p. 55514. Regulating the Internal Market
- Catherine BarnardCatherine BarnardProfessor of European Union Law and Labour Law and Senior Tutor, Trinity College, University of Cambridge
Abstract
This chapter examines the power to harmonize (that is, the power to adopt legislative acts and the possibility to supplement them by non-legislative acts), the different approaches to harmonization adopted by the Union, and the problem of the implementation and enforcement of Union standards. By setting harmonized standards, EU law enables goods, persons, services, and capital to move freely. When viewed from this perspective, harmonization is the complement of the four freedoms. However, it remains a sensitive matter both legally and politically. The chapter also examines the evolution of the digital internal market.
A. Introduction
In 1957 the European Economic Community set itself the task of creating a common market with the attainment of the four freedoms at its core. This book has concentrated on the Treaty provisions intended to achieve this objective and their interpretation by the Court of Justice. While in theory these Treaty provisions should have been sufficient to allow for successful regulatory competition—where states compete to attract products and factors of production—in practice regulatory competition has not produced the result anticipated, owing to the absence of the necessary conditions for such competition to p. 556↵function as the textbooks would predict. This market failure, together with the derogations provided by the Treaty and the mandatory/public interest requirements developed by the Court, which allowed Member States to continue applying their own rules, meant that there would always be a need for harmonization legislation enacted by the Union institutions. Such harmonization would help the market to function properly while at the same time protecting vital public interests such as consumer protection and public health.
Harmonization was always envisaged, even by the original Treaty: the Treaty of Rome gave wide-ranging powers to the (then) Community to enact secondary legislation. As we noted in Chapter 1, the Treaty was never intended to deliver unregulated trade. As Weatherill notes, ‘In the transnational sphere, there is no free trade, there is only freed trade and it is regulated trade.’1 It is regulated for reasons of, for example, environmental, consumer, and worker protection. States have been legislating for centuries—think about the German laws regulating the content of Bier (see Chapter 5), regulations insisting on high quality at a reasonable price.2 This is an early form of consumer protection legislation. Any producer trading with Germany would have to comply with German standards. Under the law of the WTO, these non-tariff barriers would be acceptable provided they applied in a non-discriminatory way. However, they do obstruct trade: Dutch beer would have to be (re)manufactured according to German standards before it could be sold in Germany. In the EU other possibilities have been tried: on the one hand, there is the mutual recognition approach where states agree to recognize the products of other states as equivalent to their own (see further Chapter 3). On the other, there is the possibility of the EU setting standards itself. As Weatherill concludes: ‘neither model suggests unregulated trade. Quite the contrary. Public regulation of one kind or another is necessary to promote an integrated trading space that spans jurisdictions which are marked by varying patterns of intervention in the market.’3
Both approaches raise sensitive issues. Mutual recognition effectively means that the host state accepts the regulatory machinery of the home state applies in the host state in respect of that particular good or service, with all of the sovereignty limitations that entails. But harmonization is also a sensitive matter, both legally and politically. For example, to what extent should a single harmonized standard set by the EU replace diverse national standards? And at what level should that standard be set—at the standard of the lowest state in the EU, at the highest, or somewhere in between? This also raises issues for Member States about their sovereignty—or, more precisely, their freedom to regulate.
The aim of this chapter is to examine the power to harmonize (i.e., the power to adopt legislative acts and the possibility to supplement them by non-legislative acts), the different approaches to harmonization adopted by the Union, and the problem of implementation and enforcement of Union standards.
B. The Power to Harmonize
1. Introduction
The 1985 Single Market White Paper proposed the adoption of about 300 measures to eliminate the three principal barriers to trade (physical, technical, and fiscal) identified in the White Paper.4 The problem facing the EU was how to realize these measures within p. 557↵a relatively short time frame when the principal legal bases provided by the EEC Treaty (Article 100 EEC (now Article 115 TFEU) and Article 235 EEC (now Article 352 TFEU)) required unanimous voting. The Single European Act 1986 provided an answer. It introduced a new legal basis, Article 100a EEC (now Article 114 TFEU), with qualified-majority voting (QMV), now the ordinary legislative procedure. Given the importance of Article 114 TFEU to the attainment of the single market, it is this legal basis that we shall focus on.5
2. Article 114 TFEU
2.1 The Conditions to be Satisfied under Article 114 TFEU
Article 114(1) TFEU provides ‘Save where otherwise provided in the Treaty’ the European Parliament and Council, acting in accordance with the ordinary legislative procedure, are to adopt ‘measures’ (not just directives6) ‘for the approximation of the provisions laid down by law, regulation, or administrative action in Member States which have as their object the establishment and functioning of the internal market’.7 There are therefore two limits to the use of Article 114 TFEU. First, resort to Article 114 TFEU can be made where no other specific legal basis applies.8 In other words Article 114 TFEU, a general provision, is a residual legal basis (although at times this seems to be honoured more in the breach than the observance). The importance of this limitation was, however, emphasized in Commission v. Council (VAT),9 where the Court said that if the Treaty contained a more specific provision that was capable of constituting the legal basis for the measure, the measure had to be founded on that provision. Therefore, on the facts, the Court ruled that two Union measures intended to consolidate and strengthen administrative cooperation in the field of VAT should not have been adopted under Article 114(1) TFEU but under the (more specific) tax legal bases, Article 113 TFEU.
The second limit on the use of Article 114 TFEU is that the measures adopted under Article 114 TFEU must be for approximation of laws (also known as harmonization).10 Therefore, measures which do not harmonize cannot be adopted under Article 114 TFEU. This can be seen in ECS,11 where the Parliament and the Commission argued that a regulation establishing a European Cooperative Society should have been adopted on the basis of Article 114 TFEU and not Article 352 TFEU. The Court disagreed, reasoning that because p. 558↵the national laws remained unchanged by the regulation (the aim of the measure was to create a new form of cooperative society in addition to national forms) the regulation did not lead to ‘approximation’ of national laws and so Article 114 TFEU could not be used.
In its original version, the procedure laid down by Article 114(1) TFEU was QMV and cooperation with the European Parliament; since Maastricht the co-decision procedure has applied, now called the ordinary legislative procedure. However, Article 114(2) TFEU expressly provides that Article 114(1) TFEU cannot be used to adopt fiscal measures,12 nor measures relating to the free movement of persons, nor measures relating to the rights and interests of employed persons—areas considered to be too sensitive to be the subject of QMV.13
The Union has adopted a large number of directives under Article 114 TFEU ranging from rules on the financial markets to directives on illegal logging, technical standards, and imports of seal products. Case Study 14.1 shows how Article 114 TFEU has been used to regulate tobacco production and advertising and the problems this has generated.
Case Study 14.1: Regulating Tobacco Production and Advertising
The health risks associated with smoking have long been a matter of concern for the Member States. Even before the EU was given express powers over public health by the Maastricht Treaty, the Council, and the Representatives of the Governments of the Member States issued a resolution on a programme of action against cancer in 1986.14 This led to the adoption of Directives 89/622/EEC on tobacco labelling15 and 90/239/EEC on the maximum tar yield of cigarettes,16 both based on Article 114 TFEU and supported by references to the Council resolution. According to the preambles to the directives, Article 114 TFEU was used because the differences between the laws, regulations, and administrative provisions were likely ‘to constitute barriers to trade and to impede the establishment and operation of the internal market’.17
Directive 89/622 on tobacco labelling required the health warning ‘Tobacco seriously damages health’ to be displayed on all packets of tobacco products. This warning had to cover at least 4 per cent of each large surface of the packet. Directive 90/239 provided that the tar yield could not be greater than 15 mg per cigarette as from 31 December 1992 and 12 mg from 31 September 1997, with Greece being given a special exemption until 31 December 2006. Since both directives laid down minimum standards, Member States could require a physically larger warning or lower levels of tar for domestically produced cigarettes. However, if a Member State did impose stricter standards on its own producers, the ‘free movement’ clause18 required the state to allow cigarettes produced in other Member States which complied only with the minimum standards laid down in the directive to be sold in its country.
Directives 89/622/EEC and 90/239/EEC were amended a number of times and were eventually repealed, recast, and amended by Directive 2001/37/EC19 on the manufacture, presentation, and p. 559↵sale of tobacco products (the Tobacco Control Directive), which was based on both Article 114 TFEU and Article 207 TFEU on the common commercial policy. This directive reduced maximum tar yields still further (to 10 mg), for the first time set maximum nicotine and carbon monoxide levels,20 and imposed stricter labelling requirements, including an increase in size of the health warning: the general warning (e.g., ‘Smoking kills/Smoking can kill’) now had to cover at least 30 per cent of the surface area of the packet,21 and an additional warning (e.g., ‘Smokers die younger’) had to cover at least 40 per cent of the surface area.22 Like its predecessors, Directive 2001/37 also contained a free movement clause.23 As we shall see, the validity of this directive, or at least parts of it, was unsuccessfully challenged in Ex p. BAT,24 Swedish Match,25 and Arnold André.26
Directive 2014/40 on the manufacture, presentation, and sale of tobacco and related products (such as e-cigarettes), also adopted under the single market legal bases including Article 114 TFEU, repealed Directive 2001/37 in May 2016.27 The size of the warning and picture has increased still further: it must cover 65 per cent of the front and back of the packet. It also bans flavoured cigarettes, such as fruit and menthol, and slim, lipstick-style packaging intended to encourage young women to smoke. Health warnings are mandatory on e-cigarette packages. The choice of legal basis was challenged in Philip Morris.28 In Poland v. Parliament and Council29 the Polish government also challenged the use of Article 114 TFEU as a legal basis for banning menthol cigarettes and argued that the ban on marketing menthol cigarettes breached the principles of subsidiarity and proportionality. Pillbox 3830 challenged the obligations on e-cigarette manufacturers and/or retailers for breaches of the Charter, and the principles of subsidiarity and proportionality. A yellow card (see Section 4) had been raised by a number of Member States’ parliaments about the draft directive but insufficient to trigger the yellow card procedure. The same Advocate General heard all three cases and rejected all the claims, as did the Court of Justice.31
Further challenges followed. For example, in Swedish Match32 a question was raised whether provisions of the directive were compatible with the subsidiarity principle. The Court said Directive 2014/40 pursued a dual objective, in that it sought to facilitate the smooth functioning of the internal market for tobacco and related products, while ensuring a high level of protection of human health, especially for young people. It continued: ‘Even if the second of those objectives might be better achieved at the level of Member States, the fact remains that pursuing it at that level would be liable to entrench, if not create, situations in which … some Member States permit the placing on the market of tobacco products for oral use, while other Member States prohibit it, thereby running completely counter to the first objective of Directive 2014/40, namely the improvement of the functioning of the internal market for tobacco and related products.’33 There was therefore no breach of the principle of subsidiarity.
p. 560↵In Planta Tabak34 the Court confirmed its earlier rulings that the prohibition of the placing on the market of tobacco products with a characterizing flavour did not go manifestly beyond what was necessary to attain the public-health objective. The Court found that in the relevant provision of Directive 2014/40 the EU legislature had struck a balance between the economic consequences of the prohibition of flavoured tobacco products, on the one hand, and, on the other, the requirement to ensure a high level of protection of human health with regard to a product characterized by harmful properties.35 The Court also rejected the challenge to Article 13 of the directive on restrictions on labelling on the grounds of breach of Article 17 of the Charter due to the substantial restrictions to the use of trade marks. The Court said Directive 2014/40 left the proprietors of the trade marks the freedom to make use of the trade marks in any way, other than in respect of the labelling of unit packets, the outside packaging, and the tobacco product itself, without prejudicing the substance of their trade mark rights. It concluded that the restriction on the use of trade marks did not amount to a deprivation of property.
At much the same time as the original tobacco labelling and tar yield directives were adopted, the ‘Television without Frontiers’ (TWF) Directive 89/552/EEC was also enacted36 (now called the Audiovisual Media Services Directive (AVMS) 2010/13/EU), which, according to Article 9(1)(d), prohibited ‘all forms of audiovisual commercial communications for cigarettes and other tobacco products’.37 With the TWF/AVMS Directive in place, campaigners called for a ban on other forms of cigarette and tobacco advertising that took place away from the point of sale (e.g., on the radio, posters, billboards, and in newspapers and magazines) as well as a ban on sponsorship by tobacco companies (especially sports sponsorship). This was the essence of Directive 98/43/EC on Tobacco Advertising.38 The directive, which was adopted by a majority of Member States (Austria and Germany voted against, Denmark and Spain abstained), set a (high) minimum standard,39 banning all forms of advertising and sponsorship of tobacco products.40 However, unlike Directive 89/622 on tobacco labelling and Directive 90/289 on tar yield, Directive 98/43 did not contain a free movement clause for products which met its provisions. The directive was due to have been implemented by 30 July 2001, but it made provision for delayed implementation for specific sectors: one year for the press, two years for sponsorship, and, ‘in exceptional circumstances’ existing tobacco sponsorship of events or activities organized at world level (primarily formula one racing) would have continued until 2006.41
Although Directive 98/43 was adopted under the internal-market legal bases Articles 53(1), 62, and 114 TFEU, it was widely thought to be a public-health measure. Article 168 TFEU had been p. 561↵introduced by the Maastricht Treaty to provide the Union with express competence in the field of public health. The competence was, however, specifically limited by Article 168(5) TFEU, which provided that the Council can adopt ‘incentive measures designed to protect and improve human health, … excluding any harmonisation of the laws and regulations of the Member States’.
The Union’s competence to act in this sensitive area and its choice of legal basis lay at the heart of Germany’s successful challenge to Directive 98/43 in Tobacco Advertising I,42 the detail of which is considered in the text below. One of the questions that was raised was whether Article 168(5) TFEU meant that harmonizing measures adopted on the basis of other provisions of the Treaty could not have any impact on the protection of human health.43 Some support for this view can be found in Article 114(3) TFEU,44 which provides that the Commission, when making proposals, must ‘take as a base a high level of protection, taking account in particular of any new development based on scientific facts’.45 In subsequent cases, the Court went further, saying that the Union legislature could not be prevented from relying on Article 114 TFEU ‘on the ground that public health protection is a decisive factor in the choices to be made’.46 However, the Court added in Tobacco Advertising I that other Articles of the Treaty could not be used ‘as a legal basis in order to circumvent the express exclusion of harmonization laid down in Article [165 TFEU]’.47 On the facts, as we shall see, the Court found that the use of Article 114 TFEU was also unlawful in this case. The Council and the EP subsequently readopted the directive with the offending parts removed48 and this directive was again challenged by Germany in Tobacco Advertising II.49 This time Germany was unsuccessful.
2.2 The Circumstances in which Article 114 TFEU Can Be Used
In Tobacco Advertising I the Court said that Article 114(1) TFEU could be used to adopt EU measures in two situations. It said that where the Union measure was genuinely50 intended to improve the conditions for the establishment and functioning of the internal market,51 and actually had that effect,52 then Article 114(1) TFEU could be used in two, alternative,53 situations:
where the legislation contributes to the elimination of likely obstacles to the exercise of fundamental freedoms
p. 562 where the legislation contributes to the removal of appreciable distortions of competition which are likely to arise from the diverse national rules.54
We shall consider these in turn.
(a) Elimination of obstacles to the exercise of fundamental freedoms
The first situation where Article 114 TFEU can be used is where those measures contribute to the elimination of obstacles to the exercise of fundamental freedoms. The following example illustrates this point. State B has stricter rules than State A on the quantity of additives that can be used in a product. State B’s rules, although justified on public-health grounds, create an obstacle to the free movement of goods because State A’s goods need to be adapted before they can be imported into State B. The solution to this problem would be to enact a common standard under Article 114 TFEU to eliminate these obstacles to trade.55
In Tobacco Advertising I the Court made clear that not only could Article 114(1) TFEU be used to adopt measures dealing with actual obstacles to trade (see the additives example just given), but it could also be used to address future obstacles to trade which might emerge due to the ‘multifarious development of national laws’.56 In this case, the emergence of such obstacles had to be ‘likely’ and the measure in question had to be ‘designed to prevent them’.57 Therefore, in Tobacco Advertising I58 the Court said that Directive 98/43’s ban on advertising of tobacco products in (the confusingly named) ‘non-static advertising media’ (periodicals, magazines, and newspapers) could be adopted on the basis of Article 114(1) TFEU, since this would help to ensure the free movement of press products. The Court said that, even though the obstacles to trade were potential rather than actual, it was ‘probable’ that the obstacles would arise in the future.59 In Inuit II60 the Court added that the preamble to the measure need only indicate the general situation which led to its adoption and the general objectives it was intended to achieve; there was no need to identify the number and identity of the Member States whose national rules were the source of the measure.
The obstacles to free movement also have to be appreciable. For this reason, the Court found in Tobacco Advertising I that Article 114(1) TFEU could not be used to ban advertising in ‘static advertising media’ (e.g., posters, parasols, ashtrays, and other articles used in hotels, restaurants, and cafés). This was because the effect on free movement of goods was too uncertain and indirect:61 the prohibition on advertising could not be justified by the need to eliminate obstacles to the free movement of advertising media or the freedom to provide services in the field of advertising.62 This view was reinforced by the fact that the directive did not contain a free movement clause.63 By contrast, Directive 2001/37 on p. 563↵tobacco control did contain such a clause, and for this reason the Court said in Ex p. BAT that because Member States could not prevent the import, sale, or use of tobacco products which did comply with the directive, the directive did improve the conditions for the functioning of the internal market.64 Therefore, Directive 2001/37 was correctly adopted under Article 114(1) TFEU.
Finally, in Czech Republic v. Parliament and Council (control of weapons)65 the Court said that where an act based on Article 114 TFEU had already removed any obstacle to trade in the area that it harmonized, the EU legislature had to be able to adapt that act ‘to any change in circumstances or development of knowledge having regard to its task of safeguarding the general interests recognised by the Treaty’66 and that ‘the EU legislature can properly carry out its task of safeguarding the general interests recognised by the Treaty only if it has the freedom to amend the relevant EU legislation so as to take account of such changes’. The case concerned a challenge by the Czech Republic to the adoption of Directive 2017/853 amending Directive 91/477 on the control and acquisition and possession of weapons. The Czech government argued that while Directive 91/477 was adopted with the aim of harmonizing the disparate national rules on the acquisition and possession of firearms in order to eliminate obstacles to the internal market, that was not the case with Directive 2017/853 whose objectives consisted exclusively in ensuring a higher level of public security in relation to the terrorist threat and other forms of crime; it did not concern the removal of obstacles to the functioning of the internal market. The Court noted that Directive 91/477 was intended to ensure, as regards the free movement of goods, namely of firearms for civilian use, approximation of the laws, regulations, and administrative provisions of the Member States, whilst circumscribing that freedom with safety guarantees suited to the nature of those goods. The Court, like Advocate General Sharpston, thought the new directive aimed to improve further certain aspects of Directive 91/477 and to adjust the balance between the free movement of the goods in question and security guarantees, in particular considering ‘recent terrorist acts’.67 For these and other reasons the Court concluded that the measures were appropriate for achieving the objectives of Article 114 TFEU.68
(b) Removal of appreciable distortions of competition
According to Tobacco Advertising I, the second situation in which Article 114(1) TFEU can be used is where the Union adopts measures to remove distortions of competition arising from the diverse national rules. To a certain extent this second ground overlaps with the first: any obstacle to trade is also likely to distort competition. However, this second ground is broader, covering situations where, owing to the absence of regulation in State A, the producers or service providers established there enjoy a competitive advantage in terms of production costs over their competitors in State B who face substantial regulation. A harmonization directive would iron out these cost differences.69 Once again, Article 114(1) TFEU can be used to address actual, as well as potential, distortions of competition. The Court made this clear in Titanium Dioxide, where it said that the Union could also legislate where the distortions were ‘likely’ to arise from the diverse national rules.70 Moreover, the distortions had to be ‘appreciable’.71 In Tobacco Advertising I the p. 564↵Court explained that it was not sufficient for the EU legislature to rely on single market legal bases ‘with a view to eliminating the smallest distortions of competition’,72 i.e., where the effects on competition were ‘remote and indirect’.73 It explained that in the absence of such a requirement ‘the powers of the [Union] legislature would be practically unlimited’,74 and that would be incompatible with the principle embodied in Article 5(2) TEU that the powers of the Union are limited to those specifically conferred on it.75 For this reason the Court said that the adoption of Directive 98/43 under Article 114(1) TFEU could not be justified on the ground of the distortion of competition caused to the advertising industry. It recognized that while advertising agencies and producers of advertising media established in Member States which imposed fewer restrictions on tobacco advertising were at an advantage in terms of economies of scale and increase in profits, the effects of such advantages on competition were ‘remote and indirect’ and did not ‘constitute distortions which could be described as appreciable’.76
The Court also rejected the justification based on the distortions of competition in the marketing of tobacco products. The Commission had argued that, in Member States where advertising was restricted, producers and sellers of tobacco products had to resort to price competition to influence their market share. The Court dismissed these arguments, saying that in these states the national laws constituted a ‘restriction of forms of competition which applied to all economic operators in those Member States’77 and not a distortion. Because the national laws merely restricted competition rather than distorted it, no harmonization was possible under Article 114(1) TFEU.78 To some commentators, this distinction between distortions of competition (which justify Union measures under Article 114(1) TFEU) and restrictions (which do not) reflects the distinction drawn in Keck79 between product requirements (to which Article 34 TFEU applies) and non-discriminatory measures such as selling arrangements (to which Article 34 TFEU does not apply);80 although with the increasing use of the ‘restrictions’ analysis in the case law on negative integration, this distinction seems increasingly less tenable.
