PRODUCTOS/SUBPRODUCTOSPROCESOS

The evidentiary burden placed on applicants wishing to establish a breach of free movement is necessarily lowered when the concept of a breach is broadened. As we have seen, it will no longer be necessary for a foreign Member State trader to demonstrate that a receiving Member State is directly discriminating against her/him. In the wake of the market access test, she/he will not even have to display the differential impact of host State rules on her/him as compared with domestic traders. Thus, much of the second section of this chapter is equally relevant to the arguments in this subsection and those findings will not be repeated. Instead, we will focus, here, on the evidential requirements placed on applicants wishing to establish a breach of the free movement provisions. The subsection will argue that the existence of concrete barriers to free movement is largely irrelevant to the question of breach. Individuals are able to challenge Member State rules, including those that seek to protect fundamental rights, regardless of whether or not they have actually been deterred from crossing borders – arguably the whole purpose of free movement tools within a common market - and irrespective of whether their market position is affected by the existence of potential barriers to trade. Consequently, diverse areas of complex national law and policy can be scrutinised, and subsequently altered, where they do not impose the fewest restrictions possible on free movement, even where its exercise has been restricted to a very limited degree.

The low evidential burden for establishing a breach of the free movement of goods originates in the Court’s definition of a ‘measure equivalent to a quantitative restriction on goods’,

112 which is prohibited by Article 34 TFEU. In its seminal Dassonville decision, the CJEU defined as an MEQR, ‘all trading rules enacted by Member States which are capable of hindering, directly or indirectly, actually or potentially, intra-Community trade…’126 Thus, the question of whether importation of goods was actually hindered was irrelevant as long as there was potential for impediment. Indeed, many cases involve applicants who are already operating in a host State, regardless of that State’s rules, though they might not always do so under their preferred market conditions. Thus, in Cowan,127 concerning services, the restriction of compensatory awards to victims of physical assault to those resident in France, constituted a breach of Article 56 TFEU. This decision appears fair; certainly Cowan himself might be discouraged from visiting France following his experiences there. But can it really be said that service recipients generally, or even Cowan specifically, would be deterred from seeking services in France on the sole basis that they would not be entitled to compensation should they be the victim of a violent crime? Nevertheless, the Court has maintained this approach such that non-discrimination is a stand-alone principle regardless of concrete deterrent effects.128

Similarly, in Bickel,129 a German and an Austrian successfully challenged as a restriction of Article 56 TFEU an Italian rule, which provided that criminal proceedings in the bi-lingual German/Italian Bolzano region could be conducted in German but limited its application to residents of that region. As service recipients, both individuals fell within the personal scope of Article 56. Moreover, since Italian nationals were more likely to be resident in Bolzano than other German speakers, the rule was indirectly discriminatory and accordingly fell within the material scope of that provision. There was no assessment by the Court of whether the Italian measure actually deterred citizens from seeking services in Italy. Indeed, like in

Cowan, it is arguably unlikely that German speakers would be discouraged from receiving services in Bolzano on the sole basis that, should they be arrested, they would face Court proceedings in Italian. At the justification stage, Italy had argued that it wished to recognise the ethnic and cultural identity of its German-speaking population by allowing them to speak German, wherever possible, in their interactions with the State. Accordingly, the measure can represent a manifestation of the fundamental rights of minority groups and respect for cultural

126 _{Case 8/74 Procureur du Roi v Dassonville [1974] EU:C:1974:82} 127 _{Case 186/87 Cowan [1989] EU:C:1989:47}

128

See C. Costello, ‘Market Access All Areas – The Treatment of Non-discriminatory Barriers to the Free Movement of Workers[Case Comment Case C-190/98 Graf EU:C:2000:49]’, (2000) 27(3) LIEI 267, 271-271

