European Business Law, the fourth volume in our series, shows how the European authorities simultaneously abolish all restrictions on access to and exercise of economic activities and support the growth of domestic markets, through the harmonization the internal legislation or the enactment of genuinely unified regulations.

European Business Law

Following Cassis de Dijon , the Article 34 prohibition has applied, according to the Court of Justice, to all commercial regulations likely to restrict trade between Member States, regardless of whether they are applied indistinctly to national and imported products, where they are not necessary to satisfy mandatory requirements “relating in particular to the effectiveness of fiscal supervision, the protection of public health, the fairness of commercial transactions and the defense of the consumer” or cannot be justified under Article 36. The scope of the prohibition has however been limited by the Keck and Mithouard judgment  to the characteristics of the product: regulations relating to selling arrangements - and not conditions relating to the product - and applying without discrimination to all traders and operations, are not likely to constitute measures having equivalent effect to a quantitative restriction.

The traditional Cassis de Dijon assessment method would have required the Court to pose two questions: although applying without distinction to imported and national products, is the regulation in question likely to hinder the free movement of goods, and, if the answer is yes, can it be justified by a general interest objective excluding the prohibition? With the Keck and Mithouard judgment, the Court prefers a test based on the nature of the State measure instead of a substantial control imposing an assessment of the effects and a balancing of the State and European interests. The scope of application of the new test is deduced from its definition: the Cassis de Dijon precedent is valid only for national rules directly concerning the products and does not apply to those relating to their placement on the market. Thus, a non-discriminatory measure relating to the sale of products does not constitute a measure having equivalent effect since it “is not by nature such as to prevent [the] access [of imported products] to the market or to impede access any more than it impedes the access of domestic products”. However, by referring to a mere disturbance to imports instead of always requiring actual foreclosure, the Court has opened up a gap into which many claims challenging purely commercial rules could fall. Any legislation on the marketing of a product, even when not discriminatory, is likely to impede trade insofar as the importer concerned may be compelled “either to adopt (marketing) systems which differ from one Member State to another or to discontinue a scheme which he considers to be particularly effective” . 

The order of priority for the relevant criteria means that such an impediment would no longer be considered as sufficient to classify the measure in question as a measure having equivalent effect and that the required discrimination can no longer result solely from the difference existing between the laws of the Member States in the area of commercial regulation. This solution seems justified. In effect, the intervention of the regulatory authorities is exclusively legitimated by the free movement objective. Insofar as the rules on marketing have more tenuous links with that objective than those directly applying to products, it is logical to have stricter conditions for the finding of discrimination in both cases. Whilst, in the first case, discrimination may still result from the mere difference between two national laws, it should not be found by the Court in the second case unless the implementation of the same national law leads to unfavorable legal treatment where products are imported from another Member State.

The system established by the Keck judgment has the advantage of maintaining the efficiency of the Dassonville precedent for all disguised quantitative restrictions while setting aside commercial laws in general. The limits to the expansionist nature of the control are no longer defined after the facts, using a casuistic assessment, but are fixed beforehand, by a rule that traders are able to know in advance. Above all, the Court no longer exercises unchecked the function of harmonization of the laws of the Member States, which comes under the competence of the legislative branch. 

Case 120/78 Rewe v Bundesmonopolverwaltung für Branntwein [1979] ECR 649, LawLex200500005788JBJ: national legislation fixing a minimum alcohol content for alcoholic beverages intended for human consumption.

Case C-267/91 Keck and Mithouard [1993] ECR I-6097, LawLex201100000270JBJ.

Case 286/81 Oosthoek [1982] ECR 4575, LawLex200900001497JBJ; Case 382/87 Buet and others v Ministère public [1989] ECR 1235, LawLex201100000335JBJ; Case C-369/88 Criminal proceedings against Delattre [1991] ECR I-1487, LawLex200900000553JBJ; Case C-60-89 Criminal proceedings against Monteil and Samanni [1991] ECR I-1547, LawLex200900001082JBJ; Case C-239/90 SCP Boscher and others v British Motors Wright and others [1991] ECR I-2023, LawLex200900002065JBJ; Case C-126/91 Schutzverband gegen Unwesen i.d. Wirtschaft v Rocher [1993] ECR I-2361, LawLex200900000431JBJ.

32. Principle