Finally, the Court considered whether Article 114(1) TFEU could be used to harmonize national rules concerning sports sponsorship by tobacco companies. It noted that prohibiting sponsorship in some Member States and authorizing it in others caused certain sports events to be moved, affecting the conditions of competition for undertakings associated with such events.81 Since this gave rise to an appreciable distortion on competition, p. 565↵it did justify an EU measure adopted under Article 114 TFEU but not an outright ban on advertising of the kind proposed by the directive.82
2.3 The Follow-Up to Tobacco Advertising I
Given that the Court could not separate those parts of the directive which had been validly adopted and those which had not, it annulled the directive in its entirety.83 The Council and Parliament then adopted a new, more tailored measure, Directive 2003/3384 on advertising and sponsorship of tobacco products, covering those areas of Directive 98/43 which the Court had said could be validly adopted under the internal-market legal bases.85 Article 3 of Directive 2003/33 bans advertising in the press and other printed publications (‘non-static’ advertising media), except for publications intended exclusively for professionals in the tobacco trade and for publications not intended for the Union market. According to the preamble, this ban was justified by the need to overcome ‘an appreciable risk of obstacles to free movement’ created by diverse national laws.86 Article 4 prohibits all forms of radio advertising for tobacco products as well as tobacco sponsorship of radio programmes. Article 5 prohibits tobacco sponsorship of events taking place in more than one Member State. This was justified by the need to address national rules giving rise to ‘an appreciable risk of distortion of the conditions of competition’.87 The directive also contains a free movement clause.88
In Tobacco Advertising II89 the Court upheld the validity of Articles 3–4 of the directive. Having analysed the existing national law on tobacco advertising and the risks of new barriers arising as a result of the accession of the new Member States, the Court said the barriers and risks of distortions of competition warranted intervention by the Union legislature on the basis of Article 114 TFEU,90 and that Articles 3–4 were in fact designed to eliminate or prevent obstacles to the free movement of goods/services or to remove distortions of competition, not least because of the existence of the free movement clause.91
In the light of the decisions in Tobacco Advertising I and Ex p. BAT it is clear that the Union does not have the power to intervene in all cases where the market does not function optimally, since this would be tantamount to providing the Union with a general legislative power.92 However, the Union can legislate to overcome the geographic fragmentation of the EU market. As Bernard puts it, the Union does not have the power under Article 114(1) TFEU to ensure the functioning of the common market (i.e., the market in general) but does have the power to regulate matters to ensure the functioning of the common market (i.e., the creation of a single, unified market).93
2.4p. 566 The Case Law after Tobacco Advertising I
(a) Departing from Tobacco Advertising I
Although the Court sent out a strong message in Tobacco Advertising I that there were limits to the use of Article 114 TFEU and that it could not be used to regulate all aspects of economic life,94 subsequent cases suggest that the Court may be relaxing its tough stance, upholding a number of uses of Article 114 TFEU which might not apparently satisfy either the detail or the spirit of the Tobacco Advertising I ruling.95 For example, the Court has since made clear that the phrase ‘measures for the approximation’ in Article 114 TFEU conferred on the legislature a broad discretion as regard the method most appropriate for achieving the desired result, in particular in areas characterized by complexity.96 Measures adopted can consist of requiring all Member States to authorize the marketing of products, subjecting any such authorization to certain conditions, or even prohibiting the marketing of products.97 Therefore, in Swedish Match and Arnold André98 the Court said that a total ban on the marketing of oral tobacco products such as snuff (finely ground tobacco consumed by placing it between the gum and the lip) in the Tobacco Control Directive 2001/37 could be adopted under Article 114 TFEU,99 even though a ban might appear to fly in the face of a single market in goods.100 And in Österreichischer Rundfunk101 the Court said that the Data Protection Directive could be adopted under Article 114 TFEU even though it applied to a wholly internal situation. The Court said that ‘recourse to Article [114 TFEU] as a legal basis does not presuppose the existence of an actual link with free movement between Member States in every situation referred to by the measure founded on that basis’.102 It was sufficient that the measure adopted under Article 114 TFEU was actually intended to improve the conditions for the establishment and functioning of the internal market.103
(b) Indirect harmonization
Subsequent cases raised other difficulties for the Court. For example, can Article 114 TFEU be used to create legal forms which help the internal market to run smoothly but p. 567↵are not about harmonization per se? Two Advocates General thought not104 but the Court disagreed. In UK v. EP and Council (European Network and Information Security Agency (ENISA))105 the Court said that Article 114 TFEU could be used to establish a Union body responsible for contributing to the implementation of a process of harmonization where, for example, the Union body provided services to national authorities and/or operators which affected the homogenous implementation of harmonizing instruments and was likely to facilitate their application.106 The Court added that the tasks conferred on such a body did, however, have to be closely linked to the subject matter of the harmonization legislation.107 Therefore, ENISA108 could be established on the basis of Article 114 TFEU since its aim was to assist the Commission and the Member States with meeting the requirements of network and information security, as part of a wider package of measures,109 thereby ensuring the smooth functioning of electronic communications services.
In Smoke Flavourings110 the Court also upheld the use of Article 114 TFEU as a legal basis for a regulation which did not harmonize laws but established procedures (then the regulatory procedure laid down by the Comitology decision111 now delegated acts under Article 290 TFEU) for the approval of lists of authorized products which could be used in ‘smoked’ foods. The UK had argued that Article 114 TFEU could be used only to harmonize national laws—i.e., Article 114 TFEU could be used to achieve at Union level what Member States could have achieved at national level on their own (direct harmonization); it could not be used to establish Union bodies, confer tasks on these bodies, or establish authorization procedures such as those in Smoke Flavourings (indirect harmonization). However, Advocate General Kokott said that Article 114 TFEU could be used to approximate laws both directly and indirectly in a ‘multi-stage model with intermediate steps’112 and the Court appeared to accept her view. It said that Article 114 TFEU could be used to adopt a measure which merely defines the basic provisions essential for achieving the objective which then confers power on the Commission to adopt the harmonization measures needed for the implementation of the legislative act in question.113 In other words, Article 114 TFEU could be used to establish a parent measure which delegates implementing power to the Commission.
The Court also said that where the Union legislature provided for harmonization which comprised several stages, for instance the fixing of a number of essential criteria set out in a basic (parent) regulation followed by scientific evaluation of the substances concerned and the adoption of a positive list of substances authorized throughout the Union (the subordinate measure), two conditions had to be satisfied:
the Union legislature had to determine in the basic act the essential elements of the harmonizing measure in question
the mechanism for implementing those elements had to be designed in such a way that it led to a harmonization within the meaning of Article [114 TFEU].
p. 568↵In particular, the Court said the parent measure had to establish detailed rules for making decisions at each stage of an authorization procedure, and determine and circumscribe precisely the powers of the Commission as the body which had to take the final decision. That applied in particular where the harmonization in question consisted of drawing up a list of products authorized throughout the Union to the exclusion of all other products.114
Given the emphasis in Smoke Flavourings on the need for the parent measure to prescribe carefully and in detail the relevant procedure for adopting subordinate measures, the Court’s decision in the earlier case of Alliance for Natural Health115 came as something of a surprise. Alliance for Natural Health concerned the Food Supplements Directive 2002/46,116 a classic single-market measure in the sense that it had been introduced to harmonize the rules on food supplements, such as vitamins and minerals, which had been the subject of much (diverse) national legislation which in turn had been challenged by traders under Article 34 TFEU. States invariably, and often successfully, invoked Article 36 TFEU to defend their rules,117 and in so doing created (legitimate) obstacles to trade. Directive 2002/46 was intended to address these obstacles by creating an EU-wide regime. It envisaged a two-stage approach to the harmonization of the rules in this area. By 1 August 2003 Member States had to permit trade in foods containing vitamins and minerals which had been ‘positive listed’ (i.e., approved). This obligation was ensured through a free movement clause. By 1 August 2005 Member States had to prohibit trade in products that did not comply with the requirements of the directive.
While Advocate General Geelhoed and the Court recognized that the directive had an internal-market dimension and so was correctly adopted on the basis of Article 114 TFEU, the Advocate General was much concerned about the proportionality of the measure.118 He said that the legal instruments which put the positive list system into effect had to be designed with care since they had a far-reaching impact on the freedom of market operators: they impeded the continuation of activities previously regarded as lawful and subjected new developments to a prior assessment by the Commission before they could be positive-listed.119 He argued that the directive failed in three respects:120
the directive, in delegating power to the Commission and the comitology committee, provided no substantive norm for the decision-makers to follow as a guiding principle to decide whether a product should appear on the positive list121
the directive did not make clear whether private parties themselves could submit substances for evaluation122
if they could, then the directive failed to provide a clear procedure to provide minimum guarantees for protecting the parties’ interests.
He concluded, ‘this procedure, in so far as it may exist and in so far as it may deserve this title, has the transparency of a black box’.123 He therefore considered the directive invalid.
p. 569↵The Court agreed that it would have been ‘desirable’ for the directive to have contained provisions which ensured that the application process be completed transparently and within a reasonable time124 but, unlike the Advocate General, the Court thought that this was not sufficient to jeopardize the validity of the directive because of the Commission’s general duty, under the principle of sound administration, to act transparently and within a reasonable time. It therefore upheld the validity of the directive.
The cases considered so far concern delegation. The Vodafone125 case raised a further difficult question for the Court: can Article 114 TFEU be used as a legal basis for a measure affecting the conduct of private parties, in casu a regulation establishing Union-wide maximum prices for roaming on public mobile phone networks? The Advocate General thought it could. While he doubted that the EU had shown that the risk of possible future differences in national price controls created obstacles to trade justifying regulation under Article 114 TFEU,126 he did think that the EU legislator could regulate roaming prices under Article 114 TFEU to remove ‘restrictions to free movement arising from the behaviour of private parties which disfavours cross-border economic activity’.127 In so doing, he asked the Court to apply ‘the logical consequences of its case-law on the horizontal application of free movement rules to its analysis of Article [114 TFEU]’.128
The Court took a different line. It said that the high level of retail charges had been regarded as a persistent problem by national regulatory authorities (NRAs), public authorities, and consumer protection associations throughout the EU and that attempts to solve the problem using the existing EU legal framework had not had the effect of lowering charges. The Court also said that there was pressure on the Member States to use their residual competence in the field to address the problem. EU legislation was therefore necessary to forestall action by the Member States which would have been ‘liable to cause significant distortions of competition and to disrupt the orderly functioning of the [Union]-wide roaming market’.129 The Regulation was therefore correctly adopted on the basis of Article 114 TFEU.
Finally, in Short Selling130 the Court had to consider what sort of measures could be adopted under Article 114 TFEU. The UK argued that Article 114 TFEU could be used only for measures of general application. Therefore, it could not be used as a legal basis for the European Securities and Markets Authority (ESMA) to take individual measures directed at natural or legal persons engaged in short-selling. The Court disagreed. It said Article 114 TFEU gave the legislature discretion as to the most appropriate form of harmonization and that discretion was particularly important where ‘highly technical and specialist analyses’ had to be made and the body (ESMA) had to respond ‘swiftly and appropriately’.131 Further, ESMA’s intervention was necessary to improve the functioning of the financial markets.
3. Choice of Legal Basis
So far, we have focused on the question of whether the Union has the competence at all to adopt measures under Article 114 TFEU. We turn now to the question of where a p. 570↵secondary measure could have been adopted on one of a number of legal bases. In addition to the general legal bases (Articles 114–15 TFEU and 352 TFEU), there are various specific legal bases which could be used for measures which might have implications for the internal market, in particular Article 43 TFEU (agriculture), Article 50 TFEU (freedom of establishment), Article 62 TFEU (freedom to provide services), Article 173 TFEU (industrial policy), and Article 192 TFEU (environment). This can lead to the situation where the proposed measure appears to raise single-market issues as well as issues covered by another legal basis. What rules should apply? As we have seen, Article 114(1) TFEU is supposed to be a residual legal basis, only to be used where there is no other suitable provision. Yet, in Titanium Dioxide132 the Court favoured the use of Article 114 TFEU over (the more specific) Article 192 TFEU on the environment as the choice of legal basis for adopting a directive on disposing of waste by the titanium dioxide industry.133 The Court said that, since environmental and health measures were a burden on undertakings, competition could be appreciably distorted in the absence of harmonization; thus Article 114(1) TFEU applied. If this logic were accepted, then Titanium Dioxide would have had the effect of marginalizing all other legal bases since nearly all Union measures have some cost implication.
In reality, the Court’s judgment may have disguised a policy preference for Article 114 TFEU at a time when Article 114 TFEU required the more democratic cooperation procedure,134 allowing for a greater involvement of the European Parliament, while other Treaty provisions, like the environmental basis (Article 130s EEC as it then was), required only simple consultation. However, such reasoning was much criticized because it allowed procedural rules to determine the choice of legal basis rather than the substantive content of the measure, and significant doubt has now been cast on elements of Titanium Dioxide. In the Waste Directive135 case the Court said that recourse to Article 114 TFEU was not justified where the measure to be adopted had ‘only the incidental effect of harmonizing market conditions within the [Union]’136 and in Beef Labelling137 the Court refused to countenance an argument that Article 114 TFEU should be used due to its more democratic procedures.
Therefore, it can now be said that if an examination of a Union act shows that it has a twofold purpose, one of which is identifiable as main or predominant and the other merely incidental or ‘ancillary’, the act must be founded on the sole, predominant, legal basis.138 Exceptionally, the Court will accept a dual basis. As the Court said in Ex p. BAT,139 if it is established that the act simultaneously pursues a number of objectives, indissociably linked, without one being secondary and indirect in relation to the other, such an act may be founded on the various corresponding legal bases.140 On the facts of the case, the Court said that because the directive had been properly adopted on the basis of Article 114 TFEU it could not simultaneously have Articles 114 TFEU and 207 TFEU for a legal basis: the provisions affecting tobacco products exported to non-EU states were secondary to the aim and content of the directive as a whole, which was primarily designed to improve the conditions for the functioning of the internal market.141 However, since the reference to p. 571↵Article 207 TFEU was a formal defect only, it did not invalidate the directive because the procedures under the two bases were essentially similar.142
With a greater use of the ordinary legislative procedure following the Lisbon Treaty, these Treaty-base disputes should become less common. However, the residual legal basis in Article 352 TFEU is not subject to the ordinary legislative procedure. In its revised form it provides that if action by the Union should prove necessary, within the framework of the policies defined in the Treaty, to attain one of the objectives set out in the Treaty (thereby broadening the scope of the original Article 308 EC, which was limited to action necessary to attain the common market),143 and the Treaty has not provided the necessary powers, the Council, acting unanimously on a proposal from the Commission and after obtaining the consent of the European Parliament, must adopt the appropriate measures. Those measures may be legislative in character, in which case they are deemed to have been adopted by the special legislative procedure. Perhaps in a nod to the problems generated by Tobacco Advertising I and the Court’s cavalier approach to the non-harmonization provision in Article 168(5) TFEU, Article 352(3) provides ‘Measures based on this Article shall not entail harmonisation of Member States’ laws or regulations in cases where the Treaties exclude such harmonisation.’144
One of the most controversial uses of Article 352 TFEU was the proposal for the adoption of the so-called Monti II Regulation145 intended to address the problems arising from the Court’s decision in Viking,146 which trade unionists saw as limiting their right to strike. This proposal was intended to strike a better balance between principles of free movement and the right to strike while introducing an alert mechanism which required Member States to notify the Commission of ‘serious acts or circumstances affecting the effective exercise of the freedom of establishment or the freedom to provide services which could cause grave disruption to the proper functioning of the internal market and/or which may cause serious damage to its industrial relations system or create serious social unrest in its territory or in the territory of other Member States’. A number of Member States objected to the use of Article 352 TFEU as the legal basis and argued that the Commission was deliberately using Article 352 TFEU to circumvent the limits in Article 153(5) TFEU, which provides that the provisions of Article 153(5) TFEU will not apply to ‘pay, the right of association, the right to strike or the right to impose lock-outs’. The Yellow Card Procedure under the Subsidiarity Protocol (see Section 4) was invoked for the first time and the Commission withdrew the proposal.
4. The Application of the Principles of Subsidiarity and Proportionality to Measures Adopted under Article 114 TFEU
In areas, such as the internal market, where the Union’s competence is not exclusive,147 measures adopted must respect the principle of subsidiarity148 (i.e., they should be taken p. 572↵at the lowest appropriate level149). If an application of the subsidiarity principle reveals that the Union should act, any measure adopted must also be proportionate (no more extensive than necessary to achieve the objective).150 For many years the Court has been reluctant to engage in a detailed examination of the compatibility of a Union act with the principles of subsidiarity and proportionality because, as it explained in Ex p. BAT,151 ‘the [Union] legislature must be allowed a broad discretion in an area such as that involved in the present case, which entails political, economic, and social choices on its part, and in which it is called upon to undertake complex assessments’. Consequently, the legality of a measure adopted can be affected ‘only if the measure is manifestly inappropriate having regard to the objective which the competent institution is seeking to pursue’.152
Subsidiarity has proved a particularly sensitive issue. In the past, the Court has been reluctant to review the merits of complaints alleging breach of subsidiarity, viewing subsidiarity more as a political than as a legal principle. In particular, it has refused to examine whether the criteria laid down in Article 5(3) TEU (i.e., whether the action can be sufficiently achieved by the Member States or, whether by reason of the scale or effects of the proposed action, it could be better achieved by the Union) have been met.153 Instead, the Court has been content to focus on the procedural aspects of the subsidiarity principle, checking to see whether the Union institutions have actually considered the implications for the principle of subsidiarity of the proposed measure;154 it has not been prepared to look behind those reasons to see whether they were justified. For example, in Working Time155 the Court simply observed that if harmonization was at issue this ‘necessarily’ presupposed Union-wide action,156 without examining the prior question of whether there was a need for harmonization in this area. Similarly, in Biotechnological Inventions157 the Court argued that the objective pursued by the directive, to ensure the smooth operation of the internal market by preventing or eliminating differences between the legislation and practice of the various Member States, could not be achieved by action taken by the Member States alone. As the scope of the protection of biotechnological inventions had immediate effects on trade and on intra-Union trade, it was clear that ‘given the scale and the effects of the proposed action, the objective in question could be better achieved by the [Union]’.158
However, in Ex p. BAT159 the Court showed itself a little more willing to consider the merits of the subsidiarity principle in deciding whether the EU should have adopted the Tobacco Control Directive 2001/37. It began by considering ‘whether the objective of the proposed action could be better achieved at [Union] level’.160 It said that since the directive’s objective was to eliminate the barriers raised by the differences which still existed p. 573↵between the laws of the Member States on the manufacture, presentation, and sale of tobacco products, ‘such an objective cannot be sufficiently achieved by the Member States individually and calls for action at [Union] level, as demonstrated by the multifarious development of national laws in this case’. It therefore considered that the objective of the directive could be better achieved at Union level.161 In effect this is a clearer articulation of the point made in Working Time and Biotechnological Inventions that harmonization requires EU action. Rather curiously, the Court then appeared to merge the tests of subsidiarity and proportionality. It said that:
the intensity of the action undertaken by the [Union] in this instance was also in keeping with the requirements of the principle of subsidiarity in that … it did not go beyond what was necessary to achieve the objective pursued.162
The Court also found the Tobacco Control Directive’s provisions proportionate. For example, when considering the obligation to give information on the tar, nicotine, and carbon monoxide levels and to print health warnings on the packets, it noted that these were appropriate measures for attaining a high level of health protection when the barriers raised by national laws on labelling were removed.163 The Court continued that although the directive required more of the surface area of the packaging to be used for warnings, it also allowed for sufficient space to be left for the manufacturers to affix other material, in particular trade marks. For this reason, the Court concluded, ‘the [Union] legislature has not overstepped the bounds of the discretion which it enjoys in this area’.164
Similarly, in Tobacco Advertising II165 the Court made clear that a tailored ban on tobacco advertising (the ban did not apply to publications intended for professionals in the tobacco trade or published in third countries) was proportionate.166 It was also compatible with Article 10 ECHR on the freedom of expression. As the Court said, the discretion enjoyed by the competent authorities in determining the balance to be struck between freedom of expression in Article 10(1) and objectives in the public interest referred to in Article 10(2) varies for each of the goals justifying restrictions on that freedom and depends on the nature of the activities in question. When a certain amount of discretion is available, ‘review is limited to an examination of the reasonableness and proportionality of the interference. This holds true for the commercial use of freedom of expression in a field as complex and fluctuating as advertising.’167
Amendments introduced by the Lisbon Treaty are intended to improve the monitoring and enforcement of the subsidiarity principle through ex ante control by national parliaments, the bodies that stand to lose most by Union action, rather than by ex post review by the Court.168 Article 5(3) TEU says that the Union’s institutions must apply the principle of subsidiarity in accordance with Protocol No. 2 on the principles of subsidiarity and proportionality. National parliaments are to ensure compliance with the principle of subsidiarity p. 574↵in accordance with Protocol No. 1 on the role of national parliaments in the European Union.169 Protocol No. 2 introduces the so-called ‘yellow card’ procedure (discussed in Section 3 earlier in respect of the Monti II proposal), under which any national parliament or chamber can object to a proposed EU measure, on the grounds that it does not comply with the principle of subsidiarity, by issuing a reasoned opinion. Where one-third of the national parliaments object, the proposal must be formally reviewed by the EU institutions.170 Heightened scrutiny applies to a proposal under the ordinary legislative procedure, which is objected to by a simple majority of votes allocated to national parliaments.
The (now defunct) UK’s New Settlement deal made provision for the introduction of the so-called red card procedure. Section C.2 of the Decision of the Heads of State or Government provided that ‘Where reasoned opinions on non-compliance of a draft Union legislative act with the principle of subsidiarity, sent within 12 weeks from the transmission of a draft, represent more than 55% of the vote allocated to the national parliaments, the Council Presidency will include the item on the agenda of the Council’ for a comprehensive discussion. Following such discussion, the representatives of the Member States would ‘discontinue the consideration’ of the draft, unless the draft was amended to accommodate the concerns. In other words, despite the language of red card, this was not in fact a blocking measure and the voting configurations in Council could already achieve this outcome. Perhaps of more significance in practice was the clear statement that ‘The choice of the right level of action therefore depends, inter alia, on whether the issue under consideration has transnational aspects which cannot be satisfactorily regulated by action by Member States and on whether action at Union level would produce clear benefits by reason of its scale or effects compared with actions at the level of Member States.’
5. Derogations From Measures Adopted under Article 114(1) TFEU
Perhaps the most striking and controversial feature of Article 114 TFEU is that Article 114(4)–(5) TFEU makes express provision for Member States to derogate from a measure adopted under Article 114(1) TFEU.171 This was the price for the introduction of QMV into Article 114(1) TFEU.172 Originally the possibility of opting out of Article 114(1) TFEU measures was confined, by Article 114(4) TFEU, to national measures existing at the time when the harmonization measure was adopted (i.e., pre-existing national measures).173 Article 114(4) TFEU says:
If, after the adoption of a harmonisation measure by the European Parliament and the Council, by the Council or by the Commission, a Member State deems it necessary to maintain national provisions on grounds of major needs referred to in Article 36, or relating to the protection of the environment or the working environment, it shall notify the Commission of these provisions as well as the grounds for maintaining them.174
p. 575↵The Amsterdam Treaty extended the possibility of derogating from measures adopted under Article 114(1) TFEU to national rules adopted after the enactment of the harmonization measure. So, Article 114(5) TFEU allows a Member State ‘to introduce national provisions based on new scientific evidence … on grounds of a problem specific to that Member State arising after the adoption of the harmonisation measure’.175 This scientific evidence—which must be both new and raising a problem specific to the applicant Member State—can relate only to the protection of the environment or the working environment. Thus, unlike Article 114(4) TFEU, the grounds listed in Article 36 TFEU cannot be invoked to justify a national derogation under Article 114(5) TFEU.176 This is because, as the Court explained in Commission v. Denmark177 in respect of Article 114(4) TFEU, the EU institutions already know of the national provisions but choose not to take them into account, while the adoption of new national legislation under Article 114(5) TFEU is more likely to jeopardize harmonization. For this reason, the grounds under which Article 114(5) TFEU can be invoked are more limited.
