Keck - Notes prepared on Selling Arrangement - Keck PDF

Preview

Summary

Notes prepared on Selling Arrangement - Keck...

Description

Keck Describing the Scope of Article 34 TFEU – Keck: Selling Arrangement  NO MEQR Keck is the third in row of the three Court of Justice of the European Union decisions, all dealing with the interpretation of Article 34 TFEU. Keck is the 3rd landmark case. Keck is an important case: No MEQR at first but later in Keck, it can technically be an MEQR The definition of MEQR which is given in Dassonville was too wide. The definition is so liberal and this is why Keck redefine MEQR and exclude it by introducing selling arrangements. As was argued by Advocate General Slynn in Cinéthèque, some of these rules were not intended to restrict imports and did not in any way make things more difficult for the importer.  For example cubes of Margarine, there was nothing on their mind to restrict trade but these were trapped by MEQR. Nonetheless, they fell within the scope of Article 34 TFEU and required justification under either Article 36 TFEU or the Cassis de Dijon mandatory requirements.

A challenge to the Sunday Trading laws in the UK occurred in the following: Case: Torfaen Borough Council: Fact: British Law required most shops to be closed on Sundays. The defence was that the Sunday trading rules breached Article 34 because imported goods could also not be sold on Sundays, thus impeding/ preventing trade from Member State. Hence Sunday trading rules initially fell with selling arrangements. The Sunday trading rules did not affect trade volume but they affected domestic goods and imports alike.

Keck v Mithouard: The French Prohibition of goods sold at a loss was argued to be a restriction on sale. Fact:    

France had rules in place forbidding the selling of products at loss. Keck and Mithouard was prosecuted in France Under Anti-Dumping Retail Laws for selling Picon Liqueur at below cost price. A French competition law prohibited retail of products for price below that which they had been purchased. The aim of this law was to prevent retailers engaging in ‘cut-throat’ competition by dumping excess produced on market and thus forcing competitors out of business.

Principle: These rules were not product based but were described as selling arrangements. Application: The court stated that product requirements involved the ‘designation, Form, size, weight, composition, presentation, labeling and packaging’ of the product concerned will be regarded as in indistinctly applicable MEQR. In Keck, the Court of Justice decided that these arrangements were not even an MEQRs, such that the Article 34 was not engaged at the outset. If Keck says that Article 34 does not apply to goods, then we do not have to justify under s36 or Cassis de Dijon since it will affect both imports and domestic goods

Selling Arrangements: In Keck and Mithouard (1993), the ECJ distinguished between 2 categories of National legislation to goods:  

Product Requirements Selling Arrangements

‘Product requirements’: Cassis de Dijon will apply to Product Requirements but not to selling arrangements. Product requirement concerns laws regulating the goods themselves such as packaging or ingredients and not the way they are sold.

‘Product requirements’ affect the goods themselves and are still governed by Article 34 and are prohibited unless they can be justified under Article 36 or Cassis de Dijon Mandatory Requirement.

‘Selling arrangements’: Selling arrangement are broadly defined as rules relating to the market circumstances in which goods are sold. Selling arrangements appear to restrict the volume of trade but are different MEQR because they are not designed to protect home market. They are not discriminatory. They affect retailer and the producer or importers. As compared to Product requirements, ‘Selling arrangements’ are those rules that concern not the goods themselves but instead how, when and where they can be marketed and by whom and to whom they are sold.

‘Selling arrangements’ do not require any change to the product itself but only restrict the way it is marketed. Note: In keck the ECJ held that these ‘selling arrangements’ fall outside the scope of Article 34 TFEU and therefore, they do not require justifications. Keck decided that Article 34 TFEU would not apply to certain selling arrangements . The ECJ held that selling arrangements are lawful subject to 2 pre-conditions being satisfied:  

It had to apply to all relevant traders operating within the national territory and It had to affect in the same way, in law and in fact, the marketing of domestic products and imported products from other Member States.

If satisfied these 2 conditions, then No MEQR.. If it is a selling arrangement, then it escapes Article 34. If it is not a selling arrangement, then it caught by Article 34 and is categoried as product requirements.

Test  To see whether a good is a selling arrangement or a product requirement: whether the importer has to make any physical alteration to the product. For example a rule which targeted a changement in the size, shape the ingredients, packaging or labelling, would be a ‘product requirement’. If no changement in size, shape, packaging or labelling, then it is a ‘selling arrangement’. In other words, ‘selling arrangements’ relate to how, when and where they can be marketed and by whom and to whom they are sold.  this is a rule which had the effect of a general reduction in the sale of all products. Note: If a provision of national legislation appears to be a selling arrangements but fails one or both conditions in Keck, then we will have to deal with that legislation under Article 34 as an MEQR.

(Refer to my page) - keck

Examples of selling arrangements Selling arrangements apply equally in law and in fact and they fall outside the Article 34 structure because they have the same effect in practice on both domestic goods and imports. For example, preventing goods being sold before noon on Sundays or limitations on advertising are known as selling arrangements and they are not prohibited as long as they are not discriminatory in law and in fact.

Example of Selling arrangements that fall outside Article 34: ( No MEQR) 

Hünermund - (rules on advertising of products in pharmacies);



Punto Casa - (opening hours): A similar decision was reached with regard to Sunday trading rules in Italy.



Commission v Greece - (restriction on where baby milk powder could be sold);



Leclerc-Siplec - (restriction on TV advertising of retail products).



Herbert Karner – An Austrian restriction on the advertising of auctions of goods bought from insolvent firms, which had the aim of preventing consumers being given a misleading impression about potential price, was seen as a selling arrangement and was not caught by Article34.



