As demonstrated above, there is a difference in the European Court of Justice's approach to measures restricting free trade in the Internal Market, depending whether it is categorised as hindering the free movement of goods or services respectively.287 Even though the European Court of Justice applies different approaches, the difference in fact seem to be limited. There seem to be a similar approach to dealing with restrictions and possible justification hereof whether it is
284 Verein für Konsumenteninformation and Karl Heinz Henkel, Case 167/00 (1 October 2002).
285 See 4.1.1.2.
286 See especially directive 93/13 (5 April 1993) on unfair terms in consumer contracts, directive 97/7 (20 May 1997) on the protection of consumers in respect of distance contracts and directive 2002/65 (23 September 2002) concerning the distance marketing of consumer financial services and amending directive 90/619 and directives 97/7 and 98/27. Directive 87/102 (22 December 1986) on the approximation of the laws, regulations and administrative provisions of the Member States concerning consumer credit and proposal for a directive on the harmonisation of the laws, regulations and administrative provisions of the Member States concerning credit for consumers, COM(2002) 443 (11 September 2002). See also Communication from the Commission on European Contract Law and the revision of the acquis, COM(2004) 651 (11 October 2004). Directive 84/450 (10 September 1984) concerning misleading and comparative advertising and directive 05/29 (11 May 2005) concerning unfair business-to-consumer commercial practices in the internal market and amending directive 84/450, directives 97/7, 98/27 and 2002/65 and regulation 2006/2004 ('Unfair Commercial Practices Directive').
287 See in general Stuyck, Jules, Case C-71/02, Herbert Karner Industrie-Auktionen GmbH v. Troostwijk GmbH, judgment of the Fifth Chamber of 25 March 2004, Court of Justice Common Market Law Review 41 (2004), p. 1683–1700, at p. 1690ff.
based on free movement of goods or services.288 The analysis applied by the court is, in principle and simplified, a weighing up the effect of and reasoning behind a restricting measure against the intentions behind the fundamental freedoms in the Internal Market (proportionality). Both freedoms comprise public policy (etc.) considerations which to a proportionate extent may justify both distinctly and indistinctly applied restrictions. Both freedoms also recognise a set of mandatory requirement which may, in a proportionate manner, be invoked to justify restrictive measures. There are even examples of situations where the European Court of Justice in dealing with one of the freedoms refers to case law concerning the other freedom.289 The main difference between the two freedoms seems to lie in the concept of certain selling arrangements, as elaborated under the free movement of goods.
As mentioned above, national provisions restricting or prohibiting certain selling arrangements may fall outside the scope of article 28 of the EC Treaty as 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.290 In Alpine Invest,291 concerning a ban on cold calling in the light of article 49 of the EC Treaty, the concept of certain selling arrangements was invoked. The European Court of Justice rejected that the prohibition in question was analogous to the above-mentioned selling arrangements, even though it was general and non-discriminatory and neither its object nor its effect was to put the national market at an advantage over providers of services from other Member States. The court maintained that the prohibition constituted a restriction on the freedom to provide cross-border services because it deprived the operators concerned of a rapid and direct technique for marketing and for contacting potential clients in other Member States.292 This ruling is not a clear rejection of the possibility to apply the concept of certain selling arrangement within the area of free movement of services.293 On the other hand, the court could be much clearer if it intended to copy this concept into the area of services within the meaning of article 28 of the EC Treaty.
However, certain selling arrangements may be caught by article 28 and all things being equal, it may be easier to justify a restriction under article 49 if it fulfil the
288 Craig, Paul and Búrca, Gráinne de, EU Law, third edition, Oxford University Press, 2003, p. 659.
289 See for example Schutzverband gegen unlauteren Wettbewerb v. TK-Heimdienst Sass GmbH, Case 254/98 (13 January 2000), paragraph 29. See also Barnard, Catherine, The Substantive Law of the EU -The Four Freedoms, Oxford, 2004, p. 371 with reference to Konsumentombudsmannen (KO) v. Gourmet International Products AB (GIP), Case 405/98 (8 March 2001), paragraph 21.
