Introduction
Article 263 of the Treaty on the Functioning of the European Union (TFEU) provides the main route for the judicial review of the legality of acts of the European Union's institutions. This procedure, known as the action for annulment, is a cornerstone of the EU legal order, intended to ensure that the Union and its institutions are subject to the rule of law (Craig and de Búrca, 2020). However, the ability of ‘someone’ to bring a challenge is not uniform; it is carefully controlled by rules of standing, or locus standi. This essay will argue that the extent to which an applicant can use Article 263 is highly dependent on their identity. While EU institutions and Member States enjoy wide access to the Court of Justice of the European Union (CJEU) to challenge EU measures, the position of private parties, such as individuals and businesses, is far more restricted. Despite reforms introduced by the Treaty of Lisbon, the standing rules for these ‘non-privileged’ applicants remain a significant hurdle, meaning their ability to directly challenge EU acts is limited.
The Scope of Review: What Acts Can Be Challenged?
Before considering who can bring a challenge, it is necessary to identify what can be challenged. Article 263(1) TFEU allows for the review of "legislative acts" and other acts of the EU institutions "intended to produce legal effects vis-à-vis third parties". The institutions whose acts are subject to review include the Council, the Commission, the European Central Bank, the European Parliament and the European Council. The CJEU has consistently taken a substantive approach, looking at the content and effect of a measure rather than its official title or form. The key case of Commission v Council (ERTA) (Case 22/70) established that any measure which has binding legal effects is a reviewable act, regardless of its name. This ensures that the institutions cannot evade judicial scrutiny simply by labelling a decision as a non-binding recommendation or opinion if, in substance, it creates legal rights or obligations.
Standing to Challenge: The Different Categories of Applicant
The core of Article 263 lies in its differentiated approach to standing, which creates three distinct categories of potential applicants. The extent to which any of them can launch a successful challenge depends entirely on which category they fall into.
Privileged Applicants
Under Article 263(2) TFEU, a group of ‘privileged’ applicants can challenge any legally binding act of an EU institution without needing to demonstrate any particular interest in the matter. These applicants are the Member States, the European Parliament, the Council, and the Commission. Their right to bring an action is automatic. The rationale for this is that these actors are considered the primary guardians of the EU legal order and their own institutional powers. For example, a Member State can challenge a Directive it believes was passed using the wrong legal basis, or the Commission can challenge an act of the Council that it sees as unlawful. For these privileged actors, the extent to which they can use Article 263 is therefore very broad; the door to the court is always open.
Semi-Privileged Applicants
Article 263(3) TFEU establishes a second category of ‘semi-privileged’ applicants. This group includes the Court of Auditors, the European Central Bank (ECB), and the Committee of the Regions. Unlike privileged applicants, their right to bring an action is qualified. They may only do so "for the purpose of protecting their prerogatives". This means they cannot challenge any act they disagree with, but only those that they believe interfere with their specific powers and functions as laid down in the Treaties. For instance, the ECB could challenge a Regulation passed by the Parliament and Council if it encroached upon the ECB's exclusive competence in the field of monetary policy. Their access to the court is therefore functional rather than general, providing them with a tool to defend their institutional territory but not to police the legality of EU law at large.
Non-Privileged Applicants
The most complex and restrictive rules apply to ‘non-privileged’ applicants, defined in Article 263(4) TFEU as "any natural or legal person". This category includes individuals, companies, and associations. For a business operating in the EU, its ability to challenge a measure that negatively affects it is governed by this provision. There are three potential routes to standing for a non-privileged applicant.
The first is straightforward: an individual or company can challenge an act that is addressed to them. For example, if the European Commission issues a decision finding a specific company guilty of anti-competitive behaviour and imposes a fine, that company has an automatic right to challenge the decision.
The second, and historically most difficult, route is to challenge an act of which the applicant is not the addressee, but which is of "direct and individual concern" to them. This two-part test has proven to be a major obstacle. ‘Direct concern’ requires that the EU measure directly affects the applicant’s legal situation and its implementation requires no real discretion on the part of an intermediary, such as a Member State authority (International Fruit Company v Commission (Cases 51-54/71)). The real difficulty, however, lies in establishing ‘individual concern’. The test for this was laid down in the landmark case of Plaumann v Commission (Case 25/70). The Court stated that an applicant is individually concerned only if the decision affects them "by reason of certain attributes which are peculiar to them or by reason of circumstances in which they are differentiated from all other persons and by virtue of these factors distinguishes them individually just as in the case of the person addressed". This requires the applicant to show they are part of a ‘fixed, closed class’ of persons identified or identifiable at the time the measure was adopted. In Plaumann, a clementine importer was held not to be individually concerned by a decision addressed to Germany refusing it permission to reduce a customs duty, because any person could import clementines at any time. The test is notoriously difficult to satisfy, especially for challenges to regulations, which are by nature generally applicable. While there have been rare successes, such as in Codorníu v Council (Case C-309/89) where a company’s specific trademark right was affected, the Plaumann test has effectively barred most private challenges to general EU laws.
