EU LAW QUESTIONS/ PRACTICE (MARATHON REVISION)

General Point: Countries that are part of EU: Austria, Belgium, Bulgaria,
Croatia, Cyprus, Czechia, Denmark, Estonia, Finland, France, Germany, Greece,
Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands,
Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden.

Free movement of Goods

Polish Law -  Article 11 prohibits use of scooters in cities with a population of

more than 200, 000 inhabitants. Article 12 states that any scooter which violates
will be liable and ceased and a fine of 2000 pounds. It is not a service they are
providing; scooters are goods.

Summary of Facts: Based on the above-mentioned facts, the Polish Act has
granted certain restrictions that prohibits use of scooters state the two laws. WE
need to advise P whether they will be able to manufacture the iconic Bee scooter
50. Relate the definition of goods with the summary of facts which was found in
the case of Art Treasure. Scooters will form part of ‘commercial transaction’.
Countries impose two types of barriers – monetary and non monetary barriers.
Will be a monetary barrier bcz the law is restricting the use of scooters. Art 12 –
is a breach of Art 11. Goods from Italy – imported, Art 34. QR or MEQR.

1st issue – MOTOR VEHICLES ACT – POLISH ACT

2nd issue – QR or MEQR. Define. Art 11 is a hindrance it is an MEQR.

3rd issue – DA or IDA – prohibits use of scooters in a population … it is an IDA

measure – both local and foreign.

4th issue – will be a SA, according to the Keck case. SA will not infringe Art 34.
The exception is that Poland can impose such a law.

5th issue – MA test – heavier burden on the foreign goods. 200,000 small no.,
benefit given to the local manufacturers.
6th issue - since it is an IDA there is a non-exhaustive list. Protection of the
environment – courts have recognized this derogation.

Public benefit – carbon emission – lead to pollution. Worst polluters – restricting.

Hazardous to the environment.

Two arguments – Art 11 is valid. Bcz of protection of the environment since

carbon emissions are hazardous.

Art 12 is not valid, since it is ceasing as well as imposing such a heavy fine -2000
which is not justified. 2000 euros will be disproportionate, if they are easing at the
same time. The law will be valid. So Pargio will not have to comply with the fine
and cease requirement. He will only be bound under art 11 which in itself is a
hindrance. 

Free movement of Services.

Answer: Summary of Facts – stated above in the QS.

The first issue is to define services under Art 57 TFEU. Services are
characterized as being temporary in nature (Gebhard case) and they are
‘normally provided for remuneration (means money payable for a service).’ The
second characteristic of remuneration removes things like gifts and unsolicited
activity from the scope of the Treaty articles. In our case, it can be said that the
Hungarian officials wanting to review their gambling legislation want to provide a
service which will be a service of an economic nature.

Right to provide as well as receive a service under Art 56. Cross border
activity – recipient will be moving.
In the case of Vans Binsbergen (1974), the Courts held that Art 56 TFEU has
direct effect. The ruling the Court gave in this case was that Art 56 TFEU applied
to a situation where a service provider was prevented from providing a service
b/c of their residence in another MS. Under Art 56, three broad categories of
cross-border activity are present; which are, freedom to provide a service (Van
Binsbergen case), freedom to receive a service (Lousi and Carbone case),
service that move (e.g. telecommunications) as seen in the case of Alpine
Investments. In our case, the right to provide a service as well as the freedom to
receive a service is being applied. The service that is being provided are those of
gambling however, they are subjected to certain criteria set out under Bill
26/2018, a to c and he operators must have a licence. The freedom to receive a
service is breached under the EU law since a and b do not comply with the
provisions set out under Free movement of services.

DA or IDA:  Hindrance under DA or IDA. IDA – local and foreign both. In our
case, IDA applies on local and foreign both – gambling. Dual license
requirement. Art 56 infringed.