290 Criminal proceedings against Bernard Keck and Daniel Mithouard, Joined Cases 267/91 and 268/91 (24 November 1993), paragraphs 16 to 17.
291 Alpine Investments BV v. Minister van Financiën, Case 384/93 (10 May 1995).
292 Alpine Investments BV v. Minister van Financiën, Case 384/93 (10 May 1995), paragraphs 28 and 33 to 36.
293 It could be argued that it was considered a restriction because it concerned a total ban. See to that end Herbert Karner Industrie-Auktionen GmbH v. Troostwijk GmbH, Case 71/02 (25 March 2004), paragraphs 40 to 42 with reference to paragraph 37 of the Keck and Mithouard ruling presented above.
requirements established in the Keck ruling on certain selling arrangements.
It follows from article 50 of the EC Treaty that the provisions on services only apply in so far as the activity is not governed by the provisions relating to freedom of movement of goods. Where a national measure restricts both the free movement of goods and the freedom to provide services, the European Court of Justice will in principle examine it in relation to only one of those two fundamental freedoms where it is shown that, in the circumstances of the case, one of them is entirely secondary in relation to the other and may be considered together with it.294
It may not always be obvious when to refer a restriction to either of the provisions, especially in cases concerning the distribution of advertising material, and decision must be made in the light of the specific circumstances of each particular case.295 In Schindler,296 the sending of advertisements application forms and possibly tickets was considered as only steps in the operation of a lottery (service) and could not be considered independently under article 28 of the EC Treaty. In GB-INNO-BM,297 advertisement (the distribution of flyers) was examined solely in the light of article 28 because consumers (in frontier areas) may travel freely to the territory of another Member State to shop (goods) under the same conditions as the local population, and that that freedom for consumers is compromised, if they are deprived of access to advertising available in the country where purchases are made.
In Herbert Karner v. Troostwijk,298 the court rejected to consider the marketing regulation in question in the light of article 49 because the dissemination of advertising was found to be a secondary element in relation to the sale of the goods in question. The advertisement giving rise to the case was posted in both a sales catalogue and on the Internet. The Advocate General pointed out that if advertising is seen as part of the general commercial process of selling goods, that rule must be examined exclusively from the point of view of the free movement of goods, whereas if advertising is seen as a separate activity, the question arises whether the prohibition in question is compatible with the provisions on the freedom to provide services.299 The Advocate General emphasised that decision must be made in the light of the specific circumstances of each particular case, and he attached importance to the fact that the advertisement was produced and published by the
294 Canal Satélite Digital SL v. Adminstración General del Estado, and Distribuidora de Televisión Digital SA (DTS), Case 390/99 (22 January 2002), paragraph 31 with references.
295 Herbert Karner Industrie-Auktionen GmbH v. Troostwijk GmbH, Opinion of Mr Advocate General Alber, Case 71/02 (8 April 2003), paragraph 92.
296 Her Majesty's Customs and Excise v. Gerhart Schindler and Jörg Schindler, Case 275/92 (24 March 1994), paragraphs 22 to 25.
297 GB-INNO-BM v. Confédération du commerce luxembourgeois, Case 362/88 (7 March 1990), paragraph 8.
298 Herbert Karner Industrie-Auktionen GmbH v. Troostwijk GmbH, Case 71/02 (25 March 2004), paragraphs 46 and 47.
299 Herbert Karner Industrie-Auktionen GmbH v. Troostwijk GmbH, Opinion of Mr Advocate General Alber, Case 71/02 (8 April 2003), paragraph 91.
seller himself and thus is part of the sale of the goods in question, whereas the activity would fall within the scope of article 49 of the EC Treaty if the advertisement was produced and published by a third party, for example by an independent advertising agency.300
Advocate General Alber elaborated in Karner v. Troostwijk on how the national court should asses advertisements on the Internet if it would establish that the advertisement in question was placed on the Internet by a third party, including for example a parent company with an independent legal personality.301 In that case, the national prohibition on certain advertisement would have to be examined with a view also to determining its compatibility with the freedom to provide services. The Advocate General noted that the freedom to provide services could have been restricted if the third party would be established in another Member State and it could not provide the services in question for the Austrian company Troostwijk. If the third party would also be established in Austria, the freedom to provide services could have been restricted if the advertisement could not be distributed via the Internet to other Member States where such advertisements are in principle permitted.
