EU Law - Oliver and Roth

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Extract title: The internal market and the four freedoms

Title author: Peter Oliver and Wulf-Henning-Roth
Publication year, Volume, Issue: 2004
Page extent: 407-441
Source title: Common Market Law Review
ISBN: 0165-0750
Common Market Law Review 41: 407-441, 2004.
tCI 2004 Kluwer Law International. Printed in the Netherlands.
THE INTERNAL MARKET AND THE FOUR FREEDOMS
PETER OLIVER AND WULF-HENNING ROTH
1. Are the four freedoms fundamental rights?
The first theme considered here is to what extent, if at all, the four freedoms
are already to be regarded as fundamental rights.
Article 2 EC has always given special prominence to the establishment of
the "common market'', which undoubtedly comprises the four freedoms.
Since the entry into force of the Single European Act, this has been rein-
forced by the provision which is now Article 14 EC. As long ago as 1983, the
Court referred to the free movement of workers as a "fundamental right", 1 an
honour apparently conferred only once on the free movement of goods.2 The
Court has bestowed other flattering terms on the four freedoms such as:
"fundamental freedom", 3 "one of the fundamental principles of the Treaty",4
a "fundamental Community provision"5 and "one of the foundations of the
Community".6
* Peter Oliver is Legal Advisor to the EC Commission. He wishes to thank his colleague
Denis Martin for his advice, but the views expressed here are personal to the author. Wulf-
Henning Roth is member of the Editorial Board of this Review and Professor at the University
of Bonn and Director of the Centre of European Economic Law.
1. Case 152182, Forcheri v. Belgium, [1983] ECR 2323, para 11; see also Case 222/86,
UNCTEF v. Heylens, [1987] ECR 4097, para 14, and A.G. Lenz in Case C-415/93, UEFA v.
Bosman, [1995] ECR I-4921, Opinion at 5007-8.
2. Case C-228/98, Dounias v. Minister for Economic Affairs, [2000] ECR I-577, para 64.
3. Cases C-394/97, Heinonen, [1999] ECR 1-3599, para 38; C-390/99, Canal Satelite Digi-
tal v. Spain, [2002] ECR 1-607, paras. 28-30, and most recently C-112/00, Schmidberger v.
Austria,judgment of 12 June 2003, nyr, paras. 62 and 74. All these cases relate to goods. The
same expression is to be found in Case C-281/98, Angonese, [2000] ECR 1-4139, para 35
(workers).
4. Cases C-205/89, Commission v. Greece, (pasteurized butter) [1991] ECR I-1361, para 9,
C-265/95, Commission v. France, (violent action by farmers) (1997] ECR 1-6959, para 27.
Both cases relate to goods.
5. Case C-44/89, Corsica Ferries France v. Direction generale des douanes fram;aises,
[1989] ECR 1-4441, para 8 (all four freedoms).
6. Case C-194/94, CIA Security v. Signalson, [1996] ECR I-2201 para 40, and C-443/98,
Unilever Italia v. Central Food, [2000] ECR 1-7535, para 40. Both cases relate to goods.
408 Roth and Oliver CML Rev. 2004
What significance should be attached to these semantic questions is un-

clear. Quite probably, it is naive to construct an entire theory on the basis of
one word occurring in an isolated judgment, especially as its use may simply
be attributable to a translation error; but where a term is used consistently in
a series of judgrnents, that cannot go unheeded.
Since they relate to the individual's right to live and work in the country of
his choice and not be separated from his immediate family, the freedoms re-
lating to the movement of natural persons can more readily be seen as funda-
mental rights of the kind enshrined in the European Convention on Human
Rights than can the free movement of goods. In addition, the Court has fre-
quently linked the free movement of workers and other natural persons to Ar.-
ticle 12 EC, which prohibits discrimination on the grounds of nationality,7
and Articles 17 and 18 EC on citizenship of the Union. 8 Moreover, Articles 7
and 15 of the (non-binding) Charter of Fundamental Rights of the European
Union9 provide for the respect of the individual's private and family life, and
for the freedom to work in any Member State, respectively.
Whether the Court sees the free movement of goods in the same light is
questionable, but such an eventuality can by no means be ruled out: the
citizen's right to purchase the washing-powder of his choice and the corre-
sponding right of another individual to purvey, it appear trivial in compari-
son with human rights such as are bound up with the free movement of
workers; but it must not be overlooked that the free movement of goods can
be linked to the freedom of expression, for example where restrictions are
placed on the importation or exportation of books, magazines or video-cas-
settes.10
7. See e.g. Cases 186/87, Cowan v. Tresor Public, [1989] ECR 195 and C-41 1/98, Ferlini,
[2000] ECR I-8081.
8. Cases C-85/96, Martinez Sala, [1998] ECR l-2691 (annotated by O'Leary (1999) EL
Rev., 68), C-135/99, Elsen, [2000] ECR I-10409; C- 184/99, Grzelczyk, [2001] ECR 1-6193 and
C-148/02, Garcia Avello v. Belgium, (judgment of 2 Oct 2003). Even prior to the entry into
force of these provisions, A.G. Jacobs stated: "In my opinion, a Community national who goes
to another Member State as a worker or self-employed person ... is entitled to say 'civis
europeus sum' and to invoke that status in order to oppose any violation of his fundamental
rights" (Case C- 168/91, Konstantinidis, [1993] ECR I-1198 at 1211-1212). In Case C-274/96,
Bickel and Franz, [1998] ECR I-7637 at p. 7645, the same A.G. stated: "The ni;>tion of citizen-
ship of the Union implies a commonality of rights and obligations uniting Union citizens by a
common bond transcending Member State nationality". See generally Castro Oliveira, "Work-
ers and other persons: Step by step from movement to citizenship - Case law 1995-2001", 39
CML Rev. (2002), 77; Scheuing, "Freiziigigkeit als Unionsbiirgerrecht", 38 EuR (2003), 744.
9. O.J. 2000, C 364/1.
10. Where information is distributed in intangible fonn via the internet and television, the
provision of services rather than goods is involved. See Cases 60 and 61/84, Cinetheque,
Internal market 409
What is more, the right to import and export goods between Member
States might be regarded as part of the freedom to conduct a business (recog-
nized both in the case law 11 and in Article 16 of the Charter of Fundamental
Rights) or as part of the right to property (Art. I of Protocol 1 to the ECHR
and Art. 17 of the Charter).12
However, it should be recalled that in his renowned Opinion in
Hiinermund, 13 Advocate General Tesauro firmly opposed the suggestion that
Article 28 is designed to prevent restrictions on the "freedom to trade" or to
guarantee the "right to the unhindered pursuit of commercial activities". The
Court was by no means deaf to this plea, as paragraph 14 of its judgment in
Keck and Mithouard 14 shows. There the Court complained of "the increasing
tendency of traders to invoke Article [28] of the Treaty as a means of chal-
lenging any rules whose effect is to limit their commercial freedom even
where such rules are not aimed at products from other Member States" - be-
fore recasting the scope of Article 28 to bring it back within its proper limits.
Finally, the ruling in Schmidberger (discussed in section 6 below) bears
witness to the considerable importance attached by the Court to the four
freedoms, even in the face of hard core fundamental rights such as the free-
dom of expression and assembly - although at the end of the day it is plain
that breaches of the latter cannot be countenanced.
As to the literature, our starting-point should be Bleckmann's paper pub-
lished in 1981 under the title "Die Freiheiten des Gemeinsamen Marktes als
Grundrechte". 15 Describing the four freedoms as either assimilated or akin to
fundamental rights, he advocated a radical approach, which would involve
sweeping away inconvenient limitations on the four freedoms enshrined in
the text of the Treaty. Although that paper foreshadowed various develop-
ments in the case law, 16 few would advocate such a far-reaching conception
today.17
[1985] ECR 2605; C-260/89, ERT, [1991) ECR 1-2925 and C-368/95, Vereinigte Familiapress,
[1997] ECR I-3689.
11. Cases C-280/93, Germany v. Council, [1994] ECR 1-4973, para 78 and C-200/96, Met-
ronome, (1998] ECR 1-1953, para 21 ; see Frenz, "Grundfreiheiten und Grundrechte", 37 EuR
(2002), 606-7.
12. Cases C-4173, Nold,. [1974) ECR 491 and C-84/95, Bosphorus, [1996] ECR 1-3953;
Frenz, op. cit supra note 11.
13. Case C-292/92 [1 993) ECR 1-6787, at 6813.
14. Cases C-267-8/91 , {1993] ECR 1-6097.
15. In Bieber et al. (Eds.), Das Europa der zweiten Generation - Gediichtnisschrift far
Christoph Sasse (Nomos, 1981).
16. Case C-60/00, Mary Carpenter, [2002] ECR 1-6279 (discussed more fully in sections 3
and 5 below), is a case in point.
17. See however, Nie Shuibhne, "Free movement of persons and the wholly internal rule:
Time to move on?", 39 CML Rev. (2002), 731.
More recent commentators have tended to follow a more nuanced ap-

proach. Judge Everling sees the four freedoms as part of the freedom of en-
terprise, even though they apply only to interstate transactions. 18 Frenz draws
various parallels between the four freedoms and fundamental rights, while
insisting on the distinction between the two. 19 Poiares Maduro describes Ar-
ticle 28 as a "fundamental political right" and a "fundamental economic
freedom", but warns: "There is a risk of giving such fundamental economic
freedoms a status higher than that awarded to other fundamental rights and

values in the Community legal order".2 Kingreen refers to the four free-
doms as significant "subjective public rights" (subjektiv-offentliche
Rechte). 21 This view is broadly endorsed by Baquero Cruz, who regards
them as "constitutional rights but not fundamental constitutional rights". 22
Last, Gerkrath speaks of "economic constitutional rights" and "the principal
elements of the economic Constitution of the Community". 23
In short, whatever their status, the four freedoms are not absolute: they do
not apply to measures internal to a Member State; nor do they apply insofar
as measures are justified. At the end of the day, the essential issue is not
whether the four freedoms are to be categorized as fundamental rights, but
rather their relative importance in the Treaty. That they do currently enjoy a
key position in the Treaty was stressed by the then President of the Court in
his inaugural address at the 2002 FIDE conference, when he entered the fol-
lowing plea:
" ... I do hope that the central character of the basic economic provisions
of the Treaty, the rules on free movement and competition, will be pre-
served in the future constitutional Treaty. One should not forget that the
Union is based upon them, that they constitute the core and best estab-
lished layer of the legal order. Indeed, they have a constitutional nature ...
These constitutional economic provisions should not be overlooked and
downgraded as something of secondary importance, Rather, they should
be given pride of place within the new constitutional framework. This
18. Everling, "Wirtschaftsfreiheit im europfilschen Binnenmarkt - Anspruch und Realitat",

