Has the Recent Case Law of the
ECJ Ushered In a New Era of
Uniformity in Terms of the
Horizontal Direct Effect for the
Four Freedoms?
Thomas Kilner 11745266
thomas.kilner01@gmail.com
European Competition Law and Regulation Ronald Van Ooik
Abstract
The purpose of this research was to form a view as to the relative strength of protection that is available for private parties in relation to their treaty-established freedoms. Given the recent situation with Brexit, as a UK citizen my senses were heightened to the rights contained in the Treaties. As I read into this I noticed the apparent discrepancy between the position of goods and the other freedoms in regards to when private individuals could rely on the free movement provisions against other private individuals. As no apparent justification was initially present, I wanted to investigate to what extent any differences truly existed between the freedoms as I believed this may indeed, also inform me as to why any differences existed. My methodology centred on conducting a thorough analysis of the case law and ths analysis of this case law, forms the central pillar of my essay. A big focus for me was ensuring that my structure allowed for a scientific and comprehensive comparison of the position in goods and the remaining freedoms. This required, firstly, to analyse the remaining freedoms in isolation before conduction a section that aimed to conclude on their position in totality and allow me to provide a comprehensive comparison against goods. Further, when analysing goods I made sure to break the analysis out beyond the widely recognised art. 34 to other goods related articles such as art. 30 to ensure the evaluation maintained integrity. Beyond this I consulted various academic articles to make sure I was aware of different
interpretations and able to more effectively link the different areas of the thesis to my overall conclusion.
After evaluating the positions, it becomes clear that there are differences in the level of protection available between the different freedoms. Even after evaluation the true extent of those differences is not entirely clear, this can be attributed to the uncertainty around the lead case in goods, Fra.bo, where it is arguable that the extended protection by the Court
represents Vertical Direct Effect rather than Horizontal Direct Effect. However, it is clear in either circumstance that the emphasis put on effect in the realm of goods leaves the
applicability of Horizontal Direct Effect in an undoubtable deficiency to that of workers. When comparing against the oft-coupled pair of establishment and services, more debate can be had to the comparative level of protection
The conclusion aims to identify possible reasons as to why this may be the case and indeed whether this is acceptable. This section considers factors beyond the treaty that are in play and aims and further considers how these facts may change and influence the decision of Court, allowing me to hypothesise the potential direction of the law in future cases.
Table of Contents
1. Introduction
2. Chapter 1 | What is the Position of HDE for the Freedoms of Services, Workers and Establishment
2.1. Introduction to Chapter 1
2.1.What is the Position of HDE for the Free Movement of Services?
2.2.What is the Position of HDE for the Free Movement of Workers?
2.3.What is the Position of HDE for Free Movement of Establishment?
2.4.Chapter 1 Conclusion
3. Chapter 2 | What is the Position of HDE for the Free Movement of Goods
3.1. Introduction to Chapter 2
3.1.What is the Position of HDE for the art.30 TFEU
3.2.What is the Position of HDE for art.110 TFEU
3.3.What is the Position of HDE for art.34 TFEU
3.4.What is the position of HDE for art.35 TFEU
3.5.Chapter 2 Conclusion
4. Comparison between Chapter 2 and Chapter 3
1. Introduction
Among the ever increasing inter-connectivity of the European Union there is a seemingly endless movement of goods between Member States (herein MSs). Each day millions of euros worth of goods are transported over borders, connecting suppliers and producers with potential customers from across the 28 MSs. Such patterns of trade are propped up by the established principle of free movement. This alongside, the sister freedoms of service, persons / workers, establishment and capital is enshrined in the Treaties. However, even though some may affirm goods the most important freedom for the commencement of
everyday life in the Union, there is an arguable disparity between extent of the rights to freely move goods and the remaining freedoms: namely that disparity in terms of the extent of Horizontal Direct Effect (herein HDE).
Until recently, it is arguable that barriers could be implemented to trading goods across borders that one could not rely on the free movement of goods (herein fmog) to overcome. The implications are significant when one considers the totality of situations which may be affected by this. For example, upon receiving a certification in their home country, a trader of Chlorine Solution, used in the sanitation of pools, may legitimately wish to expand into Europe and compete with incumbents on quality, price or branding. In theory such an expansion is justified in law, by the principle of fmog.
Yet, such efforts may be subverted. Say in MS X, a private association produced guidelines for Chlorine safety, which despite their lack of official status, may be the go-to standard for owners of swimming pools. Accordingly, an unjustified lack of certification from such a body would severely hamper the producer’s ability to trade across borders. Should the certification body be public in nature, a simple redress would be available through well-established notion of Vertical Direct Effect (herein VDE), however, given the private nature of the certification body, the true extent of protection under the fmog, and indeed the
comparable position as to the other freedoms, this requires a closer inspection.
This potential discrepancy led to this work that looks to answer the question:
To what extent can the case law for the free movement of goods be said to have aligned the position regarding Horizontal Direct Effect between free movement of goods and the remaining freedoms?
In doing so the work will follow a defined structure that aims to provide a clear assessment of the case law on HDE that has been laid down in respect of firstly, the freedoms of services, workers and establishment, before secondly moving on to consider the position of HDE of the freedom of goods. The first of these chapters will aim to provide a summary of the different freedoms in isolation. Rather than following a wide chronological order which focuses on the development of free movement provisions as a whole, this Chapter will provide summaries of the other freedoms individually, before summarising the collective position in the conclusion of this Chapter. The First Chapter therefore will be split into 4 main sections:
a) What is the position of HDE for the Free Movement of Services? b) What is the position of HDE for the Free Movement of Workers? c) What is the position of HDE for the Free Movement of Establishment? d) Conclusion
Next, the study will aim to break down the situation so far for the fmog. Being conscious of the fact that art. 34 is the protagonist but not only player in this story, this section will again aim to provide an in-depth and defined breakdown of the differing areas of the fmog, namely:
a) What is the position of HDE for Article 30 b) What is the position of HDE for Article 110 c) What is the position of HDE for Article 34 d) What is the position of HDE for Article 35
This should provide a sound basis for the third and final chapter that will provide a
comprehensive comparison the position of HDE for the fmog and the remaining Freedoms. Such comparison will build on the findings already provided in the first two chapters, as well as introducing theory and commentary to create a detailed and considered answer to the initial question.
Chapter 1: What is the Position of HDE for the Freedoms of Services, Workers and Establishment?
What is the Position of HDE for the Freedoms of Services, Workers and Establishment?
