an infringement procedure based on the breach of the principle of non-discrimination and of the principle of the highest level of protection, established respectively in Articles 21 and 53 of the Charter of Fundamental Rights of the EU. However, taking into account what we have learned from the analysis of Judgment C-769/22 Commission v. Hungary, the discrimination posed by the legislative proposals in question are also in breach of the fundamental values of the EU enshrined in Article 2 TEU.

The obvious and inevitable consequence of adopting restrictive legislation in matters of fundamental rights, focusing on the rights of sexual and/or gender minorities, is the finding of a breach of the EU’s fundamental values and, consequently, being subject to an infringement procedure similar in nature to the one analysed above.[20]

Nevertheless, irrespective of what will be the European Commission’s decision once this rollback is solidified, the high-level of protection of LGBTIQA+ rights in the EU that often led authors to call it “rainbow Europe”[21] is under threat.

[1] SIC Notícias and Lusa, “Parlamento debate identidade de género: Chega, PSD e CDS querem revogar ou alterar legislação”, SIC Notícias, March 19, 2026, accessed March 30, 2026, https://sicnoticias.pt/pais/politica/2026-03-19-parlamento-debate-identidade-de-genero-chega-psd-e-cds-querem-revogar-ou-alterar-legislacao-121fb6c0.

[2] The “LGBTIQA+” terminology used in this post is controversial, with other designations used by authors and institutions. Here we follow the one adopted by the European Commission and accepted by society at large; but even at the EU level other terminology has been used: in 2015 the term LGBT was utilised, in 2020 it changed to the term LGBTI, in 2021 LGBTIQ appeared in official documents, and more recently LGBTIQA+ was embraced.

[3] IGLYO, “Portugal: Don’t roll back trans and intersex rights”, March 18, 2026, accessed March 31, 2026, https://www.iglyo.org/news/portugal-dont-roll-back-trans-and-intersex-rights.

[4] Judgment CJEU European Commission v. Hungary, 21 April 2026, Case C-769/22, ECLI:EU:C:2026:326.

[5] Gonçalo Martins de Matos, “Glimpsing the tunnel exit: the justiciability of Article 2 TEU and the future of the European Union”, UNIO EU Law Journal – The Official Blog, 3 April 2026, accessed 7 July 2026, https://officialblogofunio.com/2026/04/03/glimpsing-the-tunnel-exit-the-justiciability-of-article-2-teu-and-the-future-of-the-european-union/.

[6] Judgment Commission v. Hungary (C-769/22), recital 546.

[7] Judgment Commission v. Hungary (C-769/22), recital 549.

[8] Judgment Commission v. Hungary (C-769/22), recital 555.

[9] Assembleia da República, Comissão de Assuntos Constitucionais, Direitos, Liberdades e Garantias, “Parecer do Projeto de Lei n.º 242/XIII/1.ª (BE)”, June 29, 2016, 2.

[10] Ana Cardoso, «The protection of LGBTIQ people in the European Union. The difference between “sex” and “gender” – its merits and shortfalls» (Masters diss., University of Minho, 2023): 75-78.

[11] Ana Cardoso, “The Hungary question: how are the rights of LGBTIQ people in the EU?”, UNIO EU Law Journal – The Official Blog, June 28, 2021, accessed March 30, 2026, https://officialblogofunio.com/2021/06/28/the-hungary-question-how-are-the-rights-of-lgbtiq-people-in-the-eu/.

[12] Assembleia da República, Lei n.º 7/2011, de 15 de março, accessed June 25, 2026, https://diariodarepublica.pt/dr/detalhe/lei/7-2011-278187.

[13] Grupo Parlamentar Partido Social Democrata, Projeto de lei n.º 486/XVII/1ª que altera o regime jurídico de mudança de sexo e de nome próprio no registo civil, March 06, 2026, accessed June 03, 2026, https://www.parlamento.pt/ActividadeParlamentar/Paginas/DetalheIniciativa.aspx?BID=356298.

[14] Grupo Parlamentar do CDS-PP, Projeto de Lei N.º 479/XVII/1ª que protege a integridade das crianças e proíbe a utilização de bloqueadores da puberdade e/ou terapia hormonal no tratamento da incongruência ou disforia de género em menores de 18 anos, March 05, 2026, accessed June 03, 2026, https://www.parlamento.pt/ActividadeParlamentar/Paginas/DetalheIniciativa.aspx?BID=356287.

[15] Grupo Parlamentar do Chega, Projeto de Lei n.º 391/XVII/1.ª que actualiza a regulação do procedimento de mudança de sexo e de nome próprio no registo civil, em particular no que diz respeito à protecção das crianças e jovens, à luz da evidência científica mais recente e em consonância com os princípios da bioética e da dignidade da pessoa humana, January 21, 2026, accessed June 03, 2026, https://www.parlamento.pt/ActividadeParlamentar/Paginas/DetalheIniciativa.aspx?BID=346025.

[16] Judgment Commission v. Hungary (C-769/22), recitals 102-105.

[17] Katherine Romero and Rebecca Reingold, “Advancing adolescent capacity to consent to transgender-related health care in Colombia and the USA”, Reproductive Health Matters, v. 21, no. 41 (2013): 186-187 and 189.

[18] Assembleia da República, “Comissão de Assuntos Constitucionais, Direitos, Liberdades e Garantias”, accessed June 25, 2026, https://www.parlamento.pt/sites/COM/XVIILeg/1CACDLG/Apresentacao/Paginas/default.aspx.

[19] Joana Mourão Carvalho, “Parlamento aprova reintrodução da obrigatoriedade de validação médica para a mudança de género”, euronews, March 20, 2026, accessed Jue 25, 2026, https://pt.euronews.com/2026/03/20/parlamento-aprova-reintroducao-da-obrigatoriedade-de-validacao-medica-para-a-mudanca-de-ge. Fernada Câncio, “Identidade de Género: PSD quer de volta a lei “inaceitável” de 2011 que Cavaco vetou”, Diário de Notícias, March 19, 2026, accessed June 25, 2026, https://www.dn.pt/política/identidade-de-gnero-psd-quer-de-volta-a-lei-inaceitvel-de-2011-que-cavaco-vetou.

[20] For more on these consequences, see Gonçalo Martins de Matos, “Defending the Rule of Law in the European Union: the role of the infringement procedure”, UNIO – EU Law Journal, Vol. 12, No. 1 (2026), https://doi.org/10.21814/unio.12.1.7524, 96-110.

[21] Philip M. Ayoub, David Paternotte, “Europe and LGBT Rights: A Conflicted Relationship”, The Oxford Handbook of Global LGBT and Sexual Diversity Politics (2019): 2.

Picture credit: by Artem Kulinych on pexels.com.

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Dr. Izabella Majcher, Independent Consultant

Photo credit: Shutterstock

*References to the Regulation's provisions reflect the agreed text at the time of writing and may change following legal-linguistic revision

Amid chants of "send them back" from some Members of the European Parliament, the Parliament adopted the EU Return Regulation on 17 June 2026 by 418 votes to 218, with 30 abstentions. Such a broad majority on legislation that would otherwise have been highly divisive was made possible by the European People's Party (EPP)'s alliance with far-right groups, breaking the political firewall traditionally maintained in several Member States. The vote drew criticism from NGOs, academics and journalists, and also prompted concern within the United Nations. Ahead of the vote, nearly 50 current and former international human rights experts issued a joint statement expressing their concerns. Following its adoption, the UN High Commissioner for Human Rights publicly expressed his deep regret.

The parliamentary vote marked the culmination of an exceptionally rapid legislative process. As announced in European Commission President Ursula von der Leyen's Political Guidelines for her second Commission, the Commission presented its proposal for a Return Regulation on 11 March 2025 (discussed here). The Council adopted its position on 8 December 2025 (discussed here), followed by the European Parliament's report on 26 March 2026 (discussed here). The subsequent interinstitutional negotiations progressed at an equal pace, culminating in the final trilogue on 1 June 2026. Once the text has undergone legal-linguistic revision, it will be published in the Official Journal of the European Union. The Regulation will become applicable one year later, replacing the Return Directive, although several provisions—including those on return hubs, preparations for the European Return Order form and readmission procedures—will apply immediately.

Given the political support from right-wing groups and the underlying objective of the proposal of increasing returns, it is unsurprising that the Regulation relies heavily on coercive measures while lowering safeguards across the board. What remains less clear is whether it will actually increase the number of returns, except perhaps at the expense of compliance with international and EU human rights standards. This blog highlights ten aspects of the Regulation that raise particularly serious human rights concerns before offering some concluding reflections.

1)    Return decisions and effective remedy

The Regulation introduces several changes that collectively weaken the assessment of the risk of refoulement. It allows return decisions either to omit the country of return or to designate several possible countries of return. The person need only be informed of the intended country of return sufficiently in advance of removal (Articles 7, 13 and 24). The Regulation also clarifies that Member States are not precluded from issuing a return decision where a hindrance to removal exists; where a risk of refoulement has been identified, removal to the country concerned must simply be postponed. Where the person indicates, or the authorities otherwise become aware, that removal would breach the principle of non-refoulement, the competent authorities must either refer the person to the appropriate procedure, including the asylum procedure, or assess the risk of refoulement themselves. In doing so, they may rely on or take into account any previous assessment of that risk. It is possible that the risk of refoulement is assessed by authorities issuing or enforcing a return decision.

This approach makes the right to an effective remedy all the more important. Compared with the Directive, the Regulation provides greater detail on the applicable standards (Article 26). It requires that the remedy provide for a full examination of both facts and points of law. Where material brought to the attention of the court or tribunal hearing the appeal, as supplemented or clarified through adversarial proceedings, indicates that the principle of non-refoulement may be at risk, the court or tribunal must verify compliance with the obligations arising from that principle. As regards the suspensive effect of appeals, the Regulation does not establish an automatic right to suspension. Instead, it clarifies that Member States must ensure, in full compliance with Article 47 of the Charter, that removal can be suspended before it is carried out (Article 28). Suspension may be granted upon request by the person concerned, unless national law also provides for suspension ex officio.

2)    Mutual recognition of return decisions

Mutual recognition of return decisions is presented as one of the Regulation's key innovations and as a part of the broader "common system for returns" (Article 42). In reality, however, the mechanism is neither new nor straightforward to implement. Under it, a Member State that apprehends a person who has already received a return decision in another Member State may recognise and enforce that decision instead of issuing a new one (Article 9). This is facilitated through a European Return Order—a standard form containing the main elements of the return decision—which is made available to Member States through the Schengen Information System. The mechanism itself is not new. It was already established by a 2001 Council Directive, although it appears to have been used only sparingly in practice. The Commission originally proposed making mutual recognition mandatory, but this approach did not receive the support of the co-legislators. As adopted, the mechanism therefore remains optional. Nevertheless, Member States are required to put in place preparatory measures, and the Commission may submit legislative proposals following an assessment to be carried out within two years of the Regulation becoming applicable. Recognising another Member State's return decision raises both practical and legal challenges. Since the grounds for lawful stay are not harmonised across the EU, a person may be in an irregular situation in one Member State but lawfully present in another. The enforcing Member State may therefore face litigation while also bearing the costs of removal and, where applicable, detention. More fundamentally, mutual recognition of return decisions and entry bans raises proportionality concerns because it exports the most restrictive national approaches across the Union, while no equivalent system exists for the mutual recognition of lawful residence statuses.

3)    Voluntary departure

The Regulation adopts a confusing approach to so-called voluntary departure. Under the Directive, Member States are required to grant a period for voluntary departure of between seven and thirty days, subject to three exceptions: where there is a risk of absconding, where an application for legal stay has been rejected as manifestly unfounded or fraudulent, or where the person poses a risk to public policy, public security or national security (Article 7). The Regulation removes this obligation and instead leaves Member States with a choice between granting a period for voluntary departure and requiring the person to leave immediately (Article 7). Moreover, where a period for voluntary departure is granted, it need no longer be at least seven days. These changes sit uneasily with the EU's broader approach to return, which has consistently favoured voluntary departure over forced removal and has invested considerable resources in assisted voluntary return and reintegration programmes. Indeed, the Regulation itself requires Member States to ensure the availability of return and reintegration programmes, which may be supported or financed by the EU. It further specifies that such programmes should provide a broad ranging assistance and incentives, including reintegration support (Article 46). Voluntary return is generally more conducive to a safe and dignified return and is also in the interest of Member States, given that forced removals are considerably more costly and complex to organise. Arguably, these amendments are intended primarily to signal a more coercive approach rather than to produce a significant change in practice. Even under the Directive, Member States are not required to grant a period for voluntary departure where there is a risk of absconding or concerns relating to public policy or security. Conversely, the Regulation still allows Member States to grant voluntary departure at their discretion, except for persons considered to pose security risks (see more on this category here).

4)    Duties and sanctions

The Regulation establishes an extensive—and at times overlapping—set of obligations for persons subject to return, raising concerns regarding legal certainty and proportionality. It introduces a general duty to cooperate (Article 21), encompassing more than a dozen specific obligations. These include appearing before third-country authorities for the issuance of travel documents or the verification of identity or nationality, and complying with third-country entry requirements, including health-related requirements. The list is open-ended, as it also incorporates obligations provided for under national law.

The Regulation also empowers Member States to impose various restrictive measures, including obligations to remain within a designated geographical area, reside at a specific address, or report periodically to those authorities (Article 23). Under international human rights law, these measures constitute restrictions on freedom of movement. Nevertheless, the Regulation does not require that they be necessary to achieve a legitimate objective. In addition, it introduces a further category of movement restrictions that may be imposed, implicitly, where there is a risk of absconding (Article 23c), including bail and electronic monitoring. Although labelled "alternatives to detention", these measures may also be imposed where detention itself would be unlawful—for example, after the maximum permissible period of detention has expired.

Failure to comply with some of these obligations may be treated as evidence of a risk of absconding, or it may directly justify detention. Other consequences include reductions in social allowances, financial penalties, extensions of entry bans and criminal sanctions, including imprisonment (Article 23b). In practice, almost any person subject to return could fail to comply with one or more of these numerous obligations, thereby exposing them to a cascade of restrictive measures and sanctions. The breadth of this regime falls short of the requirements of necessity and proportionality, leaving considerable scope for arbitrary application.

5)    Investigative measures

At the Council's initiative, the Regulation introduces a new category of so-called "investigative measures" (Article 23a). These measures authorise the authorities, without the person's consent, to search persons subject to return, their homes and other relevant premises, and to seize personal belongings, including electronic devices. The Regulation also permits the use of additional investigative measures provided for under national law. Searches of homes and other premises require either prior judicial authorisation or, where permitted under national law, an administrative order where the search is necessary, proportionate and duly justified by urgency. The Regulation specifies that investigative measures may be used where necessary, proportionate, and duly justified to ensure an effective return. It also requires that they respect fundamental rights and remain subject to the safeguards and remedies available under Union and national law. Nevertheless, the provision raises significant concerns in practice. It may facilitate police raids on homes, shelters and other premises accommodating or supporting people in an irregular situation, potentially relying on racial profiling and creating a climate of fear within migrant communities.

6)    Detention

The Regulation significantly expands the legal framework governing detention, both by broadening the grounds and by increasing its maximum duration (Article 29). Under the Directive, Member States may impose pre-removal detention on two grounds only: where there is a risk of absconding or where the person avoids or hampers the preparation of return (Article 15(1)). Unlike the Directive, the Regulation lays down detailed criteria for determining whether a person poses a risk of absconding (Article 21a). However, these criteria are drafted so broadly that most persons in an irregular situation are likely to satisfy at least one of them and, crucially, many bear little relation to the person's actual propensity to abscond. The Regulation establishes four criteria that give rise to a rebuttable presumption of a risk of absconding, including irregular entry into the territory. It further lists seven additional criteria—including the absence of a reliable address—and permits Member States to rely on criteria laid down in national law to assess the risk of absconding.

In addition to the two detention grounds contained in the Directive, the Regulation adds three further grounds. First, Member States may detain a person considered to pose a security risk, including a threat to public policy, public security, national security or any other security threat identified under national law. This broad ground blurs the distinction between administrative immigration detention and criminal detention. Given that immigration detention affords significantly fewer procedural safeguards than criminal detention, it should remain limited to grounds directly related to the enforcement of removal. Second, detention may be imposed in order to determine or verify a person's identity or nationality. This ground is particularly problematic because such procedures may take considerable time, for example, when a person is stateless, or their identity documents are not recognised. Moreover, detention may be imposed on this ground even in the absence of any risk of absconding. Third, a person may be detained for failing to comply with one of the Regulation's numerous cooperation obligations (discussed above), such as complying with carriers' travel requirements, fulfilling third countries' entry requirements, or complying with electronic monitoring requirements. Fourth, Member States may also rely on detention grounds established under their national law where these are considered necessary to ensure an effective return procedure. Leaving the determination of detention grounds to national law undermines the very objective of harmonising return-related measures across the EU.

The Regulation also dramatically extends the maximum permissible period of detention. Under the Directive, detention may last up to six months and may be extended by a further twelve months where the removal operation is delayed due to a lack of cooperation by the person concerned or the third country. Under the Regulation, the initial detention period may last up to 12 months and may then be extended by a further 12 months on the same grounds, as well as in "exceptional" circumstances provided for under national law. The resulting two-year period may be prolonged by an additional six months where there is a risk of absconding and one of three vaguely defined changes in circumstances gives rise to a reasonable prospect of removal. However, it is difficult to understand why a reasonable prospect of removal would emerge only after a person has already spent two years in detention. Such lengthy periods of detention are manifestly disproportionate and seriously undermine the fundamental right to liberty.

Finally, the Regulation weakens the safeguards requiring migrants to be detained in specialised detention facilities. This approach is at odds with the standards consistently advocated by the UN Working Group on Arbitrary Detention and the European Committee for the Prevention of Torture.

7)    Entry bans

An entry ban is a punitive measure that links return policy with border and visa policy by preventing a person from re-entering the EU through regular channels. The Regulation significantly expands the scope of this measure (Article 10). Under the Directive, an entry ban accompanies a return decision and is mandatory where no period for voluntary departure has been granted or where the person has failed to comply with that period (Article 11). The Regulation introduces the possibility of imposing an entry ban even in the absence of a prior return decision, where a person's irregular stay is detected during exit border checks or where they leave the territory before a return decision has been issued. This new possibility is both disproportionate and highly punitive, as it penalises individuals who are attempting to leave the territory. Moreover, where no formal decision is issued, a person may not even be aware that they are subject to an entry ban and may effectively be deprived of their rights of defence and to an effective remedy. Such an approach sits uneasily with the principles of good administration and legal certainty and creates a significant risk of arbitrary decision-making. The Regulation also doubles the maximum duration of entry bans in ordinary cases, from five to ten years, and allows them to be extended to twenty years where necessary to prevent re-entry. As under the Directive, the duration of an entry ban may nevertheless be reduced, or the ban withdrawn or suspended, in individual cases. In this context, the person's private and family life established in the Member States is a key consideration.

8)    Children

The Regulation introduces several safeguards for unaccompanied children, including the appointment of a guardian, the right to be heard during the return procedure and a review of detention every three months (Articles 20 and 33). At the same time, however, it weakens several of the protections currently provided under the Directive. These include removing schooling from the express grounds for extending the period for voluntary departure, reducing the entitlement to education in detention to the provision of "educational activities", and no longer requiring that assistance be provided to unaccompanied children before a return decision is issued. Crucially, almost all of the Regulation's new intrusive measures—including investigative measures and restrictions on freedom of movement (discussed above) —apply equally to children. Only unaccompanied children are exempt from removal to return hubs; families with children can be subject to this possibility. The Regulation's approach to detention is particularly concerning. Since the adoption of the Directive in 2008, international human rights standards have evolved considerably. The UN Committee on the Rights of the Child and the UN Committee on Migrant Workers, the UN Special Rapporteur on the Human Rights of Migrants, and the UN Working Group on Arbitrary Detention have all recognised that children should never be placed in immigration detention. Rather than reflecting this well-established standard, the Regulation substantially expands both the grounds for detention and its maximum duration, while failing to exclude children from its scope. On balance, the Regulation is likely to have a detrimental impact on children's rights.

9)    Alternatives to return

The Regulation largely ignores the reality that not every person in an irregular situation can be returned. Most notably, it removes the existing option to grant regular status rather than issue a return decision. Under Article 6(4) of the Directive, Member States may grant an autonomous residence permit on compassionate, humanitarian or other grounds to a person in an irregular situation. In such cases, no return decision is issued, or, where one has already been adopted, it must be withdrawn or suspended for the duration of the residence permit. As a result of this deletion, the Regulation no longer recognises any humanitarian or human rights-based exception to the obligation to issue a return decision for every person in an irregular situation. Granting regular status enables individuals to access socio-economic rights and justice, while reducing their vulnerability to exploitation. It is equally in the interest of Member States to ensure that people residing on their territory have a lawful status. Given that Member States already provide a range of humanitarian and compassionate residence permits, a genuinely common return system should also preserve avenues for regularisation, which are intrinsically linked to return policy.

10) Return hubs

One of the Regulation's most significant innovations is the possibility of removing a person to a third country with which they may have no prior connection—a so-called "return hub" (Article 17). This mechanism requires the Member State concerned to conclude an agreement or arrangement with the third country. Notably, that country is not required to satisfy the criteria applicable to safe third countries under the Asylum Procedure Regulation. Instead, the Regulation merely provides that it must respect international human rights standards and principles in accordance with international law, including the principle of non-refoulement. However, it does not specify who is responsible for assessing compliance with these requirements or by which criteria such an assessment should be conducted. Only unaccompanied children are exempt from transfer to return hubs. The concept has attracted interest among some Member States, with Rwanda, Uganda and Uzbekistan reportedly among the countries recently considered as potential locations for return hubs. The Italy–Albania Protocol has undoubtedly served as the model for this mechanism. Yet beyond the serious human rights concerns it raises, the Italian experience has also demonstrated the considerable financial and practical challenges of its implementation. Following several transfers blocked by Italian courts, the compatibility of the arrangement with EU law is yet to be decided by the Court of Justice of the European Union (CJEU) (see here and here). Return hubs have also been considered a form of externalisation of migration governance by the UN Special Rapporteur on the Human Rights of Migrants. The Rapporteur warned that they create a risk of violating the principle of non-refoulement, including chain refoulement, exposing individuals to arbitrary detention and undermining procedural safeguards. As the Rapporteur emphasised, States cannot outsource their human rights obligations and may remain internationally responsible for violations committed in the cooperating third country.

Concluding thoughts

During the negotiations on the Return Directive, a Latin American head of state famously described it as the "Directive of Shame" (Directiva de la Vergüenza). From the perspectives of human rights, proportionality, good faith and, indeed, common sense, the future Return Regulation may well deserve to be regarded as the EU's "Regulation of Shame". As the preceding analysis illustrates, the Regulation creates a significant risk of human rights violations, most notably breaches of the principle of non-refoulement—including chain refoulement—and the prohibition of arbitrary detention. It introduces a range of highly intrusive and coercive measures, even though they are part of administrative migration procedures concerning people who have committed no crime. The Regulation also raises serious concerns regarding legal certainty and the prohibition of arbitrariness by deferring to national law on core aspects of the return procedure, including the grounds for detention, the criteria for establishing a risk of absconding, restrictions on freedom of movement, investigative measures and the consequences of non-compliance. In doing so, it undermines one of its own stated objectives: the harmonisation of return rules across the EU. The Regulation is also unlikely to achieve its central policy objective of increasing the number of returns. There is little evidence that reducing opportunities for regularisation while expanding detention and entry bans will make return systems more effective. On the contrary, greater reliance on detention and reduced use of voluntary return are difficult to reconcile with considerations of financial efficiency, itself a guiding principle of EU law-making.

Reaching agreement on such a coercive text was made possible by Parliament's position. Unlike during the negotiations on the Return Directive between 2005 and 2008, the Parliament did not serve as a counterweight to the positions of the Commission and the Council. Whereas interinstitutional negotiations on the relatively short Directive lasted around nine months, agreement on the considerably longer Regulation was reached after only a handful of trilogues over approximately two months. During the negotiations on the Directive, Parliament was instrumental in preserving and strengthening a number of safeguards. By contrast, its position on the Regulation remained largely aligned with the Council's. The alliance between the EPP and far-right groups secured the necessary majority, but support also came from some centrist and liberal MEPs. This reflects a broader shift in the European political landscape, in which restrictive migration narratives have become increasingly mainstream.

With the Regulation now adopted, much will depend on its implementation and interpretation. National courts and the CJEU will have a crucial role in ensuring that its provisions are applied consistently with Member States' obligations under international law, EU law and domestic constitutional standards. Beyond litigation, financial oversight bodies may increasingly scrutinise expenditure on costly detention systems and return hubs. Given that the Commission's proposal was not accompanied by an impact assessment, independent research will be essential to evaluate whether the Regulation's coercive approach actually increases returns. Investigative journalism and advocacy will likewise remain indispensable in documenting its impact and challenging practices that undermine fundamental rights. Perhaps, ultimately, this legislation—shaped by ideas that only a few years ago remained largely confined to the political margins—will also serve as a reminder that the erosion of rights rarely remains limited to a single group. Once exceptions to fundamental guarantees become normalised, the boundaries of exclusion tend to expand, placing ever more people beyond the protection of the law.

