nep-law New Economics Papers
on Law and Economics
Issue of 2023‒06‒26
fifteen papers chosen by

  1. The interpenetration of criminal and lawful economic activities By Elisa Wallwaey; Kerstin Cuhls; Attila Havas
  2. Challenges Faced by Judges When Enforcing EU Competition Law: EU and National Perspectives By Pier Luigi Parcu; Giorgio Monti; Marco Botta
  3. International Jurdisdiction Over Standard-Essential Patents By Henrik Horn
  4. Consistent regulatory and self-regulatory mechanisms for media freedom in the Digital Single Market. The European Media Freedom Act (EMFA) as meta-regulation By Marta Cantero Gamito
  5. Flexible Implementation and the EU Sexual Abuse Directive By Ton van den Brink; Michael Hübner; Alexander Hoppe
  6. Impacts of climate litigation on firm value By Sato, Misato; Gostlow, Glen; Higham, Catherine; Setzer, Joana; Venmans, Frank
  7. The Unilateral Promise to Enter a Contract By Diana Geanina Ionas
  8. Shall we share? The principle of FRAND in B2B data sharing By Marco Botta
  9. The Future of the EU Bioenergy Sector: Economic, Environmental, Social, and Legislative Challenges By Fabio Santeramo; Monica Delsignore; Enrica Imbert
  10. The International Air Cargo Cartel By Zhiqi Chen
  11. Some evidence of regulatory convergence By Djankov, Simeon; Luksic, Igor; Zhang, Eva
  12. Reassessing the Safeguards Mess By Bernard Hoekman; Petros Mavroidis
  13. Settlement of investor-state disputes: Can states avoid arbitration? By Cannatà, Isabella; Loschi, Riccardo
  14. Valuing a reduction in the risk of chronic kidney disease: A large scale multi-country stated preference approach By Damien Dussaux; Chris Dockins; Charles Griffiths; Nathalie Simon; Sandra Hoffmann
  15. Real Estate Security Token Offerings and the Secondary Market: Driven by Crypto Hype or Fundamentals? By Kreppmeier, Julia; Laschinger, Ralf; Steininger, Bertram; Dorfleitner, Gregor

  1. By: Elisa Wallwaey (Fraunhofer ISI, Institute for Systems and Innovation Research); Kerstin Cuhls (Fraunhofer ISI, Institute for Systems and Innovation Research); Attila Havas (Institute of Economics, Centre for Economic and Regional Studies, AIT Austrian Institute of Technology, Center for Innovation Systems and Policy)
    Abstract: As the world economy operates more and more through computerised transactions, new possibilities for intertwining criminal and lawful economic activities open up, as well as new opportunities for law enforcement agencies to fight crime. Considering the tremendous and potentially devastating damages caused by criminal economic activities, the issue should be high on the agenda of policy-makers, including R&I policy-makers. The race between criminal actors and the state trying to protect companies and citizens will be a permanent one. The paper provides and overview of trends and drivers in these domains, highlighting potential disruptions. It also presents four scenarios with a time horizon of 2040 to explore the role of R&I activities and regulations in shaping the possibilities for the interpenetration of criminal and lawful economic activities and derive policy implications. The complex nature of criminal economic activities, their detection, investigation, and prosecution are related to research and innovation in at least three areas. First, research in, and the development and improvement of, information and communication technologies necessary to monitor, track and analyse criminal activities. Second, regulatory techniques for preventing innovators from i) moving outside the sphere of lawful activities; ii) moving too far and entering a grey zone where regulation is missing; and iii) settling on clear-cut criminal behaviour. Third, research in, and the development and improvement of, forensic techniques of reconstructing what actually happened, and thus attributing responsibility for crime.
    Keywords: Criminal economic activities; Fighting crime; Preventing crime; Information and communication technologies; Regulation; Prospective analyses; Scenarios
    JEL: K42 M48 O17 O38 O39
    Date: 2022–12
  2. By: Pier Luigi Parcu; Giorgio Monti; Marco Botta
    Abstract: This working paper includes a collection of case notes written by those national judges who attended the European Networking and Training for National Competition Enforcers (ENTraNCE Judges, 2022). The training programme was organised by RSCAS between November, 2021, and October, 2022, with the financial contribution of the DG Competition of the European Commission. The case notes included in the working paper summarise judgments from different EU Member States that relate to diverse aspects of competition law enforcement. This working paper thus aims to increase the understanding of the challenges that are faced by the national judiciaries in enforcing national and EU competition in the context of the decentralised regime of competition law enforcement that was introduced by Reg. 1/2003.