The case law for the remaining freedoms flows from the keystone case in this area, Walrave. While the jurisprudence in these areas rarely separates the freedoms of Services, Workers and Establishment, such a separation is essential here. Despite this separation, one must recognise that as most case law flows out of Walrave, these decisions building on similar themes. Regardless, this flow is not always without deviation and as will come to light, some later cases such as developed the direction of the law significantly. When tackling the respective freedoms, individually and in totality, the evaluation of HDE will consider that HDE is not discrete, and that, in reality, shades of HDE exist. This ranges from what can be termed purely HDE, representing a situation in which an entirely private party brings a case against another private party. Further, the case law tackles situations in which the facts of the case involve public elements despite the parties themselves being private.
a) What is the Position of HDE for the Free Movement of Services
Two leading cases cover the ground for HDE in terms of services. When the first case was brought in the mid-70s, it was ‘first time dealt with the question to what extent the
aforementioned provision can be invoked directly in dispute between private parties’1.
Effectively, Walrave & Koch2 opened the floodgates for private parties to rely on the free movement laws against other private parties under European law.
As would become somewhat of a regular occurrence, the influential decision took place in the realm of sporting professionals. The case concerned the fate of two Dutch nationals who acted as professional pacers in track cycling competitions. Their role was to drive in front of the cyclist, providing a slip stream in which the cyclists could reach the high speeds required, an essential element of the races in which they participated. These races were typically organised through respective national cycling associations via the centralised body of Union Cycliste International, who governed international cycling.
1 Merjavá, V. (2019). Horizontal Direct Effect Of The Treaty Freedoms. Diploma. Charles University Prague, pp. 49 2 Case C-36/74 Walrave and Koch v Union cycliste internationale, EU:C:1974:140
The contention arose when the UCI introduced a rule that both pacer and cyclist must have the same nationality. Walrave & Koch, despite their Dutch nationality, usually rode in front of Spanish competitors. As such, they considered the introduction of this rule as a threat to their livelihood or in any case a serious reduction in the size of the market in which they could sell their skills; thus they reached out to apply for a declaratory judgment stating that the rule introduced by the Union Cycliste Internationale was voided on the grounds of its incompatibility with EEC, now EU, law. Specifically, they asserted that the rule infringed both the freedoms of movement of workers (art. 48 EC, now art. 45 TFEU) and the key article here; the freedom of movement of services (art. 59 EC, now art. 56 TFEU).
This brought the ECJ into the fray to decide on whether the articles in question must be interpreted in such a way as to validate the concerns of Walrave & Koch as to the legality of the ruling requiring a uniformity in nationality between cyclist and pacer. The two
aforementioned articles, 48 and 59, alongside art. 7 (now art. 18 TFEU), that prohibited nationality-based discrimination, would undoubtedly be enforceable, had the rule been enacted by the member state itself, on the grounds of VDE. The Court took this chance to extend protection and introduce HDE to the realm of services.
The ECJ explained that the prohibition of discrimination ‘extends likewise to rules of any other nature aimed at regulating in a collective manner gainful employment and the provision of services’3. The reasoning highlighted the ability for the fundamental objectives of the
Community to be ‘compromised’4 in such a circumstance. This would occur if the ‘abolition of barriers of national origin could be neutralised by obstacles resulting from the exercise of their legal autonomy by associations or organisations which do not come under public law’5, since labelled the ‘effet utile argument’6. Building on this, the Court highlighted that should
such a path not be followed, it would open up opportunity for ‘inequality’7 in the application
of the laws between MSs. This occurred as the source of working conditions varied from state to state; in some they were governed by ‘means of provisions laid down by law or
3 ibid., [4] 4 ibid., [18] 5 ibid., [18]
6 S. Van den bogaert, Horizontality: The Court Attacks? in C. BARNARD, J. SCOTT, The Law of the Single European
Market, 1st ed. (2002), pp. 139-143.
regulations’8 and in others by ‘agreements or acts concluded by private persons’9. The route
taken by the court avoided this potential complication and ensured that the significant amounts of economic activity that were carried out in the private sector remained governed by directly effective EEC law. Furthermore, the ECJ noted an argument on the basis of general wording: specifically that art. 48 EC did not distinguish the source of restrictions and that the abolition of any discrimination based on nationality as regards gainful employment, extends likewise to agreements and rules which do not emanate from public authorities”10.
Almost twenty five years later, the court would strengthen its commitment to HDE for the free movement of services in Laval11. Laval is perhaps best known among academics for its development of the law in terms of employment rights and its acceptance of the right to take collective action. However, here, its significance is grounded in its acceptance of HDE in a situation where the facts went beyond those observed in the previous case law. Namely, the nature of the dispute as not only horizontal but between trade unions, ‘which are evidently not part of the state apparatus’12, and companies operating in the private sector. This was a
clear distinction from Walrave and its descendants which focused on facts that could all be placed in a category that has been termed as ‘nongovernmental regulatory bodies’13. Such
bodies typically had the traits of having both the official and de facto control in a certain area of society, usually sports, but, importantly, being a distinct entity to that of the state and therefore, outside the realm of public governance.
The case at hand concerned a Latvian company, Baltic, who were granted a contract from the Swedish Government to renovate schools. Subsequently the company posted Latvian workers to the job, who were remunerated at a much lower rate than comparable Swedish workers. The Building Workers Union in Sweden asked that Laval Ltd sign its collective agreement, which would have imposed higher requirements than contained in the so-called Posted
8 ibid., [19] 9 ibid., [19] 10 ibid., [21]
11 Case C-341/05, Laval un Partneri Ltd v. Svenska Byggandsarbetareförbundet et al., [2007] ECR I-11767
12 Dashwood A, “Viking and Laval: Issues of Horizontal Direct Effect” (2008) 10 Cambridge Yearbook of European Legal
Studies 525
Workers Directive, alongside a further clause for setting pay that would not allow Laval to determine in advance what the pay would be. Unfortunately, negotiations ultimately failed.
Laval’s refusal to sign the agreement resulted in a strike among the Swedish Union as to facilitate a blockade on Laval’s sites. This blockade was supported through solidarity actions by the electricians union. This resulted in Laval being unable to do business in Sweden and led them to claim an infringement of its right to free movement of services under, what is now, art. 56 TFEU. Laval alleged that such an infringement materialised by means of the trade union’s actioning of the blockade being contrary to this fundamental freedom and demanded a declaration of illegality, alongside compensation.
Before turning to the judgment of the court itself, it first pays to have recourse to the Opinion laid down by AG Mengozzi14. Mengozzi’s analysis begins by citing the established Walrave case law; namely the neutralisation of the effectiveness of the free movement provisions and the increased propensity for inequality across the different MSs of the union. Subsequently, he goes on to acknowledged the nature of Laval as a case that could not be labelled as involving non-governmental rule-making bodies, ‘since it is not about the legality of
regulations drawn up by such a body, but about the right of trade unions to resort to collective action against a foreign service provider, in order to compel it to sign a Swedish collective agreement.’15.