in Schwarze (Ed.), Wirtschajisverfassungsrechtliche Garantien for Untemehmen im europiii-
schen Binnnemarkt (Nomos, 2001).
19. Op. cit. supra note 11.
20. Poiares Maduro, We the Court - The European Court ofJustice & the European Eco-
nomic Constitution (Hart, 1998) at p. 166-8.
21. Kingreen, Die Struktur der Grundfreiheiten des Europiiischen Gemeinschajisrechts,
(Duncker & Humblot, 1999) at p. 15.
22. Baqero Cruz, Between Competition and Free Movement: The Economic Constitutional
Law of the European Community (Hart, 2002) at p. 81. ,
23. Gerkrath, L 'emergence d'un droit constitutionnel pour l'Europe (Universite d~
Bruxelles, 1997) at p. 315.
Internal market 411
would secure the lastin~value of the decades of case law that gives ffiem
their present meaning."
2. Restrictions and discrimination
2.1. A historical perspective
In the 1970s and 1980s the prevailing view was that the scope of the four
freedoms should be drawn along different lines: 25 Article 28 EC on the free
movement of goods was to be considered as a far-reaching prohibition of any
measures potentially hindering or restricting the import of goods, whether
indistinctly applicable or not. Dassonville26 and Cassis de Dijon27 stand for
this proposition. In contrast, the provisions on the free movement of persons
- workers, establishment and services - were generally regarded as an ex-
pression of the general principle of non-discrimination on grounds of nation-
ality, as set forth in Article 12 EC. 28
However, the case law of the Court of Justice, starting in the 1980s29 and
more so in the 1990s - Siiger3 with regard to services (Art. 49 EC),
Bosman 31 with regard to the free movement of workers (Art. 39 EC) and
Gebhanf32 concerning the right of establishment (Art. 43 EC) - brought a
definite move towards a broader concept of restrictions that are to be abol-
ished under the relevant freedoms.
More or less simultaneously, the Court's case law with regard to the free
movement of goods has undergone a major change with the judgment in
Keck,33 insofar as the Court attempted to replace its sweeping test in
24. As a result, the following provision was inserted into the 2003 draft Constitution as Art.
I-4(1 ): "Free movement of persons, goods, services and capital, and freedom of establishment
shall be guaranteed within and by the Union, in accordance with the provisions of this Consti-
tution".
25. E.g. Wyatt and Dashwood, The Substantive Law of the EEC, 2nd ed. (Sweet & Max-
well, 1987), pp, 134 (goods), 173 (workers), 203 (establishment) and 219 (services).
26. Case 8174, Procureur du Roi v. Dassonville, [1974] ECR 837.
27. Case 120/78, REWE, [1979] ECR 649.
28. See Wyatt and Dashwood, op. cit. supra note 25, pp. 173, 203, 219; Oppermann,
Europarecht, l st ed. (Beck, 1991), pp. 552 (para 1426'-1438), 575 (para 1492): the non-dis-
crimination principle as the core of freedom of establishment and freedom to provide services.
29. Case 52/79, Debauve, [1980] ECR 833; Case 205/94, Commission v. Germany, [1986]
ECR3755.
30. Case C-76/90, Sager, [1991] ECR 1-4421.
31. Case C-415/93, Bosman, [1995] ECR 1-4921.
32. Case C-55/94, Gebhard, [1995] ECR 1-4165.
33. Cases C-267/91 and C-268/91, cited supra note 14.
Dassonville by a more refined approach differentiating between product-

bound regulations on the one hand and so-called selling arrangements on the
other. Whereas product-bound measures continue to be governed by the
Cassis approach, applying the prohibition of Article 28 EC also to indis-
tinctly applicable regulations that impede the free movement of goods, the
regulation of selling arrangements was henceforth to be subject only to a
discrimination test. 34
Some commentators have found it somewhat surprising35 that in services
and establishment the Court has moved from a discrimination test to a much
stricter approach based on the prohibition on restrictions, whereas with re-
gard to the free movement of goods the Court seems to have moved in the
opposite direction to a more lenient approach as far as indistinctly applicable
measures are concerned. One commentator has attempted to explain these
developments in terms of judicial strategy: " ... less activism on the free
movement of goods may correspond to more activism with regard to other
movement rules."36
2 .2. 1Wo preliminary points
Before taking a somewhat closer look at these issues, two preliminary points
are in order. First; those who might think that the Court has failed to develop
sufficiently clear-cut rules with regard to the four freedoms, might like to
consider the experience of the United States Supreme Court dealing with the
free movement of goods in the US common market under the "negative im-
plications" of the interstate commerce clause37 in the US Constitution. On
the basis of a large number of judgments of the Supreme Court, Thomas
Reed Powell, a famous constitutional lawyer in the 1930s, made the follow-
ing ironic proposal for a "Restatement" of the case l,aw:
"Black letter text: Congress has power to regulate interstate commerce.
Comment: The states may also regulate interstate commerce, but not too
much. Caveat: How much is too much is beyond the scope of this Restate-
ment". 38
Compared to this "Restatement", the case law of the Court of Justice may
appear to be the embodiment of clarity.
34. See Keck& Mithouard, cited supra note 14, 6131paras.15-17.

35. Steiner and Woods, EC Law, 5th ed. (Blackstone, 1996), at p. 293.
36. Maduro, op. cit. supra note 20, p. 99.
37. See e.g. Southern Pacific Co. v. Arizona, 325 U.S. 761, 775-776 (1945).
38. Cited by Freund, "Review and Federalism", in Cahn (Ed.), Supreme Court and Su-
preme Law (Simon & Schuster, 1971),p. 86, at pp. 96-97.
Internal market 413
Second, with its interpretation of the four freedoms, the Court of Justice
has moved into the role of arbiter between the demands of the internal mar-
ket on the one hand and the effectiveness of a decentralized dec ision-making
process on the level of the Member States on the other. The Court's jurispru-
dence concerning the scope and content of the freedoms touches on the deli-
cate issue of the competences of the Member States; it has a dire:ct impact on
the structure and balance of the decentralized decision-making process in the
Union, presenting hard choices between the promotion' of free trade and free
movement on the one hand and the social choices pursued by the Member
States on the other. 39 fu this perspective, the varying standards applied by the
Court - the discrimination standard on the one hand and the restriction stan-
dard on the other - may be conceived as reflecting this conflict by giving
different answers to different situations.
2.3 . Keck: The essentials
Although the Keck judgment has been harshly criticized for its somewhat
formalistic approach and its meagre reasoning,40 much can be said in favour
of the analysis by Advocate General Fennelly in Graf 1 that, if Keck is re-
duced to its essential elements, it may offer the charter for an appropriate ap-
plication of the four freedoms, having regard to the aims and activities set
out in Article 3(c) and (g) of the Treaty: creating an internal market charac-
terized by the abolition of obstacles to the free movement of goods, persons,
services and capital, and ensuring that competition in the internal market is
not distorted. The decisive perspective for the application of the freedoms is
on the one hand that of allowing access to the markets of the Member States
by abolishing unjustified obstacles, and on the other hand guaranteeing
undistorted competition on the market. Keck reflects this kind of thinking in
two ways. Although it is couched in formal categories - the so-called "prod-
uct rules" and "selling arrangements" - the real motivation behind this dis-
tinction lies in the different effect of these rules on the internal market.
Product regulations tend to hinder or impede access to the market, whereas
selling arrangements typically leave such access unimpeded. When and
where access to the market is not hampered, the discrimination standard suf-
fices to guarantee undistorted competition.
39. See Roth, Freier Warenverkehl' und staat/iche Regelungsgewalt in einem Gemeinsa-
men Markt (Beck, 1977), pp. 7, 324.
40. See e.g. Reich, "The 'November Revolution' of the European Court of Justice: Keck,
Meng and Audi revisited", 31 CML Rev. (1994), 459, 465; Roth, Comment, 31 CML Rev.
(1994), 849, 852.
41. Opinion in Case C-190/98, Volker Graf. [2000] ECR I-495, paras. 18--19.
Accordingly, Keck seems to be in line with the traditional case law on

regulations other than selling arrangements like price regulations and other
neutral regulations of an indirect or only remote effect on interstate trade.
Keck cannot and should not be taken as presenting an exhaustive list of pos-
sible restrictions. Regulations other than product rules or selling arrange-
ments (e.g. a total ban on distribution, mandatory contract law), should not
be forced artificially into one of the two categories, but should be analysed
as to their effect on market access. Moreover, as the Court held in Keck, even
formally non-discriminatory distribution regulations may impede market ac-
cess if they discriminate in fact. 42
It should, however, be conceded that, although the case law seems to have
developed in the right direction, the Court has not yet achieved sufficient
clarity as to the circumstances under which market access is held to be im-
peded. Future case law will have to achieve the necessary legal certainty in
this respect.
2.4. The other freedoms
Viewed from this perspective, the test applied by the Court in cases on ser-
vices seems to be very similar.43 In Sager, the Court held that:
"Article [49] requires not only the elimination of all discrimination
against a person providing services on the ground .of his nationality but
also the abolition of any restriction, even if it applies without distinction
to national providers of services and to those of other Member States,
when it is liable to prohibit or otherwise impede the activities of a pro-
vider of services established in another Member State where he lawfully
provides similar services".44
This formula, which has been repeated in several recent judgments,45 nicely
reflects the same approach as that followed in Keck. Accordingly, no purpose
would be served in transferring the formal distinctions made in Keck to the
freedom to provide services, where they do not fit. Rather, we should recog-
nize the existing parallelism in the essential elements of the approach as ap-
42. See para 16; also Cases C-34-36/95, De Agostzm, [1997] ECR 1-3843 and C-254/98,
TK-Heimdienst, [2000) ECR I-151.
43. For a closer analysis see Roth, "The European Court ofJustice's Case Law on Freedom
to Provide Services: Is Keck Relevant?" in Andenas and Roth (Eds.), Services and Free Move-
ment in EU Law (OUP, 2002), 1.
44. Case 76/90, Siigerv. Dennemeyer, [1991) ECRI-4221, para 12.
45. Cases C-369 & 376/96, Arblade, {1999) ECR I-8453, para 33; Case C-58/98, Carsten, .
[2000] ECR 1-7919, para 33; Case C-478/01, Commission v. Luxembqurg, [2003] ECR I-2351,
para 18; Case C-42/02, Diana Elisabeth Lindman,judgment of 13 Nov. 2003, nyr, para 20.
;
Internal market 415
plied by the Court with regard to both freedoms. Moreover, it is suggested

that this double test does not only give useful guidance to goods and services
cases, but that it also should guide the case law of the Court as to the free
movement of workers, the freedom of establishment, and the free movement
of capital as well.46
2.5. Scope of the restriction test
Given the need to ensure unimpeded market access, the Court has dghtly
gone beyond a discrimination analysis in those groups of cases in which the
traders or workmen are either prevented from offering their goods or ser-
vices in another market, where the exercise of parallel competences of the
home and host (the exporting and importing) State lead to a dual burden, or
where specific disadvantages result from the diverging regulations of the two
Member States. 47
A total ban - either in law or in fact - on the distribution of certain goods
or services, though neither discriminatory in law nor discriminatory in fact,
results in a barrier to market access. As Advocate General Jacobs pointed out
in Leclerc, though with regard to an outright prohibition on advertising, the
"test of discrimination ... seems inappropriate".48 By their very nature, prod-
uct rules are likely to impede market access because of potentially conflict-
ing regulations, even if they are applied in a non-discriminatory fashion. A
somewhat similar effect may be attributed to qualification requirements con-
cerning professional activities.
Double burdens, imposed by the home and the host State, concerning mat-
ters such as social charges, result from parallel regulatory competences of
the Member States, and therefore specifically impede the interstate provision
of services49 or, at least, make it less attractive. Such a specific burden on
interstate movement may simply result from the cumulative effect of regula-
tions, as where certain licensing requirements have to be met in more than
one State. 50
46. See Opinion of A.G. Fennelly in Case C-190/98, Graf, [2000] ECR I-495, para 18. The
convergence of the freedoms is discussed in detail in section 7 below and the sources cited
there.
47. The Court speaks of a "restriction ... which is liable to prohibit, impede or render less
advantageous the activities ofa provider of services ... "; e.g. Case C-165/98, Mazzoleni, [2001}
ECR I-2189, para 22.
48. Case C-412/93, [1995) ECR 1-182, para 39.
49. Cases 62 and 63/81, Seco, {19821ECR223, para 9.
50. Concerning Art. 39 EC: Case C-232/01, Hans van Lent, judgment of2 Oct. 2003, nyr,
paras. 16-21 , with regard to automobile plates.
From the standpoint of market access, the Court appears to be right to