We would now distinguish whether the measure applicable is a distinctly

applicable measure (DA) or an indistinctly applicable measure (IDA). A DA is
applicable to cases involving imported goods and ‘make importation more difficult
or costly than the disposal of domestic production.’ IDA measures apply equally
to ‘domestic and imported products’ ‘where the restrictive effect… exceeds the
effects intrinsic to trade rules.’ In our case, we can raise the issue of dual
burden since the service of gambling comes with a provision of the requirement
of a licence which sets out certain restrictions ss. a, b and c. therefore, Art 56
TFEU is infringed.

H will raise a derogation, three points have to be met. Since IDA – non
exhaustive list. In our case, we can raise illegal services or consumer
protection.

Hungary can rely on Art 52 TFEU, which provides for derogation from the right of
establishment and the right to provide/receive a service on the same grounds as
for workers, namely: public policy, public security and public health. A national
rule restricts the freedom to provide services must be compatible with the
requirements of Art 56 for which it has to be ensured that, the rule must be non-
discriminatory, rule must be justified by imperative requirements in the general
interest, must be suitable for the attainment of the objectives it pursues and the
rule must not go beyond what was necessary to attain its objectives. Since IDA
measures are non- discriminatory in nature, there is a non-exhaustive list of
derogations that Hungary can rely upon. We can raise the derogation/restriction
of illegal services such as betting or gambling which infringe art 56. This has
been recognized placed in many cases such as Schindler case, Anomar case,
Ladbrokes Betting and Gaming Ltd, wherein the courts applied the proportionality
test. Reliance can also be placed on the derogation of consumer protection.
Public benefit: risky, fraud, manipulate, scam, addicted and lose all saving.

Raising these derogations establish the idea that by placing such restrictions the
protection of the consumer is ensured and in order to be justified they must be
consistent with the principle of proportionality. In our case, the fact that the
operator has to obtain a license and then meet the criteria set out under the Bill
26/2018 ss. (a to c). It can be argued that with regard to public benefit, depositing
200,000 euros, might be risky since it won’t be refundable, moreover, it can be
seen by ss b and c. that they might be fraud and used to manipulate the public.
With reference being made to the Ladbrokes case, the Court held that it was
legitimate to restrict the ability of operators to organize gambling and that it was
permissible for the state to issue exclusive rights to do so. Whilst on one hand,
this restricted free movement of rights, but was done due to the reasons of public
order and consumer protection. Just how the courts took this approach to ensure
the protection of the public in this case, similarly in our case, the courts can do so
that there is more benefit and no detriment to the public.

Proportionality: a) Discouraging ppl to come into gambling because it is

risky, do not want ppl to be involved in a scam. B) proportionate. To
prevent ppl becoming involved in a scam. C) disproportionate –
considerable is a vague term, not defined, there shud be a fixed amount.
They shall not bind anyone to donate. Will be all considered as
disproportionate.

With regard to proportionality, arguments can be construed on the criteria

requirements set out under ill 26/2018 ss. a, b and c. ss. (a) is proportionate
because it discourages people to come into gambling because it is risky, do not
want people to be involved in a scam since if the operator deposits the amount
which is a heavy amount and regardless of the outcome of the application, it is
non-refundable, therefore, the operator would be at loss/detriment.  B) is
proportionate as it would prevent people from being involved in a scam since
there is a guanrantee for those who play games of chance which would not allow
the customers to gamble more than 300 Euros which suggests that loss wont be
so much to the customers.  C) Disproportionate since the word ‘considerable’ is
not defined and is a vague term. It should have been a fixed amount. Also, the
Bill should not bind anyone to donate to the Hungarian Society. Therefore, in
view of the above arguments, the gambling legislation is not compatible with the
free movement of services set out under EU law. 

FMOW/Citizenship Question: (OLGA AND BORIS) 

Answer. It can be determined from the facts of the case that Olga and Boris are
searching for a job in Paris. Olga is an EU national and a trained as well as
experienced Latvian physiotherapist seeks employment as a physiotherapist and
Boris, a Russian, isn’t an EU national but seeks employment as a handyman in a
local newspaper and his business is doing well. We shall now advise Olga and
Boris as to the rights and remedies they have under EU law.

