Services and the EU Citizen 9781474200004, 9781849464260

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Acknowledgements I would like to thank Loic Azoulai, Marise Cremona and Hans Micklitz, professors in the Department of Law at the European University Institute in Florence, for all their help and advice in setting up the EUI seminars in 2010 and, in particular, for their contributions to the difficult, but stimulating, debate on EU citizenship. I also appreciated the generosity and dedication of the colleagues who came to Florence to take part in the seminars and then to write up the relevant chapters. And, lastly, I am grateful to all the friends in London, in Brussels and in Florence for their encouragement, inspiration and support of my activities in Florence and in the preparation of this work, in particular to Alexis, Christophe, David, Leo, Muriel, Noel, Roberto, Silvana, Thierry and Vanessa.

List of Contributors The list below has been drawn up to follow the order of the following chapters. Mikko Huttunen is Legal Adviser to the Permanent Mission of the European Union to the World Trade Organization (WTO) in Geneva and a member of the Legal Service of the European Commission. He has extensive experience in advising the European Commission and its services in areas such as internal market, transport and WTO law. He has also extensive litigation experience from EU courts and WTO adjudicative bodies. He holds a PhD from the EUI and an LLM from the University of Helsinki. Jens Karsten studied law at Frankfurt am Main and was a postgraduate at the University of Nottingham, where he qualified as Master of Laws in European Law (LLM). After qualifying for the German bar in 1999, he pursued research and teaching activities at the Université catholique de Louvain, Universidade Federal do Rio Grande do Sul in Porto Alegre (Brazil) and College of Europe in Bruges. He was Legal Adviser to the Directorate-General Health and Consumer Protection (DG SANCO) of the European Commission from 2001–04 and then counsel to a European trade association 2004–10 and Brussels attorney since 2010. He is also Researcher at the Scandinavian Institute of Maritime Law of the University of Oslo and part-time lecturer at the Katholieke Universiteit Leuven. He is the author of numerous publications on European law. Albert Nijenhuis is a member of the Legal Service of the European Commission (Business Law Team) where he deals with banking and telecoms. Before joining the Legal Service in 2002, he worked in DG Internal Market and DG Competition of the European Commission and practised as a qualified lawyer with Clifford Chance in Amsterdam. He was also an honorary lecturer at the Business Law Center of the University of Nijmegen in the Netherlands. He is the author of numerous articles on business law, competition law and financial services law. He studied inter alia at the Universities of Leiden, Vienna, Florida and London (LLM). Frank Benyon After university and postgraduate studies at the College of Europe, he practised as a solicitor with Allen & Overy in London before becoming a partner with Clifford Turner, working successively in their Brussels, Dubai and Paris offices. He joined the Legal Service of the Commission in 1980 and from 2000 to 2010 was Director in charge of its Business Law Team, dealing with Capital, Establishment and Services freedoms in particular in the banking, telecommunications and transport sectors. After retiring from the Commission in 2010, he is

x  List of Contributors now Senior Fellow in the Law Department of the European University Institute in Florence. His most recent publication is Direct Investment, National Champions and EU Treaty Freedoms (Oxford, Hart 2010). Julio Baquero Cruz is a member of the Legal Service of the European Commission, and visiting professor at Sciences Po (Paris), Centro de Estudios Políticos y Constitucionales and Universidad San Pablo CEU (Madrid). He has been Research Fellow at the Centro de Estudios Políticos y Constitucionales and Associate Professor at Universidad Carlos III of Madrid (2007–09), and Marie Curie Fellow at the Robert Schuman Centre at the EUI (2005–06). He holds a PhD from the EUI and a LLM from the College of Europe. From 2000 to 2004 he was a référendaire at the European Court of Justice. He has published and lectured extensively on EU law, including his book Between Competition and Free Movement (Oxford, Hart, 2002). Roberto Cisotta After earning his JD Degree at ‘La Sapienza’ University in Rome in 2005, he entered the PhD course in EU Law at the University of Trieste, in consortium with the University of Rome Tor Vergata, which he attended while working as Teaching Assistant and which he completed successfully in 2009. From 2008 to 2010 he worked as Assistant Professor at LUISS Guido Carli University in Rome. Since 2006, he has authored several articles and essays in International and EU law. Qualified as a lawyer at the Bar of Rome, in 2011 he became référendaire at the General Court of the European Union.

Table of Cases EFTA Court EFTA Surveillance Authority v Republic of Iceland, Case E–1/03.............................16 Olga Rindal and Therese Slinning v The Norwegian State, Joined Cases E–11/07 and E–11/08, 19 December 2008, EFTA Ct Rep 319.........................................121

European Commission Decisions Access to Karlstad Airport, Commission Decision 98/523/EC of 22 July 1998 [1998] OJ L 233/25–31.........................................................................................17 Airport System of Paris, Commission Decision 95/259/EC of 14 March 1995 [1995] OJ L 162/25–36.........................................................................................16 Paris (Orly) – London, Commission Decision 94/290/EC of 27 April 1994 [1994] OJ L 127/22–31.........................................................................................16 Paris (Orly) – Marseille and Paris (Orly) – Toulouse, Commission Decision 94/291/EC of 27 April 1994 [1994] OJ L 127/32–37...........................................16 Viva Air, Commission Decision 93/347/EEC of 28 May 1993 [1993] OJ L 140/51–57...........................................................................................................16

European Court of Justice/Court of Justice of the European Union Alphabetical Acereda Herrera (Case C–466/04) [2006] ECR I–5341...........................................88 Adams (Case C–226/10) (removed from register)..................................................41 Akzo Nobel and Others v Commission (Case C–97/08 P) [2009] ECR I–8237.....151 Alassini (Joined Cases C–317/08, C–318/08, C–319/08 and C–320/08) [2010] ECR I–2213.......................................................................................................7, 59 Albany (Case C–67/96) [1999] ECR I–5751..........................................................103 Altmark Trans and Regierungspräsidium Magdeburg (Case C–280/00) [2003] ECR I–7747...........................................................................................................29 Analir (Case C–205/99) [2001] ECR I–1271......................................... 18, 27, 81, 93 Angonese (Case C–281/98) [2000] I–ECR 4139....................................................178 Apothekerkammer des Saarlandes et al (Joined Cases C–171/07 and C–172/07) [2009] ECR I–4171.....................................................................................142, 150