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Vitória Menezes Sanhudo (master’s student in European Union Law at the School of Law of the University of Minho)

Over the last decade, the regulatory environment for corporate sustainability in the European Union (EU) has been increasingly reflecting a mindset shift regarding the concept of corporation. The analysis presented here is based on that premise. Despite recent legislative changes resulting from the Omnibus Package, it still seems reasonable to assume that the paradigm of corporate environmental (and social) responsibility in the EU has changed from a shareholder centred approach to a stakeholder-centred and sustainability-oriented approach.

We aim to analyse the ongoing transformation of corporate governance in the EU and the path that appears to be taking shape for the future, while remaining fully aware – against the backdrop of this central issue –, of the changes resulting from the Omnibus Package, which have simplified certain reporting and due diligence obligations regarding sustainability in response to criticism of growing regulatory complexity, mainly deriving from corporations’ limited administrative capacity. The objective is to determine whether the growing integration of sustainability into EU law merely represents increased regulatory density regarding the sustainability of the traditional corporate model or if it signals a structural transformation of the very concept of the commercial corporation towards a model in which sustainability, and perhaps purpose-driven models, assume primacy.

The traditional corporate model

The for-profit business corporation has evolved over time in both its legal and social conception. Nevertheless, during a period that may be broadly defined as extending from the late 1990s and early 2000s until 2014 (with reference to the European legislation to be analysed below), a broad consensus emerged regarding the primacy of the shareholder-oriented model. However, although this deference to shareholders’ interests is not presented as a unilateralist point of view –  detached from the reality in which it operates and solely focused on the goal of generating profit –, it ultimately has that effect. In other words, even if, under any legal system, a business corporation is never viewed as a self-contained entity that exists in complete abstraction from its impacts on society, consideration of its effects on the outside world and on the community is ultimately neglected in the practical conduct of its business activities, causing evident harm.[1]

Henry Hansmann and Reinier Kraakman argue that shareholder primacy represents the culmination of the internal logic of corporate law. In their essay, titled “The End of History for Corporate Law”, the authors offer a reflection on the reasons behind the nearly global triumph of this shareholder-centred view, explaining that, although it is necessary to harmonise the diffuse interests of stakeholders and shareholders, the former should not interfere with corporate law. Rather, these interests should be safeguarded through other areas of law, which, in their view, constitute the most effective means to protect them.[2] Therefore, in the spirit of intellectual honesty, we do not intend to disparage this conception by equating it with a disregard for any interest beyond pure profit, but rather to present it as a viewpoint that argues that shareholders’ interests must be at the centre of management decisions and that directors must be accountable to them. From a more passionate, though measured perspective, Milton Friedman wrote along the same lines, firmly advocating for the separation between the obligations of the state and those of a commercial corporation (a private entity).[3]

Corporate sustainability as an EU regulatory objective

As early as 2001, the Green Paper titled “Promoting a European Framework for Corporate Sustainability Reporting” set the tone, encouraging companies to adopt voluntary practices aimed at reporting their social and environmental performance. The underlying rationale was that companies engaging in such reporting would contribute to broader European environmental and social objectives while demonstrating a responsible commitment to their stakeholders.[4] In 2011, the Commission redefined the concept of corporate social responsibility, stating explicitly that enterprises are responsible for their impacts on society and must meet that responsibility diligently.[5] This approach reinforced the view that such commitments should not merely serve strategic purposes but should form part of the core identity of the business enterprise itself.

The growing urgency of the ecological transition has made it necessary to make deeper commitments. To this end, the EU presented the “Action Plan: Financing Sustainable Growth” (2018, updated in 2021)[6] and the Green Deal (2019), with the latter setting the goal of achieving climate neutrality by 2050 and, in line with the Action Plan, promoting the production of useful information for investors.[7] The objectives set forth in these documents have placed the corporate ecosystem at the centre of the discussion, assigning it a fundamental role on this path towards a truly “green” EU. We recognise the need to create a sustainable social fabric, since people and capital organised in this way emerge as the greatest agents of transformation in society, whether negatively, by using their power to mobilise interests and capital for purely private gain while disregarding everything else, or positively, by harnessing their potential to promote a sustainable economic landscape, with the awareness that the planet and people deserve to be treated as long-term “projects”. Corporations are increasingly and more explicitly taking on an instrumental role in relation to human beings and the environment in which they exist. It is also important to address the study commissioned by the Commission, “Study on Directors’ Duties and Sustainable Corporate Governance” (2020), which laid bare the weaknesses of corporate governance, particularly with regard to practices focused solely on profit and short-term objectives (practices that were still the cornerstone of corporate strategy and that undermined the goals of continuity and sustainability beyond profit).[8] This marked a turning point in raising awareness of the need to increasingly integrate environmental and social considerations.

It was in this context and based on the objectives listed above that several legislative instruments emerged in the EU. Following a chronological order, we will first address the Taxonomy Regulation, in effect since 2020, followed by the Corporate Sustainability Reporting Directive (CSRD), in effect since 2022, and the Corporate Sustainability Due Diligence Directive (CSDDD), in effect since 2024. The Taxonomy Regulation aims to create a sort of dictionary or universal language for understanding the sustainability performance of companies subject to this legislation. This specific regulation defines what constitutes sustainable economic activities; taking this “dictionary” into account, companies must determine, after analysing their own activities,  whether a specific activity is considered sustainable according to those parameters. The CSRD represents a major step forward in the development of sustainability reporting obligations. It requires companies to include detailed, standardised, and comparable sustainability information within their management reports. The Directive substantially expands the scope of the former Non-Financial Reporting Directive, introducing more rigorous reporting standards and subjecting sustainability disclosures to external assurance. 

Ultimately, the central idea behind the Taxonomy Regulation and the CSRD is to redirect capital in the EU toward long-term sustainable activities. Their main objective is to create a reliable information infrastructure. At the same time, these instruments impose significant governance obligations upon corporations and their directors, who must establish the structures and processes necessary to generate the required analyses and disclosures. They function almost like either a “hall of fame” or “hall of shame”, more detailed in the case of the CSRD, which is made available to investors (and the public) so they can allocate their investments in a way that aligns with their values and economic interests. These values and interests have come to be associated with sustainability, not only because consumers themselves have become more demanding in this regard, but also because investors know that by investing in businesses that are in line with the EU’s current and future objectives, they will naturally be increasing their chances of long-term returns and avoiding the risk of economic, financial, and reputational losses due to future non-compliance.

The CSDDD may be regarded as one of the most interventionist legislative instruments adopted in this field, particularly in terms of its impact on internal corporate governance and directors’ responsibilities. It requires companies to identify actual and potential adverse impacts arising from their own operations and throughout their value chains on both human rights and the environment. The Directive’s defining feature lies in the degree of active engagement that it requires. Beyond merely identifying and disclosing adverse impacts, companies must take appropriate measures to prevent, mitigate, and, where necessary, remedy them.[9]

Shareholder primacy has not disappeared, but it has increasingly been tempered by a governance model that accords greater importance to a broader range of stakeholders, including employees, local communities, investors, and the environment, placing sustainability at the centre of corporate decision-making.

Sustainability-oriented corporate models

In this vein, we consider it pertinent to address innovative perspectives in the corporate sphere. In several Member States, new corporate models have been developed that place sustainability at the centre of corporate activity or, at the very least, integrate it into the company’s structure in a comprehensive and essential manner. This section focuses on two prominent examples from Italy and Germany. These models are not the result of EU harmonisation efforts but rather stem from autonomous legislative and market initiatives aimed at proposing alternatives to the traditional shareholder-primacy paradigm.

The first model is the Italian società benefit (SB), introduced by legislation in 2016. Inspired by the American benefit corporation, Law No. 208/2015 established a pioneering framework within the EU that seeks to create a voluntary legal commitment to sustainability. Rather than creating a new corporate form, the legislation introduced a legal status that corporate entities may choose to adopt. The defining feature of the model is the mandatory inclusion, within the company’s corporate purpose, of a dual objective encompassing both profit generation and the pursuit of a specific common benefit or collective interest. The distinction between this model and the general possibility, available in many Member States, lies in the boldness with which it is proposed and drafted, requiring those wishing to become an SB to embrace, at the very core of the company’s identity, objectives that not only guide it but also structurally define it.[10] Naturally, SBs are subject to more stringent duties of transparency, reporting, and accountability than traditional companies. Directors’ duties are correspondingly broadened, at least from a theoretical perspective, as they become linked not only to shareholders’ interests but also to the interests of a broader range of stakeholders. Although these additional obligations may represent an administrative burden, they may also generate reputational benefits and contribute to perceptions of long-term sustainability.[11]

The German model, known as Verantwortungseigentum (responsible ownership) or steward-ownership, represents one of the most innovative developments in the field of sustainable corporate governance. Although it has not yet been recognised as a distinct legal form, various legal arrangements have been used in practice to implement its underlying principles. Whereas the Italian model focuses primarily on the company’s objectives, steward-ownership is centred on ownership structures and control mechanisms. The key actors in this model are the stewards, who function as guardians of the company’s purpose and are selected on the basis of their commitment to that purpose. The fundamental idea is that individual interests cannot undermine the organisation’s mission. This authority is exercised with the objective of advancing the company’s purpose rather than serving the interests traditionally associated with ownership. A central feature of the model is the asset-lock principle, whereby the economic value generated by the company remains attached to the organisation itself and cannot be appropriated for private gain. Profit is regarded primarily as a means of sustaining and advancing the company’s mission. Consequently, profits are generally reinvested, while compensation is provided in proportion to the work performed. This model promotes ways to ensure the continuity of the mission even as stewards and shareholders change.[12]^/[13]

Future outlook: a European corporate ecosystem centred on sustainability and “purpose-driven” corporations?

The legislative transformation that has taken place within the EU over the past decade reflects a clear movement towards the protection of collective interests such as environmental sustainability and human rights. Corporations have been placed at the centre of this process because of the significant impact they can have on these issues.

Although the legislative measures discussed above may initially appear to consist primarily of reporting obligations, classification requirements, and due diligence duties, they have arguably contributed to a deeper transformation in the understanding of the business corporation itself. The obligations imposed on companies require not only the development of sophisticated compliance systems, human resources, and technological capabilities, but also the adoption of concrete measures to address and mitigate identified sustainability risks and adverse impacts.

As a result, the corporation can no longer be viewed merely as a vehicle for pursuing private interests while satisfying minimum legal requirements. Instead, it increasingly appears as an organisation expected to contribute actively to environmental sustainability and the protection of human rights. In this sense, the concept of corporate interest has evolved and acquired a broader social dimension.

To fulfil one of the objectives outlined at the beginning of this study, it is necessary to consider whether a connection may be drawn between the EU sustainability framework and the alternative corporate models currently being developed in certain Member States. The question therefore arises whether the EU is moving, or should move, towards the creation of a European corporate form or legal status comparable to the Italian società benefit or the German steward-ownership model.

From a critical perspective, one of the principal strengths of these models lies in the fact that they create a corporate identity intrinsically linked to sustainability. Such an identity may possess considerable reputational value and may influence the decisions of consumers and investors. In other words, these models provide a formal legal framework through which companies can credibly signal their commitment to sustainability. Nevertheless, it may also be argued that the practical benefits of introducing such models at EU level would be limited, given the extensive body of sustainability legislation that already applies to corporate governance.[14]

There is also a practical consideration that calls into question the desirability of introducing such models at present. The amendments proposed through the Omnibus Package, particularly those affecting the CSRD, the CSDDD, and the Taxonomy Regulation, reflect concerns that the regulatory burden imposed upon companies had become excessively demanding. The reforms were largely motivated by the conclusion that many companies lacked the organisational capacity necessary to comply effectively with the growing number of sustainability obligations.

Against this background, it is legitimate to ask whether companies that struggle to comply with external regulatory obligations would be prepared to embrace more profound organisational transformations involving changes to their corporate identity and governance structures, which would likely generate additional compliance requirements. Nevertheless, this possibility should not be dismissed. These models may serve as valuable sources of inspiration for future developments in corporate law and may encourage companies to pursue specific public-interest objectives that reflect broader social needs. Whether the EU should or will eventually move in this direction remains an open question.

Conclusion

The evolution of corporate governance within the EU demonstrates that sustainability has evolved from a largely voluntary and peripheral concern into a value strongly protected and promoted by law. Through the introduction of legal obligations relating to transparency, due diligence, and the management of environmental and social impacts, companies have been required to adapt their governance structures and decision-making processes in ways that give greater consideration to a broader range of stakeholders. These developments have altered both the regulatory environment in which companies operate and the very understanding of corporate interest, contributing to the growing centrality of sustainability within corporate governance. At the same time, examples such as the Italian società benefit and the German steward-ownership model demonstrate that some companies have already made sustainability a defining element of their organisational identity and purpose. Nevertheless, there is currently little evidence that the EU intends to establish a specific European corporate form or legal status based on these models. Even so, the increasing importance of sustainability and the emergence of innovative governance structures suggest that the debate concerning purpose-driven and sustainability-oriented corporate forms is likely to play an important role in the future development of European corporate law.

Despite the adjustments introduced by the Omnibus Package, it can be concluded that, as of 2025, the paradigm of corporate sustainability within the EU remains firmly established and continues to evolve. The simplification of existing obligations does not signal a retreat from the Union’s commitment to sustainability; rather, it reflects an effort to ensure that those objectives remain both effective and achievable while preserving sustainability as a central concern of corporate governance.

[1] Beate Sjåfjell, “Reforming EU company law to secure the future of European business,” European Company and Financial Law Review 18, no. 2 (2021): 205–206, https://doi.org/10.1515/ecfr-2021-0009.

[2] Henry Hansmann and Reinier Kraakman, The end of history for corporate law, Yale Law School Program for Studies in Law, Economics, and Public Policy Working Paper No. 235 (January 2000), 1–7, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=204528.

[3] Milton Friedman, “The social responsibility of business is to increase its profits,” The New York Times Magazine, September 13, 1970, https://www.nytimes.com/1970/09/13/archives/a-friedman-doctrine-the-social-responsibility-of-business-is-to.html.

[4] European Commission, Promoting a European framework for corporate social responsibility: green paper (Brussels: Commission of the European Communities, 2001), 4–6, https://ec.europa.eu/commission/presscorner/api/files/document/print/en/doc_01_9/DOC_01_9_EN.pdf.

[5] European Commission, Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: a renewed EU Strategy 2011–14 for corporate social responsibility, COM(2011) 681 final (Brussels, 25 October 2011), 6.

[6] European Commission, Communication from the Commission to the European Parliament, the European Council, the Council, the European Central Bank, the European Economic and Social Committee and the Committee of the Regions: action plan: financing sustainable growth, COM(2018) 97 final (Brussels, 8 March 2018), 1–5, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52018DC0097.

[7] European Commission, Communication from the Commission to the European Parliament, the European Council, the Council, the European Economic and Social Committee and the Committee of the Regions: The European Green Deal COM(2019) 640 final (Brussels, 2019), 6, https://eur-lex.europa.eu/legal-content/PT/ALL/?uri=CELEX:52019DC0640.

[8] European Commission, Study on directors’ duties and sustainable corporate governance (Luxembourg: Publications Office of the European Union, 2020), https://op.europa.eu/en/publication-detail/-/publication/e47928a2-d20b-11ea-adf7-01aa75ed71a1.

[9] Nicolas Bueno, Nadia Bernaz, Gabrielle Holly and Olga Martin-Ortega, “The EU Directive on Corporate Sustainability Due Diligence (CSDDD): the final political compromise,” Business and Human Rights Journal 9, no. 2 (2024): 294–298, https://doi.org/10.1017/bhj.2024.10.

[10] Marco Speranzin, “Benefit legal entities in Italy: an overview,” European Company Law Journal 19, no. 5 (2022): 142–145, https://www.research.unipd.it/bitstream/11577/3455954/1/EUCL_19_0504.pdf.

[11] Guido Ferrarini and Shanshan Zhu, “Is there a role for benefit corporations in the new sustainable governance framework?”, ECGI Law Working Paper No. 588/2021 (2021), 8–10, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3869696.

[12] Purpose Foundation, Steward-ownership: a short guidebook to legal frameworks (1st ed., 2020), 6–9, https://purpose-economy.org/content/uploads/purpose-guidebook-for-lawyers10022021.pdf.

[13] Marvin Reiff, “Steward ownership, wealth inequality, and LPE,” Verfassungsblog, 10 October 2024, https://doi.org/10.59704/8e5a5a823184a804.

[14] Ferrarini and Zhu, “Is there a role for benefit corporations in the new sustainable governance framework?,” 23–24.

Picture credit: by Alena Koval on pexels.com.

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Dr. Meltem İneli Ciğer, Associate Professor of International Law, Suleyman Demirel University Faculty of Law, Türkiye; Honorary Fellow, School of Law and Social Justice, University of Liverpool

With comments from Professor Steve Peers, Law School, Royal Holloway University of London

Photo credit: President of Ukraine, via Wikimedia Commons

Nearly every year since I started teaching temporary protection and the Council Directive 2001/55/EC of 20 July 2001 (Temporary Protection Directive) at the Odysseus Summer School in 2022, a familiar pattern has emerged. Each year, while updating my PowerPoint slides, the European Commission adopts a proposal to extend the temporary protection regime implemented for Ukrainians fleeing the full-scale Russian invasion. I usually read and incorporate this new development, either the Commission Proposal or the adopted Council Implementing Decision, when I am flying to Brussels. This year is no exception.

This year’s Proposal for a Council Implementing Decision (COM(2026) 345 final) marks a departure from previous practice. Aside from proposing to extend temporary protection for an additional year, namely until 4 March 2028, the Commission is proposing, for the first time, to restrict the scope of temporary protection for a specific subset of newcomers. In particular, Article 2 of the Proposal targets newly arriving Ukrainian citizens who are subject to military service obligations under Ukrainian law and who lack explicit, official authorisation from the Ukrainian authorities to leave the country. By proposing this conditionality, the Commission is effectively linking eligibility for temporary protection to the enforcement of a home state’s conscription laws.

I have written here and here why I believe these yearly extensions run contrary to the Temporary Protection Directive itself and the risks they bring. This year, however, I will do something different. Since over the years, I have covered the legal problems with yearly extensions, I want to focus specifically on the legal questions brought by the new proposal, namely, those relating to the new restrictions it introduces.

Here, I will pose four main legal questions relating to these new restrictions and give my opinion on them. I should mention that the idea to write this post emerged from an exchange on LinkedIn, where I am a somewhat active user, and the comments I received from Steve Peers. I asked Steve to include his answers to these questions, to provide a ‘devil’s advocate’ perspective on some points. Finally, I should mention the sources that can help this analysis. You can watch the Commission’s official press conference video, where some similar questions were posed to the Commission. Additionally, a recent Council of Europe report explicitly warns about the human rights risks of the proposed restriction of scope. Of course, these legal questions will only arise if the proposal is adopted as it is. What are they?  

Question 1: Is restricting the scope of temporary protection and excluding newly arriving military-age men from Ukraine discriminatory?

Meltem: Yes, there is a very strong legal argument that this specific restriction is discriminatory under both EU and international human rights frameworks. First, let us look at who is excluded: Article 2 of the proposal explicitly targets newly arriving Ukrainian citizens who are subject to military service obligations under Ukrainian law and who lack official authorisation from the Ukrainian authorities to leave the country. Because martial law and mobilisation frameworks in Ukraine predominantly apply to adult males aged 18 to 60, this measure selectively excludes military-age men from receiving temporary protection in the EU in future.

Article 21 of the Charter of Fundamental Rights strictly prohibits any form of discrimination based on sex or nationality. By implementing a rule that disproportionately and systematically strips temporary protection eligibility away from mostly adult men, the proposal introduces a gender-discriminatory measure. Treating newly arriving men less favourably than women fleeing the same conflict zone creates direct friction with this principle of equal treatment. This is further reinforced by Article 14 of the European Convention on Human Rights (ECHR), which prohibits sex-based discrimination when read alongside the protection of fundamental rights under Article 3 or Article 8 ECHR (cf para 30 here). Of course, although these excluded individuals will retain their absolute right to apply for asylum under Article 18 of the Charter, this route opens up further complex legal questions. Most notably, what happens if their international protection claim is rejected?

If a Member State examines an individual’s asylum (ie international protection) claim (which can still be made, according to the temporary protection Directive, even if temporary protection is refused), and concludes that evading conscription under these specific circumstances does not meet the high threshold for refugee status or subsidiary protection, the individual is left in a dangerous legal vacuum. Because they are barred from registering as temporary protection beneficiaries by this new proposal, this may expose them to the immediate risk of a return decision. 

Steve: A devil’s advocate view: the Charter also provides for possible restrictions of Charter rights in its Article 52, which allows limitations on rights to support ‘objectives of general interest recognised by the Union or the need to protect the rights and freedoms of others’. The argument here is that the EU is seeking to support the Ukrainian defence effort, which could be described either as an objective of general interest, or protection of the rights and freedoms of others. The measure is arguably proportionate as long as the return of each Ukrainian citizen in the individual case would not amount to non-refoulement (and only provided that any application for international protection they have made has failed on the merits; the concerns raised about human rights and conscription in Ukraine can obviously be argued in this context). Having said that, the Commission’s proposal can fairly be criticised for failure to make any specific reference to the possibility of applying for international protection instead.

Question 2: Does the Temporary Protection Directive give the Council the power to restrict its scope after four years of its activation?

Meltem: No, it does not. Neither Article 5 nor any other provision in the temporary protection Directive (TPD) grants any power to the Council to retroactively alter, narrow, or restrict the objective scope of who qualifies for that protection via a yearly implementing decision. Article 5 is invoked by the Commission in the Proposal to justify restricting the scope of the TPD’s application. However, if you look closely at the TPD, you will see Article 5 is intended to designate the specific categories of persons eligible for temporary protection at the very beginning, when there is a mass influx. It does not give the Council the power to dynamically designate or exclude different groups in subsequent yearly extensions. In my opinion, attempting to introduce new restrictions now is completely contrary to the TPD provisions. These new restrictions essentially introduce new exclusion grounds for temporary protection status. When looking at Article 28 of the Directive, which explicitly sets out the allowed exclusion grounds, it is clear that the new restrictions are also not permitted as additional exclusion grounds.

Steve: Again, a devil’s advocate might argue the opposite here – that this is not an issue of a new exclusion from temporary protection (which would definitely need an amendment to the parent Directive to be created), but rather a narrowing of those included by temporary protection. The scope of people included by the current iteration of temporary protection is defined not by the parent Directive, but by the 2022 decision to trigger it in response to the main Russian invasion of Ukraine, which has been amended (to extend its duration) several times already. The parent Directive is silent on the issue of whether the scope of who is covered by temporary protection can be altered (either to narrow it or to widen it) after temporary protection is triggered, but perhaps the earlier CJEU judgment in Kaduna – which accepted that Member States could narrow the scope of any ‘optional’ temporary protection they initially offered on top of the EU minimum if they chose – applies by analogy to EU-wide temporary protection, ie the EU can narrow the scope of temporary protection it initially offered, as long as the parent Directive’s test for terminating temporary protection is met for the specific group of people being removed from the scope of that protection as regards future applications. That test is:

...the situation in the country of origin is such as to permit the safe and durable return of those granted temporary protection with due respect for human rights and fundamental freedoms and Member States' obligations regarding non-refoulement.

It might, of course, be argued that this test is not met for men of military age. In any event, the parent Directive’s guarantee that they can apply for international protection at any time, and the Return Directive’s guarantee that they cannot be refouled, have to be satisfied too, on an individual basis.

It might also be argued that since the parent Directive only sets minimum standards, it must remain open to Member States to grant temporary protection to military age men as an option, as long as they are fleeing Ukraine for the same reason as others seeking temporary protection (see the Kaduna judgment by analogy, as regards those who left Ukraine shortly before the main Russian invasion). This might be relevant in particular to Hungary, which has reportedly objected to this aspect of the proposal.

Question 3: What will happen to the family members of those who fall within the scope of temporary protection in line with Council Implementing Decision (EU) 2022/382 of 4 March 2022?  

Meltem: This raises a very messy legal question regarding family unity. Under the initial Council Implementing Decision (EU) 2022/382, family members of Ukrainian nationals, as well as those of third-country nationals holding refugee or equivalent protection status in Ukraine prior to the full-scale invasion, are explicitly included as a core category entitled to temporary protection alongside the principal applicant.  Article 15 of the Temporary Protection Directive sets out mandatory duties for Member States to reunite family members who were separated due to the circumstances of the mass influx. (cf. Milios’s contribution here) The new proposal creates a direct clash between Article 15 of the TPD and the proposed exclusion grounds. If a newly arriving, military-age man leaves Ukraine to join family members who have held temporary protection in the EU since 2022, his exclusion would directly undermine the right to family life and the obligations in the 2022 Decision and the Directive. Conversely, admitting him while excluding single men in identical circumstances introduces severe issues of differential treatment and discrimination.