The first issue is to define a worker, which was interpreted by the Courts in the
case of Hoekstra as those persons who are ‘likely to remain in the territory of a
Member State after having being employed in that state.’ It was also defined in
the case of Levin where the courts held that anyone whose objective is their
improvement of their standards of living will be considered as a worker. And also,
the concept of workers applied to those engaged in part time work for less than
the minimum wage. Furthermore, it was decided in the case of Kempf that the
work engaged in by a ‘worker’ must be provided for remuneration and be genuine
and effective, and not be marginal and ancillary. In our case, Olga is a Latvian
physiotherapist, who has trained in Switzerland and has over 10 years’
experience in her profession, which is genuine and effective, hence she will be
considered as a worker.

Once anyone becomes a worker in EU, Article 45 provides unlimited benefits,

such as access to employment (cases: Groener case, Angonese case, Kaj
Lyyski), right to reside (Rutilli case), social advantages and other benefits (Even
case), tax benefits (Schumacker case, Wielockx case), children and education
(Lair case, Casagrande case, Baumbast case), Healthcare.

Article 45  TFEU states that any discriminatory measure against migrant/foreign
worker will be void. Moreoevr, if there is any discrimination or hindrance in free
movement of workers, either by distinctly applicable measure (DA) or indistinctly
applicable measure (IDA), Article 45 will be infringed. DA measure implies that
any restriction which applies on foreign workers only. IDA measure restricts local
as well as foreign workers. In our case, Olga is an EU national (Latvian
physiotherapist) and she is told that she needs to join the Parisian Association of
Physiotherapists (the “PAP”) which is open to all French and EU nationals. And
the fact that after 6 months of being unable to find a job despite being a trained
and 10-year experienced physiotherapist, the IDA measure restricts her since
when she applied earlier she was asked to ‘take her place in the queue’ and the
French applicants will precede her, and the PAP requirement has not benefitted
her either, thereby infringing Article 45. Another argument can be construed on
the concept of dual burden being applied in this case, as Olga will have to train
again to meet the requirements of becoming an experienced physiotherapist in
France, proving that there is a hindrance in this case, hence, infringing Article 45.

Since Article 45 TFEU is being infringed, Paris will raise a derogation to save
their measure. In order to ensure that the derogation is successful, Article 45(3)
specifies possible grounds for refusing entry to or not allowing a national of
another MS to reside, i.e. public health (Joseman case), public security (Rutilli
case) or public policy (van Duyn case), public service exception (Commission v.
Belgium) and Linguistic knowledge (Groener case). Since Olga is being restricted
by an IDA measure, we must note that being indiscriminatory in nature, a non-
exhaustive list of derogations exists. In our case, Paris can argue on the basis of
Protection of Consumer as well as on the Public service exception. With regard
to Protection of Consumer, Paris can argue that in order to maintain the
protection of professional medical standards there must be a qualified
physiotherapist for the protection of the public. Since physiotherapy is risky, and
requires expertise and any negligence can be fatal, therefore proper training is
required. Art 45(4) has led to the evolution of the public service exception. being
interpreted narrowly by the Court that the question is that of the nature of the
post, and not the institution which is the employer, as seen in the cases of
(Commission v. Belgium) (Commission v. France). In our case, Paris can argue
that in order to safeguard the ‘general interests of the state’ and there must be an
‘existence of a special relationship of allegiance to the state and reciprocity or
rights and duties’ implying that whatever may be the duties assigned they must
be executed in a way that would protect the public.

Proportionality: Derogations from the free movement of workers are subject to

comply with the principle of proportionality. In this case, the measures by France
will be considered as disproportionate, since Olga, despite being an EU national,
is an experienced physiotherapist and did her training in Switzerland and has
been working for 10 years, which is a sufficient requirement for that of an
experienced physiotherapist. And we see that despite her attempting to apply at
hospitals, and one inexperienced French applicant will take precedence over her
which is not quite reasonable. Secondly, despite PAP being open to not only
French but to EU nationals who have received training in an EU law; Olga is
unable to find work. Therefore, it is not justified that Olga should be asked to
leave France.