    Keywords: Competition law, Article 101 TFEU, Article 102 TFEU, Reg. 1/2003, judicial training, national judges
    Date: 2023–03
  3. By: Henrik Horn
    Abstract: Countries are alleged to pursue commercial interests through their antitrust interventions regarding FRAND commitments for standard-essential patents (SEPs). This paper examines pros and cons of allocating jurisdiction according to fundamental principles in international law, assuming that countries’ regulations promote national objectives. It shows why the Territoriality Principle yields too lenient treatment of patent-issuing countries’ SEPs, and too strict of treatment of other countries’ SEPs, and why the Nationality Principle yields too lenient treatment generally. Non-discrimination obligations can, but need not, improve on outcomes. Hence, existing international law will typically not implement efficient outcomes, suggesting that an international agreement is required.
    Keywords: Standard-essential patents, international jurisdiction, default rules
    JEL: F15 K21 K33 L40 O38
    Date: 2023–04
  4. By: Marta Cantero Gamito
    Abstract: Recent constitutional and legislative changes in several member states are questioning core features of EU rule of law. For the first time ever, the EU institutions have proposed activation of the preventive mechanism in Article 7 TEU against Poland and Hungary, and the European Commission has launched the rule of law conditionality mechanism against Hungary. The jurisprudence of the CJEU finding numerous violations of judicial independence and fundamental rights undermining the rule of law in Europe is growing at a fast pace. Moreover, many preliminary references show the willingness of national courts to engage in judicial dialogue with the CJEU, relying on it to provide harmonised standards and guidelines on the rule of law. However, the future of such interactions is undermined by recent decisions of supreme and constitutional courts limiting the rights of domestic courts to use the preliminary reference procedure and prohibiting their obligation to give effect to EU law based on a tendentious understanding of national constitutional identity. In this context, the TRIIAL project has embarked on an ambitious research quest, which resulted in the present Edited Working Paper. It consists of nine country reports which cover the most relevant issues concerning judicial independence, impartiality, accountability, mutual trust and the rule of law in the jurisdictions of the project partners: Belgium, the Netherlands, Hungary, Romania, Italy, Portugal, Poland, Spain and Slovenia. The country reports primarily build on case law identified and analysed during the TRIIAL project and published in the CJC database. They outline the current state of affairs and challenges the member states face in the topics covered by TRIIAL exposing and analysing specific pressing issues, especially ones that are not yet covered in other reports such as the European Commission’s Rule of Law report
    Keywords: Independence, accountability, impartiality, rule of law, EU member states
    Date: 2022–07
  5. By: Ton van den Brink; Michael Hübner; Alexander Hoppe
    Abstract: This report concerns the Directive on combating the sexual abuse and sexual exploitation of children and child pornography (SAD). It assesses the room for flexible implementation it provides and the way in which EU Member States have made use of this. The sample of Member States includes Czech Republic, Germany, Ireland and the Netherlands. The Directive includes various ways to allow for flexible implementation. The directive establishes thresholds for the maximum terms of imprisonment that the Member States should include in their laws (minimum harmonization). The directive equally contains provisions with elaboration discretion for the Member States, allowing them to further flesh out the content of these provisions in national law. This is especially the case with regard to the provisions on prevention and protection of victims. The directive further contains open-worded and non-defined terms which also allow for differentiated implementation. Our analysis demonstrates that implementation legislation varies quite substantially across the Member States. Frequently, the national implementation strategy has been informed by the wish not to unnecessarily change existing laws. From an input legitimacy perspective this may be criticised, but also be understood from the particular nature of criminal law and legislation. This report has not identified major implementation problems, but especially the open worded provisions may create legal uncertainties.
    Keywords: Differentiated integration, flexible implementation, European Union, Sexual Abuse Directive
    Date: 2022–07
  6. By: Sato, Misato; Gostlow, Glen; Higham, Catherine; Setzer, Joana; Venmans, Frank
    Abstract: Communities and individuals are increasingly turning to courts to hold governments and high emitting corporations to account for the adverse consequences of climate change and are starting to find success. For defending corporations, rising climate litigation risk may exacerbate well-known physical and transition risks associated with climate change. Yet, little is known about the impacts of climate litigation against corporations. Here we provide the first robust evidence. We construct a comprehensive database of filings and decisions relating to 108 climate change lawsuits worldwide against US and European-listed corporations between 2005–2021. Our causal analysis estimates that a filing or an unfavourable court decision in a climate case reduced firm value by -0.41% on average, relative to expected values. The largest stock market responses were found for cases filed against Carbon Majors, reducing firm value by -0.57% following case filings and by -1.50% following unfavourable judgements. Larger market reactions are observed in “novel” cases involving a new form of legal argument or in a new jurisdiction. No statistically significant effect on firm value was found in filings against non-Carbon Majors. We conclude that lenders, financial regulators, and governments should consider climate litigation risk as a relevant financial risk in a warmer future.