xii  Table of Cases Arduino (Case C–35/99) [2002] ECR I–1529........................................................147 Asturcom Telecomunicaciones (Case C–40/08) [2009] ECR I–9579........................38 Base and others (Case C–389/08) [2010] ECR I-9073.............................................60 Baumbast (Case C–413/99) [2002] 1–ECR 7091..................................................174 Becker (Case C–594/11), pending............................................................................41 Bickel and Franz (Case C–274/96) [1998] ECR I–7637........................................174 Bidar (Case C–209/03) [2005] ECR 1–2703..........................................................176 Bienek (Case C–525/08) (removed from register)...................................................40 Bond van Adverteerders v Netherlands State (Case 352/85) [1988] ECR 205.................................................................................................................76 Bosmann (Case C–352/06) [2008] ECR I–3827......................................................97 Brännström (Case C–150/12), pending....................................................................41 British American Tobacco (Case C–491/01) [2002] ECR I–11453..............68–70, 72 Büsch and Siever (Case C–255/11), pending............................................................41 Butz et al (Case C–212/12), pending........................................................................41 Carpenter (Case C–60/00) [2002] ECR I–6279.....................................................105 Centro Europa 7 (Case C–380/05) [2008] ECR 349......................................... 81–82 CIF (Case C–198/01) [2003] ECR I–8055.............................................................147 Cipolla et al (Joined Cases C–94/04 and C–202/04) [2006] ECR I–11421..........147 Collins (Case C–138/02) [2004] ECR I–2703................................................106, 176 Commission v Belgium (Case C–201/98) [1998] ECR I–3557................................26 Commission v Belgium (Case C–503/99) [2002] ECR I–4809 ............................154 Commission v Belgium (Case C–222/08), [2010] ECR I-9017................................60 Commission v Council (Case 22/70) [1971] ECR 263....................................... 29–31 Commission v Denmark (Case C–467/98) [2002] ECR I–9519 (Open Skies Case).................................................................................................... 14, 24, 26, 29 Commission v France (Case 167/73) [1974] ECR 359...................................... 11–12 Commission v France (Case C–381/93) [1994] ECR I–5145...................................26 Commission v France (Case C–220/07) [2008] ECR I–95.......................................60 Commission v France (Case C–512/08) [2010] ECR I-8833...........88, 100–101, 107, 129–131, 133–134, 140 Commission v France (Case C–89/09) [2010] ECR I-12941..................148, 150, 154 Commission v French Republic (Case C–89/08) [2009] ECR I–11245..........153, 155 Commission v Germany (Case C–476/98) [2002] ECR–I 9855 (Open Skies Case)............................................................................................................5, 26, 29 Commission v Germany (Case C–318/05) [2007] ECR I–6957.............................103 Commission v Germany (Case C–141/07) [2008] ECR I–6935.............................142 Commission v Germany (Case C–424/07) [2009] ECR–I 11431.........................5, 54 Commission v Greece (Case C–140/03) [2005] ECR I–3177.................................149 Commission v Italy (Case 145/82) [1983] ECR 711...............................................131 Commission v Italy (Case C–447/99) [2001] ECR I–5203......................................16 Commission v Italy (Case C–531/06) [2009] ECR I–4103....................150, 152, 155 Commission v Italy (Case C–326/07) [2009] ECR I–2291....................................154 Commission v Kingdom of Spain (Case C–207/07) [2008] ECR I–111.................154

Table of Cases  xiii Commission v Luxembourg (Case C–490/09) [2011] ECR I-247............99, 132, 134 Commission v Portugal (Case C–84/98) [2000] ECR I–5215..................................26 Commission v Portugal (Case C–70/99) [2001] ECR I–4845..................................16 Commission v Portugal (Case C–154/09), Judgment of 7 October 2011, not yet reported....................................................................................................60 Commission v Portugal (Case C–255/09), Judgment of 27 October 2010, not yet reported...............................................................................................................134 Commission v Spain (Case C–211/08) 2010 [ECR] I-5267.............. 88, 99, 101, 118, 122, 124, 128–129, 146 Commission v Spain (Case C–281/09), 24 November 2011....................................85 Commune de Mesquer (Case C–188/07) [2008] ECR I–4501.................................44 Condor (Case C–151/11), pending...........................................................................41 Corsica Ferries Italia (Case C–18/93) [1994] ECR I–1783......................................26 Costa v Enel (Case 6/64) [1964] ECR 585..............................................................171 Cowan v Tresor Public (Case 186/87) [1989] ECR I–5145....................173–174, 176 Cuadrench More (Case C–139/11), pending............................................................41 D’Hoop (Case C–224/98) [2002] ECR I–6191.......................................................174 Decker (Case C–120/95) [1998] ECR I–1831.........................................6, 87–90, 92, 95, 98, 113, 118, 160 Deutsche Telekom (Case C–543/09), Judgment of 5 May 2011, not yet reported.................................................................................................................60 Deutscher Apothekerverband (Case C–322/01) [2003] ECR I–14887...................142 Duphar (Case 238/82) [1984] ECR 523.................................................................119 Eglitis & Ratnieks (Case C–294/10), Judgment of 12 May 2011.............................41 Elchinov (Case C–173/09) [2010] ECR I-8869............... 88, 100–101, 107, 116–117, 119–121, 123–124, 129–130, 134, 139, 159 Emirate Airlines (Case C–173/07) [2008] ECR I–5237................... 31, 34, 40, 43–44 Espada Sánchez (Case C–410/11), pending.............................................................41 Esteves Coelho dos Santos (Case C–365/11), pending.............................................41 Finnair (Case C–22/11), Judgment of 4 October 2012...........................................41 Flightline (Case C–181/00) [2002] ECR I–6139......................................................16 Flughafen Hannover–Langenhagen (Case C–363/01) [2003] ECR I–11893...........18 Folkerts (Case C–11/11), pending.............................................................................41 Football Association Premier League Ltd et al (Joined Cases C–403/08 and C–429/08), Judgment of 4 October 2011, not yet reported..........................81, 83 France v Commission (Case 202/88) [1991] ECR 1223...........................................48 France v Commission (Case C–174/94 R) [1994] ECR I–5229................................17 Galileo and Galileo International v Council (Case C–96/01 P) [2002] ECR I–4025...........................................................................................................19 Gambelli (Case C–243/01) [2003] ECR I–13031.......................................... 156–157 Garcia–Avello (Case C–148/02) [2003] ECR I–11613...........................................175 Gebhard (Case C–55/94) [1995] ECR I–4165................................................142, 150 Germanwings (Case C–413/11), pending................................................................41 Germany v Parliament and Council (Case C–376/98) [2000] ECR I–8419............69