Boris being a non-EU national and advertises his services as a handyman and
his business is going well. An argument can be construed under the law set out
for job seekers under Article 45(3). Pursuant to this law, a jobseeker can reside
in a member state for up to 3 to 6 months, provided that he is actively seeking
work and has a genuine chance of success (Antonissen case). In our case, he
was seeking a job, and upon finding one and with his business going well, in
terms of his rights of residence, which if expired, he is able to provide enough
evidence of him seeking employment and he has a genuine chance of success,
he cannot be asked to leave France. Moreover, with regard to equal treatment for
job seekers as seen being illustrated in the case of Collins, he will receive the
benefits of a financial nature and it would be unfair if he won’t get the same
advantages as that of a worker.

On the basis of these arguments and the above discussion, it can be argued that
both Olga and Boris would be allowed to live in France. 

COMPETITION POLICY (Intelligent Toys case)

Answer. Intelligent Toys has agreed with Wooden Toys and Plastic Toys to sell
toys in different parts of Europe. Intelligent Toys has not been successful in
Northern Europe and is now wanting to increase the sales and would like to offer
discounts to attract customers in Sweden. We shall now advise Intelligent Toys
whether the competition rules ‘necessary for the functioning of the internal
market’ falls under the exclusive competence of the EU, and also ensure that
competition is not distorted and, hence consumers are being protected from
being exploited.

Competition Policy

The competition policy is governed under Article 101 TFEU and Article 102
TFEU. In order to prove that there is infringement of Article 101 TFEU, it is
important to determine that there was either an agreement between
undertakings, or a decision by an association of undertakings, or a concerted
practice between undertakings; an effect on trade between MS; that the
agreement, decision by an association of undertakings or concerted practice has
as its object or effect the prevention, restriction or distortion of competition within
the internal market.

The first issue is to determine the definition of undertaking which was defined in
the case of Hofner as an entity engaged in an economic activity. In our case,
Intelligent Toys falls under the category of an undertaking. Secondly, we shall
determine whether there was an agreement between the undertaking or not.
Agreement has been defined in the case of Consten and Grundig as being
inclusive of written agreements (both vertical and horizontal), oral agreements, in
the form of a gentleman’s promise (ACF case). In our case, on the basis of the
facts provided within the case, it can be said that there was an agreement
between IT and WT and Plastic Toys (PT).

Hereafter, we shall now elaborate on the jurisdictional point. This means that the
EU Commission will only penalize and be involved if the effect of the agreement
is on the trade between more than one MS. Pursuant to the Woodpulp case, the
Commission also has power for the jurisdiction of companies outside the EU
provided the distortion is within the EU. In our case, Intelligent Toys, Wooden
Toys and Plastic Toys are selling toys in different parts of Europe and in the UK,
therefore the effect of the agreement is on more than one MS, thus, the
jurisdictional point is met.

The object of prevention, restriction or distortion of competition was established

from the case of Consten and Grundig and it would lead to Article 101 being
breached as seen in the case of Mobile Netherlands case (2009). The effect of
prevention of competition would be taken into account provided that the
agreement had not been implemented (STM case). In our case, the Court will
see whether the agreement had an object or an effect, which prevented
competition from happening. From the facts given in the case above, we can
consider that the effect of agreement led to distortion of competition, for which
the Court will consider numerous factors. in our case, in an attempt to increase
sales, Intelligent Toys want to offer attractive discounts, thus the relevant factor
applicant in this regard would be the opportunities allowed for other commercial
competitors in the same products by means of parallel re-exportation and
importation, and nature and quality of the products (in this case, toys). Since all
the three points are met, hence Artcile 101 TFEU is infringed.