Despite this, Mengozzi assertively applies analogical reasoning that shows, in my view, a convincing argument that Laval fits ‘snugly’16 into the Walrave case line. Firstly, he notes
that the Swedish model of collective employment ‘grants considerable autonomy to both sides of the industry, guided by the principle that such parties are responsible for and regulate their own conduct’17. Next, Mengozzi references the power that trade unions have to ‘extend
the scope of collective agreements adopted in Sweden to employers not affiliated to an employer’s organisation in that Member State, including the power to take collective action if necessary’18. The crux of the reasoning was that such powers and their execution have a
collective effect on the Swedish employment market. This collective action ‘ultimately
14 Laval (n 12)
15 Dashwood (n 15), p. 534. 16 ibid., p. 535
17 Case C-341/05, Laval un Partneri Ltd v. Svenska Byggandsarbetareförbundet et al., [2007] ECR I-11767, Opinion of
Advocate General Mengozzi
represents a manifestation of the exercise of trade unions on their legal autonomy with the aim of regulating the provision of services’19; thus Mengozzi ‘convincingly established’20 a
clear analogy with Walrave by breaking down the way in which industrial relations are organised in Sweden: ‘recourse to collective action by trade unions formed an integral part of the process of regulating the provision of services in that country’21. The detail in the
reasoning found above arguably superseded that in the actual judgment of the ECJ who largely followed ‘the same line of argumentation in its judgment’22, adding only that the
actions of trade unions, such as that in Laval, made it more difficult for establishments to exercise their right to provide services throughout the union.
Here, it seems pertinent to refer back to the shades of HDE referenced in the introduction to this Chapter. One must recognise that although HDE has clearly been established in relation to the free movement of services, the extent of HDE that has been established falls short of what can be described as a pure form of HDE. While the case of Laval clearly builds on the availability and presence of HDE in this area, it would be foolish to overlook that the
situation in Laval, while between two private parties, had definite public characteristics.
Specifically, it is role of the trade union and their actions in this factual situation which creates the obligation for the court to reach a finding of HDE. Their presence, and
importantly, their ability to impact a situation through their scale, organisation and influence on public life is ultimately what encouraged the court to find that HDE should be established in this circumstance. It seems clear then, that HDE for the freedom of services falls short of what one could call pure. Despite this, the case of Laval still creates a clear development in the significance of HDE by establishing its presence in situations beyond those grouped as non-governmental regulatory bodies.
b) What is the Position of HDE for the free movement of Workers
Once again the sporting world provided the setting for the development of the law around the HDE of the fundamental freedoms, it was the case of Bosman that started the ball rolling for the free movement of workers. The case concerned Jean-Marc Bosman who, at the expiration
19 ibid., [160]
20 Dashwood (n15), p.535
21 C-438/05 International Transport Workers’ Federation and Finnish Seamen’s Union v Viking Line ABP and OÜ Viking
Line Eesti [2007] ECR I-10779
of his contract, desired to move from his current club RFC Liege, in Belgium, to play for Dunkerque in France. However, Liege requested a transfer fee for the move on the basis of the cross-border transfer ruling; this ruling allowed Liege to demand a fee for such move if it involved moving to a club outside of Belgium, however, Dunkerque refused to make the payment. The consequence of the Bosman case permeates beyond the realm of the law itself, with Bosman still a household name across Europe for its significance in dealing with the so-called nationality clauses in professional football; the judgment here would go on to open up the market for the culture of commerciality in football, and particularly, intra-union transfers, that exists so richly today.
Bosman subsequently brought a claim against Liege, the Belgian football body and European football authorities. He asserted that the actions of Liege and the respective football
authorities breached his right to move freely for employment in the Union. Bosman’s point of contention was that the fee demanded by Liege was only applied in the situation in which a player wished to move across borders and so formed a barrier as to his ability to move freely across borders, which he believed was fundamentally protected within the Union.
The Court initially confirmed, with reference to Walrave, that a sporting event only came into their jurisdiction when it constituted an economic activity. Having dealt with this issue, the Court again relied on Walrave in asserting that ‘Article 48 [EC] not only applies to the action of public authorities but extends also to rules of any other nature aimed at regulating gainful employment in a collective manner’23. Their justification again cited Walrave, highlighting
that the abolition between MS of obstacles to the free movement of persons would be ‘compromised if the abolition of State barriers could be neutralised by obstacles resulting from the exercise of their legal autonomy by associations or organisations not governed by public law’24.
The ECJ further considered the potential mire that would occur in the Union through the inconsistency which would be introduced by ‘working conditions in the different MSs’ being governed sometimes by ‘provisions laid down by law or regulation’ and other times by ‘agreements and other acts concluded or adopted by private persons’25. Further, it highlighted
that the facts of the case presented an immediate example of where such a risk would be
23 Case C-415/93, Union Royale Belge des Sociétés de Football Association ASBL v. Jean-Marc Bosman and others, [1995]
ECR I-4921
24ibid., [82] 25 ibid., [84]
increased, since the transfer rules in questions varied in both source and substance across the different MSs.26 Therefore the court confidently extended the reasoning in Walrave to the realm of the free movement of workers in this mostly analogous situation. Indeed, the fallout from this decision was probably for more significant in the footballing, rather than legal, sphere. Indeed, the court doubled down on their protection as they recognised the defense’s argument that their freedom of association did exist, however, only when it did not infringe on the free movement rules.
The decision in Bosman was later built upon by the ECJ who strengthened the de facto protection available for workers in the Union through the cases of Angonese27 and Racanelli28. Firstly, Racanelli, a case centered on an Italian researcher in Germany who wanted equal status to his German colleagues, recognised that it was in the public interest, and thus required, to observe the principle of non-discrimination when it comes to a question of nationality. In Angonese, the plaintiff spoke German as his native language but was in fact an Italian citizen. Angonese wished to enter a competition as to win a position of employment with a bank based in Bolsano, Italy. In light of a collective agreement for savings banks, that was in place at the time, the bank laid down specific requirements and conditions for the recruitment of candidates.
The bank required that to enter the competition a candidate should be bilingual and
furthermore should produce an official certificate of bilingualism in Italian and German, and that it should be produced by the public authorities in Bolzano. The issue for Angonese, however, was that he was studying in Austria at the time and thus the procurement of the required certificate was near impossible in practice. Undeterred by his lack of certificate, Angonese applied, citing various university courses studied in multiple languages alongside his professional experience as a translator. The bank were not swayed and refused entry to the competition; this led Angonese to bring a claim to the Italian court on the grounds that while the requirement for bilingualism was perfectly acceptable, the necessity of the certificate produced in Bolzano infringed his rights under Union law, specifically, art. 45 TFEU.