xiv  Table of Cases Germany v Parliament and Council (Case C–380/03) [2006] ECR I–11573..........69 Gintec (Case C–374/05) [2007] ECR I–9517...........................................................68 Government of the French Community and Walloon Government (Case C–212/06) [2008] ECR I–1683...........................................................................174 Grisoli (Case C–315/08), Order of 29 September 2011, not yet reported.......146–147 Grunkin and Paul (Case C–353/06) [2008] ECR I–7639......................................175 Grzelczyk (Case C–184/99) [2001] ECR I–6193............................................106, 176 Guevara Kamm (Case C–316/12), pending.............................................................41 Haegeman v Belgium (Case 181/73) [1974] ECR 449.............................................43 Hartlauer (Case C–169/07) [2009] ECR I–1721...........................102, 142–143, 152 Hauptzollamt Mainz v Kupferberg (Case 104/81) [1982] ECR 3641......................43 Heinrich (Case C–345/06) [2009] ECR I-1659....................................................5, 21 Humbel (Case 263/86) [1988] ECR 5365.................................................................92 IATA and ELFAA (Case C–344/04) [2006] ECR I–403......... 4, 22, 29, 31, 38, 40–44 Inizan (Case C–56/01) [2003] ECR I–12403 .................. 88, 113, 118–119, 121, 138 International Transport Workers’ Federation and Finnish Seamen’s Union v Viking Line (Case C–438/05) [2007] ECR I–10779...............................68, 71, 178 Intertanko and others (Case C–308/06) [2008] ECR I–4057.......................28, 31, 44 Italy v Commission (Case C–361/98) [2001] ECR I–385........................................16 Josemans (Case C–137/09) [2010] ECR I-13019 ..................................................174 Kabel Deutschland Vertrieb (Case C–336/07) [2008] ECR I–10889.......................58 Keck and Mithouard (Joined Cases C–267/91 and C–268/91) [1993] ECR I–6097.........................................................................................................105 Keller (Case C–145/03) [2005] ECR I–2529 ...........................................................88 Kohll (Case C–158/96) [1998] ECR I–1931................................ 6, 87–90, 92, 95, 98, 113, 118–119, 135, 160 Koninklijke Luchtvaart Maatschappij and TUI Airlines Nederland (Case C–227/12), pending..............................................................................................41 Konsumentombudsmannen v De Agostini and TV Shop (Joined Cases C–34/95, C–35/95, and C–36/95) [1997] ECR I–3843.......................................................78 Kramme (Case C–396/06) (removed from register)...............................................40 Laval un Partneri (Case C–341/05) [2007] ECR I–11767.........................68, 71, 178 Leichtle (Case C–8/02) [2004] ECR I–2641.............................................................88 Liga Portuguesa de Futebol Profissional and Bwin International (Case C–42/07) [2009] ECR I–7633.....................................................................................156, 158 Lufthansa v Aeropuertos de Portugal SA (Case C–181/06) [2007] ECR I–5903.....18 Luisi and Carbone (Joined Cases 286/82 and 26/83) [1984] ECR 377.....88–91, 114 Martínez Sala v Freistaat Bayern (Case C–85/96) [1998] ECR I–2691.................174 Mauri (Case C–250/03) [2005] ECR I–1267.........................................................147 McDonagh (Case C–12/11), pending.......................................................................41 Meca–Medina and Majcen v Commission (Case C–519/04 P) [2006] ECR I–6991.........................................................................................................104 Merci Convenzionali Porto di Genova (Case C–179/90) [1991] ECR I–5889...........................................................................................................26

Table of Cases  xv Mesopotamia Broadcast and Roj TV (Cases C–244/10 and C–245/10)..................78 Ministère Public v Lucas Asjes (Joined Cases 209 to 213/84) (Nouvelles Frontières) [1986] ECR 1425..........................................................................12, 31 Molenaar (Case C–160/96) [1998] ECR I–843........................................................97 Mostaza Claro (Case C–168/05) [2006] ECR I–10421............................................38 Müller Fauré and van Riet (Case C–385/99) [2003] ECR I–4509........................................88, 93–96, 113, 119, 123, 130–131, 133, 135 Nelson (Case C–581/10), Judgment of 23 October 2012................................. 41–43 Parking Brixen GmbH (Case C–458/03) [2005] ECR I–8585...............................151 Parliament v Council (Case 13/83) [1985] ECR 1513..................................12, 25–26 Peralta (Case C–379/92) [1994] ECR I–3453..........................................................44 Pérez (Joined Cases C–570/07 and C–571/07) [2010] ECR I–4629.........................................................................140, 144, 146–148, 155 Placanica (Joined Cases C–338/04, C–359/04 and C–360/04) [2007] ECR I–1891.................................................................................................. 156–58 Polisseni (Case C–217/09), Order of 17 December 2010, not yet reported.......................................................................................................140, 146 Polska Telefonia Cyfrowa (Case C–99/09), Judgment of 1 July 2010, not yet reported.................................................................................................................58 Poucet and Pistre (Joined Cases C–159/91 and C–160/91) [1993] ECR I–637.....................................................................................92, 102–103, 119 Rehder v Air Baltic Corporation (Case C–204/08) [2009] ECR I–6073..................40 Rodríguez Cachafeiro et Martínez–Reboredo Varela–Villamor (Case C–321/11), pending..............................................................................................41 Ruiz–Zambrano (Case C–34/09), Judgment of 8 March 2011..............................175 Runevic–Vardyn (Case C–391/09), Judgment of 12 May 2011.................... 176–177 Sacchi (Giuseppe) (Case 155/73) [1974] ECR 409...................................................75 Sayn–Wittgenstein (Case C–208/09) [2010] ECR I-13693 ...........................175, 177 Schempp (Case C–403/03) [2005] ECR I–6421.......................................................98 Schlüsselbauer & Schauß (Joined Cases C–436/11 and C–437/11), pending.........41 Schulze and others (Case C–529/08) (removed from register)................................41 Smits and Peerbooms (Case C–157/99) [2001] ECR I–5473..................6, 88, 91–93, 95–96, 107, 113, 118–121, 130 Sodemare (Case C–70/95) [1997] ECR I–3395...................... 102–103, 119, 150, 155 Sousa Rodríguez et al (Case C–83/10)......................................................................41 Stamatelaki (Case C–444/05) [2007] ECR I–3185..................................................88 Sturgeon and others (Joined Cases C–402/07 and C–432/07) [2009] ECR I–10923............................................................................. 1, 4, 40, 42–44, 183 Stylianakis (Case C–92/01), Judgment of 6 February 2003, not yet reported........16 Telekomunikacja Polska (Case C–522/08) [2010] ECR I–2079...............................60 TUI Travel and others (Case C–629/10), pending............................................ 41–43 United Kingdom v Parliament and Council (Case C–217/04) [2006] ECR I–3771...........................................................................................................68 Van de Ven and Van de Ven–Janssen (Case C–315/11), pending...................... 41–43

