The three issues to be discussed pertain to thefree movement of goods, free movement of people and EU citizenship, and thedirect effect of directives. Where Cindy is concerned, it must primarily beestablished that “fruit cordials” constitute as goods under Art 30 TFEU1,as they are “products which can be valued in money and which are capable, assuch of forming the subject of commercial transactions.”2There are several issues pertaining to expanding into the EU market. Principally,to facilitate trade between members, Art 3 EC3eliminates customs duties and quantitative restrictions.
The primary question iswhether the prohibition of express food advertising and the limitation on theshape of the cordials by national law complies with EU law considering they areMeasures Equivalent to Quantitative Restrictions? 4MEQRs are in breach of art 34 if they fall under the Dassonville formula, whichbroadly defines MEQRs as “all trading rules enacted by Member States whichare capable of hindering directly or indirectly, actually or potentially,intra-Community trade”5. Directive 70/506divides MEQRS into distinctly and indistinctly applicable MEQRs. Those placedon the fruit cordials are indistinctly applicable as they apply to bothdomestic and imported products7.Due to the nature of their application, the courts have adopted a less strictapproach towards MEQRs as they are often national differences between EU MemberStates rather than protectionist measures aiming to discriminate againstimports. Cassis established two rules toallow indistinctly applicable MEQRS to stand and fall outside of art 34: therule of mutual recognition and the rule reason. Under the rule of mutualrecognition, “there is no validreason why, provided that they have been lawfully produced and marketed in oneof the Member States, the products should not beintroduced into any other Member State.
“8 Thus,if the fruit cordials meet the standards of country X, then they should, byvirtue of mutual recognition, meet the standards of country Y. As for the rule of reason, indistinctlyapplicable MEQRS will fall outside of art 34 if they satisfy certain mandatoryrequirements. The list is non-exhaustive, however what pertains to the ban onadvertising and the shape of the bottles would be “the fairness of commercialtransactions and the defence of the consumer” and public health. The general rule is that if a measure isnecessary then it will be allowed under the rule of reason. However, it must beproportionate.
9 There is a distinction between productrequirements, which relate to the goods themselves (e.g form, size, weight,labelling, packaging, etc.) and sellingarrangements, which relate to extrinsic qualities like advertising and rulesregarding when and by whom goods may be sold.10Keck established that where a measure is indistinctly applicable, ifthat measure constituted a ‘selling arrangement’, it would not breach Article34, but subject to two requirements: if provisions apply to all effectedtraders operating within the national territory and they affect in the samemanner, in law and fact, the marketing of domestic and imported products. Applying these to the two issues, the rule thatfruit cordials must be sold in “tall, thin bottles” as to prevent confusion isa product requirement. Whereas the prohibition on the express advertising offoodstuffs in magazines is a selling arrangement. Regarding the shape and sizeof the bottle, it is unlikely that this product requirement will fall outsideof article 34 due to primarily the mutual recognition rule.
However, article 34captures dual burden cases as such. For instance, Belgian law that restrictedmargarine to cube-shaped tubs was prohibited because margarine was lawfullysold in other types of packaging elsewhere in the EU11.If the rule of reason is incorporated, such a requirement would bedisproportionate where labelling would suffice, and would impose a dual burdenon the importer.
However, labelling as to the country of origin is far moreproportional and can extend protection towards consumers just as effectively asthis would ‘hinder the free movement of goods less.’12Although, Lasa argues that labelling does not provide adequate protection for consumersand may mislead them.13It may also be the case that a strict application of the Court’s case law willresult in a ‘labelling jungle’.14 As for the prohibition on advertising, the linebetween product requirement and selling arrangement is uncertain15.It is unlikely however that it would be a product requirement, although anadvert may constitute as a product requirement.16A general prohibition on advertising beverages with an alcoholic strength above23 degrees in the media, streets, highways, cinemas and public transportamounted to an MEQR although it was non-discriminatory.17Where proceedings were brought against a French firm for distributingcatalogues and brochures infringing German law which prohibits eye-catchingprice comparisons, the law was held by the court to be an MEQR.18 This decision was reached via mutualrecognition.
However, where an advertising restriction affected the marketingof products of other Member States in the same way as domestic ones, it was notconsidered an MEQR.19This perhaps is relevant to Cindy’s situation in that the law applies todomestic and EU producers alike. However, AG Jacobs believes that generally arestriction on advertising will have a definitive impact on EU producerswishing to expand into a different market than on already established domesticproducers. He argues that advertising is fundamental, as it allows producers”to persuade consumers that their goods or services are worth buying”20.Also, it is fundamental in terms of launching new products and accessing newmarkets, as “without advertising it would be much easier for establishedmanufacturers to retain their existing market share, because prospective marketentrants would find it difficult to gain foothold.”21This, in some markets will create monopolies and inhibit competition, perhapsfailing then to protect consumers from extortionate pricing. Therefore, hesuggests a market access test as an alternative to Keck.
