Test Satisfactory

The aim of this essay is to examine if the Keck test is unsatisfactory, too rigid and places too much emphasis on law and fact, rather than market access and consider that there are no clear outer boundaries to the Article. Article 34 of The Treaty on The Functioning of The European Union (TFEU) prohibits Members States (MS) from discriminating against imported goods by favouring domestic products, unless the MS can establish a justifiable cause. The case of Dassonville established the courts need to look into issue of national legislation that would constitute a measure equivalent to quantitative restrictions (MEQR). It was held that Article 34 would have a broad definition that measures which were “capable of hindering, directly or indirectly, actually or potentially, intra-Community trade are to be considered as . The issue that arose from the ruling was that the formula, theoretically established that all national measures from other MSs could be caught under Article 34. The issue that arose from the case of Dassonville, was whether the formula should catch all national measure even those close to restricting trade or should there be test that would allow a MS to escape the formula?

It was the case of Keck that formulated the test that allowed MSs to escape the Dassonville formula; it was created to change the structure of free movement of goods and the scope of Article 34. Keck is used to determine whether MS legislation directly, indirectly, actually or potentially hinders trade within the Dassonville formula. The Keck test for defining if a measure is non-discriminatory is whether the measure has equivalent effect and in turn has to be justified. Keck has two rules, the first rule deals with product-bound measures, which imposes additional requirements on the product. These requirements are seen to restrict trade and fall within the scope of article 34. The second rule deals with selling arrangements, these are rules that regulate when[6], where and by whom goods may be sold[7], advertising restrictions[8] and price controls[9]. There rules by their nature do not impede the market access of imported products more than they prevent the market access of domestic products, provided that they apply to all relevant traders within the national territory and apply equally in law and fact to domestic and imported products, if they meet these criteria they fall outside the scope of Article 34.

The issue that Keck had was with dealing with measures of intra-community trade that were too uncertain or indirect to warrant the use of Article 34. HA¼nermund[10] showed how far the European Court of Justice (ECJ), were willing to stretch the scope of the term ‘selling arrangement’ outlined in Keck. The ECJ referred to Keck and the conditions that had to be satisfied before the German rule of prohibiting pharmacists from advertising pharmaceutical products outside their pharmacy, fell outside the scope of Article 34. In this case the conditions were satisfied and the German rule was found to be compatible with EU law. In Leclerc-Siplec, the ECJ ruled that a French ban advertising certain products on television was a selling arrangement. The ECJ concluded that the rules in question were not within the scope of Article 34. Though EU case law has shown that selling arrangements do not necessarily fall within one set of rules, ‘the form of advertising is a significant factor in determining whether the Cassis[11] or Keck… rule applies.’ The Mars[13] dealt with German unfair competition law. The ECJ held that the German rules related to presentation, labelling and packing of goods that lawfully had been manufactured and marketed in another MS. Under Cassis, these rules are within the scope Article 34 and can only be justified under mandatory requirements, in this instance no justifications were found, and the rules were said to be restricting trade between MSs and against EU law.

Familiapress[14] demonstrates the importance of the form of advertising. Austrian legislation prohibited the sale of newspapers that contained games or competitions for prizes. The ECJ disagreed even though the method was used for sales promotion; the ECJ was concerned with the actual content of the product in the case, because the competitions formed an important aspect of the magazine. By making this distinction, the ECJ established that the Austrian legislation did not fall within Keck definition of selling arrangements. It was established that the national legislations compatibility with EU law would have to be determined under the Cassis rule. The ECJ left the national court to decide if the restriction was proportionate. Greaves stated that ‘Where the method of advertising is an intrinsic part of the product itself, as in Mars, then the Cassis rule applies. Where the form is external to the product, the Keck… rule applies.’[15] Familiapress shows a distinction between Mars and the application of Keck, regarding the rules of product characteristics and selling arrangements. After Keck, extrinsic advertising constituted a selling arrangement falling outside the scope of Article 34, while intrinsic advertising, which relates to the product requirement, would only be restricted by a MS if it can be justified under the Keck requirements.

Weatherill and Chalmers both argued that the ECJ has misinterpreted the purpose of Article 34, instead of focusing on the free movement of goods and the creation of an internal market, the Court focused on discrimination imposed by national legislation. Chalmers states that ‘Cassis… [was] the main judicial instrument for achieving legal interpenetration of Member State markets. Following Keck, the Cassis…principle now has only a limited integrative function.’[16], the issue here is that Keck has disrupted the development of an internal market and in turn Keck has established a narrower market based on equality in law and fact. Advocate General Jacobs found the Court’s approach in Keck unsatisfactory for two reasons[17], the first being that ‘the severity of the restriction imposed by different rules is merely one of degree’[18], Jacobs illustrates that a type of restriction is as serve as an outright ban on importation and marketing, Jacobs places emphasis on when dealing with the restrictions to advertising, that also have an important role in building an internal market, ‘In short, advertising injects greater fluidity and mobility into the economy and enhances competitiveness.

A ban on advertising tends to crystallize existing patterns of consumption, to ossify markets and to preserve the status quo.’ The second reason that Jacobs find Keck unsatisfactory is Keck criteria that focuses on a discrimination test, the problem with a discrimination based test is that it leads to a fragmented internal market, because producers and traders must adapt to restrictions on selling arrangement depending on which MS they market their products in, the restrictions should not be based on local conditions but against the entire Union. Two tests where put up forward, the first being de mininmus, which has been established to be unsatisfactory in this area because it focuses on principles far too complex for the courts to evaluate compared to Kecks rule based formula. The more plausible test would be ‘An approach based on the access to the market provides is with a…framework for analysing the goods…’ which was acknowledged by Jacobs and Weatherill, regarding Keck, Article 34 and market access.

Case law prior to Keck showed the difficulties in defining the outer boundaries of Article 34, in turn Keck was criticised for being overly formalistic because it drew a distinction between rules relating to product characteristics and selling arrangement. The focus on market access, Jacobs argued that were measures affected the goods directly, as in a Cassis type case, then it will be presumed to have a substantial impact. If the measure affected a selling arrangement and was not discriminatory, the severity of the impact would be based on other factors, such as the nature of the restriction, if the impact was direct or indirect and the extent of other available selling arrangements. Keck would remain establishing that selling arrangements are outside the scope of Article 34, but could be caught either by the classification concerned with product characteristic or because they have a different application in law or fact.

The market access test has been further refined, by Wheatherill to ‘apply equally in law and in fact to all goods’ though the market access test was not used initially compared to cases regarding free movement of services and workers, it has been slowly adopted by later cases, it has been shown that the ability of goods to access the market of a state is a core feature of the Keck test, the distinction under this test, is that Keck will be fulfilled provided that state legislation does not restriction a products access to the market. Wheatherill has shown that there is an outer boundary and to maintain this element, national rules must not threaten the growth of the internal market. To an extent the Keck test has been seen as unsatisfactory for being overly formalistic between the distinction between product rules and selling arrangements, but what has been seen through case law is a development and understanding of what selling arrangements are, the development of an outer boundary to Article 34 and the Court recognition and application of a market access approach. I 1052518 declare that this piece of work contains [actual number] words

Bibliography

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