The ECJ was faced with a decision with respect to the principle of non-discrimination based on nationality surrounding employment, remuneration and other employment related
26 ibid., [82], [84]
27 Case C-281/98, Angonese v. Casa di Risparmio di Bolzano SpA, [2000] ECR I-04139 28 Case C-94/07 Raccanelli [2008] ECR I-05939
conditions29. Firstly, the court dismissed both the concerns of AG Fennelly and the Commision that ‘the case did not have sufficient connection to EU law to trigger the application of the Treaty’30. Subsequently, the court unsurprisingly came to the conclusion
that discrimination was indeed present in this case citing ‘exactly the same legal analysis as it did in Walrave’31. Next, they ‘declared unequivocally’32 that the private nature of the bank’s
requirements was irrelevant in determining whether there was a breach of EU law; indeed ‘the prohibition of discrimination on grounds of nationality laid down in art. 48 of the Treaty must be regarded as applying to private persons as well’33. The court here provided an
unequivocal and ardent assertion of the applicability of art. 45 to purely private situations, adding further texture to our understanding of HDE for art. 45 and clearly extending the application of HDE beyond the previously established case law in cases ‘invoked against collective regulators’34, thus accepting, what may be called, pure or real HDE of art. 45.
c) What is the position of HDE for the free movement of Establishment
The leading case on HDE under art. 49 TFEU concerned shipping company Viking Line ABP35. Viking operated The Rosella, a ship that ran commercially between Estonia and Finland. The dispute arose in the context of the flag flown by the ship. In shipping, the flagging of a ship is relevant to the nationals who work upon it. Viking wanted to operate under the flag of Estonia, rather than Finland, so that it could employ Estonian workers on lower wages. In response to this, the Finnish Seaman’s Union (FSU) threatened collective action to stop the proposed re-flagging. The issue was complicated by the role of the International Transport Workers Federation (ITWF) who opposed the changing of flags on the basis of convenience, a term that for the ITWF indicated a changing of flags on a non-justified basis. The FSU asked its members not to start negotiations with Viking unless they were flying the flag of Finland.
29 Angonese (n 29), [29] 30 Merjavá ( n 1), pp. 59 31 ibid., pp. 79
32 Mirjam de Mol, 'The Novel Approach Of The CJEU On The Horizontal Direct Effect Of The EU Principle Of
Non-Discrimination: (Unbridled) Expansionism Of EU Law?' (2011) 18 Maastricht Journal of European and Comparative Law
33 Angonese (n 29), [36] 34 Merjavá, (n 1), pp. 39 35 Viking (n 22)
Viking brought the case to court as they believed this stipulation for the flying of a Finnish flag contravened their right to establish business freely across the Union. As the case
involved a trade union, the court was faced with the question: could the right of establishment be relied on in this private situation? The ECJ, echoing AG Mendozzi’s opinion in Laval, connected the facts of this case to the facts found in the cases concerning non-governmental regulatory bodies. Indeed, the court ‘rather repeated its effet utile argument from the
judgments Walrave and Koch, Bosman and Angonese’36 in stating that ‘not to apply the
Treaty freedoms to private organisations would compromise the objective of the creation of the internal market.’37
The trade union’s action against Viking was a keystone constituent of the collective
regulation of an economic activity and finding HDE was the natural conclusion. Indeed, the ECJ strengthened this sentiment as they took the time to declare clearly that an alternative interpretation, as suggested by ITWF in the case, that relying on art. 49 required some form of ‘public organisation or to associations exercising a regulatory task and having quasi-legislative powers’38, was not required. Instead, the course of interpretation was set fair and
HDE was clearly established for the freedom of establishment. Subsequently, it was clear that art. 49 TFEU can be invoked directly against trade unions by any other party, but it is not apparent which particular collective action is caught by this ruling and which is not’39. Yet despite this uncertainty, the court chose to reject the ‘provocative’40 opinion of AG Maduro who attempted to define a test that looked to the restrictiveness of potential actions as to decide whether particular facts should activate the extended protection of HDE for individuals. Maduro believed that HDE should follow logically from the Treaty where it would be necessary in order to enable market participants throughout the community to have equal opportunities to gain access to any part of the market41.
Finally, circling back as to consider the purity of HDE under art. 49. The cases of Viking and Laval are often paired and, as under art. 56, it seems evident that the extent of HDE that has been recognised by the Court falls short of the understanding of pure HDE that was earlier
36 Merjavá ( n 1), pp. 73 37 Ibid., pp. 73
38 Viking (n 22), [64] 39 Ibid., pp. 74
40 Barnard C, The Substanive Law of the EU, 4th ed. (2013), pp. 3-6
41 C-438/05 International Transport Workers’ Federation and Finnish Seamen’s Union v Viking Line ABP and OÜ Viking
established. Again, it would be foolish to overlook the significance of Viking and its extension beyond non-governmental regulatory bodies that the judgment represents. Yet, while this judgment offers a much broader level of protection in private situations, it is impossible to convincingly dispute that the form of HDE is undoubtedly limited and does not exist between parties with truly private characteristics.
d) Conclusion
Examining the above freedoms in their totality shows that, in both the Court’s conclusion and reasoning, there is little deviation in cases which contain comparable factual situations. The original bases on which the Walrave judgment was made have provided an established flow of case law. The two leading arguments presented, namely, the potential for the abolition of barriers, and further, the potential for inequality across the MSs by reason of the
differentiation in the source of regulation in the different MSs, can therefore be said to have stood the test of time. This, in my view, is unsurprising given the clear and direct language which was laid down by the Court who left little room for confusion as to their interpretation. Further, beyond the logic, this reasoning was clearly grounded in rational thinking,
considering both the original purpose behind the creation of the treaties and the practical effects that would result for any decision that was reached.
Alongside this strength of reasoning, the similarity between some of the cases arguably allowed the subsequent decisions to fall naturally into place. Indeed, the facts of Bosman showed little variation from Walrave outside of the fact that it concerned a different freedom. Therefore, there could be little surprise that the court would extend this reasoning from one the realm of freedom to another. Such similarities are clearly reflected in the closely echoed judgment of Bosman which considers the potential abolition of barriers the most convincing factor in finding HDE. Bosman did, however, allow the court to ‘broaden the substantive scope of the free movement of workers in that for the first time genuinely non-discriminatory measures of private entities were brought under its scrutiny’42. The landmark case of Walrave
was markedly different as it ‘regarded measures that were obviously discriminatory on the grounds of nationality’43. Therefore a broadening of the scope protection must be recognised
as subsequent to Bosman it was clear that the free movement of workers could be invoked not
42 Merjavá ( n 1), pp.55 43 ibid., pp. 51
only against ‘evidently discriminatory measures’44 but also against those which ‘merely
affected access to the market of another Member State, both vertically and horizontally’45.
It is arguable to suggest that between the potential for a circumvention of the abolition of barriers and inequality in enforcement, the abolition of barriers argument has greater legitimacy. One can posit this on the grounds that this objection is founded on the foundational natures of free movement in Union law. The alternative justification, the potential for inequality, harks to the uniform application and the necessity for applying law evenly across the Union. This is, by nature, reactive to the practicalities of the potential situation; this reactivity, while itself strong reasoning, is arguably slightly inferior to that of the abolition of barriers. Such argumentation elevates the latter on the basis that the reasoning itself is based in the very purpose of Union law, which is more foundational in its nature and thus assumes its position of superior legitimacy.