If the proposed testis applied to Leclerc-Siplec22,a partial ban on advertisement will not amount to substantial restriction onmarket access. On the other hand, if the test is applied to AlpineInvestments, it would. Weatherill and Beaumont note thatthere is a risk ‘that the Court has introduced a legal test that tends to tip thebalance away from legitimate social protection towards a deregulated (perhapsunregulated) free market economy in which standards of, inter alia, consumerprotection will be depressed’23.Establishing directives to harmonize the law in this area will post probablyentail vague clauses, which would pose a risk for producers, as they would notbe certain as to what constitutes lawful commercial behaviour.
Hence, it maydeter commerce and harm the single market.24Given these cases, if Cindy can prove that this ban on advertising impedesmarket access, then she will be able to proceed with her advertising campaign. Moving then to Ken who is unemployed, not ajobseeker, student or a taxpayer; he will not be able to enjoy rights under Art45 TFEU. Since Ken is an EUcitizen and by virtue of the direct application of Art 20(1) TFEU he hasthe right to enjoy theright of residence in country Z25. This right however isnot absolute and is subject to limitations.
Where EU citizens were unemployed,showed no signs of being employed, and were claiming income support from the UKgovernment, they were required to leave the UK.26 An EU citizen has theright to reside in another EU Member State for up to three months withoutconditions or formalities. If they want to stay for a period longer than threemonths, they must either be workers, have sufficient resources andcomprehensive sickness insurance, be enrolled at a private or publicestablishment, or be family members accompanying a resident. While anEU citizen has the right to enjoy social advantages on equal terms withnationals27,’it is for each Member State, having due regard to union law, to lay down theconditions for the acquisition and loss of nationality’28 Ken was able to reside in country Z for a yearon the basis of having ‘sufficient resources’, when Cindy was financing hisstay. He was also entitled to social assistance at that time. However, now thatshe has decided to refrain from sending him money, he no longer fulfils any ofthe four conditions.
Therefore, he will no longer be entitled to socialassistance. Anyone not classed as a worker must ‘not becomea burden on the social assistance system of the host Member State during theirperiod of residence.’29A Member State musttherefore have the possibility, pursuant to Article 7 of Directive2004/38, of refusing to grant social benefits to economically inactive Unioncitizens who exercise their right to freedom of movement solely in order toobtain another Member State’s social assistance although they do not havesufficient resources to claim a right of residence. However,it must be noted that economically inactive EU citizens cannot be assumed to bea burden on the social assistance system. Each case must be judgedindividually. However, Article 7(1)(b) is now construed as “seeking toprevent economically inactive Union citizens from using the host Member State’swelfare system”.30It should be noted that although one person cannot be described as an’unreasonable burden’ for a Member State, it is however the accumulation of allindividual claims creates that burden.
31This has perhaps opens the doors for ‘benefit tourism’. However, should also benoted the Brey case concerned non-contributory benefits, and thus can bedistinguished from Ken’s case. Therefore, Member States are entitled todistribute social security benefits depending on residence, and this does notconstitute ‘systematic verification’ contrary to Article 14(2) of the Directive,32as reiterated in R(Gureckis)v SSHD33.However, R(Gureckis) quashed the policy of removing EEA national rough sleepersfor reasons including the application of ‘systematic verification’ anddiscrimination, thus it is likely that Ken would not get deported, but thisdoes not mean that he will be entitled to housing benefits. It is recommended thatKen registers as a job-seeker with the relevant employment office, as when hedoes so, he retains the status of worker for six months, retaining his right toreside in country Z, and consequently may be able to rely on the principle ofequal treatment in Article 24(1). 34 With regards to Barbie’s situation, it isestablished law that the Commission can act against Member States that breachEU law35,in recognition of the ‘new legal order’ emphasizing that EU law is supreme tonational law36,and as such should be integrated into the Member States’ legal systems.
37Where a national judge is faced with a conflict between national and EU law, hehas to ‘dis-apply’ or set aside the national law but not invalidate it.38 Regarding the EU directive in Barbie’ssituation provides that where unpaid internships for persons aged under 25years old exceeds two weeks in duration, any time after the two weeks durationshould be paid at the minimum hourly rate applicable for equivalent workers inthat country. This conflicts with the Act of Parliament in force in country X,which provides for a minimum hourly pay for those over 18 who must be employeesnot interns. Art.
