The CJEU’s reasoning in Keck is unsatisfactory

The CJEU’s reasoning – although not the result – in Keck is unsatisfactory for two reasons. First, it is inappropriate to make rigid distinctions between different categories of rules, and to apply different tests depending on the category to which particular rules belong. Secondly, the exclusion from the scope of Article [34 TFEU] of measures which “affect in the same manner, in law and in fact, the marketing of domestic products and those from other Member States” amounts to introducing, in relation to restrictions on selling arrangements, a test of discrimination. That test, however, seems inappropriate.” Discuss this statement.

Date authored: 03 ^rd September, 2014.

Introduction

The decision of Keck[1] concerns the interpretation of Article 34 of the Treaty on the Functioning of the European Union (TFEU) [2] which is in turn concerned with removing any obstacles to inter-state trade within the EU. In aiming to foster the free movement of goods, this provision shares with numerous others the objective of creating a single, pan-European common market: a foundation of the Community-establishing Treat of Rome 1957 [3]. Keck’s interpretation of Article 34 and its contribution to this wider objective has been the subject of much debate. Here, after a brief summary of the key jurisprudence of the Court of Justice of the European Union (CJEU) leading up to Keck, the specific criticisms made in the given statement – regarding the “rigid distinctions” and “test of discrimination…in relation to restrictions on selling arrangements” to which Keck gave rise – will be discussed. It shall be seen that while both criticisms hold water, they can and have also been countered on various levels, with the conclusion that Keck in fact had an overall positive influence on the law within the area.

Summary of Article 34 jurisprudence leading to Keck

As mentioned above, Article 34’s direct purpose is to foster the free movement of goods by removing any obstacles to inter-state trade, reading: “Quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between Member States”. Although the concept of quantitative restrictions is not defined, here it simply means a limitation on the number of goods that can be imported by member states. As regards “measures having an equivalent effect” to quantitative restrictions on imports, again there is no formal definition, however in Dassonville the CJEU propounded a formula widely used since, that all rules within the EU “ capable of hindering, directly or indirectly, actually or potentially, intra-Community trade are to be considered as measures having an effect equivalent to a quantitative restriction” .[4] Ultimately, Dassonville paved the way for the landmark case of Cassis de Dijon [5] which confirmed that as well as discriminatory measures, Article 34 also captures non-discriminatory measures. The rationale given by the court for expanding Article 34’s scope was that of “disparities between the national laws” of member states. [6] They reasoned that where imported products had to comply with regulations in both their home state and the state to which they exported this represented a disadvantage amounting to an obstruction to inter-state trade. Practically speaking, this distinction meant that regulations which required goods to be altered at the production or designing stage would normally be considered ‘dual burden rules’ whereas regulations concerning how the goods are sold would generally be ‘equal burden rules’, and Cassis suggested that only the latter would be excluded from the scope of Article 34.

Following Cassis, a number of issues came to the court, and while the CJEU generally adhered to the Cassis analysis as understood above [7], in several cases it did not.[8] One important example of the latter is the case of Torfaen Borough Council, [9] where the CJEU held that rules restricting shops from opening on Sunday could potentially be prohibited under Article 34, even though such a measure would clearly be an equal burden rule. Due to this such cases, and ultimately the divergence between these decisions and those found on the basis of the dual/equal burden distinction[10], many became concerned that the breadth of the Cassis test was too wide, that it was being abused, and effectively being utilised simply to protect the commercial freedom of traders rather than preclude obstacles to intra-community trade as such. [11] Keck attempted to rectify[12] this by explicitly propounding a further distinction between so called ‘product rules’ “such as those relating to designation, form, size, weight, composition, presentation, labelling, packaging” which it deemed to be prohibited by Article 34 and “selling arrangements” which it deemed prima facie would not. [13]

The distinction between ‘product rules’ and ‘selling arrangements’