internal market law Flashcards
Name the fundamental
freedoms
*Goods
*Persons
◦Workers
◦Establishment
*Capital
*Services
Do the fundamental freedoms
have direct effect?
All internal market freedoms are capable
of having direct effect: Individuals may
directly invoke them before MS courts to
challenge discriminations or restrictions
affecting their exercise of free movement
rights.
What is a good?
= Products which can be valued in money
and which are capable, as such, of
forming the subject of commercial
transactions (7/68 – Commission v Italy
(art treasures))
What is a worker?
= a person performs genuine and
effective economic activity for and
under the direction of another person
in return for remuneration
(Lawrie Blum 66/85)
What constitutes service?
= a person performs a task in return
for remuneration NOT under the
direction of another person and
WITHOUT a permanent
establishment
What constitutes establishment?
“The concept of establishment within the
meaning of the Treaty is therefore a very broad
one, allowing a [Union] national to participate,
on a stable and continuous basis, in the
economic life of a Member State other than his
State of origin and to profit therefrom, so
contributing to economic and social
interpenetration within the [Union] in the sphere
of activities as self-employed persons”
(Gebhard, C-55/94)
What constitutes capital?
The transfer of value in the form of real
and monetary capital, which regularly
represents an investment at the same
time. This includes real capital (company
shares, real estate), monetary capital
(loans, credits, securities) and capital
transactions of a personal nature
(inheritances, gifts).
Investment in companies
- Freedom of establishment: shareholdings that
make it possible to exercise a definite influence
on the decisions and management of this
company and to determine its activities - Freedom of movement of capital: shareholdings
which makes it possible to participate effectively
in the management of that company and its
control (so-called direct investment), as well as
the acquisition of securities on the capital market
for the sole purpose of investing money without
wishing to influence the management and control
of the company (so-called portfolio investment)
What is the personal scope
about?
- Who has rights under the internal market freedoms?
Union citizen
(family members and non-EU
citizen with comparable rights):
Free movement of workers
Freedom of establishment
Freedom to provide and
receive services
Regardless of nationality:
Free movement of goods
Free movement of capital and
payments
What is the issue of territorial
scope?
*Cross-border situation→ Competence
question
*No purely internal situations, e.g.
worker takes a new job in another
Member State, goods cross the border
*… but broad interpretation: e.g.
potential cross-boarder situation (C321-324/94 – Pistre)
Who has obligations under the
internal market freedoms?
Primary addressee = Member State
*Host state
*Home state?
oSpecial provision for free movement of
goods: Art. 35 TFEU
oBut: similar for other market freedoms (e.g.
C-384/93 – Alpine Investments)
Are non-state actors covered
by the fundamental freedoms?
- General rule for all market freedoms that non-state
actors are not covered by internal market freedoms - Exceptions for all market freedoms
◦ Non-state actors exercising regulatory competence
conferred by public authorities (266 and 267/87 – API)
◦ Non-state actors attributable to the state, e.g. financed,
created, staffed (249/81 – Commission v Ireland (BuyIrish))
◦ Failure to protect the internal market rights against
private acts (C-265/95 – Commission v France
(Spanish strawberries))
Professional bodies and other
collective organizations
*Re-erecting removed state barriers
*Private governance (state-like function)
*No escape into private law (growing
privatisation)
→ Collective organisations: sport associations,
bar associations, trade union, etc.
What constitutes a
discrimination or restriction of
the internal market freedoms?
*Direct discriminations
*Indirect discriminations
*Restrictions (Dassonville)
➢ Exception: Keck and Mithouard –
situations
What is considered indirect
discrimination?
Formally, a provision is not linked to the origin
stemming from another member state, but to a
criterion which, as a result, places domestic
goods, persons, etc. in a better position than
those from other member states.
= same burden in law, different burden in fact
What constitutes a restriction?
