Scope of Article 34 TFEU in EU Trade: Sunday Trading and Unfair Competition, Essays (high school) of Public Relations

Download Scope of Article 34 TFEU in EU Trade: Sunday Trading and Unfair Competition and more Essays (high school) Public Relations in PDF only on Docsity! 3 In Search of the Limits of Article 30 of the EEC Treaty Revisited ERIC WHITE I. Introduction ‘ In Search of the Limits of Article 30 of the EEC Treaty ’, published in the Common Market Law Review in 1986, was a response to the expansive interpretation given by the Court of Justice to the concept of ‘ quantitative restrictions and all measures having equivalent eff ect ’ in what is now Article 34 of the Treaty on the Functioning of the European Union (TFEU). Th e Court had reformulated this concept in Dassonville to cover ‘ all trading rules enacted by Member States that are capa- ble of hindering, directly or indirectly, actually and potentially, intracommunity trade ’. Th is had culminated in the Sunday Trading cases, where the Court held that restrictions on the opening hours of shops were measures of equivalent eff ect that needed to be justifi ed in order to be consistent with the Treaty. Aft er an extensive review of the case law, ‘ In Search of the Limits ’ concluded notably that: • Th e Dassonville formula could not be taken literally. Requiring all economic regulation to be justifi ed and proportionate leads, as Miguel Poiares Maduro put it later in 1998 in his book We the Court , to a ‘ process of Europeanisation of regulation in the Common Market through the judicial process ’. • In relation to indistinctly applicable measures, what is now Article 34 TFEU only applies to barriers to trade that arise out of the application of rules relating to the characteristics of products (thus preventing the product from benefi ting in the Member State of importation of the advantages arising from the diff erent legal and economic environment prevailing in the Member State of exporta- tion) and not therefore to rules that regulate the circumstances of sale in the Member State of importation. • Th e same limitation of the scope of Article 34 TFEU must also apply to non-discriminatory restrictions on the use of products (so that, to take one example, the Reinheitsgebot may be applied to prevent the use of cereals other than barley in the production of beer in Germany even though it cannot be 66 Eric White 1 Case 145/88 Torfaen Borough Council v B&Q plc EU:C:1989:593 . 2 Para 12 of the judgment. 3 Para 14 of the judgment. applied to prevent the sale of beers legally produced and marketed in other Member States). • Regulations on the sale and use of goods that eff ectively prevent all sale or use of a product do fall under Article 34 TFEU as they are more properly consid- ered quantitative restrictions (the quantity being zero) rather than measures of equivalent eff ect. • Article 34 TFEU applies only to goods legally produced and marketed in a Member State and not to third-country goods in free circulation. • In this article, the author of ‘ In Search of the Limits ’ reviews his original conclu- sions in the light of some subsequent developments over the last 30 years. II. Th e Case Law Since ‘ In Search of the Limits ’ Th e following rather selective review of the cases is designed to illustrate the evolu- tion on the case law over the period. A. Case C-145/88 Torfaen (Sunday Trading) 1 Th e fi rst case, or rather series of cases, that needs to be mentioned arose out of a concerted attempt by large UK retailers, especially do-it-yourself stores, to chal- lenge the restrictions on Sunday trading that then applied in the UK. Th ese retailers argued that the restriction on Sunday trading reduced their sales, including of products imported from other Member States and thus fell within the Dassonville formula of trading rules that are capable of hindering, directly or indirectly, actu- ally and potentially, intra-Community trade. Th ese cases were the inspiration for ‘ In Search of the Limits ’ and the European Commission defended in its observations to the Court a position along the lines of that set out in that article. Th e Court however, in a rather short judgment, stuck to its predominant case law of the time and held that the ‘ obstacle to Community trade ’ within the mean- ing of the Dassonville formula was not compatible with what is now Article 34 TFEU unless it ‘ did not exceed what was necessary in order to ensure the attain- ment of the objective in view and unless that objective was justifi ed with regard to Community law ’. 2 Th e Court went on to hold that the objective ( ‘ to ensure that working and non-working hours are so arranged as to accord with national or regional socio- cultural characteristics ’ ) could be justifi ed 3 but left it to the national court to Th e State of the Case Law on Article 34 TFEU 69 17 Para 7 of the judgment. 18 Paras 17 and 18 of the judgment. 19 Case C-34/95 De Agostini EU:C:1997:344 . 20 Para 44 of the judgment. 21 See para 19 of the judgment in Commission v Greece . 22 Case C-254/98 TK Heimdienst EU:C:2000:12 . 23 Para 25 of the judgment. 24 Para 28 of the judgment. Th e Commission had tried to distinguish Keck by arguing that Greece did not manufacture infant formula milk. 17 Th e Court held that the applicability of Article 30 of the Treaty to a national measure for the general regu- lation of commerce, which concerns all the products concerned without distinction according to their origin, cannot depend on such a purely fortuitous factual circum- stance, which may, moreover, change with the passage of time. If it did, this would have the illogical consequence that the same legislation would fall under Article 30 in certain Member States but fall outside the scope of that provision in other Member States. Th e situation would be diff erent only if it was apparent that the legislation at issue protected domestic products which were similar to processed milk for infants from other Member States or which were in competition with milk of that type. 18 E. Selected Subsequent ‘ Unfair Competition ’ Cases In De Agostini , 19 the Court held that advertising was a selling arrangement within the meaning of the Keck principle but that the outright ban in Sweden of television advertising aimed at children under 12 could come within the scope of [Article 34 TFEU] ‘ unless it is shown that the ban does not aff ect in the same way, in fact and in law, the marketing of national products and of products from other Member States ’. 