subject those regulations and measures of the importing or host State to an
all-encompassing restriction test, where market access is either totally im-
peded or at least burdened by regulating an issue which has already been
regulated by the home State. In contrast, where such danger is not imminent,
the discrimination test may suffice.
2.6. Discrimination test
For many years, in its case law concerning the free movement of workers the
Court adhered to a mere discrimination test, 51 scrutinizing not only open and
direct, but also covert and indirett discriminatory measures.52 Regarding the
importation of goods, Keck has applied the same test: distribution regulations
of the importing State are no longer caught by Article 28 EC "provided that
they affect in the same manner, in law and in fact, the marketing of domestic
products and of those of other Member States". 53 Recent case law indicates
that the Court seems to be ready to take the criterion of de facto discrimina-
tion seriously (as it has done with regard to Article 39 EC in the past). Even
when they are couched in neutral terms, regulations may have an inherently
discriminatory effect (like an establishment requirement54), whereas other
regulations may exert such an effect only under certain market conditions.
Judgments such as De Agostini, 55 Gourmet56 and Morellato 57 show that the
Court is ready to scrutinize national regulations whenever a distortive effect
on competition can be shown, or to require the referring national court to do
so. On occasion, the Court has not shrunk from contemplating the use of sta-
tistics.58
5 1. See e.g. Case C-204/90, Bachmann, 1992 ECR I-249; para 9, para 32, in which the
Court applied the restriction test under Art. 49 EC and the discrimination test under Art. 39 EC;
see annotation by Roth, 30 CML Rev. (1993), 391-392.
52. For an overview see Craig and de Bilrca, EU Law, 3rd ed. (OUP, 2003),pp. 715-718.
53. Cases C-267 & 268/91, Keck& Mithouard, [1993] ECR 1-6097, para 16.
54. TK-Heimdien.st cited supra note 42, paras. 24-26.
55. De Agostini cited supra note 42, para 42.
56. Case C-405/98, Gourmet, [2001] ECR 1-1795, para 21.
57. Case C-416/00, Morellato,judgment of 18 Sept. 2003, nyr, paras. 36-37.
58. This is implied in both De Agostini and Gourmet. As pointed out elsewhere (Oliver, The
Free Movement ofGoods in the European Community, 4th ed. (Sweet & Maxwell, 2003), para.
6.63), statistics should be handled with great care, since they may lead .to perverse results.
Monthly or annual fluctuations could well result in a measure continually hovering between
legality and illegality. In its case law on sex discrimination under Art. 141 EC, the Court has
clearly been mindful of these dangers, as it has only sanctioned 'r el,iance on statistics where they
Internal market 417
3. Export regulations: A different matter?
3.1. General considerations
Whereas the case law of the Court concerning the freedoms as applied to
'regulations of the host States seems to have reached some degree of conver-
gence, the same cannot be said with regard to regulations of the Member
States in their role as home States, concerning outgoing transactions (the ex-
port of goods and services or outward movements of workers er self-em-
ployed persons). The standards applied by the Court seem to vary
considerably. With regard to the export of goods, the Court, since Groen-
veld59 and in contrast to Dassonville, 60 has persistently applied a discrimina-
tion test in its standard definition of "measures of equivalent effecf' under
Article 29 EC. 61 In striking contrast, in Bosman the non-discriminatory regu-
lations on the transfer compensation of footballers were qualified as restric-
tions on the free movement of workers, when hindering the access to the
labour market of the other Member States. 62 Similarly, with regard to the ex-
port of services, the Court has treated neutrally framed State regulations as
restrictions of freedom to provide services, thereby extending its control over
non-discriminatory measures of the State of origin to all conditions under
which the service provider exercises his or her fundamental freedom. 63
3.2. The provision of services
With regard to freedom to provide services, a good example of the Court's

approach is the judgment in Alpine lTTVestments, which concerned a Dutch
reveal persistent and significant phenomena: Cases C-127/92, Enderby v. Frenchay Health
Authority, [1993) ECR 1-5535 and C-167/97, Regina v. Secretary of State for Employment ex
parte Seymour-Smith, [1999] ECR 1-666. Perhaps it has been influenced by Disraeli's famous
statement that: "There are three kinds of lies: lies, damned lies and statistics".
59. Case 15/79, Groenveld, [1979) ECR 3409, para 7, according to which Art. 29 "concerns
national measures which have as their specific object or effect the restriction of patterns of
exports and thereby the establishment of a difference between the domestic trade of a Member
State and its export trade in such a way as to provide a particular advantage for national produc-
tion or for the domestic market of the State in question at the expense of the production or the
trade of the other Member States."
60. Cited supra note 26.
61. Case C-203/96, Dusseldorp, [1998] ECR I-4075, para 40; Case C-388/95, Belgium v.
Spain, [2000] ECR I-3123, para 41; Case C-469/00, Ravi!, [2003] ECR 1-5053, paras. 41-43;
Case C-108/01, Consorzio de! Prociutto di Parma, [2003] ECR 1-5121, paras. 56-58; Case C-
12/02, Grilli,judgment of2 Oct 2003, nyr, para 42.
62. Case C-415/93, cited supra note 31, paras. 96-103.
63. Case C-384/93, Alpine Investments , [1995) ECR I-1141, paras. 36-38.
regulation prohibiting "cold calling". The scope of this regulation extended

not only to domestic calls, but also to those made to other Member States,
particularly the United Kingdom where the practice was permitted. The regu-
lation was even-handedly applied. The Court extended the reach of Article
49 to non-discriminatory regulations 64 restricting the access of the service
provider to the market of another Member State. 65
The use of the catch phrase "restriction of market access" in this context
may be explained by the fact that the extra-territorial application of market-
ing rules by the State of origin carries with it the potential danger of a dual
burden which should give rise to strict scrutiny. Perhaps more importantly in
the given case, the service provider of the State of origin should be in a posi-
tion to compete in the State of destination on the same terms as service pro-
viders based in that State.
The extension of the Dutch prohibition on cold calling to cross-border
situations meant that Dutch service providers could not use the same effec-
tive marketing instruments as their British competitors, and accordingly that
they met with a competitive disadvantage on the market of the United King-
dom. This result makes it obvious that there is indeed a good case for the
Court to apply its strict scrutiny approach to non-discriminatory marketing
regulations of the State of origin in settings of extra-territorial effect.
Most recently, in Mary Carpenter the Court even seems prepared to
stretch the scope of the freedom to provide services to even-handed regula-
tions of the home State of the service provider that (i) neither concern the
service as a product nor the ability to "sell" the service on the market of an-
other Member State but (ii) affect the family life of the service provider. Ac-
cording to the Court, a separation of a service provider from his wife would
be detrimental to their family life and therefore to the conditions under
which the service provider exercises a fundamental freedom. 66 It is submit-
ted that the Court's far-reaching interpretation of the scope of Article 49 and
its application to even-handed regulations raises more questions than it answers.
As is well known, it is now beyond dispute that the service provider may
rely on Article 49 vis-a-vis regulations of the State of origin. 67 The decisive
issue raised by the judgment in Mary Carpenter is, however, whether all
measures of the State of origin that are even-handedly applied to the provider
64. In contrast, in Case C-266/96, Corsica Ferries, [1994] ECR I-3949, paras. 57-58, the
Court seemed to be content with the non-discriminatory character of the relevant regulation;
see also Case C-379/92, Peralta, [1994) ECR 3453, para 51.
65. Alpine Investments , cited supra note 63, para 37.
66. Case C-60/00, Mary Carpenter, cited supra note 16, para 39.
67. Cf. the judgments cited supra notes 44 and 45.
Internal market 419
of the service and that may impose an incidental burden on the interstate
provision of services will in the future be strictly scrutinized as well. In that
case, the approach taken by the Court will lead to a question comparable to
that which was posed by Advocate General Tesauro in Hiinermund, 68
namely: is the freedom to provide services to be considered as a right of a
service provider to pursue his economic activities, unrestrained by regula-
tions of the Member State of origin, or is it restricted to those regulations
and measures of the State of origin that specifically hinder the access to the
markets of the other Member States or put him or her at a competitive disad-
vantage on the markets of those States? It is suggested that the Court's an-
swer should clearly be in favour of the second altemative. 69 Contrary to what
the Court suggested in Mary Carpenter, all provisions and measures of the
State of origin that relate to the conditions under which the production of
services takes place - regulations concerning labour law, social security, po-
lice matters, asylum law etc. - should not be regarded as impinging on free-
dom to provide services as long as they do not discriminate, in law or in fact,
against interstate transactions. 70
3.3. Export ofgoods
Whereas the Court's case law on the free movement of services appears to go
too far, its approach to the export of goods seems to go not far enough. It is
submitted that a good case can be made for the proposition that the Court
should - at least in some cases - go beyond a mere discrimination test and
apply its strict scrutiny approach to non-discriminatory regulations. 71 Article
68. Case C-292192, cited supra note 13, 6813, 6826-27.

69. It may be conceded that Carpenter could be taken as an example of a judgment in which
the Court attempted to decide a human rights issue (see paras. 40-45) under the cover of Art. 49
EC and the public good justification. If the Court was driven by this motivation, it has clearly
overstepped its competence.
70. O'Leary, "The Free Movement of Persons and Services", in Craig and de Burca, The
Evolution of EU Law (OUP, 1999), p. 377, at p. 404, argues that the rejection of the Keck
approach to Art. 39 and Art. 49 in Bosman and Alpine Investments should be regarded as a
withdrawal from the Keck philosophy. However, on the understanding of Keck advanced in this
paper - that as long as market access is not impeded, the Court will only apply the discrimina-
tion test - Bosman and Alpine Investments are certainly not a withdrawal from Keck, since in
both cases the Court heavily relies on the assumption that market access was impeded!
71. For such an argument see Roth, "Wettbewerb der Mitgliedstaaten oder Wettbewerb der
Hersteller?", 159 ZHR (1995), 78; von Wilmowsky, "Ausnahmebereiche gegeniiber den EG-
Gnmdfreiheiten?", 31 EuR (1996), 362, 363; Oliver, "Some Further Reflections on the Scope
of Articles 28-30 (ex 3~36) EC", 36 CML Rev. ( 1999), 783, 799; Muller-Graff, "Artikel 29
EG'', in von der Groeben and Schwarze (Eds.), Vertrag iiber die Europiiische Union und
Vertrag zur Griindung der Europiiischen Gemeinschaft, 6th ed., vol. 1 (Nomos, 2003), at para
29 should be conceived as a right of the exporter vis-a-vis his or her home

State to sell his or her products everywhere in the single market. This right
of access to the markets of the other Member States seems to be unnecessar-
ily undermined where the Member State of origin extends the application of
its marketing and distribution regulations to cross-border situations, as with
the prohibition on cold calling regulation in Alpine Investments.
A regulation of the State of origin prohibiting cold calling practices with
regard to certain products (e.g. pharmaceuticals), being even-handedly ap-
plied to intrastate and interstate situations, cannot be regarded as discrimi-
nating against exports; still, there is no good reason to treat the marketing of
goods differently from services. Non-discriminatory marketing regulations
enacted by the State of origin may have an extraterritorial effect - the danger
of a "dual burden" or double regulation becomes. imminent. 72 Moreover, by
applying its marketing regulations to exports, the Member State of origin
may withhold from the exporter an important instrument to gain a foothold
on the markets of the other Member States. In the single market, where the
producer should be able to have unrestricted access to the markets of all
Member States, such marketing rules of the State of origin require judicial
review beyond a mere discrimination test.
An analogous argument can be advanced with respect to all regulations
concerning the composition of a product. 73 Goods that are specifically pro-
duced for export will potentially have to conform to another set of rules in
the State of destination, 74 resulting in a dual burden if the product rules of
the State of origin are applied in a mandatory fashion as well. Both cases
show that the Court's discrimination approach with respect to Article 29
seems to be not wholly in tune with the idea of a single market. A producer
in one Member State should, in principle, be able to compete with producers
from other Member States on the markets of the other Member States on an
equal footing. All non-discriminatory marketing or product regulations of
the State of origin that prevent access to the markets of other Member States,
or that put the producer at a competitive disadvantage should fall under the
strict scrutiny approach and should need a justification by mandatory re-
quirements of the general good of the State of origin. 75
27; Schroeder, "Art. 29 EGV", in Streinz (Ed.), EUVIEGV(Beck, 2003), at para 5.