The Amsterdam Treaty also elaborated on the procedure to be followed once a Member State has notified either an existing or a new national measure. On receipt of a notification, Article 114(6) TFEU provides that the Commission has six months (or 12 in the case of complexity) to approve or reject the national provisions ‘after having verified whether or not they are a means of arbitrary discrimination or a disguised restriction on trade between Member States and whether or not they shall constitute an obstacle to the functioning of the internal market’.178 If the Commission does not respond within the six-month period the national provisions are deemed to have been approved.179 If the Commission does respond and authorizes a Member State to maintain or introduce national provisions derogating from a harmonization measure, the Commission can examine whether to propose an adaptation of the harmonization measure,180 especially when the national provisions approved by the Commission offer a level of protection which is higher than the harmonization measure.181 Article 114(9) TFEU then provides an expedited procedure, by way of derogation from Articles 258–9 TFEU, to bring a Member State directly before the Court of Justice if the Commission or another Member State considers that a Member State is making improper use of the derogation procedure.
p. 576↵Despite the initial fears of some commentators,182 Article 114(4)–(5) TFEU has not been much invoked by Member States,183 except in the area of GMOs. The most notorious case was a derogation obtained by Germany from Directive 91/173 on dangerous substances184 enabling it to maintain stricter standards for PCPs (pentachlorophenol) than those provided in the directive.185 But the case’s notoriety arose not from Germany’s abuse of the procedure but from the Commission’s procedural failings in respect of the decision granting the derogation to Germany.186 As the Court said in France v. Commission,187 the Commission had merely described in general terms the content and aim of the German rules and then stated that those rules were compatible with Article 114(4) TFEU ‘without explaining the reasons of fact and law on account of which the Commission considered that all the conditions contained in Article [114(4) TFEU] were to be regarded as fulfilled in the case in point’.188 In particular, the Court said, the Commission should have checked whether the German provisions were justified on the grounds of the major needs mentioned in Article 114(4) TFEU and were not a means of arbitrary discrimination or a disguised restriction on trade.189
The Court has also been prepared to take a tough line under Article 114(5) TFEU, requiring Member States to show that they have satisfied the conditions prescribed. This can be seen in the Austrian GMO case. The provincial government of Upper Austria wanted to ban GMOs, on the basis of a scientific report, in order (1) to safeguard organic and traditional farming which is characteristic of the region, and (2) to protect natural biodiversity, particularly in sensitive ecological areas, as well as genetic resources, from ‘contamination’ by GMOs. Since this ban would contravene the controversial Directive 2001/18 on the deliberate release of GMOs into the environment,190 the Austrian government notified the Commission of its draft legislation, in accordance with Article 114(5) TFEU. The Commission referred the matter to the European Food Safety Authority,191 which found that (1) there was no new scientific evidence, in terms of risk to human health and the environment, to justify the prohibition;192 (2) there were no new data that would change the environmental risk assessment conducted on GMOs that currently held marketing consent in the EU; and (3) there was no scientific evidence to indicate that Upper Austria had unusual or unique ecosystems that required separate risk assessments from those p. 577↵carried out for Austria as a whole.193 The Commission therefore rejected the Austrian application.194
The Land of Upper Austria unsuccessfully sought judicial review of the Commission’s decision.195 The General Court emphasized that, in order to avoid prejudicing the binding nature and uniform application of Union law, the procedures laid down in Article 114(4)–(5) TFEU were both intended to ensure that no Member State applied national rules derogating from the harmonized legislation without obtaining prior approval from the Commission. In that respect, the rules applicable to national measures notified under Article 114(4) TFEU did not differ significantly from those which applied to national measures still in draft form notified under Article 114(5) TFEU.196 In respect of Austria’s application under Article 114(5) TFEU, the Court noted that Austria had failed to satisfy the burden of proof that there existed specific problems faced by Upper Austria197 and, since one of the cumulative conditions laid down in Article 114(5) TFEU had not been satisfied, Austria could not derogate from Directive 2001/18.198 The Court of Justice upheld the General Court’s decision.199 However, Austria’s protests were not in vain: Directive 2015/412 was adopted allowing Member States the possibility of restricting or prohibiting the cultivation of GMOs in their territory.200
6. Non-Legislative Acts
The legislative acts can be supplemented by ‘non-legislative acts’. For our purposes, these non-legislative acts take two forms. The first are Article 290 TFEU delegated acts. These can be regulations, directives, or decisions adopted by the Commission which supplement or amend certain non-essential elements of the legislative acts. Drawing on the Court’s decisions in cases like Smoke Flavourings, Article 290 TFEU provides that the parent legislative act must lay down the objectives, content, scope, and duration of the delegation. It also specifies the conditions to which the delegation is subject (i.e., the EP or the Council may decide to revoke the delegation (a more exceptional measure of control), or the delegated act may enter into force only if no objection has been expressed by the EP or Council within the period expressed by the legislative act).
The second type of non-legislative acts are Article 291 TFEU implementing acts. These can be regulations, directives, or decisions which are adopted by the Commission to ensure uniform conditions for implementing legislative acts. The parent ‘legislative act’ will confer implementing powers on the Commission. The procedure by which the Commission acts (the advisory procedure for less politically controversial matters or the examination procedure for more controversial matters, e.g., programmes with substantial implications, taxation, health and safety) is also specified in the parent measure. The detail of those procedures is spelled out in Regulation 182/2011.201 In summary, where the p. 578↵advisory procedure is used the Commission must take the ‘utmost account’ of the opinion of the relevant ‘comitology’ committee, composed of representatives of the Member States and chaired by the Commission, but is not obliged to follow it. By contrast, under the examination procedure if the relevant comitology procedure votes against the implementing measure the Commission cannot adopt it, but the Commission can submit the draft to the appeal committee for further deliberation.
The use of these two types of non-legislative acts can be seen in the context of illegal logging. EP and Council Regulation 995/2010, adopted under Article 114 TFEU, lays down the obligations of operators who place timber and timber products on the market.202 It prohibits the placing of illegally harvested timber on the EU market and sets up a system of due diligence for operators when placing timber on the market to minimize the risk of placing illegally harvested timber on the market. The bare bones of the due diligence system are contained in Article 6(1) of the regulation. Article 6(2) of the regulation provides that detailed rules necessary to ensure the uniform implementation of paragraph 1 must be adopted in accordance with the examination procedure.203 These rules were adopted by Commission Implementing Regulation 607/2012.204
Regulation 995/2010 also made provision for the establishment of monitoring organizations, which must maintain and evaluate the due diligence system and take action against an operator not using the due diligence system. It identifies the criteria for recognizing and withdrawing recognition from the monitoring organizations. Article 8(7) provides that: ‘In order to supplement and amend the procedural rules with regard to the recognition and withdrawal of recognition of monitoring organisations and, if experience so requires, to amend them, the Commission may adopt delegated acts in accordance with Article 290 TFEU.’ The Commission duly adopted Delegated Regulation 363/2012 on the procedural rules for the recognition and withdrawal of recognition of monitoring organizations as provided for in Regulation 995/2010.205
It is, in fact, often difficult in any particular case to determine whether the measure is classified as an implementing act or a delegated one.206 However, in Biocidal products the Court indicated that its review of the choice would be light-touch.207 It said:
It must be noted that the EU legislature has discretion when it decides to confer a delegated power on the Commission pursuant to Article 290(1) TFEU or an implementing power pursuant to Article 291(2) TFEU. Consequently, judicial review is limited to manifest errors of assessment as to whether the EU legislature could reasonably have taken the view … that the system requires uniform conditions for implementation.
C. Different Approaches to Harmonization
1. Introduction
Having examined the Union’s power to harmonize national rules, we turn now to consider the different approaches adopted by the Union to harmonization. In essence, harmonization involves replacing the multiple and divergent national rules on a particular subject p. 579↵with a single EU rule. This rule is intended to protect certain beneficial interests, which would otherwise be protected by national law and justified on the ground of one of the express derogations or a public-interest requirement (e.g., consumer protection and public health), while at the same time advancing free trade and market integration. The Union has long faced the problem of how to realize a harmonized, uniform standard and thus a level playing field upon which firms can compete, while at the same time respecting (even fostering) the diversity of the national systems. The EU has experimented with different types of harmonization measure—exhaustive, optional, partial, minimum, reflexive—which we shall examine in turn. However, we begin by examining the situation where no harmonization is necessary at all: mutual recognition.
2. Mutual Recognition
The principle of mutual recognition means that products/services lawfully put on the market in one Member State can and should be allowed access to the markets in other Member States because they have already satisfied home-state controls. This principle—found in the Treaty208 and confirmed by Cassis de Dijon209—lies at the heart of the single market, where standard-setting and enforcement are decentralized, thus removing the need for harmonization. Putting it bluntly, mutual recognition means if the standards by which the goods are produced are good enough for Member State A, they should be good enough for Member State B. The result of this approach is to put the national systems of regulation into competition.210 It also means that goods from State A going into State B essentially carry with them State A’s regulatory regime.
Mutual recognition goes beyond the simple requirement that the host state must not discriminate on the ground of nationality. As Armstrong puts it, it requires host states to be ‘other-regarding’ in the sense that they must recognize and give meaning to information about the regulatory history of a product, service, or worker coming from another Member State.211 Host state administrators need to be open to the regulatory systems of other Member States and active in their assessment of equivalence. The duty to be ‘other-regarding’ also applies to legislators. National legislation must not foreclose the possibility of accepting products complying with equivalent standards made in other Member States. Therefore, in Foie Gras212 France was condemned by the Court for adopting a law on the use of the term ‘foie gras’ without including a mutual recognition clause in its legislation. Such a clause would permit foie gras produced to equivalent standards in other Member States to be sold in France. The Commission now requires mutual recognition clauses to be included in all technical regulations to alert economic operators to the existence of the principle,213 although Commission v. France (nutrients)214 cast doubt on the validity of this requirement, especially in legislation which is not susceptible to having such a clause imposed (e.g., legislation requiring authorization such as that at issue in the Nutrients case).215
p. 580↵However, despite the promise offered by the principle of mutual recognition as a vehicle for ensuring both market access and national regulatory diversity, its full potential has been limited by administrators who are reluctant to recognize the equivalence of foreign products.216 As we saw in Chapters 3 and 5, the Mutual Recognition Regulation 764/2008 now Regulation 2019/515, laying down procedures relating to the application of certain national technical rules to products lawfully marketed in another Member State, attempts to overcome this problem. This regulation introduces the mutual recognition declaration to show that the goods are lawfully marketed in another Member State.
The role of mutual recognition has also been limited by the Court, first by the introduction of mandatory requirements which can rebut the presumption of mutual recognition,217 and, secondly, by the development of the principle of functional equivalence,218 which requires those making an assessment of equivalence to take into account not only the foreign standards but also the broader context in which the goods/services are to be used. This can be seen in Commission v. France (woodworking)219 concerning woodworking machines manufactured in Germany according to standards which took account of the fact that those (Germans) operating them would have a high level of training. However, in France, standards were premised on the fact that (French) users of the machines had to be protected from their own mistakes and so presupposed a low (or non-existent) level of training. Given these differences between the systems, the Court allowed France to apply its own standards to the imported German goods.
While the principle of mutual recognition is attractive and continues to be a key pillar of the single-market programme, the serious limits on its use have meant that it is not a miracle solution and that there is still a need for harmonization legislation to ensure free movement.220 We start by examining exhaustive harmonization.
3. Exhaustive Harmonization
3.1 What Is It?
As the name suggests, exhaustive (or full) harmonization concerns situations where diverse national rules are replaced by a single EU rule, leaving no room for Member State action. A number of such directives have been adopted in the field of goods and all impose a twofold obligation on the Member States:
to permit the goods complying with the directive to be freely imported and marketed (the free movement clause)
to prohibit the sale of goods not complying with the directive, even when manufacture and sale take place wholly inside one Member State (the exclusivity clause).
p. 581↵Directive 76/768,221 concerning the content of cosmetics together with their packaging and labelling, provides a good example of exhaustive harmonization in the field of goods. Article 7(1) of Directive 76/768 contains the free movement clause:
Member States may not, for reasons related to the requirements laid down in this Directive and the Annexes thereto, refuse, prohibit or restrict the marketing of any cosmetic products which comply with the requirements of this Directive and the Annexes thereto.
Article 3 of Directive 76/768 contains the exclusivity clause:
Member States shall take all necessary measures to ensure that only cosmetic products which conform to the provisions of this Directive and its Annexes may be put on the market.
Once the Union has adopted an exhaustively harmonized standard222 Member States cannot unilaterally impose stricter standards because their action is pre-empted. For example, Article 6(1) of the Cosmetics Directive 76/768 and its annexes list the information which must appear on the packaging of cosmetics. Because this list is ‘exhaustive’, the Court said in Provide223 that Germany could not require further information concerning the quantity and quality of a particular product.224
The UK also discovered the full effects of pre-emption in Dim-dip Headlights.225 The annex to Directive 76/756/EEC226 contained a list of all the lighting and light-signalling devices that were permitted on motor vehicles. This list did not include the dim-dip device which, for safety reasons, British law required vehicles to have. The Court said that because the annex contained an exhaustive list of all the lighting devices considered necessary or acceptable for motor vehicles,227 the UK could not unilaterally require manufacturers who had satisfied the harmonized technical rules set out in Directive 76/756/EEC to comply with this additional British requirement. Thus, in the name of free movement, the UK was deprived of the possibility of imposing additional safety standards. If the area had not been harmonized and the matter had been dealt with by the Court solely under Articles 34 and 36 TFEU, such additional requirements might well have been justified. However, as the Court said in Van Bennekom,228 when EU directives made provision for the full harmonization of all the measures needed to ensure, inter alia, the protection of human and animal health and life, then recourse to Article 36 TFEU ceased to be justified.
Given the pre-emptive effects of exhaustive harmonization, the Court will check to see whether the directive does in fact fully harmonize the field. This can be seen in Crespelle,229 a case concerning the unlikely subject of trade in deep-frozen bovine semen. Directive 88/407230 on health requirements of bovine semen made provision for the collection and p. 582↵processing of semen in the Member State of dispatch and transport to the state of destination. It did not, however, address the question of the storage or use of semen in the state of destination. The Court therefore said that since health conditions in intra-Union trade in bovine semen had not yet been fully harmonized at EU level, the state of destination (France) could take unilateral action and, relying on the health grounds in Article 36 TFEU, require importers of bovine semen to store it in an authorized insemination and production centre.231
3.2 The Problem with Exhaustive Harmonization
Exhaustively harmonized rules have their attractions for producers: by developing a clear set of rules which manufacturers can apply, they create a level playing field for competition, thereby reducing transactions costs. However, negotiating the content of those rules can take years232 because, given the pre-emptive effects of any Union rule, Member States are determined to ensure that their own national interests are protected (see Case Study 3.1: Jam and Chocolate) and, where the legal basis requires unanimous voting in Council, any unpopular proposal can be blocked almost indefinitely. And, once adopted, the same obstacles make such legislation difficult to amend to take account of innovation or other unforeseen circumstances, making harmonization conservative and inflexible. Furthermore, by its very nature, exhaustive harmonization eliminates the chance for diversity and experimentation at national level and so raises the spectre of creating Euro-products (sausages, beer, cheese). Yet this is a caricature of exhaustive harmonization: as Case Study 14.1 demonstrates, harmonization legislation has helped accommodate national differences through derogations,233 opt-outs, and phased implementation. In areas such as consumer law, the Commission has returned to the use of exhaustive harmonization, reasoning that the benefits outweigh the disadvantages.234 The Consumer Rights Directive 2011/83235 provides an example. Article 4 says:
Member States shall not maintain or introduce, in their national law, provisions diverging from those laid down in this Directive, including more or less stringent provisions to ensure a different level of consumer protection, unless otherwise provided for in this Directive.
The Consumer Sales Directive has an equivalent clause.236
3.3 Subordinate Legislation
Further flexibility is introduced into exhaustive harmonization measures by provisions allowing for adaptation to technical progress through subordinate legislation—either delegated acts, where the Commission’s activities are overseen by both the Parliament and the Council, or implementing acts, where the Commission’s activities are overseen by various comitology committees. In Alliance for Natural Health237 the Court recognized the value of the comitology procedure:238
[It] is intended to reconcile, on the one hand the requirement for effectiveness and flexibility arising from the need regularly to amend and update aspects of [Union] legislation in the light of developments in scientific understanding in the area of protection of human health and safety and, on the other, the need to take account of the respective powers of the [Union] institutions.
An example of the application of the comitology procedures can be found in Article 10 of the original Cosmetics Directive 76/768. This provided that the Standing Committee on Cosmetic Products (comprising representatives of the Member States) would assist the Commission239 under the regulatory committee procedure (now the examination procedure) in amending the lists of substances which cannot be used in cosmetics. Scientific expertise is provided by the Scientific Committee on Consumer Safety (SCCS).240 The role of the SCCS was emphasized in Angelopharm,241 where the Court said that since the purpose of consulting the Scientific Committee was to ensure that measures adopted at EU level were necessary and adapted to the objective pursued by the Cosmetics Directive of protecting human health, ‘consultation of the Committee must be mandatory in all cases’.242
Extensive use is also made of subordinate legislation in the Lamfalussy process, which is considered at Section 7.3.
3.4 Conclusions
Despite the various techniques to ensure flexibility, hostility to exhaustive European regulation was acute. In the UK, the so-called ‘Metric Martyrs’ case, Thoburn,243 demonstrated this most clearly. According to Directive 80/181/EC244 as amended, metric measures had to be the primary indicators for goods sold loose from 31 December 2000. Imperial measures could be used until January 2010 but only as secondary indicators.245 Steve Thoburn, a British greengrocer, was successfully prosecuted for using scales calibrated only in imperial measures. He and four others appealed to the Divisional Court, unsuccessfully invoking the doctrine of implied repeal to challenge the validity of the UK’s implementation of the EU directives.246 They were bitter in defeat and used their new-found celebrity to challenge the legitimacy of EU lawmaking.247 Some of the seeds of Brexit date back to this time. Against this backcloth of hostility, it is not surprising that the EU increasingly looked to other types of harmonization.
4. Optional Harmonization
One such alternative is optional harmonization, where directives provide a harmonized standard which manufacturers can choose whether to follow. Such directives therefore have a free movement clause but not an exclusivity clause. This means that if manufacturers p. 584↵wish to trade goods across frontiers, then the harmonized standard must be applied; if they wish to operate on a local market only, they can decide whether to apply the harmonized standard or continue to apply national rules. Directive 71/316 on measuring instruments248 provides an example of such harmonization. The preamble makes it clear that initially EU standards would complement national standards and later, after the required conditions develop, national standards would be replaced by Union standards.
While optional harmonization offers some advantages, by avoiding the disruption to existing markets and preventing technical progress from being stifled, it does raise problems in respect of trade in non-conforming products and difficulties with Articles 34–6 TFEU. It has therefore been little used.
5. Minimum Harmonization
5.1 What Is It?
Minimum harmonization is one of the most common forms of approximation used today. As the name suggests, the Union sets minimum standards, but Member States are free to impose higher standards on their own goods and services. This partly explains the popularity of minimum standards directives: they help to reconcile the need for a level playing field for competition (the minimum standards) with space to accommodate national diversity (above those minima). This is particularly important in more welfare-orientated areas such as social and consumer policy that merely interface with, rather than serve, the economic demands of the single market.
Although minimum harmonization directives have been around since the early days of the EU,249 their use was constitutionalized by the Single European Act 1986, when certain new legal bases expressly provided that the Union should adopt directives laying down ‘minimum requirements’250 and that these directives did not ‘prevent any Member State from maintaining or introducing more stringent protective measures compatible with the Treaty’.251 Even though Articles 114–15 TFEU do not contain an express minimum standards clause, minimum harmonization directives have also been adopted under these bases,252 as the Tobacco Labelling Directive 89/622 and the Tobacco Control Directive 2001/37 (considered in Case Study 14.1) both show.
Minimum harmonization directives therefore provide the floor below which national legislation cannot fall. This floor is exhaustively harmonized and may be set at a relatively high level. As the Court explained in the Working Time case, minimum standards do not mean minimal standards: the term minimum requirements ‘does not limit [Union] action to the lowest common denominator, or even the lowest level of protection established by the Member States’.253 Over and above the floor, Member States are free to choose whether p. 585↵to adopt more stringent measures than those resulting from EU law.254 The only constraints on that freedom are the provisions of the EU Treaties.255
Buet,256 concerning doorstep selling, provides a good example of how the Treaty set the ceiling beyond which national legislation cannot go. Doorstep selling was regulated by Directive 85/577/EEC on the protection of the consumer in respect of contracts negotiated away from business premises.257 The directive did not prohibit doorstep selling; rather it aimed to protect the consumer from the surprise element associated with such contracts by giving the consumer a right of cancellation.258 However, Article 8 of the directive allowed Member States to adopt or maintain more favourable provisions to protect the consumers,259 which, according to the preamble, might include ‘a total or partial prohibition on the conclusion of contracts away from business premises’.260 This was the approach adopted by French law. The question in Buet was whether the French provisions were compatible with Article 34 TFEU. The Court acknowledged that the French law constituted an obstacle to imports and breached Article 34 TFEU but found that it could be justified on the grounds of protecting consumers, especially those who were particularly vulnerable, against the risk of ill-considered purchases. Thus, the French prohibition on door-to-door selling, which gave consumers more protection than that laid down by the floor in the directive, was also compatible with the ceiling provided by the Treaty provisions (Articles 34–6 TFEU).
5.2 Reverse Discrimination
Laws protecting consumers are territorial in nature. Not only do they apply to all companies established in the state which sets standards above the directive’s minima (e.g., France) but they also apply to those companies wishing to trade in France but established in another Member State where only the minimum standards laid down by the directive have been implemented. So, if a company wishes to leave France in order to avoid the ban on doorstep selling and set up in Belgium, where it can engage in doorstep selling, it will nevertheless have to respect France’s standards when trading in France. Therefore, in respect of consumer protection rules, when a Member State sets higher standards than the directive’s minima its businesses do not suffer a competitive disadvantage and consumers benefit.
p. 586↵The situation may be different in respect of minimum standards directives which regulate products. For example, if French law requires goods manufactured in France to be produced according to standards above the directive’s minima, the French manufacturer may be placed at a competitive disadvantage when exporting its goods to Belgium, where the manufacturer has to comply only with the minimum standards laid down by the directive. This disadvantage also extends to sales within France. If, due to the free movement clause, the directive requires that France admits Belgian goods manufactured according to the minimum requirements laid down by the directive, while French goods have to be manufactured according to the higher French standards, French producers may suffer a competitive disadvantage when faced with competition from their Belgian rivals. The disadvantage experienced by national producers forced to comply with ‘superior’ national laws is known as ‘reverse discrimination’.
