EU Law: Article 34 TFEU and the Free Movement of Goods, Study notes of European Union law

Download EU Law: Article 34 TFEU and the Free Movement of Goods and more Study notes European Union law in PDF only on Docsity! In the Apple and Pear Development Council, the ECJ stated that the council was “under a duty not to engage in any advertising intended to discourage the purchasers of products of other member states or to disparage those products in the eyes of consumers”. The court, on the other hand, found that the council has the right to promote/advertise a national product based on its particular attributes. State measure requirement The term "measure" does not have to be a binding act to fall within the prohibition of Article 34 (Commission v Ireland (Buy Irish), where the Irish council's advertising campaigning fell within the scope of Article 34 TFEU because the council was funded by the state and the state had a hand in the appointment of its Management Committee. In Apple and Pear Development, the council was held to be a state body as it was created by statute even though it was privately funded. Dassonville The ECJ defined MEQR as: “All trading rules enacted by Member States that are capable of hindering, directly or indirectly, actually or potentially, intra- Union trade are to be considered as measures having an effect equivalent to qualitative restrictions”. Distinctly applicable MEQRs These measures do not apply equally to local and imported items, and hence discriminate directly. As a result of direct discrimnation importing goods becomes more difficult/expensive in comparison to locally produced products. Only Article 36 may justify measures that are distinctly applicable MEQRs. Hygiene inspection carried out only on imported goods prima facie breaches Article 34 TFEU. In Commission v UK (UHT milk), the measure in question required that imported milk be submitted to stringent inspection while local milk was not. The measure was deemed to be in violation of Article 34 due to the time and expenditure that would be incurred by an importer. Indistinctly applicable measures Indistinctly applicable measures are those that apply to both local and imported goods, but in fact impose an additional burden on imported goods. The rationale for this is that whereas domestic products are created to fulfill the requirements in their home states, imported items must meet the criteria in both their home state and the importing state therefore imposing a "dual burden" which is in violation of Article 34 TFEU. Article 36 and reference to Cassis "mandatory requirements' might be used to justify indistinctly applicable measures. Origin- marking requirement In the case of Commission v United Kingdom, the measure in question was that all products must indicate their origin. This allowed the British consumer to discriminate against imported goods. Therefore, despite the fact that the law applied to all commodities equally, a discriminatory effect was discovered and breach of article 34 was found. Packaging requirements Article 34 TFEU is often violated by national laws that govern how a product should be packaged. While the law applies to all trades, the result is that those who want to import the product into the Member State will have to change their production method, which will result in higher costs. Imported commodities must fulfill requirements imposed by both their native state and the importing state, creating a double burden which is a violation of Article 34 TFEU (Walter Rau) In Walter Rau, Belgian statute required all margarine in Belgium to be sold in cubic packages to differentiate it from butter. The CJ held that although the measure was for consumer protection however the measure failed the test of proportionality as the objective could be achieved by using proper labeling (a less restrictive measure) and was therefore breached Article 34 TFEU. Name Restrictions Article 34 may be violated by national law that reserves certain names for goods. In Smanor French case legislation limited the use of the term "yogurt" to fresh food exclusively, requiring frozen yogurt to be renamed "deep frozen fermented milk." The ECJ ruled that Article 34 had been violated because ‘it may nonetheless make the marketing of imported frozen yogurt more difficult and thus impede, at least indirectly, trade between Member States’. In the Clinique Laboratories case, the German measure in question prohibited the use of the word "Clinique" for cosmetics due to the name's medical overtones. The measure was deemed disproportionate to the goal of consumer protection and human health by the CJ. Cassis de Dijon: the approach to “indistinctly applicable measure” (mandatory requirements) Mandatory requirements of Cassis 1) Consumer Protection (Walter Rau) In Estee Launder the ECJ held that “it is necessary to take into account the presumed expectations of an average consumer who is reasonably well informed and reasonably observant and circumspect”. 2) Culture (Cinéthèque SA) 3) Protection of environment: In Commission v Denmark the CJ held “the protection of environment is one of the (Union) essential objectives, which may justify certain limitations of the principle of the free movement of goods…It must therefore be stated that the protection of the environment is a mandatory requirement which may limit the application (of Article 34 TFEU). 4) Diversity of Press: In Familiapress, Austrian legislation directed against sale promotion in the papers was held to be caught by Article 34 but was justified under the diversity of press derogation. 