Steve: here I think the devil’s advocate has no good argument to make. Family members of those with temporary protection are entitled to temporary protection, according to the 2022 Decision, and family reunion, according to the parent Directive, unless the criteria for exclusion set out in that Directive (ie security risks and serious crimes, defined similarly to the exclusion clauses in the Refugee Convention) apply. This route to temporary protection is most likely to be relevant to men whose wives or partners have temporary protection in the EU (for partners, this is subject to the criteria of having a ‘stable relationship’, and that the host Member State treats partners in a ‘comparable’ way to married couples). As Jane Austen might have said, “It is a truth universally acknowledged, that a single man seeking temporary protection from a Russian platoon, must be in want of a wife.”

Question 4: Is Recital 5 of the Proposal a mistake or a new interpretation of the Krasiliva case (C-753/23) by the Commission?

In the Krasiliva case (C-753/23), the Court of Justice of the European Union (CJEU) confirmed that displaced persons from Ukraine have a right to choose the Member State where they want to apply for temporary protection. However, the Court ruled that national authorities cannot declare a newcomer’s temporary protection registration and resident permit request inadmissible simply because they already applied for a permit in another Member State but have not received it. Interestingly, the Court left open the question whether a person who has received temporary protection status and a resident permit attached to this status in one Member State can apply and be granted temporary protection in another MS.

Recital 5 of the Commission Proposal notes “Given that a person can benefit from the rights attached to temporary protection in only one Member State at a time, to ensure that this is the case, and to avoid multiple registrations for temporary protection, Member States should reject residence permit requests made on the basis of Article 8(1) of Directive 2001/55/EC when it is apparent that the person concerned has already obtained a residence permit on that basis in another Member State and therefore is enjoying the rights attached to temporary protection therein, including social assistance. This would be coherent with the judgment of the Court of Justice of the European Union in case C-753/23 and in particular paragraph 30 thereof.”

Steve: To my mind, the Krasiliva judgment is ambiguous. The key para in the judgment says that it is “open to the authorities of a Member State to verify, in the course of examining” a temporary protection application, “whether those persons have already obtained a residence permit in another Member State”. This is not explicitly definitive either way. The important point here is the addition of the words in the Commission proposal: “and therefore is enjoying the rights attached to temporary protection therein, including social assistance”, which do not appear in the previous Council decision extending temporary protection. This suggests that if another Member State has granted temporary protection but has not done so correctly, ie does not extend the substantive rights set out in the parent Directive to beneficiaries in practice, another Member State is obliged to consider a temporary protection application from those persons. This would be consistent with CJEU case law on international protection (Ibrahim).

Meltem: I believe the Commission adopts a very restrictive reading of the Judgment by noting Member States should reject residence permit requests made on the basis of Article 8(1) of the Directive when it is apparent that the person concerned has already obtained a residence permit in another MS. However, as Steve pointed out, what happens if a person holds TP status in a Member State but is not enjoying the rights attached to temporary protection therein, including social assistance? Then can they apply for temporary protection in another Member State? I think the recital somehow supports this reading. Is this on purpose or a mistake we do not know.

Conclusion

In conclusion, although the Commission's proposal to restrict the scope of temporary protection to help Ukrainian allies is understandable from a policy point of view, it raises many serious legal problems. For the reasons I have outlined, ranging from discrimination and ultra vires overreach to the risk of creating a dangerous legal gap for those whose asylum claims might be rejected, I argue that the Commission proposal should not be adopted as it is.

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By the Editorial Team

The recently released Special Eurobarometer on the Digital Decade 2026 offers an insightful view into the hopes and concerns of European citizens regarding the digital transformation. A large majority of Europeans (73%) believe that the digitalisation of daily public and private services is making their lives easier or much easier. An even wider majority (79%) consider that digital policy should be a high or very high priority for the EU. The EU also gets passing marks on the protection of digital rights, with about 51% of respondents stating that the EU protects their digital rights fairly well (46%) or very well (5%). Satisfaction is, however, not unanimous with a statistically relevant 37% of respondents arguing that the EU does not protect their rights very well (30%) or not well at all (7%).

Artificial Intelligence (“AI”) is a growing presence in the daily lives of Europeans. Currently, 43% are using it at least once a week in their personal life and 39% in their work and studies. Most respondents also report increases in use. Without prejudice, important concerns are still present and to achieve a successful integration of AI in the economy without hindering fundamental rights, they need to be addressed. 78% of citizens consider that AI should be developed in an environmentally friendly way and, in fact, 20% even cite environmental impacts as a key barrier to AI adoption. Privacy and data protection concerns (39%), along with concerns about accuracy and incorrect information (36%) and ethical issues (32%), are the most cited barriers to AI adoption. Labour-related concerns are also very much on top of Europeans’ minds with 28% citing potential job losses due to generative AI and 27% lack of training or skills. Europeans are also largely unwilling to sacrifice safety for AI development, with an overwhelming majority (80%) saying that “the development of AI should be carefully regulated to ensure safety, even if this means that AI developers face some constraints”.

With this in mind, the current issue of UNIO appears to reflect the concerns of EU citizens, including articles on AI, data protection, environmental issues, labour rights, and the rule of law.

The first contribution to this issue of UNIO, by Mafalda Miranda Barbosa – entitled “Forbidden uses of AI and liability” –, addresses the interplay between Article 5 of the AI Act prohibiting certain AI practices that are incompatible with the fundamental values of the EU and liability rules, in particular in what concerns wrongfulness, fault and causation.

Our second contribution, by José Vegar Velho, entitled “European Works Councils: normative evolution and challenges of the new Directive (EU) 2025/2450 of the European Parliament and of the Council”, assesses the interplay between Articles 77 and 78 GDPR, with regard to the right to lodge a complaint and to obtain effective judicial remedy against a supervisory authority, Article 79 regarding the right to obtain effective judicial remedy against a controller or processor with the principle of effective judicial protection, and the right to a fair trial, particularly in what relates to the relationship between the judicial and administrative tracks of the proceedings.

The third contribution, by Ana Cardoso and Simone Minelli Teixeira – “The European Green Deal – a portrait of a “green Europe” in a changing geopolitical landscape” –, aims to assess how changes in the geopolitical landscape affect the implementation of the European Green Deal – which has taken a back seat in recent public discourse –, paying particular attention to the influence of the Omnibus Packages in this context. As the authors explain, although there is a drive to develop policies geared towards competitiveness and to adopt urgent measures, it is imperative that effective policymaking remains consistent with the Union’s values and can be reconciled with its sustainability commitments.

The fourth contribution, a co-authorship by Mônia Clarissa Leal and Camila Lopes Martins entitled “Algorithmic discrimination and the criteria for special protection of structurally discriminated groups: an analysis under the Brazilian General Data Protection Law and the European Union General Data Protection Regulation”, presents an analysis of the relationship between algorithmic discrimination and structural discrimination – with a focus on the treatment of structurally discriminated groups – and how these phenomena are regulated by the Brazilian General Data Protection Law and the EU’s General Data Protection Regulation.

Our fifth contribution, authored by Gonçalo Matos – “Defending the Rule of Law in the European Union: the role of the infringement procedure” –, examines the relevance of the infringement procedure as an effective judicial means of addressing the negative consequences arising from the backsliding of the Rule of Law in the EU. Such an analysis is particularly relevant in light of current developments plaguing Europe – which the author explores –, indicating a rise in the prominence of illiberal political movements within Member States that threaten to undermine the values upon which the Union is founded.

The final contribution, entitled “Generative AI – challenges for trade mark law”, is authored by Maria Miguel Carvalho and, as the title suggests, seeks to examine the regulatory challenges that generative artificial intelligence (GenAI) presents for European trade mark law. Drawing on relevant and recent case law on the subject, particularly in the UK and the US, the author investigates how trade mark legislation was not originally designed to tackle the new reality that GenAI presents for trade mark law, highlighting the importance of reinterpreting existing legislation or even introducing amendments to overcome the legal uncertainty arising from it.

The post Green foreign investment must be integrated into Europe’s clean industrial policy first appeared on LSE European Politics.

Dr Eleni Frantziou, Associate Professor in Public Law and Human Rights, Durham Law School, and Dr Sylvia de Mars, Reader in Transnational Public Law, Newcastle Law School

Photo credit: Samuel Lennox, via Wikimedia Commons

Introduction

Is there anything left to say on the direct effect of EU law? Yes, according to the UK Supreme Court, which handed down its much-awaited judgment in Dillon et al on 7 May 2026. The UK reference above is not a typo: despite Brexit, aspects of the EU/UK Withdrawal Agreement (‘WA’) have direct effect under the conditions provided for in EU law, in line with Article 4 WA. In Dillon, the UK Supreme Court was asked to interpret whether one provision of this agreement – Article 2(1) of the Ireland/NI Protocol (‘Protocol’), which is itself a core part of the WA (Article 182 WA) – is directly effective and, if so, on what terms.

The case concerned the Legacy (Troubles and Reconciliation) Act 2023, which set out a broad range of immunities for serious crimes committed in Northern Ireland during the Troubles. The principal claimants were one direct victim and three relatives of victims killed in the conflict – a wife, mother and sister who, as O’Donoghue observes, were but minimally acknowledged by the UKSC. They challenged the immunities provisions of the Act under the ECHR and EU law.

In this post, we focus only on the EU law dimensions of the case and, particularly, on the question of direct effect. In our view, Dillon raises significant questions about the correct application of the direct effect conditions, the ultimate arbiter of which is the CJEU. In particular, we argue that the UKSC’s interpretation of direct effect in Dillon is inconsistent with EU law, because it creates an unprecedented requirement of ‘double direct effect’: it applies the direct effect conditions to both a provision of the Withdrawal Agreement/Protocol and to measures referenced in this provision.

Why was EU law still relevant in Dillon in 2026?

One of the most contentious aspects of the Withdrawal Agreement negotiations was the status of Northern Ireland. It is widely documented that EU membership was one of the principal catalysts for the Belfast/Good Friday Agreement (‘BGFA’) that officially marked the end of the Northern Ireland conflict known as ‘the Troubles’. As EU membership by both the UK and Ireland had ensured free movement between the Irish north and south, the creation of special arrangements that secured this after Brexit was a crucial aspect of the UK’s exit negotiations.

These special arrangements were embedded into the Ireland/NI Protocol (as of 2023 also known as the ‘Windsor Framework’ in the UK), which was appended to the Withdrawal Agreement as a core part of it dealing with a specific ‘withdrawal’ issue.  The Protocol provides for continued north/south cooperation, avoiding a hard border and protecting both trade and cross-border work. Importantly for the purposes of the Dillon case, the Protocol also notes in recital 7 of its Preamble that ‘Union law has provided a supporting framework for the provisions on Rights, Safeguards and Equality of Opportunity of the 1998 Agreement’ (‘RSEO’) and includes a specific non-regression guarantee with respect to this part of the BGFA. To this end, Article 2(1) of the Protocol provides:

The United Kingdom shall ensure that no diminution of rights, safeguards or equality of opportunity, as set out in that part of the Belfast/Good Friday Agreement entitled Rights, Safeguards and Equality of Opportunity results from its withdrawal from the Union, including in the area of protection against discrimination, as enshrined in the provisions of Union law listed in Annex 1 to this Protocol, and shall implement this paragraph through dedicated mechanisms.

It was this article of the Protocol that formed the basis of the EU law claim in Dillon. The claimants’ argument went as follows: since the UK had been subject to the Victims’ Rights Directive (‘VRD’) before Brexit and this had been implemented in NI through domestic measures, the immunities created by the Legacy Act reduced the level of protection of fundamental rights available during the UK’s membership of the EU, and were therefore in conflict with Article 2 of the NI Protocol. This claim was made possible by Article 4(1) WA, which states that the “Agreement shall produce in respect of and in the United Kingdom the same legal effects as those which they produce within the Union and its Member States” and the test for individuals to rely on a provision of the Withdrawal Agreement before domestic courts is that such a provision should “meet the conditions for direct effect under Union law.”

In line with the widely known Van Gend en Loos formula, a provision of EU law has direct effect if it confers rights to individuals that are clear, precise, and unconditional, rather than being subject to the adoption of further measures by either Member States or the EU.  The wording of Article 2(1) of the Protocol prima facie meets these conditions with ease. The right conferred by Article 2(1) is to not have ‘rights, safeguards or equality of opportunity’ as set out in the BGFA and in Annex 1 of the Protocol diminished. This paragraph contains a ‘textbook’ negative obligation. It requires no further measures at all – the UK simply needs to refrain from introducing new measures that reduce the level of protection of EU fundamental rights as it stood on 31 December 2020.

The claimants consequently argued that, since Article 4 WA also provides for the Agreement to have primacy and, at paragraph 2, requires that domestic courts be capable of disapplying incompatible provisions, the immunity provisions of the Legacy Act had to be disapplied. Two courts in Northern Ireland had found for the claimants, disapplying the offending provisions – but the government challenged this on appeal to the UKSC. It argued that if Article 2 was to have direct effect, it could only do so by reference to obligations that were themselves clear, precise and unconditional.

The Supreme Court sided with the government. It found that Article 2 could not always have direct effect, but only under certain circumstances, namely when the measures cross-referenced in Article 2 were themselves directly effective.  It is worth setting out its reasoning in some detail.

The UKSC commences, at paragraph 112, by citing the so-called Demirel test.  Demirel is one of the early cases in which the CJEU considered whether provisions in bilateral agreements signed by the EU could have direct effect; and it found at paragraph 14 that:

…a provision in an agreement concluded by the European Union with a non-member country must be regarded as being directly applicable when, regard being had to its wording and to the purpose and nature of the agreement, the provision contains a clear and precise obligation which is not subject, in

its implementation or effects, to the adoption of any subsequent measure... (emphasis added)

So far, so good.  While, as we discuss further below, the treatment of the Withdrawal Agreement (or Protocol) as part of ordinary EU external relations law is questionable, this does reflect the commonly used test for evaluating the direct effect of bilateral agreements involving the EU.

However, the UKSC proceeds with the following statement in paragraph 113:

The obligation imposed on the United Kingdom by article 2(1) of the Windsor

Framework relates to rights, safeguards or equality of opportunity “as set out in” the RSEO chapter. It is therefore necessary to consider whether, having regard to the wording and to the purpose and nature of the RSEO chapter and of article 2(1) of the Windsor Framework, those provisions read together impose a clear and precise obligation which satisfies the test for direct effect.

In our view, the words “therefore necessary” make a huge argumentative leap, hitherto unseen in any EU law treatment of direct effect. In this single short paragraph, the CJEU takes the Demirel test but applies it simultaneously to the Withdrawal Agreement and its provisions and the BGFA’s RSEO chapter’s provisions. In other words, the UKSC reasons that Article 2 of the Protocol cannot have direct effect as such: for it to be directly effective, anything it references must also be directly effective.  This leads to its even more confounding finding, which is – ultimately – that Article 2 of the Protocol sometimes has direct effect – but at other times it does not. This is because, according to the UKSC, it is impossible to identify a clear and precise obligation without reference to the RSEO chapter. As the UKSC puts it at paragraph 116, “[i]t is only in this way that the obligation not to diminish rights, safeguards or equality of opportunity acquires any content.”

This aspect of the ruling – which we dub ‘double direct effect’ –presents a deep challenge to settled understandings of the direct effect of EU law.

The fallacy of the UKSC’s direct effect

The UKSC’s ruling does not question the possibility of Article 2 of the Protocol to have direct effect, nor does it challenge the terms of direct effect. According to the Court, as per paragraph 112, the relevant conditions are the conditions set out in EU law. But the choice of EU law is already telling of the ruling’s direction and tone: rather than going straight for the Van Gend en Loos conditions, the Court refers to the Demirel test on the direct effect of international agreements.

While this choice is defensible to a degree as the WA is, after all, a bilateral agreement, the confidence with which the UKSC resorts to it is puzzling. Unlike association agreements, such as the one between the EU and Turkey at stake in Demirel, or even the UK/EU Trade and Cooperation Agreement, EU competence for which resides in external relations law (Article 217 TFEU), the Withdrawal Agreement is a very specific type of agreement. The competence to conclude it is found in the constitutional part of the Treaty on European Union – Article 50 TEU – and it is Article 50 (2) that sets out that the terms of withdrawal are to be negotiated in accordance with Article 218(3) TFEU. The Withdrawal Agreement is thus a category in its own right: it is not about a third state negotiating the terms of its association with the EU, however deep, but about a Member State negotiating its departure from the bloc in line with its own constitutional requirements, as set out in Article 50 TEU.  The exceptionality of the Withdrawal Agreement has been raised indirectly in litigation before the CJEU and, albeit that the Court has not had specific occasion to address what this means for direct effect, it has emphasised the significance of Article 50 TEU as the essential legal context for analysing the provisions of the Withdrawal Agreement (see, e.g., Préfet du Gers I, para 54). 

But even if we were to accept that the Withdrawal Agreement should be treated just like any other bilateral treaty, its own terms make its ‘intention’ clear, given the express wording of Article 4 WA on the application of the direct effect conditions – a very unusual stipulation that, to our mind, would not go unnoticed by the CJEU. In fact, as Gallo and Labus note, specific exclusions of direct effect are the norm in the external relations context, as is indeed the case for the TCA, Article 5 of which preclude direct reliance by individuals on its provisions. The choice of the Demirel conditions is, therefore, significant for at least two reasons: first, it is important symbolically. The UKSC makes a choice to treat the Withdrawal Agreement as one of many international agreements the UK has signed. This automatically limits any perceived onus on its part to read the ‘purpose and nature’ of the Withdrawal Agreement or the Protocol as resulting in different obligations than other international law. Second, the reliance on the Demirel test and its focus on not only the precision and unconditionality of the relevant provisions, but also the ‘purpose and nature’ of the agreement, enables the UKSC’s further findings about Article 2(1) WA. For, as already highlighted above, rather than treating ‘purpose and nature’ as pertaining to the Withdrawal Agreement and its provisions, the UKSC understands this test as applying to the RSEO section of the BGFA.

The ‘purpose and nature’ of the BGFA is summarised in paragraph 119 as “establishing peace in Northern Ireland after decades of sectarianism and civil conflict”. This reference appears to preclude a reading of the BGFA as aiming to secure cross-community equality in a broader sense, which makes reliance on Article 2 for the purposes of ensuring the non-diminution of EU fundamental rights altogether less likely. It will be far more difficult to link provisions in the RSEO chapter to EU law if it is essential to prove that their purpose and nature was ‘establishing peace’. This focus on the Demirel condition of the nature and purpose of the agreement thus appears to negate, at least to an extent, the practical relevance of Article 2 as a non-regression clause. Rather than protecting the ‘supporting framework’ of fundamental rights that membership of the EU meant for the peace process in tune with the Protocol’s Preamble, the interpretation could prove to be much narrower– a possibility that remains to be fleshed out further in subsequent case law.

Beyond the type of direct effect it chooses, though, the UKSC also commits, in our view, a fundamental, substantive error of EU law in its application of the direct effect conditions. This error rests on the finding that Article 2(1) is a provision that could sometimes, but not always, have direct effect – depending on what else it references. This position does not withstand scrutiny from the perspective of EU law. 

It is trite EU law, including under Demirel, that the direct effect conditions refer to ‘a provision’. Leaving the categorical exclusion of certain forms of direct effect for certain instruments (eg, the horizontal direct effect of directives), the CJEU has never held that a provision can both have and lack direct effect. The test is a clear binary: the provision either meets the conditions and it is directly effective or it does not, and it is not.

In this sense, it may have been more coherent for the UKSC to state that Article 2 is not directly effective at all. That, however, would have created the problem that some of the EU law explicitly referred to in the provision (the Equality directives) are par excellence directly effective obligations. Finding that Article 2(1) lacks direct effect altogether would have created a procedurally awkward situation, whereby the Annex to the Protocol has direct effect and supremacy in accordance with Article 4(1) WA, but its ‘activating’ provision does not. It was also clear that the provision was thought to have direct effect when negotiated and the UK government did not challenge the right of individuals to invoke it with respect to the annexed Directives; while the UKSC made it clear that UK government interpretations of its own commitments made when concluding the WA were of no help in determining of Art 2 of the Protocol was directly effective (see paragraphs 123-124 of the judgment), it seems to have wanted to avoid making the existence of that Annex 1 and, indeed, Article 2 itself wholly pointless from a litigation perspective. Hence, the UKSC resorts to a half-way house: if the provisions against which non-diminution is sought are themselves directly effective, then Article 2 can be invoked before domestic courts. If they are not, it cannot. Much like Schrödinger’s cat, then, direct effect is simultaneously alive and dead – it all depends on what Article 2 is referencing. 

This reasoning in our view misunderstands (though it does not reference) CJEU case law on the direct effect of provisions that also refer to other provisions, as well as the nature of the direct effect conditions as interpreted in EU law, more generally. For example, Charter provisions regularly give ‘specific expression’ to non-directly effective measures of directives (see, eg, the Grand Chamber rulings in Egenberger, Braathens,  KL v X). Unlike the approach espoused by the UKSC, it is not the non-directly effective measures detailing the core obligation that suddenly acquire direct effect. Rather, the presence of a directly effective measure, such as Art 47 CFR, makes the more specific obligations listed in the directives invocable in court, where they otherwise would not be. The core obligation is directly effective regardless of what it cross-references. The CJEU makes this very clear in Egenberger:

78. [L]ike Article 21 of the Charter, Article 47 of the Charter on the right to effective judicial protection is sufficient in itself and does not need to be made more specific by provisions of EU or national law to confer on individuals a right which they may rely on as such [emphasis added].

In other words: it is the more general provision of primary law – Article 47 of the Charter – that gives rise to a clear, precise and unconditional obligation. This does not require a cross-reference to a separate provision that is also directly effective in order to be relied upon. Rather, the only effect of the directives in the above cases is to show that the scope of EU law – and hence the relevant provision of the Charter – was engaged.

We found similar reasoning in CJEU judgments that involve international agreements, where the cross-referencing to Annexes and Protocols is very common. In Sevince, for instance, concerning the EEC-Turkey Association Agreement, the CJEU found in paragraph 22 that provisions in several decisions adopted under this association agreement had direct effect – and that this

cannot be affected by the fact that [other provisions] provide that the procedures for applying the rights conferred onto Turkish workers are to be established under national rules. Those provisions merely clarify the obligation of the Member States to take such administrative measures as may be necessary for the implementation of those provisions, without empowering the Member States to make conditional or restrict the application of the precise and unconditional right which the decisions of the Council of Association grant to Turkish workers. (emphasis added) 

The analogy is, in our view, powerful: similarly to Article 2, this case concerned a standstill obligation that no further obstacles to the free movement of workers be imposed. Moreover, like Article 2, there was an expectation that national procedures would be introduced to ensure the effectiveness of this core obligation. The CJEU clearly distinguished this procedural conditionality from the primary negative duty. 

The idea that the ‘referred-to’ provisions do not themselves have to be directly effective for a primary provision to be directly effective is also expressly confirmed in the 2022 ruling in Deutsche Umwelthilfe, which concerned standing requirements in the implementation of the Aarhus Convention. The CJEU’s reasoning is worth citing in some detail:

66. [W]hile it is true that Article 9(3) of the Aarhus Convention does not have direct effect in EU law and cannot, therefore, be relied on, as such, in a dispute falling within the scope of EU law, in order to disapply a provision of national law which is contrary to it, the fact remains that, first, the primacy of international agreements concluded by the European Union requires that national law be interpreted, to the fullest extent possible, in accordance with the requirements of those agreements and, secondly, that Article 9(3) of the Aarhus Convention, read in conjunction with Article 47 of the Charter, imposes on Member States an obligation to ensure effective judicial protection of the rights conferred by EU law, in particular the provisions of environmental law...

          …

78. … the discretion conferred on the Member States to lay down rules governing the right to bring proceedings, referred to in [Article 9(3) of the Aarhus Convention], does not affect their obligation to ensure a right to an effective remedy enshrined in Article 47 of the Charter, as, moreover, also alluded to in Article 9(4) of the Aarhus Convention. Article 47 of the Charter is sufficient in itself and does not need to be made more specific by provisions of EU or national law in order to confer on individuals a right which they may rely on as such … Thus, that article may be relied on as a limit on the discretion left to the Member States under Article 9(3) of the Aarhus Convention.

This case is also analogous to what the UKSC had to consider in Dillon: a primary provision that set out a clear, precise and unconditional right (Article 47 of the Charter) – and further provisions, covering more specific situations in which such a right might apply, which are not directly effective (in Article 9(3) of the Aarhus Convention).  The CJEU had every opportunity to set out that both Article 9(3) of the Aarhus Convention and Article 47 of the Charter had to be directly effective, but did not do so – instead, it stressed that Article 47 sets out framework conditions for how a conditional, imprecise referred provision had to function.  This is in our view similar to the function that Article 2 of the Protocol carries out: it sets out the conditions that apply once the RSEO and Annex 1 directives need to be considered, in the form of setting a non-diminution test.

Finally, the UKSC’s understanding of the core negative obligation in Article 2 as vacuous without a contemporaneous assessment of the RSEO sets too high a threshold for clarity and precision. If this was how its reasoning worked, the CJEU would have denied the direct effect of most provisions of EU primary law. To take one iconic example, it clearly would have declined to accept the direct effect of Article 157 TFEU in Defrenne back in 1976; as Daniele Gallo puts it, “[t]he contents of the obligation of [what is now Article 157 TFEU] were considered sufficiently clear, to the extent that the Member States must ensure ‘the application of the principle that men and women should receive equal pay for equal work’, despite … that there was, at the time, relative uncertainty about the concept of ‘equal work’ as well as that of ‘work of equal value’.  (Gallo, OUP 2025, 83).