    Keywords: regulation; spillovers; environment; energy; firms
    JEL: J1 R14 J01
    Date: 2023–05–23
  7. By: Diana Geanina Ionas (Transylvania University of Brasov, Romania)
    Abstract: The conclusion of a contract can occur in a spontaneous manner, by unequivocally accepting an offer, or preceded by negotiation between parties, whether extensive or simpler. Within these negotiations, the parties can conclude certain preparative contracts which precede the conclusion of the main contract. Among these is the unilateral promise to enter a contract. In practice, it is often difficult to choose between the options provided by the lawmaker so that the document is an accurate expression of the parties’ will. Therefore, legal construction requires clear and precise theoretical approaches that establish the validity conditions, the nature, and legal effects of the contract to efficiently protect the parties. The current paper presents an extensive study of the unilateral promise to enter a contract, from a historical perspective, by pointing out and commenting on the controversial aspects of specialty literature. By using the comparative method, the paper describes the institution of the unilateral promise to enter a contract in relation to other systems of law, thus being a useful tool for both doctrinarians and practitioners.
    Keywords: negotiations, contract, legal nature, conditions, effects, compared law
    Date: 2023–04
  8. By: Marco Botta
    Abstract: Data is often defined as the ‘oil’ of the 21st century economy: companies that successfully collect and process a large amount of data can provide more personalized services to their customers, develop new products, and reduce their production costs, thus becoming more competitive. Similarly, public institutions can provide more personalized services to citizens if they can access a large dataset. However, small firms and public institutions often cannot collect a sufficiently large amount of data on their own, and via data sharing small firms and public institutions can access larger and more diversified sets of data, thus boosting their efficiency. Despite its well-recognized benefits, several technical, regulatory and economics obstacles currently limit the degree of data sharing.This paper first discusses the market failures that currently limit data ‘access’ and ‘re-use’ – which are jointly defined as ‘data sharing’. Secondly, the paper analyses the legislation recently adopted by the European Union (EU) to foster Business2Business (B2B), Government2Business (G2B) and Business2Government(B2G) data sharing, especially by comparing the terms of the compensation that is provided by the EU legislation. Finally, the paper analyses the meanings of Fair, Reasonable and Non-Discriminatory (FRAND) terms in the context of the licensing of Standard Essential Patents (SEPs) and access remedies in EU competition law, to draw some lessons on how the principle of FRAND, in the context of B2B data sharing, is interpreted.
    Keywords: Data access, Data portability, Data Governance Act, Digital Markets Act, Data Act, FRAND, Standard Essential Patents, Antitrust access remedies
    Date: 2023–04
  9. By: Fabio Santeramo; Monica Delsignore; Enrica Imbert
    Abstract: The bioenergy sector is becoming of increasing interest: the European Union is not an exception. Indeed, it is in need of solutions to face one of the worst energy crises of the last century. The sector’s growth faces numerous challenges. The main use of energy crops, as feedstock, generates stiff competition on the use of land for food and energy purposes. The production of bioenergy has relevant environmental implications in terms of greenhouse gas emissions. The social aspects related to the bioenergy sector are also potential obstacles to its development. These pressing issues for policymakers call for a better understanding on how national and international laws should regulate the growth of the bioenergy sector. Flying over the economic, environmental, social, and legislative aspects faced by the bioenergy sector, we conclude on threads, opportunities, and priorities that should be considered for its development and propose directions for future studies.
    Keywords: Bioenergy, European Union, impact, land use, law, sustainability
    JEL: K32 Q18 Q42
    Date: 2023–03
  10. By: Zhiqi Chen (Department of Economics, Carleton University)
    Abstract: This case study reviews the history and operation of the international air cargo cartel, in which over 20 airlines around the world colluded on the setting and implementation of fuel and other surcharges for international air cargo services from late 1999 to 2006. To an economist, this cartel has several interesting features, including the choice of a simple variable to collude on, the use of a fuel price index as a facilitating device, and the reliance on a complex web of contacts among the executives of different airlines to enforce the cartel. Most interesting of all is that the airlines colluded on the surcharges without coordinating on the freight rates. On the surface, this cartel seemed to be poorly designed because higher surcharges achieved through collusion could have simply been offset by lower freight rates as the airlines competed for customers. But the theoretical analyses by Chen (2017 and 2022) demonstrate that colluding on surcharges without coordination on base prices could be an effective way of raising the full price of a product.