The compatibility of reverse discrimination with Union law was considered by the Court in Gallaher,261 a case concerning the UK’s implementation of Directive 89/622262 on tobacco labelling (see Case Study 14.1). The directive required that indications of tar and nicotine levels and health warnings should cover ‘at least 4%’ of the surface area of the packet. Although the UK voted against the directive, arguing that it represented an undue incursion into national competence,263 the British implementing rules actually exceeded the minimum requirements laid down by the directive since they required that the warnings cover ‘at least 6%’ of the surface of the packet.264 However, in accordance with the free movement clause in Article 8 of the directive,265 the UK regulations provided that an importer of cigarettes from another Member State was to be regarded as complying with the requirements of UK law if the packets carried the warnings in English and those warnings complied with the rules of the state of origin (normally 4 per cent).266 Various tobacco companies argued that this different treatment led to reverse discrimination and inequalities in conditions of competition267 but the Court rejected their argument, saying that the reverse discrimination was the consequence of ‘the degree of harmonization sought by the provisions in question, which lay down minimum requirements’.268
The same rule about reverse discrimination applies equally to exports, as Compassion in World Farming (CWF) demonstrates.269 Directive 91/629/EEC270 laid down minimum standards for the protection of fattening calves, including minimum provisions on housing space and diet. Article 11(2) provided that ‘Member States may, in compliance with the p. 587↵general rules of the Treaty, maintain or apply within their territories stricter provisions for the protection of calves than those laid down in this Directive.’271 Stricter standards were applied in the UK. The Court confirmed that the UK could not, as CWF had advocated, ban exports of calves for rearing in veal crates to countries which had implemented the directive, but which did not have the same high standards as the UK. Such a result would have given extraterritorial effect to UK law and undermined the harmonization achieved by the directive. The Court said that:
the fact that the Member States are authorised to adopt within their own territory protective measures stricter than those laid down in a directive does not mean that the Directive has not exhaustively regulated the powers of the Member States in the area of the protection of veal calves.272
In other words, the floor laid down by the directive was exhaustively harmonized regarding imported/exported goods. The UK was free to insist upon higher standards, but only in respect of British calves.
The effect of these rulings might be to prompt a company to move to a Member State which requires only the (cheaper) minimum standards laid down by the directive and then, relying on the directive’s free movement clause, import products into the UK, thereby circumventing the higher British standards.273 Faced with the prospect of an exodus of companies (and thus the loss of British employment), the UK might decide to drop its higher standards and require only the directive’s minima. In this way a minimum rule risks becoming a maximum rule. If this is the case, then the level at which that minimum is set becomes an important issue for the purpose of consumer protection.
However, some commentators can see commercial advantages for producers manufacturing in states which do insist on higher standards. For example, Scharpf argues that national regulations setting standards above the minima may serve as a certificate of superior quality.274 Where this is the case, high levels of regulation imposed by France or the UK may create a competitive advantage for the companies subjected to them, and thus exert a competitive pressure on other governments to raise their own level of regulation. These national product regulations may then induce a race to the top, particularly if the French or British market is considered attractive and big enough, with governments of other Member States being persuaded to regulate at French/British levels (or at least their producers voluntarily manufacturing according to French/British standards) so that they do not lose out competitively. This is sometimes referred to as the ‘California effect’,275 where states in the USA copied the stricter environmental standards of California in order to enable their producers to trade on the Californian market.
Minimum harmonization is inevitably a compromise between market integration and ensuring sufficient flexibility for Member States. In terms of market integration, the free movement clause has the advantage of ensuring that out-of-state traders will have to comply with only one set of rules across the EU, even if producers in a state which requires higher standards may suffer a competitive disadvantage. From the perspective of diversity p. 588↵and regulatory autonomy, minimum harmonization also has merits because Member States are free to experiment above the minima, if they so choose. Member States must inform the Commission of the steps they have taken to implement the directive,276 which gives the Commission a large database of comparative national practice to inform any proposed amendments to the directive.277
6. The New Approach to Technical Harmonization and Standardization
6.1 Introduction
The old vertical approach to harmonization was based on common, detailed, technical rules applying to individual sectors. However, the 1980s witnessed a renaissance of a simpler method of regulation known as the ‘new approach’, which formed a key pillar in the Commission’s White Paper on completing the internal market.278 These new-approach directives are horizontal,279 applying throughout an industry as a whole rather than to specific groups within that industry. Given their broad field of application, these directives set out general principles rather than detailed rules, leaving wide latitude for interpretation,280 and rely on private bodies to set voluntary standards. In fact, this ‘new’ approach is hardly new. It was first tried in the Low Voltage Directive 73/23/EEC281 and the experience gained formed the basis of a Commission Communication,282 approved by the Council in a ‘Resolution on a new approach to technical harmonisation and standards’, which contained a ‘model’ new-approach directive.283 This was followed up by a Commission Communication and a Council Resolution ‘Enhancing the implementation of the new approach directives’. More significant revisions have occurred with the Requirements for Accreditation and Market Surveillance (RAMS) Regulation 765/2008,284 which has laid down general principles on the accreditation of conformity assessment bodies, on CE marking, and on market surveillance; and Decision 768/2008/EC285 on a common framework for the marketing of p. 589↵products, which provides common principles and reference provisions for the purposes of legislation based on the new-approach principles. Both of these measures, which formed part of the Commission’s 2007 Goods Package,286 apply to all the new-approach directives which were revised to take account of the changes they introduce.
6.2 The Fundamental Principles
The Commission summarizes the new approach in the following terms: it ensures free movement of goods on condition that a manufacturer guarantees that they are safe. The legislation sets out the level of protection to be achieved but does not prejudge the choice of technical solution to achieve the levels.287 The new approach is based on five fundamental principles.288 First, legislative harmonization is limited to the adoption of essential safety standards with which products placed on the market must conform. Once goods conform to those standards and a CE marking is placed on the goods, they must enjoy free movement throughout the Union without the need for verification.289 Secondly, the task of drawing up the technical specifications which satisfy the essential requirements is entrusted to specialist standardization organizations, CEN,290 CENELEC,291 and ETSI,292 acting by QMV,293 on a mandate from the Commission.294 Thirdly, these technical standards are voluntary, and the producer has the choice of either manufacturing in accordance with the standards set by the voluntary bodies or manufacturing according to other standards and then proving that they conform with the essential requirements of the directive through a system of tests and certificates.295 Fourthly, products manufactured in conformity with harmonized standards are presumed to conform to the essential requirements established by the directive.296 Finally, Member States must take all appropriate enforcement measures, including market surveillance, to ensure that non-conforming products are withdrawn from the market.
6.3 The Toy Safety Directive
The paradigm example of a new-approach directive is the Toy Safety Directive 2009/48.297 This updates and replaces the original Toy Safety Directive 88/378,298 which itself was considered a key test for the new approach to harmonization299 because it unblocked proposals for a directive on toy safety based on the old approach which had dragged on since the p. 590↵mid-1970s. A proposed directive put forward in 1979 contained over 80 pages of technical annexes.300 By contrast, the new-approach proposal (what became Directive 88/378) took less than two years to adopt, had 15 Articles and four relatively short annexes covering seven pages. Directive 2009/48 is somewhat longer (57 Articles and five annexes) but is based on broadly similar principles, albeit revised to take account of the RAMS Regulation 765/2008 and Decision 768/2008 on marketing of products.
According to the directive, any toy, defined as a product designed or intended for use in play by children under 14 years old,301 may be placed on the market, but only if it meets essential safety requirements. These safety requirements are both general, as set out in Article 10(2) (‘Toys, including the chemicals they contain, shall not jeopardise the safety or health of users or third parties when they are used as intended or in a foreseeable way, bearing in mind the behaviour of children’), and particular, as set out in Annex II to the directive. The onus is on the Member States to ensure that toys cannot be placed on the market unless they meet these essential safety requirements.302 The annex identifies six specific risks: physical and mechanical, flammability, chemical, electrical, hygiene, and radioactivity. In some cases, the requirements are drafted in general terms, setting objectives to be achieved rather than specifying detailed technical rules. For example, the annex provides ‘[t]oys, and their parts must not present a risk of strangulation’. Other requirements are more technical and prescriptive, including the requirement that ‘Toys shall not be powered by electricity of a nominal voltage exceeding 24 volts direct current (DC) or the equivalent alternating current (AC) voltage, and their accessible parts shall not exceed 24 volts DC or the equivalent AC voltage.’
A manufacturer has two ways to ensure that toys satisfy these essential safety requirements. The first is to manufacture the toy according to harmonized standards produced by CEN and CENELEC303 in accordance with Directive 2015/1535.304 Conformity with harmonized standards305 provides a presumption of conformity with the essential safety requirements of the directive.306 The manufacturer is then entitled to affix the CE mark (the French acronym for ‘European Conformity’ (EC)) confirming that the toys comply with the essential safety requirements laid down by the directive.307 This process of self-certification is a central feature of the directive. Contrary to popular belief,308 the CE mark does not represent a guarantee of quality, nor does it indicate prior approval of the toy. It merely shows that the manufacturer declares that it has applied all relevant EU directives.309 The Commission has recognized that the function of CE marking is misunderstood but has not made significant changes. Article 30 of the RAMS Regulation 765/2008 merely reiterates that ‘The CE marking shall be the only marking which attests the conformity of the product with the applicable requirements of the relevant [Union] harmonisation legislation providing for its affixing.’ The Commission also intends to run an information campaign explaining the true meaning of the CE marking.310 It also makes provision for Member States to take action against improper use of the CE marking.
p. 591↵The second method of ensuring compliance with essential safety standards is to manufacture the toy in accordance with a model which has been ‘EC-type examined’ by an approved, conformity assessment body (referred to as a notified body) in the state of manufacture.311 In essence, the notified body will test a sample of the toy to see whether it satisfies the essential safety requirements laid down by the directive. The testing body then issues an ‘EC-type examination certificate’,312 which means that the manufacturer can attach the CE mark to each production toy as a self-declaration that the toy has been manufactured in accordance with the sample which has been the subject of an EC-type examination certificate. This second route for compliance was introduced to encourage innovation in new toys where the existing standards are inadequate to establish compliance with the essential safety requirements.313
Once the toy complies with the directive and bears the CE mark, it enjoys free movement. The host Member State must assume compliance with the essential safety requirements and cannot impede the toy from being placed on its market314 (unless the state’s market surveillance authorities consider that it presents a risk to health and safety315). The host state certainly cannot require products with the CE marking from other Member States to undergo a prior-authorization procedure or any other procedure designed to multiply the number of people required to affix the conformity marking.316 From this perspective the directive is a total harmonization measure:317 once the manufacturer318 complies with the essential requirements its goods will have free access to the markets of all the Member States, with the CE mark acting as a kind of passport. The Member States certainly cannot invoke any Treaty provisions (e.g., Article 36 TFEU) to justify any national measures which derogate from the provisions of the directive.319 However, the principle of mutual recognition also plays a role: the host state must assume that, for example, the certificates issued by the notified body in the state of origin after testing the toy, are equivalent to the host state’s standards or tests. The accreditation rules introduced by the RAMS Regulation are intended to enhance confidence in the genuine equivalence of conformity assessment testing by the 1,800 or so testing bodies in the Member States.
Finally, Member States must organize and perform surveillance of toys placed on the market in accordance with the provisions of the RAMS Regulation. This includes performing physical checks on samples of the toy.320 Where they consider that the product presents a serious risk requiring rapid intervention, they can order the recall of the product.321 The RAPEX mechanism (considered in Section D) is used for exchanging information with other Member States.
6.4p. 592 Assessment
While some commentators have expressed concerns that the new approach may actually reduce protection given to consumers due to the absence of specific detailed standards,322 Pelkmans believes that the new approach is ‘qualitatively an enormous improvement over the traditional approach’.323 He argues that it is a serious attempt to achieve coherence by ‘combining total harmonization of the objectives at issue (safety etc.) with a flexible approach of the means (standardization)’.324 At the heart of the new approach lie the harmonized standards adopted by CEN, CENELEC, and ETSI. Some have questioned whether this constitutes an impermissible delegation of power by the Commission.325 But the Commission argues that no delegation is involved because the standards (as opposed to the essential safety requirements) are voluntary codes and therefore independent of EU law.326 Others have questioned the legitimacy and accountability of CEN, CENELEC, and ETSI. For example, Burrows expresses concerns that decision-making can be slow327 and lacks transparency, prompting fears of capture by the industry to be regulated and thus the risk of dilution of the pre-existing national standards and the exclusion of the consumer’s voice. These standards bodies are also not bound by Treaty obligations such as the duty to give reasons in Article 296 TFEU or other principles of good government,328 nor have they been subject to review by the Court of Justice.329
There is some recognition of these problems by the EU institutions,330 but, in the context of the wider debate about the quality of governance in the EU,331 reforming the standard-setting process is not a priority.332 This may be because the process actually works. As de Búrca puts it, one of the possible explanations for the acceptance of such ‘non-democratic’ bodies and networks in the EU is that elite or technocratic modes of governance have always been central to the European integration project, and the EU has never been more than a weakly democratic polity whose legitimacy has been based on factors such as the success of the single market project.333
7.p. 593 ‘New Governance’ Approaches
7.1 Introduction
Of the approaches to harmonization considered so far, the law has been used to ‘perfect’ the market in the sense of reproducing the outcome which the parties would have arrived at in the absence of transaction costs. Such a substantive approach to regulation presupposes that there is ‘optimal’ legislation which can be identified by legislators. In practice the information problems facing legislators are such that it is very difficult to identify an ‘optimal’ solution. For this reason, there was a growing interest, dating back to the 1990s, to a more procedural approach to regulation whereby the law does not seek to achieve its ends by direct prescription (e.g., an exhaustive harmonization directive) but instead empowers local actors to promote diverse local-level approaches to regulatory problems. This has been described as ‘reflexive harmonization’,334 by analogy to the idea of reflexive law,335 where the law seeks to devolve or confer rule-making powers to self-regulatory processes.
7.2 Reflexive Harmonization and the Open Method of Coordination
This reflexive quality can be seen in minimum standards directives, which allow Member States or other actors to exceed the minimum standards, taking into account national interests. The European Works Councils (EWC) Directive336 provides a good example. It requires the creation of an EWC or a similar information and consultation procedure in transnational companies over a certain size. Management and labour, the so-called social partners, are encouraged to set up their own EWCs or equivalent and to negotiate the terms and conditions under which they operate. If they fail to do so, the default rules found in the annex apply. These default rules induce the more powerfully placed party (the employer) to enter into a bargaining process when it otherwise would lack an incentive to do so.337 The success of this model has been extended to the worker participation provisions in a European company (Societas Europea (SE)).338 The standard rules contained in the annex, as laid down by the legislation of the Member State in which the registered office of the SE is to be situated, apply from the date of the registration of the SE, where either the parties so agree or no agreement has been concluded at the end of the six-month deadline.
The open method of coordination (OMC) provides another, softer example of reflexive harmonization. OMC involves:
fixing guidelines for the Union, establishing quantitative and qualitative indicators and benchmarks as a means of comparing best practice, translating these European guidelines into national and regional policies by setting specific targets, and periodic monitoring, evaluation and peer review organised as ‘mutual learning processes’.339
The OMC process is explicitly about experimentation and learning. Most commentators agree that it should, at least in theory, increase democracy in the EU through the p. 594↵enhanced role for deliberation among policymakers and participation of a broad range of actors at different levels.340
OMC was first tried and tested in the policies supporting EMU. It then spilled over into the employment strategy, found in Title IX TFEU on employment, where guidelines are set which are then reflected in national reform programmes.341 OMC also peppered the (now infamous) Lisbon strategy 2000 (which set the over-ambitious target of making the European economy the most competitive in the world by 2010). For example, in the context of modernizing the European social model, targets were set (e.g., raising the employment rate from an average of 61 per cent in 2000 to as close as possible to 70 per cent by 2010,342 now 78 per cent by 2030343), and comparing best practice was encouraged (e.g., Member States were to exchange experiences and best practices on improving social protection and to gain a better understanding of social exclusion344). The failure of the Lisbon strategy and the spectacular failure of the OMC mechanisms, used in EMU to predict and then deal with the economic crisis, has brought OMC somewhat into disrepute. Nevertheless, the follow-on programme to the Lisbon strategy, Europe 2020,345 still relied on OMC techniques, albeit with fewer targets.346
Advocates of OMC argue that it offers a ‘third way’ for European policy between regulatory competition (with the risk of a race to the bottom) and harmonization (with the risk of ill-suited uniformity). According to the Commission,347 OMC has greater visibility, encourages a strategic and integrated approach, puts a particular issue in the mainstream, mobilizes all relevant actors, and encourages mutual learning. It can also be used in areas which are not so easily susceptible to regulation either because of the subject matter (e.g., employment policy) or because of a lack of clear Union competence (e.g., education). It can sit alongside a legislative approach, in areas such as employment and social policy, or it can stand alone, adding ‘value’ at a European level where there is little scope for legislative solutions (e.g., work at a European level defining future objectives for national education systems).348 It underpins much of the European Semester.349
Detractors of OMC say that it allows the EU to encroach into policy areas largely reserved for the Member States, that it is opaquer and more unaccountable350 than the ‘classic Community method’,351 and that its success is still dependent on Member State action. If—or when—states do not fulfil their commitments, the credibility of the process is undermined.
p. 595↵Even if OMC worked perfectly, it is clear that there would still be a role for hard-law harmonization. As Schmitt von Sydow bluntly observes, it will be possible to buy an electrical appliance in any part of the EU and to take it across the border without restriction, but at home it may still prove impossible to plug it into the wall socket.352
7.3 The Lamfalussy Process
Another example of these ‘new governance’ techniques with a ‘harder’ edge than OMC is the Lamfalussy process. A committee of ‘wise men’, under the chairmanship of Baron Lamfalussy, identified the problems associated with the traditional approach to regulation, especially in the field of financial services.353 It noted that blockages occur at four levels:354
in the Commission itself—over-stretched, sometimes slow off the mark
most notably in the Council of Ministers, where there is far too often a tendency to add unnecessary levels of complexity to straightforward Commission proposals (often in an attempt to try to fit (the then) 15 sets of national legislation into one Union framework)
in the European Parliament, although less than in the past
in the Member States, where transposition and implementation were often late and frequently incomplete.
The Lamfalussy report therefore concluded that the current regulatory system was too slow (e.g., the European Company Statute took more than 30 years to agree), too rigid (every change, however small or technical, required a full-blown Commission proposal to be negotiated by co-decision), and produced too much ambiguity both in the substance of the directive and the way the texts were implemented.355 It also complained that the system failed to distinguish between core, enduring, essential framework principles and practical, day-to-day, implementing rules with the result that directives were too detailed and could not be adjusted expeditiously at a time when the pace of change in financial markets, global and Europe-wide, was accelerating. Lamfalussy therefore proposed a four-level approach to regulation designed to overcome the defects it had identified. It was piloted in the securities field and has since been extended to banking, insurance, and pensions.
Even with the major changes to regulation in the field of financial services since the crisis, this four-level approach remains, albeit with amendments taking into account the new regulatory architecture of the EU and the Lisbon reforms.356 What follows is a summary of the post-Lisbon Lamfalussy framework:357
Level 1 (legislative acts): Framework principles (or basic acts)—the core political principles—to be decided by normal EU legislative procedures (generally the ordinary legislative procedure). The Level 1 measure specifies the powers given to the Commission under Article 290 TFEU (for delegated acts)358 or Article 291 TFEU (implementing acts) or whether, in the case of non-legislative acts that are binding technical standards (BTS), the relevant European Supervisory Authority (ESA) must submit draft legislation to the Commission.
p. 596 Level 2 (non-legislative acts):359 Detailed technical measures—two types of measures can be adopted at Level 2:
Binding technical standards (BTS): these are drafted by the ESA and can be adopted by the Commission as delegated or implementing regulations or decisions under Articles 290–1 TFEU. These are known as regulatory technical standards (RTS) and implementing technical standards (ITS) respectively. The regulatory technical standards ‘shall not imply strategic decisions or policy choices and their content shall be delimited by the legislative acts on which they are based’.360
Other non-legislative acts adopted as either delegating measures under Article 290 TFEU or implementing measures under Article 291 TFEU. In respect of implementing measures there are three relevant comitology committees: the EU Securities Committee (ESC), the European Banking Committee (EBC), the European Insurance and Occupational Pensions Committee (EIOPC).
Level 3: Enhanced cooperation and networking—the ESAs (European Securities and Markets Authority (ESMA), the European Insurance and Occupational Pensions Authority (EIOPA), and the European Banking Authority (EBA)), acting in coordination with national supervisors (who sit on the board of supervisors of the ESA),361 and the European Systemic Risk Board are to ensure consistent and equivalent transposition of Level 1 and 2 legislation. The ESAs can issue guidelines and recommendations362 and conduct regular peer reviews of national supervisory authorities to improve the consistency of supervision.
Level 4: Strengthened enforcement—notably with more vigorous action by the European Commission, and now the ESAs, to enforce Union law.363 The procedure with the ESA ultimately leads to a fast-track quasi-enforcement procedure initiated by the Commission.
As this brief description of the Lamfalussy process shows, this process recognizes two layers: (1) legislative and (2) implementation/enforcement. The legislative layer is subdivided into two: basic political choices that are translated into broad but sufficiently precise framework norms (Level 1)364 and then operationalized through more detailed technical measures (Level 2) which are to be adopted on a faster track. The implementation/enforcement layer is also subdivided into two: Level 3 concerns practical implementation, with greater consistency in implementation using the ESAs to achieve this, and more robust enforcement (Level 4).
In assessing the effects of the Lamfalussy process pre-Lisbon, Hadjiemmanuil wrote that the Level 1 directives had indeed all included significant comitology mandates, asking the Commission to clarify and adapt certain basic definitions found in the main instrument.365 He also noted that the detailed character of the Level 2 instruments signals a drastic departure from the minimum harmonization principle. However, he also identified the practice of preparing Level 2 measures while the content of the Level 1 p. 597↵measure has not been finalized, thereby risking pre-empting the political decisions at Level 1. He concluded that while the Lamfalussy process is complex and not as quick as originally envisaged, it has streamlined rule-making and strengthened cooperation between regulators and the coherent and equivalent application of norms by the Member States,366 with the result that the Lamfalussy process has now been extended to banking, insurance, and pensions.