xvi  Table of Cases Van Gend en Loos v Nederlandse Administratie der Belastingen (Case 26/62) [1963] ECR 1.......................................................................................................171 Vanbraekel and Others (Case C–368/98) [2001] ECR I–5363......88, 91–93, 99–100, 113, 119, 122, 125, 128–129, 131–132 Vodafone (Case C–58/08) [2010] ECR I-4999....................... 5, 48, 65, 165, 179, 183 von Chamier–Glisczinski (Case C–208/07) [2009] ECR I–6095........88, 96–98, 101, 106–107, 115 Walletin–Hermann (Case C–549/07) [2008] ECR I–11061..............................31, 40 Watts (Case C–372/04) [2006] ECR I–4325................... 6, 88, 94–96, 113, 118–119, 121–122, 125, 130, 135, 138 Chronological 26/62 Van Gend en Loos v Nederlandse Administratie der Belastingen [1963] ECR 1.......................................................................................................171 6/64 Costa v Enel [1964] ECR 585..........................................................................171 22/70 Commission v Council [1971] ECR 263.................................................. 29–31 155/73 Sacchi (Giuseppe) [1974] ECR 409...............................................................75 167/73 Commission v France [1974] ECR 359.................................................. 11–12 181/73 Haegeman v Belgium [1974] ECR 449.........................................................43 104/81 Hauptzollamt Mainz v Kupferberg [1982] ECR 3641..................................43 145/82 Commission v Italy [1983] ECR 711...........................................................131 238/82 Duphar [1984] ECR 523.............................................................................119 286/82 and 26/83 Luisi and Carbone [1984] ECR 377..............................88–91, 114 13/83 Parliament v Council [1985] ECR 1513.............................................12, 25–26 209 to 213/84 Ministère Public v Lucas Asjes (Nouvelles Frontières case) [1986] ECR 1425.........................................................................................................12, 31 352/85 Bond van Adverteerders v Netherlands State [1988] ECR 205.....................76 263/86 Humbel [1988] ECR 5365.............................................................................92 186/87 Cowan v Tresor Public [1989] ECR I–5145................................173–174, 176 202/88 France v Commission [1991] ECR 1223.......................................................48 C–179/90 Merci Convenzionali Porto di Genova [1991] ECR I–5889.....................26 C–159/91 and C–160/91 Poucet and Pistre [1993] ECR I–637.......92, 102–103, 119 C–267/91 and C–268/91 Keck and Mithouard [1993] ECR I–6097......................105 C–379/92 Peralta [1994] ECR I–3453......................................................................44 C–18/93 Corsica Ferries Italia [1994] ECR I–1783..................................................26 C–381/93 Commission v France [1994] ECR I–5145...............................................26 C–55/94 Gebhard [1995] ECR I–4165...........................................................142, 150 C–174/94 R France v Commission [1994] ECR I–5229...........................................17 C–34/95, C–35/95, and C–36/95 Konsumentombudsmannen v De Agostini and TV Shop [1997] ECR I–3843.........................................................................78 C–70/95 Sodemare [1997] ECR I–3395.................................102–103, 119, 150, 155 C–120/95 Decker [1998] ECR I–1831...................6, 87–90, 92, 95, 98, 113, 118, 160 C–67/96 Albany [1999] ECR I–5751......................................................................103

Table of Cases  xvii C–85/96 Martínez Sala v Freistaat Bayern [1998] ECR I–2691............................174 C–158/96 Kohll [1998] ECR I–1931............................................ 6, 87–90, 92, 95, 98, 113, 118–119, 135, 160 C–160/96 Molenaar [1998] ECR I–843....................................................................97 C–274/96 Bickel and Franz [1998] ECR I–7637....................................................174 C–84/98 Commission v Portugal [2000] ECR I–5215..............................................26 C–201/98 Commission v Belgium [1998] ECR I–3557............................................26 C–224/98 D’Hoop [2002] ECR I–6191...................................................................174 C–281/98 Angonese [2000] I–ECR 4139................................................................178 C–361/98 Italy v Commission [2001] ECR I–385....................................................16 C–368/98 Vanbraekel and Others [2001] ECR I–5363.................88, 91–93, 99–100, 113, 119, 122, 125, 128–129, 131–132 C–376/98 Germany v Parliament and Council [2000] ECR I–8419........................69 C–467/98 Commission v Denmark [2002] ECR I–9519 (Open Skies case)..................................................................................................... 14, 24, 26, 29 C–476/98 Commission v Germany [2002] ECR–I 9855 (Open Skies case).............................................................................................................5, 26, 29 C–35/99 Arduino [2002] ECR I–1529....................................................................147 C–70/99 Commission v Portugal [2001] ECR I–4845..............................................16 C–157/99 Smits and Peerbooms [2001] ECR I–5473..............................6, 88, 91–93, 95–96, 107, 113, 118–121, 130 C–184/99 Grzelczyk [2001] ECR I–6193........................................................106, 176 C–205/99 Analir [2001] ECR I–1271..................................................... 18, 27, 81, 93 C–385/99 Müller Fauré and van Riet [2003] ECR I–4509.......... 88, 93–96, 113, 119, 123, 130–131, 133, 135 C–413/99 Baumbast [2002] 1–ECR 7091..............................................................174 C–447/99 Commission v Italy [2001] ECR I–5203..................................................16 C–503/99 Commission v Belgium [2002] ECR I–4809..........................................154 C–60/00 Carpenter [2002] ECR I–6279.................................................................105 C–181/00 Flightline [2002] ECR I–6139..................................................................16 C–280/00 Altmark Trans and Regierungspräsidium Magdeburg [2003] ECR I–7747....................................................................................................................29 C–56/01 Inizan [2003] ECR I–12403............................... 88, 113, 118–119, 121, 138 C–92/01 Stylianakis, Judgment of 6 February 2003, not yet reported...................16 C–96/01 P Galileo and Galileo International v Council [2002] ECR I–4025..........19 C–198/01 CIF [2003] ECR I–8055.........................................................................147 C–243/01 Gambelli [2003] ECR I–13031..................................................... 156–157 C–322/01 Deutscher Apothekerverband [2003] ECR I–14887...............................142 C–363/01 Flughafen Hannover–Langenhagen [2003] ECR I–11893......................18 C–491/01 British American Tobacco [2002] ECR I–11453..........................68–70, 72 C–8/02 Leichtle [2004] ECR I–2641.........................................................................88 C–138/02 Collins [2004] ECR I–2703............................................................106, 176 C–148/02 Garcia–Avello [2003] ECR I–11613.......................................................175 C–140/03 Commission v Greece [2005] ECR I–3177.............................................149