113 and linguistic diversity.130 Crucially, the Court did not assess the potential impact, or proportionality, of the pursuit of free movement on the protection of these fundamental rights as part of its breach analysis. At the justification stage, the Court simply acknowledged that the protection of minority groups was a legitimate aim, but then declared that there was nothing to suggest that this would be undermined if the rules were extended to cover German- speaking nationals of other Member States.131 It was not until the Italian government expressly outlined the practical impact of the extension in the subsequent case of Rüffer that the Court considered, in more detail, whether the protection of minorities would be encumbered by the financial and organisational implications of an increase in German- language trials.132 The CJEU maintained that the Italian rule could not be justified since the referring court had itself admitted that the extension of the measure to non-national German speakers would impose no new organisational burdens.133 In relation to additional costs, Member States could not rely on aims of a purely economic nature to justify restrictions on free movement.134

It could, therefore, be argued that the Court’s approach in Bickel was not problematic from a fundamental rights perspective. And yet, it is intrinsically worrying that the low evidentiary burden at the breach stage contains no consideration of the potential impact, and proportionality, of a finding of a violation of free movement on a Member States’ ability to meet its fundamental rights obligations. The onus is, instead, on the Member State to highlight this at the justification stage where the focus is, nevertheless, on the proportionality of protecting fundamental rights in light of their restriction of free movement. Moreover, the Court’s rejection, in Rüffer, of additional costs as a justification since they were of a ‘purely economic nature’ underappreciates the budgetary considerations that are inherent in meeting the positive obligations of programmatic fundamental rights.135 Indeed, if protective schemes prove particularly costly, they might be abandoned altogether. This will be discussed in more detail, as a broader issue, in section 3.3.3.

130 _{See Arts.21 and 22 CFR} 131 _Para.29

132 _{Case C-322/13 Rüffer v Pokorná [2014] EU:C:2014:189. The Court did note, in Bickel, that Mr. Bickel and}

Mr. Franz had argued ‘without contradiction’ that their trials could proceed in German ‘without additional complication or cost’ (n.129, para.30).

133 _Para.24 134 _Para.25 135

Although, there is an emerging case-law that permits as a justification ‘the risk of seriously undermining the social security system’, Case C-368/98 Vanbraekel a.o. v ANMC [2001] EU:C:2001:400, para.47; Joined Cases C-396, 419, 450/05 Habelt [2007] EU:C:2007:810

114 The low evidentiary burden in Cowan and Bickel, containing no consideration of deterrent effects in real-terms, is arguably justifiable by reference to the fact that non-discrimination is a fundamental principle of the Union, especially in light of the introduction of Union citizenship.136 Nevertheless, ‘per se restrictions’ necessarily reduce the evidentiary burden for

establishing obstacles to free movement and consequently expose a greater quantity of fundamental rights to challenge as restrictions of EU law. This can also be seen in relation to DRBs,137 where the CJEU adopts a per se approach with respect to product requirements i.e. rules concerning inter alia the designation, composition, size, weight and packaging of goods. Clearly, having to alter one’s product in order to enter another Member State’s market can have significant, restrictive effects on movement. However, the per se approach removes any requirement to examine the actual extent of limitations on free movement before a restriction is found. This is problematic in cases where DRBs reflect Member State efforts to protect fundamental rights because relevant domestic rules will be considered prima facie unlawful breaches of EU law, even where obstacles to free movement might be quite minimal. Since, by the justification stage, a restriction on free movement is already established, the emphasis turns to the proportionality of fundamental rights restrictions on free movement. No comparison is made between the size of the impediment placed on producers/importers, on the one hand, and the effect of allowing goods to enter the host State market unhindered on fundamental rights protection, on the other. The focus is on whether fundamental rights impose the fewest possible restrictions on free movement. As the following subsections will detail, this might require Member States to alter their methods of safeguarding fundamental rights protection, impacting on the effectiveness or level of protection. And yet, the obstacles to free movement, which trigger this change, only need be potential, indirect, or slight.