To summarise, the RSEO determines the scope of Article 2 and it is squarely for the Supreme Court to interpret what this means. As noted above, there may be disagreement about how narrowly the ambit of the RSEO was drawn in this ruling – disagreement which can be further discussed in the Specialised Committee on the Windsor Framework. Such disagreement, however, would concern the substantive question of diminution (i.e., was there a relevant RSEO right that has now been diminished?) – and not the relevant test for direct effect. As a matter of the direct effect conditions, there can be little doubt, based on CJEU authority on direct effect, that Article 2 can be invoked before domestic court. In turn, if disagreement arises about the direct effect conditions, the correct interpretation must be determined by the CJEU – a point to which we now turn, in concluding.

Is this the final word on the direct effect of Article 2 NIP?

Assuming that our analysis is correct, and that the application of the direct effect conditions in Dillon is inaccurate, can anything be done about it? The UKSC was not entitled to make a reference to the CJEU on the matter of direct effect, as this is not provided for under this part of the Protocol. While references are possible with regard to a limited number of other provisions, primarily relating to trade, they are not provided for in the context of the non-diminution guarantee. It is to be hoped, however, that the Joint Committee overseeing the WA will discuss these issues in its upcoming meeting, particularly given the significance of the direct effect question for ongoing litigation on Article 2 at lower levels and, more generally, for the very ability of the Dedicated Mechanism set up under the Protocol to contribute to the enforcement of the non-diminution guarantee through litigation.

Arguably, regardless of the outcome of the political discussion, a question should now be put to the CJEU about the correct application of the direct effect criteria by agreement of the parties. The Dillon case demonstrates the technical difficulties associated with ongoing Brexit litigation that involves EU law concepts without the possibility of interpretive clarity through the preliminary reference structure, and it is in nobody’s interest for different versions of a 60 year old test to apply in the EU itself and its closest trading partner. Ultimately, though, if no agreement is reached about what the correct interpretation of the direct effect conditions is in the context of Article 2 within the Joint Committee, an arbitration panel may be appointed to determine the issue. Its decision will be binding on both parties. Crucially, the arbitration panel would be required to make a reference to the CJEU to determine any issues of EU law before it reaches its decision. Undoubtedly, the concept of direct effect would be such an issue.

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Lorna Woods, Professor Emerita, University of Essex

Photo credit: TodayTesting.com, via Wikimedia Commons   

This recent CJEU judgment has been flagged in some quarters as upholding the French rules requiring age verification for porn sites. In others, it has been seen as stripping intermediary immunity from social media sites. Based on the e-Commerce Directive, however, is this just a transient discussion, fading away as the Digital Services Act (DSA) becomes the relevant law?

The Facts

The national cases in Case C-188/24 concern French rules requiring porn operators to implement technical age verification mechanisms to prevent minors from accessing those sites.  The companies were each the subject of a formal notice pursuant to Decree No 2021/1306 implementing Law No 2020-936 and Article 227-24 of the Criminal Code which prohibits any person from broadcasting a pornographic message likely to be seen by a minor. The rules in Coyote System concern the restriction on the broadcasting of information to drivers about roadside checks (eg in relation to speed or drunk driving). The relevant implementing measures were also derived from the French criminal code. These measures were subject to judicial challenge before the French Conseil d’État. The companies in question were not established in France and questioned the applicability of the French rules.

The Issues

The first question the CJEU had to address was whether the measures fell within the coordinated field of the  e-Commerce Directive (Directive 2000/31) and would therefore be caught by Article 3, which provides for the country of origin principle (COOP). Recital 22 which states that ‘information society services should be supervised at the source of the activity’. This means that services in general comply with the domestic law of the State in which they are established and do not have to comply with the laws of the States in which their services are capable of being accessed.  Article 3(3) excludes certain areas from the coordinated field and Article 3(4) et seq provide for limited grounds of derogation from the COOP and provide conditions with which the receiving State must comply to access the derogation.   The COOP applies only to laws falling within the coordinated field. Here the relevant laws were not sector specific measures targeting information society services in particular, but the general criminal law. The referring court questioned whether the provisions in issue fell within the coordinated field and referred the issue to the CJEU.

The ban on transmission in Coyote System was, according to the applicant, contravening the prohibition on general monitoring found in Article 15 e-Commerce Directive. This application of this article is dependent on the information society services in question falling within one of the categories of service found in Articles 12-14 e-Commerce Directive (mere conduit, caching services or hosting services respectively). The Court thus then had to consider whether the service in Coyote System was a hosting service within the meaning of Article 14 e-Commerce Directive. Article 14(1) provides:

Where an information society service is provided that consists of the storage of information provided by a recipient of the service, Member States shall ensure that the service provider is not liable for the information stored at the request of a recipient of the service, on condition that:

(a) the provider does not have actual knowledge of illegal activity or information and, as regards claims for damages, is not aware of facts or circumstances from which the illegal activity or information is apparent; or

(b) the provider, upon obtaining such knowledge or awareness, acts expeditiously to remove or to disable access to the information.

Judgment

The Coordinated Field

The Court emphasised that the coordinated field

covers all requirements laid down by the legal systems of the Member States relating to the taking up or pursuit of the activity of an information society service, … that definition does not make the coordinated field subject to the condition that only matters harmonised by that directive are covered. [para 52]

Following the Advocate General (at para 56 of his Opinion), it remarked that Article 3 is of particular importance precisely for the areas of law not harmonised. The mere fact that the laws apply generally cannot remove them from the coordinated field. Moreover, the Directive excludes certain areas from the scope of the Directive, so the question of exclusion had been taken into account in the Directive. Taking a different approach would undermine the purpose of the Directive.

The Court confirmed that requiring age verification sets the conditions for access to the information society services and is a requirement concerning the pursuit of an activity within Article 2(h)(i) (see Case C-649/18 A (Advertising and sale of medicinal products online)). For the roadside broadcasts, the Court took the view that the prohibition constituted a requirement relating to the content of the service. Both sets of measures therefore fall within the coordinated field.

The COOP and Derogation

The key question for the application of the COOP was whether the measures restricted the free movement of the services. This question the Court answered in the affirmative before considering whether the derogation in Article 3(4) could be used.

The derogation has substantive and procedural conditions. Substantively, the measure must be necessary in the interests of one of more of: public policy; protection of public health; public security; or protection of consumers. Further, those measures should be taken against an information society service which actually prejudices those objectives or presents a serious and grave risk to those objectives. Finally, the measures must be proportionate to the objectives. In procedural terms, the recipient Member State must first have issued an unsuccessful request to the host Member State to fix the issue and, secondly, notified the Commission.  A failure to comply renders the obligations unenforceable (Case C-390/18 Airbnb Ireland – following long established case law).

General rules applying without distinction do not satisfy the second of the substantive conditions. The rules, however, provided for the issuing of individual notices which satisfy this requirement [para 90]. The third substantive element – that of proportionality – was satisfied in relation to the protection of human dignity and the rights of the child as regards the broadcasting of pornography [para 94] and, without much elaboration, the prohibition on rebroadcasting is also proportionate [para 96]. 

So in principle, the national rules could meet the substantive criteria but it was for the referring court to determine whether the procedural rules were satisfied.

General Monitoring

Hosting

As noted above, the possibility of relying on Article 15 depends on whether the service in issue – here the service in Coyote System - is a host within the scope of Article 14 [see para 105]. The Court noted that the definition of hosting did not automatically preclude a service which also has elements of broadcasting from being a host, referring to long-standing caselaw as well as more recent (Case C-360/10 SABAM; Case C-682/18 YouTube and Cyanado and Case C-401/19 Poland v Parliament and Council). Conversely, just because a service includes the storage of information does it mean that the service is a host for the purposes of Article 14. The Court reiterated the limitations arising from Recital 42 – that the services should be of a mere technical, automatic and passive nature. This implies, according to the Court’s case law (Case C-324/09 L’Oréal and Case C-682/18 YouTube and Cyanado), “the information society service provider has neither knowledge of nor control over the information which is transmitted or stored” [para 108].  The Court underlined that “those two conditions requiring knowledge and control should be understood as being alternative to and independent of each other” [para 110].  The Court then held that

if, beyond the mere categorisation and indexation of information for the purpose of improving its accessibility, the algorithm used determines, in the interest of the operator or its service, under what conditions, how and in which order of priority that information is or is not be broadcast, that operator exercises control over that information, with the result that the service it offers cannot be classified as an ‘information society service … that consists of the storage of information provided by a recipient of the service’ [para 112].

Impact on Article 14(3) and Article 15

If a service exercises control over content, it does not fall within Article 14 and therefore the restrictions imposed on Member States by Article 15 are not applicable to such are service. The questions were for the national court to determine.

On the assumption that the service were found to be neutral, the national court must decide whether the prohibition on rebroadcasting the information on roadside checks is permitted by Article 14(3) which concerns orders requiring a neutral host to terminate any infringement on the part of the recipient of the service due to, inter alia, the presence of illegal information stored on its website or on its platform by removing or blocking access to that information.

Considering Article 15, the Court referred to Recital 47 e-Commerce Directive, which clarifies that Article 15 does not apply to monitoring in specific cases. Referring to the test laid down in Glawischnig-Piesczek (Case C-18/18), paras 46 and 47, the Court noted in this case that the information targeted by the prohibitions “is circumscribed in such a way that its rebroadcasting may be automatically prevented by the operator concerned” [para 121].

Comment

Coordinated Field and COOP

The Court has taken a typical approach here, a broad approach to the areas covered: criminal law rules and public policy rules can fall within the scope of the directive, provided they impose requirements on the access or conduct of an information society service. Furthermore, none of the criminal law in general, public policy and public security measures appear on any of the exclusions from the scope of the directive. The Court’s ruling makes explicit that this absence from the exclusions is deliberate. This position is in the interests of ensuring that a service is not subject to multiple regulation, but it can lead to unevenness and gaps in protection from the viewpoint of a person expecting the rules of the member state in which they reside to apply to services providers providing services in that self-same Member State. This is especially the case when the aspect potentially taking the national rule outside the derogation regime is about its form, not its substance.  The COOP principle has long given rise to concerns about forum shopping and a race to the bottom (as can be seen also in the broadcasting sector and the Audiovisual Media Services Directive) but has been re-affirmed as a central tenet of the EU regime (see eg Case C-769/22 Commission v Hungary (Values of the European Union)). 

It is also worth noting that the Court in principle accepted that both sets of rules in the cases referred were aimed at achieving legitimate aims and were proportionate. The Court drew on the fact that the AVMSD requires age verification in relation to pornography to reach this latter assessment. In so doing, the Court engaged in a joining up the dots activity between different piece of EU digital legislation. 

In this ruling, the Court underlined both the importance of the right to human dignity and the rights of the child.

Impact on Article 14

The headline news from this ruling is the impact on Article 14 and the test for neutral intermediary. The hosting safe harbour in Article 14 was always meant for neutral, passive intermediaries – entities whose activity is “purely technical, automatic and passive”, implying that the provider “has no knowledge of or control over” the information stored (Recital 42 e-Commerce Directive). This has been the standard position since the early case law – for example L’Oreal.  What this means, and in particular the impact of automated tools, has been the subject of some discussion. In a different context (copyright infringement), the Court even if an operator automatically indexes infringing content to recommended videos based on each users’ use did not necessarily mean that the host had specific knowledge of the infringing content, and the Court determined that this sort of specific knowledge was what was required. This could be seen as quite a generous view towards the hosting services and the scope of immunity. It might almost be said that there was an assumption that platforms would benefit from Article 14 (provided they responded to notices). In Coyote there is a shift of focus.

The first point to note is the Court’s statement that hosting services do not automatically benefit from Article 14. While this is not new – and, indeed, can be seen the Court’s previous jurisprudence – the reminder feels significant, especially in the light of the rest of the ruling. The Court here confirmed that a service has to satisfy both the knowledge and the control tests, a point not laboured in previous judgments. The Court (at para 110) makes this really clear: if a service exercises control, even if it has no knowledge, it will fall outside the intermediary immunity provision.

Whereas Cyanado dealt with knowledge, System Coyote looks at control. Significantly, the Court held that algorithmic curation constitutes “control”.  The Court (following its Advocate General) held (para 111):

it is, inter alia, by means of the algorithm used that such an operator exercises control over the information stored. So long as it has predetermined, by means of that algorithm, the conditions under which such information may or may not be broadcast, it is irrelevant that that operator does not itself carry out additional interventions which have the effect of promoting, modifying or deleting information stored with a view to it being broadcast.

In other words, when a service which stores information uses an algorithm to determine – in its own interest or that of its service – under what conditions, in what manner, and in what order of priority information is or is not disseminated it has control (see para 112). It does not matter that this is automatic. So creating the algorithmic system is exercising control.  In focussing on control, the Court avoids outright conflict with its earlier position (for example in Cyanado), but it certainly signals a change in emphasis and (in line with thinking underpinning parts of the DSA) a recognition that the algorithm is not necessarily neutral.

Not all categorisation or prioritising satisfies the control test. Simple categorisation and indexing of information to improve its accessibility do not on their own constitute control. Essentially, the Court is trying to draw the line between a neutral index, or chronological feed, and something more editorial (and it is telling to remember that the services themselves have claimed first amendment rights – is relating to their speech – in relation to how results are provided). 

Nonetheless, this ruling will affect a wide range of services based on curating user generated content, from social networks, video-sharing services and – of course – services that rebroadcast user reports (eg about police checks), as well as recommended products on a marketplace. The judgment could be read as stripping most (if not all) of the large social media platforms of their immunity (though this does not mean they will automatically be liable in all cases – that will depend on national law and the facts in individual cases). It could also be said to follow a similar path to the Russmedia decision (Case C-492/23), discussed here, which also took a narrow view of immunity (hosting defence does not apply to liability under the GDPR).

Impact on Article 15

The prohibition on general monitoring only relates to those services covered by intermediary immunity. Although this follows the language of Article 15(1) there had been some dispute as to who could claim the protection of Article 15. The answer is now clear: fall outside Article 14 (or 12 or 13) and Article 15 does not apply. 

The Court also reiterates its position on the distinction between general and specific monitoring and highlighting the possibility of using automated techniques to identify particular types of content. This could be relevant for Member States’ ability to impose monitoring or filtering obligations (in services of some public interest) – these (in relation to copyright infringements, e.g. SABAM, above) had been thought problematic in the relatively early days of the e-Commerce Directive, and platforms have often challenged such obligations as constituting general monitoring. The Court’s discussion here is focussed tightly on content; it does not discuss behavioural monitoring or profiling (which might be techniques by services to reduce the incidence of illegal content or behaviour across their services). It will be interesting to see how this line of case law joins up with the jurisprudence under the e-Privacy directive on collection of metadata and intrusions into communications privacy (see eg Case C-746/18 Prokurator).

Impact on DSA

Article 6 DSA, which replaces Article 14 e-Commerce Directive, provides that hosting providers are not liable for information stored at the request of a recipient of the service, provided that they do not have actual knowledge of illegal activity or content, unless the recipient acts under the authority  “or control” of the provider. It has been assumed given the similarity in the text, that the case law on Article 14 is relevant for understanding Article 6 DSA, including as regards the threshold condition of neutral. The wording of the relevant recitals in the DSA differ, however, from the text in the e-Commerce Directive (noted above) – and the Court has relied heavily on that text in its interpretation of Article 14.  Indeed, Article 14 itself does not refer to control. Recital 22 DSA specifies:

[i]n order to benefit from the exemption from liability for hosting services, the provider should, upon obtaining actual knowledge or awareness of illegal activities or illegal content, act expeditiously to remove or to disable access to that content. … The provider can obtain such actual knowledge or awareness of the illegal nature of the content, inter alia, through its own-initiative investigations or through notices submitted to it by individuals or entities in accordance with this Regulation in so far as such notices are sufficiently substantiated to allow a diligent economic operator to reasonably identify, assess and, where appropriate, act against the illegal content. However, such actual knowledge or awareness cannot be considered to be obtained solely on the ground that the provider is aware, in a general sense, of the fact that its service is also used to store illegal content. Furthermore, the fact that the provider automatically indexes information uploaded to its service, that it has a search function or that it recommends information on the basis of profiles or preferences of the recipients of the service is not a sufficient ground for considering that provider to have ‘specific’ knowledge of illegal activities carried out on that platform or of illegal content stored on it. [emphasis added]

At first glance, the recital seems to contradict the ruling in Coyote System. The wording of the recital seems to follow the approach the Court adopted in Cyanado and like that judgment deals with the question of knowledge. We have noted earlier, the Court’s sidestep in this case, to talk about control. The recital says nothing about control and is therefore not inconsistent with the approach in Coyote System.  Of course, this means that there is no reference to “control” in the text of the DSA because Article 6, like its predecessor Article 14, is silent on the point. It is far from clear, however, that the change in wording in the recital was intended to mark a change in meaning from Article 14 resulting in an expansion of the scope of immunity. Rather it seems an intention to align the DSA with the case law on Article 14 e-Commerce Directive. Presumably, there will be much litigation on this point as well as the linked question as to where the boundary between control and “mere categorisation and indexation of information” [para 112].

Gabriel Real Ferrer (Professor Emeritus from the University of Alicante)

From a technical-legal point of view, we could reflect on the extraordinary changes that lie ahead for the law over the next 20 or 30 years. We could discuss hybrid sovereignty, the transition from a rule-based law to a principle-based law, the need to move from a reactive to a proactive law, or the emergence of transnational law and sustainability as a new paradigm. We are undoubtedly moving towards a legal system which is vastly different from the one we have been teaching.

From a very personal perspective, I would prefer that we take a few moments to rethink our profession of teaching the law, which is so valuable to the world. Let us reflect on how we use our knowledge and on what society hopes we will achieve. It is obvious that society expects us to train good professionals who go on to have successful careers, but, in my view, our responsibility goes far beyond that.

Given the state of the world – the wars, the decline of democracy and human rights, and the obvious erosion of the values on which we have based our civilisation – I believe we must look up and ask ourselves about our impact on global society. Indeed, our knowledge as legal professionals is not neutral; it conveys values and carries an indisputable ethical and moral responsibility to guide society. That said, the question arises: are we doing the right thing? Is this what we are instilling in our students? Are we failing?

When my children asked me what I did for a living, I told them that I was a law professor, and that I was teaching the path to justice, which would help build a better, fairer world. I believed, and still sincerely believe, that this is our primary mission: to train lawyers who will improve the world, who do not see the law as a mechanism of oppression by the rich against the poor, or by the powerful against the disadvantaged, but as the most powerful tool for social progress and the advancement of civilisation. This progress is founded on solidarity and social justice, on understanding and tolerance. We have trained legions of lawyers, yet the world seems to be heading towards a moral abyss.

As my mentor, Ramón Martín Mateo, used to say, legal professionals – that is, both us and our students – are social engineers: we design institutions and lay down the rules of society through legislation. Do we not know how to do better?

Now, I dread looking into the eyes of my children and grandchildren and sensing a burning question: “Where is that world you promised us, the one you worked towards?” All they see is a future of war and plastic. I did not lie to them, but we have collectively failed.

We can adopt different attitudes towards the news that reaches us every day. Personally, I can only offer my own: that of the “melancholic optimist”. The concept stems from the poetry of Luis García Montero and was popularised in Spain by the actor José Sacristan, but it is well on the way to becoming a collective attitude. Melancholy alludes to a sense of loss and an awareness of one’s own mortality: the values we once believed in have been lost, many hopes have been dashed, friends and mentors are gone, and I have little left in this world. Yet, despite this, I remain optimistic; every day I continue to fight for dignity – my own and that of others. I continue to believe in and work towards a better future, even if I cannot yet see it.

That said, given the state of the world, progress in terms of the advancement of civilisation seems to have failed, but this is actually not the case. If, for the sake of simplicity, we define this progress as the consolidation of human dignity and the rejection of cruelty – cruelty towards human beings, but also towards animals, our companions on this journey, and towards nature, our common home – then the upward trajectory of civilisation is unquestionable. One need only compare current ethical and moral standards – albeit still crisis-ridden – with those of 100, 200 or 500 years ago. They are, without question, on an upward trajectory.

As Pope Leo XIV stated on the 25^th of May of this year in his Encyclical Letter Magnifica Humanitas (a title that should not be forgotten): “Each generation inherits the task of shaping its own era, of guiding history to become a place where the dignity of every person is safeguarded, justice is promoted and fraternity is made possible. Yet every era also runs the risk of creating an inhumane and more unjust world.”[1]

This risk is currently evident in the weakness of multilateralism, in diplomacy based on force, and in the fragility of the rule of law – which is the foundation of any peaceful civil coexistence – as Pope Leo XIV also stated in January of this year during his annual address to the Diplomatic Corps accredited to the Vatican City State (The Holy See).

But we are not looking at the end of progress; rather, on that systematic upward curve, there are collapses – some more prolonged and some shorter – but progress is restored. History is full of such collapses. To cite a few examples, the European Inquisition was a downturn that lasted, to varying degrees of intensity, for more than three centuries. Auschwitz is the symbolic scene of another collapse, and Gaza is now yet another failure of civilising progress. But history also provides reasons for optimism: slavery has accompanied humanity since the dawn of time, yet it was abolished. Although this may not be widely known, it was perfectly legal in Mauritania until 1981 and was only criminalized in that country in 2001. In the 21^st century! It should be noted, however, that it has now taken on other forms and continues to exist, but there is no longer any physical punishment, and it must be disguised.

The point I am making is that this end of the hegemonic empire we are witnessing – chaotic and confusing, as is the end of every empire – and this civilisational collapse we are experiencing, is merely a temporary phase; progress will continue. And it largely depends on our efforts to determine how long this collapse will last.

What will our attitude be, however, during this collapse, in the face of this global disorder, amidst this self-centred, anti-civilisational current that seeks to impose authoritarianism and rejects tolerance and solidarity?

Without a doubt, we must stand firm and persevere in defending our values – the values that lead to a better world. We need not ask ourselves what will happen; we do not know that, nor do we control it. What we must ask ourselves is what we are going to do. How can we avoid falling into the bleak social scenario that García Lorca described in Poeta en Nueva York (La Aurora) as early as the 1930s: “the mud of figures and laws, (…) artless games, (…) fruitless sweat.”[2]

In Arabic, there is a word that perfectly defines the culture which, in my view, we should embrace at this difficult time: Sumud. Sumud means steadfastness, perseverance or constant resistance in the face of all adversity. Since the Six-Day War in 1967, Palestine has given this concept its current meaning as a non-violent yet active strategy for living and resisting, based on attachment to the land and the preservation of its culture, despite occupation, oppression and extreme hardship. Whilst the Palestinians cling to their land, let us cling to the values that serve the progress of civilisation, despite our sense of being besieged. Let us recall the great Fernando Pessoa: “My homeland is the Portuguese language”; and if, for the poet, language was his homeland, for us the values we share must be ours. Empathy, compassion, tolerance, solidarity… this must be our homeland – an open homeland without borders.

Let us prepare our students to take their place in this nation; let us teach them to use the law for the common good and to overcome this collapse. We must not think that this is utopian or that it is impossible to teach goodness, because, as the poet Cora Coralina said, kindness, too, can be learnt.

I propose a paradigm shift: modern law was based on the first three words of the American Constitution of 1787: “We the people”, which was a cry for freedom in the face of 18th-century absolutism. Since then, freedom has become the paradigm of the aspirations of the 19th and 20th centuries. An aspiration celebrated by citizens, politicians and poets, such as Paul Éluard: “On my school notebooks / On my desk and on the trees / On the sand, on the snow / I write your name”.[3]

Or in Neruda’s “Canto a la Libertad” (published in 1950), which warns us that freedom is never guaranteed, but must be won: “(…) freedom (…) you find yourself waiting/ for someone reckless and daring/ who will deign to win you over.”[4] But Pope Leo XIV warns of a new risk: when this cry for freedom is understood as the vigorous defence of “my freedom”, even at the expense of the enslavement of others – that is, freedom only for the rich and powerful – it eventually turns into outright barbarism. For freedom as the sole reference point is precisely that: barbarism. It must be accompanied by other values which, carrying equal weight, balance it out. This is nothing new; Robespierre already set us on this path when he coined the motto of the French Republic: “Liberté”, of course, that must be complement by “Égalité” – that is, true equality of opportunity – and “Fraternité”, a fraternal and supportive society; this is so because freedom, when isolated and misunderstood, becomes an exaltation of the “self” and gives rise to the excesses of egocentrism. As García Montero recently remarked in A puerta cerrada (2011–2017),[5] “Everything that binds you to the word ‘I’ / is now a danger”.[6]

But the revolutionary slogan did not take sufficiently deep root, not even in France, where it was suppressed on two occasions: during the Second Empire under Napoleon III and during the Vichy regime. These are the setbacks of progress.

Today, we must replace the “We the people” with which he cried out for freedom with an even more powerful and inclusive cry: “We the humanity”. A cry against suicidal egocentrism, against the technological dictatorship. A cry that calls for survival and dignity, which requires moving towards sustainability, the new paradigm.