In Canal Satélite Digital,302 it was established that it in the field of telecommunications is difficult to determine generally whether it is free movement of goods or freedom to provide services which should take priority. In the case in question the court noted that the two aspects often are intimately linked and that the supply of hardware sometimes is more important than connected services and that it in other circumstances is the economic activities of providing know-how or other services which are dominant.303 The court found that the restriction in question should be examined simultaneously in the light of both articles 28 and 49 of the EC Treaty. The court examined, apparently without distinction between the freedoms, whether the national measure pursued an objective of public interest which complied with the principle of proportionality (that is to say whether it is appropriate for securing the attainment of that objective and does not go beyond what is necessary in order to attain it).304
In the situations dealt with in this thesis, the Business's activities may fall under article 28 and/or article 49 depending on the underlying activity and in particular the restriction in question. Restrictions concerning the goods or services sold by the Business will fall under the respective provisions. Advertisement (i.e. the Business's website) in connection to such sales would, as a starting point, follow
300 Herbert Karner Industrie-Auktionen GmbH v. Troostwijk GmbH, Opinion of Mr Advocate General Alber, Case 71/02 (8 April 2003), paragraph 93.
301 Herbert Karner Industrie-Auktionen GmbH v. Troostwijk GmbH, Opinion of Mr Advocate General Alber, Case 71/02 (8 April 2003), paragraphs 94 to 98.
302 Canal Satélite Digital SL v. Adminstración General del Estado, and Distribuidora de Televisión Digital SA (DTS), Case 390/99 (22 January 2002).
303 Canal Satélite Digital SL v. Adminstración General del Estado, and Distribuidora de Televisión Digital SA (DTS), Case 390/99 (22 January 2002), paragraph 32.
304 Canal Satélite Digital SL v. Adminstración General del Estado, and Distribuidora de Televisión Digital SA (DTS), Case 390/99 (22 January 2002), paragraph 33.
the nature of the product offered (goods or services), but the advertisement may also be treated as an independent service as suggested by Advocate General Alber in Karner v. Troostwijk.
2.6.1. Goods, Services and Information Society Services.
Information society services, as discussed above,305 are not characterises by the underlying product which is offered, but is determined by the definition, including in particular whether it is carried out online. Activities which takes place off-line are not included in the definition, and it does not concern legal requirements relating to goods or the delivery hereof. Of particular interest for this thesis is that the Business's marketing on the website and possible online delivery of services is included in the definition. This will have consequences, in particular, for the treatment of certain selling arrangements as defined by the Keck ruling. In situation where it, under the Keck-doctrine, is justified to impose national marketing rules on foreign operators' activities in that state, such marketing rules must not restrict the freedom to provide information society services within the meaning of article 3(2) of the 2000 E-Commerce Directive.
Even though a justified selling arrangement, by definition, is not a quantitative restriction or a measure having equivalent effect within the meaning of article 28 of the EC Treaty, it may none the less constitute a restriction within the meaning of the 2000 E-Commerce Directive. This is in particular true when the provision is construed in the light of article 3(1) and the overall goal of the directive which is to ensure that businesses only needs to comply with the legislation of one Member State.306 Restrictions may, however, be justified under the limited scope of the exception in article 3(4) of the 2000 E-Commerce Directive.
In so far as restrictions do not fall under the coordinated field or do not concern information society services, the restrictions will have to be examined under the fundamental freedoms of the EC Treaty and not under the E-Commerce Directive.