Keck offered some opportunity for closing this evidentiary gap because, in the context of selling arrangements, it placed the burden of proof back on foreign traders to demonstrate that they were being treated differently in law or in fact from domestic producers. For instance, the Court stated in De Agostini, that, as a selling arrangement, a prohibition on television advertising did not breach Article 34 TFEU unless it was shown that the ban did not affect in the same manner, in fact and in law, the marketing of national products compared with those

136 _{Art.2 TEU; Art.21 TFEU} 137

There, of course, remains disagreement in the literature as to whether product requirements are

discriminatory in effect and also offend the principle of non-discrimination: N. Bernard, n.4, 92; D. Chalmers, ‘Repackaging the Internal Market – the ramifications of the Keck judgment’, (1994) 19(4) ELRev 385, 394

115 coming from other Member States.138 This has led Barnard to argue that, in contrast with product requirements, there is a presumption in relation to selling arrangements that they do not hinder market access ‘and the trader will have to work very hard to rebut this presumption, possibly by introducing statistical or other evidence’.139

However, De Agostini itself seems to undermine this conclusion. Although final application was left to the referring court, the CJEU appeared, in that case, to accept on face value that television advertising was the only way for De Agostini to penetrate the Swedish market.140 This implies that De Agostini was at a disadvantage perhaps because domestic traders could penetrate the market in other ways, but no explicit assessment was made in this regard. While this was the responsibility of the national court, which could have conducted a rigorous analysis of De Agostini’s factual situation, the burden of proof to which Barnard refers, appears to have been discharged with relative ease. Moreover, in Gourmet, the CJEU conducted its own assessment.141 Examining the effects of another Swedish advertising ban, relating to alcohol, the Court declared that, since the consumption of alcohol is linked to local habits, it was not necessary to conduct a ‘precise analysis’ to conclude that a prohibition of alcohol advertising is liable to impede access to the market for imported goods more than domestic products, with which consumers are instantly more familiar.142 However, if the Court’s reasoning lies in consumer familiarity, surely the penetration of new products on to the market is similarly, or equally, difficult for both domestic and imported goods?143 Further, it will be recalled that this finding of a restriction in Gourmet exposed Member State rules that can be viewed as targeting the fundamental right to health, to a justification analysis, since they were a prima facie breach of EU law. This was also the case in De Agostini, which also concerned efforts to safeguard the rights of the child. Indeed, Wilsher has argued that a higher, more precise evidentiary burden should operate at the breach stage precisely because of free movement’s potential effects on other legitimate objectives:

138 _{Joined Cases C-34-36/95 De Agostini, n.42, para.40}

139 _{C. Barnard, ‘Fitting the Remaining Pieces into the Goods and Persons Jigsaw?’ (2001)26(1)ELRev 35, 45} 140 _Para.43

141

Case C-405/98 Gourmet, n.45

142 _Para.21

143 _{Unless the Court was focusing on consumer habits in respect of generic products, not produced in the}

receiving State. Thus, it might be harder for French cognac generally to penetrate the Swedish market than it would a new brand of Swedish vodka. This issue has been recognised in relation to Art.110(2) TFEU, which prohibits indirect protectionism through internal taxation. See Case 168/78 Commission v France [1980] EU:C:1980:51

116 [The Court] has found discrimination based on judicial hunches or intuitions rather than clear criteria and objective evidence about conditions of competition in the product markets… Only where a trader can demonstrate that a restriction is truly arbitrary should [Article 34 TFEU] bite. For many non-product rules this will rightly be difficult to do because such rules pursue broad policy goals that are largely non-justiciable.144

The introduction of a market access test has removed the question of discrimination altogether, increasing the pertinence of Wilsher’s critique. Returning to Gourmet, this time in the context of services, the Court held that the Swedish ban constituted a restriction on Article 56 TFEU, since foreign producers would not be able to use Swedish advertising service providers to market alcohol. This was established by reference to the ‘international nature’ of the advertising market,145 with no empirical examination of whether any foreign advertisers actually sought to advertise on the Swedish market. The fact that this presumption might prove true does not detract from the fact that empirical evidence is rarely needed to establish a breach of free movement. A similar approach can be seen in Libert.146 In that case, Flemish rules required, for certain target communes that there be a ‘sufficient connection’ between the area and proposed transferees before property could be conveyed. Likewise, property developers had to fulfil a ‘social obligation’ by making certain of their units available for social housing, or make payment in kind. Both measures were arguably targeted at providing accessing to housing, a fundamental right pursuant to Article 34 CFR. The ‘sufficient connection’ requirement was found to be in breach of, inter alia, Article 56 TFEU, since estate agents could not offer their services to ‘just any Union citizen’, and Article 63 TFEU because a prior authorisation assessment was a restriction on capital movements per se.147 The ‘social obligation’ also constituted a restriction of capital since investors could ‘not freely use the land for the purposes for which they wished to acquire it’.148