xviii  Table of Cases C–145/03 Keller [2005] ECR I–2529........................................................................88 C–209/03 Bidar [2005] ECR 1–2703......................................................................176 C–250/03 Mauri [2005] ECR I–1267.....................................................................147 C–380/03 Germany v Parliament and Council [2006] ECR I–11573......................69 C–403/03 Schempp [2005] ECR I–6421...................................................................98 C–458/03 Parking Brixen GmbH [2005] ECR I–8585...........................................151 C–94/04 and C–202/04 Cipolla et al [2006] ECR I–11421...................................147 C–217/04 United Kingdom v Parliament and Council [2006] ECR I–3771............68 C–338/04, C–359/04 and C–360/04 Placanica [2007] ECR I–1891.............. 156–58 C–344/04 IATA and ELFAA [2006] ECR I–403..................... 4, 22, 29, 31, 38, 40–44 C–372/04 Watts [2006] ECR I–4325............................... 6, 88, 94–96, 113, 118–119, 121–122, 125, 130, 135, 138 C–466/04 Acereda Herrera [2006] ECR I–5341.......................................................88 C–519/04 P Meca–Medina and Majcen v Commission [2006] ECR I–6991.........104 C–168/05 Mostaza Claro [2006] ECR I–10421........................................................38 C–318/05 Commission v Germany [2007] ECR I–6957.........................................103 C–341/05 Laval un Partneri [2007] ECR I–11767.....................................68, 71, 178 C–374/05 Gintec [2007] ECR I–9517.......................................................................68 C–380/05 Centro Europa 7 [2008] ECR 349..................................................... 81–82 C–438/05 International Transport Workers’ Federation and Finnish Seamen’s Union v Viking Line [2007] ECR I–10779..............................................68, 71, 178 C–444/05 Stamatelaki [2007] ECR I–3185..............................................................88 C–181/06 Lufthansa v Aeropuertos de Portugal SA [2007] ECR I–5903.................18 C–212/06 Government of the French Community and Walloon Government [2008] ECR I–1683.............................................................................................174 C–308/06 Intertanko and others [2008] ECR I–4057...................................28, 31, 44 C–345/06 Heinrich................................................................................................5, 21 C–352/06 Bosmann [2008] ECR I–3827..................................................................97 C–353/06 Grunkin and Paul [2008] ECR I–7639..................................................175 C–396/06 Kramme (removed from register)...........................................................40 C–531/06 Commission v Italy [2009] ECR I–4103................................150, 152, 155 C–42/07 Liga Portuguesa de Futebol Profissional and Bwin International [2009] ECR I–7633.....................................................................................156, 158 C–141/07 Commission v Germany [2008] ECR I–6935.........................................142 C–169/07 Hartlauer [2009] ECR I–1721.......................................102, 142–143, 152 C–171/07 and C–172/07 Apothekerkammer des Saarlandes et al [2009] ECR I–4171.................................................................................................142, 150 C–173/07 Emirate Airlines [2008] ECR I–5237............................... 31, 34, 40, 43–44 C–188/07 Commune de Mesquer [2008] ECR I–4501.............................................44 C–207/07 Commission v Kingdom of Spain [2008] ECR I–111.............................154 C–208/07 von Chamier–Glisczinski [2009] ECR I–6095............................88, 96–98, 101, 106–107, 115 C–220/07 Commission v France [2008] ECR I–95...................................................60 C–326/07 Commission v Italy [2009] ECR I–2291................................................154

