Freedom to provide Freedom to provide servicesservices

The rule: Arts 56 & 57 TFEUThe rule: Arts 56 & 57 TFEU

Art 56: “... restrictions on freedom to Art 56: “... restrictions on freedom to provide services shall be prohibited in provide services shall be prohibited in respect of nationals of Member States who respect of nationals of Member States who are established in a Member State other are established in a Member State other than that of the person for whom the than that of the person for whom the services are intended. ...”services are intended. ...”

Art 57: concept services: “where they are Art 57: concept services: “where they are normally provided for remuneration, in so normally provided for remuneration, in so far as they are not governed by the far as they are not governed by the provisions relating to ... goods, capital and provisions relating to ... goods, capital and persons”.persons”.

NotesNotes

56 talks about “restrictions”, not 56 talks about “restrictions”, not discriminationdiscrimination

cross-border elementcross-border element remuneration elementremuneration element subsidiary definition: only when other subsidiary definition: only when other

freedoms do not applyfreedoms do not apply

Concept “service” and cross-Concept “service” and cross-border elementborder element

Economic concept of “services”; Economic concept of “services”; examples:examples: banking, insurancebanking, insurance telecomstelecoms legallegal ITIT

Goods v services: tangible v intangibleGoods v services: tangible v intangible Example: Example: SchindlerSchindler: selling lottery : selling lottery

tickets is servicetickets is service

Establishment v services: permanent v Establishment v services: permanent v temporarytemporary

Example: a bank with an office in Example: a bank with an office in another MS: establishment, not services!another MS: establishment, not services!

A bank which sells a product in another A bank which sells a product in another MS over the internet: servicesMS over the internet: services

Any cross-border element:Any cross-border element: service provider travels (Croatian lawyer in service provider travels (Croatian lawyer in

the ECJ)the ECJ) service consumer travels (tourism)service consumer travels (tourism) the service travels (cross-border television)the service travels (cross-border television)

““Remuneration”Remuneration” creates distinction creates distinction

between economic and between economic and non-economic servicesnon-economic services

““public services”: public services”: depends!depends!

education:education: HumbelHumbel: no : no

consideration for the consideration for the service nor agreed service nor agreed between partiesbetween parties

WirthWirth: depends on : depends on extent of State funding!extent of State funding!

““Restriction”Restriction” Same principle as Same principle as Cassis de DijonCassis de Dijon: :

indistinctly applicable measures are caughtindistinctly applicable measures are caught ““all measures liable to hinder or make less all measures liable to hinder or make less

attractive the exercise of fundamental attractive the exercise of fundamental freedoms” – “to prohibit, impede, make freedoms” – “to prohibit, impede, make less attractive”less attractive”

Again emphasis on “market access”Again emphasis on “market access” Basic issue: to draw the line between what Basic issue: to draw the line between what

effectively restricts market access and effectively restricts market access and what notwhat not

Alpine InvestmentsAlpine Investments: no : no Keck Keck for for servicesservices

Alpine Investments Alpine Investments sells commodities sells commodities futures contracts in futures contracts in NetherlandsNetherlands

Type of financial Type of financial investment – very riskyinvestment – very risky

Dutch authorities Dutch authorities prohibit “cold calling”prohibit “cold calling”

Alpine Investments Alpine Investments claims this hinders its claims this hinders its ability to attract clients ability to attract clients in other Member Statesin other Member States

Court in Court in Alpine InvestmentsAlpine Investments Deprives firm of a rapid and direct Deprives firm of a rapid and direct

technique for marketingtechnique for marketing Does not matter that it is the MS of Does not matter that it is the MS of

origin, not of destinationorigin, not of destination Netherlands and UK: is non-Netherlands and UK: is non-

discriminatory, and is a selling discriminatory, and is a selling arrangementarrangement

Keck Keck was about market accesswas about market access Prohibition directly affects access to the Prohibition directly affects access to the

market in services in other MSmarket in services in other MS

NotesNotes

Discrimination not requiredDiscrimination not required First judgment to confirm focus on First judgment to confirm focus on

market access, after market access, after KeckKeck Selling arrangements reasoning does Selling arrangements reasoning does

not work for servicesnot work for services But there must be a limit: taxes But there must be a limit: taxes

which merely add to cost of providing which merely add to cost of providing services are not caughtservices are not caught

Commission v ItalyCommission v Italy

Prohibition motor Prohibition motor insurers to reject a insurers to reject a clientclient

Also premiums Also premiums regulatedregulated

Indistinctly Indistinctly applicableapplicable

Restriction?Restriction?