72. Snell and Andenas, "How far? The Internal Market and Restrictions on the Free Move-
ment of Goods and Services: Part 2'', 2 Int. Comp. Corp. J. (2000), 362-363.
73. Milller-Graff, op. cit. supra note 71, para 27, is in agreement.
74. This is the case when the State of destination may apply its rules justified by mandatory
requirements of the public good.
75. With regard to product rules, a producer who produces goods for expOrt would, there-
fore, have the option either to confonn with the product regulations of the State of origin or
with the product regulations of the State of destination.
Internal market 421
It is important to note that this suggestion refers only to marketirig rules

and regulations on the composition of products, and not to regulations and
measures relating to the conditions under which the goods are produced,
such as labour and social legislation, town planning, police laws, eaviron-
mental legislation.76 Such regulations are, generally speaking, too far re-
moved from interstate trade. Insofar as the application of the discrimination
standard turns out to be sufficient for the protection of exports, this standard
proves to be a reasonable compromise between the demands of free trade on
the one hand and the ability of the Member States (where the production
takes place) to pursue their social policies effectively on the other. The Court
in Oebel found a prohibition of baking at night, which was applied even-
handedly and irrespective of the fact whether the goods were to be exported
or sold on the domestic market, not to be a measure of equivalent effect un-
der Article 29. 77 This judgment should still be regarded as good law.
4. Horizontal effect
4.1. General considerations
A further question is whether private parties are or should be considered ad-

dressees of, and therefore directly bound by, the four freedoms. The issue is
sometimes referred to as one of "horizontal" application. However, such ter-
minology is not precise enough. It is, indeed, beyond dispute that the four
freedoms are not only vertically, but also horizontally applicable insofar as in
proceedings among private parties the four freedoms come into play when
national regulations, either from the realm of private or public law, have to
be interpreted in the light of the four freedoms. The Court's case law con-
cerning national intellectual property law78 or the law of unfair competition 79
has long proceeded on this basis. This question has, however, to be distin-
guished from the other, much discussed issue as to whether, to what extent
and in what manner private persons are bound by the four freedoms when
exercising their private autonomy.80
76. In agreement: Muller-Graff, op. cit. supra note 71, para 28.
77. Case 155/80, Oebel, (1981] ECR 1993, para 16.
78. An overview of the case law is given by Oliver, op. cit. supra note 58, p. 333 para.
8.183- 8.199.
79. Cf. Oliver, op. cit. supra note 58, p. 303 para. 8.148-8.157.
80. See Baquero Cruz, op. cit. supra note 22, pp. 105-125; Van den Bogaert, "Hori-
zontality", in Barnard and Scott, The Law of the Single European Market (Hart, 2002), p. 123;.
Canaris, "Drittwirkung der gemeinschaftsrechtlichen Grundfreiheiten'', in Bauer, Czybulka,
4.2. Dichotomy in the case law
The Court's case law with regard to this issue is characterized by a di-
chotomy in the interpretation 'o f the free movement of goods and the free
movement of persons provisions in the TreatY: in the van de Haar, 81 Vlaamse
Reisbureaus82 and Sullhofer8 3 judgments, the Court took the view that Ar-
ticles 28 and 29 EC are addressed only to measures taken by the Member
States and not by private persons. 84
In striking contrast stands the case law concerning the free movement of
workers and (to some extent) services. In Walrave, 85 Dona, 86 Haug-Adrion, 87
Bosman,88 Deliege, 89 Lehtonen,90 and Wouters91 the Court held, with some-
what varying reasoning, that provisions adopted in a collective manner (in-
cluding standard contracts) should be caught gy Articles 39 and 49 EC and
should be subjected to the same standards applicable to State measures. In
Ferlini, 92 indeed, the Court took a small step further when it stressed the
binding force of Article 12 EC in a setting where an organization exercises
"a certain power" over individuals. 93 The final step to date was taken in
Kahl and Vosskuhle (Eds.), Umwelt. Wirtschaft und Recht (Mohr-Siebeck, 2002), 29; Ganten,
Die Drittwirkung der Grundfreiheiten (Duncker & Humblot, 2000); Hintersteininger, Binnen-
markt und Diskriminierungsverbot (Duncker & Humblot, 1999); Jaensch, Die unmittelbart
Drittwirkung der Grundfreiheiten (Nomos, 1997); Korber, "lnnerstaatliche Anwendung und
Drittwirkung der Grundfreiheiten?" 35 EuR (2000), 932; Roth, "Drittwirkung der Grundfrei-
heiten?", in Festschriftfar Everling, vol. II (Nomos, 1995), p. 1231; Snell, "Private Parties anc
the Free Movement of Goods and Services", in Andenas and Roth (Eds.), op. cit. supra note 43.
p . 211; Steindorff, "Drittwirkung der Grundfreiheiten im europliischen Gemeinschaftsrecht''.
in Festschrift far Lerche (Beck, 1993), p. 575; Steindorff, EG-Vertrag und Privatrecht (No
mos, 1996), p. 277; Vieweg and Rothe!, "Verbandsautonomie und Grundfreiheiten'', 166 ZHll
(2002), 6; most recently Parpart, Die unmittelbare Bindung Privater an die Personenfreiheite1,
im europliischen Gemeinschaftsrecht (Beck, 2003). .
81. Cases 177 & 178/82, Van de Haar, [1984) ECR 1787, paras. ll - 12.
82. Case 311/85, Vlaamse Reisbureaus, [1987) ECR 3801, para 30.
83. Case 65/86, Bayer v. Sii/lhofer, [1988) ECR 5249, para 11.
84. In Case 58/80, Dansk Supermarked, [1981) ECR 181 , para 17, there is language indi
eating that private persons shall be considered as being directly bound by Art. 28 EC. Thii
obiter dictum has never been referred to in later judgments. For a recent ruling expressly deny.
ing such an effect, see Case C-159/00, SapodAudic, [2002] ECR 1-5031, para 74.
85. Case 36/74, Walrave, [1974] ECR 1405, para 20.
86. Case 13/76, Dona, [1976] ECR 1333, para 18.
87. Case 251/83, Haug-Adrion, [1984] ECR 4277, paras. 14-18.
88. Bosman, cited supra note 31, paras. 82-83.
89. Cases C-51/96 & 191/97, Deliege, [2000] ECR 1-2549, para 47.
90. Case C-176/96, Lehtonen, [2000] ECR 1-2681, para 35.
91. Case C-309/99, Wouters, [2002] ECR I-1577, para 120.
92. Ferlini, cited supra note 7, para 50.
93. Ibid.
Internal market 423
Angonese, 94 where the Court held that Article 39 is to be regarded as binding

on private persons with regard to the conclusion of an employment contract,
although no collective action was involved.
e This case law extends, as shown in the Bosman and Lehtone.>1 judgments,
e to non-discriminatory regulations of private organizations, that iB to say mere
- restrictions on the movement of workers. As far as the justifica.:ion for such
:r restrictions is concerned, private parties may justify the relevant restrictions
only on the basis of the well-known exceptions in Article 39(3) EC and the
,f mandatory requirements of the general good developed by the Court. More
;7 importantly, they are also confined to those justifications in a most problem-
~- atic manner: private autonomy, protected by national constitutf.ons and the
l- very essence of the European market economy, does not show up as a justifi-
d cation.95 Economic considerations which are based on private autonomy do
n not belong to the mandatory requirements of the public good accepted by the
e Court.
:s
n 4.3. A critical view of the case law
In this section, the case law of the Court will be put into perspective, fol-
n, lowed by a modest proposal contained in section 4.4.
1- (i) First, a comment on the relationship between the four freedoms and the
e competition rules is in order. The Spaak Report of 195596 spells out what the
1d
:i- Court, in Van de Haar, 97 accepted as the starting point of its analysis: the
1d function of the competition rules of the Treaty is to protect the aim of the
,,3, freedoms in relation to undertakings. These rules presuppose private au-
tonomy of undertakings, and only as an exception may the prohibitions of
o-
:R Articles 81 and 82 EC be applied. Only undertakings (and not all private per-
sons) are addressees. Agreements between undertakings are only caught if
they distort competition in an appreciable manner. Unilateral behaviour like
the conclusion or non-conclusion of a contract is caught by the competition
rules (as a potential abuse) only when the relevant undertaking enjoys a
Ii- dominant position. Unilateral behaviour of non-dominant undertakings (and,
us
y-
94. Angonese, cited s11pra note 3, paras. 29-36.

95. With regard to the autonomy of sport organizations, the Court, in Deliege, sidestepped
this problem by classifying rules on the selection of sportsmen who may qualify for interna-
tional sport events as a "natural task" of the competent organization, and therefore not as a
"restriction" (para 66); Deliege, cited supra note 89, paras. 66-67.
96. Bericht der Delegationsleiter an die AuBenrninister - Eingesetzt von der Konferenz von
Messina, Brussels, 21April1956, MAE 120 d/56 (korr.), pp. 18- 19.
97. Cases 177 & 178/82, Van de Haar, [1984] ECR 1797, para 11.
of course, of any private person98) is not caught by Article 82. They may act
or refrain from acting on the market without having to justify their behaviour
in any way. 99 Applying the four freedoms to the unilateral behaviour of pri-
vate persons alongside the competition rules tends to undermine the basic
value judgments on which Articles 81 and 82 are based. 100
(ii) It has been argued that the free movement of workers should be regarded
as having a higher moral value than goods. What is more, Articles 81 and 82
do not apply, at least with full force, to the labour market, which may be
taken as an argument to justify the application of Article 39 to private
behaviour. 101 It is suggested that this line of reasoning runs into severe prob-
lems: there is nothing in the Treaty which allows such a differentiation be-
tween commodities and work, except for Article 12 dealing with
discrimination on the basis of nationality. Moreover, self-employed work and
services are covered by Articles 81 and 82, giving them the same status as
commodities.
It may, however, be argued that the Court proceeds on the implicit as-
sumption that human work should nevertheless deserve a special status be-
cause it may be attributed a hwnan rights character. Such an argument might
be especially developed today with regard to Article 15(1) of the Charter of
Human Rights, according to which every person has a right to work. How-
ever, such an assumption would only beg another question: do human rights
have Drittwirkung? The implications of this issue have been a prominent
topic in the German legal discourse for the last forty years. 102
98. In contrast, the Court, in Angonese, held that Art. 48 EC may be applied to private
persons (without any qualification): Case C-281/98, cited supra note 3, para 36.
99. The four freedoms do and should come into play when the undertaking is a public enter-
prise; e.g. Storr, Der Staal als Untemehmer (Mohr Siebeck, 2001), pp. 298. The rules concern-
ing public procurement are an emanation of the non-discrimination principle of the relevant
freedoms insofar as the Member States are their addressees. Moreover, Arts. 86(1) and 85(2) of
the Treaty are based on the premise that, besides the Member States themselves and their public
entetprises, there is (only) one further category of entetprises - enterprises entrusted with a
service public function - that are to be regarded as bound by the four freedoms. Accordingly,
one should be very cautious about extending the application of the four freedoms beyond these
categories to all private persons.
100. See Van den Bogaert, op. cit. supra note 80, p. 140; Roth, op. cit. supra note 80, pp.
1242-1243; Snell, op. cit. supra note 80, p. 228.
101. Baquero Cruz, op. cit. supra note 22, pp. 115, 124.
102. Summarizing the discussion: Canaris, op. cit. supra note 80, pp. 33. As to the discus-
sion within the UK on the analogous issue under the ECHR and the Human Rights Act 1998,
see Markesinis, "Privacy, Freedom of Expression, and the Horizontal Effect of the Human
Rights Bill: Lessons from Germany", 115 LQR (1999), 47; Phillipson and Fenwick, "Breach of
confidence as a privacy remedy in the Human Rights Act Era'', 63 MLR (2000), 660; Beyleveld
and Pattinson, "Horizontal applicability and horizontal effect", 118 LQR (2002), 623.
Internal market 425
An exhaustive discussion of this issue would be out of place here. Suffice