Table of Cases  xix C–336/07 Kabel Deutschland Vertrieb [2008] ECR I–10889...................................58 C–402/07 and C–432/07 Sturgeon and others [2009] ECR I–10923............................................................................. 1, 4, 40, 42–44, 183 C–424/07 Commission v Germany [2009] ECR–I 11431.....................................5, 54 C–549/07 Walletin–Hermann [2008] ECR I–11061..........................................31, 40 C–570/07 and C–571/07 Pérez [2010] ECR I–4629.............. 140, 144, 146–148, 155 C–40/08 Asturcom Telecomunicaciones [2009] ECR I– 9579..................................38 C–58/08 Vodafone [2010] ECR I-4999................................... 5, 48, 65, 165, 179, 183 C–89/08 Commission v French Republic [2009] ECR I–11245......................153, 155 C–97/08 P Akzo Nobel and Others v Commission [2009] ECR I–8237.................151 C–204/08 Rehder v Air Baltic Corporation [2009] ECR I–6073..............................40 C–211/08 Commission v Spain {2010] ECR I-5267.......................... 88, 99, 101, 118, 122, 124, 128–129, 146 C–222/08 Commission v Belgium [2010] ECR I-9017.............................................60 C–315/08 Grisoli, Order of 29 September 2011, not yet reported............... 146–147 C–317/08, C–318/08, C–319/08 and C–320/08 Alassini [2010] ECR I–2213.......................................................................................................7, 59 C–389/08 Base and others [2010] ECR I-9073.........................................................60 C–403/08 and C–429/08 Football Association Premier League Ltd et al, Judgment of 4 October 2011, not yet reported.............................................81, 83 C–512/08 Commission v France [2010] ECR I-8833...... 88, 100–101, 107, 129–131, 133–134, 140, 148, 150, 154 C–522/08 Telekomunikacja Polska [2010] ECR I–2079...........................................60 C–525/08 Bienek (removed from register)..............................................................40 C–529/08 Schulze and others (removed from register)...........................................41 C–34/09 Ruiz–Zambrano, Judgment of 8 March 2011.........................................175 C–89/09 Commission v France [2010] ECR I-12941.............................................148 C–99/09 Polska Telefonia Cyfrowa, Judgment of 1 July 2010, not yet reported.................................................................................................................58 C–137/09 Josemans [2010] ECR I-13019...............................................................174 C–154/09 Commission v Portugal, Judgment of 7 October 2010, not yet reported.................................................................................................................60 C–173/09 Elchinov [2010] ECR I-8869........................... 88, 100–101, 107, 116–117, 119–121, 123–124, 129–130, 134, 139, 159 C–208/09 Sayn–Wittgenstein [2010] ECR I-13693........................................175, 177 C–217/09 Polisseni, Order of 17 December 2010, not yet reported..............140, 146 C–255/09 Commission v Portugal, Judgment of 27 October 2011, not yet reported..................................................................................................134 C–281/09 Commission v Spain, 24 November 2011................................................85 C–391/09 Runevic–Vardyn, Judgment of 12 May 2011................................ 176–177 C–490/09 Commission v Luxembourg [2010] ECR I-247........................99, 132, 134 C–543/09 Deutsche Telekom, Judgment of 5 May 2011, not yet reported..............60 C–83/10 Sousa Rodríguez et al..................................................................................41 C–226/10 Adams (removed from register)..............................................................41

xx  Table of Cases Cases C–244/10 and C–245/10 Mesopotamia Broadcast and Roj TV.....................78 C–294/10 Eglitis & Ratnieks, Judgment of 12 May 2011.........................................41 C–581/10 Nelson, Judgment of 23 October 2012............................................. 41–43 C–629/10 TUI Travel and others, pending........................................................ 41–43 C–11/11 Folkerts, pending........................................................................................41 C–12/11 McDonagh, pending...................................................................................41 C–22/11 Finnair, Judgment of 4 October 2012.......................................................41 C–139/11 Cuadrench More, pending........................................................................41 C–151/11 Condor, pending.......................................................................................41 C–255/11 Büsch and Siever, pending.......................................................................41 C–315/11 Van de Ven and Van de Ven–Janssen, pending.................................. 41–43 C–321/11 Rodríguez Cachafeiro et Martínez–Reboredo Varela–Villamor, pending..................................................................................................................41 C–365/11 Esteves Coelho dos Santos, pending..........................................................41 C–410/11 Espada Sánchez, pending.........................................................................41 C–413/11 Germanwings, pending............................................................................41 C–436/11 and C–437/11 Schlüsselbauer & Schauß, pending..................................41 C–594/11 Becker, pending........................................................................................41 C–150/12 Brännström, pending...............................................................................41 C–212/12 Butz et al, pending....................................................................................41 C–227/12 Koninklijke Luchtvaart Maatschappij and TUI Airlines Nederland, pending..................................................................................................................41 C–316/12 Guevara Kamm, pending.........................................................................41

General Court Alphabetical Air Inter v Commission (Case T–260/94) [1997] ECR II–997.................................17 FIFA v Commission (Case T–385/07) [2011] ECR II-205.........................................6 FIFA v Commission (Case T–68/08) [2011] ECR II-349 ....................................6, 80 Galileo and Galileo International v Council (Case T–113/99) [2000] ECR II–4141..........................................................................................................19 UEFA v Commission (Case T–55/08) [2011] ECR II-271...................................6, 80 Vodafone España and Vodafone Group v Commission (Case T–109/06) [2007] ECR II–5151..............................................................................................53 Chronological T–260/94 Air Inter v Commission [1997] ECR II–997.............................................17 T–113/99 Galileo and Galileo International v Council [2000] ECR II–4141..........19 T–109/06 Vodafone España and Vodafone Group v Commission [2007] ECR II–5151..........................................................................................................53

Table of Cases  xxi T–385/07 FIFA v Commission [2011] ECR II-205.....................................................6 T–55/08 UEFA v Commission [2011] ECR II-271...............................................6, 80 T–68/08 FIFA v Commission [2011] ECR II-349.................................................6, 80

Germany German Constitutional Court, Judgment of 30 June 2009 concerning the Lisbon Treaty, Recital 276...................................................................................173

Italy Constitutional Court (Corte costituzionale), Judgment no 132 of 2 May 1985 (N. 132 Sentenza 2 maggio 1985)..........................................................................30 Judgment no 323 of 18 May 1989 (N. 323 Sentenza 18 maggio – 6 giugno 1989)......................................................................................................................30

United States of America Zicherman v Korean Airlines 516 US 217 (1996).....................................................32 Dooley v Korean Airlines 524 US 116 (1998)............................................................32

Table of Legislation Belgium Décret Royal of 10 June 1994..................................................................................154 Bulgaria Law on health (DV n. 70 of 10 August 2004) (Natsionalna zdravno osiguritelna kasa (NZOK)).........................................................................................117, 122 Law on sickness insurance    Art 36...................................................................................................................120    Art 45(2)..............................................................................................................117

