Freedom to provide services

The rule: Arts 56 & 57 TFEU Art 56: “... restrictions on freedom to provide services shall be prohibited in respect of nationals of Member States who are established in a Member State other than that of the person for whom the services are intended. ...” Art 57: concept services: “where they are normally provided for remuneration, in so far as they are not governed by the provisions relating to ... goods, capital and persons”.

Notes 56 talks about “restrictions”, not discrimination cross-border element remuneration element subsidiary definition: only when other freedoms do not apply

Concept “service” and cross-border element Economic concept of “services”; examples: banking, insurance telecoms legal IT Goods v services: tangible v intangible Example: Schindler: selling lottery tickets is service

Establishment v services: permanent v temporary Example: a bank with an office in another MS: establishment, not services! A bank which sells a product in another MS over the internet: services Any cross-border element: service provider travels (Croatian lawyer in the ECJ) service consumer travels (tourism) the service travels (cross-border television)

“Remuneration” creates distinction between economic and non-economic services “public services”: depends! education: Humbel: no consideration for the service nor agreed between parties Wirth: depends on extent of State funding!

“Restriction” Same principle as Cassis de Dijon: indistinctly applicable measures are caught “all measures liable to hinder or make less attractive the exercise of fundamental freedoms” – “to prohibit, impede, make less attractive” Again emphasis on “market access” Basic issue: to draw the line between what effectively restricts market access and what not

Alpine Investments: no Keck for services Alpine Investments sells commodities futures contracts in Netherlands Type of financial investment – very risky Dutch authorities prohibit “cold calling” Alpine Investments claims this hinders its ability to attract clients in other Member States

Court in Alpine Investments Deprives firm of a rapid and direct technique for marketing Does not matter that it is the MS of origin, not of destination Netherlands and UK: is non-discriminatory, and is a selling arrangement Keck was about market access Prohibition directly affects access to the market in services in other MS

Notes Discrimination not required First judgment to confirm focus on market access, after Keck Selling arrangements reasoning does not work for services But there must be a limit: taxes which merely add to cost of providing services are not caught

Commission v Italy Prohibition motor insurers to reject a client Also premiums regulated Indistinctly applicable Restriction?

Court in Commission v Italy “prohibit, impede, make less attractive” Fact that other MS have less restrictive rules: not relevant Affects access to the market for undertakings from other MS Substantial interference in freedom to contract Therefore a restriction

Notes Central notion of market access Contrast a mere tax with the Italian contract requirement: much more intrusive for insurance companies from other MS Goes to the heart of the freedom to provide services: is a freedom to contract

Exceptions and justifications Art 52: public policy, public security, public health To add: imperative or overriding requirements in the public interest (= mandatory requirements of Cassis de Dijon) Proportionality suitable/appropriate necessary non-discriminatory

Human rights and exceptions Human rights protected as general principles EU law and under EU Charter Can be relied upon in the context of internal market freedoms What with conflict? Which rights prevail – internal market or human rights? Should one ‘balance’ them?

Carpenter Case which shows how human rights need not conflict with fundamental freedoms Mrs Carpenter is from Phillipines & illegally resident in UK Authorities seek to deport her

Mr Carpenter provides services in other MS Mrs Carpenter helps by looking after the children Challenge the deportation order as contrary to the freedom to provide services Court agrees: Deportation is a restriction of Mr Carpenter’s rights Must be seen in the light of the right to family life That human right (cf ECHR) leads to a wide conception of a restriction on freedom to provide services

Omega Spielhallen - Facts Omega sets up laserdrome in Bonn Obtains franchise from Pulsar (UK firm) for installation of laser shooting game Bonn authorities object: playing at killing is affront to human dignity Human dignity protected under Art 1 German Constitution

Omega Spielhallen - Court Public policy exception Variation between Member States is possible – margin of discretion Here: fundamental right Protection human dignity compatible with EU law Proportionality permits different approaches Level of protection and necessity

Viking Line - Facts Viking is Finnish ferry operator Suffers from Estonian competition: Finnish wages too high Seeks to ‘reflag’ the Rosella, to conclude new collective agreement with trade unions Finnish trade union and International Transport Federation take collective action Viking relies on right of establishment

Viking Line - Held Trade union collective action not outside scope Treaty provisions on establishment Right to take collective action is fundamental right (see also Charter), but can be limited Balance must be struck: collective action justified in so far as ‘jobs or conditions of employment are jeopardised or under serious threat’

Notes Human rights do not take measures outside scope internal market freedoms As an exception to free movement, human rights can trump fundamental freedoms No uniform concept of human rights: variation possible Proportionality (balancing): light touch Can human rights really be balanced against economic rights?