8. Enhanced Cooperation
The Treaties do ‘enable and encourage a group of Member States to cooperate inside rather than outside the Union, where it is established that the objectives pursued by that co-operation cannot be achieved by the Union as a whole’.367 The use of enhanced cooperation is strictly limited by the framework for enhanced cooperation between Member States found in Title IV of the TEU and Title III (Article 20 TEU) of Part Six of the TFEU (Articles 326–34 TFEU). In particular enhanced cooperation must involve at least nine Member States and must be authorized by the Council, which must give its authorization only as a last resort.368 Further, the measure adopted:
must be aimed at furthering the objectives of the Union, at protecting its interests, and at reinforcing its integration process369
must comply with the Treaties and Union law370
must not undermine the internal market or economic, social, and territorial cohesion
must not constitute a barrier to, or discrimination in, trade between Member States, and must not distort competition between them371
must also respect the competences, rights, and obligations of those Member States that do not participate in it. Those Member States, in turn, must not impede its implementation by the participating Member States.372
The Unitary Patent case373 suggests that enhanced cooperation has the Court’s blessing. By definition, of course, any measures adopted will not bind all Member States and so will lead to further fragmentation. However, it does break a deadlock. As the story of the Unitary Patent shows, some Member States had been trying to adopt this measure for decades; Spain and Italy held out over the language rules. The Council approved the measure to go ahead under enhanced cooperation. Spain and Italy objected but to no avail.
D. Completing the Internal Market?
1. Post-1992
Most of the Commission’s 282 proposals put forward in the Single Market White Paper of 1985 were adopted by the end of 1992374 (although crucial elements such as utilities, p. 598↵taxation, and corporate law were still missing). The question then was where to go next. There have been numerous strategy documents and reviews.375
The Monti Review of May 2010 recognized ‘integration fatigue’, eroding the appetite among citizens for a single market and ‘market fatigue’, with a reduced confidence in the role of the market. The Report was therefore followed up with another relaunch of the single market in Spring 2011, grandly named the Single Market Act (SMA) I. This identified ‘Twelve Levers to boost growth and strengthen confidence’,376 accompanied by 50 complementary actions. These levers included: Lever 2, ‘citizens mobility’, modernizing the rules for the recognition of professional qualifications and improving the portability of pensions; and Lever 5, ‘services’, revising legislation on European standardization and ensuring the implementation of the services directive. Lever 10, ‘social cohesion’, specified that legislation on the enforcement of the Posted Workers Directive would be introduced (now Directive 2014/67) together with legislation ‘clarifying the exercise of freedom of establishment and the freedom to provide services alongside fundamental social rights’. This led to the so-called Monti II proposal, which rose and sank amid the fury of trade unions.377
Despite all the fanfare surrounding the launch of SMA I, within 18 months the Commission felt obliged to issue the Single Market Act II378 in order to inject some fresh impetus into the programme and a further strategy, ‘Updating the single market’, three years later.379 As the Commission noted of the SMA, 11 of the 12 key action proposals had not yet been agreed by the European Parliament and Council. SMA II largely reiterates the content of SMA I, but it returns to a familiar theme: ‘The success of this endeavour will depend on whether Single Market rules are applied on the ground efficiently, in a predictable and reliable manner. To this end, the transposition and day-to-day implementation of Single Market rules by authorities in Member States is of paramount importance. The Commission will devote all its attention to this challenge.’380
This idea of a ‘coordinated and cooperative approach’ between the Commission and the Member States with a ‘common objective of improved transposition, application and enforcement of single market rules’,381 is further emphasized by the Commission in its Recommendation 2009/524/EC382 on measures to improve the functioning of the single market. It is this aspect of the post-1992 internal-market strategy—described by Weatherill as ‘market management’383—that we shall focus on, looking first at simplification/improving the quality of legislation, secondly, the implementation of that legislation, and thirdly, enforcement.
2. Market Management
2.1 Simplification/Improving Quality of Legislation
According to the Commission, €50 billion could be saved by better-quality legislation. This emphasis on better lawmaking has been a preoccupation for the EU since the late p. 599↵1990s. The ‘Better Lawmaking’ programme384 was replaced by the Better Regulation for Growth and Jobs Agenda385 and now the Better Regulation: Joining Forces to Make Better Laws 2021.386 It is possible to identify three strands to these programmes. First, pending legislative proposals are screened to ensure their consistency with, initially, the objectives of the revised Lisbon strategy to check they meet with the better regulation standards and to ensure they are not outdated. As a result, 73 proposals were withdrawn in 2015 and 400 since 2006. Proposals withdrawn in 2015 included Investor Compensation schemes, the Statute for a European Foundation, and European Tourism Quality Principles.387 The 2021 Better Regulation programme focuses more on ensuring consistency with the EU’s economic, social, and environmental agenda. We return to this later.
Secondly, existing legislation is to be simplified. This strand builds on the earlier ‘SLIM’ (Simpler Legislation for the Internal Market) initiatives and is now referred to as ‘REFIT’, the Regulatory Fitness and Performance programme. Action is taken ‘to make EU law simpler and to reduce regulatory costs, thus contributing to a clear, stable and predictable regulatory framework supporting growth and jobs’.388 The EU is assisted by the Fit for the Future Platform, a high-level group helping the Commission to simplify its laws.389
The case for simplification is a strong one.390 For example, there were 38 directives on agricultural tractors, 13 on dangerous substances, and 11 on fertilizers.391 The Commission launched a series of actions to simplify the content of the acquis,392 update it, and reduce its volume (through consolidation, codification, and removal of obsolete legislation), as well as improving its organization and presentation. This has reduced the volume of legislation: the Commission aimed to reduce the acquis by almost 10 per cent—about 1,300 legal acts and 7,800 pages of the Official Journal.393 More than 6,100 legal acts have been repealed since 2005.394 There is now a REFIT scoreboard which provides an overview of simplification initiatives across a wider range of policy areas such as climate, energy, and the internal market.395 The Commission also presents yearly a survey of the Union’s efforts undertaken to simplify legislation, avoid overregulation, and reduce regulatory burdens in an Annual Burden survey.396
The third strand of the Commission’s Better Regulation agenda concerns better quality of new Commission proposals, in particular through the systematic use of impact assessment397 and public consultation398 in the development of proposals. The Regulatory Scrutiny p. 600↵Board, set up in July 2015, provides a central quality control and support function for Commission impact assessment and evaluation work.399 It examines and issues opinions on all the Commission’s draft impact assessments and of major evaluations and ‘fitness checks’ of existing legislation. In principle, a positive opinion is needed from the Board for an initiative accompanied by an impact assessment to be tabled for adoption by the Commission.
The better regulation communication also advocates the principle of ‘one in, one out’ to ensure that any newly introduced burdens are offset by removing equivalent burdens in the same policy area. More fundamentally, the Commission communication commits the EU to:
systematically assessing the economic, social, and environmental impacts of policy action and ensures a consistently high quality of proposed legislation and ensures that policies support the recovery and resilience of the EU
mainstreaming the United Nations’ sustainable development goals (SDGs) to help ensure that every legislative proposal contributes to the 2030 sustainable development agenda; and ensures that the ‘do no significant harm’ principle is applied across all policies in line with the European Green Deal oath
promoting the ‘digital by default’ principle in forthcoming EU legislation as an important tool to support digital transformation
integrating ‘strategic foresight’ into policymaking will see to it that existing and new EU legislation is fit for the future.
The details of better regulation in practice are laid down in the Better Regulation Guidelines of 2015 and now of 2021.400 ‘Better regulation’ is about creating legislation that achieves its objectives while being targeted, effective, easy to comply with, and with the least burden possible. As the Commission notes:401
‘Better regulation’ is not about regulating or deregulating. It is a way of working that allows political decisions to be prepared in an open and transparent manner, informed by the best available evidence, including via the comprehensive involvement of stakeholders. This is to ensure that the EU acts in line with the overarching principles of subsidiarity and proportionality, i.e., only where necessary and in a way that does not go beyond what is needed to address the problem at hand.
Despite all these initiatives, the problem remains that legislation, like the Services Directive,402 adopted under the ordinary legislative procedure is the result of a large-scale political compromise, which inevitably means that there are provisions, inserted in the middle of the night to accommodate a particular interest, whose meaning is not clear or certain. The result, as we saw in Chapter 11, is a large number of references to the Court of Justice often looking at resolving some fundamental issues (such as whether the Establishment Chapter applies to wholly internal situations). As we saw in Alliance for Natural Health,403 the Court has tried to use general principles of law to paper over some of the cracks in legislation, but this may be insufficient in more difficult cases.
2.2p. 601 Implementation
Even with better-quality legislation, the question is whether the Member States will actually implement it. As we have seen, the Lamfalussy report identified this as a major issue. In order to assist states with the task of implementation, the Commission issued a recommendation on the transposition of directives affecting the internal market.404 This contains practical advice to Member States on how to address transposition problems, in particular through the appointment of a senior member of the government to take responsibility for monitoring transposition. The Commission has also set up an Internal Market scoreboard documenting the levels of implementation of directives by each Member State.405 This has shown that implementation has been steadily improving. According to the Commission,406 ‘the average transposition deficit continues to decrease and is standing at 0.6 % (–15 %) while the EU average conformity deficit has increased (+50 %) and is now at 1.2 % (proposed target 0.5 %). The average transposition delay is now 11.5 months (+37 %).’ While these league tables and the traffic light system deployed across a range of indicators have had some success in naming and shaming, they do not reveal the quality of implementation, the level of actual compliance with the national laws, or the means of enforcement. This is something that the EU is trying to address through its annual reports monitoring the application of EU law.407
2.3 Enforcement
Enforcement has proved to be the greatest challenge. It has two elements: (1) the enforcement of EU rules by Member States against their own nationals, and (2) the enforcement of EU rules by nationals and the Commission against Member States. Both types of enforcement are essential to ensure continued confidence in the single market. The first element requires states to enforce national laws implementing EU law. If the EU measure is premised on the idea of home-state control (e.g., the Toy Safety Directive) this leads to the intriguing result that the home state is enforcing legislation largely for the benefit of the host state’s consumers.408 This raises the paradox of why home states would act against the interests (and votes) of home-state producers to protect largely out-of-state consumers. For domestic political reasons the home state might have the incentive not to enforce the law, raising the spectre of a race to the bottom—not in terms of setting rules at national level but in respect of enforcing EU rules.
However, in Muñoz409 the Court made clear that individuals as well as states have the power to enforce Union standards. The case concerned a trader wishing to bring civil proceedings against a competitor to enforce Union rules on quality standards laid down in two regulations. The Court recognized that the possibility of bringing proceedings ‘strengthens the practical working of the [Union] rules on quality standards’. It continued that as a ‘supplement’ to the action of the Member States’ authorities, proceedings brought by competitors ‘helps to discourage practices, often difficult to detect, which distort competition’.410
The second type of enforcement—of EU rules by individuals and the Commission against Member States—is more familiar territory. Individuals enforce Union law by relying on p. 602↵their directly effective rights,411 and the Court has required conflicting national laws to be set aside.412 The Commission can bring enforcement proceedings under Article 258 TFEU against a defaulting state.413 The weakness of this type of enforcement is that it is lengthy414 and depends on the Commission’s discretion. It is still a key tool for the Commission. It reports: ‘The number of Single Market-related infringements has risen (800 pending cases), reaching the same level as in November 2014. With 57 cases (double the EU average), Spain (ES) has most pending cases. The sectors with most Single Market-related infringement cases are environment (28 %), transport (17 %) and taxation (10 %).’415
3. Market Surveillance
Once EU legislation has been transposed into national law and importers and producers are making use of its provisions, Member States must fulfil their obligations to ensure that only compliant goods are allowed onto the market (‘market surveillance’). Certain specific directives, such as the General Product Safety Directive 2001/95,416 make provision for coordination between the Member States to remove dangerous products from the market. Most successful has been RAPEX,417 the EU’s rapid alert system for dangerous consumer products (but not food, pharmaceuticals, and medical devices, which are covered by other mechanisms). It facilitates the rapid exchange of information between Member States and the Commission on measures taken to prevent or restrict the marketing or use of products posing a serious risk to the health and safety of consumers. The RAMS Regulation 765/2008418 extends the RAPEX system to all products which present a serious risk. In addition, it improves the traceability of products and clarifies the obligations for economic operators.419 It also makes provision for border controls on products from non-EU sources, which, if they do not comply with Union harmonization legislation or if the product poses a serious risk, will not be authorized for release for free circulation.420
E. The Digital Single Market
Even though, as we know, the single market was due to be completed by 31 December 1992, in fact it has been—and will continue to be—an evolving project. A good example of this is the Digital Single Market programme, a concept which was not even a glint in the eye of the drafters of the Single European Act 1986. As the Commission put it, a Digital Single Market (DSM) is one in which ‘the free movement of persons, services and capital is ensured and where the individuals and businesses can seamlessly access and engage in online activities under conditions of fair competition, and a high level of consumer p. 603↵and personal data protection, irrespective of their nationality or place of residence’.421 Launched in May 2015, with the aim of generating up to €250 billion of additional growth in Europe in the course of the mandate of the next Commission,422 the DSM strategy has the following objectives:423
boosting e-commerce in the EU by tackling geo-blocking, and making cross-border parcel delivery more affordable and efficient
modernizing the EU copyright rules to fit the digital age
updating EU audiovisual rules and creating a level playing field for comparable digital sources, tackling illegal online content, and protecting the most vulnerable users424
stepping up Europe’s response to cyber-attacks by strengthening ENISA, the EU cybersecurity agency, and creating an effective EU cyber deterrence and criminal law response to better protect Europe’s citizens, businesses, and public institutions
unlocking the potential of a European data economy with clear rules for the free flow of non-personal data in the EU
ensuring everyone in the EU has the best possible internet connection through ‘connectivity for a European gigabit society’
adapting ePrivacy rules for the new digital environment
helping large and small companies, researchers, citizens, and public authorities make the most of new technologies by ensuring that everyone has the necessary digital skills, and by funding EU research in health and high-performance computing.
The techniques for delivery include both hard and softer measures: introducing new legislation (such as the Geo-blocking Regulation—see later) but also providing funding to help train individuals in the necessary skills needed to take advantage of, and develop, the digital economy.
In fact, the notion of responding to the digital economy via (hard) legislation is not new: the E-commerce Directive 2000/31425 has been in place for 20 years. It provides for the freedom to provide information services from another Member State426 without prior authorization.427 It also lays down harmonized rules on issues such as the transparency and information requirements for online service providers, commercial communications, electronic contracts, and limitations of liability of intermediary service providers.428 In addition, the Services Directive 2006/123429 requires Member States to ensure that the recipient is not made subject to discriminatory requirements based on their nationality or place of residence.430
However, despite these initiatives, online services have remained largely territorial and not cross-border—for understandable reasons: lack of familiarity with legal systems in other Member States, the problems of claiming money owing in a cross-border situation, and potential compliance issues. The DSM was intended to overcome some of these problems. One of the most significant measures adopted is Regulation 2018/302 on geo-blocking431 which is intended to remove barriers created by online sellers based on the nationality or place of residence of consumers by, for example, blocking access to websites p. 604↵across borders or refusing delivery across borders or providing different prices and conditions depending on nationality, country of residence, or location of the customer. Article 3 of the regulation therefore makes clear that:
A trader shall not, through the use of technological measures or otherwise, block or limit a customer’s access to the trader’s online interface for reasons related to the customer’s nationality, place of residence or place of establishment.
A trader shall not, for reasons related to a customer’s nationality, place of residence or place of establishment, redirect that customer to a version of the trader’s online interface that is different from the online interface to which the customer initially sought access, by virtue of its layout, use of language or other characteristics that make it specific to customers with a particular nationality, place of residence or place of establishment, unless the customer has explicitly consented to such redirection.
These prohibitions do not apply where the blocking or limitation of access, or the redirection, is necessary in order to ensure compliance with a legal requirement laid down in Union law, or in the laws of a Member State in accordance with Union law, to which the trader’s activities are subject. Article 5 contains the principle of equal treatment: ‘A trader shall not, within the range of means of payment accepted by the trader, apply, for reasons related to a customer’s nationality, place of residence or place of establishment, the location of the payment account, the place of establishment of the payment service provider or the place of issue of the payment instrument within the Union, different conditions for a payment transaction’.
The Geo-blocking Regulation is complemented by new rules on cross-border parcel delivery, making pricing more transparent432 and a revised Directive on Payment Services 2015/2366. This directive aims: (1) to contribute to a more integrated and efficient European payments market; (2) to further level the playing field for payment service providers by including new players; (3) to make payments safer and more secure; and (4) to enhance protection for European consumers and businesses.433
The EU has also successfully adopted legislation abolishing roaming charges434—perhaps one of the most popular steps the Commission has taken. This has meant that consumers pay the same price for calls, texts, and mobile data for temporary use of their mobile phones wherever they are travelling in the EU. Likewise, Regulation 2017/1128435 introduced cross-border portability of online content services. Article 3(1) says: ‘The provider of an online content service provided against payment of money shall enable a subscriber who is temporarily present in a Member State to access and use the online content service in the same manner as in the Member State of residence, including by providing access to the same content, on the same range and number of devices, for the same number of users and with the same range of functionalities.’ Article 3(2) says: ‘The provider shall not impose any additional charges on the subscriber for the access to and the use of the online content service pursuant to paragraph 1.’
p. 605↵When listed in this way, the range and content of the measures indicate an impressive package of liberalizing measures. However, Adamski suggests that appearances are deceptive. Taking the example of the Geo-blocking Regulation, he notes that it is essentially prohibitive of restrictions on cross-border online services and is in fact limited in scope (it is subject to the same exceptions as are found in the Services Directive, such as financial services, audiovisual services, and gambling). He also notes the multiple limitations to the Geo-blocking Regulation, including the fact that online vendors are not obliged to extend their aftersales service to new countries, to offer their interfaces in any new form or language, nor to establish any new payment method. It also allows for different terms and conditions, including sale prices to different groups of customers. This, he says, is a reflection of the fact that ‘the more traditional, market opening harmonization has been facing serious lobbying counter-offensives from the incumbents, who are jeopardized by technologically more advance challengers’.436 In other words, European companies have lobbied for protection against the big (US) players in the field, players which would benefit from market liberalization. And this touches on a core issue of the single market: to what extent should market liberalization with long-term benefits for consumers (and the (big) players), take precedence over the needs to protect local (European) business. Adamski concludes that the ‘mixture of far-reaching obligations and many escape doors’, epitomized by the Geo-blocking Regulation, may be considered as a pragmatic way out of the dilemma but it does mean that the transformation of ‘the EU’s regulatory landscape from the currently largely separate national digital markets into anything resembling a seamless regulatory space’437 is unlikely. At present, the EU may be seen to be favouring the local over the global.
The prioritization of the local over the global also helps to explain the Uber decision.438 The case concerned a claim by a Spanish taxi firm, Elite Taxi, that the activities of Uber constituted unfair competition under Spanish law which should be prohibited. The national court had to decide whether the services provided by Uber were to be regarded as transport services, in which case they fell outside both the Services Directive and the Treaty provision on free movement of services, information society services under Directive 2015/1535, or a combination of both. The national court thought that if the services at issue were covered by Directive 2006/123 or Directive 2015/1535, Uber’s practices could not be regarded as unfair practices.
The Court of Justice disagreed. It ruled that Uber’s ‘intermediation’ service formed an integral part of an overall service whose main component was a transport service and so was classified as ‘a service in the field of transport’ within the meaning of Article 2(2)(d) of Directive 2006/123 which excludes transport services from the scope of the directive. Further, since the intermediation service was classified as ‘a service in the field of transport’, it was covered not by Article 56 TFEU on the freedom to provide services in general but by Article 58(1) TFEU, a specific provision which provides that ‘freedom to provide services in the field of transport shall be governed by the provisions of the Title relating to transport’ under Article 91(1) TFEU. However, there are no EU rules or other measures based on Article 91(1) TFEU. Therefore, as EU law currently stands, ‘it is for the Member States to regulate the conditions under which intermediation services such as that at issue in the main proceedings are to be provided in conformity with the general rules of the [TFEU]’.439 In other words, states are free to regulate transport services (and therefore p. 606↵protect local business if they choose) and the ability of new market entrants, like Uber, to disrupt the current system may be reduced or removed altogether. As Adamski put it, if the judges pursued their traditional liberalization approach to the internal market, they would allow aggressive multinationals (Uber and the like) ‘to pursue creative destructions on the market populated by clamorous and well-organised incumbents’ (Elite Taxi and the like). The alternative of a more defensive agenda for the judges becomes particularly compelling.440
However, the Commission Communication, Shaping Europe’s Digital Future,441 changed matters. It proposed the introduction of two measures: the Digital Services Act (DSA)442 and the Digital Markets Act (DMA).443 The DSA is intended to update the E-commerce Directive but is more ambitious than that.444 The proposal defines clear responsibilities and accountability for providers of intermediary services, and in particular online platforms, such as social media and marketplaces. More specifically the DSA introduces:445
measures to counter illegal goods, services, or content online, such as a mechanism for users to flag such content and for platforms to cooperate with ‘trusted flaggers’
new obligations on traceability of business users in online marketplaces, to help identify sellers of illegal goods
effective safeguards for users, including the possibility to challenge platforms’ content-moderation decisions
transparency measures for online platforms on a variety of issues, including on the algorithms used for recommendations
obligations for very large platforms to prevent the misuse of their systems by taking risk-based action and by independent audits of their risk-management systems
access for researchers to key data of the largest platforms, in order to understand how online risks evolve
oversight structure to address the complexity of the online space: EU countries will have the primary role, supported by a new European Board for Digital Services; for very large platforms, enhanced supervision and enforcement by the Commission.
The DMA establishes a set of criteria for qualifying a large online platform as a so-called ‘gatekeeper’, such as having a strong economic position, having a significant impact on the internal market, being active in multiple EU countries, and having a strong intermediation position, meaning that it links a large user base to a large number of businesses. As the Commission explains, the DMA then imposes ex-ante obligations on gatekeeper platforms such as allowing third parties to inter-operate with the gatekeeper’s own services and allowing their business users to access the data they generate in their use of the gatekeeper’s platform. In addition to these positive obligations, there are a series of negative obligations such as not treating services and products offered by the gatekeeper itself more favourably in ranking than similar services or products offered by third parties on p. 607↵the gatekeeper’s platform.446 The measure gives considerable powers of enforcement to the Commission, perhaps reflecting its early role in the enforcement of competition law.447
These are important measures and have the capacity to address some of Adamski’s concerns as well as setting the direction of travel for regulation of the digital economy not just for Europe but also beyond. They do not operate in a vacuum. The Commission is also developing a strategy on artificial intelligence (AI).448 This includes an important proposed regulation laying down harmonized rules on AI (the AI Act), another measure intended to ‘improve the functioning of the internal market’.449 In essence this proposal will address risks specifically created by AI applications; propose a list of high-risk applications and set clear requirements for them; define specific obligations for AI users and providers of high-risk applications; propose a conformity assessment before the AI system is put into service or placed on the market; and an enforcement mechanism after such an AI system is placed in the market.450 This is the modern face of the single market going forward. The EU is undertaking innovative legislation in very new areas, legislation which is likely to influence the shape of global regulation in this fast-developing field.