5) Protection of fundamental rights: The Austrian authorities allowed an environmental organization to hold a protest in Schmidberger. The Austrian freeway was shut as a result of the protest, impeding free flow of goods. The Court ruled that it constituted an MEQR and hence in violation of Article 34 however, it was justified by the overwhelming concern of the individual protestors' basic rights. Mutual recognition In Cassis, the court (due to dual burden principle) established a second important principle of mutual recognition which stated that there is no valid reason why “Provided that (goods) have been lawfully produced and marketed in one of the Member States, (they) should not be introduced into any other Member States” Cinetheque (cinema) = Proportionality principle A French law that prohibited the sale or renting of videotapes of films during their first year of release was justified as necessary to encourage the French people to go to see the motives at cinema and maintain the profitability of film production. The measure applied equally to domestic and imported films , and it was a proportionate means of safeguarding film production. Keck (selling arrangements) The CJ stated in Keck that Article 34 TFEU “will not be infringed by national rules relating to certain selling arrangements that apply in the same manner, both in law and in fact, to all traders within the national territory”. Such a selling arrangement fell outside Article 34 TFEU altogether and thus did not need to be justified. These selling arrangement are prima facie lawful but there are two preconditions that must be satisfied: (1) Apply to all affected traders operating within the national territory; and (2) Affect in the same manner in law and in fact the marketing of domestic and imported products. The case of Keck involved a measure which prohibited selling coffee and beer at loss. The CJ held that Article 34 did not apply as the measure in question was a selling arrangement that applied in the same manner to local and foregin goods in law and in practice. Partial restrictions on advertisement Post-Keck national legislation imposing partial limits on advertising will not be covered by the Article 34 as such rules would be considered a selling arrangement. In Hunermund, a German law prohibiting excessive promotion for non-medical items was held to fall outside Article 34 since it was a selling arrangement. Advocate General Jacob's assessment of Keck in the matter of Leclerc-Siplec is worth considering. He pointed out that customers are likely to be familiar with local items, but products from other Member States depend more on promotion to break into new markets. Sunday trading rules and opening hours In Punto, an Italian law provided for the total closure of shops on Sundays and public holidays. The Court concluded that such regulations fell within the definition of selling arrangement and that Article 34 TFEU did not apply. Sale of goods through designated methods In Commission v Greece (Processed Milk), the court said that a prohibition in law stipulating that the goods to be sold via defined ways was only a constraint on the means of distribution and did not modify the product itself , and so it constituted a "selling arrangement." In that case, the law required that processed milk for newborns be sold exclusively in pharmacies. The law extended to all items, regardless of origin, and to all traders. Rules on the use of the product In Commission v Italy, the CJ used the “access to market test” and held that the measures on the use of the products fall within the ambit of Article 34 TFEU but could be justified. The case involved Italian legislation that made towing a trailer illegal for motorcycles and quadricycles. Therefore customers would not be able to legally ride a motorbike with a trailer are unlikely to purchase. The Court decided that such measures cannot be deemed a selling arrangement, and that regulations on the use of the product would come within the scope of Article 34 TFEU. This position was reaffirmed in Mickelsson and Ross where under Swedish law, jet skis could only be used in certain waterways. The effect was that there were very few waterways where jet skis could be used and this hindered the market. The measure was MEQRs but was justified on the ground of environmental protection, both in the form of a mandatory requirement and by reason of the Article 36 derogation for the protection of health and life of humans, animals and plants. Although a blanket ban on using all navigable waterways would have been disproportionate. Access to market The case of De Agostini concerned a Swedish ban on television commercials. The television advertisement had a greater impact on goods from other Member States rather than the host country, according to the CJ, since television marketing was the only efficient way for imports to penetrate the Swedish market, hence the measure would be evaluated under Article 34. Provision affects in the same manner, in law and in fact the marketing of domestic products and those from other Member States. In Gourmet International Products, the Court of Justice ruled that the total ban on advertising alcoholic drinks under Swedish law was not a selling arrangement since it impacted imports more than local manufacturers. This was due to the fact that customers were already familiar with local items, but the foreign product needed marketing to reach the host market and become well recognised. Therefore, the rule was evaluated under Article 34. Similarly, in the case of TK-Heimdienst, Austrian law required sellers of certain foods to have a fixed establishment in Austria if they wanted to sell in a Member State. Clearly, the provision imposes a heavier burden on foreign Member States than on domestic sellers, since importers would be required to invest in permanent establishments prior to selling their products. Therefore, access to the market was restricted for imports more than for domestic producers. Consequently, the rule was evaluated under Article 34 TFEU