The case of Angonese, while indicative of the strength of protection offered under art. 45, inherently raises questions as to the breadth of interpretation for the other two freedoms. One can clearly distinguish the strength of protection that is available under the freedom of workers from that of services and establishment. While since the court’s judgment ‘legal academia accepts that Art 45 is horizontally directly effective’46, this only works to highlight the relative uncertainty in play for both the freedom of services and establishment for which it has been argued ‘is to a large extent unresolved’47. Referring to earlier terminology, we see that for Angonese there is a purity, manifested in the lack of requirement for a public
element, for the protection of HDE to be established by the court.
Thus, Angonese, provided a significant step-change in the development of HDE, since this was the first case in which the situation concerned protagonists who did not exercise the ‘same role in practice as MSs’48. In light of the above, the court’s unequivocal declaration
that the private nature of the bank was not a relevant factor is especially significant. It provides a very strong indication that HDE is fully extended for cases falling under art. 45 and provides further justification to describe this as pure HDE.
44 ibid., pp. 56 45 ibid., pp. 56 46 ibid., pp 62 47 ibid., pp 64
48 Öberg, J (2007). The Doctrine of Horizontal Direct Effect In EC Law and the Case of Angonese. SSRN Electronic
The discrepancy between the freedom of workers, following Angonese, and the freedoms of services and establishment, has been justified by AG Maduro and others on the basis that ‘workers cannot change their professional qualifications or find alternative employment’49 as
easily as traders can alter products and their marketing: such justification can be questioned. It is arguably unfair to suggest that a business forced to alter products and related marketing, at a potentially debilitating cost, should be alleviated of the protection of EU law on the basis it is relatively easier than changes an individual would have to make. Whether the apparent greater protection for workers can be legitimately justified, subsequent to Angonese, it seems difficult to ignore its existence. Looking ahead, should the right facts materialise as to bring the question of HDE between purely private parties in the context of the freedom of services and enterprise, the arguable fragility of arguments put forward by the likes of Maduro to justify the differential in protection, may well see any ‘relative uncertainty’50 eradicated; one
could reasonably expect the Court, motivated by the equal formation of the internal market, to make a decision in line with Angonese.
Despite the texture added by Angonese, one can argue that Viking & Laval were the most influential cases in developing our understanding of HDE for the free movement provisions in this Chapter. That is because, together, they ushered in a new type of case that helped to further illuminate the ECJ’s attitude to the extent of protection that would be afforded to private parties through HDE. The willingness of the court to find analogous qualities between the trade union and nongovernmental regulatory bodies cases is indicative of their intention to interpret the law in a protective manner.
When evaluating these decisions, the close, almost parallel, situational context of services and establishment allows us to conflate the two. Therefore, while the element in question was delivered in the realm of establishment in the Viking case, the reasoning can be seen to apply equally to the former. Indeed, in Viking, the ECJ went further than necessary in dismissing the argumentation of one party as they declared that there was not a necessity for a private party to be in essence quasi-legislative before the protection of HDE is afforded.
Significantly, the extra attention paid to eliminate any area for doubt or questioning of the extension of HDE is important of a reflection of the strong sentiment to maximise the
protection available under establishment and therefore, by analogy, services. This is a marked
49 Case C-281/98, Angonese v. Casa di Risparmio di Bolzano SpA, [2000] ECR I-04139, Opinion of AG Maduro [49] 50 Merjavá, (n 1), pp. 71
and distinct contrast from the undertones that are present in the considered and delicate extension we observe in the realm of goods and its lead case Fra.bo.
In these cases, the collective organisations responsible for the disruptive actions are ‘clearly outside the apparatus of the state’51. That argument is strongly agreeable, the Unions are by
nature there to protect the interests of private individuals in the respective industries. Indeed, this point is highlighted when thinking about the nature of unions and trade collectives. These bodies were traditionally formed to protect workers and are arguably, not only outside of the state apparatus, but further, inherently in opposition to the state. While such an opposition may not be direct, their desire to essentially protect workers’ rights and opportunities in the courts sees them set up against large business and the state itself who naturally walk hand in hand. The aforementioned leads to the recognition that these cases are in the traditional sense private. However, it would be foolish to overlook the demonstrably public elements that exist in these cases. Just as the protection of private individuals is inherently private, the scale and potential impact of their movements as a whole brings an undeniable public element.
Therefore, the ECJ’s stretching of interpretation to ensure the protection of HDE in this circumstance appears both pragmatic and logical. As Dashwood suggests these decisions ‘are in line with the case law that descends from Walrave’52. Indeed, to create space for
manipulation and deviation from the free movement rules would damage the integrity of the provisions originally laid down in the Treaty. Viking & Laval have been questioned,
however, such questions ignore the ‘acknowledgement that if the Court had proceeded any differently, the framework of free movement law would have been, in consequence, either dis-applied or fundamentally altered.’53
A pressing question surrounding this case law may well be the rather curt reasoning laid down by the court in explaining this analogy which falls short of the detailed explanation that was laid down by AG Mendozzi in his opinion in Laval. However, such arguably loose explanation is mitigated by the later ardent rejection of the suggestion that for HDE to be applied there must be a quasi-public element to the organisation involved: such rejection epitomised the Court’s desire to interpret the law in a manner that promotes the rights of
51 Dashwood (n 15), p. 534. 52 Dashwood (n 15), p.539 53 Ibid., p. 539
private parties in the Union against other private parties, to a position that is equal to the protection that is undoubtedly afforded against public parties. A perhaps bigger issue arises when one considers the potential issues that may arise in cases involving actions by non-affiliated groups. Barnard notes that ‘massive strikes of individuals’54 would cause similar
disruption to that as organised by a trade union; however without an effective test as to decide if the court should activate the extended protection of HDE for individuals, there now exists considerable uncertainty as to which direction a decision would take. Perhaps then, while arguably poorly formulated, the attempt of Maduro to define such a test deserved more attention from the Court. Had they been able to amend the test to a workable point, there would be considerably more certainty here.
Chapter 2: What is the Position of HDE for Goods?
The most distinctive article in relation to the fmog is undoubtedly that of art. 34 TFEU. This article acts a keystone in the protection offered in relation to the movement of goods within the Union. However, it is necessary to form a broader view and look beyond purely the vista created by art. 34 as we consider the totality of protection offered in relation to the fmog. Therefore, while the majority of the relevant case law is covered by art. 34, one must extend the evaluation to other relevant articles, namely: art.30, art. 110 and art. 35.
a) What is the position of HDE for Article 30
Art. 30 is recognised as a ‘fundamentally important provision55’ in relation to the Unions commitment to establishing an internal market. Further, as art. 30 contains the only relevant case law outside of the realm of art. 34 to the evaluation hand, its importance in this context cannot be overlooked. The substance of art. 30 is directed towards the prohibition of customs duties on imports and exports, and charges having equivalent effect, between MSs who are not allowed to impose these duties as goods are traded between one Member State and another. Indeed, the legislation offers a comprehensive level of protection as it makes clear that it prohibits, not only customs duties, but also disallows the legality of measures having equivalent effect.