F. Conclusions
The discussion in this chapter suggests that, far from the Union being a ‘market without a state’,451 in Joerges’ words, the EU market is increasingly heavily regulated by the central authorities. However, this is not a case of straightforward re-regulation, with a shift of regulation from the national level to the EU, but rather a blending of the national and the Union—this is multilevel governance.452 Modern regulatory techniques which aim to combine the benefits of centralization together with local autonomy—minimum harmonization, the new-approach directives, reflexive harmonization, and OMC—rely on a mix of centralized and decentralized regulation together with the involvement of a wide range of actors, both public and private. For this reason, it may be more appropriate to talk about co-regulation or self-regulation than re-regulation.453 This approach to regulation represents a seismic shift away from the caricature of exhaustive harmonization and the basic philosophy of ‘if it moves (or even if it doesn’t) harmonize it’ and a far greater sensitivity to the values of diversity and local autonomy. Given the limits of the EU’s powers, as Tobacco Advertising I makes clear, together with the political unacceptability of doing more, such meshing of decision-making is the only viable option for the EU as it goes forward.
The reliance on national and sub-national actors is particularly true in the case of enforcement. The absence of an effective range of enforcement mechanisms at EU level means that the EU is dependent on enforcement at national level, and it is here that the Court of Justice has been instrumental in strengthening the hand of one of the most important defenders of the Union’s interests, the individual. And so, we come full circle—the p. 608↵four freedoms are intended to benefit the individual and it is ultimately up to the individual to ensure that they work. As the Commission itself puts it:454
The Single Market is one of Europe’s great achievements. In the past 50 years, it has generated new opportunities and economies of scale for European companies that have strengthened industrial competitiveness, it has created jobs and offered greater choice at lower prices for consumers, and it has enabled people to live, study and work where they want. It has contributed to better integrating EU firms into international value chains and strengthening the global competitiveness of European companies.
For Leave voters in the UK this was not a sufficiently attractive offering to enable them to vote to stay in the EU. The integration process had disintegrative effects. ‘Europe’ became divisive and not inclusive. And yet in the process of leaving, the UK had to set up its own internal market via the United Kingdom Internal Market Act (UKIMA) 2020. Oddly, but politically not surprisingly, the EU’s single market barely gets a mention in the White Paper which preceded UKIMA. The seminal decision in Cassis de Dijon is consigned to a footnote on page 99 of a 104-page report (and even then as a reflection on the Swiss experience). Yet there is, in fact, considerable commonality between the two internal markets, in respect of concepts, ideas, and language. This is a further manifestation of the ‘Brussels effect’ identified by Anu Bradford.455 Not only is the EU, in practice, setting standards for the world, but it is also exporting its trading model. The EU’s internal market is world-leading.
Further Reading
On issues of governance and competence
On the different approaches to harmonization
Single European Act 1996
On the fate of Monti II
On the tobacco advertising saga
On the debates around completing the single market
Assessment
Digital Single Market
Better regulation
UK Internal Market
Notes
1 <http://eulawanalysis.blogspot.com/2017/01/what-is-free-trade.html?m=1>.
2 <https://www.historisches-lexikon-bayerns.de/Lexikon/EN:Purity_Law,_1516>.
3 <http://eulawanalysis.blogspot.com/2017/01/what-is-free-trade.html?m=1>.
5 The internal market is identified as an area of ‘shared’ competence by Art. 4(2) TFEU. According to Art. 2(2) TFEU, ‘When the Treaties confer on the Union a competence shared with the Member States in a specific area, the Union and the Member States may legislate and adopt legally binding acts in that area. The Member States shall exercise their competence to the extent that the Union has not exercised its competence. The Member States shall again exercise their competence to the extent that the Union has decided to cease exercising its competence.’ See also Decl. 18.
6 Although a Declaration annexed to the SEA requires the Commission to give precedence to the use of directives, in practice this is not always the case (see, e.g., the regulation at issue in Case C–66/04 UK v. EP and Council (smoke flavourings) [2005] ECR I–10553). Cf. Art. 115 TFEU, which allows for the use of directives only.
7 See also Art. 26(3) TFEU giving the Council the power, on a proposal from the Commission, to determine the guidelines and conditions necessary to ensure balanced progress in all the sectors concerned, and the Commission’s duty in Art. 27 TFEU to take into account the extent of the effort that certain economies showing differences in development will have to sustain for the establishment of the internal market. It may propose appropriate provisions. If these provisions take the form of derogations, they must be of a temporary nature and must cause the least possible disturbance to the functioning of the internal market.
8 The Lisbon Treaty removed the reference in Art. 95 EC (ex Art. 100a EEC) to ‘By way of derogation from Article 94 (ex Article 100)’. The reordering of Arts. 94–5 EC (Art. 95 EC has become Art. 114 TFEU and Art. 94 EC has become Art. 115 TFEU) reflected what happened in practice: Art. 114 TFEU had become the principal legal basis of the two.
9 Case C–533/03 Commission v. Council (VAT) [2006] ECR I–1025, para. 45.
10 The Court appears to use the two terms interchangeably: see, e.g., Case C–217/04 UK v. EP and Council (European Network and Information Security Agency (ENISA)) [2006] ECR I–3771, para. 43.
11 See, e.g., Case C–436/03 EP and Commission v. Council (ECS) [2006] ECR I–3733.
12 In Case C–533/03 Commission v. Council (VAT) [2006] ECR I–1025, para. 47 the Court said that the words ‘fiscal measures’ covered not only all areas of taxation, without drawing any distinction between the types and duties or taxes concerned, but also all aspects of taxation, whether material rules or procedural rules.
13 Pre-Lisbon, measures adopted in these fields were assumed to be subject to unanimous vote under Art. 94 EC due to the reference in Art. 95(1) EC to the phrase ‘By way of derogation from Article 94’. However, it may well be that the expansion of Union competence into the areas listed in Art. 114(2) TFEU means that specific legal bases should be applied instead.
14 [1986] OJ C184/19.
15 [1989] OJ L158/30.
16 [1990] OJ L137/36.
17 See preamble to Dir. 89/622 ([1989] OJ L158/30).
18 Considered further in Case C–11/92 R. v. Secretary of State for Health, ex p. Gallaher Ltd [1993] ECR I–3545.
19 [2001] OJ L194/26. See also Commission Dec. 2003/641/EC on the use of colour photographs or other illustrations as health warnings on tobacco packages ([2003] OJ L226/24).
20 Art. 3(1)–(2).
21 Art. 5(2)(a) and (5).
22 Art. 5(2)(b) and (5).
23 Art. 13.
24 Case C–491/01 The Queen v. Secretary of State for Health, ex p. British American Tobacco (Investments) Ltd and Imperial Tobacco Ltd (BAT) [2002] ECR I–114 TFEU. See also Case T–311/00 British American Tobacco (Investments) Ltd v. Commission [2002] ECR II–2181 on access to the Commission’s documents on which it based its proposal.
25 Case C–210/03 R. v. Secretary of State for Health, ex p. Swedish Match [2004] ECR I–11893.
26 Case C–434/02 Arnold André GmbH & Co. KG v. Landrat des Kreises Herford [2004] ECR I–11825.
27 [2014] OJ L127/1.
28 Case C–547/14 Philip Morris v. Secretary of State EU:C:2016:325. These cases are discussed in detail in S. Varvaštian, ‘Promoting human health and the functioning of the internal market: The reaffirmation of the Tobacco Products Directive’s key objectives in Poland v. Parliament and Council, Pillbox 38 and Philip Morris Brands and Others’ (2017) 23 EPL 271.
29 Case C–358/14 Poland v. Parliament and Council EU:C:2016:323.
30 Case C–477/14 Pillbox 38 (UK) Ltd, trading as ‘Totally Wicked’ v. Secretary of State for Health EU:C:2016:324. Kokott AG’s Opinion was delivered on 23 Dec. 2015 (EU:C:2015:854).
31 The Court’s decisions were handed down on 4 May 2016.
32 Case C–151/17 Swedish Match AB v. Secretary of State for Health EU:C:2018:938.
33 Case C–151/17 Swedish Match AB EU:C:2018:938, paras. 67–8.
34 Case C–220/17 Planta Tabak-Manufaktur Dr. Manfred Obermann GmbH & Co. KG v. Land Berlin EU:C:2019:76.
35 Case C–220/17 Planta Tabak EU:C:2019:76, paras. 54–5.
36 [1989] OJ L298/23 repealed and replaced by Dir. 2010/13/EU ([2010] OJ L95/1). See Case Study 11.2 for further details about this directive. The directive was based on Art. 53(1) TFEU on the free movement of persons and Art. 62 TFEU. The ban on radio advertising of tobacco was introduced by Dir. 2003/33 ([2003] OJ L152/16), to mirror the television ban and this was an influential factor in persuading the Court to uphold the validity of Dir. 2003/33 in Case C–380/03 Germany v. European Parliament and Council (Tobacco Advertising II) [2006] ECR I–11573, paras. 64 and 70.
37 As a result of changes introduced by Dir. 2007/65 to Dir. 89/552, audiovisual media services or programmes are not to be sponsored by undertakings whose principal activity is the manufacture or sale of cigarettes and other tobacco products (Art. 10(2) of Dir. 2010/13/EU). In addition, Art. 11(4) provides that where states allow product placement in programmes, these are not to contain product placement of tobacco products or cigarettes or product placement from undertakings whose principal activity is the manufacture or sale of cigarettes and other tobacco products.
38 [1998] OJ L213/9.
39 Art. 5. Minimum standards directives are considered in more detail at nn. 252–64.
40 Art. 5(1).
41 Art. 6(3).
42 Case C–376/98 Germany v. European Parliament and Council [2000] ECR I–8419. See also Case C–74/99 R. v. Secretary of State for Health, ex p. Imperial Tobacco [2000] ECR I–8599.
43 Case C–376/98 Tobacco Advertising I [2000] ECR I–8419, para. 78.
44 On the legal effects of Art. 114(3) TFEU: Case C–350/03 Schulte v. Deutsche Bausparkasse Badenia AG [2005] ECR I–9215, para. 61.
45 Though this does not necessarily have to be the highest standard that is technically possible. Case C–284/95 Safety HI–Tech v. S & T Srl [1998] ECR I–4301, para. 49. See also Art. 9 TFEU, which requires the Union to take a range of values into account, including public health and Art. 168(1) TFEU, which says that a high level of human health shall be ensured in the definition and implementation of all Union policies and activities.
46 See, e.g., Case C–380/03 Germany v. European Parliament and Council (Tobacco Advertising II) [2006] ECR I–11573, para. 39 (emphasis added) and paras. 92–8; Case C–58/08 R. (on the application of Vodafone Ltd) v. Secretary of State for Business, Enterprise and Regulatory Reform [2010] ECR I–4999, para. 36 (consumer protection).
47 Case C–376/98 Tobacco Advertising I [2000] ECR I–8419, para. 79.
48 EP and Council Dir. 2003/33 on the approximation of laws relating to advertising and sponsorship of tobacco products ([2003] OJ L152/16).
49 Case C–380/03 Germany v. European Parliament and Council [2006] ECR I–11573.
50 Case C–376/98 Tobacco Advertising I [2000] ECR I–8419, para. 84.
51 Case C–376/98 Tobacco Advertising I [2000] ECR I–8419. para. 83.
52 Although not very clearly stated in Tobacco Advertising I, it can be seen in paras. 84, 102, 104, and 107–8.
53 Case C–380/03 Tobacco Advertising II [2006] ECR I–11573, para. 67.
54 See Poiares Maduro AG’s view in Case C–58/08 Vodafone [2010] ECR I–4999, that a proper reading of Art. 114 TFEU had to distinguish between what triggers Union harmonization (the risk of obstacles to free movement or distortions of competition) and the scope and content of that harmonization. In respect of scope and content, he argued that the Union should be able to pursue a variety of policy goals, not limited to market integration, policy goals usually pursued by national measures which are to be replaced by Union harmonization (para. 8).
55 Case C–491/01 Ex p. BAT [2002] ECR I–11453, paras. 64–5.
56 This language is actually taken from Case C–491/01 Ex p. BAT [2002] ECR I–11453, para. 61.
57 Case C–491/01 Ex p. BAT [2002] ECR I–11453.
58 Case C–376/98 Tobacco Advertising I [2000] ECR I–8419, para. 98.
59 Case C–376/98 Tobacco Advertising I [2000] ECR I–8419, para. 97.
60 Case C–398/13 P Inuit Tapiriit Kanatami v. Commission EU:C:2015:535, para. 29.
61 It is, however, rather puzzling why posters, ashtrays, and parasols were classified as static rather than non-static since the arguments made about non-static media seem equally applicable to these so-called static media.
62 Case C–376/98 Tobacco Advertising I [2000] ECR I–8419, para. 99.
63 Case C–376/98 Tobacco Advertising I [2000] ECR I–8419, para. 101.
64 Case C–376/98 Tobacco Advertising I [2000] ECR I–8419, para. 74.
65 Case C–482/17 EU:C:2019:1035, noted by F. Nwadike (2020) 11 EJRR 177.
66 Para. 38.
67 Para. 49.
68 Para. 63.
69 For arguments to this effect, see Case C–300/89 Commission v. Council (titanium dioxide) [1991] ECR I–2867.
70 Case C–300/89 Commission v. Council (titanium dioxide) [1991] ECR I–2867, para. 15.
71 Case C–376/98 Tobacco Advertising I [2000] ECR I–8419, para. 106.
72 Case C–376/98 Tobacco Advertising I [2000] ECR I–8419, para. 107. See also para. 84: ‘If a mere finding of disparities between national rules and of the abstract risk of obstacles to the exercise of fundamental freedoms or of distortions of competition liable to result therefrom were sufficient to justify the choice of Article [114 TFEU] as a legal basis, judicial review of compliance with the proper legal basis might be rendered nugatory.’
73 Case C–376/98 Tobacco Advertising I [2000] ECR I–8419, para. 109. Cf. Case C–190/98 Graf [2000] ECR I–493, para. 25, considered in Ch. 6.
74 Case C–376/98 Tobacco Advertising I [2000] ECR I–8419, para. 107.
75 Case C–376/98 Tobacco Advertising I [2000] ECR I–8419, para. 83.
76 Case C–376/98 Tobacco Advertising I [2000] ECR I–8419, para. 109.
77 Case C–376/98 Tobacco Advertising I [2000] ECR I–8419, para. 113, emphasis added.
78 See also Case C–412/93 Leclerc–Siplec [1995] ECR I–179, considered in Ch. 4, where restrictions on advertising applied equally to all traders operating in the state and did not make a distinction, in law or in fact, between domestic and imported goods. These were certain selling arrangements which did not breach Art. 34 TFEU.
79 Joined Cases C–267 and 268/91 Keck and Mithouard [1993] ECR I–6097.
80 See also Geelhoed AG’s Opinion in Case C–434/02 Arnold André [2004] ECR I–11825, para. 65. See also the direct links between the Art. 34 TFEU case law (e.g., Case C–405/98 Gourmet International Products [2001] ECR I–1795) and the Art. 114 TFEU case law made in Case C–380/03 Tobacco Advertising II [2006] ECR I–11573, para. 42. Cf. G. Davies, ‘Can selling arrangements be harmonised?’ (2005) 30 ELRev. 371 and Poiares Maduro AG’s views on parallelism in Case C–58/08 Vodafone [2010] ECR I–4999, paras. 21–4.
81 Case C–376/98 Tobacco Advertising I [2000] ECR I–8419, para. 110.
82 Case C–376/98 Tobacco Advertising I [2000] ECR I–8419, para. 111.
83 Case C–376/98 Tobacco Advertising I [2000] ECR I–8419, para. 117.
84 [2003] OJ L152/16.
85 EP and Council Dir. 2003/33 on the approximation of laws relating to advertising and sponsorship of tobacco products ([2003] OJ L152/16).
86 Fourth recital.
87 Fifth recital.
88 According to Art. 8, ‘Member States shall not prohibit or restrict the free movement of products which comply with this Directive.’
89 Case C–380/03 Germany v. European Parliament and Council (Tobacco Advertising II) [2006] ECR I–11573.
90 Case C–380/03 Tobacco Advertising II [2006] ECR I–11573, para. 68.
91 Case C–380/03 Tobacco Advertising II [2006] ECR I–11573, para. 73.
92 Cf. M. Ludwig’s note on Tobacco Advertising II, (2007) 44 CMLRev. 1159, 1176.
93 N. Bernard, ‘The future of European economic law in the light of the principle of subsidiarity’ (1996) 33 CMLRev. 633, 640–1.
94 See also the politically important decision in Joined Cases C–317 and 318/04 Parliament v. Council (passenger name records) [2006] ECR I–4721, where the Court ruled that Art. 114 TFEU, read in conjunction with Art. 25 of Dir. 95/46/EC on the protection of individuals with regard to the processing of personal data and on the free movement of such data, could not justify (then) Community competence to conclude an agreement between the EC and the USA on the processing and transfer of passenger name record (PNR) data by air carriers to the US Department of Homeland Security. Because the agreement related to data-processing operations which were excluded from the scope of the directive, the decision implementing the agreement could not be adopted under Art. 114 TFEU. Any internal market objective was purely incidental; the real objectives of the agreement (prevention of terrorism, organized crime, and protection of privacy) were objectives of the then EU, not EC, Treaty.
95 See S. Weatherill, ‘Competence and legitimacy’ in C. Barnard and O. Odudu (eds.), The Outer Limits of European Union Law (Oxford: Hart Publishing, 2009), 19–20, who argues that the Court’s approach is now ‘competence-enhancing and not competence-restricting’. He also argues that the result of Case C–176/03 Commission v. Council (criminal penalties) [2005] ECR I–7879 hints at the use of Art. 114 TFEU to make a harmonized criminal law.
96 Case C–380/03 Tobacco Advertising II [2006] ECR I–11573, para. 42.
97 Case C–380/03 Tobacco Advertising II [2006] ECR I–11573, para. 43.
98 Case C–210/03 Swedish Match [2004] ECR I–11893; Case C–434/02 Arnold André [2004] ECR I–11825.
99 Case C–434/02 Arnold André [2004] ECR I–11825, para. 35. See also the discussion of the proportionality of the ban in para. 54.
100 See also Reg. (EC) No. 1007/2009 ([2009] OJ L286/36) on trade in seal products, which essentially banned the import of seal products.
101 Case C–465/00 [2003] ECR I–4989, para. 41. Case C–101/01 Lindqvist [2003] ECR I–12971, paras. 40–1.
102 See also Case C–398/13 P Inuit II EU:C:2015:535, para. 40, where the Court said that there was no requirement that measures taken on the basis of Art. 114 TFEU were limited solely to markets for products in which trade was relatively sizeable.
103 Case C–380/03 Tobacco Advertising II [2006] ECR I–11573, para. 80.
104 Stix-Hackl AG in Case C–436/03 ECS [2006] ECR I–3733; Kokott AG in Case C–217/04 UK v. EP and Council (ENISA) [2006] ECR I–3771.
105 Case C–217/04 ENISA [2006] ECR I–3771.
106 Case C–217/04 ENISA [2006] ECR I–3771, paras. 44–5.
107 Case C–217/04 ENISA [2006] ECR I–3771, para. 45.
108 ENISA is an example of the relatively recent phenomenon of establishing an agency to facilitate decision-making by ensuring independence and expertise.
109 Case C–217/04 ENISA [2006] ECR I–3771, para. 60.
110 Case C–66/04 UK v. EP and Council (smoke flavourings) [2005] ECR I–10553.
112 Case C–66/04 Smoke Flavourings [2005] ECR I–10553, para. 33.
113 Case C–66/04 Smoke Flavourings [2005] ECR I–10553, para. 50.
114 Case C–66/04 Smoke Flavourings [2005] ECR I–10553, paras. 47–9.
115 Joined Cases C–154 and 155/04 Alliance for Natural Health [2005] ECR I–6451.
116 [2002] OJ L183/51.
117 E.g., Case C–192/01 Commission v. Denmark [2003] ECR I–9693; Case C–24/00 Commission v. France (nutrients) [2004] ECR I–1277; Case C–95/01 Greenham and Abel [2004] ECR I–1333. See further Ch. 5.
118 Joined Cases C–154 and 155/04 Alliance for Natural Health [2005] ECR I–6451, para. 38.
119 Joined Cases C–154 and 155/04 Alliance for Natural Health [2005] ECR I–6451, para. 66.
120 Joined Cases C–154 and 155/04 Alliance for Natural Health [2005] ECR I–6451, para. 68.
121 This, he emphasized, was particularly serious: para. 69. The Court disagreed: it said that the procedure for modifying the positive list was linked to recitals in the directive which made clear that the Commission had to use public health as the yardstick for modification.
122 There was an internal conflict in the directive between the preamble, which said that private operators could do so, and the body of the directive, which said that it was for the Member States.
123 Joined Cases C–154 and 155/04 Alliance for Natural Health [2005] ECR I–6451, para. 85.
124 Joined Cases C–154 and 155/04 Alliance for Natural Health [2005] ECR I–6451, para. 81.
125 Case C–58/08 R. (on the application of Vodafone Ltd) v. Secretary of State for Business, Enterprise and Regulatory Reform [2010] ECR I–4999.
126 Case C–58/08 Vodafone [2010] ECR I–4999, para. 18.
127 Case C–58/08 Vodafone [2010] ECR I–4999, para. 19.
128 Case C–58/08 Vodafone [2010] ECR I–4999, para. 21.
129 Case C–58/08 Vodafone [2010] ECR I–4999, para. 47.
130 Case C–270/12 UK v. European Parliament and Council EU:C:2014:18.
131 Case C–270/12 UK v. European Parliament and Council EU:C:2014:18, paras. 103 and 105. Se further K. Armstrong, ‘Short-Changed on Short-Selling’, <https://eutopialaw.wordpress.com/2014/01/22/short-changed-on-short-selling/>.
132 Case C–300/89 [1991] ECR I–2867.
133 Dir. 89/428/EEC ([1989] OJ L201/56).
134 Case C–300/89 Titanium Dioxide [1991] ECR I–2867, para. 20.
135 Case C–155/91 Commission v. Council (Waste Directive) [1993] ECR I–939.
136 Case C–155/91 Waste Directive [1993] ECR I–939, para. 19.
137 Case C–269/97 Commission and Parliament v. Council (beef labelling) [2000] ECR I–2257.
138 Case C–491/01 Ex p. BAT [2002] ECR I–11453, para. 94. For an example in the field of the internal market, see Case C–137/12 Commission v. Council (conditional access) EU:C:2013:675, para. 76.
