#16778 - Legal Limits On European Law Making - European Human Rights Law

Legal limits on European law-making:

1. Competence

Article 5(1) TEU- The limits of Union competences are governed by the principle of conferral. The use of Union competences is governed by the principles of subsidiarity and proportionality.

Note the distinction between Article 114 TFEU, which permits qualified majority voting, and Article 113 TFEU, which requires that the Council act unanimously. The breadth of EU policy making may be demonstrated by Directive 93/13 EEC, Unfair Contract Terms, having a concern both for harmonisation issues but equally for consumer protection.

Equally, not that even in the absence of specific EU legislation, the Treaty may have a wide impact: Article 18 prohibits any discrimination on grounds of nationality.

Germany v Parliament and Council (Tobacco Advertising)

• EU introduces Directive which bans tobacco advertising.

• Germany argues that they do not have competence in this area, as tobacco advertising is not an activity which extends beyond the borders of individual member states (it tends to be on static objects). It is not enough for the internal market merely to be mentioned for the purposes of Article 114- it must actually contribute.

• The Court HELD

• A measure adopted on the basis of Article 114 must genuinely have as its object the improvement of the conditions for the establishment and functioning of the internal market.

• If this condition is fulfilled, the legislature cannot be prevented from relying on that legal basis on the ground that public health protection is a decisive factor in the choices to be made.

• It is clear that differences in advertising may cause barriers to trade. Equally, the trend to increasing hostility to tobacco advertising in Member States makes it probable that obstacles to the free movement of persons will arise in the future. However, this is not the case for ‘static’ advertising, in hotels, restaurants and cafés.

• The distortion must be appreciable: must actually contribute to eliminating appreciable distortions of competition.

• RESULT- Directive annulled in its entirety.

QUESTION: Do subsequent cases indicate a general power to regulate the internal market? Craig argues that the limits on Article 114 have been loosened or relaxed by subsequent case law.

Craig: Two possible readings of the case law delineating the scope of Article 114 TFEU

The positive reading:

Article 114 is central to the scheme of the treaty, the principle vehicle for the passage of harmonising measures. It is therefore legitimate for it to be given a broad interpretation, so as to provide the legal base for EU measures designed to enhance the establishment and functioning of the internal market. It is therefore legitimate for it to be given a broad interpretation, so as to provide the legal base for EU measures designed to enhance the establishment and functioning of the internal market.

The cautious reading:

While adhering to the (positive) decision in Tobacco advertising in form, subsequent case law has in reality undermined it in substance, and comes close to affording the EU a general regulatory power. This is so for a number of reasons: the ECJ has been willing to find some connection between national disparities and the four freedoms so as to trigger Art 114, without too close an inquiry as to the reality of the impact on those freedoms; it has legitimated resort to Article 114 where there are national disparities which could in the future impact on the internal market, subject only to the relatively lax standard that obstacles to trade must be likely to result; and it has affirmed that recourse to 114 is possible where the preceding conditions are met, notwithstanding that protection of, for example, public health is a decisive feature of the contested legislation.

Ex parte BAT

• The likelihood of member states implementing divergent rules on labelling and tar yields justified a Directive harmonising the area.

• Weatherill: there were significant arguments to the effect that the size required under the Directive for the health warning labels precluded a trader labelling effectively in compliance with the rules of more than a small number of Member States.

• The Court dealt with the subsidiarity issue by simply cross-referring to the paragraphs of the judgement which dealt with proportionality.

Swedish Match

• An attack on the banning of the placing on the market of snus. The litigation was driven by a Swedish producer of snus unable to sell the product anywhere in the EU apart from Sweden itself, who had negotiated a derogation in its act of accession.

• The Court ruled that the presence of public health considerations as a decisive factor in the shaping of the regime did not deprive it of a valid basis in Article 95 EC where conditions for recourse to that Article were satisfied.

• It was common ground that there were differences at the time of adoption of that directive, between the laws, regulations and administrative provisions of the Member States.

• Thus, the conditions were satisfied.

• The CONTRAST with the original Tobacco Advertising case is that the requirement of a genuine intention to improve the conditions for the establishment and functioning of the internal market was found.

• Weatherill: a revealing case: even a ban on a product may fall within the legitimate scope of harmonisation measures. This improves the functioning of the market as to safe products. There is a ‘kinder’ reading of the case, that the specific ban fell within the general legislative measure. One bans unsafe products in order to foment the trade of safe products. However, this is still extraordinarily permissive, and encourages the drafting of legislative measures which are broad not targeted.

Germany v Parliament v Council

• The Tobacco Advertising Directive annulled in Case C-376/98 was replaced. This new Directive was more narrowly drawn, focusing in particular on obstacles to free movement resulting from differences in national rules governing tobacco advertising. It focused particularly on the obstacles arising from advertising in the press and distortions of competition arising from sponsorship of sporting events.

• The Court found this Directive to be valid: the measure genuinely had the object of improving the conditions for the functioning of the internal market.

• Interestingly, the judgment set the bar for harmonization of laws in anticipation of future obstacles to trade as it being ‘likely’ they would emerge.

Vodafone

• A regulation was adopted which aimed to establish a common framework for the imposition of network charges throughout the EU.

• This was based on the probability that the issue of high charges while travelling abroad would eventually be tackled by the Member States individually: the EU chose to act in order to forestall measures which would probably have been taken by the Member States based on their residual competence as regards consumer protection rules. (Likely)

• A divergent development of national laws seeking to lower retail charges only, without affecting the level of costs for the wholesale provision of Community-wide roaming services, would have been liable to cause significant distortions of competition and to disrupt the orderly functioning of the Community-wide roaming market. (Appreciable)

• Weatherill: odd because why would MS lower roaming charges? IT would only harm the individual MS.

Inuit Tapiriit Kanatami

• A regulation was imposed with the purpose of establishing a harmonised and very restrictive set of rules concerning the placing on the market of seal products.

• Held, that the measure was within the competence of the EU.

Phillip Morris v Secretary of State for Health

• A tobacco directive appeared by its terms to allow the Member States to create further regulation, in relation to the standardisation of packaging of tobacco products.

• If Article 24(2) of Directive 2014/40 were interpreted as permitting Member States to maintain or introduce further requirements in relation to all aspects of the packaging of tobacco products, including those which have been harmonised by the directive, that would amount, in essence, to undermining the harmonisation effected by the directive with regard to the packaging of those products. Indeed, the consequence of such an interpretation would be to permit Member States to replace the requirements relating to packaging which have been harmonised by the directive with other requirements, introduced at national level, and to do so in breach of the rules laid down in Article 114(4) to (10) TFEU relating to the retention and introduction of national provisions derogating from a harmonisation measure.

• However, the Court accepted the interpretation which rendered the Directive compatible- that the Article permitting creation of further protection only applies to aspects of packaging which have not yet been harmonised. As such, there was no inconsistency with Article 114.

• This case is IMPORTANT for challenging the idea that harmonisation is based in economics and not in social policy- expressly permitting the creation of new, higher standards in some areas seems to be encouraging the distortions which the Court will eventually have to act on.

• AG Kokott: ‘Certainly, this kind of partial harmonisation means that products cannot automatically be exported from one Member State to another, even if their labelling and packaging complies with the requirements of the Directive in every respect, as each Member State may impose further requirements for non-harmonised aspects of product packaging. Nevertheless, such partial harmonisation also...