Administrative Law and Market Regulation: Complete Course Notes
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Cours
RGBBE50210 (RGBBE50210)
Établissement
Rijksuniversiteit Groningen (RuG)
When it comes to Administrative Law and Market Regulation, the most important thing is to have a good understanding of the different theories and models studied throughout the course. These reviewed and revised notes provide in depth explanations of all lectures, as well as answers and notes from e...
Administrative Law and Market Regulation
LLB International and European Law | Year 2 | Block 3
Table of Contents
Lecture 1: Introduction to Market Regulation from a Legal Perspective 1
Lecture 2: Why Regulate? Public and Private Interests of Regulation 4
Seminar 1 7
Lecture 3: Who Regulates? Public vs. Private Regulators 9
Lecture 4: Regulate at What Level? Multilevel Reg. and Global Administrative Law 13
Seminar 2 17
Lecture 5: Regulatory Techniques 19
Lecture 6: Market Regulation and The Public / Private Divide 22
Lecture 7: Regulation of Consumer Transactions 31
Lecture 8: Regulation of Financial Services I 36
Seminar 4 40
Lecture 9: Regulation of Financial Services II 43
Lecture 10: Regulatory Enforcement with Compliance; General Aspects 47
Seminar 5 51
Lecture 11: Public & Private Enforcement in European European Consumer Law 54
Lecture 12: Public and Private Enforcement in European Financial Law 58
Seminar 6 64
Lecture 13: Administrative Action and the Principles of Good Administration 69
Lecture 14: Judicial Review of Administrative Action 74
Seminar 7 78
,Lecture 1: Introduction to Market Regulation from a Legal Perspective
Today: equipping us with the basics for understanding the course, via introduction to the key
concepts.
Rules of The Game
● Recommended to do the readings AFTER the lecture.
● No mandatory tutorial / WG participation, but of course recommended.
● Exam is fully closed book, practice exams are already available.
Three Modern Cases
● Volkswagen emissions scandal (Dieselgate) → 2015, US environmental protection
agency discovered half million of the Volkswagen cars on the US market contained
emission test CHEATING devices to make them look more environmentally friendly than
they were! Since this agency made the discovery, Volkswagen came clean to say that
millions of its cars were affected by this.
○ They settled with 193 payout. Every England and Wales claimant got
approximately 2,100 pounds each.
● Elizabeth Holmes, the Theranos Scandal → revolutionary blood test without any big
needles, only a small needle needing only 1 drop of blood to understand any and all
diseases that person has. However, it was too good to be true – reality was that there
was no scientific evidence behind this test. She was attracting investors with this case,
but it ended up merely being a scam.
○ 2022, found guilty for defrauding investors. Sentenced to over 11 years. This
harsh ruling was to show founders will be held accountable for what they
promise.
● Sam Bankman-Fried FTX Scandal → Founded a crypto exchange worth billions of
euros, promoted himself as an eccentric genius.
○ The US securities and exchange commission accused Sam of taking money from
investors and diverting it to his private hedge fund. This was run by his girlfriend
at the time. A number of his close associates testified against him.
○ Prosecutor: “while the cryptocurrency industry might be new … this kind of
corruption is as old as time”
What is The Message of These Scandals?
● All three tried to distort the market by trying to mislead customers and / or investors.
● Scandals demonstrate market failures. There are always some individuals that will try to
cheat the system, meaning that no market can be foolproof. The more money involved,
the greater chance things will go wrong.
● In each of the three cases, there was an element of MISINFORMATION surrounding the
product or service provided by the company in question.
● We need regulation to somehow prevent these kinds of scandals, of which too
many happen everywhere / all the time.
1
,What is Market Regulation?
● Two perspectives for its definitions:
● 1: functional perspective, focusing on three core functions:
○ Standard setting to allow a distinction to be made between more / less preferred
states of the system (Holmes, Dieselgate)
○ Information gathering or monitoring to produce knowledge about current or
changing states of the system.
○ Behavior modification to change the state of the system
○ NOTE: market regulation can thus also be enacted by non state actors!
● 2: Scope via what the state may do:
○ 1: Narrow sense → deliberate attempts by the state to influence socially valuable
behavior (may have adverse side effects by establishing, monitoring and
enforcing legal rules)
○ 2: Broad sense → all forms of social control, whether intentional or not, and
whether imposed by the state or other social institutions (lecture 3).
Three Main Issues of Market Regulation
● 1. What is the goal or outcome to be achieved by the regulation?
○ Markets may not really work without (e.g.) consumer protection and care (see
Volkswagen case), as it is necessary to ensure consumer confidence and, from
there, market operation.
● 2. What standard of conduct is required from market participants?
○ E.g. prevent misleading practices, stop misinformation, bring greater
transparency.
● 3. What enforcement techniques are appropriate to ensure compliance?
○ Ensure the goal or outcome from the first section.
How Does Market Regulation Relate to Law?
● Two different roles.
● Law’s Facilitative role → law as an instrument for shaping social behavior so as to
facilitate transactions in the market (law as a regulatory instrument).
○ E.g. conduct of business rules, most relevant to start-ups.
○ Not only in administrative law, but market regulation also uses criminal and
private law as regulatory instruments. Thus, facilitative.
● Law’s Expressive role → law is giving expression to certain values that shape, but also
constrain the power of institutions, notably governmental institutions (law as a
CONSTRAINT on market regulation).
Relationship between Public and Private law
● Defining the two areas of law.
, constitutional law.
● The relationship between private
● Dealing with the relationship parties; natural and legal persons,
between public authorities and even public authorities so long as they
citizens (or other public authorities). act in a private capacity.
● About public interests. ● Private and individual interests.
● Distributive (social) justice — socially ● Interpersonal (corrective) justice —
just distribution of goods in a society, balance between the parties’ interests
such as taxes. through their respective rights and
remedies (such as damages).
● Public enforcement by public
authorities (primarily), via public law ● Private enforcement by aggrieved
means such as fines, private parties through private law
○ Ex ante compliance (= comply means. Cannot call on the state /
without causing damage in the public agencies in pursuit of private /
first place) and deterrence. own interests.
○ Ex post compensation (= after
the wrongful act occurred, the
guilty is expected to remedy
that. Always balancing out the
two parties).
Distinction Between Public and Private Law?
● Public law focuses on the vertical relationship between public authorities and private
parties + equips public authorities and private parties + equips public authorities with the
necessary powers….
● Private law is dealing with a horizontal legal framework allowing the parties to shape
their legal relationships as self-determining agents (able to determine their own means of
doing so via private law areas).
● HOWEVER, despite this the public / private divide has blurred because of the increasing
use of both public and private law as a regulatory instrument.
Relationship between Constitutional and Administrative Law (ie, within Public Law)
● Climate activists block the main road into The Hague → A12. Hundreds of climate
activists. They believe it is justified because of the huge public interest involved to take
such radical action as road blockage. They were not allowed to be there.
○ Constitutional element: right to assembly, right to freedom of expression, right to
protest. The Constitution provides this right to citizens. Sets a general
framework for the relationship between public authorities and citizens.
○ Administrative element: Cannot exercise that right whenever and however; it is
administrative law that determines how they can do so. Therefore,
administrative law is dealing with the details and specific rules of how one
can exercise their constitutional rights.
● Or another example, the Covid vaccine.
○ Constitutional element: every citizen has a right to health.
3
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