European Union Charter of Fundamental Rights of the European Union 2007.............166, 172, 175   Recitals.................................................................................................................172    Art 26.....................................................................................................................39    Art 35...................................................................................................106, 142, 162    Art 38.....................................................................................................................38 EC Treaty.....................................................................................................11, 39, 172   Pt 2.......................................................................................................................172    Art 3(e)..................................................................................................................12    Art 3(1)(t).............................................................................................................38    Art 5.......................................................................................................................73    Art 17(1) (now Art 20(1) TFEU).........................................................................98    Art 18(1)................................................................................................................98    Art 39...................................................................................................................104    Art 42.....................................................................................................................98    Art 43 (now Art 49 TFEU).........................................................................148, 154    Art 46 (now Art 52 TFEU).........................................................................119, 149    Art 49 (now Art 56 TFEU).......................................... 82, 104, 117–118, 123, 125, 128–129, 131–133, 135, 138–139    Art 51 (now Art 58 TFEU.................................................................................4, 13    Art 59 (now Art 56 TFEU).............................................................................13, 16    Art 60 (now Art 57 TFEU)...................................................................................13    Art 61 (now Art 58 TFEU).............................................................................13, 16    Arts 74–75.............................................................................................................12

xxiv  Table of Legislation    Art 75(1)(a)–(b) (now Art 91(1)(a)–(b) TFEU).................................................13    Arts 76–82.....................................................................................................12, 104    Art 84.....................................................................................................................12    Art 84(2) (now Art 100(2) TFEU).................................................................12, 16    Art 90.....................................................................................................................48    Art 90(3) (now Art 106(3) TFEU).......................................................................48    Art 95 (now Art 114 TFEU).................................................................5, 63, 65–71    Art 95(1)................................................................................................................66    Art 95(3)......................................................................................................... 66–67    Art 153(2)..............................................................................................................67    Art 175(1) (now Art 265 TFEU)..........................................................................12    Art 232 (now Art 265 TFEU)...............................................................................13    Art 234...................................................................................................................44    Art 251...................................................................................................................66    Art 300...................................................................................................................43    Art 300(7)..............................................................................................................44 Single European Act 1986.......................................................................................171 Single Market Act....................................................................................................169 Treaty of Amsterdam..............................................................................................172    Protocol on public service broadcasting..............................................................85 Treaty Establishing a Constitution for Europe 2004    Art I–8.................................................................................................................172    Art I–10...............................................................................................................172 Treaty on European Union 1992 (Maastricht Treaty/TEU)............... 2, 7, 39, 77–78, 168, 172, 174, 176, 185    Art 4(2)................................................................................................................175    Art 6(1)–(2).........................................................................................................173    Art 9.............................................................................................................170, 173    Art 11...................................................................................................................173 Treaty on the Functioning of the European Union (TFEU).............................6, 173   Pt Two..................................................................................................................172    Art 4(2)(a).............................................................................................................38    Art 4(2)(f).............................................................................................................38    Art 4(2)(g).......................................................................................................12, 38    Art 6a...........................................................................................................115, 136    Art 6(d)..................................................................................................................39    Art 9.....................................................................................................................136    Art 12.............................................................................................................. 38–39    Art 18...................................................................................................................175    Art 19...................................................................................................................170    Art 20........................................................................... 167, 170, 174–177, 180, 184    Art 20(1)–(2).......................................................................................................172    Art 20(2)(a).........................................................................................................184    Art 21...................................................................................................................175

Table of Legislation  xxv    Art 21(1)–(2).......................................................................................................184    Art 22...................................................................................................................176    Art 25...........................................................................................................169, 172    Art 49 (ex Art 43 EC)............................................................................14, 142, 147    Art 52...........................................................................................................142, 165    Art 56 (ex Art 49 EC)............................................................... 89, 98–99, 105, 139    Art 57 (ex Art 50 EC)................................................................................75, 90, 92    Art 58(1)................................................................................................................38    Art 59 (ex Art 52 EC)............................................................................................75    Art 62...................................................................................................................165    Art 90.................................................................................................................... 38    Art 91............................................................................................................ 38, 179    Art 91(1)(c)–(d)....................................................................................................27    Arts 92–95.............................................................................................................38    Art 95(3) (ex Art 75(3) EC)..................................................................................39    Arts 96–99.......................................................................................................12, 38    Art 100.....................................................................................................12, 38, 179    Art 101...................................................................................................................12    Art 101(3)..............................................................................................................84    Art 102...................................................................................................................12    Art 106(3) (ex Art 90(3) EC)..................................................................................5    Art 114 (ex Art 95 EC)......................................................... 7, 50, 66, 71, 136, 179    Art 114(3)................................................................................................................7    Art 167 (ex Art 151 EC)........................................................................................77    Art 167(1)..............................................................................................................77    Art 168.................................................................................................115, 136, 166    Art 168(1)............................................................................................................142    Art 169...................................................................................................................38    Art 216(2)..............................................................................................................31    Arts 227–228.......................................................................................................180    Art 263 (ex 230 EC)............................................................................................173    Art 265............................................................................................................ 12–13   Lisbon Protocol.......................................................................................................8 Treaty of Lisbon........................................................................................66, 172–173 Treaty of Maastricht 1992. See Treaty on European Union 1992 Treaty of Rome..........................................................................................89, 168, 185    Art 63.......................................................................................................................3 Decisions Dec 65/271/EEC on the harmonisation of certain provisions affecting competition in transport by rail, road and inland waterway [1965] OJ P 88/1500.....................................................................................................11 Dec 76/787/ECSC, EEC, Euratom [1976] OJ L 326/32.........................................171

xxvi  Table of Legislation Dec 87/602/EEC on the sharing of passenger capacity between air carriers on scheduled air services between Member States and on access for air carriers to scheduled air–service routes between Member States [1987] OJ L 374/19   Recital 4.................................................................................................................17 Dec 2001/539/EC on the conclusion by the European Community of the Convention for the Unification of Certain Rules for International Carriage by Air (Montreal Convention) [2001] OJ L 194/38...................23, 31 Dec 194 of the Administrative Commission of the European Communities on Social Security for Migrant Workers of 17 December 2003 concerning the uniform application of Art 22(1)(a)(i) of Regulation 1408/71 in the Member State of stay [2004] OJ L 104/127...................................................126 Dec 2007/730/EC [2007] OJ L295/12......................................................................80 Directives Dir 85/432/EEC concerning the coordination of provisions laid down by Law, Regulation or Administrative Action in respect of certain activities in the field of pharmacy [1985] OJ L 253/34................................................142    Art 1(1)–(2).........................................................................................................146 Dir 87/601/EEC on fares for scheduled air services between Member States [1987] OJ L 374/12   Recital 2.................................................................................................................17   Recital 7.................................................................................................................17 Dir 88/201/EC on competition in the markets in telecom­munications terminal equipment (Terminal Equipment Directive) [1988] OJ L131/73..................48 Dir 89/552/EEC on the co–ordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the pursuit of television broadcasting activities (Television Without Frontiers Directive/Audio–Visual Services Directive) [1989] OJ L 298/23...........................................................................6, 75–77, 81–82, 84   Recitals 2–3............................................................................................................76   Recital 7.................................................................................................................76   Recital 13...............................................................................................................77   Recital 24...............................................................................................................77    Arts 2–3.................................................................................................................78    Arts 4–5.................................................................................................................77    Arts 10–12.............................................................................................................77    Arts 13–14.............................................................................................................78    Arts 15–16.............................................................................................................78    Art 18.....................................................................................................................85    Art 19.....................................................................................................................78    Art 22.....................................................................................................................78    Art 22(a)................................................................................................................78