“We, humanity!” do not need castles or palaces; we need liveable cities. We do not need more missiles; we need more schools. We do not need to reach Mars; we need to reach the hospital and be treated without our passports or bank balances being scrutinised. We do not need preachers; we need children to learn not to lie. We need to rediscover a sense of what it means to be human.

We need to be recognised as a collective – those we once were, those we are now, and those we will become. And, tentatively, the law has already begun to move towards this recognition.

One need only look at the Inter-American Court of Human Rights Advisory Opinion 32/25 of the on the Climate Emergency and Human Rights, dated 29 May 2025,[7] or the United Nations’ “Pact for the Future” (Resolution 79/1 of 22 September 2024),[8] or, as recently as on the 13^th of May of this year, the United Nations General Assembly resolution (A/80/L.65) fully endorsing the Advisory Opinion of 23 July 2025 issued by the International Court of Justice.[9] This alone is enough to show the path we are following. Some of these documents already refer to the “collective interest of humanity” as being in full force – an interest that must be taken into account and considered; in other words, the prelude to the recognition of humanity as a subject of law.

“We, humanity!” – let’s say it in every language. After all, as Joan Manuel Serrat sang in “Te guste o no”, deep down we are all the same: “we share the same fear of death, the same fragility, (…) and the same desire to love and be loved in return”.[10] Here, or at the end of the world, we are all the equals, part of the same whole. In the name of humanity, let us enact the law that brings these things to fruition; it is our duty and what future generations expect of us.

I have often said that we must train imaginative and courageous lawyers. Imaginative enough to find solutions to problems we did not know how to solve, or to those that do not yet even exist; and courageous enough to stand up to the powerful forces that defend the interests of a selfish and self-destructive elite, willing to sacrifice the future of humanity in order to continue amassing power and wealth.

If we wish to build this conscious and caring humanity, the first thing we must teach our students is to identify and combat the myriad Shibboleths that permeate this blind society. “Shibbolet” means “ear of grain” in Hebrew, but to discover its other meaning, we must turn to the Old Testament (dating back more than 3,000 years). Specifically, to the Book of Judges, chapter 12, verses 5 and 6.

When the Ephraimites, fleeing for their lives, sought to cross the Jordan, the Gileadites were waiting for them and made them pronounce “shibbolet”, which the Ephraimites could not do properly; and if they failed to do so, they would be killed on the spot. According to the Holy Scriptures, around 42,000 died in these circumstances.

Since then, “shibboleth” has come to be understood as any identifying characteristic – be it cultural, religious, ethnic, linguistic or of any other nature – that identifies the outsider. The outsider who must be cast out, persecuted or killed. Historically, religion has been a recurring, absurd “shibboleth”, but so too has any other equally absurd difference. In September last year, none other than the United States Supreme Court ruled that ‘racial bias’ or the imperfect use of English were sufficient grounds for immigration patrols to make an arrest. This is “shibboleth” in its purest form. We cannot agree with this.

Let us pass this on to our students and do what Pessoa demanded of himself and told the poet Côrtes-Rodrigues in 1915: “… to work, as much as I can and in every way I can, for the progress of humanity and the broadening of humanity’s consciousness.”[11] It could not be put more clearly.

With the exception of my mentor – out of gratitude – I have not cited any great jurists to whom we owe so much. Neither Kelsen, nor Santi Romano; and I did not do so because I did not wish to follow the path of reason. Instead, I wished to explore and reflect alongside those who question the most sensitive aspects of the human spirit. This is because I believe this is the path that legal education must follow in the 21^st century in order to restore the civilising process. We should stand with Vinicius de Moraes and his ‘Rosa de Hiroshima’,[12] rather than with Mao, for whom “political power grows out of the barrel of a gun”. Violence is, without doubt, part of human behaviour; all species use it to achieve their goals, but precisely for that reason – because it is common to all species – this trait does not set us apart from other animals. What sets us apart are certain sensibilities and the capacity to build and embrace values; that is what makes us human. Mozart sets us apart as a species; Gandhi sets us apart; the violent do not.

I would like to conclude with this amusing observation by the well-known Greek writer Nikos Kazantzakis: “What a strange machine man is! You fill him with bread, wine, fish, and radishes, and out comes sighs, laughter, and dreams”. We should make the most of this marvellous effect and continue dreaming of a better world. Help me to fulfil the promise I made to my children. Let’s teach law for the greater good.

[1] See The Holy See, Encyclical Letter Magnifica Humanitas of His Holiness Pope Leo XIV on safeguarding the human person in the time of artificial intelligence, available at https://www.vatican.va/content/leo-xiv/en/encyclicals/documents/20260515-magnifica-humanitas.html.

[2] Federico García Lorca, La Aurora, from Pueta en Nova York, translated by Stephen Spender and JL Gili, available at https://www.wussu.com/poems/lorca_la_aurora.htm.

[3] The original reads: “Sur mes cahiers d’écolier/ Sur mon pupitre et les arbres/ sur le sable sur la neige/ j’écris ton nom“. Paul Eluard, Liberté, 1942, available at https://www.poetica.fr/poeme-279/liberte-paul-eluard/. The excerpt has been freely translated into English.

[4] The original reads: “(…) libertad (…) te encuentras aguardando / alguien temerario y osado / que se digne a conquistarte.” Pablo Neruda, Canto a la Libertad, 1950, available at https://emigreat.org/canto-a-la-libertad/. The excerpt has been freely translated into English.

[5] Luis García Montero, A puerta cerrada (2011-2017) (Visor de Poesía, 2018).

[6] The original reads: “Todo lo que te une a la palabra yo/es ahora un peligro”. García Montero, A puerta cerrada. The excerpt has been freely translated into English

[7] Available at https://www.corteidh.or.cr/docs/opiniones/seriea_32_en.pdf.

[8] Available at https://docs.un.org/en/a/res/79/1.

[9] Available at: https://docs.un.org/en/A/80/L.65.

[10] The original lyrics of the song read: “tenemos el mismo miedo a morir, idéntica fragilidad, (…) y los mismos deseos de amar y de que alguien nos ame a su vez”. The excerpt has been freely translated into English.

[11] The original reads: “… trabalhar, quanto possa e em tudo quanto possa, para o progresso da humanidade e o alargamento da consciência da humanidade”, in Fernando Pessoa, Carta a Armando Côrtes-Rodrigues, 19 January 1915, available at http://arquivopessoa.net/textos/3510.The excerpt has been freely translated into English.

[12] The famous poem depicts and criticises the horrors brought about by the atomic bomb.

Picture credit: by Kari Alfonso on pexels.com.

Ana Filipa Ribeiro (master’s student in European Union Law at the School of Law of University of Minho and ENDE Research Grant Holder – ref. UMINHO/BIM/2026/33) and Renan Bendel Vaughan (master’s student in European Union Law at the School of Law of University of Minho and ENDE Research Grant Holder – ref. UMINHO/BIM/2026/40)

Setting the scene: a first fine and an open question

On 28 May 2026, the European Commission adopted a non-compliance decision against Temu, imposing a fine of 200 million euros for breach of its obligations under the Digital Services Act (DSA).[1] The decision is significant for several reasons. It is the first major fine imposed on an electronic commerce platform under that instrument and confirms that the public enforcement mechanism of the DSA is fully operational. It is important, however, to bear in mind that the procedure is not closed: under Article 75 DSA, Temu has until 28 August 2026 to submit an action plan to the Commission aimed at remedying the infringement, following which the European Board for Digital Services issues an opinion. The decision remains open to challenge before the Union courts.[2] 

What Temu was fined for

The decision concerns Temu’s failure to properly identify, analyse and assess systemic risks linked to the dissemination of illegal products through its online marketplaces.[3] In October 2024, the Commission opened a formal investigative procedure; in July 2025, it adopted preliminary findings of infringement; and in May 2026, it confirmed those findings in a non-compliance decision.[4]

The Commission’s findings are detailed. The risk assessment conducted by Temu for the 2024 exercise was based on generic information about the electronic commerce sector, rather than on specific evidence concerning the service itself; it seriously underestimated the frequency with which Union consumers encounter illegal products on the platform; and it failed to consider the manner in which its recommendation systems and promotion by digital influencers could amplify the dissemination of hazardous products.[5] An independent mystery shopping exercise, carried out in the scope of the investigation, confirmed that a markedly elevated proportion of the tested chargers failed basic electrical safety assessments, and that a significant proportion of baby toys posed medium to high risks.[6] The fine of 200 million euros was calculated by reference to the nature, gravity and duration of the infringement.[7]

The Commission also required Temu to adopt corrective measures and to submit an action plan setting out how it intends to remedy the infringement. The decision, thus, forms part of a broader enforcement framework, combining the punitive response to a previous failure in risk assessment with a forward-looking remedial function aimed at strengthening the platform’s future governance of systemic risks.

The Commission’s decision is grounded in the exposure of consumers in the Union to illegal or unsafe products, but its legal effects operate within the sphere of public enforcement by establishing a failure in the platform’s risk governance.[8] For that reason, its legal effect is directed primarily at Temu’s compliance obligations under the DSA, leaving open the individual legal position of consumers who may already have been exposed to (or harmed by) the relevant products.[9] To understand why that is so, it is necessary to examine the enforcement architecture within which the decision was adopted – and the structural position it assigns to the individual consumer.  

The public enforcement under DSA: a mechanism of market regulation

The DSA establishes a supervision and enforcement system structured around a distinction of scale. For the generality of platforms, supervision and enforcement are entrusted to the national Digital Services Coordinators (DSCs) – independent authorities designated by each Member State and endowed with investigative and sanctioning powers.[10] For Very Large Online Platforms (VLOPs) and Very Large Online Search Engines (VLOSEs) – services with an average of at least 45 million active monthly recipients in the Union[11] –, the Commission holds exclusive supervisory and enforcement competences in respect of the specific obligations imposed upon them, namely the obligations of systemic risk management.[12]

Temu was designated as a VLOP, which places it under the direct jurisdiction of the Commission and subjects it to the obligations laid down in Articles 34 and 35 DSA. Article 34 imposes upon VLOPs the obligation to carry out in-depth risk assessments, taking into account in particular the risks associated with the design of the service and the functioning of its recommendation systems. Article 35 requires the adoption of reasonable, proportionate and effective measures to mitigate the risks thus identified, with particular regard to their impact on fundamental rights.

This enforcement mechanism is, structurally, a mechanism of market regulation. The Commission acts in the public interest; the decision produces effects for the platform and the user community as a whole, not for any individual user. The consumer who purchased a hazardous toy, for example, is not a party to the procedure, does not have access to the evidence gathered, and receives no compensation for any damage suffered. Leerssen, van Duin, Toepoel and van Hoboken underscore that whilst public enforcement receives considerable attention, the role of private enforcement – that is, legal action brought by private individuals before national courts to enforce rights conferred by the DSA – remains relatively under-explored.[13] That observation provides the starting point for the analysis that follows, which examines whether this is borne out in practice.

The consumer behind the fine: Article 54 and the structural problem of causation

The DSA is not limited to conferring enforcement powers upon public authorities. Article 54 establishes the right of recipients of the service to seek compensation from providers for damages or losses suffered by reason of an infringement of the obligations laid down in the Regulation. The provision is legally significant because it makes clear that the DSA is not directed solely at platforms as regulated entities but also confers individual subjective rights upon users – an option that Recital 126 of the DSA confirms, by affirming that the Regulation seeks to ensure access to legal remedies for those whose rights have been violated.[14]  

To access this compensation, the user must demonstrate, in accordance with the general conditions of civil liability law, (i) the existence of damage or loss, (ii) an infringement of the DSA on the part of the service provider, and (iii) a causal link between the two. These three conditions are not expressly enumerated in Article 54, but stem from its textual structure and correspond to elements common to the legal traditions of the Member States in the field of civil liability, as the literature observes.[15] What the provision does not regulate is the manner in which those elements must be proved: Article 54 contains no evidentiary presumption, establishes no rules on the burden of proof, and creates no mechanism of access to evidence held by the platform, remitting those matters to national procedural law under the principle of the procedural autonomy of Member States.[16]

This gap gives rise to a specific problem where the breach underlying the claim for damages consists in a breach of the obligations of systemic risk management laid down in Article 35 DSA. Unlike other obligations under the Regulation – such as the content moderation rules of Article 14, which tend to be precise and to generate infringements identifiable on a case-by-case basis – the obligations of Article 35 are, by their nature, diffuse: they are addressed to platforms in the abstract, in relation to the totality of their service, and compliance is measured holistically.

There is debate in the literature as to whether these obligations are obligations of means or of result. In the words of Husovec, the systemic risk management obligations of VLOPs relate to “more of a process or systems put in place” than to concrete and individually verifiable results – which means that their breach does not automatically generate liability for an individual damage.[17] This reading is corroborated by Recital 122 of the DSA: the damages recoverable under Article 54 must be causally linked to the breach of the duty of care in question and compensate only for the proportion of the damage attributable to it; damages caused by third parties who have uploaded content remain distinct.[18] Del Moral Sánchez argues that the obligations applicable to VLOPs are tendentially obligations of means, calibrated by reference to the scale and systemic impact of the service; Leerssen et al. acknowledge the ambiguity but conclude that the due diligence obligations of the DSA must, as a general rule, be treated as obligations of result, with the possible exception of the specific obligations of VLOPs.[19] In either case, the practical consequence for the individual user is the same: establishing a causal link between a systemic failure in the platform’s risk assessment and the specific harm suffered is a structurally difficult task.          

Leerssen et al. identify precisely this point as the central fragility of the right to compensation in this context, observing that establishing harm and causality can be challenging for many of the issues governed by Article 35 DSA, and that demonstrating that individuals have been harmed by those policies may be challenging, much less that they suffered harm as a result thereof.[20] This difficulty is not peculiar to the DSA: it arises in other areas of Union law whenever an obligation of a systemic or diffuse character generates individual damage. In the field of competition law, for example, the legislature responded to a structurally similar problem by introducing in Article 17(2) of the Antitrust Damages Directive a rebuttable presumption that cartel infringements cause harm, thereby easing the burden of proof placed on injured parties.[21] The DSA did not follow that path: it created the right to compensation without creating the conditions for its effective exercise.

That structural insufficiency takes concrete form when one considers what an individual consumer would actually need to do in order to lodge a claim. Four difficulties, each compounding the others, stand in the way.

The civil procedural difficulty

The first difficulty concerns the proof of damage or loss, as the presence of illegal products on a platform is insufficient to establish compensable harm for each consumer. For that purpose, the consumer must identify a concrete loss, which may take the form of economic loss, physical harm, non-material damage or another form of prejudice recognised under the applicable law. Although the fine may evidence the insufficiency of Temu’s risk assessment, it does not individualise the damage allegedly suffered by each consumer.[22]

The second difficulty concerns causation, which is likely to constitute one of the most demanding aspects of any individual claim. The infringement sanctioned by the Commission relates to the governance of systemic risks at platform level, whereas a consumer claim will ordinarily concern a specific product, transaction or exposure, together with a concrete instance of harm. The consumer must, therefore, establish a legally relevant connection between the platform-level failure identified by the Commission and the individual damage allegedly suffered.[23] This connection may be particularly difficult to establish in the context of an online marketplace. The unsafe product may have been listed by a third-party seller, manufactured by another entity, imported by a separate operator and delivered through an autonomous logistical structure.[24] The platform may nevertheless have contributed to the consumer’s exposure to that product through search, ranking, recommendation or promotional mechanisms that increased its visibility and accessibility.[25] In that context, the consumer must explain how the platform’s infringement contributed, in the specific circumstances of the case, to the harm allegedly suffered.

The third difficulty concerns the attribution of responsibility. The DSA makes the platform accountable before the regulator for the governance of systemic risks, yet civil liability requires the identification of the actor legally responsible for the damage suffered by the consumer. Hence, in individual proceedings, the consumer may need to determine whether the claim should be directed against the platform, the seller, the manufacturer, the importer or several actors jointly, depending on their respective role in the placing, promotion, distribution or supply of the unsafe product.[26]

A fourth difficulty concerns access to evidence, since many of the facts relevant to an individual consumer claim are likely to remain within the informational sphere of the platform.[27] This may include previous notices concerning the same seller or product, internal risk signals, moderation history, ranking criteria, recommendation mechanisms, audit findings and mitigation measures. The consumer’s ability to establish that the platform knew (or ought to have known) of the relevant risk or that its systems contributed to the exposure to the unsafe product, may, for that reason, depend on information that is not readily accessible in individual proceedings.

This difficulty is closely connected to the regulatory logic of the DSA. The information asymmetry that justifies the systemic regulation of VLOPs may, after harm has occurred, become a procedural obstacle to individual redress.[28] Although the Regulation equips public authorities with powers to obtain and assess information concerning platform risks, the extent to which that information can support compensation claims brought by consumers (or by entities acting on their behalf) remains legally and procedurally uncertain.

Article 54 DSA and the limits of redress

At the procedural level the right to compensation remains contingent on national rules. Although a consumer may rely on Article 54, the practical success of the claim will depend on national procedural rules, evidentiary standards and access to the information necessary to connect the infringement of the DSA with the individual damage suffered.

This is particularly important in the context of cross-border digital marketplaces. The consumer may be located in one Member State, the seller in another jurisdiction, the manufacturer outside the Union and the platform may operate through a complex corporate and technical structure. In that setting, EU private international law and judicial cooperation instruments may provide answers to questions of jurisdiction, applicable law, service of documents, taking of evidence and recognition of judgments. In the field of online consumer contracts, the Court of Justice has, for instance, developed criteria for determining whether a trader directs its activities to the consumer’s Member State and has addressed applicable-law issues in cross-border online consumer relations.[29]

Nevertheless, they do not remove the more specific difficulty raised by the Temu fine, that is, how a Commission finding of an infringement relating to systemic risk management can be used by an individual consumer seeking redress.[30] The remaining problems concern the evidentiary value of the Commission’s decision, access to platform-held information, the causal link between systemic risk governance and individual harm, and the identification of the actor legally responsible for compensation.

The Temu fine, therefore, reveals the difficulty of translating a Commission finding of an infringement relating to systemic risk management into effective remedial protection for the individual consumer. The platform may be held accountable before the Commission for defective risk governance, while the consumer must still formulate that finding as a civil claim capable of satisfying the requirements of damage, causation, attribution of responsibility and proof under the applicable procedural framework. This tension between the formal existence of a right and the practical conditions for its exercise is not just a procedural inconvenience.

Effectiveness and effective judicial protection

The difficulties identified above may also be examined through the principle of effectiveness[31] and the right to effective judicial protection.[32] That tension raises a question about the architecture of enforcement itself, particularly whether a system that relies on consumer exposure to justify public enforcement action can avoid addressing the practical possibility of redress for those consumers.

The central issue concerns the conditions under which the remedy formally recognised by Article 54 DSA can be exercised in practice. Where the consumer cannot obtain the information necessary to substantiate the claim, or where the public finding of infringement has no clear procedural relevance in subsequent proceedings, the right to compensation risks remaining difficult to operationalise.

This analysis preserves the distinction between administrative fines and civil redress. The administrative fine is directed at punishing the infringement, deterring future non-compliance and correcting platform behaviour. Civil redress is directed at repairing individual harm. The difficulty lies in the limited articulation between these two dimensions, especially where the administrative fine is justified by reference to consumer exposure to illegal or unsafe products.

For that reason, the Temu fine raises a broader question of effective protection. Where consumer exposure forms part of the justification for public enforcement, the established infringement should acquire procedural relevance for consumers already affected by the relevant risks. The effectiveness of Article 54 DSA depends, at least in part, on whether findings relating to failures in systemic risk assessment and mitigation can support the practical construction of individual or representative claims for compensation.

The possible direction

The possible direction is, therefore, to give Article 54 DSA greater procedural density in cases where public enforcement has already established a an infringement relating to systemic risk management obligations. A Commission decision should be capable of assisting subsequent claims by affected consumers, at least as an authoritative basis for demonstrating the existence and nature of the breach. This would allow national courts to focus the assessment on the remaining elements of civil liability, especially the connection between the established infringement and the harm alleged in the concrete case.

This approach would also require procedural tools capable of addressing the informational imbalance that characterises claims against VLOPs. Where the relevant facts are embedded in risk assessments, internal alerts, recommender systems, moderation practices or mitigation measures, the effectiveness of Article 54 depends on whether those materials can be accessed and used in a legally structured manner. Hence, representative actions may play an important role in this respect, particularly where the harm is dispersed across a large number of consumers and individual litigation would be unlikely to provide an effective route to compensation.

Finally, the Temu fine points to a broader development in the enforcement architecture of the DSA. Public findings of failures in systemic risk assessment and mitigation need to be capable of supporting the remedial dimension of the Regulation, so that the right to compensation is not confined to formal recognition. The future effectiveness of Article 54 will depend on the emergence of procedural mechanisms that allow established infringements to be translated into viable individual or representative claims. But a rule enforced without a remedy is, in the end, a rule enforced only halfway – and the consumer who was exposed to unsafe products before 28 May 2026 remains, after it, in the same procedural position. The fine remains nonetheless an important assertion of the Union’s regulatory authority over VLOPs. As Thomas Regnier put it, speaking for the Commission: “If you want access to our market of 450 million consumers, you have to respect our rules. Period!”[33]

[1] European Commission, Press Release, Commission fines Temu €200 million for breaching the Digital Services Act (28 May 2026), available at: https://ec.europa.eu/commission/presscorner/detail/en/ip_26_1178.

[2] European Commission, The enforcement framework under the Digital Services Act, available at: https://digital-strategy.ec.europa.eu/en/policies/dsa-enforcement; Regulation (EU) 2022/2065 of the European Parliament and of the Council of 19 October 2022 on a Single Market for Digital Services and amending Directive 2000/31/EC (Digital Services Act), OJ L 277 (27.10.2022), Article 75.

[3] European Commission, Commission fines Temu €200 million for breaching the Digital Services Act.

[4] European Commission, Commission fines Temu €200 million for breaching the Digital Services Act.

[5] European Commission, Commission fines Temu €200 million for breaching the Digital Services Act; European Commission, Press Release, Commission preliminarily finds Temu in breach of the Digital Services Act, 28 July 2025, available at: https://ec.europa.eu/commission/presscorner/detail/en/ip_25_1913.

[6] European Commission, Commission fines Temu €200 million for breaching the Digital Services Act; European Commission, Commission preliminarily finds Temu in breach of the Digital Services Act.

[7] European Commission, Commission fines Temu €200 million for breaching the Digital Services Act; European Commission, Commission preliminarily finds Temu in breach of the Digital Services Act.

[8] DSA, Articles 34, 35 and 74.

[9] DSA, Article 54.

[10] DSA, Articles 49 and 51. See also European Commission, The enforcement framework under the Digital Services Act.

[11] DSA, Article 33(1).

[12] DSA, Articles 56(2) and (3), and 74.

[13] Paddy Leerssen, Anna van Duin, Iris Toepoel and Joris van Hoboken, Pathways to Private Enforcement of the Digital Services Act, Institute for Information Law (IViR) (University of Amsterdam, June 2025), 4, available at: https://dsa-observatory.eu/2025/06/05/report-pathways-to-private-enforcement-of-the-digital-services-act-dsa/.

[14] DSA, Article 54 and recital 126. See also Leerssen et al., Pathways, 9, and Folkert Wilman, Saulius Lukas Kaleda and Paul-John Loewenthal, The EU Digital Services Act (Oxford: Oxford University Press, 2024): 370-317, available at: https://doi.org/10.1093/law/9780198892847.001.0001

[15] Judgment CJEU Österreichische Post, 4 May 2023, case C-300/21, ECLI:EU:C:2023:370, para. 32. Similarly, upholding the analogous application of the three cumulative requirements set out in Österreichische to Article 54 DSA. See also Leerssen et al., Pathways to Private Enforcement of the Digital Services Act, 9, and Wilman, Kaleda and Loewenthal, The EU Digital Services Act, 370-371.

[16] On procedural autonomy and its limits, see Anna Van Duin, Effective Judicial Protection in Consumer Litigation (Cambridge: Intersentia, 2022): 43-45, available at: https://doi.org/10.1017/9781839702501. See also Joana Covelo de Abreu, “Princípio da Autonomia Processual dos Estados-Membros”, in Enciclopédia da União Europeia, ed. Ana Paula Brandão, Francisco Pereira Coutinho, Isabel Camisão, and Joana Covelo de Abreu (Lisbon: Petrony, 2017): 300-303.

[17] Martin Husovec, “Rising Above Liability: The Digital Services Act as a Blueprint for the Second Generation of Global Internet Rules”, in Berkeley Technology Law Journal 38, no. 3 (2023): 902-904, available at: https://doi.org/10.15779/Z38M902431.

[18] Husovec, “Rising Above Liability”, 911, fn. 102. See also DSA, recital 122 and Articles 35 and 54.

[19] Leerssen et al., Pathways to Private Enforcement of the Digital Services Act, 11 and 18-22. See also Miguel Del Moral Sánchez, “The Devil Is in the Procedure: Private Enforcement in the DMA and the DSA”, University of Bologna Law Review 9 (2024): 7, accessed at: https://doi.org/10.6092/issn.2531-6133/19638.

[20] Leerssen et al., Pathways to Private Enforcement of the Digital Services Act, 21-22.