it then to refer to one key point on which consensus should be reached. Ap-
plying human rights to State action is a wholly different matter from apply-
ing them to acts and behaviour of private persons. Private persons alsc enjoy
private autonomy in their business affairs as a basic human right (Art. 16 of
the Charter). This should be the starting point for the analysis. Ultimately,
adding a human rights dimension to the free movement of persons provisions
of the Treaty in no way justifies an undifferentiated direct application of Ar-
ticles 39 and 49 EC to the acts of States and private persons alike.
(iii) The Court rightly applies the four freedoms not only to measures of the
Member States and their subdivisions, but also to public enterprises and to
private organizations to which state powers are delegated, 103 or which are set
up, staffed and perhaps financed by the State. 104 In such cases which are
characterized by an intermingling of the public and the private sphere, the
application of the four freedoms seems to be necessary, for the simple reason
that strategies of evading the application of the four freedoms should be
forestalled at the outset.
(iv) In Walrave 105 the Court held that a coherent application of Articles 39
and 49 may require their application to measures of private organizations
that regulate the subject matter in a collective manner. What is regulated by
public authorities in one Member State and is a matter for the self-regulation
by private bodies in another should be judged according to the same stan-
dards, as far as the four freedoms are concerned. One has to acknowledge
that, although this kind of argument subjects private organizations to the exi-
gencies of the internal market despite their autonomy, the fact remains that
the instruments of self-regulation may exert the same impact on the persons
concerned as measures taken by public authorities. The application of the
freedoms - as prohibitions of even-handed restrictions and of discriminatory
measures - may derive its justification from the quasi-legislative character
of the regulations of private organizations. 106
(v) In contrast to the case law just discussed, it may be doubtful whether the
four freedoms should be applied where an undertaking, group or organiza-
tion merely "exercises a certain power" over individuals, as stated in
Ferlini 107 - although admittedly that case related to Article I 2. It must be re-
103. Joined Cases C-266 & 267/87, Royal Pharmaceutical Society, (1989] ECR 1295.
104. Case C-325/00, Commission v. Germany, (labels oforigin and quality) [2002] ECR 1-
9977, paras. 17- 18.
105. Case 36174, Walrave, cited supra note 85.
106. See also Lehtonen, cited supra note 90, para 35; Angonese, cited supra note 3, paras.
31- 33.
107. Ferlini, cited supra note 7, para 50.
called that it is the very purpose of Article 82 to address those situations in

which an undertaking exercises its power which is not efficiently controlled
by competition. The Court should be wary about interfering with private
contractual relations by applying the four freedoms, thereby circumventing
the preconditions for the application of Articles 81 and 82. 108
(vi) In Angonese, the Court justified the direct application of Article 39 to
private persons with the argument that, since Defrenne II, 109 Article 141 EC
has been considered applicable to contractual relationships; and that a for-
tiori the same approach should be taken with regard to Article 12, and to
Article 39 as a specific application of the general prohibition of discrirnina-
tion.110
However, this line of reasoning is not fully convincing. Assuming for a
moment that private parties are bound by Article 12 in The same manner as
they are bound by Article 141, there is no inherent logic in applying this ap-
proach to Article 39. The character of Article 39 as /ex specialis has been es-
tablished for public measures. If Article 39 were not regarded as applicable
to private measures, the /ex specialis argument could not stand insofar.
Moreover, it is to be noted that the Court in Angonese extended the scope of
Article 39 to private persons only with regard to discriminatory acts 111 and
not to other restrictions. This leaves the way open for a differentiated appli-
cation of the freedoms to private persons, undertakings and organizations:
the prohibition of restrictions would then be applicable only to measures of a
collective character, whereas the prohibition of discriminations may be ap-
plied to measures of all persons.
4.4. A proposal
The direct application of the freedoms to collective measures seems to be

based on a convincing argument - the coherent application of the freedoms
in all Member States. In contrast, the same could not be said if the freedoms
were to be applied in the same manner to the acts of all private persons as
well. In this regard, the Court should refine, if not rethink itS approach. 112
108. It should be noted that in Ferlini the addressee was a public undertaking and therefore
bound by Art. 12 EC (and the freedoms as well).
109. Case 43/75, Defrenne, [1976] ECR 455, para 31. It should be noted that Defrenne
concerned a public undertaking (Sabena); insofar the Court's holding as to private perlions
amounts to an obiter dictum.
110. Angonese, cited supra note 3, paras. 34-35.
111. Ibid. para 34.
112. Cf with regard to the following argument with variati9nsi11 details: Canaris, op. cit.
supra note 80, pp. 54; Baquero Cruz, op. cit. supra note 22; P.P 121- 125; Kingreen, Die
Internal market 427
The starting point should be that applying the four freedoms to the acts of
private persons may constitute an inappropriate interference in their au-
tonomy. Private persons cannot be compared to States or similar organiza-
tions: their autonomy is the very basis of the internal market. Moreover, the
exceptions set out in Article 30, 39(3) and 46 are clearly designed to justify
Member State measures, 113 not private action. Most strikingly, private au-
tonomy does not appear as a justification! 114 To exclude private action from
the scope of the four freedoms would not, however, mean that the sjms of
these freedoms have no role to play with respect to private persons -- quite
the contrary. In Commission v. France 115 and again in Schmidberger, the
Court stressed with regard to Article 28 (which it holds not directly appli-
cable to private action) that the Member States are under an obligation to
"take all necessary and appropriate measures to ensure that [the] funda-
mental freedom is respected on their territory ... Article [10] of the Treaty
requires the Member States to take all appropriate measures, whether
general or particular, to ensure fulfilment of the obligations arising out of
the Treaty". 116
It is suggested that this statement opens the way to approach the impact of
the four freedoms on private persons not primarily as a matter of direct ap-
plicability of the freedoms, but as a matter to be resolved by law of the Mem-
ber States. The Member States should be considered to be under the duty to
respect and to enforce the basic aims of the freedoms and to protect them
against private action by national law. At the same time, the law of the Mem-
ber States is called upon to protect private autonomy of the individuals as a
basic human right against unnecessary intrusions. It should be up to the
Member States to delimit the respective spheres of private autonomy on the
one hand and the objectives of the four freedoms on the other. In this pro-
cess, considerable weight should be attached to private autonomy (as a mat-
ter of economic self-interest of private persons).
Struktur der Grundfreiheiten des Europiiischen Gemeinschaftsrechts (Duncker & Humblot,

1999), p. 195; Koch, Die Gewiihrleistungspjlicht der Mitgliedstaaten zur Aufrechterhaltung
des Binnenmarktes (Duncker & Humblot, 2003); Korber, op_ cit. supra note 80, at 951;
Riesenhuber, Europiiisches Vertragsrecht (de Gruyter, 2003), pp. 44, 49; Snell, op. cit. supra
note 80, pp. 236- 242; Franzen, "Art. 39", in Streinz (Ed.), op. cit. supra note 71, paras. 96-98;
Suerbaum, "Die Schutzpflichtdimension der Gemeinschaftsgrundrechte", 38 EuR (2003), 390.
113. Snell, op. cit. supra note 80, p. 231; Roth, op. cit. supra note 80, pp. 241- 1242.
114. It has been convincingly argued that individuals may pursue their private non-altruis-
tic aims without any need for justification; Streinz and Leible, "Die unmittelbare Drittwirkung
der Grundfreiheiten'', 11 EuZW (2000), 459 at 461.
115. Case C-265/95, Commission v. France, [1997] ECR 1-6959, para 32.
116. Schmidberger, cited supra note 3, para 59.
In the end, the proposal is a simple one: the four freedoms should not be
held directly applicable to the actions of private persons in the same way as
they are to State acts. The starting point should be the autonomy of private
persons; in defining the boundaries of this autonomy in national law, the
Member States should be under the obligation to take into account the tenets
and aims of the freedoms, and construe and develop their national law ac-
cordingly. The Court of Justice, in the Article 234 procedure, might give ad-
vice to the national courts on the role that the four freedoms should play in
national law, and what weight should be accorded to them.
The question remains whether Article 12 and the four freedoms should be
directly applied at least to discriminatory actions of private persons. Should
they come into play with regard to the strategy of an undertaking that prefers
to buy (and sell) Italian products' instead of French goods? Is it different
when we discover that a certain (German) automobjle producer employs a
labour force which is 80% Greek? Is Article 39 or Article 12 relevant with
regard to a French restaurant in Bonn which makes no secret of its prefer-
ence for French-speaking personnel over Italian or Greek staff? Or, con-
versely, should Article 39 be applicable to a Bavarian restaurant in Bonn
employing only speakers of a Bavarian dialect instead of Italian-speaking
workers who, however, may find employment as waiters across the street in
an Italian restaurant?
In Angonese, the Court's finding that Articles 12 and 39 were applicable
was based on an a fortiori argument from its case law concerning Article
141. 117 It is submitted that this argument does not seem very strong. It is to
be recalled that this provision contained (only) an obligation on the Member
States to enforce the principle of equal pay in their respective legal orders.
The judgment in Defrenne JI118 may be viewed as an extraordinary reaction
of the Court towards the inaction of the Member States (and the Commis-
sion) vis-a-vis a clear-cut obligation laid down in the Treaty. 119 In the light of
Commission v. France and Schmidberger, Defrenne II seems to go too far:
instead of applying Article 141 horizontally, it would have been more appro-
priate to rely on the obligation of the Member States to enforce in their na-
tional law the tenets set forth in Article 141. 120 Having this in mind it is
117. Angonese, cited supra note 3, paras. 34-35. One of the present authors has argued in
the same way in a publication issued before Commission v. France was handed down: Roth,
op. cit. s upra note 80, pp. 1240-1241.
119. Korber, op. cit. supra note 80, at 942; Van den Bogaert, op. cit supra note 80, at 138.
120. Indeed, Riesenhuber, op. cit. supra note 112, pp. 141, argues with some force that
Internal market 429
suggested that the Court should abstain from applying Article 12 and the
freedoms directly to the discriminatory behaviour of private pemons (as op-
posed to acts of a collective manner).
This proposed restrained approach to the four freedoms and Article 12
will overcome the above-mentioned dichotomy in the case law between the
free movement of goods and the free movement of persons, and replace it by
a unitary approach. Furthermore, the proposed solution avoids the anomaly
whereby private action that typically pursues self-interested economic aims
is judged on the basis of the justifications which are set out in the Treaty and
developed by the Court in relation to the public interest; these are most ap-
propriate for public, but not for private actors. The national law (the legisla-
ture and the courts) of the Member States should be regarded as carrying
responsibility for the protection of the internal market and thereby taking
into account the interests of private persons and foremost the p:rotection of
their private autonomy.
Last but not least, the Community legislature may, if there is a need for
Community-wide standards, step in and set forth standards for private per-
sons that it regards as appropriate for the protection of the tenets set forth by
Article 12 and the freedoms, as it has done with regard to Article 7(4) of
Regulation 1612/68 121 and, in relation to racial and ethnic origin, in Direc-
tive 2000/43. 122
5. Measures internal to a Member State
Article 3(1)(a) EC provides that the activities of the Communities shall in-
clude "the prohibition, as between Member States, of customs duties and
quantitative restrictions on the import and export of goods, and of all other
measures having equivalent effect''. By the same token, Article 3(l)(b) pro-
vides that these activities shall also include "an internal market characterized
by the abolition, as between Member States, of obstacles to the free move-
ment of goods, persons, services and capital". Equally, the specific provi-
sions relating to each of these four freedoms is expressly limited to
movements.between Member States. Article 14(2), which defines the inter-
nal market, does not alter this situation in any way, since it provides:
Defrenne JI could be interpreted as dealing with the obligations of the Member States to en-
force the tenets set forth in Art. 141.
121. O.J. 1968, L 257/2.
122. O.J. 2000, L 180/22.
"The internal market shall comprise an area without internal frontiers in

which the free movement of goods, persons, services and capital is en-
sured in accordance with the provisions of this Treaty". 123
Accordingly, the Court has long held that the Treaty has no bearing on re-
strictions on any of these movements, in so far as they are internal to a Mem-
ber State.124
In Hiinermund, Advocate General Tesauro began by asking: "Is Article
[28] of the Treaty a provision intended to liberalize intra-Community trade
or is it intended more generally to encourage the unhindered pursuit of com-
merce in individual Member States?" .125 The answer, as he pointed out him-
self, could only be the former; and, as we have just noticed, the Court was in
Keck of the same mind.
So far, so uncontroversial; but is the Court straying from thls path again?
The answer is clearly "yes" - despite the strenuous efforts of various Advo-
cates General to keep it on the straight and narrow.
The first case to raise concern was Lancry. 126 That case related to the "oc-
troi de mer", the tax imposed on all goods coming into the French overseas
departments, irrespective of their origin. In Lancry, it was held that such a
charge contravened Article 23 EC, even where the goods came from main-
land France. Among the grounds advanced by the Court in support of this
interpretation was that ''the situation does not appear to be of a kind where
all the components are confined to one Member State'', since the charge also
applied to goods coming from other Member States - reasoning which is not
123. Emphasis added.