288(3) TFEU provides that ‘a Directiveshall be binding as to the result to be achieved, upon each Member state towhich it is addressed, but leave to the national authorities the choice of form& methods.’ Directives can have a direct effect if it appears that they arecapable of having it, and can be given effect through the estoppel argument.39For that to happen, the transposition period must have expired, which has inBarbie’s situation.40The Directive must also give clearly identifiable rights to individuals, whichit also does,41therefore the following will apply. Directivesonly have a vertical direct effect, meaning that a claim can be brought againstthe state or an emanation of the state42and not an individual. Thus, Barbie cannot bring a claim against her employer,but she can bring a claim against Middling Water if it is considered anemanation of the state. An emanation of a state must be subject to stateauthority, control or have special powers43.
It must also provide a public service.44Farrell45affirmed that Foster is not a cumulative test, and that for an entity to be anemanation of state, it must satisfy one of the two elements in Foster. Middlingwater appears to be an emanation of the State thus direct effect of thedirective would apply to them. Craig argues that a Foster line of case lawembodies an “inverse principle of state orvicarious responsibility, whereby a body that might be in some way connectedwith the state is held responsible for the failing of the State itself,even though it had no control over the relevant event.”46 One must notethat through indirect effect, a directive is capable of being appliedhorizontally.
As noted before, the interpretation of ‘state’ is wide, and thusnational courts are part of the State, hence their obligation to interpretnational law in line with EU law (harmonious interpretation).47 With regards to state liability fornon-implementation, Barbie may gain remedy via suing the State for its failureto implement legislation when it was obliged to do so. This is contingent uponthree conditions: if the Directive gave rights to individuals, identifiable withinthe working of the direction, and there was a causal link between the State’sbreach and the damage suffered by the individual.48The breach of EU law must also be ‘sufficiently serious’.49However, it has been argued that “acceptance of state liability for judicialacts” would undermine the independence of the judiciary.50 A claim could also be made on the grounds ofthe non-discrimination principle. In Mangold51,where although the transpiration had not expired, the ECJ ruled that theapplicant could rely on the EU general principle of non-discrimination againstage to challenge fixed-terms of a contract.
Even in cases involving privateparties, Directive 2000/78 can be invoked to set aside conflicting provisions.52It seems as though this is an attempt “to give greater effect tounimplemented directives that comes at the expense of legal certainty”. It isargued that Mangold parallels with the decision in Portgás in thesense that the aim to ensure the implementation of directives by any meansregardless of how this is procuring a “new type of direct effectgeometry.”531 Consolidated version of the Treaty on the Functioning of theEuropean Union 2012 OJ C 326/01.2 Case 7/68 Commission v Italy Italian Art Case 1968 ECR423.3 Consolidated version of the Treaty Establishing theEuropean Community 2002 OJ C325.4 ibid Art 34-36 TFEU.
5 Case 8/74 Procureur du Roi v Dassonville 1974 ECR 837; Directive 70/50 (1969).6 Commission Directive 70/50/EEC on the abolition of measures which have an effect equivalent to quantitativerestrictions on imports and are not covered by other provisions adopted inpursuance of the EEC Treaty 1969 OJ L 13.7 Case 120/78 Rewe- Zentral AG v Bundesmonopolverwaltung furBranntwein (De Cassis) 1979 ECR 649.8 Ibid.9 Cassis n(5).10 Cases 267 and 268/91 Criminal Proceedings against Keck vMithourad 1993 ECR I-6097.
11 Case 261/81 Walter Rau Lebensmittelwerke v DeSmedt PVBA 1982 ECR 396.12 Ibid.13 H.C. Von Heydebrand u.
d. Lasa, ‘Free movement of foodstuffs, consumer protection and food standards in the European Community: has the Court of Justice got it wrong?’ 1991 16 European Law Review 391, 411.14 Paul Craigand Grainne de Burca: EU Law (1st end, OUP 2015) 15 StephenWeatherill, ‘After Keck: Some Thoughts On How To Clarify The Clarification’ 1996 33(5) CommonMarket Law Review 887–908.16 C-470/93 Verein gegen Unwesen in Handelund Gewerbe Köln e.V. v Mars 1995ECR I-1923.
17 Cases C-1/90and C-176/90 Aragonesa de Publicidad Exterior SA and Publivía SAE vDepartamento de Sanidad y Seguridad Social de la Generalitat de Cataluña 1991ECR I-4151.18 Case C-126/91Schutzverband gegen Unwesenin der Wirtschaft e.V. v Yves Rocher GmbH 1993 ECRI-2361.
