1.Operation Of The Internal Market Flashcards
Article 26 TFEU
- Function
The Union will adopt measures with the aim of establishing or ensuring the functioning of the internal market
- 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
Primary mechanisms
- Negative harmonisation
- Positive harmonisation
- Preventing State aid
- Ensuring fair competition between private actors
Negative harmonisation
- Prohibition on restricting goods, services, people capital enforced in court
- Derogations (ie. exceptions from prohibitions) allowed where restriction to free movement is necessary to protect public interest objectives
- Remove offending national law that illegally restricts free movement unjustifiably -> Restoring free movement, leaving a ‘harmonised’ field for MS
Positive Harmonisation
- Remove national rules that will lead to regulatory gaps
- EU rules need to provide common standards that everyone follows
- EU rules pursue similar goals, resulting in a ‘harmonised’ approach
Preventing State Aid
States tempted to subsidise to help withstand competition
Need strict rules to prohibit state aids due to anti-competitive effects
Fair competition between private factors
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
‘Free’ movement models
~Non-discrimination
~Mutual recognition
~Market access
Non-discrimination
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
Non-discrimination
Model about comparative equality- leaves autonomy alone, as long as regulation applies equally
Mutual recognition
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
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
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
Based on idea of functional equivalence
Ie. Standards may vary but they are all sufficient to ensure basic standards of protection
Mutual recognition principle originally designed as a response to product protectionism, but accepted widely in internal market
Market Access
Developed in response to the weaknesses of the discrimination model.
Questions whether the national rule prevents or hinders market access
Favoured by CJEU
Important
‘Free’ movement about much more than just freedom from unequal treatment
Freedom from difficulty in engaging in cross-border movement
Reasons for favouritism of Market access;
~Flexibility to achieve policy goals
~Believe internal market should be about market access rather than non-discrimination
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.
Held;
- 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
Commission v Italy (trailers)
Concerned rules prohibiting towing of trailers by motorcycles
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
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
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)
Problems with Market Access
~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)
CJEU has recognised implication.
Therefore MS are not asked to justify national rules that have no practical impact on free movement
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
Problems
~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