Court in Court in Commission v ItalyCommission v Italy

““prohibit, impede, make less prohibit, impede, make less attractive”attractive”

Fact that other MS have less restrictive Fact that other MS have less restrictive rules: not relevantrules: not relevant

Affects access to the market for Affects access to the market for undertakings from other MSundertakings from other MS

Substantial interference in freedom to Substantial interference in freedom to contractcontract

Therefore a restrictionTherefore a restriction

NotesNotes

Central notion of market accessCentral notion of market access Contrast a mere tax with the Italian Contrast a mere tax with the Italian

contract requirement: much more contract requirement: much more intrusive for insurance companies intrusive for insurance companies from other MSfrom other MS

Goes to the heart of the freedom to Goes to the heart of the freedom to provide services: is a freedom to provide services: is a freedom to contractcontract

Exceptions and justificationsExceptions and justifications Art 52: public policy, public security, Art 52: public policy, public security,

public healthpublic health To add: imperative or overriding To add: imperative or overriding

requirements in the public interest (= requirements in the public interest (= mandatory requirements of mandatory requirements of Cassis de Cassis de DijonDijon))

ProportionalityProportionality suitable/appropriatesuitable/appropriate necessarynecessary non-discriminatorynon-discriminatory

Human rights and exceptionsHuman rights and exceptions

Human rights protected as general Human rights protected as general principles EU law and under EU principles EU law and under EU CharterCharter

Can be relied upon in the context of Can be relied upon in the context of internal market freedomsinternal market freedoms

What with conflict? Which rights What with conflict? Which rights prevail – internal market or human prevail – internal market or human rights?rights?

Should one ‘balance’ them?Should one ‘balance’ them?

CarpenterCarpenter Case which shows Case which shows

how human rights how human rights need not conflict with need not conflict with fundamental fundamental freedomsfreedoms

Mrs Carpenter is from Mrs Carpenter is from Phillipines & illegally Phillipines & illegally resident in UKresident in UK

Authorities seek to Authorities seek to deport herdeport her

Mr Carpenter provides services in other MSMr Carpenter provides services in other MS Mrs Carpenter helps by looking after the Mrs Carpenter helps by looking after the

childrenchildren Challenge the deportation order as contrary Challenge the deportation order as contrary

to the freedom to provide servicesto the freedom to provide services Court agrees:Court agrees: Deportation is a restriction of Mr Carpenter’s Deportation is a restriction of Mr Carpenter’s

rightsrights Must be seen in the light of the right to family Must be seen in the light of the right to family

lifelife That human right (cf ECHR) leads to a wide That human right (cf ECHR) leads to a wide

conception of a restriction on freedom to conception of a restriction on freedom to provide servicesprovide services

Omega Spielhallen - FactsOmega Spielhallen - Facts

Omega sets up laserdrome in BonnOmega sets up laserdrome in Bonn Obtains franchise from Pulsar (UK Obtains franchise from Pulsar (UK

firm) for installation of laser shooting firm) for installation of laser shooting gamegame

Bonn authorities object: playing at Bonn authorities object: playing at killing is affront to human dignitykilling is affront to human dignity

Human dignity protected under Art 1 Human dignity protected under Art 1 German ConstitutionGerman Constitution

Omega Spielhallen - Omega Spielhallen - CourtCourt Public policy exceptionPublic policy exception Variation between Member States is Variation between Member States is

possible – margin of discretionpossible – margin of discretion Here: fundamental rightHere: fundamental right Protection human dignity compatible Protection human dignity compatible

with EU lawwith EU law Proportionality permits different Proportionality permits different

approachesapproaches Level of protection and necessityLevel of protection and necessity

Viking Line - FactsViking Line - Facts Viking is Finnish ferry Viking is Finnish ferry

operatoroperator Suffers from Estonian Suffers from Estonian

competition: Finnish wages competition: Finnish wages too hightoo high

Seeks to ‘reflag’ the Rosella, Seeks to ‘reflag’ the Rosella, to conclude new collective to conclude new collective agreement with trade unionsagreement with trade unions

Finnish trade union and Finnish trade union and International Transport International Transport Federation take collective Federation take collective actionaction

Viking relies on right of Viking relies on right of establishmentestablishment

Viking Line - HeldViking Line - Held

Trade union collective action not outside Trade union collective action not outside scope Treaty provisions on establishmentscope Treaty provisions on establishment

Right to take collective action is Right to take collective action is fundamental right (see also Charter), but fundamental right (see also Charter), but can be limitedcan be limited

Balance must be struck: collective action Balance must be struck: collective action justified in so far as ‘jobs or conditions of justified in so far as ‘jobs or conditions of employment are jeopardised or under employment are jeopardised or under serious threat’serious threat’

NotesNotes Human rights do not take measures Human rights do not take measures

outside scope internal market freedomsoutside scope internal market freedoms As an exception to free movement, human As an exception to free movement, human

rights can trump fundamental freedomsrights can trump fundamental freedoms No uniform concept of human rights: No uniform concept of human rights:

variation possiblevariation possible Proportionality (balancing): light touchProportionality (balancing): light touch Can human rights really be balanced Can human rights really be balanced

against economic rights?against economic rights?