[21] Directive 2014/104/EU of the European Parliament and of the Council of 26 November 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union, OJ L 349, 5 December 2014, article 17(2).

[22] Hannah von Wickede, Johannes Berchtold, and Andreas Splittgerber, “Compensation Claims under the Digital Services Act”, Reed Smith Viewpoints, 14 August 2024, available at: https://www.reedsmith.com/our-insights/blogs/viewpoints/102jglg/compensation-claims-under-the-digital-services-act/.

[23] Leerssen, et al., Pathways to Private Enforcement of the Digital Services Act, 20-21.

[24] Regulation (EU) 2023/988 of the European Parliament and of the Council of 10 May 2023 on general product safety, amending Regulation (EU) No 1025/2012 of the European Parliament and of the Council and Directive (EU) 2020/1828 of the European Parliament and the Council, and repealing Directive 2001/95/EC of the European Parliament and of the Council and Council Directive 87/357/EEC, OJ L 135 (23.05.2023): 1-51, recitals 45, 46 and 58 and Articles 9 to 22.

[25] DSA, Article 34 and recital 84.

[26] Christoph Busch, “Rethinking Product Liability Rules for Online Marketplaces: A Comparative Perspective,” The 49th Research Conference on Communication, Information and Internet Policy (July 31, 2021), 23-24 and 33-35, accessed June 11, 2026, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3897602. Christoph Busch notes that online marketplaces have disrupted traditional distribution chains and made the application of product liability rules to online intermediaries controversial, while EU law has largely relied on public enforcement of product safety rules and market surveillance.

[27] DSA, recital 85 and Article 40. See also Leerssen, et al., Pathways to Private Enforcement of the Digital Services Act, 8 and 12.

[28] See Leerssen, et al., Pathways to Private Enforcement of the Digital Services Act, 8, 12 and 26 on information asymmetries, national procedural autonomy and evidentiary burdens in private enforcement.

[29] Judgment CJEU Pammer v Reederei Karl Schlüter GmbH & Co KG and Hotel Alpenhof GesmbH v Heller, 7 December 2010, joined cases C-585/08 and C-144/09,  ECLI:EU:C:2010:740, recitals 75-84, and  CJEU Verein für Konsumenteninformation v Amazon EU Sàrl, 28 July 2016, case C-191/15, ECLI:EU:C:2016:612, recitals 66,71.

[30] See Leerssen, et al., Pathways to Private Enforcement of the Digital Services Act, 12, 20-21 and 26.

[31] See Judgment CJEU Rewe-Zentralfinanz, 16 December 1976, case 33/76, ECLI:EU:C:1976:188, recital 5, where the Court held that national procedural rules must not render the exercise of EU rights impossible or excessively difficult, and CJEU Unibet, 13 March 2007, case C-432/05, ECLI:EU:C:2007:163, recital 37-44, where the Court reaffirmed effective judicial protection as a general principle of EU law requiring judicial remedies capable of protecting rights derived from EU law.

[32] Maria José Rangel Mesquita, “Article 47”, in The charter of fundamental rights of the European Union: A commentary, 439-446. See also Joana Covelo de Abreu, “Princípio da tutela jurisdicional efetiva”, In Enciclopédia da União Europeia, ed. Ana Paula Brandão, et al., (Lisbon: Petrony, 2017), 329-332.

[33] Thomas Regnier, Statement on the Commission’s decision fining Temu, 28 May 2026, cited in: Thomas Regnier, LinkedIn post, 28 May 2026, available at: https://www.linkedin.com/posts/thomas-regnier-24a05810b_today-the-european-commission-has-imposed-activity-7465717713747927042–di_/. See also: European Commission, Commission fines Temu €200 million for breaching the Digital Services Act.

Picture credit: by V H on pexels.com.

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The post Britain, Brexit and the spectre of Empire first appeared on LSE European Politics.

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The post LSE and the Brexit referendum first appeared on LSE European Politics.

The post South Tyrol and the myth of “dynamic autonomy” first appeared on LSE European Politics.

Renan Bendel Vaughan (master’s student in European Union Law at the School of Law of University of Minho and ENDE Research Grant Holder – UMINHO/BIM/2026/40)

Setting the scene: eight days in April, one contradiction

In April 2026, two events gave rise to a situation that European Union law has not yet addressed in its entirety. On the 21st, the Court of Justice of the European Union (CJEU), sitting as a full court, delivered its judgment in Commission v. Hungary (C-769/22) and recognised for the first time an autonomous and self-sufficient violation of Article 2 of the Treaty on European Union (TEU): the Hungarian legislation stigmatising and marginalising LGBTI+ people was held to be contrary to “the very identity of the Union as a common legal order in a society in which pluralism prevails.”[1] Article 2 TEU thereby acquired the status of a justiciable provision with genuine normative force, capable of constituting an autonomous ground of infringement in its own right, provided that the violation is manifest and particularly serious – a threshold the Court held to be crossed in the Hungarian case on account of the cumulative and coordinated character of the breaches of Articles 1, 7, 11, and 21 of the Charter of Fundamental Rights of European Union (CFREU).[2]

Eight days later, on the 29th, the European Parliament adopted a resolution which examined the European Commission’s 2025 Rule of Law Report, and noted that 93% of the Commission’s recommendations are repeats from previous years, with only 6% having been fully implemented; furthermore, it condemned the use of spyware as a persistent and systematic threat to the rule of law, requiring binding response mechanisms.[3]

Read together, these two instruments reveal a contradiction that is constitutionally precise. Article 2 TEU acquired, in April 2026, an operative density that goes beyond declaratory commitment. The Parliament confirmed, at that same moment, that one of the most elementary structural conditions of the rule of law – judicial independence – remains exposed to a threat that Union law has yet to address: the clandestine surveillance of members of the judiciary by spyware tools operated by the Member States themselves. The legal basis for imposing a positive obligation has just been consolidated, yet the very problem that would call for such imposition remains without an articulated legal response. This text argues that construction is already possible – and that the time has come to undertake it.

The full-spectrum instrument

The starting point is empirical. The PEGA report, adopted in March 2023, documents the use of Pegasus against judges and prosecutors in Poland, Hungary, and Spain; Predator in Greece; and FinFisher in other contexts.[4] The Report concluded that it could reasonably be assumed that all Member States had acquired or deployed one or more spyware systems, which renders the threat to the judicial function independent of the identity of the operator.[5] In Poland alone, between 2017 and 2022, the number of individuals subjected to operational surveillance authorised by the public prosecutor reached 578 – a figure not restricted to Pegasus alone; among those under surveillance were members of the public prosecution service, including a prosecutor standing as a candidate in parliamentary elections.[6] The Parliament’s resolution on the 2025 Rule of Law Report confirmed that this pattern persists, placing it explicitly on the same level as political interferences in judicial appointments and pressure exerted against investigative journalists.[7]

Spyware is a full-spectrum interception instrument. Pegasus, developed by the NSO Group, is able to infiltrate the target device in its entirety, accessing encrypted communications, microphone, camera, and deleted data.[8] This analysis uses the term “surveillance” rather than “espionage” because the relevant object here is not the act of information collection, but the structural effect that the possibility of such collection produces upon the judicial function.

Bauman and Lyon describe this transformation as the passage from the panopticon to liquid surveillance. The classical panopticon – Bentham’s prison design, theorised by Foucault – required the potential presence of an inspector to produce compliance: the inmate behaved because someone might be watching.[9] Contemporary digital surveillance has dissolved even that structure. It moves silently, without fixed architecture, without a visible watcher. The subject no longer knows whether they are being observed, or when, or by whom, or to what end – and it is precisely that not-knowing that does the work. For a judge, that internalisation does not just affect the worker, but the function itself. The juridification of its effects, proceeds not through social theory but through the case law of the courts.

The harm that leaves no trace

The chilling effect is, before a legal category, a behavioural phenomenon: confronted with the possibility of sanction or surveillance, individuals fall silent or modify their conduct, even where no sanction has yet been applied.[10] The European Court of Human Rights (ECtHR) consolidated this as an autonomous legal category in Klass and Others v. Germany: the mere existence of legislation permitting secret surveillance constituted an interference with the right protected by Article 8 of European Convention of Human Rights (ECHR), irrespective of any proof that the applicant had actually been monitored.[11] In Szabó and Vissy v. Hungary the Court held that the mere possibility of surveillance sufficed to produce inhibitory effects on the exercise of rights, without any requirement of individualised proof.[12]

The CJEU operationalised an equivalent logic in Digital Rights Ireland (joined cases C-293/12 and C-594/12): Directive 2006/24/EC (the Data Retention Directive) could generate, in the minds of users of electronic communications, the feeling that their private life is subject to constant surveillance, and that this effect alone constituted sufficient grounds for invalidity.[13] The harm derives not from the damage suffered, but rather from the uncertainty maintained.

Fajdiga and Zagorc show that the chilling effect on judges with greater institutional visibility amplifies its inhibitory efficacy disproportionately: the threat directed at a prominent judge communicates to the judiciary as a whole, without words, the cost of an autonomous decision. In a particularly striking formulation, the authors describe this condition as the transformation of guaranteed freedom into feardom – a state in which one formally possesses freedom yet lives in fear of exercising it.[14]

When the target of surveillance is a judge in the exercise of a jurisdictional function, the chilling effect ceases to be a private matter. The judge who learns, or reasonably suspects, that members of the judiciary have been subjected to surveillance deliberates under a structurally altered condition: an ambient uncertainty that can neither be proved nor contested, because the specific act that produced it remains, by definition, unknown. Bárd shows that a chilling effect of this kind strikes as the very condition of effectiveness of Union law: without judges who are genuinely free from undisclosed external pressure, the mechanism of preliminary reference and the guarantee of effective judicial protection lose their substance.[15]

The harm is not suffered by the individual judge alone. What is damaged is the jurisdictional function itself, as a constitutional guarantee of the Union’s legal order. This displacement – from the level of subjective rights to the level of constitutional architecture is the central doctrinal step of the argument. It explains why this cannot be treated as a simple matter of data protection, and why it demands a response at the level of Article 2 TEU. In A.K. and Others (joined cases C-585/18, C-624/18, and C-625/18), the Court established that the appearance of judicial independence is not a prerogative of the judge but a right of the litigant: Article 47 CFREU requires a court that those subject to its jurisdiction can perceive as genuinely free from external influence.[16] Where the structural possibility of surveillance undermines the appearance, it simultaneously and prospectively infringes the right of every litigant whose dispute is adjudicated under conditions of ambient uncertainty. The harm migrates from the private sphere of the judge to the constitutional architecture of the judicial function.

The intersection of exclusions

The case law developed since Associação Sindical dos Juízes Portugueses (C-64/16), through Repubblika (C-896/19) and Commission v. Poland (C-619/18), offers robust protection of judicial independence against normative and institutional pressure – legislative reforms affecting irremovability, alterations to appointment regimes, and instrumentalised disciplinary procedures.[17] But this body of case-law was fashioned to address what is visible. It presupposes the existence of a contestable act: a law, a decision, a norm susceptible to challenge. Clandestine surveillance produces none of these traces. What remains is an effect that dissipates before the law can capture it.

Regulation (EU) 2016/679 (GDPR), Article 2(2)(a) and (b) expressly excludes from its scope the processing of data carried out in the exercise of activities falling outside the scope of Union law; recital 16 confirms that the Regulation does not apply to activities concerning national security.[18] Nonetheless, La Quadrature du Net and Others (joined cases C-511/18, C-512/18, and C-520/18) confirmed that this exclusion is not unlimited: a Member State invoking national security cannot thereby exempt itself wholesale from the obligations of Union law, and that the CFREU continues to impose inviolable conditions on derogations.[19] The interaction of data protection, judicial independence, and the national security reservation of Article 4(2) TEU, produces an intersection of exclusions within which clandestine surveillance of the judicial function is installed. None of the three regimes was designed to address this specific type of problem, and their overlapping reproduces the gap across each of its layers.

Imposing the result

Commission v. Hungary (C-769/22) constitutes an inflection point. The CJEU held that only violations that are manifest and particularly serious are capable of giving rise to a finding of autonomous non-compliance under Article 2 TEU, but held equally that such a finding is possible, and that the threshold was crossed in the Hungarian case.[20] This benchmark, together with Commission v. Poland (C-448/23) – which confirmed that Article 2 TEU generates legally binding duties for the Member States –, enables the conclusion that Article 2 TEU is today an operative provision with dense normative content, capable of grounding positive obligations of protection.[21]

The argument put forward is both more modest and more robust than a call for Union supervision of national intelligence services. Article 2 TEU, read in conjunction with Articles 7, 8, and 47 CFREU and the second subparagraph of Article 19(1) TEU, imposes results-based obligations: Member States must ensure that their surveillance operations do not compromise the structural conditions for the exercise of the jurisdictional function. These obligations are expressed in two minimum requirements.

The first is prior review by an authority that is genuinely independent both from the executive branch and from the judicial order under scrutiny. The CJEU set out the structural content of this requirement in Prokuratuur (C-746/18), in the context of access to retained traffic data: prior review must be entrusted to a body that is a genuine third party in relation to the authority requesting access. Where the surveillance target is a member of the judiciary, the requirement is yet more stringent: proximity to either the intelligence services or the judicial order under scrutiny would reproduce, rather than resolve, the constitutional problem that the review is designed to prevent.[22]

The second is the existence of effective means of challenge and repair when surveillance is discovered, with a corresponding positive procedural obligation on the State to actively seek out corroborative evidence once the person concerned presents strong prima facie elements. This procedural obligation flows directly from Article 47 CFREU: effective judicial protection, as the Court held in A.K. and Others, is not satisfied by the formal availability of a remedy where the structural conditions for its exercise have been compromised by the very act that the remedy is meant to address.[23]

A serious objection is well known: Article 4(2) TEU reserves national security to the exclusive competence of the Member States. Taken seriously, however, this objection becomes the strongest argument in favour of the positive obligation. The reservation protects the competence of the Member States, not the arbitrary exercise of that competence. The surveillance of members of the judiciary produces direct effects in the domain of judicial independence, governed by the second subparagraph of Article 19(1) TEU. The positive obligation does not penetrate the Member States’ competence in matters of national security: it governs the exercise of that competence in a constitutionally coherent manner, imposing the result without determining the means. The Union does not appoint judges or manage national courts; yet it imposes, in a binding manner, that Member States guarantee effective judicial independence. The same reasoning applies here.

What the law already permits

Over decades, the EU has constructed a normative architecture designed to guarantee that its Member States share a genuine commitment to the rule of law. That commitment rests, ultimately, on the existence of judges who decide without fear. What the present article has sought to demonstrate is that this fundamental presupposition is today threatened by a mechanism that Union law has yet to name with precision: the clandestine surveillance of the judicial function by the very States that constitute the Union’s legal order.

The threat is all the more disturbing because it is silent. It does not manifest itself through a law, or a decree, or any act susceptible to challenge. It installs itself in uncertainty. The mere possibility – demonstrated, documented, statistically present – suffices to produce the inhibitory effect. And once the effect is produced judicial independence is no longer what it appears to be: it becomes a form of complicity with the very fragility it is meant to resist.

Union law possesses today the doctrinal instruments to respond to this threat. Article 2 TEU is operative. Article 47 CFREU is demanding. The positive obligation is constructible. What is lacking is not a legal foundation: it is the institutional will to recognise it. It is in this gap between what the law already permits and what the institutions have yet to do that the real risk lies: that judicial independence in the EU will, without anyone formally declaring it, turn into a system of feardom.

[1] Judgment CJEU Commission v. Hungary, 21 April 2026, case C-769/22, ECLI:EU:C:2026:326, para. 556.

[2] Commission v. Hungary, paras. 547, 551, 553.

[3] European Parliament, Resolution of 29 April 2026 on the Commission’s 2025 Rule of Law Report (2025/2239(INI)), P10_TA(2026)0147, recitals O, AB and paras. 60-64, 161, available at: https://www.europarl.europa.eu/doceo/document/TA-10-2026-0147_EN.html.

[4] European Parliament, Report on the use of Pegasus and equivalent surveillance and spyware, A9-0189/2023, 25 May 2023, paras. 1, 59, 72, available at: https://www.europarl.europa.eu/doceo/document/A-9-2023-0189_EN.html. See also: European Parliament, Recommendation of 15 June 2023 to the Council and the Commission following the investigation of alleged contraventions and maladministration in the application of Union law in relation to the use of Pegasus and equivalent surveillance spyware (2023/2500(RSP)), P9_TA(2023)0244, Preamble, recitals O, P, Q, R, Y, AD, para. 3, available at: https://www.europarl.europa.eu/doceo/document/TA-9-2023-0244_EN.html. 

[5] European Parliament, Report on the use of Pegasus and equivalent surveillance and spyware, paras. 1, 10

[6] Poland, Sejm, Wypowiedzi na posiedzeniach Sejmu [Statements during Sejm Sessions], 10th Session, 1st day of debates, 24 April 2024, Statement No. 080, available at: https://www.sejm.gov.pl/sejm10.nsf/wypowiedz.xsp?posiedzenie=10&dzien=1&wyp=080. See also: European Parliament, Report on the use of Pegasus and equivalent surveillance and spyware, paras. 61, 72.

[7] European Parliament, resolution on the Commission’s 2025 Rule of Law Report, recitals N, O and paras. 9, 13, 59-64.

[8] John Scott-Railton, Bill Marczak, Bahr Abdul Razzak, Masashi Crete-Nishihata and Ron Deibert, “Reckless Exploit: Mexican Journalists, Lawyers, and a Child Targeted with NSO Spyware,” Citizen Lab Research Report No. 93, University of Toronto, June 2017, pp. 7-10, available at https://citizenlab.ca/research/reckless-exploit-mexico-nso. See also: European Parliament, Report on the use of Pegasus and equivalent surveillance and spyware, paras. 5-6.

[9] Zygmunt Bauman and David Lyon, Liquid surveillance: a conversation (Cambridge: Polity Press, 2013), Introduction and Chapter 2, pp. 7-11, 75.

[10] Frederick Schauer, “Fear, risk and the first amendment: unravelling the chilling effect,” Boston University Law Review 58 (1978): 689, 693-695, available at: https://scholarship.law.wm.edu/facpubs/879.

[11] Judgment ECtHR Klass and Others v. Germany, Application no. 5029/71, 6 September 1978, paras. 34, 37, 41.

[12] Judgment ECtHR Szabó and Vissy v. Hungary, Application no. 37138/14, 12 January 2016, paras. 33, 38, 53-54, 73.

[13] Judgment CJEU Digital Rights Ireland, joined cases C-293/12 and C-594/12, 8 April 2014, ECLI:EU:C:2014:238, paras. 27, 33-34, 37.

[14] Mohor Fajdiga and Saša Zagorc, “Freedom or feardom of expression of judges? Exploring the chilling effect on judicial speech,” European Constitutional Law Review 19 (2023): 267-269, available at: https://doi.org/10.1017/S1574019623000093.

[15] Petra Bárd, “In courts we trust, or should we? Judicial independence as the precondition for the effectiveness of EU Law,” European Law Journal 27 (2022): 194-197, 206, available at: https://doi.org/10.1111/eulj.12425.

[16] Judgment CJEU A.K. and Others, joined cases C-585/18, C-624/18 and C-625/18, 19 November 2019, ECLI:EU:C:2019:982, paras. 123, 127-128, 153.

[17] Judgments CJEU, Associação Sindical dos Juízes Portugueses, case C-64/16, 27 February 2018, ECLI:EU:C:2018:117, paras. 31, 41-42, 44-45; Repubblika, case C-896/19, 20 April 2021, ECLI: EU:C:2021:311, para 26; Commission v. Poland, case C-619/18, 24 June 2019, ECLI:EU:C:2019:531, paras. 53-57, 63-65.

[18] Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data (General Data Protection Regulation), OJ L 119, 4 May 2016, p. 1, recital. 16, Article 2(2)(a)-(b).

[19] Judgment CJEU La Quadrature du Net and Others, joined cases C-511/18, C-512/18 and C-520/18, 6 October 2020, ECLI:EU:C:2020:791, paras 99-100.

[20] CJEU Commission v. Hungary, C-769/22, para. 551.

[21] Judgment CJEU Commission v. Poland, case C-448/23, 18 December 2025, ECLI:EU:C:2025:975, paras. 102, 103, 105, 108.

[22] Judgement CJEU Prokuratuur, case C-746/18, 2 March 2021, ECLI:EU:C:2021:152, paras. 51-55.

[23] CJEU A.K. and Others, paras. 123, 127–128, 153, 167.

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The post A vote for isolation? What the Swiss population referendum means for Europe first appeared on LSE European Politics.

Ana Filipa Ribeiro [master’s student in European Union Law at the School of Law of University of Minho and ENDE Research Grant Holder (ref. UMINHO/BIM/2026/33)]

On 1 July 2026, the transitional period provided for under the Markets in Crypto-Assets Regulation (MiCAR)[1] will expire across the European Union,[2] meaning that providers wishing to continue serving EU clients must either hold a MiCAR authorisation, benefit from another entitlement recognised under the Regulation,[3] or cease the provision of those services.[4] This date marks a decisive moment in the legal ordering of crypto-asset markets, since it is the point at which Regulation (EU) 2023/1114 becomes a concrete legal condition for access to the European market. More specifically, it is the moment at which national authorisation begins to operate as a Union-wide market-access decision with consequences for providers, competitors, users and host Member States across the internal market.

The legal significance of this transition lies in the regulatory architecture chosen by MiCAR. The Regulation seeks to overcome the previous fragmentation of national regimes by establishing uniform rules on authorisation, governance, conduct, prudential requirements, supervision and client protection.[5] Yet, it does so through a model in which authorisation is granted by national competent authorities,[6] while the effects of that authorisation may extend throughout the internal market by means of the European passport.[7] National administrative decisions, thus, acquire a Union-wide market-access function, insofar as an authorisation granted by one competent authority may determine the ability of a crypto-asset service provider to operate across several Member States.

That structure gives rise to a central tension in the legal ordering of EU crypto-asset markets. MiCAR presupposes that decentralised authorisation can coexist with integrated market access, provided that national supervisory practices remain sufficiently convergent.[8] The expiry of the transitional period places that assumption under practical scrutiny. If national authorities apply authorisation requirements with materially different levels of intensity, speed or interpretative strictness, operators subject to the same Regulation may enter the internal market under unequal supervisory conditions.[9] Hence, the concern extends beyond administrative coordination and reaches the conditions of competitive neutrality within the market framework that MiCAR is intended to create.

The transitional regime under Article 143(3) was designed to manage the passage from national fragmentation to European authorisation. Providers that had supplied crypto-asset services in accordance with applicable national law before 30 December 2024 could continue to do so until 1 July 2026, or until the granting or refusal of a MiCAR authorisation, whichever occurred first. That regime was conceived as temporary and instrumental, with the purpose of avoiding abrupt disruption to the market while affording providers and supervisory authorities the time necessary to adjust to the new legal framework.[10] Once it expires now, MiCAR will transition from transitional harmonisation instrument into a definitive gatekeeping regime.

The relevance of this transformation lies in the position occupied by crypto-asset service providers within the digital financial ecosystem. Far from operating at its margins, they perform a gatekeeping function by mediating access to custody, trading, exchange, execution, transfer and, in certain cases, the practical use of crypto-assets as instruments of payment, investment or participation in decentralised applications. Their role is, therefore, capable of shaping both the conditions under which users access digital assets and the competitive environment in which undertakings operate within a regulated space of financial innovation.[11]

Under Article 59, crypto-asset services may be provided within the Union only by authorised crypto-asset service providers or by certain financial entities entitled to provide such services under the Regulation. Article 63 sets out the authorisation procedure, while Article 65 enables the cross-border provision of services through passporting. Taken together, these provisions define the boundary between lawful participation in the European crypto-asset market and unauthorised activity, while they also make public authorisation a constitutive element of competition. Market access is now structured by a regulatory framework in which technological capacity, liquidity, reputation and commercial reach are assessed alongside the provider’s ability to obtain and preserve the legal status required for participation.

This has important consequences for understanding competition in crypto-asset markets. In regulated sectors, the competitive process begins at the level of market access, where entry conditions play a constitutive role in shaping the market structure in which undertakings operate.[12] Authorisation requirements, supervisory expectations, procedural timelines, prudential obligations and enforcement practices shape the competitive environment before any service is offered to users. A provider that obtains authorisation earlier, under a less burdensome supervisory approach, or with a broader practical interpretation of its permitted activities, may acquire a competitive advantage that derives from regulatory conditions rather than from merit, efficiency, or innovation.[13]

The European passport[14] intensifies this concern. As an essential instrument of the internal market, the European passport prevents the re-emergence of duplicative national authorisation procedures and gives practical effect to the freedom of establishment[15] and freedom to provide services,[16] allowing an authorised provider to conduct cross-border activity beyond its home Member State within a harmonised legal framework.[17] Nevertheless, when passporting rights are triggered by a national authorisation, the legitimacy of their cross-border effects depends on the reliability of the supervisory assessment carried out by the home Member State authority. If the authorisation granted in one Member State is perceived as insufficiently rigorous, the passport risks becoming a vehicle for regulatory arbitrage rather than an instrument of mutual trust.[18]

Administrative discretion and institutional variation are inherent in a decentralised supervisory system, although they become legally problematic where they affect the substantive conditions of market entry and the competitive position of providers across the internal market. Divergent supervisory practices may encourage providers to seek authorisation in jurisdictions perceived as faster, more predictable or less demanding, with a view to using that authorisation as a gateway to the entire Union. Such incentives are capable of undermining the level playing field between providers, placing pressure on authorities that apply stricter scrutiny and generating a form of competition between supervisory jurisdictions beneath the formal unity of the Regulation.