Boerman: Dutch rules regarding the closure of all petrol station at night, and which applied to all trader operating in the national territory were not caught by Article 34. The rules affected domestic and foreign producers in the same way in law and in fact.

Fachverband v LIBRO: This case concerns legislation on pricing. Selling books published in Germany at prices lower than the minimum price set in Austria. In Clinique [1994], a German law prohibited the use of the name ‘Clinique’ for cosmetics because the consumer might be confused and think that the product had medicinal properties.  No physical alteration done to the products. It was held by the Court of Justice to be disproportionate to the objective of consumer protection and the health of humans.

Familiapress:

The Court has applied Keck in a formalistic way which has been criticised by many commentators, particularly in relation to advertising restrictions. There is a restriction on Television advertising of retail products as per Leclerc-Siplec

Leclerc-Siplec: It is a selling arrangement since no physical alteration to the product. There was a ban on retailed products. In his conclusion, Advocate General Jacobs applied the Keck formula to Leclerc-Siplec and decided that the national rule fell outside Article 34 TFEU.  NO MEQR Although the product is not an MEQR but is a selling arrangement, then it might technically remained an MEQR because this selling arrangement will prevent importers to import goods. Advocate General Jacobs said that advertising restriction is not an MEQR but technically it is an MEQR.

Refinement (Improvement)of Keck: the market access test Refinement of keck will occur when it can no longer be a selling arrangement, then it will amount to an MEQR. An interesting example of where the Court held that a ‘selling arrangement’ discriminated against foreign traders in fact is Heimdienst (2000): Under the Austrian Code of Business and Industry 1994, traders such as bakers, butchers and grocers were only permitted to sell on rounds from locality to locality or from door-to-door those goods which they also sold from a permanent establishment in the area or in an adjacent municipality. The Court held that the legislation in question related to ‘selling arrangements for certain goods’ but that it did not affect in the same manner the marketing of domestic products and that of imported products from other Member States. As such, the rule did not apply equally in law and in fact but rather impeded/prevented access to the market of the Member State of importation for products from other Member States more than it impedes access for domestic products.  Therefore, it will not be a Keck Version since it impede access to imported goods Therefore the Austrian law in Heimdienst did fall within the scope of Article 34 TFEU despite being described by the Court of Justice as a selling arrangement.

Another key case concerning selling arrangements which do not apply equally in law and in fact and fall inside Article 34 (lead to MEQR) is Gourmet International Products: When import goods, we have to make use of advertisement but here there is a restriction on advertisement which will impede access of imported goods to the market. Fact:  

Gourmet published a magazine called Gourmet which contained advertisements for red wine and whisky. Gourmet published a magazine that contained advertisements for alcohol in breach of Swedish Legislation which restricted the advertising of alcohol drinks.



A ban on alcohol advertisement was challenged under the same argument that it had a greater impact on imported product trying to gain access to Swedish market because, without advertising, consumer would not be familiar with domestic product.



Thus, it was held that the measure would be caught by Article 34 TFEU.



The arrangement impedes access to imported products more than domestic products because consumers would be more familiar with domestic goods.



Hence, the arrangements constituted an indistinctly applicable MEQR. However, the MEQR was justified by the Public Health derogation under Article 36.

With regards to the justification of the national rule on the grounds of public health, the Court stated that it was for the national court to determine: 

whether it was proportionate



whether ‘the protection of public health against the harmful effects of alcohol can be ensured by measures having less effect on intra-Community trade’.

The end of Keck? The application of the Keck test continues to trouble the CJEU.

Commission v Italy (Trailers): It cannot be a selling arrangement since the law is prohibiting any motorcycle to that trader. So it is clearly preventing the selling of this kind of trailer. Fact: 

Commission v Italy (Trailers) involving a ban on mopeds towing trailers, was held to have a significant impact on the marketing of such trailers and it was thus imports of trailers and therefore it is in breach of Article 34 TFEU.



Therefore, it constituted a measure having equivalent effect to quantitative restrictions on imports within the meaning of Article 34 TFEU. The interest of the decision lies in the Court’s dismissal of a possible application of the Keck threshold.



National rules which is to treat products coming from other Member States less favourably. (Dassonville)



Measures applied to goods coming from other Member States where they are lawfully manufactured and marketed that lay down requirements to be met by such goods (Cassis de Dijon)



Any other measure which hinders access of products originating in other Member States to the market of a Member State

Market access approach:  Trailers: 1. Does the measure hinder trade? 2. Justifications? 

Was Keck overruled following Trailers? Refer to Scotch Whisky

My Notes

The Court implicitly rejected a possible extension of Keck to ‘use arrangements’ and embraced what could be concisely termed as an ‘access to market’ test.  The court says selling arrangement can no longer be used as per Keck Version. Thus rather to use the ‘use arrangement’. Such an approach was suggested by Attorney General Kokott in the case of Mickelsson [2009]: The question was whether restrictions imposed by Swedish law on the use of jet skis on inland waters could be considered as an obstacle to free movement of goods. Fact: The Swedish ban on the use of jet skis was held to be a MEQR but justified on the ground of protection of health and environment protection. It is, therefore, to be concluded that restrictions on product uses will not be ‘saved’ under the Keck test. It should, however, be noted that in both cases, Italian Mopeds and Mickelsson, the court found that the measures in question could be justifiable on the grounds of public aims such as road safety or protection of the environment. The court say it is not possible to be rescued by Keck since it is restricting its use to some area and there is no physical alteration. Restrictions of products can no longer use selling arrangement of Keck and hence the case Mickelsson is the rescue case....