54 Barnard (n 40), p 5
Therefore, we observe this article is directed towards barriers to the trade of goods that are almost always inherently public in nature. This is because customs duties and measures of equivalent effect are, generally, imposed by the Member state and not by private individuals. It seems logical that by nature these measures should come from a public source, as such there has only been one case in which private parties have successfully relied on art.30. Indeed, it will likely be many more years before we see another one.
The aforementioned case was that of Dubois56, the facts of the case centered around a dispute
between the manager of an international road station, Garonor, and two of its customers Dubois and Cargo over the non-payment by the latter of a contractually stipulated charge known as a ‘taxe de passage’, or transit charge. The station managed by Garonor provided both private and public road transport services. Of particular note is that there is an office at which ‘all the customs clearance operations normally completed at State frontiers can be carried out’57. Dubois and Cargo were forwarding agents recognised as such by the customs agencies. They made arrangements, ‘on their own responsibility and in their own name, for goods to be transported for customers, and they undertake, inter alia, completion of customs formalities’58. Dubois and Cargo had always paid a flat transit charge for every transit which
leaves Garonor’s premises and completes customs clearance.
However, in 1984, they refused to pay this charge on the ground it was to cover costs
incurred by Garonor in building a vehicle park used by customers authorities – since customs authorities had agreed to carry out clearance operations on private premises, Dubois and Cargo no longer saw any basis for the transit charge. Garonor disputed this and eventually the court were asked to decide whether Art 12 applied to a transit charge designed to compensate a private undertaking for bearing the costs arising from the performance of customs duties, when such a charge has not been imposed by the state but arises from an agreement
concluded by a private undertaking.
The ECJ declared that the ‘nature of the measure requiring economic agents to bear part of the operating costs of customs services is immaterial’59. Indeed, whether the pecuniary charge
56 C-16/94 Édouard Dubois & Fils SA and Général Cargo Services SA v Garonor Exploitation SA. [1995], 1995 I-02421 57 Ibid., [4]
58 Ibid., [4] 59 Ibie., [4]
occurs because of a unilateral measure adopted by the authorities or by a series of private contracts, it arises in all cases, directly or indirectly, from the failure of the MS concerned to fulfil its financial obligations under art. 12 of the treaty (now art. 30 TFEU). The decision in Dubois is significant in displaying the Court’s willingness to protect the fmog in the purely private space. Their judgment unequivocally establishes that the private context of the factual situation cannot be used to avail the intended protection envisaged in art. 30. While the lack of reference as to the Walrave case line may dissuade a claim of true HDE, the ability to for private parties to rely on art. 30 to protect themselves against other private parties allows us to observe that, nonetheless, there is an equivalence to HDE in this situation.
b) What is the position of HDE for Article 110
Art. 110 sits alongside art. 30 as a fundamental provision in promoting integration in the Union. Indeed, art. 110 can be considered a sister to that of art. 30. Whereas 30 looks to prohibit customs duties and measures having equivalent effect on goods in the moment they are being imported into the country, art. 110 focuses on situations in which MSs impose, directly or indirectly, on the products of other MSs, any internal taxation which is in excess of that imposed directly or indirectly on similar domestic products.
Therefore, as with what can be considered its sister act, art. 30, art. 110 seemingly exists in purely private-public relationships. One can not immediately, or indeed after further
consideration, envisage a situation which would require the protection of HDE in relation to art. 110. Indeed, there has been no case law brought before the court, under these
circumstances. Therefore, as we look for a situational comparison of the HDE between the fmog and the remaining freedoms, one must move beyond art 110.
c) What is the position of HDE for Article 34?
The established position, up until recently, was quite unequivocal; HDE for the fmog was not a possibility. The strongest authority for this position can be found in the case of Sapod Audic60. The case involved Eco-Emballages, whose purpose was the organisation of systems for the disposal of waste materials and the collection of packaging from the undertakings,
subject to obligations laid down by statute.61 By joint ministerial decision Eco-Emballages was granted the approval to organise the recovery from the waste resulting from the discarding of used packaging from products intended for household consumption62. Subsequently, producers or importers engaged into individual contracts with Eco-Emballages.
Sapod marketed poultry in plastic wrappings and entered into such a contract on standard terms. These terms granted Sapod the right to use the Green Dot logo. This became the point of contention when Sapod refused to pay as they claimed that ‘Decree no 92-377 was a technical regulation which had not been notified to the commission and which therefore could not be relied upon against the Commission’ and as such ‘was a measure having equivalent effect which was incompatible with Article 30 of the Treaty [Now 34 TFEU]’63.
Among a number of questions, the ECJ highlighted that ‘if the general obligation to identify the packaging’ has manifested itself to the form of ‘an obligation on Sapod to mark the packaging’ then such an obligation ‘ arises out of a private contract between the parties to the main proceedings’64. The definitive ruling followed that such a contractual provision cannot
be regarded as a barrier to trade for the purposes of art. 30 of the Treaty since it was not imposed by a MS but agreed between individuals. Disappointingly, providing a succinct breakdown of the logic that led such a direct statement of inaplicability is impossible due to the Court’s failure to provide ‘any further reasoning’65. However, despite this absence, the
mere strength and clarity of their rejection of HDE induced little challenge as the status quo of the legal position surrounding HDE in the realm of the fmog.
Further, beyond this unequivocal rejection present in Sapod, there have been additional cases which arguably suggest a lack of applicability of HDE for art. 34. The two most significant are Spanish Strawberries66 and Schmidberger67; both these cases concerned protests which
61 ibid., [5] 62 ibid., [5] 63 ibid., [17] 64 ibid., [74]
65 van Harten, Herman & Nauta, Thomas. (2013). Towards Horizontal Direct Effect for the Free Movement Of Goods?
Comment on Fra.bo. European law review. 38. 677-694. 66 Case C-265/95, Commission v. France, [1997] ECR I-6959.
affected the movement of goods between MSs. In Spanish Strawberries, French farmers blocked roads as to prevent the import of the Spanish fruit. In Schmidberger an
environmental protest group executed an anti-traffic protest, blocking a major motorway. While in Schmidberger, justifications and the balance of rights were in play, in both cases, the court put forward a similar statement that MSs were obliged to remove the obstacles to trade across border. This resulted from the combination of art. 34 with the obligation of fidelity under art 4(3)68, which aims to ensure the proper functioning of EU law.
