Key point
- A measure adopted under Article 114 must genuinely have as its object the improvement of the conditions for establishment and functioning of the internal market and the distortion of competition it purports to eliminate must be appreciable
Facts
- The Tobacco Advertising Directive was adopted under Article 95 EC (now Article 114 TFEU)
- The preamble stated that the differences in national laws leads to barriers to movement of the products which serve as media
- Article 3(1) of the Directive provided that all forms of advertising and sponsorship of tobacco be banned within the Union
- Germany sought its annulment, it argued that the Directive was not really designed to promote the operation of the internal market but to regulate public health, which is a field of supporting competence under Article 138 TFEU
Outcome
- The Directive was annulled for improper legal bases and breach of principle of conferral under Article 5(2) TEU
Judgment
Scope of Article 95 EC
- Article 95 EC could not be construed as conferring upon the Union legislator a general power to regulate the internal market
- The measures adopted under Article 95 EC must genuinely have as its object the improvement of the conditions for establishment and functioning of the internal market
- The mere finding of disparities between national rules and abstract risk of obstacles to freedoms or distortion of competition could not justify the use of Article 95 EC as legal basis, since that would render judicial review of compliance with the proper legal basis nugatory
- In examining the lawfulness of a directive under Article 95 EC the court is required to determine whether the distortion of competition which the measure purports to eliminate is appreciable. If the smallest distortions suffice the powers of the EC would be unlimited
The directive fell outside Article 114
- The directive prohibited not only media that is tradeable (newspapers and magazines) between countries but also media that is not: hotel and restaurant posters, parasols and ashtrays
- Moreover, it did not ensure that there was free movement for compliant products
- As regards the advertising agencies those in MS with no ban have an advantage, but these advantages are remote and indirect and not appreciable
- The difference between certain regulations may give rise to appreciable distortions, such as advertising at sports events, but this does not justify a blanket ban
- A ban of certain forms of advertising could pass under Article 95 EC, but the court cannot make a partial annulment since that would amount to amendment of the directive, which is a matter for the legislature
Commentary
- If the Directive did not come under 114 it would be annulled since harmonisation of health policy is barred