Restriction (Dassonville)
* Free movement of goods = „All measures enacted by Member
States which are capable of hindering, directly or indirectly, actually
or potentially, intra-[Union] trade are to be considered as measures
having an effect equivalent to quantitative restrictions.“ (8/74 –
Dassonville)
* Other market freedoms = „National rules which, even potentially,
prohibit, impede, hinder, restrict and who are liable to hamper or to
render less attractive the exercise of the individual’s right to free
movement“ (e.g. C-55/94 – Gebhard)
→ Principle of mutual recognition (120/78 – Cassis de Dijon)
Keck and Mithouard (C-267 and
268/91) exemption
Restriction → Exception (Keck and Mithouard –
situation)
℗ Hardly any regulation is conceivable that does not in some
way restrict EU foreigners in their activity according to the
Dassonville formula. This leads to a loss of member-state
competence (subsidiarity principle).
As long as the principle of mutual recognition is not violated
and a non-discriminatory market access option exists, the
Dassonville formula is too comprehensive.
“By contrast, contrary to what has previously been
decided, the application to products from other
Member States of national provisions restricting or
prohibiting certain selling arrangements is not such
as to hinder directly or indirectly, actually or
potentially, trade between Member States within the
meaning of the Dassonville judgment, so long as
those provisions apply to all relevant traders
operating within the national territory and so long
as they affect in the same manner, in law and in
fact, the marketing of domestic products and of those
from other Member States.
*Alignment of the jurisprudence to Keckexemption for the freedom of goods →
similar underlying logic
*Rules which merely structure the market
but do not hinder access to the market,
do not constitute restrictions
Restriction → Exception (Keck and Mithouard –
situation)
* Early case law
◦„Certain selling arrangements“ (C-267 and 268/91 –
Keck and Mithouard): free movement of goods
◦ Too uncertain and indirect“ (C-190/98 – Graf): other
market freedoms
* Newer case law: market access approach (C-110/05
– Commission v Italy (trailers))
Access to an activity
e.g. degrees:
Affects market access =
Always a restriction
Exercise of an activity
e.g. working times → Who, When,
Where, How?:
No restriction if
a) Indistinctly applicable
measure (principle of
universality)
b) Affect in the same manner, in
law and in fact, the marketing
of domestic products and of
those from other Member
States (principle of neutrality)
What is the difference between
derogations and justifications?
Public service derogation for free
movement of persons, Arts. 45(4), 51, 62
TFEU, e.g. police force → special
allegiance to the state
„Do not apply“
→ No proportionality
What are treaty basedjustifications?
Treaty-based justifications, e.g. public policy,
public security
* Free movement of goods, Art. 36 TFEU
* Free movement of workers, Art. 45(3) TFEU
* Freedom of establishment, Art. 52 TFEU
* Freedom to provide and receive services, Art.
62 TFEU
* Free movement of capital and payments, Art.
65 TFEU
When can one use overriding grounds
in the public interest for justification?
120/78 – Cassis de Dijon
1) No direct discrimination
2) No purely economic measure
3) Non-exhaustive list of reasons
e.g., commercial fairness, consumer
protection, environmental protection etc
When is a measure
proportional?
i. Suitability: measure must be suitable to
achieve the goal (e.g. C-169/08 – Sardegna)
ii. Necessity: measure must not go beyond
what is necessary to achieve the goal (e.g.
C-169/7 – Hartlauer)
iii. Appropriateness: no excessive impact on
the market freedoms, balancing competing
interests (e.g. C-446/08 – Solgar Vitamins
Fundamental Rights
Case C-368/95 – Familiapress
“Where a Member State relies on overriding requirements, such
as maintaining press diversity, […] in order to justify rules
which are likely to obstruct the exercise of free movement of
goods, such justification must also be interpreted in the light
of the general principles of law and in particular of fundamental
rights. Those rights include freedom of expression […]. A
prohibition on selling publications, which offer the chance to take
part in prize competitions may, in that context, detract from
freedom of expression. [Freedom of expression], however, permit
derogations […] for the purposes of maintaining press diversity,
in so far as they are prescribed by law and necessary in a
democratic society.”