Recognising the difficulty of this test, the Treaty of Lisbon introduced a third route to standing. Article 263(4) now allows a natural or legal person to challenge "a regulatory act which is of direct concern to them and does not entail implementing measures". This was intended to relax the strictness of the Plaumann test. However, its effectiveness has been limited by the CJEU’s interpretation. In Inuit Tapiriit Kanatami v Parliament and Council (Case C-583/11 P), the Court defined a "regulatory act" as a non-legislative act of general application. This means that acts adopted through the ordinary or special legislative procedure (i.e. Regulations and Directives) are excluded from this new, more liberal standing test. Furthermore, the requirement that the act "does not entail implementing measures" means that if a Member State has to pass national laws to give the EU act effect, this route is unavailable. The combined effect of these interpretations is that the Lisbon reform, which appeared to promise wider access to justice, has in practice had a very narrow impact (Chalmers et al., 2019).
The Alternative Route: Article 267 TFEU
The CJEU has often justified its strict approach to standing under Article 263 by pointing to the existence of the preliminary reference procedure under Article 267 TFEU. This provides an alternative, albeit indirect, route for challenging the validity of an EU act. An individual or business can challenge a national measure implementing an EU act in their national court. That national court can then, and in some cases must, refer a question to the CJEU asking whether the underlying EU act is valid. While this ensures that all EU acts can eventually be subject to review, it is not a direct right of action for the individual. It is dependent on litigation in a national court and on that court’s decision to make a reference. In his famous opinion in Unión de Pequeños Agricultores v Council (UPA) (Case C-50/00 P), Advocate General Jacobs argued that this indirect route was insufficient to guarantee effective judicial protection and that the Plaumann test should be relaxed. The Court, however, rejected this argument, maintaining the strict traditional test and reaffirming the central role of the national courts in the EU’s system of judicial review.
Conclusion
In conclusion, the extent to which someone can use Article 263 TFEU to challenge an EU measure varies dramatically. The legal framework provides a clear hierarchy of access to the EU courts. Privileged applicants, such as Member States and EU institutions, have a virtually unrestricted right to initiate a challenge, empowering them as key supervisors of the Union’s legality. Semi-privileged applicants have a more limited, functional right to protect their own institutional powers. For non-privileged applicants – the individuals and businesses who are often most affected by EU regulation – the path to the courtroom is narrow and full of obstacles. The "direct and individual concern" test established in Plaumann remains a formidable barrier to challenging acts of general application. The reform introduced by the Treaty of Lisbon, which was designed to alleviate this, has been interpreted so restrictively by the CJEU in cases like Inuit Tapiriit Kanatami that its practical benefit is minimal. Consequently, for the ordinary person or business, the primary method for questioning the legality of an EU act remains the indirect, and less certain, preliminary reference procedure under Article 267. Therefore, while Article 263 is a fundamental component of the EU’s rule of law, its direct use as a tool for legal accountability is largely reserved for a select group of institutional and state actors.
References
Chalmers, D., Davies, G. and Monti, G. (2019) European Union Law: Text and Materials. 4th edn. Cambridge: Cambridge University Press.
Craig, P. and de Búrca, G. (2020) EU Law: Text, Cases, and Materials. 7th edn. Oxford: Oxford University Press.
Case 22/70, Commission of the European Communities v Council of the European Communities (ERTA) [1971] ECR 263.
Case 25/70, Plaumann & Co. v Commission of the European Economic Community [1963] ECR 95.
Cases 51-54/71, International Fruit Company NV and others v Commission of the European Communities [1971] ECR 1107.
Case C-309/89, Codorníu SA v Council of the European Union [1994] ECR I-1853.
Case C-50/00 P, Unión de Pequeños Agricultores v Council of the European Union [2002] ECR I-6677.
Case C-583/11 P, Inuit Tapiriit Kanatami and Others v European Parliament and Council of the European Union [2013] ECLI:EU:C:2013:625.