19 Case C-292/92 Ruth Hünermund and others vLandesapothekerkammer Baden-Württemberg 1993 ECR I-6787.20 Case C-412/93 Société d’ImportationEdouard Leclerc-Siplec v TF1 Publicité SA and M6 Publicité SA1995 ECRI-00179, Opinion of AG Jacobs.21 Ibid n(20).22 Case C-412/93 Société d’Importation Edouard Leclerc-Siplec vTF1 Publicité SA and M6 Publicité SA1995 ECR I-00179.23 S Weatherill and P Beaumont, EU Law(3rdedn, Penguin 1999) 608.24 Hugh Collins, ‘Harmonisation by example: European lawsagainst unfair commercial practices’ 2010 Modern Law Review 73(1) 89-118.25 Case C-200/02 Kunqian Catherine Zhu and Man LavetteChen v Secretary of State for the Home Department 2004 ECR I-09925.
26 R v Secretary of State for the Home Department, exParte Vitale and Do Amaral 1996 2 CMLR 587.27 Art.18 TFEU, (n 1) OJ C 326/01.28 CaseC-192/99, The Queen v Secretary of State for the Home Department, ex parte:Manjit Kaur 2001 I-01237.29 Article 7(1)(b) Directive 2004/38/EC on the rightof citizens of the Union and their family members to move and reside freelywithin the territory of the Member States 2004 OJ 2 158/77.
30 Case C-333/13, Elisabeta Dano and Florin Dano vJobcenter Leipzig 2014 ECR 2358.31 Case C?299/14,Vestische Arbeit Jobcenter Kreis Recklinghausen v Jovanna García-Nieto andOthers 2016 ECR 114.32 Case C-308/14, European Commission v United Kingdomof Great Britain and Northern Ireland 2016.33 R (on the application of Gureckis) v Secretary ofState for the Home Department; R (on the application of Cielecki) v Secretaryof State for the Home Department; R (on the application of Perlinski) vSecretary of State for the Home Department 2017 EWHC 3298.34 Directive 2004/38/EC on the right of citizens ofthe Union and their family members to move and reside freely within theterritory of the Member States 2004 OJ 2 158/77.35 Article 258 TFEU (n 1) OJ C 326/01.
36 Case 26/62 NV Algemene Transport- en Expeditie Ondernemingvan Gend & Loos v Netherlands Inland Revenue Administration 1963 ECR1.37 Case 6/64Flaminio Costa v E.N.E.
L. 1964 ECR 585.38 Case 106/77Amministrazione delle Finanze dello Stato v Simmenthal SpA 1978 ECR 629.39 Case 41/74 Van Duyn v Home Office 1974 ECR 1337.
40 Case 148/48 Pubblico Ministero v Tullio Ratti 1979 ECR1629.41 Case 43/75 Defrenne v SABENA (No.2) 1979 ECR 1365.42 Case 152 /84 M.
H. Marshall v Southampton and South –WestHampshire Area 1986 ECR 0723.43 Case C-188/89 Foster v British Gas plc 1990 ECR1-3313 para 18.44 ibid para 20.45 Case C?413/15 Elaine Farrell v Alan Whitty and Others2017 ECR 745.
46 Paul Craig,’The Legal Effect of Directives: Policy, Rules and Exceptions’ 2009 34 EuropeanLaw Review 349, 356.47 Case13/83 von Colson v Land Nordhein-Westfalen 1984 ECR 1981, Case C-106/89Marleasing v La Comercial Internacional de Alimentacion 1990 ECR I-413.48 CasesC-6 ;Case9/90 Francovich and Bonifaci v Italy 1991 ECR I-535749 Case 46/93 and 48/93 Bresserie du Pecheur Sa vFederal Republic of Germany and The Queen v Secretary of State for Transport exparte Factortame Ltd and Otheres 1996 ECR I -1029.50 Case C-224/01, GerhardKöbler v Republik Österreich 2003 ECR I-1023951 CaseC-144/04 Werner Mangold v Rüdiger Helm 2005 ECRI-0998152 CaseC-555/07 Seda Kücükdeveci v Swedex GmbH & Co.
KG 2010 ECR I-00365; CaseC-441/14 Dansk Industri (DI), acting on behalf of Ajos A/S v Estateof Karsten Eigil Rasmussen 2016 ECR 278.53 Albertina Albors-Llorens, ‘The direct effect of EUDirectives: fresh controversy or a storm in a teacup?’ 1991 European LawReview 39, 850-862