1) Special rules
*Art. 110 TFEU: fiscal barriers to trade
*Art. 38 et seq. TFEU: agricultural
products
*Art. 346 ff. TFEU: trade in arms
*Fully harmonised secondary legislation
2) Scope
a) Material
b) Personal
c) Territorial
d) Temporal
Addressees
a) Primary addressee = Member State
* Host state
* Home state
oSpecial provision for free movement of goods: Art. 35
TFEU
oBut: similar for other market freedoms (e.g. C-384/93 –
Alpine Investments)
b) Non-state actors
General rule for all market freedoms that nonstate actors are not covered by internal market
freedoms
Exceptions for all market freedoms
* Non-state actors exercising regulatory competence
conferred by public authorities (266 and 267/87 –
API)
* Non-state actors attributable to the state, e.g.
financed, created, staffed (249/81 – Commission v
Ireland (Buy-Irish))
* Failure to protect the internal market rights against
private acts (C-265/95 – Commission v France
(Spanish strawberries))
Only recognized in the context of free
movement of workers (C-281/98 – Angonese)
Discriminations/restriction
- types of discrimination and cases for restriction
- Direct discriminations
- Indirect discriminations
- Restrictions (Dassonville)
➢ Exception: Keck and Mithouard –
situations
Direct discrimination
= If a national rule directly contains less
favourable treatment of nationals of other
member states.
Indirect discrimination
= Formally, a provision is not linked to the
origin stemming from another member state,
but to a criterion which, as a result, places
domestic goods, persons, etc. in a better
position than those from other member states.
Restriction (Dassonville)
- Free movement of goods = „All measures enacted by Member
States which are capable of hindering, directly or indirectly, actually
or potentially, intra-[Union] trade are to be considered as measures
having an effect equivalent to quantitative restrictions.“ (8/74 –
Dassonville) - Other market freedoms = „National rules which, even potentially,
prohibit, impede, hinder, restrict and who are liable to hamper or to
render less attractive the exercise of the individual’s right to free
movement“ (e.g. C-55/94 – Gebhard)
→ Principle of mutual recognition (120/78 – Cassis de Dijon)
Derogations
„Do not apply“
Public service derogation for free
movement of persons, Arts. 45(4), 51,
62 TFEU, e.g. police force
= special allegiance to the state
How can discriminations/restrictions be justified?
a) Grounds
i. Treaty-based justifications
ii. Overriding grounds in the public
interest (Cassis de Dijon)
b) Proportionality test
c) Fundamental rights
How can discriminations/restrictions be justified?
a) Grounds
i. Treaty-based justifications, e.g. public
policy, public security
* Free movement of goods, Art. 36 TFEU
* Free movement of workers, Art. 45(3) TFEU
* Freedom of establishment, Art. 52 TFEU
* Freedom to provide and receive services, Art.
62 TFEU
* Free movement of capital and payments, Art.
65 TFEU
ii. Overriding grounds in the public interest
(120/78 – Cassis de Dijon)
* No direct discrimination
* No purely economic measure
* Non-exhaustive list of reasons of
mandatory requirement: e.g. protection of the
environment (302/86 – Commission v Belgium (beer bottles)),
consumer protection (120/78 – Cassis de Dijon), protection of
fundamental rights (C-112/00 – Schmidberger)
How can discriminations/restrictions be justified?
b) Proportionality
i. Suitability: measure must be suitable to
achieve the goal (e.g. C-169/08 – Sardegna)
ii. Necessity: measure must not go beyond
what is necessary to achieve the goal (e.g.
C-169/7 – Hartlauer)
iii. Appropriateness: no excessive impact on
the market freedoms, balancing competing
interests (e.g. C-446/08 – Solgar Vitamins)
How can discriminations/restrictions be justified?
c) Fundamental Rights (C260/89 – ERT)
- Any justification must be appraised in light
of EU fundamental rights - Balancing exercise between fundamental
rights and the mandatory requirement (C368/95 – Familiapress)