124. As to goods, see Cases 314---316/81 & 83/82, Waterkeyn, [1982] ECR 4337; 286/81,
Oosthoek's Uitgeversmaatschappij, [1982] ECR 4575; and 355/85, Cognet, [1986] ECR 3231;
also Muller-Graff, op. cit. supra note 71, p. 962 and Oliver, op. cit. supra note 58, pp. 146-8.
As to persons, see Cases 115/78, Knoors v. Secretary of State for Economic Affairs, [1979)
ECR 399; C-136/78, Auer, [1979] ECR 437; C-175178, R v. Saunders, (1979) ECR 1129; C-
35-6/83, Morson and Jhanjhan v. Netherlands, [1982) ECR 3273; C-332/90, Steen v. Deut-
sche Bundespost, [1992] ECR 1-341; Martin and Guild, Free Movement of Persons in the
European Union (Butterworths, 1996), pp. 25-6; Wol.ker and Grill in Groeben and Schwarze
(Eds.), op. cit. supra note 71, pp. 1325-7 and Troberg and Tiedje in Groeben and Schwarze, op.
cit. supra note 71, vol I p. 1513. As to services, see Knoors (cited supra) and Cases 52/79,
Procureur du Roi v. Debauve, [1980] ECR 833 and C-70/95, Sodemare v. Lombardy, [1997)
ECR 1-3395; Martin and Guild, op. cit. supra, pp. 71-2 and Troberg and Tiedje, op. cit. supra,
p. 1625. As to capital, see Case C-515/99, Reisch v. Salzburg , [2002) ECR I-2157 and Leo
Flynn, "Coming of age: The free movement of capital, case law 1993-2002", 38 CML Rev.
(2001), 773 at 784-5.
125. Cited supra note 13, at 6800.
126. Case C-363/93 [1994] ECR 1-3957; see Keppenne and van Ypersele, "Vers une appli-
cation du droit coromunautaire a des obstacles a la libre circulation des marchandises a
l'inteneur d'un Etat membre", 1994 JTDE, 179; Slotboom, "L'application du Traite CE au
commerce intraetatique? Le cas de l'octroi de mer", 1996 CDE, 9 at 16/
Internal market 431
easy to fathom. Another reason given by the Court was that "it would be V;~r)'
difficult, if not impossible, in practical terms, to distinguish between prod-
ucts of domestic origin and products originating in other Member States".
Here the Court clearly has a point: how do you distinguish between the two
groups of products since 1992?
At all events, Lancry was subsequently confirmed in Simitzi v. Kos 127
which related to trade in Greek goods into and out of the Dodecanese. It
would seem that these two rulings apply only to trade between a geographi-
cally distinct territory and the rest of a Member State. Their direct impact to
date seems to be fairly limited, and perhaps this is why they have attracted
relatively little attention.
An apparently separate development which appears to have more far-
reaching consequences began with Pistre, 128 a case on Article 28 in which all
the material facts were confined to France. Advocate General Jacobs
strongly urged the Court not to answer the question posed, pointing out that
it is "well established that Article [28] is not infringed in purely internal situ-
ations." After a thorough discussion of the issues raised, he concluded: " ...
such issues can and should only be addressed in a factual context which
genuinely raises them". However, the Court went ahead and decided the case
in terms which could reasonably be regarded as a complete reversal of the
traditional rule on purely internal situations. Indeed, a number of commenta-
tors read it that way. 129
In various cases since Pistre, the Court has held that it has jurisdiction to
hear references for a preliminary ruling, even if no interstate element is
present. The rationale for this is said to be that "a reply might be useful to it
if its national law were to require, in proceedings such as those in this case,
that a national producer must be allowed to enjoy the same rights as those
which a producer of another Member State would derive from Community
law in the same situation". 130 In principle, this is to be regarded not as an
issue of substance, but merely as a question of the Court's jurisdiction under
127. Cases C-485-6/93, (1995] ECR 1-2665.

128. Case C-321/94 (1997) ECR 1-2343.
129. Simon and Lagondet, "Libre circulation des marchandises et situations purement in-
temes: chronique d'une mort annoncee", (1997/July) Europe - Edition du Juris-Classeur, 7;
Tagaras, "Regles communautaires de libre circulation, discriminations a rebours et situations
a
dites 'purement intemes"', in Melanges en hommage Michel Waelbroeck (Bruylant, 1999)
vol II, p. 1499; Weyer, "Freier Warenverkehr, rein innerstaatliche Sachverhalte und
umgekehrte Dislaiminierung", 33 EuR (1998), 435. The latter author warmly welcomes this
development.
130. In relation to goods, see also Case C-448/98, Guimont, [2000] ECR I-10663, para-
graph 23. As to persons, see Angonese, cited supra note 3. As to services, see Case C-6/01,
Anomar v. Portugal, judgment of 11 Sept. 2003, nyr. As to capital, see Reisch v. Salzburg,
cited supra note 124 and Case C-300/01, Salzmann, [2003] ECR 1-4899.
Article 234. Whatever the merits of this body of cases - and that is highly
contested - it falls outside the scope of this paper. 131 However, what does
give rise to concern in the present context is that, in some cases which ap-
pear to lack an interstate element, the Court has failed to reiterate the tradi-
tional rule. This gives the impression that the Treaty does indeed apply to
purely internal situations.
A case in point is Sapod Audie, 132 a case on goods concerning French leg-
islation on waste disposal. Both parties to the dispute were French compa-
nies and there was no interstate element. Nevertheless, the Court replied to a
preliminary question on Article 28 without troubling to mention that this
provision only applies to restrictions on imports between Member States.
Another was Angonese. 133 As an Italian national resident in Italy and contest-
ing an Italian restriction, the plaintiff could show only the most remote link
with any other Member State in the form of a four-year course of studies at
Vienna. Advocate General Fennelly noted that "the facts as found by the na-
tional court do not suggest any link between the nature of those studies and
the employment sought by him in Balzano or the condition imposed for ac-
cess to that employment". 134 From this he concluded: "in the absence of a
connecting factor with Community law, the applicarit is unable to derive any
rights from Article [39] of the Treaty or from the secondary measures en-
acted to implement it".
None of this deterred the Court from simply finding the measure in ques-
tion to be contrary to Article 39 of the Treaty without ever addressing this
issue. It only alluded to this major obstacle for the purpose of rejecting
Italy's contention that the Article 234 reference was inadmissible, on the
grounds that a reference for a preliminary ruling from a national court may
be rejected by the Court only if it is quite obvious that the interpretation of
Community law sought by that court bears no relation to the actual nature of
the case or the subject-matter of the main act. 135
More recently, in Mary Carpenter, 136 the Court went so far as to accept,
on the most tenuous of bases, that the requisite interstate element was
present arid found that the measure in issue was contrary to Article 49. The
131. See in particular Cases C-28/95, Leur-Bloem v. lnspecteur der Belastingdienst, [1997]
ECR 1-4161 and C-130/95, Giloy v. Hauptzollamt Franlifurt am Main-Ost, [ 1997) ECR 1-4291,
both annotated by Betlem in 32 CML Rev. (1995), 165; also Oliver "La recevabilite des ques-
tions prejuclicielles: la jurisprudence des annees 1990", 2001 CDE, 15.
132. C-159/00, cited supra note 84.
134. At p. 4153.
135. Para 18.
Internal market 433
plaintiff was a Philippino national married to a UK national. Both spouses

were resident in the UK, but the authorities of that Member State sought to
deport her. The Court found that this would constitute a breach of Article 49,
since her husband frequently visited other Member States for the purposes of
providing services there and "the separation of Mr and Mrs Carpenter would
be detrimental to their family life and, therefore, to the conditions under
which Mr Carpenter exercises a fundamental freedom" .137 The Court went
on to find that the deportation of the plaintiff would also amount to a breach
of Article 8 of the European Convention of Human Rights.
A number of commentators have criticized thls ruling. Thus Reich de-
scribes it as "artificial" to regard Mr Carpenter's rights as an economic citi-
zen as the basis for holding the envisaged deportation of his wife as
unlawful. 138 The authors of this contribution agree: whether the discrimina-
tion or access to market tests are applied, a genuine interstate element is
surely required.
Though widespread, this view is by no means universal. In contrast, one
recent contributor to this Review, who has tackled the problem from the
standpoint of the free movement of persons uses the very same word - "arti-
ficial" - to describe the requirement that an interstate element be present be-
fore a party can rely on Article 39.139
Finally, to complete the picture, it should be recalled that Community leg-
islation may be based on Article 95 EC only where it has a sufficient inter-
state element. This is to be expected, given that Article 95(1) makes it
abundantly plain that thls provision is designed to achieve the objectives of
the internal market as defined in Article 14. 140 Moreover, as we noticed at
137. Para 39.