    Keywords: cartels, collusion, surcharges
    JEL: L41
    Date: 2023–05–31
  11. By: Djankov, Simeon; Luksic, Igor; Zhang, Eva
    Abstract: We find some evidence of regulatory convergence in four distinct areas of business activity over the 2005-2019 period. This convergence is most pronounced for countries in the French and German civil law tradition.
    JEL: G00 K00
    Date: 2022–05–18
  12. By: Bernard Hoekman; Petros Mavroidis
    Abstract: The WTO Agreement on Safeguards was hailed as an important achievement of the Uruguay round, rightly so, given that it managed to outlaw the use of voluntary export restraints. Intended to facilitatethe use of transparent, temporary, and non-discriminatory instruments to assist domestic industriesinjured by import competition, World Trade Organization (WTO) jurisprudence undermined therealization of this objective. Worse, erratic case law created negative externalities, ranging fromgreater recourse to more discriminatory trade practices and use by the United States (US) of thetypes of managed trade that the Agreement of Safeguards was meant to abolish. As in the classicbootlegger-Baptist metaphor in the literature on regulation, the unintended consequence of WTOjurisprudence on safeguards has been more rather than less selective protection (discriminatorytrade policies). As, if not more important, it made it more difficult for WTO members to use aninstrument intended to assist governments in sustaining political support for an open trade regime.In this paper, we describe the source of discomfort and suggest ways to address it in a meaningfulmanner.
    Keywords: Emergency protection, safeguards, trade agreements, WTO, Appellate Body
    Date: 2023–02
  13. By: Cannatà, Isabella; Loschi, Riccardo
    Abstract: Can states avoid lengthy and costly investor-state arbitration proceedings by entering into amicable settlements? While this is always possible in principle, data suggests that states struggle to do so. This Perspective discusses possible structural reforms for states to enable (and encourage) their officials to engage in meaningful settlement negotiations with investors.
    Date: 2023
  14. By: Damien Dussaux; Chris Dockins; Charles Griffiths; Nathalie Simon; Sandra Hoffmann
    Abstract: Compromised kidney function is associated with an array of environmental contaminants and chemicals, including heavy metals, certain organic solvents, and polycyclic aromatic hydrocarbons (PAHs), as well as food and waterborne pathogens. Many of these hazards are subject to regulation, or may be considered for regulation, in order to reduce exposures and prevent human health risks. However, valuation estimates for kidney effects that can be used in cost-benefit analyses are few, particularly willingness-to-pay estimates. In particular, there appears to be no willingness-to-pay (WTP) estimate available for reduced risk of chronic kidney disease and therefore no estimate for the Value of a Statistical Case (VSC) of chronic kidney disease.This paper is part of the series of large scale willingness to pay (WTP) studies resulting from the Surveys to elicit Willingness to pay to Avoid Chemicals related negative Health Effects (SWACHE) project that intends to improve the basis for doing cost benefit analyses of chemicals management options and environmental policies in general. The paper details a stated preference survey estimating WTP to reduce the risk of symptomatic chronic kidney disease, termed serious kidney disease in the survey instrument, filling an important gap in the valuation literature and addressing a need for applied benefits analysis for chemicals regulation. The SWACHE serious kidney impairment survey was fielded in 10 countries: Canada, Chile, China, Denmark, Germany, Italy, Norway, Türkiye, the United Kingdom and the United States.
    Keywords: chemicals regulation, economic valuation, health risk, health valuation, kidney disease, monetised benefits, morbidity valuation, non-market valuation, stated preferences, surveys, value of a statistical case, willingness-to-pay
    JEL: D61 J17 K32 Q51 Q53 Q58 I18
    Date: 2023–06–05
  15. By: Kreppmeier, Julia (University of Regesburg, Germany); Laschinger, Ralf (University of Regensburg, Germany); Steininger, Bertram (Department of Real Estate and Construction Management, Royal Institute of Technology); Dorfleitner, Gregor (University of Regensburg, Germany)
    Abstract: Tokens, the digital form of assets, are an innovation that has the potential to disrupt how to transfer and own financial instruments. We hand-collected data on 173 real estate tokens in the USA between 2019 and 2021 and trace back 238, 433 blockchain transactions. We find that tokens provide broad real estate ownership to many small investors through digital fractional ownership and low entry barriers, while investors do not yet hold well-diversified real estate token portfolios. We analyze the determinants of the success of security token offerings (STOs), secondary market trading, and daily aggregated capital flows. In addition to some property-specific determinants, we find that crypto-market-specific determinants, such as transaction costs and the related sentiment, are relevant both to the STO and capital flows.
    Keywords: digital asset; security token offering (STO); real estate token; blockchain; distributed ledger technology (DLT); decentralized finance
    JEL: G24 G32 K22 L26 M13
    Date: 2023–06–09

This nep-law issue is ©2023 by . It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.