Abuse of Rights and Corporate Mobility: (Re)Interpreting the Role of Companies in the European Social Market

Abstract

Freedom of establishment of companies has always been a delicate area of European Union law. The challenge of achieving political consensus has delayed the harmonisation process and prompted creative adjudication. The Court of Justice of the European Union [hereinafter - C.J.E.U.], particularly in the Polbud case, just confirmed in Edil Work, has interpreted free movement broadly and allowed companies to relocate their registered offices to benefit from more favourable national laws, without relocating their economic activities. This approach raised doubts about the notion of establishment and complicated the national authorities’ ability to prevent abusive moves aimed at circumventing stakeholders’ protective legislation. Directive 2019/2121 provides a procedural framework for such a control, but lacks a definition of abuse, leaving national courts with interpretative challenges. This study explores what distinguishes legitimate establishment from its abuse and aims to create a unified model for its identification. At a general level, it expresses the long-standing clash between E.U. economic and social legal integration.