According to the case of Metropole Television v. Commission (2001), the Courts

held that Article 101(1) will not be ‘interpreted as establishing the existence of a
rule of reason in Community competition law’. Article 101(1) could not be applied
to any agreement restricting freedom of action of one or more parties. Once an
infringement has been proven, there are certain exceptions set out under Article
101 (3) which need to be applied. These exceptions include the restriction which
contributes to improving the production or distribution of goods or to promote
technical or economic progress, consumers receive fair share of the resulting
benefit from the restriction, there must be a casual link between the restriction of
competition and the improvement gained, the restriction must not put the parties
in a position to eliminate competition ‘in respect of a substantial part of the
products in question.’ In our case, the first, second as well as third points have
not been met, and only the last point is met, therefore the exception set out under
Article 101 (3) are not met. WE shall then base our argument upon the fact that
Intelligent Toys is advised to get a leniency notice which they will get from the EU
Commission.

Moreover, the Block exemption for vertical agreements has been set out under
Regulations 2790/1999 and to be eligible for this the undertakings having more
than 30% market share need to follow formalities and, in our case, Intelligent
Toys has a market share of 40% and is hence will be liable if they do not comply
with the requirement and prohibited clauses for contracts and need to carry out
their own assessment of their position under Article 101.

Article 102 TFEU prohibits abuse of dominant position. In order to prove

dominance within the ambit of Article 102, it's necessary to examine the relevant
product and the geographical market. The relevant product is determined when
two products are substitutes and similarity can be determined by applying three
economic tests; Cross elasticity of demand (United Brands case), Cross-elasticity
of supply (Michellin v. Commission) and assessing if there is a ‘small but
significant non-transitory increase in price,’ thus in our case, the relevant product
market is toys. Next, we shall illustrate the geographic market, i.e. the area in
which the available and acceptable substitutes to the product exist. Pursuant to
our case, the geographic area consists of mostly the UK and different parts of
Europe to which the toys will be supplied.

Furthermore, in order to prove dominance, three points have to be met, including

a presumption that if the market share is 50% or above then there will be
dominance, if the market share is less than 50 percent then the share of mere
competitors should be taken into account, Barriers to entry (technological,
economic, financial, legal, etc.) should be considered. In our case, since
Intelligent Toys is already wanting to increase its sales, which means that the
market share will also increase, hence if it goes up till 50%, entity will be more,
thus the first point is met. The second point applies to our case, as the market
shar initially is 40%, share of nearest or mere competitors will be taken into
account. Thirdly, the barriers to entry are high and the possible barriers in this
case would include Economies of scale, vertical integration and well-developed
distribution systems. Hence, it can be said that dominance is proven in this case.

Article 101(2) prohibits the abuse of a dominant position and in the case of
Hoffmann it was defined as hindering the maintenance of degree of competition
in the market existing or growth of that competition. In our case, the abuse of
predatory pricing, selective pricing and fidelity discounts would be applicable.
Selective Pricing is based on charging lower prices to competitors and higher
prices to its own consumers, and in our case, IT is wanting to increase its sales
in Sweden which would not benefit the consumers since they would have to pay
higher prices. Also, the fact that since there will be lower cost prices to drive out
competition, i.e. predatory pricing, IT is also planning on granting attractive
discounts only in Sweden, i.e. fidelity discounts, which is eventually distorting the
degree and growth of competition within the market.

With regard to the Post Danmark case, a general principle was set out that it is
open to an undertaking to provide justification for the behaviour by proving that
their conduct was objectively necessary or the exclusionary effect was balanced
by benefitting the consumers. It would be difficult for IT to prove that the
dominant undertaking was beneficial, as by increasing sales only in Sweden and
offering attractive discounts in Sweden would have an exclusionary effect to the
detriment of the competition and hence, consumer’s interests.

 Alternative argument: The IT can argue based on this principle that by

increasing their sales and offering discounts would benefit the consumers since
they would be attracted to buy the toys and meet the consumers’ interest.

Conclusion: Based on the above discussion and arguments, it can be said rightly
that IT has been unable to meet the criteria under Article 101 and breached it,
and will be liable under Article 102 due to abuse of dominant position which will
subsequently not only hinder the competition within the internal market of the EU
but also impact the consumers’ interests.