20 September 2005

Finally: The Keck approach outside free movement of goods (by Christa Tobler)

Many thanks to professor dr. Christa Tobler LLM of the University of Basel (Switzerland) and the Europa Institute here in Leiden for this guest post on the ECJ's recent judgments in the Mobistar and Belgacom cases.

In a judgment handed down on 8 September 2005 (Joined Cases C-544/03 and C-545/03 Mobistar SA v Commune de Fléron, and Belgacom Mobile SA v Commune de Schaerbeek) the Court of Justice of the European Communities for the first time applied the “Keck approach” in a context different from Art. 28 EC. The decision is noteworthy because the Keck argument had made on several occasions before the Court, which, however, was not willing to accept it outside Art. 28 EC. The Mobistar & Belgacom cases concerned taxation in the telecom sector, and more specifically fiscal charges imposed on mobile telephony operators holding an authorisation or individual licence. At issue was Belgian municipal legislation imposing an annual tax on transmission antennae, masts and pylons for GSM (‘Global system for mobile communications’). The lawfulness of these taxes was challenged by telephony operators established in Belgium who argued that they constitute restrictions contrary to EC law on the development of their telecommunications network and on the freedom to provide mobile telephony services. The national court seized with the matter turned to the Court of Justice for a preliminary ruling on this matter. One of the questions referred to the Court concerned Art. 49 EC on free movement of services. It is in this context that the Court applied what can be called a “Keck approach” and – what is more important – in effect found that this is a Keck type of case.

As is well known, Keck is the last of three landmark decisions of the Court of Justice concerning the interpretation of the concept of “measures having equivalent effect to a quantitative restriction to imports” under Art. 28 EC. In Dassonville (Case 8/74 Procureur du Roi v Benoît and Gustave Dassonville [1974] ECR 837), the Court has held that this concept related to “all trading rules enacted by Member States which are capable of hindering, directly or indirectly, actually or potentially, intra-Community trade”. In Cassis de Dijon (Case 168/78 Commission v France [1980] ECR 347), the Court added that this also included so-called indistinctly applicable measures (that is, measures applying both to domestically and to imported goods), if they could not be explained by mandatory requirements. In Keck (Joined Cases C-267 and 268/91 Keck and Mithouard [1993] ECR I-6097) the Court found it necessary to limit this broad approach by stating that “certain selling arrangements” (that is, measures concerning the circumstances of selling the goods) are not covered by Art. 28 EC to begin with (that is, irrespective of the existence of mandatory requirements). The Keck formula thus established by Court covered measures that “apply to all relevant traders operating within the national territory […] so long as they affect in the same manner, in law and in fact, the marketing of domestic products and of those from other Member States”.

After Keck, it was sometimes argued before the Court of Justice that the same approach should also apply in other areas of free movement law. After all, there, too – the argument went - the Court had recognised that “indistinctly applicable measures” could constitute prohibited restrictions. The same view was taken by some academic writers (apparently in particularly in Germany). However, in none of the cases from areas other than Art. 28 EC did the Court agree that the facts could be compared to those of Keck (e.g. Case 384/93 Alpine Investments [1994] ECR I-1141; Case C-415/93 Union royale belge des sociétés de football association ASBL v Jean-Marc Bosman [1995] ECR I-4921; Joined Cases C-34/95, C-35/95 and C-36/95 Konsumentombudsmannen (KO) v De Agostini (Svenska) Förlag AB and Konsumentombudsmannen (KO) v TV-Shop i Sverige AB [1997] ECR I-3843). Against this background, the Mobistar & Belgacom judgment presents itself as the long awaited case where a Keck type of case is indeed found to exist by the Court of Justice in a field outside that of Art. 28 EC.

In Mobistar, the question posed to the Court was whether Art. 49 EC (at the time when the facts of the case occurred still Art. 59 of the EC Treaty) must be interpreted as precluding the introduction, by legislation of a national or local authority, of a tax on mobile and personal communications infrastructures used to carry on activities provided for in licences and authorisations. As the case concerned taxation, the Court first recalled that at present direct taxation does not as such fall within the scope of the Community’s competence, but that Member States must nevertheless exercise their retained powers consistently with Community law. The Court then repeated its often-made statement that Art. 49 EC “requires not only the elimination of all discrimination on grounds of nationality, against providers of services who are established in another Member State, but also the abolition of any restriction, even if it applies without distinction to national providers of services and to those of other Member States, which is liable to prohibit or further impede the activities of a provider of services established in another Member State where he lawfully provides similar services” and that this includes “national rules which have the effect of making the provision of services between Member States more difficult than the provision of services purely within one Member State”. The Court now added the following, decisive sentence: “By contrast, measures, the only effect of which is to create additional costs in respect of the service in question and which affect in the same way the provision of services between Member States and that within one Member State, do not fall within the scope of Article 59 of the Treaty.” In relation to facts such as those at issue in the case before it, the Court stated that the disputed “taxes apply without distinction to all owners of mobile telephone installations within the [Belgian] commune in question, and that foreign operators are not, either in fact or in law, more adversely affected by those measures than national operators. Nor do the tax measures in question make cross-border service provision more difficult than national service provision. According to the Court, "there is nothing in the file to suggest that the cumulative effect of the local taxes compromises freedom to provide mobile telephony services between other Member States and the Kingdom of Belgium".

From this seems clear that Mobistar & Belgacom is a Keck type of case in an area outside Art. 28 EC. In fact, the Court’s judgment was not heralded in any way but comes quietly and without loud fanfares. Not only does the Court itself make no reference to Keck, there is also no such suggestion by Advocate General Léger (he thought that Art. 49 EC was not relevant in the case hand because the Belgian rule in question is prohibited under secondary law). With hindsight, the Court’s approach is perhaps not surprising. After all, the Court bases its finding on the general statement – made in many earlier judgments – that Art. 49 EC precludes the application of any national rules “which have the effect of making the provision of services between Member States more difficult than the provision of services purely within one Member State”. This in itself implies that rules that do not make it more difficult - that is, rules with the same effect both in law and in fact – do not constitute prohibited restrictions. This is now explicitly confirmed by the Court in the context of a case that, at the same time, provides an actual example for this approach. Thus: We now know for sure that the Keck approach also applies outside the field of application of Art. 28 EC, at least in relation to services. Whilst we still have to wait for corresponding cases in other areas of free movement (establishment, workers, capital), there is no conceivable reason why they should not follow with time.

(All cited judgments can be found on the ECJ's website)

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