Yet, there was no concrete assessment of whether estate agents’ business would really be affected by the ‘sufficient connection test’ or whether investors would genuinely be deterred by the rigmarole of a prior authorisation procedure. For instance, how many target communes were there? What percentage of an estate agent’s annual business would be affected by the fact that they were restricted as to whom they could offer their services, and, in any case, only in relation to

purchases and long-term rents, in particular communes? Although the Advocate General did

144 _{D. Wilsher, ‘Does Keck Discrimination Make Any Sense? An Assessment of the Non-Discrimination}

Principle within the European Single Market’, (2008) 33(1) ELRev 3

145 _{N.45, para.39} 146

Joined Cases C-197/11 and C-203/11 Libert, n.48

147 _Paras.42-44 148 _Para.66

117 in fact acknowledge the pertinence of the number of target communes, this was only relevant at the justification stage, placing the evidential burden on the Member State.149 In any case, neither the Advocate General, nor the Court, actually took this into account as part of their justification analyses.150

Of course, the Court has frequently made plain that it does not apply a de minimis threshold in its examination of whether there has been a breach of free movement.151 For the Court, evidence that potentially restrictive rules are not affecting foreign traders, who have no interest in the domestic market or who are not being deterred, only demonstrates the status quo and not the potential for further cross-border trade once a measure has been removed. Some commentators have argued convincingly against the introduction of quantitative empirical analysis for establishing a breach of free movement. For instance, Davies posits that free movement rights are often exercised by smaller actors152 who are not able to provide complex economic assessments.153 Nevertheless, as section 3.3 will demonstrate, the Court frequently imposes similar empirical obstacles at the justification stage, requiring Member States or private individuals to provide in-depth statistical data to support their fundamental rights justifications. Other writers have argued that a de minimis test does operate within free movement but is qualitative in nature. Specifically, Nic Shuibhne points to the Court’s focus on the absolute prohibition of use of motorcycle trailers in finding a restriction on market access in Commission v Italy,154 and the fact that use of personal watercraft was ‘very limited’155

in Mickelsson v Roos.156 Such thresholds can also be viewed in the free movement of persons case-law, where the Court has imposed a test of ‘serious inconvenience’.157

149

Joined Cases C-197/11 and C-203/11 Libert , Opinion of AG Mazák, EU:C:2012:621, paras.26-27

150 _{This low evidentiary burden can of course be beneficial to fundamental rights when they run congruent to}

free movement. Thus, in Case C-60/00 Carpenter (n.57), the Court found that the deportation of an EU citizen’s third country national wife would be detrimental to his ability to provide cross-border services, with no concrete elaboration as to how or why, this might be the case. Although there was a reference to Mrs. Carpenter’s

provision of childcare, this was part of a separate discussion as to whether the couple’s family life was genuine, para.44

151 _{Joined Cases 177/ 82 and 178/82 Van de Haar [1984] EU:C:1984:144; Case 269/83 Commission v France}

[1985] EU:C:1985:115; Case 67/97 Bluhme [1998] EU:C:1998:584. This is not the approach of the Court in the area of tax: Case C-383/01 De Danske Bilimportører [2003] EU:C:2003:352.

152 _{By comparison with competition law, which does impose quantitative thresholds.}

153 _{P. Oliver, ‘Some further reflections on the scope of Articles 28–30 (ex 30–36) EC,’ (1999) 36(4) CMLRev}

783, 799; see also G Davies, ‘The Court’s jurisprudence on free movement of goods: pragmatic presumptions, not philosophical principles’ (2012) European Journal of Consumer Law 25, 31

154 _{Case C-110/05 Commission v Italy, n.50, para.56}