138. "Citizenship and family on trial: A fairly optimistic overview of recent court practice
with regard to free movement of persons", 39 CML Rev. (2002), 615 at 628. Equally critical is
Puth, whose case note is tellingly entitled, "Die unendliche Weite der Grundfreiheiten des EG-
Vertrages'', 37 EuR (2002), 860. See also the editorial on Mary Carpenter, 40 CML Rev. 537 at
541.
139. Nie Shuibhne, op. cit. supra note 17, especially at 770. This author seeks to bolster her
argument by reference to the Charter of Fundamental Rights as well as the two Directives
adopted for the implementation of Art. 13 EC (Directive 2000/43 on equal treatment of persons
irrespective of racial and ethnic origin, O.J. 2000, L 180/22, and Directive 2000178 establishing
a general framework for equal treatment in employment and occupation, O.J. 2000, L 303/16).
Previous authors had also advocated the abandonment of the traditional rule, e.g. Gaja, "Les
discriminations a rebours: un revirement souhaitable", in Melanges en hommage a Michel
Waelbroeck (Bruylant, 1999) vol. II, p. 993 and, with respect to goods, Weyer, op. cit. supra
note 129.
140. Thus, where the Community legislation is primarily designed to remove barriers to
trade in goods between Member States, it is "inextricably linked" to the free movement of
goods: Case C-30/01, Commission v. United Kingdom, (status of Gibraltar), judgment of 23
Sept. 2003, nyr, para 62.
the outset, nothing in Article 14 purports to extend the concept of the inter-
nal market to transactions internal to a Member State. At all events, this prin-
ciple was brought home in the clearest possible terms in Germany v.
Parliament and Council (tobacco advertising), 141 where the Court also ruled
to the same effect with respect to Articles 47(2) and 55 on establishment and
services respectively.
However, in Rechnungshof v. Osterreichischer Rundfunk, 142 it was held
that Directive 95/46 on data protection, 143 which is based on Article 95
alone, is not confined to flows of data between Member States, but may also
govern flows within a Member State. 144 Accordingly, the test as to the exist-
ence of a sufficient interstate element is of a different nature. Harmonization
may be effected under this provision either
(i) where this is necessary to deal with disparities between the laws of Mem-
ber States in so far as such disparities are liable to hinder free movement be-
tween Member States; 145 or
(ii) where, "in order to give effect to the four freedoms mentioned in Article
[14], harmonizing measures are necessary to deal with disparities between
the laws of the Member States in areas where such disparities are liable to
create or maintain distorted conditions of competition ..." .146
Manifestly, a directive or regulation may fulfil these alternative condi-
tions, even though some of the transactions to which it relates are purely in-
ternal to a Member State.
6. Justification
6.1. "Mandatory requirements "
In relation to all of the four freedoms, the Court has added to the grounds of
justification expressly spelt out in the Treaty. Various terms are used in the
141. Case C-376/98, Germany v. Parliament and Council, (tobacco advertising), [2000]
ECR 1-8419.
142. C-465/00, [2003] ECR 1-4989, para 41.
143. O.J. 1995, L 281/31.
144. A.G. Tizzano reached the opposite conclusion (see in particular paras. 55-56 of his
Opinion), although his reasoning followed a somewhat different path.
145 . Case C-350/92, Spain v. Council, (1995] ECR 1-1985, para 33; Germany v. Parlia-
ment and Council, (tobacco advertising) cited supra note 141 ; and Case 491/01, The Queen v.
Secretary ofState for Health ex parte British American Tobacco, (Investments), [2002) ECR I-
11453.
146. Case C-300/89, Commission v. Council (titanium dioxide), [19911 ECR 1-2867, para
15; Spain v. Council, cited supra note 145, para 32; Germany v. Parliament and Council,
(tobacco advertising), cited supra note 141.
Internal market 435
case law to describe such judge-made grounds, but for present purposes let
us just refer to them as "mandatory requirements" (the term m:ed in Cassis
de Dijon). 147
The mandatory requirements are broadly the same, regardless of which
freedom is at issue. This includes such matters as:
- consumer protection, 148
- the protection of the environment, 149
- the protection of culture, 150
- the improvement of working conditions, 151
- protection of the plurality of the media. 152
Some of these objectives recognized as mandatory requirements could very
well have been subsumed within the express exceptions in the Treaty. We
have already noticed this phenomenon with respect to the protection of fun-
damental rights which could reasonably have been regarded as falling within
public policy (Schmidberger). Other examples include: road safety, 153 which
is surely a matter of public health; and the prevention of fraud, 154 which most
of us would regard as a matter of public policy.
Moreover, the list of grounds of justification spelt out in the Treaty varies
between the freedoms. In particular, the list in (new) Article 30 is consider-
ably longer than those in the corresponding provisions relating to the other
three freedoms. As a result, for instance, the protection of industrial and
commercial property, which is referred to expressly in Article 30, is a man-
datory requirement in relation to services. 155 Yet it is plainly undesirable that
this ground of justification should be applied differently according to wheth-
er goods or services are involved.
Nevertheless, according to the Court's traditional approach, the mandatory
requirements are indeed treated differently from the grounds of justification

148. On goods, see Cassis de Dijon, cited supra note 27; Case 178/84, Commission v. Ger-
many, (beer) [1987J ECR 1227; on services, see Case 205/84, Commission v. Gennany, (insur-
ance), [1986] ECR 3755, para 33.
149. Cases 302/86, Commission v. Denmark, (returnable bottles) [1988] ECR 4607; C-2/
90, Commission v. Belgium, (Walloon waste), [1992] ECR 1-4431; C-379/98, PreussenElektra
v. Schleswag, [2001] ECR 1-2099. All these cases relate to goods.
150. Cases C-154/89, Commission v. France, (1991] ECR 1-709 (tourist guides); C-288/89,
Collectieve Antennevoorziening Gouda v. Commissariaat voor de Media , [ 1991] ECR 1-4007.
Both cases relate to services.
151. Cases 155/80, Gebel, [1981] ECR 1993 (goods), and C-272/94, Guiot, [1995] ECR 1-
1907; C-369 & 376/96, Arblade v. Leloup, [1999] ECR I-8453 (services).
152. Familiapress, cited supra note 10 (goods).
153. Case C-55/93, Van Schaik, [1994} ECR I-4837, para 19, (services).
154. Case C-275/95, Customs and Excise v. Schindler, [1993] ECR 1-1039 (services).
155. Case 62/79, Coditel v. Cine Vog, [1980] ECR 833.
spelt out in the Treaty: on this test, only "indistinctly applicable" measures
may be warranted under the mandatory requirements.156 This is despite the
fact that there is every reason why, in appropriate cases, even discriminatory
measures should not be upheld on such grounds; and on occasion the Court
has thus had to resort to extreme devices to maintain this fa<;:ade. 157
For the reasons given here, the traditional approach is less than satisfac-
tory. Rather, it is suggested that the mandatory requirements should be as-
similated to the heads of justification set out in the Treaty - a suggestion
which has been endorsed by Advocate General Jacobs on no less than two
occasions. 158 What is more, in some recent cases the Court itself has tacitly
followed the same line. 159 However, so far it has conspicuously failed to nail
its colours to this particular mast. 160
156. On goods, see Case 113/80, Commission v. Ireland, (souvenirs) [1982) ECR 1625 and
the cases referred to in the following footnote; on services, see Case 352/85, Bond van
Adverteerders v. Netherlands, [1988) ECR 2085, para 32, and ERT, cited supra note 10, para
24. This approach has met with the approval of a large number of authors, particularly in the
early years, including Ahlfeld, Zwingende Erfordernisse im Sinne der Cassis-Rechtsprechung
des Europiiischen Gerichtshofs zu Art. 30 EGV (Nomos, 1997), passim; Hatzopoulos, "Exigen-
ces essentielles, imperatives ou imperieuses: une theorie, des theories, ou pas de theorie du
tout?" 34 RTDE, 191 ; Mattera, Le marche unique europeen - Ses regles, sonfonctionnement,
2nd ed. (Jupiter, 1990) at p. 274; Judge Touffait, "Les entraves techniques ala libre circulation
des merchandises", 37Recueil Dalloz-Sirey; and VerLoren van Themaat, "La libre circulation
des marchandises apres l'arret 'Cassis de Dijon", 1982 CDE, 123.
Those who have advocated the converse approach have included: Barnard, "Fitting the re-
maining pieces into the goods and persons jigsaw", 26 EL Rev. (2001), 35 at 54; Masclet, "Les
articles 30, 36 et 100 du traite CEE a la lurniere de l'arret 'Cassis de Dijon"', 16 RTDE, 64;
Oliver, op. cit. supra note 58, at pp. 216-20, Roth, "Diskriminierende Regelungen des
Warenverkehrs und Rechtfertigung <lurch die 'zwingende Erfordemisse' des Allgemein-
interesses", 46 WRP (2000), 979; von Wilmovsky, "Waste disposal in the Internal Market: The
state of play after the ECJ' s ruling on the Walloon import ban", 30 CML Rev. ( 1993), 541 and
Weiler, "The Constitution of the Market Place", in Craig and De Btirca, op. cit. supra note 70,
atp. 366.
157. Cases 16/83, Prantl, [19841 ECR 1299; C-274/87, Commission v. Germany, (meat
products) [1989) ECR 229 and C-2/90, Commission v. Belgium, (Walloon waste) [1992) ECR
1-4431.
158. C-203/96, Chemische Ajvalstojfen Dusseldorp v. Minister van Milieubeheer, [1998]
ECR 1-4075, paras. 89-90 of the Opinion; C-379/98, PreussenE/ektra cited supra note 149,
paras. 225-6 of the Opinion. Both cases related to goods.
159. On goods, see Cases C-34/95, Konsumentenombudsmannen v. De Agostini, (19971
ECR 1-3843; C-120/95, Decker v. Caisse de maladie des employes prives, [1998] ECR 1-1831
and PreussenE/ektra, cited supra note 149. On workers, see Cases C-350/96, Clean Car Auto
Service v. Landeshauptmann von Wien, [1998) ECR 1-2521 and C-15/96, Schoning-
Kougebetoplou v . Hamburg, [1998) ECR 1-47. On services, see Case C-42/02, Lindman,judg-
ment of 13 Nov. 2003, nyr. See O'Leary and Fernandez Martin, "Judicially Created Exceptions
to the Free Provision of Services'', in Andenas and Roth, op. cit. supra note 43, at p. 163;
Oliver, op. cit. supra note 58, pp. 216- 220.
160. Indeed, in Case C-224/97, Ciola v. Vorarlberg, [19991ECR1-2517 it reverted to the
traditional approach (para 16).
Internal market 437
6.2. Justification and fundamental rights
Since the Court's ruling in ERT, 161 it has been plain that, when considering
the exceptions to the four freedoms, it will have regard to fundamental
rights, and particularly the ECHR. 162 In Schmidberger v. Austria,163 this pro-
cess was taken a step further. The plaintiff in the main case was a road haul-
age company engaged in transporting goods between Germany and Italy via
the motorway through the Brenner pass. The Austrian authorities had autho-
rized an environmental demonstration, which resulted in that motorway be-
ing closed for nearly two days. Schmidberger claimed that this authorization
amounted to a breach of Article 28 EC and consequently sought to recover
damages.
Having found that the authorization of the demonstration fell within Ar-
ticle 28, the Court was called upon to decide whether that restriction was jus-
tified. Austria maintained that its authorities had been required to permit the
demonstration, as the demonstrators were merely exercising their freedom of
expression and freedom of assembly under Articles 10 and 11 ECHR. Aus-
tria relied on the protection of fundamental rights as a discrete ground of jus-
tification. Following Advocate General Jacobs, the Court accepted this
claim. After setting out its traditional case law as to the place of fundamental
rights in Community law, it stated:
"It follows that measures which are incompatible with observance of the
human rights thus recognized are not acceptable in the Community (see,
inter alia, ERT, cited above, paragraph 41, and Case C-299/95, Kremzow,
[1997] ECR I-2629, paragraph 14).
Thus, since both the Community and its Member States are required
to respect fundamental rights, the protection of those rights is a legitimate
interest which, in principle, justifies a restriction of the obligations im-
posed by Community law, even under a fundamental freedom guaranteed
by the Treaty such as the free movement of goods." (paras. 73 and 74)
Next, reiterating its time-honoured statement that "the free movement of

goods constitutes one of the fundamental principles in the scheme of the
Treaty", the Court pointed out that this principle was not absolute, given the
existence of Article 30 and "the overriding requirements relating to the pub-
lic interest". Equally, the Court noted that, unlike certain other fundamental
161. Case C-260/89 [1991) ECR I-2925.