At this point, when considering HDE for art. 34, it is possible to read the above cases in diverging directions. On the one hand it could be argued that these decisions worked to suggest HDE should be applicable in the realm of goods. Indeed, these cases both
demonstrated that the court were conceptually happy to identify a form of protection for the fmog in the private realm. Both cases, but especially, Spanish Strawberries, involved a collection of private individuals, the angry French farmers, acting against another group of private individuals, the Spanish exporters. Therefore, one could posit that in logic these judgments exist next door to the possibility of granting HDE to purely private situations in which there is no state involvement. In this sense, they represent a considerable progression from the long-established notion of VDE as they recognise that restrictions may be the result of individuals or groups rather than merely acts caused by the state.
The more obvious reading appears to be that these decisions softened arguments in favour of HDE, that is, because these cases recognised, even highlighted, the state element that was necessary for the court to protect the application of art 34. Further, it was seemingly the scale and organisation of the protests that induced the Courts into deciding in this direction, rather than the pure intention of disruption. If a similarly motivated protest had been held by one individual, and owing to that solidarity, had been ineffective in causing significant disruption, one may struggle to convincingly suggest the Court would have decided the same way: the important element of the decisions being that these aforementioned factors had the effect of creating a situation in which the state should have acted to protect the private individuals. Here then, we can see, that the focus of the court is on the factors that cause an obligation for the state to act. Significantly, the focus is applied here, rather than being inherently on the
68 Consolidated versions of the Treaty on European Union and the Treaty on the Functioning of the European Union (TFEU)
protection of private individuals as a standalone concept. Once fully considered, these cases seemingly add to the strong anti-HDE momentum established by Sapod.
That momentum has more recently been disturbed by the case of Fra.Bo69, brought before the court in 2011. Fra.bo surrounded a legal dispute between the Deutsche Vereinigung des Gas- und Wasserfaches eV (DVGW) and Fra.bo, a manufacturer of copper fittings mostly used in the gas or water supply sector. The DVGW was a non-profit body governed by private law that promoted the gas and water sector in Germany, and in practice, this manifested itself in the drawing up of technical standards. In Fra.bo, standard W 534 was in question, it allowed certification of products that came into contact with drinking water; importantly, such certification was presumed to signify compliance with the recognised rules of technology. Fra.bo applied for such a certification in 1999 and was granted a 5 year licence. However, complaints by third parties led to a reassessment which this time was failed with the
possibility of an alternative positive test report was allowed. The alternative test was carried out by an Italian laboratory but failed as it was not an approved laboratory. Concurrently, the DVGW altered their certification test, introducing a 3000-hour test to the requirements for certification; Fra.bo failed to submit this application or comply with the 3000-hour test. Accordingly, Fra.bo’s certificate for copper fittings was cancelled alongside a further rejection of an extension of their certificate on the ground that compliance certificates could no longer be extended. Fra.bo asserted this was contrary to EU law, they believed the DVGW was bound by the provisions governing the fmog: for Fra.bo the cancellation as well as the rejection of an extension of the certificate was a restriction to its access to the German market.
Initially Fra.bo’s claim was rejected in the local court before a decision in their favour that was later appealed up to the ECJ to answer two main questions. Firstly, is art. 34 to be interpreted as meaning that private law bodies that have been set up ‘for the purpose of drawing up technical standards in a particular field and certifying products on the basis of those technical standards’ should be ‘bound by the aforementioned provisions when drawing up technical standards in the certification process where the national legislature expressly regards the products in respect of which certificates have been issued as lawful, thus making
69 Case C-171/11 Fra.bo SpA v Deutsche Vereinigung des Gas- und Wasserfaches eV (DVGW) —
it at least considerably more difficult in practice to distribute products in respect of which certificates have been issued’70.
The second question relates to the consequences of the answer to the first question: if the answer is in the negative, the referring court asked the Court to assess the interpretation of art. 101 TFEU, the provision which is designed to prohibit cartels, in relation to the activities of a private-law body in the field of drawing up technical standards and certifying products on the basis of those technical standards.
Shadowing other key cases in this evaluation, the opinion of the AG in Fra.bo is of
considerable significance. Indeed, when given the opportunity to comment on the potential applicability of HDE to goods, A.G. Trstenjak herself referred to the ‘extensive assessment of the case law related to the rationale behind the horizontal effects of fundamental freedoms’71.
Her conclusion was quite clearly stated: the certification activities of the DVGW should be caught by the fmog which thus ‘implies, in her view, automatically embracing the principle of horizontal direct effect’72; a position which she reasons on the basis of a convergent
approach of the fundamental freedoms.
For Trstenjak ‘ there are no fundamental objections to the application of the argument developed in case-law on the limited horizontal effect of the freedom of movement for workers, the freedom of establishment and the freedom to provide services to a case such as the present one’73. With undeniable certainty she posits that when the issue involves a
‘private-law association with de facto rule-making competence’ that there is no logical, pertinent or indeed suggestable reason as to why the ‘argument developed by the court regarding the applicability of Articles 45 TFEU, 49 TFEU and 56’ 74should not be extended
to the realm of goods.
Having already displayed clarity in her reasoning and explanation, Trstenjak continued in a similar vein by confirming her conclusion that ‘private law associations which have been established for the purpose of drawing up technical standards in a certain area and of
70 ibid., [16]
71 van Harten et.al. (n 59), p 670
72 Case C-171/11 Fra.bo SpA v Deutsche Vereinigung des Gas- und Wasserfaches eV (DVGW) —
Technisch-Wissenschaftlicher Verein [2012], Opinion of AG Trstenjak [45]
73 ibid., [45] 74 Ibid., [46]
certifying products on the basis of those technical standards’ are bound ‘if the national legislature explicitly regards the products equipped with a certificate of the private-law institution as complying with the law and marketing of products not equipped with such a certificate is therefore virtually impossible in practice.’75
Next it was the turn of the ECJ to lay down its judgment; the court deviated slightly from the path taken by Trstenjak as they firstly consulted the Dassonville formula to conclude that the ‘mere fact an importer might be dissuaded from introducing or marketing’ their product in another state was sufficient to constitute a restriction. 76
The court then set about re-establishing the contentious issue in the case and the factors that played into it. They observed that it was clear and common ground that the DVGW was a private body, not intended for profit and that it had no financial link to the German state, highlighting as they did so, that, although some of the members of the DVGW are public bodies, the German state had no decisive influence over the standardisation or certification remit of the DVGW. With these particular facts agreed by both sides, the true contention in the case reveals itself; one the one hand the DVGW’s belief their status as a private body made Art 34 inapplicable, in opposition to the belief that in certain circumstances private-law bodies are bound by the fmog guaranteed by art. 34
As such, the court stated a test for the applicability of art. 34 and whether the activities of a private law body truly has the effect of measures imposed by the State. The test involves numerous components that the court, thankfully, decided to break down in the context of the present case. Firstly, in relation to the legislative and regulatory context, they highlight that the German legislator has confirmed that certification by the DVGW automatically induces compliance with the national legislation.77 Beyond this they note that such certification can in
practice only come from the DVGW; with this point we clearly see the focus of the Court is truly on the de facto state of affairs as they look to decide if art. 34 can be relied on in a particular case.
