1.Operation Of The Internal Market

Question 1

Article 26 TFEU

Answer 1

1. Function

The Union will adopt measures with the aim of establishing or ensuring the functioning of the internal market

2. Free movement guaranteed

The internal market shall comprise an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured in accordance with the Treaty

Question 2

Primary mechanisms

Answer 2

1. Negative harmonisation
2. Positive harmonisation
3. Preventing State aid
4. Ensuring fair competition between private actors

Question 3

Negative harmonisation

Answer 3

1. Prohibition on restricting goods, services, people capital enforced in court
2. Derogations (ie. exceptions from prohibitions) allowed where restriction to free movement is necessary to protect public interest objectives
3. Remove offending national law that illegally restricts free movement unjustifiably -> Restoring free movement, leaving a ‘harmonised’ field for MS

Question 4

Positive Harmonisation

Answer 4

1. Remove national rules that will lead to regulatory gaps
2. EU rules need to provide common standards that everyone follows
3. EU rules pursue similar goals, resulting in a ‘harmonised’ approach

Question 5

Preventing State Aid

Answer 5

States tempted to subsidise to help withstand competition

Need strict rules to prohibit state aids due to anti-competitive effects

Question 6

Fair competition between private factors

Answer 6

Private entities may collude with each other, creating barriers to trade and preventing benefits of free movement.

Strict rules in place to prohibit anti-competitive behaviour

Question 7

‘Free’ movement models

Answer 7

~Non-discrimination
~Mutual recognition
~Market access

Question 8

Non-discrimination

Answer 8

Goods, services, people and capital should enjoy same treatment as those that originate in MS.

Direct- Law specifically discriminates
Indirect- The law doesn’t discriminate but its application on the facts does have a discriminatory effect

Question 9

Non-discrimination

Answer 9

Model about comparative equality- leaves autonomy alone, as long as regulation applies equally

Question 10

Mutual recognition

Answer 10

Originates in Cassis de Dijon case

~Based on non-discrimination model
~Recognises some rules are genuinely non-discriminatory but will be more burdensome for foreign goods

Question 11

Eg. MS A applies standards for a toy- same as standards for domestic and foreign toys.

MS B applies secondary foreign standard

Thus, toy faces dual regulatory burden, making it more difficult to freely move the toys between states

Answer 11

Solution:
CJEU developed mutual recognition principle- if a product has lawfully complied with the rules of one EU MS, then the other MSs should accept those products without applying further standards

Question 12

Based on idea of functional equivalence

Ie. Standards may vary but they are all sufficient to ensure basic standards of protection

Answer 12

Mutual recognition principle originally designed as a response to product protectionism, but accepted widely in internal market

Question 13

Market Access

Answer 13

Developed in response to the weaknesses of the discrimination model.

Questions whether the national rule prevents or hinders market access

Favoured by CJEU

Question 14

Important

‘Free’ movement about much more than just freedom from unequal treatment

Freedom from difficulty in engaging in cross-border movement

Answer 14

Reasons for favouritism of Market access;

~Flexibility to achieve policy goals

~Believe internal market should be about market access rather than non-discrimination

Question 15

Gebhard

Facts:

German national authorised to practice law in Germany.
Set up chambers in Milan describing himself as “avvocato”
Not registered with Milan bar
Suspended for failing to register.
Was registration an obstacle to freedom of establishment and as such, a breach of Art 49 TFEU
Argued that he had not “established” himself.

Answer 15

Held;

1. Considered established under Art. 49 TFEU
   While membership could be a condition of pursuing activities,
   it did not constitute establishment.
   Established as pursuing professional activity

Question 16

Commission v Italy (trailers)

Concerned rules prohibiting towing of trailers by motorcycles

Answer 16

Held;
‘Any other measure which hinders access of products originating in other Member States to the market of a Member state’ breaches Art 34 TFEU on free movement of goods, unless justified

Question 17

Commission v Greece (Opticians)

Highlights the difference between non-discrimination and market access

Facts
~Greek law prohibited qualified opticians from operating more than one opticians shop
… Treats Greek and foreign opticians badly, but equally, so lawful under non-discrimination model

Answer 17

In comparison

Under market access model ruled prohibition “effectively amounts to a restriction on the freedom of establishment
Notwithstanding the alleged absence of discrimination on grounds of nationality”

Therefore Unlawful unless Justified!!!

Non-discrimination model uses comparison between Greek and non-Greek opticians.
Market access model focusses solely on the perspective of non-Greek optician (ie. what stands in their way of getting onto the market)

Question 18

Problems with Market Access

Answer 18

~More intrusive into national regulatory autonomy

Serious implications on domestic legislatures- almost any national rule could have some effect on inter-state movement (Even if not intention)

Question 19

CJEU has recognised implication.

Therefore MS are not asked to justify national rules that have no practical impact on free movement

Answer 19

Keck case (concerning rules prohibiting retail at a loss)

Court disagreed that this national rule hindered free movement.
Insisted that measures only fall foul of Art 34 if discriminatory

Question 20

Problems

Answer 20

~Barriers to market access created where a rule makes it more costly to enter a market

~Barriers created by any regulation, as any regulation imposes and implies compliance costs

~Barriers created where rules interfere with intra-Union trade, but rules considered neutral to trade do not