139 Case C–491/01 Ex p. BAT [2002] ECR I–11453, para. 94.
140 Opinion 2/00 [2001] ECR I–9713, para. 23.
141 Case C–491/01 Ex p. BAT [2002] ECR I–11453, paras. 95–6.
142 Cf. Case C–211/01 Commission v. Council (carriage of goods by road and combined transport) [2003] ECR I–8913, para. 52.
143 Note the additional safeguard in Art. 352(2) TFEU: ‘Using the procedure for monitoring the subsidiarity principle referred to in Article 5(3) of the Treaty on European Union, the Commission shall draw national Parliaments’ attention to proposals based on this Article.’ Some national parliaments (e.g., the UK’s parliament) have added additional requirements when a measure is being proposed under Art. 352 TFEU.
144 See also the limit in Art. 352(4): ‘This Article cannot serve as a basis for attaining objectives pertaining to the common foreign and security policy and any acts adopted pursuant to this Article shall respect the limits set out in Article 40, second paragraph, of the Treaty on European Union.’ See also Decls. 41–2 annexed to the final act.
145 COM(2012) 130.
146 Case C–438/05 Viking Line [2007] ECR I–10779.
147 Art. 5(3) TEU. See also Case C–491/01 Ex p. BAT [2002] ECR I–11453, para. 179.
148 As Case C–491/01 Ex p. BAT [2002] ECR I–11453 indicates, subsidiarity will also apply to situations where the Union has already exercised its shared competence, with at least some pre-emptive effects, and replaces that legislation with revised rules (the Tobacco Control Dir.).
149 This is reflected in the revised language (in italics) of Art. 5(3) TEU, which provides that the ‘Union shall act only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States, either at central level or at regional and local level’.
150 Art. 5(4) TEU.
151 Case C–491/01 [2002] ECR I–11453, para. 123.
152 Case C–491/01 [2002] ECR I–11453, para. 123.
153 N. Bernard, ‘The future of European economic law in the light of the principle of subsidiarity’ (1996) 33 CMLRev. 633, 653.
154 Case C–233/94 Germany v. Parliament and Council (deposit guarantee schemes) [1997] ECR I–2405.
155 Case C–84/94 UK v. Council [1996] ECR I–5755.
156 Case C–84/94 UK v. Council [1996] ECR I–5755, para. 47.
157 Case C–377/98 Netherlands v. Parliament and Council [2001] ECR I–7079.
158 Case C–377/98 Netherlands v. Parliament and Council [2001] ECR I–7079, para. 32.
159 Case C–491/01 [2002] ECR I–11453. See also Joined Cases C–154 and 155/04 Alliance for Natural Health [2005] ECR I–6451, paras. 105–6. See also Case C–58/08 Vodafone [2010] ECR I–4999, para. 78 and Case C–508/13 Estonia v. Parliament and Council EU:C:2015:403, paras. 49–55. See also the AG’s Opinion in Case C–358/14 Poland v. Parliament and Council EU:C:2015:848 for a somewhat more searching review.
160 Case C–491/01 Ex p. BAT [2002] ECR I–11453, para. 180.
161 Case C–491/01 Ex p. BAT [2002] ECR I–11453, paras. 181–3. See also Case C–103/01 Commission v. Germany (PPE) [2003] ECR I–5369, para. 47.
162 Case C–491/01 Ex p. BAT [2002] ECR I–11453, para. 187.
163 Case C–491/01 Ex p. BAT [2002] ECR I–11453, para. 131.
164 Case C–491/01 Ex p. BAT [2002] ECR I–11453, para. 132.
165 Case C–380/03 Germany v. European Parliament and Council [2006] ECR I–11573, para. 148.
166 See also the AG’s Opinion in Case C–358/14 Poland v. Parliament and Council EU:C:2015:848.
167 Case C–380/03 Tobacco Advertising II [2006] ECR I–11573, para. 155, citing the controversial decision in Case C–71/02 Karner [2004] ECR I–3025, para. 51.
168 Although Art. 8 of Protocol No. 2 on the principles of subsidiarity and proportionality confirms that ‘The Court of Justice of the European Union shall have jurisdiction in actions on grounds of infringement of the principle of subsidiarity by a legislative act’, brought in accordance with the rules laid down in Art. 263 TFEU by ‘Member States, or notified by them in accordance with their legal order on behalf of their national Parliament or a chamber thereof’.
169 See also Art. 12(a)–(b) TEU.
170 For a full explanation of the procedure, see M. Dougan, ‘The Treaty of Lisbon 2007: Winning minds, not hearts’ (2008) 45 CMLRev. 617, 657–61.
171 This is the only way that derogation can occur: Joined Cases C–281 and 282/03 Cindu Chemicals v. College voor de Toelating van bestrijdingsmiddelen [2005] ECR I–8069, para. 47. See also Commission Communication, ‘Article 95 (paragraphs 4, 5 and 6) of the Treaty Establishing the European Community’, COM(2002) 760 final.
172 The opt-out applies only to measures adopted under Art. 114(1) TFEU and not to those adopted under any other legal basis: Case C–183/00 González Sánchez v. Medicina Asturiana SA [2002] ECR I–3901, para. 23.
173 E.g., Sweden applied for a derogation under Art. 114(4) TFEU from Dir. 94/36 ([1994] OJ L237/4) to maintain its prohibition on the use of E124 (cochineal red) in foodstuffs. The Commission then failed to respond to the notification. However, in Case C–319/97 Criminal Proceedings against Kortas [1999] ECR I–3143 the Court ruled that Sweden could not apply its national rules until authorized to do so by the Commission (para. 28). Cf. Case C–194/94 CIA [1996] ECR I–2201, considered in Ch. 3.
174 Emphasis added.
175 Emphasis added. On the need to produce new scientific evidence, see Commission Dec. 2003/1/EC relating to ‘national provisions on limiting the importation and placement on the market of certain NK fertilizers of high nitrogen content and containing chlorine notified by France pursuant to Art. [114(5) TFEU]’ ([2003] OJ L1/72).
176 This distinction was recognized by the Court in Case C–512/99 Germany v. Commission [2003] ECR I–845, paras. 40–1, and again in Case C–3/00 Denmark v. Commission [2003] ECR I–2643, paras. 57–8.
177 Case C–3/00 Commission v. Denmark [2003] ECR I–2643, para. 57.
178 For an example of this process see the Dutch notification on maintaining national provisions concerning the use of short-chain chlorinated paraffins (SCCP) (2003/C 100/07).
179 This will prevent the problem that arose in Case C–319/97 Kortas [1999] ECR I–3143, see n. 173, from recurring. See also Case C–439/05 P Land Oberösterreich v. Commission [2007] ECR I–7141, para. 41, where the Court of Justice emphasized that the authors of the Treaty intended, in the interests of both the notifying Member State and the proper functioning of the internal market, that the procedure laid down in Art. 114 TFEU should be swiftly concluded. It added that this objective would be difficult to reconcile with a requirement for prolonged exchanges of information and observations. Therefore, there was no right to a hearing. See generally N. De Sadeleer, ‘Procedures for derogations from the principle of approximation of laws under Article 95’ (2003) 40 CMLRev. 889.
180 Art. 114(7) TFEU. Art. 114(8) TFEU makes specific provision regarding Member State difficulties in the public-health field where that area has already been the subject of harmonization.
181 Case C–3/00 Commission v. Denmark [2003] ECR I–2643, para. 65.
182 P. Pescatore, ‘Some critical remarks on the “Single European Act”’ (1987) 24 CMLRev. 9, 12.
183 Hitherto the Commission’s decisions have concerned PCP, creosote, mineral wool, food colourings, sulphates and nitrites, and nitrates used in foodstuffs.
184 [1991] OJ L85/34.
185 This directive had been the result of a German notification in 1987 under what is now Dir. 2015/1535 of a draft regulation restricting PCP concentration in wood-treatment preparations.
186 Dec. of 2 Dec. 1992, not published in the OJ but summarized in a Communication ([1992] OJ C334/8).
187 Case C–41/93 France v. Commission [1994] ECR I–1829.
188 Case C–41/93 France v. Commission [1994] ECR I–1829, para. 36.
189 Case C–41/93 France v. Commission [1994] ECR I–1829, para. 27. The Commission remade the decision authorizing the German government to maintain its stricter rules. The Danish government was also authorized to maintain stricter rules on PCPs after having notified its draft national laws under Art. 114(4) TFEU (Dec. 96/211 ([1996] OJ L68/32)). At first it had argued that Dir. 91/173 represented minimum rather than complete harmonization. The Commission disagreed. Eventually Denmark was persuaded to make an application under Art. 114(4) TFEU to maintain the stricter national rules, and the measure was considered under the Dir. 2015/1535 procedure.
190 [2001] OJ L106/1.
191 <http://www.efsa.europa.eu/en.html>. The reference was made in accordance with Reg. 178/2002 ([2002] OJ L31/1).
192 If the Commission itself does not properly analyse the relevant scientific evidence this is ‘apt to vitiate not only its determination as to whether there was a specific problem but the entirety of its determination of the conditions for applying Articles [114(5)–(6) TFEU], and, particularly, that of the proportionality of the measure notified’: Case C–405/07 P The Netherlands v. Commission [2008] ECR I–8301, para. 77.
193 Opinion of the Scientific Panel on Genetically Modified Organisms on a question from the Commission related to the Austrian notification of national legislation governing GMOs under [Art. 114(5) TFEU] (2003) 1 The EFSA Journal 1.
194 Commission Dec. 2003/653 ([2003] OJ L230/34). See also Commission Dec. 2008/62/EC ([2008] OJ L16/17), where the Commission rejected a similar request from Poland on the grounds of the absence of any new scientific evidence relating to the protection of the environment or the working environment.
195 Joined Cases T–366/03 and 235/04 Land Oberösterreich v. Commission [2005] ECR II–4005.
196 Joined Cases T–366/03 and 235/04 Land Oberösterreich [2005] ECR II–4005, para. 44.
197 Joined Cases T–366/03 and 235/04 Land Oberösterreich [2005] ECR II–4005, paras. 64–5.
198 Joined Cases T–366/03 and 235/04 Land Oberösterreich [2005] ECR II–4005, para. 69.
199 Case C–439/05 P Land Oberösterreich v. Commission [2007] ECR I–7141.
200 [2015] OJ L68/1, considered by M. Lee, ‘GMOs in the internal market: New legislation on national flexibility’ (2016) 79 MLR 317.
201 [2011] OJ L55/13.
202 [2010] OJ L295/23.
203 This was formerly the regulatory procedure (Art. 5 of Council Dec. 1999/468 ([1999] OJ L184/23)): Art. 13(1)(c) of Reg. 182/2011.
204 [2012] OJ L177/16.
205 [2012] OJ L115/12.
206 See further L. Campo, ‘Delegated versus implementing acts: How to make the right choice?’ (2021) 22 ERA Forum 193. See also Register of delegated and implementing acts, <https://webgate.ec.europa.eu/regdel/#/home>.
207 Case C–427/12 Commission v. Parliament and Council EU:C:2014:170.
208 Art. 53 TFEU on the mutual recognition of diplomas and Art. 293 EC (repealed by Treaty of Lisbon) on the mutual recognition of companies and legal persons.
209 Case 120/78 [1979] ECR 649.
211 K. Armstrong, ‘Mutual recognition’ in C. Barnard and J. Scott (eds.), The Law of the Single European Market: Unpacking the premises (Oxford: Hart Publishing, 2002), 231.
212 Case C–184/96 Commission v. France [1998] ECR I–6197.
213 The Foie Gras case came to the Commission’s attention as a result of France’s notification of its draft legislation under the Technical Standards Dir. 2015/1535 (considered in Ch. 3). This directive is seen by the Commission as an important instrument to promote mutual recognition because the Member States can have their own rules recognized when the draft national legislation is sent to other Member States: Commission Communication, ‘Management of the mutual recognition of national rules after 1992’ (93/C 353/04), para. 36.
214 Case C–24/00 Commission v. France (nutrients) [2004] ECR I–1277, para. 28.
215 For more detailed discussion, see M. Jarvis (2004) 41 CMLRev. 1395, 1401–5.
216 Commission Communication, ‘Mutual recognition in the context of the follow-up to the action plan for the single market’ (Jun. 1999), 5, and Council Res. of 28 Oct. 1999 on mutual recognition (2000/C 141/02), para. 12. See also Commission Communication, ‘Internal market strategy. Priorities 2003–2006’, COM(2003) 238, 7, on ways to improve the effectiveness of the operation of the mutual recognition principle.
218 J. H. H. Weiler, ‘The constitution of the common market place: Text and context in the evolution of the free movement of goods’ in P. Craig and G. de Búrca (eds.), The Evolution of EU Law (Oxford: OUP, 1999), 366–7.
219 Case 188/84 Commission v. France [1986] ECR 419. Cf. Case 124/81 Commission v. UK (UHT milk) [1983] ECR 203, where the Court obliged Member States to recognize regulations and controls which provided equivalent guarantees to their own.
220 Commission, ‘Second biennial report on the application of the principle of mutual recognition in the single market’, COM(2002) 419, para. 3.
221 [1976] OJ L262/169, as amended on numerous occasions. The directive has now been repealed and replaced by Reg. (EC) No. 1223/2009 ([2009] OJ L342/59) with effect from 1 Dec. 2010. The original directive is used, by way of illustration here, since its terminology is more straightforward.
222 As with Dir. 2001/37, which imposed stricter standards concerning maximum tar yields of cigarettes: Case C–491/01 Ex p. BAT [2002] ECR I–11453, paras. 77–8.
223 Case 150/88 Parfümerie-Fabrik v. Provide [1989] ECR 3891, para. 28.
224 Case 150/88 Provide [1989] ECR 3891, para. 28.
225 Case 60/86 Commission v. UK [1988] ECR 3921. In the environmental field, see Case C–2/90 Commission v. Belgium (Walloon waste) [1992] ECR I–4431, paras. 20–1.
226 [1976] OJ L262/1. The directive has been repealed and replaced by Reg. (EC) No. 661/2009 ([2009] OJ L200/1).
227 Case 60/86 Commission v. UK [1988] ECR 3921, paras. 9 and 11.
228 Case 227/82 Criminal Proceedings against Leendert van Bennekom [1983] ECR 3883, para. 35. See also the discussion of the Unfair Commercial Practices Directive 2005/29 ([2005] OJ L149/22) in Ch. 4.
229 Case C–323/93 Société Civile Agricole du Centre d’Insémination de la Crespelle v. Coopérative d’Elevage et d’Insémination Artificielle du Département de la Mayenne [1994] ECR I–5077.
230 [1988] OJ L194/10, now repealed and replaced by Reg. 2016/429 ([2016] OJ L84/1).
231 Case C–323/93 Crespelle [1994] ECR I–5077, paras. 34–5.
232 E.g., the Architects Dir. took 17 years to agree and the Pharmacists Dir. 16 years: Lord Cockfield, The European Union: Creating the single market (Chichester: Wiley Chancery, 1994), 79.
233 See, in particular, the use of Art. 114(4)–(5) TFEU, as the Court pointed out in Joined Case C–281 and 282/03 Cindu Chemicals BV v. College voor de toelating van bestrijdingsmiddelen [2005] ECR I–8069, para. 47, or derogations expressly provided for in the directive itself, as the Court recognized in Case C–439/06 Citiworks v. Flughafen Leipzig [2008] ECR I–3913, para. 63.
234 See, e.g., COM(2002) 208, 7; COM(2007) 99, 7. For criticism, see S. Weatherill, ‘Maximum or minimum harmonisation: What kind of “Europe” do we want’ in K. Boele-Woelki and W. Grosheide (eds.), The Future of European Contract Law: Essays in Honour of Ewoud Hondius (Utrecht: Kluwer, 2007).
235 [2011] OJ L304/64.
236 Art. 4 of Dir. 2019/771 ([2019] OJ L136/28) considered in Ch. 5.
237 Joined Cases C–154 and 155/04 [2005] ECR I–6451.
238 Joined Cases C–154 and 155/04 Alliance for Natural Health [2005] ECR I–6451, para. 78. See Section B earlier.
239 Art. 10. This is still the case under Art. 32 of the Cosmetics Reg. 1223/2009.
240 Art. 8(2).
241 Case C–212/91 Angelopharm GmbH v. Freie Hansestadt Hamburg [1994] ECR I–171.
242 Case C–212/91 Angelopharm [1994] ECR I–171, para. 38.
243 Thoburn v. Sunderland City Council [2003] QB 151.
244 [1980] OJ L39/40.
245 After public consultation, the Commission agreed to lift the sunset clause for the UK and Ireland and to permit the use of supplementary indications indefinitely: Commission, ‘Pints and miles will not disappear due to Commission proposal’, IP/07/1297, now Dir. 2009/3/EC ([2009] OJ L114/10).
246 Thoburn [2002] EWHC 195 (Admin), [2002] 1 WLR 247. Had the Metric Martyrs tried to challenge the validity of the directive instead of raising points of UK constitutional law, they might have enjoyed more success, since it could be argued that a directive regulating loose, over-the-counter sales could not be justified on the grounds of removing obstacles to intra-Union trade under Art. 114 TFEU; nor was such a measure compatible with the principles of subsidiarity and proportionality.
247 Neil Herron of the Metric Martyrs Defence Fund expressed his disgust at the ruling: ‘It shows our laws can be overturned by a gathering of unelected bureaucrats over which we have no democratic control.’ P. Crosbie and M. Davill, ‘Death of pounds and ounces’, Sun, 19 Feb. 2002, 8. The front-page story is headed ‘SURRENDER. Pound of bananas banned as our judges cave in to Europe. So who’s running Britain now? BRUSSELS’.
248 Council Dir. 71/316/EEC of 26 Jul. 1971 on the approximation of the laws of the Member States relating to common provisions for both measuring instruments and methods of metrological control ([1971] OJ L202/1), repealed by Dir. 2009/34 ([2009] OJ L106/7).
249 For an early example, see Art. 11 of Council Dir. 69/466/EEC and the discussion in Case 4/75 Rewe-Zentralfinanz GmbH v. Landwirtschaftskammer [1975] ECR 843. See also Case C–44/01 Pippig Augenoptik GmbH & Co. KG v. Hartlauer Handelsgesellschaft mbH [2003] ECR I–3095, para. 40.
250 E.g., Art. 153(2)(b) TFEU.
251 Art. 153(4) TFEU. Similar provisions appear in Art. 193 TFEU on environmental protection, also introduced by the SEA 1986, and in Art. 169(4) TFEU on consumer protection, introduced by the Maastricht Treaty.
252 Under Art. 115 TFEU: e.g., Art. 5 of Council Dir. 98/59/EC ([1998] OJ L225/16) on collective redundancies. Under Art. 114 TFEU: e.g., Art. 8 of Dir. 93/13 on unfair terms in consumer contracts ([1993] OJ L95/29). See also the Edinburgh European Council’s conclusions in 1992 that where it is necessary to set standards at Union level, ‘consideration should be given to setting minimum standards, with freedom for the Member States to set higher standards, not only in the areas where the Treaty so requires … but also in other areas where this would not conflict with the objectives of the proposed measure or with the Treaty.’
253 Case C–84/94 UK v. Council [1996] ECR I–5755, para. 56.
254 See also Opinion 2/91 [1993] ECR I–1061, para. 16, and Case C–2/97 Società Italiana Petroli SpA v. Borsana [1998] ECR I–8597.
255 Case C–1/96 Ex p. Compassion in World Farming [1998] ECR I–1251, para. 63, considered later and Case C–169/89 Criminal Proceedings against Gourmetterie van den Burg [1990] ECR I–2143, para. 9. As to whether fundamental rights might also constitute a ‘ceiling’, see F. De Cecco, ‘Room to move minimum harmonisation and fundamental human rights’ (2006) 43 CMLRev. 9.
256 Case 382/87 Buet v. Ministère public [1989] ECR 1235, para. 8, also considered in Ch. 4. In the field of services, see, e.g., Joined Cases C–34–36/95 De Agostini [1997] ECR I–3843 concerning the AVMS Dir. 2010/13 ([2010] OJ L 95/1), considered in Case Study 11.2, where the Court found that the national rule could in principle be justified and so did not breach Art. 56 TFEU, although ultimately this was a matter for the national court to decide. Cf. Case C–410/96 André Ambry [1998] ECR I–7875, where the Court found that the national rule did breach the Art. 56 TFEU ceiling.
257 [1985] OJ L372/31. This directive has now been repealed and replaced by the Consumer Rights Dir. 2011/83 ([2011] OJ L304/64), which is an exhaustive harmonization measure (see Art. 4).
258 Preamble to the directive.
259 Cf. the Product Liability Dir. 85/374/EEC ([1985] OJ L210/29), which does not contain the equivalent clause and so is an exhaustive harmonization directive: Case C–183/00 González Sánchez [2002] ECR I–3901.
260 Cf. Case C–376/98 Tobacco Advertising I [2000] ECR I–8419, paras. 101–5, where the presence in a directive of a clause permitting Member States to introduce stricter rules that impede imports complying with the requirements of the harmonization directive may be relevant in determining whether the use of Art. 114 TFEU is valid.
261 Case C–11/92 [1993] ECR I–3545.
262 Now Dir. 2001/37.
263 S. Weatherill, ‘Regulating the internal market: Result orientation in the Court of Justice’ (1994) 19 ELRev. 55, 57.
264 Even though the directive did not state explicitly that any of its provisions set minimum standards only, the Court accepted that the expression ‘at least’ gave the Member States the liberty to decide that the indications and warnings were to cover a greater surface area in view of the level of public awareness of the health risks associated with tobacco consumption.
265 Art. 8(1) provides: ‘Member States may not, for reasons of labelling, prohibit or restrict the sale of products which comply with this Directive.’
266 Case C–11/92 Gallaher [1993] ECR I–3545, para. 20.
267 Case C–11/92 Gallaher [1993] ECR I–3545, para. 22.
268 Case C–11/92 Gallaher [1993] ECR I–3545, para. 22. See also Case C–128/94 Hans Hönig v. Stadt Stockach [1995] ECR I–3389, para. 17; Case C–14/00 Commission v. Italy (chocolate) [2003] ECR I–513, paras. 72–3. However, in Case C–222/91 Ministero delle Finanze and Ministero della Sanità v. Philip Morris Belgium SA [1993] ECR I–3469 the Court recognized that not all of the provisions of the directive laid down minimum standards: e.g., Art. 4(2) of the directive provided for the use of only a single specific health warning. Since this provision did not lay down a minimum requirement the Member State could not require more than one warning (para. 28).
269 Case C–1/96 [1998] ECR I–1251.
270 [1991] OJ L340/28. This directive has now been repealed and replaced by Dir. 2008/119/EC ([2009] OJ L10/7).