That point is demonstrated as the court dismisses the idea put forward by the DVGW and the German Government that an alternative procedure involving expert verification acts to dis-apply the ‘effect’ of a ‘restriction on the free movement of goods in the same manner’78 as
75 Fra.bo (n 63), [13] 76 ibid., [16] 77 Fra.bo (n 63), [29] 78 Ibid., [26]
measures imposed by the State. While in theory the alternative procedure could have been relevant, the practical situation that administrative difficulties in combination with the additional costs of an individual expert, made the alternative procedure ‘of little or no practical use’79. Indeed, additional facts at play further worked against any alternative really
being an option. Firstly, the lack of certification was seen as a significant hinderance on marketing the products concerned on the German market. Secondly, beyond any marketing problems, in truth, the safety element intrinsic in the copper piping market meant that few consumers even considered a purchase of a copper fitting without a certification by the DVGW.
This led the court to deliver the case’s most significant observation as to the effect and power that was held by the DVGW ‘in reality’. Here, they concluded that ‘by virtue of its
authority’80 the DVGW held the power to regulate entry into the German market for copper
product fittings such as the ones produced by Fra.bo. The Court’s focus on the reality of the situation acting to resonate the importance of the de facto concept and that each case would be judged on the circumstances in play.
The above observation flowed nicely to form the courts conclusion that art. 34 applies to the standardisation and certification activities of a private law body when (1) the national legislation considers the products certified by that body to be compliant with national law; and (2) that has the effect of restricting the marketing of products which are not certified by that body. After this statement, the court offered no more guidance as to decide whether art. 34 would be applicable.
With the progressive Fra.bo judgment covering a lot of ground it pays to take a moment to contextualise the court’s decision here. While the reasoning in the opinion of AG Trstenjak arguably ‘is built up in a more logical way’81, both her and the Court’s decisions make it clear
that private parties are now bound to observe art. 34 ‘in a limited and case specific manner’82.
The question of how far this protection extends remains ‘vague’83, and therefore in need of
further consideration.
79 Ibid., [29] 80 Ibid., [31]
81 van Harten et.al. (n 65), p, 686 82 Ibid., p, 686
A broadening of Horizontal Direct Effect or an extension of Vertical Direct Effect?
Subsequent to Fra.bo there is undoubtedly an extended level of protection for the fmog. The crux of the discussion, however, is whether this represents a broader interpretation of HDE or simply an extension of VDE. The ECJ’s failure to refer to HDE has fuelled the discussion here. While arguable this is mere coincidence, borne out of the fact that in handing down judgments the focus of the court is to solve the dispute at hand, ‘and not with drafting a text book’84, it would appear this choice was deliberate. Nauta et.al. suggest this was a reasoned
choice as to ‘send the following implicit message: in these specific circumstances, in which DVGW functions almost as a public authority, there is no other possibility than to apply art. 34 TFEU’85.
Arguments positing the acceptance of HDE, combine the increased protection in Fra.bo with the factual context that ‘private actors are directly and the state only indirectly involved’86. At
a high level this logic makes sense, the constituent elements to the argument are true. However, an evaluation which simply accepted HDE and continued no further, would be simplistic. Alternative suggestions, that the Fra.bo decision represents an extended form of VDE focus not only on the ‘wording’87 used but also the ‘emphasis’ put on the state involvement in the judgment. Indeed, the aforementioned attention, carefully spelled out by the ECJ, to whether there is the effect of a state measure, is hard to ignore in the judgment. Beyond this, any other reading of the situation would mean the failure to refer to the well-established Walrave case-line to have been a truly glaring omission. Given the calibre of judicial capacity needed to take a place in the Supreme Court, it is perhaps short-sighted, even disrespectful, to suggest such an omission is not deliberate.
Further, the potential significance of AG Trestnjak’s Opinion should not be overlooked in this story. Her enthusiastic arguments in favour of HDE allude to situations where protection is offered in which organisations have been granted powers similar to sovereign powers, further, she mentions that when there is direct or indirect state involvement, VDE will offer protection. The distinguishing factor in her assessment is her unequivocal use of the Walrave case-line which: her reference here working to clearly identify her as a proponent of HDE. This strong logic in tandem with the settled case law regarding articles 45, 49 and 56 TFEU
84 Ibid., p 684 85 Ibid., p, 688
86 Sakovic Vladimir, (2017) The Fundamental Freedoms of the Single Market on the Path towards Horizontal Direct Effect:
The Free Movement of Capital - Lex Lata and Lex Ferenda, 7 Juridical Trib. 208, p 214
forms the majority of her argument. The final string to that bow of argumentation, has however, caused more contention.
That string relates to the cases of Angonese, mentioned in Chapter 1, and Racanelli; two cases in which the court decided that the prohibition of discrimination on the grounds of nationality applied in the purely private sphere and which for the AG, were ‘an important step in binding private individuals to the fundamental freedoms’88. Commentators have been
divided on this reading. The esteemed Barnard treads a similar path when dealing with these cases by picking out, by analogy, the ‘good policy reasons’89 for applying HDE. Yet, David
passionately argues that such a reading oversteps the interpretative mark in it’s failing to recognise that these decisions were made in attempts to ensure consistency between
secondary and primary law. Therefore, arguably, the broadening of the scope of HDE should be treated in isolation and not used to justify an unwarranted extension of HDE for art. 34. Either way it is clear that the AG’s judgment is more benevolent to the extension of art. 34 and looks to find reasoning as to welcome and encourage the extension.
Nauta and Van Harten conclude that despite the disparity in reasoning, in the end, it may not be of much significance since ‘the result is the same: the private law entity is, under certain circumstances, bound by art. 34 TFEU’. This is generally supportable, in both cases, the seemingly correct conclusion is reached. However, the question is should there be a need for the breadth of HDE for art. 34 to be extended, will the curt and hesitant reasoning of the court have the capability to follow?
This thinking corresponds with that of Sakovic, who identifies Fra.bo as indicative of a conflating of HDE and VDE. Such arguments are grounded in the ECJ’s focus ‘purely on the impact that its certification activities had on the internal market’90, therefore, ‘because the
actions of the DVGW constituted a restriction on the fmog of Fra.bo’91 art. 34 was applicable. Such an approach bypassed previous evaluations that treated the applications of free
movement provisions as a separate question from the existence of a restriction to free movement. Therefore, the ECJ have arguably moved away from questioning status, instead assessing impact, leading to the distinction between HDE and VDE ‘losing most of its
88 Trstenjak, (n 62) [35]
89 C. Barnard, The Substanive Law of the EU, 4th ed. (2013), pp. 3-6
90 Van Leeuwen, Barend (2014) 'Private regulation and public responsibility in the internal market.', Yearbook of European
law., 33 (1). pp. 277-297.