This risk is particularly acute in markets marked by speed, scale and network effects.[19] Given the capacity of crypto-asset service providers to rapidly consolidate market positions through user acquisition, liquidity concentration, brand recognition and integration with other digital services, an earlier authorisation (or one granted under more favourable administrative conditions) can generate effects beyond the provider’s immediate legal position by facilitating the accumulation of a first-mover advantage that later proves difficult to contest. If that advantage is grounded in better compliance, stronger governance or superior service quality, it belongs to the normal dynamics of lawful competition. If it is grounded in divergent supervisory practice, the competitive result becomes more problematic from the perspective of the internal market.

In this sense, the end of the transitional period reveals a deeper question of EU economic law. The internal market requires more than the formal harmonisation of legal rules, since its effective operation also depends on consistent administrative application, particularly where national decisions produce cross-border effects. The effectiveness of the MiCAR passport as an instrument of economic freedoms and market integration depends on sufficient convergence in authorisation practices, because divergences in supervisory assessment can allow practical asymmetries capable of affecting competition to persist beneath the formal appearance of harmonisation.

The link with economic freedoms is, therefore, twofold. For unauthorised providers, the expiry of the transitional period functions as a market-access restriction justified by legitimate objectives, including client protection, market integrity, financial stability and the orderly development of crypto-asset activity. The freedom to conduct a business under Article 16 of the Charter of Fundamental Rights of the European Union[20] does not confer an unconditional right to provide crypto-asset services, but any restriction on lawful economic activity must be framed by clear, foreseeable and proportionate rules enabling providers to identify the conditions for authorisation, understand the reasons for refusal and challenge adverse administrative decisions through effective procedures.[21]

For authorised providers, MiCAR operates as an enabling framework, granting the regulatory status through which cross-border activity becomes legally possible and participation in the internal market is secured. Yet, that status remains conditional.[22] Authorisation should be understood as a continuing public-law position, grounded in ongoing supervision and sustained by compliance with organisational, prudential and conduct obligations. The freedom to provide services is, thus, mediated by a regulatory relationship between the provider and the competent authority, where the credibility of that relationship determines whether passporting operates as a legitimate expression of economic freedom or as a channel through which divergent national practices are exported to the wider Union market.

The position of users adds a further constitutional dimension. The end of the transitional period may require non-authorised providers to wind down operations, cease serving EU clients, migrate users to authorised entities, or facilitate the transfer of crypto-assets to other providers or to self-hosted wallets. These processes affect more than contractual convenience, as they may interfere with access to assets, continuity of services, patrimonial interests and legal certainty. In crypto-asset markets, the dependence of the market architecture outlined above on private platforms means that regulatory changes can have immediate effects on the effective enjoyment of legally protected interests.[23]

Article 17 of the Charter[24] may be relevant where users face restrictions on access to crypto-assets or funds held through a platform. Even though the classification of crypto-assets may vary according to their legal and technical characteristics, the patrimonial interests attached to them cannot be ignored. Article 47 of the Charter[25] is also engaged where users need to contest account closures, transfer delays, blocked withdrawals or unclear migration arrangements, since effective judicial protection requires that affected persons be able to identify the responsible entity, understand the basis of the decision affecting them and access meaningful complaint or redress mechanisms. Article 38[26] further reinforces the public interest in ensuring a high level of consumer protection, particularly where users may have difficulty distinguishing between authorised EU entities, third-country entities and other companies operating under the same commercial brand.

The institutional role of European Securities and Markets Authority (ESMA) is consequently significant. A decentralised system of authorisation with European effects requires mechanisms capable of preventing fragmentation in practice. Guidance, peer scrutiny, supervisory coordination and common expectations are necessary to ensure that national authorities apply MiCAR in a manner compatible with the objectives of the Regulation. Accordingly, the central question lies in the capacity of the existing supervisory architecture to secure sufficient convergence across national authorities, so that the passport can operate on a credible basis while safeguarding users and preserving equal competitive conditions.[27]

Centralisation can strengthen uniformity in the supervision of large cross-border providers whose activities produce systemic or quasi-systemic effects in crypto-asset markets, while also raising questions of subsidiarity, administrative capacity and proximity to local market knowledge. Decentralisation, by contrast, preserves the role of national competent authorities and allows closer engagement with operators established within their jurisdiction. Nonetheless, it requires stronger coordination precisely because its decisions produce effects beyond national borders. The legal issue is, therefore, one of supervisory legitimacy, namely whether national decisions can be trusted as functionally equivalent within a Union-wide market.

The termination of the MiCAR’s transitional period, therefore, operates as a legal stress test for EU crypto-asset governance: (1) it tests whether harmonised regulation can produce an integrated market without allowing national differences in supervision to distort competition; (2) it tests whether the freedom to provide services can coexist with strict and credible authorisation standards; (3) it tests whether users’ fundamental rights and patrimonial interests can be protected during the withdrawal, migration or regularisation of providers;  (4) it tests whether private digital infrastructures, once brought within a public regulatory framework, can be subjected to constraints that make their power legally accountable.

The success of MiCAR will be measured by the Union’s ability to translate regulatory harmonisation into a genuinely contestable, rights-sensitive and effectively supervised internal market for crypto-asset services. Where supervisory convergence remains insufficient, the European passport risks facilitating cross-border activity while preserving asymmetries capable of affecting competition, economic freedoms and user protection. On the other hand, where convergence is effective, MiCAR can operate as more than a regulatory response to the risks of crypto-assets, becoming an instrument for the constitutional ordering of a European digital financial market open to economic activity, disciplined by public supervision and constrained by fundamental rights.

[1] Regulation (EU) 2023/1114 of 31 May 2023 on markets in crypto-assets and amending Regulations (EU) No 1093/2010 and (EU) No 1095/2010 and Directives 2013/36/EU and (EU) 2019/1937, CELEX:32023R1114.

[2] Regulation (EU) 2023/1114, Article 143(3). See European Securities and Markets Authority (ESMA), Statement on the End of Transitional Periods under MiCA, ESMA75-113276571-1679 (April 17, 2026), 1, accessed May 27, 2026, https://www.esma.europa.eu/sites/default/files/2026-04/ESMA75-113276571-1679_Statement_on_the_end_of_transitional_periods_under_MiCA.pdf.

[3] Regulation (EU) 2023/1114, Article 60.

[4] Regulation (EU) 2023/1114, Articles 59 to 63 and recital 76.

[5] Regulation (EU) 2023/1114, Recital 6 and 73.

[6] Regulation (EU) 2023/1114, Article 3(1)(35).

[7] Regulation (EU) 2023/1114, Articles 59(7) and 65.

[8] Article 63 provides for authorisation by the competent authority of the home Member State, while Articles 59(7) and 65 enable authorised crypto-asset service providers to provide services throughout the Union through the right of establishment or the freedom to provide services. On the need for supervisory convergence during the transitional phase and full application of MiCAR see ESMA, ESMA75-113276571-1679, 1-2, and ESMA, ESMA clarifies timeline for MiCA and encourages market participants and NCAs to start preparing for the transition, ESMA74-449133380-441 (October 17, 2023), 1, accessed May 27, 2026, https://www.esma.europa.eu/sites/default/files/2023-10/ESMA74-449133380-441_Statement_on_MiCA_Supervisory_Convergence.pdf.

[9] These concerns have also emerged in recent supervisory and policy debate, as reflected in Reuters’ reporting on statements by the President of the French AMF concerning unauthorised crypto-asset activity after the MiCAR deadline and the possibility of opposing passporting where France disagreed with another Member State’s licensing decision. See Elizabeth Howcroft, “Crypto companies without EU licences face prosecution, French regulator warns”, Reuters, 28 May 2026, accessed May 28, 2026, https://www.reuters.com/business/finance/crypto-companies-without-eu-licences-face-prosecution-french-regulator-warns-2026-05-28/.

[10] Regulation (EU) 2023/1114, recitals 113, 114 and 119.

[11] A more detailed analysis of the position occupied by crypto-asset service providers can be found in our previous article published on this blog, which forms part of the same broader research. See Ana Filipa Ribeiro, “Quasi-public powers in private crypto governance: a question of legitimacy”, The Official Blog of UNIO – Thinking and Debating Europe, April 11, 2026, accessed May 28, 2026 https://officialblogofunio.com/2026/04/11/quasi-public-powers-in-private-crypto-governance-a-question-of-legitimacy/

[12] See Organisation for Economic Co-operation and Development (OECD), “Competition Assessment Toolkit: Principles”, vol. I, version 4.0, Report, 2019, 9–13, accessed May 28, 2026, https://www.oecd.org/en/publications/competition-assessment-toolkit-principles-version-4-0-volume-i_5f9fa6ca-en.html, explaining that regulation may restrict competition by limiting the number or range of suppliers, including through licensing, permit or authorisation requirements.

[13] See ESMA, Fast-track Peer Review on a CASP Authorisation and Supervision in Malta, ESMA42-2004696504-8164 (July 10, 2025), 1-8, accessed May 28, 2026, https://www.esma.europa.eu/sites/default/files/2025-07/ESMA42-2004696504-8164_Fast-track_peer_review_on_a_CASP_authorisation_and_supervision_in_Malta.pdf. ESMA found that the Malta Financial Services Authority’s authorisation process only partially met supervisory expectations, while also noting adequate expertise and supervisory engagement. The example is used here to illustrate concerns regarding the timing, depth and quality of national authorisation processes under MiCAR, but not to question the legal validity of any specific authorisation. See also Elizabeth Howcroft, “EU regulator criticises Malta’s crypto licensing process”, Reuters, 10 July 2025, accessed May 28, 2026, https://www.reuters.com/legal/government/eu-regulator-criticises-maltas-crypto-licensing-process-2025-07-10/.

[14] See Marcin Szczepański, “Understanding equivalence and the single passport in financial services: third-country access to the single market”, European Parliamentary Research Service Briefing, PE 599.267 (February 2017), 3, https://www.europarl.europa.eu/RegData/etudes/BRIE/2017/599267/EPRS_BRI%282017%29599267_EN.pdf. The briefing explains that the freedom to provide financial services across the Union derives from the Treaties and secondary legislation, and that companies established in an EEA Member State have access to the single market for financial services under single passport rights, allowing them to establish branches or provide services across the EEA without further authorisation. On the corresponding mechanism under MiCAR, see Regulation (EU) 2023/1114, Articles 59(7) and 65.

[15] In the case of crypto-asset service providers and their authorisation, the freedom of establishment is directly engaged, understood as the right of natural or legal persons of one Member State to participate, on a stable and continuous basis, in the economic life of another Member State and to benefit from that participation, thereby contributing to economic and social interpenetration within the Union. See Judgment of the Court Reyners v. The Belgian State, 21 June 1974, case C-2/74, para. 21. See also article 49 of the Treaty on the Functioning of the European Union (TFEU).

[16] The freedom to provide services enables nationals of a Member State to provide and/or receive services in the territory of another Member State, while prohibiting any measures, irrespective of their source or form, which are liable to hinder the exercise of that freedom. See article 56 TFEU and also Luís Pinto Monteiro, “Liberdade de prestação de serviços”, in Enciclopédia da União Europeia, ed. Ana Paula Brandão, et al. (Lisbon: Petrony, 2017), 235-237.

[17] This requirement is consistent with the logic of the internal market in which the removal of regulatory fragmentation and the facilitation of cross-border economic activity presuppose a degree of mutual reliance between national authorities and a harmonised framework capable of preventing the re-emergence of national barriers to market access. See articles 26, 49 and 56 TFEU. See also Pedro Madeira Froufe, “Mercado Interno”, in Enciclopédia da União Europeia, ed. Ana Paula Brandão, et al. (Lisbon: Petrony, 2017), 254-256.

[18] Reuters reports the French AMF’s concern that crypto platforms were engaging in “regulatory shopping” across the Union, seeking a jurisdictional “weak link” capable of granting a licence subject to fewer requirements, and refers to France’s possible opposition to the passporting of licences granted by other Member States. See Mathieu Rosemain and Elizabeth Howcroft, “France threatens to block crypto licence “passporting” in EU regulatory fight”, Reuters, 15 September 2025, accessed May 30, 2026, https://www.reuters.com/sustainability/boards-policy-regulation/france-threatens-block-crypto-licence-passporting-eu-regulatory-fight-2025-09-15/.

[19] On concentration and liquidity in crypto trading, see ESMA, Crypto Assets: Market Structures and EU Relevance, TRV Risk Analysis (April 10, 2024), 4-12, accessed May 30, 2026, https://www.esma.europa.eu/sites/default/files/2024-04/ESMA50-524821-3153_risk_article_crypto_assets_market_structures_and_eu_relevance.pdf, noting that trading is highly concentrated, with the top ten exchanges processing around 90% of trades. On network effects in crypto-asset markets, see Konstantinos Stylianou et al., “Cryptocurrency competition and market concentration in the presence of network effects”, Ledger, vol. 6 (September 2021): 81-101, https://doi.org/10.5195/ledger.2021.226.

[20] For a more comprehensive discussion of this provision, see Pedro Madeira Froufe, “Article 16”, in The charter of fundamental rights of the European Union: A commentary, ed. Alessandra Silveira, et al. (Braga: JusGov/ UMinho Law School, 2024), 176-180.

[21] This follows from the general limitation clause laid down in Article 52(1) of the Charter, according to which any limitation on the exercise of Charter rights must be provided for by law, respect the essence of those rights and, subject to the principle of proportionality, be necessary and genuinely meet objectives of general interest recognised by the Union or the need to protect the rights and freedoms of others. See Alessandra Silveira, “Article 52”, in The charter of fundamental rights of the European Union: A commentary, 477-486.

[22] Regulation (EU) 2023/1114, articles 24, 64 and 68.

[23] See ESMA, ESMA75-113276571-1679, 1–3. ESMA expects unauthorised CASPs to implement orderly wind-down plans, including client offboarding and the transfer of crypto-assets to an authorised CASP or to a self-hosted wallet, without causing undue economic harm to clients. ESMA also warns consumers that MiCAR protections apply only to the specific authorised EU legal entity and that remaining with an unauthorised provider may entail less legal protection and a greater risk of losing access to assets.

[24] Luís Couto Gonçalves e Maria Miguel Carvalho, “Article 17”, in The charter of fundamental rights of the European Union: A commentary, 181-189.

[25] Maria José Rangel Mesquita, “Article 47”, in The charter of fundamental rights of the European Union: A commentary, 439-446. See also Joana Covelo de Abreu, “Princípio da tutela jurisdicional efetiva”, In Enciclopédia da União Europeia, ed. Ana Paula Brandão, et al., (Lisbon: Petrony, 2017), 329-332.

[26] Fernando de Gravato Morais, “Article 38”, in The charter of fundamental rights of the European Union: A commentary, 377-382.

[27] As already reflected in several footnotes throughout this text, ESMA has taken an active role in supporting the transition to the MiCAR authorisation regime by issuing supervisory guidance, setting common expectations and promoting convergence among national competent authorities. This institutional intervention confirms that the credibility of the passport depends not merely on formal harmonisation, but on the consistent administrative application of MiCAR across the Union.

Picture credit: by DS Stories on pexels.com.

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Helder Matos (master’s student in Human Rights at the School of Law of the University of Minho)

Introduction

In March 2024, the European Data Protection Supervisor (EDPS) revealed that the European Commission, the institution assuming the role of global vanguard in the matter of digital rights, violated the EU’s own data protection regulation due to its structural dependency on the Microsoft 365 ecosystem.[1]

Although the EDPS closed the case in July 2025 after the Commission updated its licensing agreements with Microsoft, this episode brings to the surface the underlying problem that this article proposes to address.[2]

Even as it received the green light to proceed with business-as-usual, the European Commission admitted its deep concerns regarding the crippling dependence on a non-European company for the digital platforms needed for normal day-to-day functioning.[3] The European Union (EU) does not control the technological infrastructure it runs on, as it is forced to negotiate the terms of its own data security with foreign corporations.

Furthermore, during April 2026, the announcement of Anthropic’s Claude Mythos model perfectly highlighted the sheer geopolitical danger this paradigm poses to European sovereignty. Presented as a technology so powerful that it had to be contained, Claude Mythos can supposedly discover zero-day flaws and take over any operating system, essentially acting as a digital master-key capable of unlocking any door. Anthropic restricted the model under an initiative called Project Glasswing, releasing it only to a highly vetted coalition of US tech giants (such as Amazon, Apple, Google, Microsoft, NVIDIA) to safeguard their own systems.[4]  Recognising the systemic threat, European institutions, most notably the banking industry, were immediately pressured to access the model so that they could protect their critical infrastructure.[5]

This caused Washington to take a few steps back. While the Pentagon had just labeled Anthropic a “supply chain risk” and Donald Trump publicly called its executives “left-wing nut jobs,” the power of Claude Mythos forced their hand causing the White House to recognise that this technology is, after all, too powerful for the US government to do without.[6]

Despite all of this, on April 21, 2026, it was revealed that a small group of unauthorised users from a private Discord channel had successfully breached and accessed the Mythos model, effectively breaching one of the most “ethically secure” AI labs in the world.[7]

The one-million-euro question is: if a company like Anthropic cannot secure its most dangerous offensive cyber-weapon from a handful of Discord users, how can the EU entrust its cybersecurity and digital sovereignty to the fragile, geographically biased criteria of Silicon Valley tech companies?

The democratisation of knowledge and the decentralisation of power – the original promises of the digital age – have long collapsed. In their place arose a digital infrastructure that has been challenging the classical categories of political and legal thought, bringing the EU to an inflection point of existential proportions.

The EU currently faces the transition from a paradigm focused on the rule of law to a techno-authoritarian ecosystem, where sovereignty is progressively alienated in favour of American military and corporate interests.

The farce of ethical AI and the geopolitics of algorithmic imperialism

Progress through uncritical technological innovation, frequently sustained by the marketing departments of Silicon Valley tech giants, is an illusion. To support this claim, let us consider the case between the AI company, Anthropic, and the Pentagon, in February 2026.[8]

Anthropic, self-proclaimed as the most “ethically aligned” in the sector and often shielding itself behind its proprietary Constitutional AI – which is an internal governance mechanism that aims to align AI models with a certain set of rules and morality[9] –, initially sought to distance itself from the competition by establishing “red lines” and high accountability standards. In order to stay true to this position, it stated that it could not, in good conscience, accede to the Pentagon’s demands, which explicitly required the removal of guardrails preventing the use of their AI models in offensive military operations and mass surveillance.

DoD’s Secretary Pete Hegseth immediately responded by classifying the corporation as an “unacceptable national security risk” and a “supply chain risk” (a label never before publicly applied to an American company), raising eyebrows across the board. On the exact same day, leveraging the power vacuum, OpenAI stepped up and signed a multimillion-dollar agreement with the Pentagon, accepting the removal of these ethical barriers. This case reveals that moral objections in the face of the current American administration have severe consequences, and that you need to be aligned to survive it.[10]

However, what seemed to be moral superiority and ethics above anything else, quickly proved to be geographically limited to US borders. In a February 2026 interview following the Pentagon’s blacklisting, Anthropic’s CEO, Dario Amodei, proudly declared that his company “has been the most lean forward of all the AI companies in working with the U.S. government and working with the U.S. military”, bragging about their ties with the intelligence community for cyber and combat operations. Amodei clarified that their ethical exception applies specifically to domestic mass surveillance, arguing that “no one wants to be spied on by the U.S. government” justifying his position as a defense of the Fourth Amendment.

Also, when asked about the morality behind AI weaponisation, Amodei stated that “we are patriotic Americans… everything we have done has been for the sake of this country, for the sake of supporting U.S. national security.”[11]

But what does this mean for European citizens? It means that, in this regard, fundamental rights against mass surveillance are reserved exclusively for American citizens, while the rest of the global population, including allies, are relegated to the category of raw behavioural data points and legitimate targets for extrajudicial and extraterritorial intelligence operations, validating Shoshana Zuboff’s thesis on surveillance capitalism,[12] clearly exposing the farce of “ethical AI” promoted by techno-solutionists. There is nothing ethical about omnipresent mass surveillance.

Militarization of AI and neo-reactionary thought

Moving beyond the safety-washing theatre characterised by Anthropic, the unapologetic reality of digital imperialism is best exemplified by Palantir Technologies. Palantir represents a logical consequence of Zuboff’s surveillance capitalism, as it transcends the mere extraction of consumer behavioural surplus for targeted advertising by redirecting that massive data apparatus toward state coercion, evidenced by its predictive policing experiments in New Orleans and its instrumental function in powering the logistical infrastructure for mass deportations under U.S. Immigration and Customs Enforcement (ICE).[13]

Founded in 2003 by Peter Thiel, Alex Karp, Stephen Cohen, Nathan Gettings, and Joe Lonsdale, and initially funded by the CIA’s venture capital arm, In-Q-Tel, Palantir derives its name from the enchanted seeing stones in Lord of the Rings that are used for long-distance communication and viewing past or distant events. Palantir established itself as a preferred defence contractor with Gotham and Foundry, platforms built to synthesise fragmented intelligence and commercial data and provide semantic analysis to inform executive action.[14] The subsequent integration of generative AI served as the catalyst that skyrocketed the company’s financial valuation to unprecedented heights in late 2025.

The company has positioned itself as the “U.S. government’s central operating system” as it has secured multiple state contracts across public entities such as the DOD, FBI, IRS, NSA, and CIA.[15] In 2025, in the beginning of Donald Trump’s second term, co-founder Joe Lonsdale was involved in the Department of Government Efficiency (DOGE), and Palantir’s CTO was officially appointed as a Lieutenant Colonel alongside Meta and OpenAI executives. The dividing line between corporation and State has effectively been dissolving.[16]

To understand Palantir is to understand the ideological worldview proclaimed by its founders, which emerges from neo-reactionary (NRx) thought. Peter Thiel’s philosophy is deeply intertwined with the accelerationist theories of figures like Nick Land, who believes that democratic deliberation is a fundamental obstacle to true technological optimisation.[17] Following this logic, the administrative state must be dismantled and replaced by algorithmic governance submitted to the sole interests of a techno-authoritarian elite. This kind of political thought perfectly aligns with Steve Bannon’s call for the “deconstruction of the administrative state”, thus creating a symbiotic relationship where techno-authoritarianism provides the digital infrastructure for political authoritarianism.[18]

This ideological worldview is explicitly presented to the world in the 22-point manifesto published by Palantir’s official X account on April 18, which is essentially a summary of The Technological Republic, a book by Alexander Karp, declaring, among other things, that: “the limits of soft power… have been exposed (…) hard power in this century will be built on software”; “the atomic age, is ending, and a new era of deterrence built on AI is set to begin”; “the defanging of Germany was an overcorrection for which Europe is now paying a heavy price (…) Japanese pacifism will, if maintained, also threaten to shift the balance of power in Asia” – conveniently opening massive new markets for its defence software; “some cultures have produced vital advances; others remain dysfunctional and regressive.”[19] This manifesto resonates with Marinetti’s Futurist Manifesto, published in 1909, which similarly glorified “war—the world’s only hygiene—militarism, patriotism,” and the destruction of pacifism.[20]

With the death of traditional market dynamics, the new ruling class relies on “cloud capital”, which describes the networked algorithmic machines that grant their owners unprecedented power to colonise the state. This doctrine glorifies brute force and operates with alarming supremacist undertones by praising apartheid-inspired narratives and seeking to subjugate the masses to the “divine algorithm”, viewing vulnerable populations as inferior beings needing to be managed or eliminated.

The materialisation of this ideology is already underway and the catastrophic consequences of accelerating military protocol with automated systems were exposed during the United States’ war on Iran. In the first 24 hours of the conflict, AI tools such as Palantir’s Project Maven, were used by the US to strike over 1,000 targets at a rate of 42 suggested targets per hour. On February 28, relying on outdated satellite imagery with mere seconds to execute, an American Tomahawk cruise missile struck an Iranian elementary school, killing around 150 students and teachers. The system worked exactly as intended. Days after the attack, the Department of Defense’s chief digital and artificial intelligence officer revealed that Palantir’s latest targeting workflow was as simple as “left click, right click, left click,” openly celebrating the elimination of several layers of human scrutiny.[21]

At this tactical speed, the concept of “meaningful human control” (MHC), a foundational requirement of International Humanitarian Law to ensure compliance with the Geneva Conventions’ principles of Distinction and Proportionality, becomes dead letter.[22] As AI ethicist Scott Robbins dissects, MHC is systematically annihilated by these architectures due to insurmountable psychological and epistemic limitations. Psychologically, humans simply cannot exercise moral judgment or regain situational awareness at the speed of algorithmic targeting. Epistemically, the opaque nature of machine learning means operators have no access to the considerations or statistical weights the algorithm utilises to reach its lethal outputs. When an algorithm selects 42 targets per hour based on a black-box rationale, the human operator is reduced to a mere biological rubber stamp for a machine whose logic they can neither access nor comprehend.[23]

European complicity

What does the rise of algorithmic imperialism and the digital colonisation of the State mean for the EU? The core of this crisis lies in the material reality of EU’s technological ecosystem as it is confronted with its near-absolute technological dependency. Because the EU does not own much of the physical or digital infrastructure it operates on, it remains deeply dependent on American technology for critical capabilities such as cloud and intelligence software. Consequently, the EU deals with a volatile geopolitical landscape where US foreign policy can shift abruptly. That’s a risk that must be actively mitigated.[24]

The EU’s legislative attempts to counter this situation are proving to be inherently insufficient. A prime example is the AI Act [Regulation (EU) 2024/1689]. While it was presented as the global gold standard for AI regulation, its structure contains a fatal blind spot as it exempts AI systems for national security and military purposes from its jurisdictional control.[25] This means that EU’s regulation on AI becomes entirely performative the moment military prerogatives are invoked.