271 Emphasis added.
272 Case C–1/96 CWF [1998] ECR I–1251, para. 63.
273 These problems could be avoided if there was no free movement clause, although following Tobacco Advertising I the legality of such directives adopted under Art. 114 TFEU is uncertain because they do not assist in the process of market integration: manufacturers still have to comply with the different standards of the Member States.
274 F. Scharpf, ‘Introduction: The problem-solving capacity of multi-level governance’ (1997) 2 JEPP 520.
275 D. Vogel, ‘Trading up and governing across: Transnational governance and environmental protection’ (1997) 4 JEPP 556, 571.
276 Directives now contain a fairly standard clause requiring Member States to ‘communicate to the Commission the texts of the provisions of national law which they adopt in the field governed by the Directive’: e.g., Art. 10 of Dir. 93/13 on unfair terms in consumer contracts.
277 S. Weatherill, ‘Pre-emption, harmonisation and the distribution of competence to regulate the internal market’ in Barnard and Scott, n. 211, cites an example from the environmental field: a four-year concession made on accession allowing Austria, Finland, and Sweden to apply stricter environmental and health standards generated a review that led to the adoption of higher EU-wide standards in a number of relevant areas (COM(98) 745).
278 COM(85) 310 final, 19–20.
279 See Case C–359/92 Germany v. Council (product liability) [1994] ECR I–3681, paras. 23–4.
280 N. Burrows and H. Hiram, ‘Legal articulation of policy in the EC’ in T. Daintith (ed.), Implementing EC Law in the UK: Structures for indirect rule (Chichester: Wiley, 1995), 45. See also <http://sesei.eu/european-standardization/new-approach-legislation/>.
281 Council Dir. 73/23/EEC on the harmonization of the laws of Member States relating to electrical equipment designed for use within certain voltage limits ([1973] OJ L77/29), now repealed and replaced by Dir. 2014/35 ([2014] OJ L96/357). For a full discussion of the 1973 directive see T. Hartley, ‘Consumer safety and the harmonisation of technical standards: The Low Voltage Directive’ (1982) 7 ELRev. 55.
282 COM(85) 19.
283 85/C 136/01. Commission, ‘Enhancing the Implementation of New Approach Directives’, COM(2003) 240, 5, and Council Res. of 10 Nov. 2003. For details, see <http://www.newapproach.org>.
284 [2008] OJ L218/30. See L. Gorywoda, ‘The new European legislative framework for the marketing of goods’ (2009–10) 16 Columbia Journal of European Law 161. This regulation has been amended by Reg. 2019/1020 ([2019] OJ L169/1).
285 [2008] OJ L218/82. It covers the general obligations of economic operators, the presumption of conformity, formal objections against harmonized standards, rules for the CE marking, requirements for conformity assessment bodies and notification procedures, and the provisions concerning procedures dealing with products presenting a risk which should be aligned to that decision.
287 Commission, ‘Package on internal market for goods’, MEMO/07/54.
288 ‘Guidelines for a new approach to technical harmonisation and standards’ in Annex II of Council Res. 85/C 136/01; and Commission, ‘Enhancing the implementation of the new approach directives’, COM(2003) 240, 5.
289 See also Case 123/76 Commission v. Italy [1977] ECR 1449, para. 13.
290 Comité Européen de Normalisation.
291 Comité Européen de Normalisation Electronique.
292 European Telecommunications Standards Institute.
293 The use of QMV was challenged in Case 123/76 Commission v. Italy [1977] ECR 1449. Although the Court did not discuss the point, Warner AG said that national standards organizations could decide ‘by common agreement’ to be bound by QMV.
294 See General Guidelines for the Cooperation between CEN, CENELEC, and ETSI and the European Commission and EFTA ([2003] OJ C91/7), supplementing the General Guidelines for Cooperation adopted in 1984 (CEN/CENELEC Memo. 4), which confer a monopoly of standard setting on CEN, CENELEC, and now ETSI.
295 This was facilitated by the Global Approach to Testing and Certification aimed at coordinating the different practices and procedures across Europe: COM(89) 209. See further M. Egan, Constructing a European Market (Oxford: OUP, 2001), 126–9; and Commission, Guide to the Implementation of Directives Based on the New Approach and the Global Approach (Luxembourg: OPEC, 2000). See <https://sesei.eu/european-standardization/new-approach-legislation/>.
296 Case 815/79 Criminal Proceedings against Gaetano Cremonini and Maria Luisa Vrankovich [1980] ECR 3583, para. 13.
297 [2009] OJ L170/1.
298 [1988] OJ L187/1.
299 M. Egan, Constructing a European Market (Oxford: OUP, 2001), 169.
301 Art. 2(1). Certain exceptions to this definition are listed in Annex I, which broadly covers products not intended for children, such as scale models for adult collectors and those requiring supervision such as fireworks. Further exceptions (e.g., playground equipment for public use) can be found in Art. 1(2).
302 Art. 10(1).
303 CEN/CENELEC’s role is referred to in the preamble only.
304 [2015] OJ L241/1.
305 In addition, the manufacturer must use the internal production control procedure set out in Module A of Annex II to Dec. 768/2008/EC (Art. 19(2) of Dir. 2009/48).
306 Art. 13. See also Case C–14/02 ATRAL [2003] ECR I–4431, para. 51.
307 Art. 8(1). The manufacturer must also keep certain specified information available.
308 Commission Communication, ‘Enhancing the implementation of the new approach directives’, COM(2003) 240.
309 COM(2007) 35, 9.
310 MEMO/07/54.
311 An application for ‘EC–type’ examination, performance of that examination, and issue of the ‘EC–type’ examination certificate are to be carried out in accordance with the procedures set out in Module B of Annex II to Dec. No. 768/2008/EC. ‘EC–type’ examination shall be carried out in the manner specified in the 2nd indent of point 2 of that Module: Art. 20(1).
312 Art. 20.
313 In a similar vein, in the context of Art. 34 TFEU, see Joined Cases C–388 and 429/00 Radiosistemi [2002] ECR I–5845 and Case C–13/01 Safalero Srl v. Prefetto di Genova [2003] ECR I–8679.
314 Art. 12.
315 Art. 42.
316 Case C–132/08 Lidl Magyarország Kereskedelmi bt v. Nemzeti Hírközlési Hatóság Tanácsa [2009] ECR I–3841, para. 28.
317 See Annex II, B, II.1 of Council Res. 85/C 136/01 and Case C–288/08 Kemikalieinspektionen v. Nordiska Dental AB [2009] ECR I–11031, para. 44; Case C–132/08 Lidl Magyarország Kereskedelmi bt [2009] ECR I–3841, para. 43.
318 The directive also imposes obligations on other economic operators, such as importers and distributors: Arts. 4–9.
319 Case C–132/08 Lidl Magyarország Kereskedelmi bt [2009] ECR I–3841, para. 42.
320 Art. 19 RAMS Reg.
321 Art. 20 RAMS Reg.
322 Cf. the discussion in Ch. 4 about the effects of the judgment in Case 120/78 Cassis de Dijon [1979] ECR 649.
323 J. Pelkmans, ‘The new approach to technical harmonization and standardization’ (1987) 25 JCMS 249, 259.
325 E. Previdi, ‘The organisation of public and private responsibilities in European risk regulation: An institutional gap between them’ in C. Joerges, K.-H. Ladeur, and E. Vos (eds.), Integrating Scientific Expertise into Regulatory Decision-Making: National traditions and European innovations (Baden-Baden: Nomos Verlagsgesellschaft, 1997).
326 Burrows and Hiram, n. 280, 44, and L. Gormley, ‘Some reflections on the internal market and free movement of goods’ [1989/1] LIEI 9, 13. Cf. R. H. Lauwaars, ‘The “model” directive on technical harmonisation’ in R. Bieber et al. (eds.), One European Market? A critical analysis of the Commission’s internal market strategy (Baden-Baden: Nomos Verlagsgesellschaft, 1988), 165–7.
327 See, e.g., Council Res. of 28 Oct. 1999 (2000/C 141/02), para. 29; Council Conclusions of 1 Mar. 2002 on Standardization (2002/C 66/01). This is caused in part by lack of resources: Pelkmans, n. 323, 263.
328 R. Dehousse, ‘1992 and beyond: The institutional dimension of the internal market programme’ [1989/1] LIEI 109, 126.
329 Although the Court may have an ancillary role in ensuring that these committees are involved in the standardization process: cf. Case C–212/91 Angelopharm [1994] ECR I–171. Cf. the Lisbon revisions to Art. 263(1): the Court of Justice shall review ‘the legality of acts of bodies, offices or agencies of the Union intended to produce legal effects vis-à-vis third parties’.
330 See, e.g., Commission, ‘Efficiency and accountability in European standardisation under the new approach’, COM(98) 291; Council Res. 2000/C141/01, which ‘Confirms that standardisation is a voluntary, consensus-driven activity, carried out by and for the interested parties themselves, based on openness and transparency’; Parliament Res. ([1999] OJ C150/624) and the follow up Commission Report, COM(2001) 527.
331 See the European Governance White Paper, COM(2001) 428.
332 See COM(2001) 527, para. 4.1.
333 G. de Búrca, ‘Institutional development of the EU’ in Craig and de Búrca, n. 218, 79.
334 See, e.g., S. Deakin, ‘Two types of regulatory competition: Competitive federalism versus reflexive harmonisation. A law and economics perspective on Centros’ (1999) 2 CYELS 231.
335 See generally G. Teubner, Law as an Autopoietic System (Oxford: Blackwell, 1993); R. Rogowski and T. Wilthagen (eds.), Reflexive Labour Law (Deventer: Kluwer, 1994).
336 Dir. 2009/38/EC ([2009] OJ L122/28).
337 I. Ayres and R. Gertner, ‘Filling gaps in incomplete contracts: A theory of default rules’ (1989) 99 Yale LJ 87.
338 See Council Reg. No. 2157/2001 on the Statute for a European Company ([2001] OJ L294/1) supplemented by Council Dir. 2001/86 with regard to the involvement of employees ([2002] OJ L294/22). For a further example of reflexive law, see EP and Council Dir. 2002/14 on the general framework for informing and consulting employees in the European company ([2002] OJ L80/29).
339 Presidency Conclusions, Lisbon European Council, 23 and 24 Mar. 2000, para. 37.
340 Although, for a sceptical view based on a case study taken from the Occupational Health and Safety sector, see S. Smismans, ‘New modes of governance and the participatory myth’, European Governance Papers (EUROGOV), No. N–06–01.
341 Discussed further in C. Barnard, EU Employment Law (Oxford: OUP, 2012), Ch. 3; and D. Ashiagbor, The European Employment Strategy: Labour market regulation and new governance (Oxford: OUP, 2005).
342 Presidency Conclusions, Lisbon European Council, 23 and 24 Mar. 2000, para. 30.
343 <https://ec.europa.eu/info/strategy/priorities-2019-2024/economy-works-people/jobs-growth-and-investment/european-pillar-social-rights/european-pillar-social-rights-action-plan_en>.
344 Presidency Conclusions, Lisbon European Council, 23 and 24 Mar. 2000, paras. 31 and 33.
345 European Council Presidency Conclusions, 25 and 26 Mar. 2010.
346 For suggestions as to how OMC might apply in the context of the single market: Commission Communication on an open method of coordination for the Community immigration policy, COM(2001) 387 final.
347 <http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52001DC0565>.
348 Governance White Paper, COM(2001) 428, 22.
349 <https://ec.europa.eu/info/business-economy-euro/economic-and-fiscal-policy-coordination/eu-economic-governance-monitoring-prevention-correction/european-semester/european-semester-timeline/2022-european-semester-cycle_en>.
350 C. de la Porte and P. Nanz, ‘The OMC: A deliberative-democratic mode of governance? The cases of employment and pensions’ (2004) 11 JEPP 267. As Hepple puts it in Rights at Work (London: Sweet & Maxwell, 2005), 32, the employment guidelines are phrased in ‘the mumbo-jumbo of modern management speak’.
351 Cf. the principles of good governance set out in the Commission’s White Paper on Governance, COM(2001) 428.
352 See H. Schmitt von Sydow, ‘The basic strategies of the Commission’s White Paper’ in Bieber et al., n. 326.
353 Final Report of the Committee of Wise Men on the Regulation of European Securities Markets (Brussels, 2001).
354 Final Report of the Committee of Wise Men, n. 353, p. 14.
355 Final Report of the Committee of Wise Men, n. 353, p. 15.
356 Final Report of the Committee of Wise Men, n. 353, p. 19.
357 See also <https://ec.europa.eu/info/business-economy-euro/banking-and-finance/financial-reforms-and-their-progress/regulatory-process-financial-services/regulatory-process-financial-services_en>.
358 Although there is no comitology any more under Art. 290 TFEU, advisory committees consisting of national experts continue to exist in the area of financial services (Decl. No. 39).
359 <https://ec.europa.eu/info/sites/default/files/overview-table-level-2-measures_en.pdf>.
360 See, e.g., Art. 10 of the ESMA Reg. 1095/2010 ([2010] OJ L331/84).
361 See, e.g., Art. 31 of the ESMA Reg.
362 The BTS and the guidelines and recommendations constitute the ‘common European rule book’.
363 See, e.g., Art. 17 of the ESMA Reg.
364 See Reg. 596/2014 on Market Abuse ([2014] OJ L173/1); the Prospectus Reg. 2017/1129 ([2017] OJ L168/12); the Markets in Financial Instruments Dir. 2014/65 ([2014] OJ L173/349); the Transparency Dir. 2004/109/EC ([2004] OJ L390/38) for examples of Level 1 measures.
365 See D. Chalmers et al., European Union Law (Cambridge: CUP, 2006), 815–17.
366 This broadly favourable view is repeated in the Commission’s own review of the Lamfalussy process: COM(2007) 727. A number of the reforms proposed then have now been adopted.
367 Opinion of Bot AG in Joined Cases C–274 and 295/11 Spain and Italy v. Council EU:C:2013:240, para. 82.
368 Art. 20(2) TEU.
369 Art. 20(1), second subpara. TEU.
370 Art. 326, first para. TFEU.
371 Art. 326, second para. TFEU.
372 Art. 327 TFEU.
373 Joined Cases C–274 and 295/11 Spain and Italy v. Council EU:C:2013:240. See further Ch. 5.
374 The Commission noted in 1992 that 32 out of the 282 measures proposed still awaited adoption, of which nine were of low priority: COM(92) 383.
375 Commission Communication, ‘The strategy for Europe’s internal market’, COM(99) 624. This followed on from the Single Market Action Plan, CSE(97) 1 final, which followed on from the Commission’s Communication, ‘The impact and effectiveness of the single market’, COM(96) 520. See also COM(2003) 238; COM(2007) 724. See further I. Govaere, ‘The future direction of the EU internal market: On vested values and fashionable modernism’ (2009–10) 16 Columbia Journal of European Law 67.
376 COM(2011) 206.
378 COM(2012) 573.
379 COM(2015) 550. See now the Commission website: <https://ec.europa.eu/growth/single-market/single-market-strategy_en>.
380 See also ‘Better governance for the single market’, COM(2012) 259.
381 COM(2007) 724.
382 [2009] OJ L176/17.
383 S. Weatherill, ‘New strategies for managing the EC’s internal market’ (2000) 53 CLP 595, 598.
384 COM(96) 559. See also the Commission’s Action Plan, ‘Simplifying and improving the regulatory environment’, COM(2002) 278, followed up by the Commission’s Communication, ‘Updating and simplifying the Community acquis’, COM(2003) 71. See also the Interinstitutional Agreement on Better Law-Making ([2016] OJ L123/1).
385 Commission Communication, ‘Better regulation for growth and jobs in the European Union’, COM(2005) 97.
386 COM(2021) 219.
387 <http://ec.europa.eu/smart-regulation/refit/index_en.htm>.
388 <http://ec.europa.eu/smart-regulation/refit/index_en.htm>.
389 <https://ec.europa.eu/info/law/law-making-process/evaluating-and-improving-existing-laws/refit-making-eu-law-simpler-less-costly-and-future-proof/fit-future-platform-f4f_en>.
390 Council Res. of 8 Jul. 1996 on legislative and administrative simplification in the field of the internal market ([1996] OJ C224/5).
391 Sutherland Report, The Internal Market after 1992: Meeting the challenge, Report to the EEC Commission by the High Level Group on the Operation of Internal Market 1992, 10.
392 COM(2003) 71.
393 COM(2003) 71.
394 <http://ec.europa.eu/smart-regulation/refit/index_en.htm>.
395 <https://op.europa.eu/webpub/com/refit-scoreboard/en/index.html>.
396 <https://ec.europa.eu/info/sites/default/files/annual-burden-survey_2020_en.pdf>.
397 <https://ec.europa.eu/info/law/law-making-process/planning-and-proposing-law/better-regulation-why-and-how/better-regulation-guidelines-and-toolbox_en>.
398 See now the Have your Say portal: <https://ec.europa.eu/info/law/better-regulation/have-your-say_en>.
399 <https://ec.europa.eu/info/law/law-making-process/regulatory-scrutiny-board_en>.
400 <https://ec.europa.eu/info/sites/default/files/swd2021_305_en.pdf> and the toolbox (<https://ec.europa.eu/info/sites/default/files/br_toolbox-nov_2021_en_0.pdf>). This contains better regulation guidelines on planning, impact assessments, input from stakeholders, preparing proposals, monitoring, evaluation and fitness checks, and compliance promotion tools.
401 <https://ec.europa.eu/info/sites/default/files/swd2021_305_en.pdf>, 5.
403 Joined Cases C–154 and 155/04 Alliance for Natural Health [2005] ECR I–6451, see n. 115.
404 Commission Rec. 2005/309/EC ([2005] OJ L98/47). See also Commission Communication, ‘Better governance for the single market’, COM(2012) 259.
406 <https://ec.europa.eu/internal_market/scoreboard/performance_overview/index_en.htm>.
407 See, e.g., <https://ec.europa.eu/info/publications/annual-reports-monitoring-application-eu-law_en>.
408 S. Weatherill, ‘Pre-emption, harmonisation and the distribution of competence to regulate the internal market’ in Barnard and Scott, n. 211, 66–9.
409 Case C–253/00 Antonio Muñoz y Cia SA v. Frumar Ltd [2002] ECR I–7289.
410 Case C–253/00 Muñoz [2002] ECR I–7289, para. 31.
411 Case 26/62 Van Gend en Loos [1963] ECR 1.
412 Case C–213/89 Factortame (No. 1) [1990] ECR I–2433.
413 See also Commission Communication, ‘Better monitoring of Community law’, COM(2002) 725. See also the SOLVIT initiative, complementary to infringement proceedings, which is an attempt through administrative cooperation to make it easier to obtain redress where internal market rules are misapplied in practice: COM(2001) 702, Commission Rec. ([2001] OJ L331/79).
414 COM(2007) 502. The Commission is also bringing fewer cases: https://www.politico.eu/article/curious-case-eu-disappearing-infringements/.
415 <https://ec.europa.eu/internal_market/scoreboard/performance_overview/index_en.htm>.
416 [2002] OJ L11/4.
417 For full details, see <http://ec.europa.eu/consumers/dyna/rapex/rapex_archives_en.cfm>. Commission Dec. 2010/15/EU ([2010] OJ L22/1) lays down guidelines on the management of RAPEX.
418 As amended by Reg. 2019/1020 ([2019] OJ L169/1).
419 MEMO/07/54.
421 <https://ec.europa.eu/eurostat/cache/infographs/ict/bloc-4.html>.
422 COM(2015) 192 final.
423 <https://ec.europa.eu/commission/priorities/digital-single-market_en>.
425 [2000] OJ L 178/1.
426 Art. 3.
427 Art. 4.
428 <https://ec.europa.eu/digital-single-market/en/e-commerce-directive>.
430 Art. 20(1).
431 [2018] OJ L 60I/1.
432 Regulation (EU) 2018/644 of the European Parliament and of the Council on cross-border parcel delivery services ([2018] OJ L112/19). According to the European Parliament, sending a 2kg parcel from Belgium to Italy would cost €32.80 while the same package sent from the Netherlands to Italy would cost €13. From 2020 consumers will be able to consult parcel delivery prices on a dedicated page on the Commission’s website. (<http://www.europarl.europa.eu/news/en/headlines/economy/20180308STO99327/online-shopping-new-eu-rules-for-cross-border-parcel-delivery>).
433 <https://www.ecb.europa.eu/paym/intro/mip-online/2018/html/1803_revisedpsd.en.html>.
434 EP and Council Reg. 2015/2120 ([2015] OJ L310/1); Commission Implementing Reg. 2016/2286 ([2016] OJ L344/46).
435 [2017] OJ L168/1.
436 D. Adamski, ‘Lost on the digital platform: Europe’s legal travails with the Digital Single Market’ (2018) 55 CMLRev. 719, 735.
438 Case C–434/15 Asociación Profesional Elite Taxi v. Uber Systems Spain SL EU:C:2017:981.
439 Case C–434/15 Uber EU:C:2017:981, paras. 44–9.
441 <https://ec.europa.eu/info/strategy/priorities-2019-2024/europe-fit-digital-age/shaping-europe-digital-future_en>.
442 <https://eur-lex.europa.eu/legal-content/en/TXT/?qid=1608117147218&uri=COM%3A2020%3A825%3AFIN>.
443 <https://eur-lex.europa.eu/legal-content/en/TXT/?uri=COM%3A2020%3A842%3AFIN>.
444 See further <http://eulawanalysis.blogspot.com/2020/12/overview-of-digital-services-act.html>.
445 <https://ec.europa.eu/info/strategy/priorities-2019-2024/europe-fit-digital-age/digital-services-act-ensuring-safe-and-accountable-online-environment_en>.
446 <https://ec.europa.eu/info/strategy/priorities-2019-2024/europe-fit-digital-age/digital-markets-act-ensuring-fair-and-open-digital-markets_en>.
447 <http://eulawanalysis.blogspot.com/2021/01/the-proposed-digital-markets-act.html>.
448 <https://digital-strategy.ec.europa.eu/en/policies/european-approach-artificial-intelligence>.
449 COM (2021) 206
450 Summary taken from <https://digital-strategy.ec.europa.eu/en/policies/regulatory-framework-ai>.
451 C. Joerges, ‘European economic law, the nation state and the Treaty of Maastricht’ in R. Dehousse (ed.), Europe After Maastricht: An ever closer union (Munich: Law Books in Europe, 1994).
452 L. Hooghe and G. Marks, Multi-Level Governance and European Integration (Lanham, Md: Rowman & Littlefield, 2001).
453 COM(2003) 238, 26.
454 COM(2015) 550.
455 <https://scholarship.law.columbia.edu/cgi/viewcontent.cgi?article=1275&context=faculty_scholarship>.