20 Th e requirement of non-discrimination or neutrality is also present in Keck and one can wonder about the instruction to the national court to require the defender of the legality of the rule to prove this neutrality. It is by now well estab- lished that if the European Commission were to bring infringement proceedings against the Member State in question, it would be required to prove all elements of its case (as, for example, in the case of Commission v Greece discussed above). 21 In Case C-254/98 TK Heimdienst , 22 the Court held that the requirement for Austrian butchers, bakers and grocers wishing to sell their wares door-to-door to have a permanent establishment in the same or a neighbouring administrative district to be a measure of equivalent eff ect to a quantitative restriction despite recognising it as a selling arrangement. Th e rationale of the Court is that such a measure lacks neutrality 23 since, even if an establishment in a neighbouring district of a neighbouring Member State might be suffi cient, traders from elsewhere in the EU would not be able to provide their goods door-to-door in Austria 24 and also 70 Eric White 25 Para 30 of the judgment. 26 Unpredictability is arguably an inevitable by-product of evolving case law. A large part of the criti- cism was more motivated by a desire to return to the pre- Keck days when all national trading rules needed to be justifi ed under Art 34 TFEU. 27 Case C-142/05 Å klagaren v Percy Mickelsson and Joakim Roos EU:C:2009:336 , judgment of 4 June 2009. 28 Opinion of 14 December 2006, EU:C:2006:782. 29 Para 52 of the opinion. 30 Para 55 of the opinion 31 Para 67 of the opinion. 32 Para 28 of the judgment. 33 Para 44 of the judgment. that the measure does not allow traders from other Member States to provide their goods door-to-door in central areas of Austria. 25 F. Use Restrictions Th e application of the Keck formula in the case law was considered by many to be giving rise to unpredictability. 26 It was however cases concerning use restrictions that gave the opportunity for a clarifi cation of the guiding principle. Th e fi rst, that we will discuss is Mickelsson and Roos , 27 a reference for a prelim- inary ruling concerning restrictions on where jet skis (referred to as ‘ personal watercraft ’ in the judgment) could be used on inland waterways in Sweden. It was argued in that case that these restrictions created an obstacle to the marketing of such products in Sweden. Th e case took an extraordinary length of time to decide, evidencing perhaps an intensive debate. Advocate General Kokott had delivered an opinion 28 in December 2006 in which she observed that ‘ arrangements for use and selling arrangements … are comparable in terms of the nature and the intensity of their eff ects on trade in goods ’ 29 and ‘ it therefore appears logical to extend the Court ’ s Keck case-law to arrangements for use and thus to exclude such arrangements from the scope of Article 28 EC ’. 30 Th e Advocate General was however conscious that restrictions on use could amount to a virtual general prohibition if use was restricted to such an extent that little use was possible. In such a case, access to the market would be prevented and Article 34 TFEU would apply. 31 Th at was however a matter for the national judge to assess in light of the facts. It is not clear, however, whether the Court accepted the Advocate General ’ s ‘ logical ’ conclusion that an approach similar to that in Keck should apply. Although the Court refers to a hindering of access to the market, 32 it goes on to approach the question from the point of view of justifi cation holding that the measures would be compatible if regulations were adopted that allowed use of such craft ‘ within a reasonable period ’. 33 Th e State of the Case Law on Article 34 TFEU 71 34 Case C-110/05 Commission v Italy EU:C:2009:66 . 35 Para 53 of the judgment. 36 See esp paras 56 and 58 of the judgment. 37 P Pecho , ‘ Good-Bye Keck ? : A Comment on the Remarkable Judgment in Commission v Italy, C-110/05 ’ ( 2009 ) 36 Legal Issues of European Integration 257 . 38 Case C-525/14 Commission v Czech Republic EU:C:2016:714 . Th e Court paid more attention to the problem in its judgment in Italian Trailers , 34 whose gestation overlapped that in Mickelsson and Roos. Th at case concerned the prohibition contained in the Italian Highway Code on motorcy- cles towing trailers. Th e Commission argued in an infringement proceeding that this constituted a measure of equivalent eff ect to a quantitative restriction since it created an obstacle to the marketing of such products in Italy. Th e case was originally assigned to a chamber but then, aft er a fi rst Advocate General ’ s opinion, was referred to the Grand Chamber and all Member States were specifi cally requested to provide observations on whether the principles underly- ing the Keck judgment should also apply to use restrictions. Th is led to a second Advocate General ’ s opinion. Although this has not been widely noted, the Court eff ectively held in this case that non-discriminatory (in law and eff ect) use restrictions do not come within the scope of Article 34 TFEU, since it dismissed the action insofar as concerned trailers not specially designed for motorcycles. 35 It limited the case therefore to trailers specially designed for motorcycles, for which the prohibition in the Italian Highway Code was tantamount to an absolute prohibition of the product. What Italian Trailers highlights is a change of emphasis from the classifi ca- tion of a measure (as relating to product characteristics, selling arrangements or use restrictions) to its eff ects (restricting access to the market). 36 A considera- tion of whether particular measures restrict access to the market was present in H ü nemund and Keck and also in ‘ In Search of the Limits ’ but served more as a means of arriving at the conclusion on selling arrangements than as a test in itself. Some have asked whether Italian Trailers means ‘ Good-Bye Keck ? ’ 37 Th e answer is clearly ‘ no ’, not only because Italian Trailers did not concern selling arrangements but also because the Court continues to apply the test in Keck in its case law. G. Hallmarking ( Commission v Czech Republic ) 38 A judgment relevant to the last of the conclusions from ‘ In Search of the Limits ’ noted above arose recently from an infringement proceeding concerning the Czech Republic. Th e Commission claimed in that proceeding that a refusal of the Czech assay offi ce to recognise hallmarks on precious metals from affi xed by a third-country branch of the assay offi ce of a Member State was a measure of equiv- alent eff ect to a quantitative restriction.