When it comes to the broader civil sphere, the Digital Services Act (DSA) was theoretically designed to tackle the ideological degradation of the public sphere, a space now almost entirely colonised by American tech giants. However, this regulatory framework fails to grasp the ontological violence of what philosopher Byung-Chul Han describes as Infocracy, a regime where factual discourse is actively replaced by viral, polarised noise.[26] This was well articulated by Pope Leo XIV, who issued a public statement regarding how these systems inherently permeate our mentality and social environments:

“When simulation becomes the norm, it weakens the human capacity for discernment. As a result, our social bonds close in upon themselves, forming self-referential circuits that no longer expose us to reality. We thus come to live within bubbles, impermeable to one another. Feeling threatened by anyone who is different, we grow unaccustomed to encounter and dialogue. In this way, polarization, conflict, fear and violence spread. What is at stake is not merely the risk of error, but a transformation in our very relationship with truth.”[27]

Faced with technology that fundamentally alters the human relationship with truth, the DSA does not challenge the architecture creating these self-referential circuits. Instead, it outsources the mitigation of systemic risks to the exact same platforms whose financial success depends on the proliferation of that very risk by profiting from the destruction of truth.[28]

Furthermore, as the Court of Justice of the European Union (CJEU) ratified in the Schrems II judgment, international data transfer frameworks are functionally impotent as the United States’ CLOUD Act oblige US-based service providers to make data hosted in the EU available to US intelligence agencies anyway.[29]

The Chatcontrol proposal acts as the ultimate vector for techno-authoritarianism as it is aimed at the implementation of Client-Side Scanning (CSS) technologies directly onto citizens’ devices, intercepting private communications before the encryption process even begins. This would completely reverse the presumption of innocence and violate the principle of data minimisation.[30] Although the European Court of Human Rights (ECtHR) explicitly stipulated in Podchasov v. Russia that the deliberate weakening of encryption harms democratic society,[31] EU institutions insist on seeking mass surveillance legislation. Also, Neziha Akalin and Alberto Giaretta warn that the normalisation of Chatcontrol in mobile phones will inevitably pave the way to Robotcontrol in domestic “Internet of Things” (IoT) devices, dictating the absolute end of the sanctuary of the home.[32]

Simultaneously, the Digital Omnibus legislative package acts as a perfect Trojan horse by utilising the pretext of “administrative simplification” to boost AI competitiveness as it actively dilutes data protection rules. As noted by Douwe Korff, Digital Omnibus legalises the unrestricted extraction of European data under the generic pretext of the industry’s “legitimate interests” for commercial AI training, relegating fundamental human rights to mere bureaucratic obstacles.[33]

Observing this deliberate erosion of digital rights alongside the structural dependency on foreign tech giants, the reality of the European predicament becomes clear. To frame this crisis exclusively as a product of United States’ imperialism would be to indulge in a fallacy of European innocence, while the reality is that the EU has been an active accomplice in the construction of its own algorithmic cage.

The (avoidable) tragedy of the digital tenant

Because the EU operates under the principle of legal harmonisation, the structural vulnerabilities engineered in Brussels inevitably cascade into the domestic spheres of the Member States. Portugal serves as a prime case study of this top-down uncritical techno-solutionism, where national modernisation efforts collide head-on with the reality of infrastructural dependency.

The contemporary neoliberal consensus dictates that states should not worry about this dependency, asserting that technology is inherently neutral and that the market will self-regulate. The material reality, however, is diametrically opposed. Today, the critical services that keep Portuguese society functioning, such as schools, hospitals, the justice system, social security, and the public administration itself, depend entirely on data flows and computer systems hosted on infrastructures controlled by foreign Big Tech companies.

When the Portuguese government promotes modernisation policies such as the National Digital Strategy that establishes the goal of implementing digital twins to monitor urban life in order to transition cities to the status of Smart Cities,[34] it necessarily invites home the architecture of imperialist control. This dependency is tangible and carries stratospheric costs. Every year, the Portuguese State spends nearly 70% of its software licensing budget (between 150 and 200 million euros) on a single American company: Microsoft. It is public money exported in exchange for systemic dependency. Handing over the logistical and civil mapping of the country to foreign corporations results in a concentration of political and economic power outside any effective democratic control, effectively outsourcing the State’s capacity to govern itself. In this scenario of structural fragility, the State assumes the condition of a mere digital tenant.

The counter-offensive

While the current trajectory leans heavily toward algorithmic captivity, it is not an inescapable fate. Stephen Holmes and Cass Sunstein assert that “all rights are positive”, meaning that fundamental rights are hollow without the active institutional and financial investment of the State to protect them.[35] In this instance, the right to digital privacy cannot be secured merely by passing regulations as it demands that the State actively spend financial resources to build and maintain the physical infrastructure necessary to enforce it.

To shield the EU from this techno-authoritarian drift and break free from infrastructural dependency, our defence must operate both on legal and material levels:

Regarding the legal level, the defence lies in the judicial authority of the CJEU. In December 2025, the CJEU paved the way for the full justiciability of Article 2 of the Treaty on European Union (TEU) in the Commission v. Poland judgment (C-448/23).[36] By deciding that the values enshrined in Article 2 TEU, such as respect for human dignity, freedom, democracy, equality, the rule of law, and human rights, are not mere political guidelines but “legally binding and enforceable obligations,” the Court cemented the primacy of EU law against autocratic drift. This ruling grants civil society the concrete legal mechanism to systematically challenge and invalidate predatory surveillance legislation like Chatcontrol or the Digital Omnibus by invoking their constitutional incompatibility with European values.[37] However, the ruling of the law remains insufficient against American corporate giants if the EU does not build its own physical infrastructure.

Naturally, achieving technological sovereignty overnight is a logistical impossibility given that one cannot simply unplug from Microsoft or AWS tomorrow without paralysing business, civil administration and, consequently, everything else. Transitioning from these monopolistic fiefdoms to sovereign systems demands the imposition of the systemic interoperability proclaimed by Cory Doctorow to mitigate artificial switching costs and vendor lock-in.[38] By legally forcing closed American platforms to communicate seamlessly with third-party European systems, the EU can break open these so-called “walled gardens” and allow public administrations to safely migrate to sovereign clouds without risking operational collapse during the transition.

In a broader sense, to solve a crisis engineered by the neoliberal consensus, the EU cannot rely on the very ideological tools that built its cage. The defence on the material level requires a radical shift in Europe’s economic and industrial strategy. Escaping the trap of the digital tenant requires abandoning the dogmatic belief that the free market will organically resolve Europe’s infrastructural dependency. Here, the theoretical framework provided by Paul Cockshott and Allin Cottrell regarding cybernetic economic planning gives us some clues. Their thesis asserts that modern computational power allows for highly efficient, deliberate economic planning that overtakes the blind and often monopolistic forces of the free market.[39]

However, computational planning alone is insufficient without bold structural investment. This vision goes hand-in-hand with Mariana Mazzucato’s thesis on the “Entrepreneurial State”, which demonstrates that in order to achieve major technological breakthroughs, the State must act as a proactive risk-taker and market-creator.[40] Applied to the current European crisis of technological sovereignty, this means that the EU must stop waiting for a domestic equivalent to Silicon Valley to miraculously emerge through private venture capital. Instead, under this paradigm, the EU engages in deliberate, large-scale planning through the injection of massive public capital to purposefully engineer a native ecosystem of hardware and open-source software from the ground up.

To properly overcome this crisis, the EU must acknowledge its own complicity. By embedding military exemptions into crucial regulations, by entrusting the public sphere to monopolies, and actively pursuing mass surveillance with proposals like Chatcontrol and Digital Omnibus, the EU is facilitating its own captivity. Furthermore, by outsourcing the critical functions of civil administration to foreign Big Tech, Member States are progressively abandoning their autonomy, assuming the fragile condition of mere “digital tenants” renting their capacity to function.

The safeguarding of human dignity resides in rejecting the inevitability of this techno-authoritarian drift. Democracy will survive only if Law masters Technology, and not the other way around. In the 21st century, full emancipation demands the recognition that technological sovereignty is a non-negotiable condition of democracy itself.

As Shoshana Zuboff puts it, “How did they get away with it?”[41]

[1] European Data Protection Supervisor (EDPS), “European Commission’s use of Microsoft 365 infringes data protection law for EU institutions and bodies,” Press Release, March 11, 2024, https://www.edps.europa.eu/press-publications/press-news/press-releases/2024/european-commissions-use-microsoft-365-infringes-data-protection-law-eu-institutions-and-bodies_en.

[2] European Data Protection Supervisor (EDPS), “European Commission brings use of Microsoft 365 into compliance with data protection rules for EU institutions and bodies,” Press Release, July 28, 2025, https://www.edps.europa.eu/press-publications/press-news/press-releases/2025/european-commission-brings-use-microsoft-365-compliance-data-protection-rules-eu-institutions-and-bodies_en.

[3] Claudie Moreau, “EU’s privacy supervisor clears Commission’s use of Microsoft,” Euractiv, July 28, 2025, https://www.euractiv.com/news/eus-privacy-supervisor-clears-commissions-use-of-microsoft/.

[4] Anthropic, “Introducing Project Glasswing,” April 7, 2026, https://www.anthropic.com/glasswing.

[5] “The Guardian view on Anthropic’s Claude Mythos: when AI finds every flaw, who controls the Internet?,” The Guardian, April 23, 2026, https://www.theguardian.com/commentisfree/2026/apr/23/the-guardian-view-on-anthropics-claude-mythos-when-ai-finds-every-flaw-who-controls-the-internet.

[6]   Kali Hays and Lily Jamali, “White House and Anthropic Hold ‘Productive’ Meeting Amid Fears Over Mythos Model,” BBC News, April 2026, https://www.bbc.com/news/articles/cyv10e1d13po.

[7] Rachel Metz, “Anthropic’s Mythos model is being accessed by unauthorized users,” Bloomberg News, April 21, 2026, https://www.bloomberg.com/news/articles/2026-04-21/anthropic-s-mythos-model-is-being-accessed-by-unauthorized-users.

[8] Sanya Mansoor, “Anthropic’s AI model Claude gets popularity boost after US military feud,” The Guardian, March 2, 2026, https://www.theguardian.com/technology/2026/mar/02/claude-anthropic-ai-pentagon.

[9] Aman Priyanshu, Yash Maurya, and Zuofei Hong, “AI Governance and accountability: an analysis of Anthropic’s Claude,” arXiv preprint, arXiv:2407.01557v1 (May 2, 2024), https://arxiv.org/abs/2407.01557.

[10] Mansoor, “Anthropic’s AI model Claude gets popularity boost.”

[11] Dario Amodei, “Full transcript of our interview with Anthropic CEO Dario Amodei,” interview by Jo Ling Kent, CBS News, February 28, 2026, https://www.cbsnews.com/news/anthropic-ceo-dario-amodei-full-transcript/.

[12] Shoshana Zuboff, The age of surveillance capitalism: the fight for a human future at the new frontier of power (New York: PublicAffairs, 2019).

[13] Patrícia Alexandra Gonçalves Névoa, “Capitalismo de Vigilância: o Caso de Palantir Technologies Inc. em análise (2001-2023)”, (Master’s diss., University of Minho, 2024).

[14] Patrícia Alexandra Gonçalves Névoa, “Capitalismo de Vigilância: o Caso de Palantir…”.

[15] More Perfect Union, “I worked at Palantir: the tech company reshaping reality,” April 17, 2025, YouTube video, 10:41, https://www.youtube.com/watch?v=DZ95Gmvg_D4.

[16] Steven Levy, “What Lt. Col. Boz and Big Tech’s enlisted execs will do in the army,” Wired, June 20, 2025, https://www.wired.com/story/what-lt-col-boz-and-big-techs-enlisted-execs-will-do-in-the-army/.

[17] Andy Beckett, “Accelerationism: how a fringe philosophy predicted the future we live in,” The Guardian, May 11, 2017, https://www.theguardian.com/world/2017/may/11/accelerationism-how-a-fringe-philosophy-predicted-the-future-we-live-in.

[18] Philip Rucker and Robert Costa, “Bannon vows a daily fight for ‘deconstruction of the administrative state’,” The Washington Post, February 23, 2017, https://www.washingtonpost.com/politics/top-wh-strategist-vows-a-daily-fight-for-deconstruction-of-the-administrative-state/2017/02/23/03f6b8da-f9ea-11e6-bf01-d47f8cf9b643_story.html.

[19] Palantir Technologies (@PalantirTech), “The limits of soft power… have been exposed,” X (formerly Twitter), April 18, 2026, https://x.com/PalantirTech/status/2045574398573453312.

[20] Filippo Tommaso Marinetti, “The futurist manifesto,” Le Figaro, February 20, 1909.

[21] Sheera Frenkel, Paul Mozur, and Adam Satariano, “Mutually automated destruction: the escalating global A.I. arms race,” The New York Times, April 12, 2026, https://www.nytimes.com/2026/04/12/technology/china-russia-us-ai-weapons.html.

[22] International Committee of the Red Cross (ICRC), Autonomy, Artificial Intelligence and Robotics: Technical Aspects of Human Control (Geneva: ICRC, 2019).

[23] Scott Robbins, “The many meanings of meaningful human control,” AI and Ethics 4 (2024): 1377–1388, https://doi.org/10.1007/s43681-023-00320-6.

[24] Bruno Castro, “Europa: entre a passividade tecnológica e a soberania de defesa que tarda em chegar,” Líder, March 13, 2026, https://sapo.pt/artigo/europa-entre-a-passividade-tecnologica-e-a-soberania-de-defesa-que-tarda-em-chegar-69b3b62d3d53858f4452f4f4.

[25] European Union, Regulation (EU) 2024/1689 of the European Parliament and of the Council (AI Act), Official Journal of the European Union, July 12, 2024.

[26] Byung-Chul Han, Infocracy: digitalization and the crisis of democracy (Cambridge: Polity Press, 2022).

[27] Pope Leo XIV (@pontifex), “Artificial Intelligence systems increasingly shape and permeate our mentality…,” X (formerly Twitter), April 17, 2026, https://x.com/Pontifex/status/2045208457440059414.

[28] European Union, Regulation (EU) 2022/2065 (Digital Services Act), October 27, 2022.

[29] Judgment CJEU Data Protection Commissioner v Facebook Ireland Ltd and Maximillian Schrems (Schrems II), 16 July 2020, case C-311/18, ECLI:EU:C:2020:559.

[30] Council of the European Union, Proposal for a Regulation laying down rules to prevent and combat child sexual abuse (Chatcontrol), Interinstitutional File 2022/0155 (COD), November 13, 2025.

[31] Judgment ECtHR Podchasov v. Russia, 13 February 2024, application no. 33696/19.

[32] Neziha Akalin and Alberto Giaretta, “From chat control to robot control: the backdoors left open for the sake of safety,” arXiv preprint, 2026.

[33] Douwe Korff, “Digital Omnibus: proposed changes to the definition of personal data in the EU GDPR analysed in the light of the SRB and earlier CJEU Judgments”, 2025, https://dx.doi.org/10.2139/ssrn.5891404; European Commission, Proposal for a Regulation (Digital Omnibus), COM(2025) 837 final, November 19, 2025.

[34] República Portuguesa, Estratégia Digital Nacional (2024), 76.

[35] Stephen Holmes and Cass R. Sunstein, The cost of rights: why liberty depends on taxes (New York: W. W. Norton & Company, 1999).

[36] Judgment CJEU European Commission v. Republic of Poland, 18 December 2025, case C-448/23, ECLI:EU:C:2025:975.

[37] Gonçalo Martins de Matos, “Glimpsing the tunnel exit: the justiciability of Article 2 TEU and the future of the European Union,” The Official Blog of UNIO, April 3, 2026, https://officialblogofunio.com/2026/04/03/glimpsing-the-tunnel-exit-the-justiciability-of-article-2-teu-and-the-future-of-the-european-union/.

[38] Cory Doctorow, The Internet con: how to seize the means of computation (London: Verso Books, 2023).

[39] W. Paul Cockshott and Allin F. Cottrell, Towards a new socialism (Nottingham: Spokesman, 1993).

[40] Mariana Mazzucato, The entrepreneurial state: debunking public vs. private sector myths (London: Anthem Press, 2014).

[41] Zuboff, The age of surveillance capitalism.

Picture credit: by Google DeepMind on pexels.com.

The post Europe’s universities face mounting financial and political challenges first appeared on LSE European Politics.

Catalin Gabriel Stanescu, Associate Professor of Private Law at the University of Southern Denmark. His research focuses on consumer law, digital regulation, financial vulnerability, and the political economy of private law.

Photo credit: David Dixon, via Wikimedia Commons

The DSA Observatory recently published a thoughtful post on the General Court’s judgment in Amazon v Commission, which rejected Amazon’s argument that it should not have been listed as a ‘very large online platform’ (VLOP) under the Digital Services Act (DSA), and, in doing so, critiqued a working paper of mine on ‘systemic risk’ under the Digital Services Act. For me, it was a valuable engagement. The judgment does influence how arguments about systemic risk under the DSA can be framed. However, it does not support the broader claim that a financial-law analogy about the definition of ‘systemic risk’ has been displaced. When read carefully, Amazon takes a narrower approach: it rejects one specific application of the financial analogy, while preserving a more structural comparison between financial supervision and the DSA’s systemic-risk regime.

My paper’s central claim was not that the DSA should be read as banking law in another guise. Nor was it that systemic risk under the DSA must be defined by interbank contagion or by the existence of a closed system of interconnected undertakings. What I proposed was that the DSA relocates into digital governance a supervisory rationality already familiar from EU financial law: a mode of regulation built around ex ante risk assessment, differentiated obligations for systemically significant actors, and a recalibrated proportionality analysis where institutions are acting under conditions of complexity, uncertainty, and potentially large-scale harm. That remains, in my view, the right level at which to compare the two regimes.    

The General Court’s judgment, however, establishes an important limitation. Amazon contended that marketplaces could not generate “systemic” risks because, unlike financial institutions, they do not form part of an interconnected system. In paragraph 69, the Court summarized Amazon’s submission that marketplaces are not interdependent, do not constitute a system, and therefore cannot give rise to systemic risks in the manner of financial institutions. The Court rejected this argument in paragraph 70. It held that the DSA is not concerned with systemic risks posed by marketplaces due to their participation in a “system” in that sense. Instead, the DSA aims to mitigate systemic risks to society as a whole, insofar as those risks may affect a significant portion of the European Union’s population. Consequently, the Court found that the independence of marketplaces from one another does not prevent them from generating some of the risks identified in Article 34(1) DSA (ie the risks which VLOPs are obliged to assess).

This is a significant point. Under the DSA, interconnectedness in the financial-law sense is not a necessary criterion for defining systemic risk. Instead, the Court places decisive emphasis on reach, scale, and disproportionate societal impact. This approach is evident not only from paragraph 70, but also from the Court’s reliance on recitals 75 and 76 DSA, which highlight the reach of very large online platforms, their role in facilitating public debate and economic transactions, and the potential for disproportionate impact once they reach a significant share of the Union’s population. The same reasoning appears later when the Court notes that marketplaces above the Article 33 DSA threshold for designating VLOPs may pose risks to society that differ in scale and impact from those posed by smaller platforms. On this point, the Observatory’s interpretation is correct: Amazon shifts the analysis away from a narrow contagion model.

What does not follow, however, is the stronger conclusion that the judgment rejects the relevance of financial systemic-risk thinking altogether. The Observatory interprets Amazon as attributing a more autonomous meaning to systemic risks under the DSA and as introducing a break with the reliance on financial systemic-risk regulation as a reference point. I believe this interpretation overstates the case. The Court rejected Amazon’s specific application of the analogy, but did not assert that the DSA lacks structural affinity with systemic-risk governance as developed in other areas of EU law.

This distinction is important because the DSA’s regime retains a recognizably systemic-risk structure.

First, the regime is actor-specific. In the present context, Articles 34 to 43 DSA apply only to platforms designated as VLOPs, while more broadly it also includes very large online search engines (VLOSEs). The Court accepts this differentiation as resting on the legislative judgement that platforms of such scale may generate risks with a disproportionate impact in the Union. In paragraphs 52 and 53, the Court summarizes the obligations imposed on VLOPs: risk assessment, potential adaptation of service design, independent audit, profiling-free recommender options, advertising repositories, data access for researchers, internal compliance functions, transparency reports, and supervisory fees. In paragraphs 63 to 65 and 77, the Court accepts the legislative premise that VLOPs may cause societal risks that differ in scope and impact from those caused by smaller platforms, and that marketplaces above the threshold may give rise to the risks listed in Article 34(1). This is not merely a semantic distinction regarding the meaning of what qualifies as “systemic.” It is a sorting mechanism that imposes heightened obligations on actors deemed systemically significant due to their scale. This feature is central to the financial-law genealogy discussed in my paper.

Second, the regime is preventive. The obligations upheld in Amazon are not limited to sanctioning completed infringements, but are intended to identify, assess, and mitigate risks before harm occurs. The Court’s summary of Articles 34 to 43 confirms this preventive orientation. This is why the financial-law comparison remains relevant at the level of supervisory logic. In both contexts, the law acts proactively rather than waiting for collapse or completed harm before intervening. My paper identified this preventive approach as a central element of systemic-risk governance in EU law, both in finance and under the DSA. Nothing in Amazon contradicts this analysis.

Third, and most importantly, Amazon strongly supports the argument that systemic-risk governance is accompanied by a relatively flexible form of proportionality review. The Court explicitly recognizes that Article 33(1), by subjecting VLOPs to Articles 34 to 43, interferes with the freedom to conduct a business under Article 16 of the Charter, as these obligations may entail significant costs, substantial organizational effects, and complex technical solutions. Nevertheless, the Court upholds this interference because the legislature possesses broad discretion when making political, economic, and social choices and undertaking complex assessments. In this context, only measures that are “manifestly inappropriate” can be deemed unlawful. The Court further emphasizes that the freedom to conduct a business is not absolute and must be balanced with the objective of ensuring a high level of consumer protection under Article 38 of the Charter. It concludes that the legislature did not commit a manifest error in treating marketplaces above the threshold as capable of generating the risks identified in Article 34(1), and that Article 33(1) DSA was not shown to be manifestly inappropriate for achieving the Regulation’s objectives.

This aspect of the judgment is at least as significant as paragraph 70. Even if one accepts that DSA systemic risk is not linked to interconnectedness in the financial sense, the Court’s reasoning still supports a model of anticipatory, differentiated, and intrusive supervision, constitutionally sustained through broad institutional discretion and limited judicial review. This is precisely the dimension of systemic-risk governance that my paper sought to highlight. EU financial-law jurisprudence exhibits the same pattern: preventive intervention, differentiated obligations for systemically significant actors, and a proportionality review tailored to technical complexity and predictive judgment. At this level, the comparison is not only valid but also illuminating.

The core disagreement with the Observatory is not whether Amazon alters the analytical landscape –it does – but rather concerns the appropriate level of abstraction for comparison. If the argument were that DSA systemic risk merely replicates bank-contagion logic, the judgment would be difficult to defend. However, that was not my position. My argument is that the DSA adopts a macroprudential style of governance: it identifies a subset of actors whose scale enables them to cause significant harm, subjects them to enhanced due diligence and supervision, and justifies these obligations through a preventive public-interest rationale. Amazon does not undermine this claim, it only refines it.

One further point should be noted. The judgment did not resolve all interpretive questions regarding Article 34 DSA. Specifically, it did not explicitly determine whether the list of risks to be assessed, set out in Article 34(1), is exhaustive. While the Observatory may reasonably infer from certain passages that this is the case, such an inference does not constitute a definitive holding. The repeated references to the risks “referred to in Article 34(1)(a) to (d)” are consistent with the narrower view that these were the risks relevant to the case at hand. On this issue, a cautious approach remains advisable.

In my view, the most accurate reading of Amazon is as follows. The judgment narrows the conceptual overlap between financial and digital systemic risk by rejecting interconnectedness as a necessary definitional criterion under the DSA. However, it reinforces the structural overlap at the level of governance. Under the DSA, systemic risk continues to justify a regime that is differentiated, preventive, supervisory, and constitutionally sustained through a broad margin of institutional discretion. Therefore, the financial analogy I proposed remains useful, provided it is applied at the appropriate level of abstraction. The DSA is not banking law for platforms, but it is law crafted in a distinctly macroprudential register.

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