162. See also Cases C-32/90, Commission v. Germany, (imports of pharmaceuticals)
[1992] ECR I-2575, para 23; C-368/95, Familiapress, cited supra note 10; Mary Carpenter,
cited supra note 16; see Oliver, op. cit. supra note 58, pp. 238- 242.
rights enshrined in the ECHR such as the right to life and the prohibition of
torture and inhuman or degrading treatment, the freedom of expression and
freedom of assembly were subject to various public interest exceptions.
These considerations led the Court to find that:
"In those circumstances, the interests involved must be weighed having
regard to all the circumstances of the case in order to determine whether
a fair balance was struck between those interests.
The competent authorities enjoy a wide margin of discretion in that
regard. Nevertheless, it is necessary to determine whether the restrictions
placed upon intra-Community trade are proportionate in the light of the
legitimate objective pursued, namely, in the present case, the protection of
fundamental rights." (paras. 81 and 82)
The Court went on to consider all the circumstances of the instant case (no-
tably the duration of the demonstration, its motives and its isolated nature)
and concluded - again like the Advocate General - that"the action of the
Austrian authorities was compatible with Article 28.
The Court was faced with a clash of presumptions, due to the fact that the
free movement of goods (Art. 28 EC) and the freedoms of expression and
assembly (Arts. 10 and 11 ECHR) are each fundamental principles under
their respective treaties. Consequently, exceptions to each of these principles
are to be interpreted restrictively. 164 Yet, in this instance, the latter two prin-
ciples were being relied on as exceptions to the free movement of goods.
While neither the Court nor the Advocate General referred to this conun-
drum expressly, the Court made it clear that Member States were in no cir-
cumstances required by Article 28 to infringe fundamental rights: that
emerges incontrovertibly from its ruling that "measures which are incompat-
ible with observance of the human rights ... recognized [as part of Commu-
nity law] are not acceptable in the Community".1 65
Attention should also be drawn to the Court's insistence that only those
fundamental rights recognized as such in Community law itself are thus pro-
tected. This harks back to the Advocate General's observation that interests
164. As to the free movement of goods, see in particular, Case 46/76, Bauhuis v. Nether-
lands, [1977] ECR 5. A s to Art. 10(2) ECHR, see ECtHR judgment of 26 Nov. 1991, The
Observer and The Guardian v. United Kingdom, A.216 p. 30 para 59(a); the Court expressly
recognized in Case C-274/99P, Connolly v. Commission, (2001] ECR I-1611 , para 41, that Art.
10(2) was to be construed strictly.
165. Para 73 of its judgment (quoted above). In his case note on Schmidberger (40 CML
Rev. (2003), 1499), Christopher Brown berates the Court for giving insufficient weight to fun-
damental rights. In view of this crucial passage of the judgment, this criticism seems somewhat
harsh. However, the complaint that the Court's fundamental rights scrutiny lacks sufficient
rigour is by no means new: see Frenz, op. cit supra note 11, atl'P 611....()13.
Internal market 439
recognized as fundamental rights in the legal system of one Member State

may not qualify as such in Community law; and that conceivably they may
run even counter to the very scheme of the Treaty. 166 This caveat deserves a
warm welcome. 167
A final question is in point: could this growid of justification not have
been subsumed within the concept of public policy, which is exprc;:ssly spelt
out in Article 30? Surely, the protection of fundamental rights mu:>t rank as
one of the "fundamental interests of society" 168 and can thus be regarded as
a matter of public policy.
7. Convergence between the four freedoms?
It is axiomatic that, whereas free movement of goods was once the trail-
blazer, the other freedoms have now caught up and in some cases even over-
taken it. Thus it is widely considered that the provisions on wo:rkers and
services have taken over the role of pioneer since the early 1990s and espe-
cially since Keck. That is now reflected in the order of Part III draft Constitu-
tion. Two distinct reasons for this are in evidence:
- First, in so far as natural persons are concerned, the Community has moved
on from treating them merely as units of production or other economic units
to considering them as human beings. The most striking manifestation of this
trend has of course been the change of name from the European Economic
Community to the European Community, and the insertion of the provisions
on the citizenship of the Union. Also, as we noticed at the outset, the intro-
duction into the Treaty of the provisions on the citizenship of the Union have
acted as a catalyst in this process.
166. Paras. 96-99 of the Opinion.

167. In contrast, some controversy surrounds the possible relevance of the demonstrators'
motives. The Court found that " the specific aims of the demonstration are not in themselves
material in legal proceedings such as those instituted by Schmidberger" (para 66 of the judg-
ment). Brown, op. cit supra note 165, at 1505, questions whether this approach is compatible
with the ECHR; in his view, the situation would have been quite different, ifthe demonstrators
had planned to use the motorway to perform drama or to hold a neo-Nazi march. What is more,
the Court appeared to contradict itself in a later passage of its ruling (para 86), when it distin-
guished Commission v. France, (Case C-265/95, on violent protests by fanners, [1997] ECR 1-
6959; annotated by Jarvis, 35 CML Rev. (1998), 1371 and Schwarze 33 EuR (1998), 53) - on
the grounds that there the farmers' actions were protectionist in intent!
168. Case 30/77, Bouchereau, [1 977] ECR 1999 at para 35: " ... recourse by a national
authority to the concept of public policy presupposes ... the existence ... of a genuine and suffi-
ciently serious threat to the requirements of public policy affecting one of the fundamental
interests of society". See also para 108 of A.G. Uger's Opinion in Case 1/96, Compassion in
World Farming, [1998) ECR 1-1251.
- Second, while the parallels between goods and services are especially
close, services which were of scarcely any economic importance in 1957 in
relation to goods have come into their own. 169
At the same time, the free movement of capital, long the weakest of the
four freedoms in view of its lack of direct effect, was the subject of a series
of liberalizing Directives before being placed on the same footing as the oth-
ers by the Treaty of Maastricht. "As a result", one author has written
colourfully, "free movement of capital has ceased to be the runt of the litter
amongst the market freedoms". 170 What is more, it has now shot to promi-
nence with the recent spate of judgments on golden shares. 171
As a result of this trend, the principles governing the four freedoms have
converged to a considerable extent - but not absolutely. There has been a
wealth of literature in recent years considering the extent to which the four
freedoms are or should be treated in the same way. 172 Surely it is right that
169. See generally Snell, Goods and Services in EC Law: A Study of the Relationship be-
tween the Freedoms (OUP, 2002), p. 226; Troberg, "Commentary on the Treaty provisions on
services", in Groeben and Thiesing and Ehlermann (Eds.), Kommentar zum EU-IEG-Vertrag,
5th. ed. (Nomos, 1997), vol. I at p. 1447; also the same author's remarks (with Tiedje) in the
6th edition of the same commentary (cited supra note 71 ), at pp. 1616--7.
170. Leo Flynn, op. cit. supra note 124, 773.
171. Cases C-367/98, Commission v. Portugal, [2002] ECR I-4731; C-483/99, Commis-
sion v. France, [2002] ECR 1-4781; C-503/99, Commission v. Belgium, [2002] ECR 1-4809;
Case C-463/00, Commission v. Spain, [2003] ECR 1-4581 and C-98/01, Commission v. United
Kingdom, [2003] ECR 1-4641; see case notes by Fleischer, 40 CML Rev. (2003), 493, Gippini
Fournier and Rodriguez Miguez, 39 RDUE, 89 and Mortelmans, 50 SEW (2002), 341.
172. As to whether the Keck approach should be transferred to the other freedoms see e.g.
Barnard, op. cit. supra note 156; Behrens, "Die Konvergenz der wirtschaftlichen Freiheiten im
europiiischen Gemeinschaftsrecht'', 27 EuR (1992), 145; Bernard, "Discrimination and Free
Movement in EC Law", 45 ICLQ (1996), 82 and "La libre circulation des marchandises, des
personnes et des services dans le Traite CE sous l'angle de la competence", 1998 CDE, 11;
Everling, "Sur la jurisprudence recente de la Cour de justice en matiere de libre prestation de
services rendus dans d'autres Etats membres", 1984 CDE, 3 at 14; Feiden, Die Bedeutung der
"Keck"-Rechtsprechung im System der Grundfreiheiten (Duncker & Humblot, 2003), pp. 121;
Haferkamp, Die Kapitalverkehrsfreiheit im System der Grundfreiheiten des EG-Vertrags (No-
mos, 2003), pp. 84, 95; Jarass, "Elemente einer Dogmatik der Grundfreiheiten", 30 EuR
(1995), 202 and 35 EuR (2000), 705; Marenco, "La notion de restriction aux libcrtes
d'etablissement et de prestation des services dans la jurisprudence de la Cour", (1992/nos.
124--{5) Gazette du Palais, 4 (also published as "The Notion of Restriction on the Freedom of
Establishment and Provision of Services in the Case law of the Court", JO YEL (1992), 111);
Martin, "'Discriminations', 'entraves' et 'raisons imperieuses' dans le traite CE: trois concepts
en quete d'identite", lere partie (1998) CDE, 261; Mortelmans, "Excepties bij non-tarifaire
intracommunautaire belemmeringen: assimilatie in het nieuwe EG-Verdrag?'', 45 SEW
(1997), 182 at 189 (although he rightly points out that it would be neither possiQle nor desirable
to apply precisely the same rules to all four freedoms); O'Keeffe and Bavasso "Four freedoms,
one market and national competence: In search of a dividing' line", in Liber Amicorllm in
Honour of Lord Slynn of Hadley, vol. I (Kluwer, 2000) p. 541; Oliver, "Goods and services:
Internal market 441
the same principles should apply in the absence of any objective reason to
make a distinction. Unwarranted divergences should clearly be aYoided. But
at the end of the day the four freedoms cannot all be treated in the same way.
The principal dividing line should be drawn where common sense and hu-
manity suggest: between the movement of human beings, on the one hand,
and purely economic transactions on the other. Advocate General Fennelly
made this point most aptly in Graf, 173 when he said:
"Persons are not products and the process of migration for the purposes of
employment or establishment abroad, including preparation thcrefor, can-
not be so neatly divided into (mass) production and marketing stages."
Two freedoms compared", in Melanges en l 'honneur de Michel Waelbroeck (Bruylant, 1999)

vol. II, p. 1377; Snell, op. cit. supra note 169; Timmermans, "Note on Case C-384/93 Alpine
Investments v. Minister van Financien", 44 SEW (1996), 244; van Gerven, "Articles 30, 48, 52
and 59 after Keck and Mithouard", 2 CJEL (1996), 217; von Wilmowsky, op. cit. supra note
71.
173. Case C-190/98 [2000] ECR I-493 at 501.

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Course of study: LWM3024-02

Extract title: The internal market and the four freedoms

Page extent: 407-441

Source title: Common Market Law Review

THE INTERNAL MARKET AND THE FOUR FREEDOMS

PETER OLIVER AND WULF-HENNING ROTH

1. Are the four freedoms fundamental rights?

What significance should be attached to these semantic questions is un-

More recent commentators have tended to follow a more nuanced ap-

18. Everling, "Wirtschaftsfreiheit im europfilschen Binnenmarkt - Anspruch und Realitat",

2. Restrictions and discrimination

2.1. A historical perspective

Dassonville by a more refined approach differentiating between product-

2 .2. 1Wo preliminary points

34. See Keck& Mithouard, cited supra note 14, 6131paras.15-17.

2.3 . Keck: The essentials

Accordingly, Keck seems to be in line with the traditional case law on

2.4. The other freedoms

plied by the Court with regard to both freedoms. Moreover, it is suggested

2.5. Scope of the restriction test

From the standpoint of market access, the Court appears to be right to

2.6. Discrimination test

3. Export regulations: A different matter?

3.1. General considerations

3.2. The provision of services

With regard to freedom to provide services, a good example of the Court's

regulation prohibiting "cold calling". The scope of this regulation extended

3.3. Export ofgoods

68. Case C-292192, cited supra note 13, 6813, 6826-27.

29 should be conceived as a right of the exporter vis-a-vis his or her home

27; Schroeder, "Art. 29 EGV", in Streinz (Ed.), EUVIEGV(Beck, 2003), at para 5.

It is important to note that this suggestion refers only to marketirig rules

4.1. General considerations

A further question is whether private parties are or should be considered ad-

4.2. Dichotomy in the case law

Angonese, 94 where the Court held that Article 39 is to be regarded as binding

94. Angonese, cited s11pra note 3, paras. 29-36.

An exhaustive discussion of this issue would be out of place here. Suffice

called that it is the very purpose of Article 82 to address those situations in

The direct application of the freedoms to collective measures seems to be

Struktur der Grundfreiheiten des Europiiischen Gemeinschaftsrechts (Duncker & Humblot,

5. Measures internal to a Member State

"The internal market shall comprise an area without internal frontiers in

123. Emphasis added.

127. Cases C-485-6/93, (1995] ECR 1-2665.

plaintiff was a Philippino national married to a UK national. Both spouses

137. Para 39.

6.1. "Mandatory requirements "

147. Cited supra note 27.

6.2. Justification and fundamental rights

Next, reiterating its time-honoured statement that "the free movement of

161. Case C-260/89 [1991) ECR I-2925.

recognized as fundamental rights in the legal system of one Member State

7. Convergence between the four freedoms?

166. Paras. 96-99 of the Opinion.

Two freedoms compared", in Melanges en l 'honneur de Michel Waelbroeck (Bruylant, 1999)

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