Table of Legislation  xxvii    Art 23.....................................................................................................................78 Dir 90/314/EEC on package travel, package holidays and package tours [1990] OJ L 158/59.................................................................................................21, 33 Dir 90/365/EEC and Dir 93/96, since repealed and replaced by Dir 2004/38/ EEC on the right of citizens of the Union and their family members to move and reside freely within the territory of the Member states [2004] OJ L158/77......................................................................................................174 Dir 90/388/EEC on competition in the markets for telecommunications services (Services Directive) [1990] OJ L 192/10............................................48 Dir 93/83/EEC on the coordination of certain rules concerning copyright and rights related to copyright applicable to satellite broadcasting and cable retransmission (Copyright Directive) [1993] OJ L 248/15............................84    Art 3.......................................................................................................................84 Dir 94/19/EC on deposit guarantee schemes, as amended by Dir 2009/14.........166 Dir 94/56/EC establishing the fundamental principles governing the investigation of civil aviation accidents and incidents [1994] OJ L 319/14.............20 Dir 94/57/EC on common rules and standards for ship inspection and survey organisations and for the relevant activities of maritime administrations [1994] OJ L 319/20, now Dir 2009/15/EC [2009] OJ L 131/47......................27 Dir 94/58/EC on the minimum level of training of seafarers [1994] OJ L 319/28, now Dir 2001/25/EC [2001] OJ L 136/17..................................27 Dir 95/21/EC concerning the enforcement, in respect of shipping using Community ports and sailing in the waters under the jurisdiction of the Member States, of international standards for ship safety, pollution prevention and shipboard living and working conditions (port State control) [1995] OJ L 157/1, now Dir 2009/16 on port State control [2009] OJ L 131/57...........................................................................................27 Dir 95/46/EC on the protection of individuals with regard to the processing of personal data and on the free movement of such data [1995] OJ L 281/31................................................................................................ 61–62 Dir 96/67/EC on access to the groundhandling market at Community airports [1996] OJ L 272..................................................................................18   Recital 5.................................................................................................................19 Dir 97/7/EC on the protection of consumers in respect of distance contracts [1997] OJ L 144/19 and Reg 2006/2004 on cooperation between national authorities responsible for the enforcement of consumer protection laws [2009] OJ L 337/11...........................................................................................55 Dir 97/36/EC amending Dir 89/552/EEC on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the pursuit of television broadcasting activities [1997] OJ L 202/60......................................................................76, 79   Recitals 18–22........................................................................................................79   Recitals...................................................................................................................80    Art 2–2a.................................................................................................................79

xxviii  Table of Legislation    Art 3.......................................................................................................................79    Art 3(3)..................................................................................................................79    Art 3a.............................................................................................................. 79–80    Art 3a(1)......................................................................................................... 80–81 Dir 97/55/EC amending Directive 84/450/EEC concerning misleading advertising so as to include comparative advertising (Misleading Advertising Directive) [1997] OJ L 290/18......................................................55 Dir 98/18/EC on safety rules and standards for passenger ships [1998] OJ L 144/1, now recast as Dir 2009/45/EC [2009] OJ L 163/1.......................28 Dir 2001/25/EC [2001] OJ L 136/17........................................................................27 Dir 2002/19/EC on access to, and interconnection of, electronic communications networks and associated facilities (Access Directive) [2002] OJ L 108/7.......................................................................................50, 53 Dir 2002/20/EC on the authorisation of electronic communications networks and services (Authorisation Directive) [2002] OJ L 108/21...........................50 Dir 2002/21/EC on a common regulatory framework for electronic communications networks and services (Framework Directive) [2002] OJ L 108/33............................................................................... 50, 52, 61, 65, 82   Recital 5.................................................................................................................51    Art 1.......................................................................................................................82    Art 1(3)..................................................................................................................82    Art 2.......................................................................................................................82    Art 2(a)..................................................................................................................51    Art 2(c)..................................................................................................................51    Art 2(k)..................................................................................................................51    Art 2(n)..................................................................................................................51    Art 7................................................................................................................ 53–55    Art 7(3)..................................................................................................................53    Art 8.................................................................................................................51, 54    Arts 15–16...........................................................................................52–53, 60–61 Dir 2002/22/EC on universal service and users’ rights relating to electronic communications networks and services (Universal Service Directive) [2002] OJ L 108/51.......................................................50–51, 53, 55–56, 59–61    Ch II (Arts 3–15)...................................................................................................59   Ch IV.....................................................................................................................56    Art 1.......................................................................................................................55    Art 1(4)............................................................................................................55, 61    Art 2(i)...................................................................................................................51    Art 20...............................................................................................................56, 61    Art 20(1)(b)...........................................................................................................56    Art 20 (1)(d)–(e)...................................................................................................56    Art 21.....................................................................................................................56   Art 22.....................................................................................................................57    Art 23a...................................................................................................................57

Table of Legislation  xxix    Arts 25–26.............................................................................................................57    Art 30.............................................................................................................. 57–58    Art 30(1)–(2).........................................................................................................58    Art 30(4)................................................................................................................58    Art 31.....................................................................................................................58   Art 34.....................................................................................................................59 Dir 2002/58/EC concerning the processing of personal data and the protection of privacy in the electronic communications sector (e–Privacy Directive) [2002] OJ L 201/37.................................................................50, 55, 61–63, 165   Recital 17...............................................................................................................62   Recital 25...............................................................................................................62    Arts 3–4.................................................................................................................62    Art 6.......................................................................................................................62    Art 13.....................................................................................................................63 Dir 2003/42/EC on occurrence reporting in civil aviation [2003] OJ L 167/23–36.................................................................................................20 Dir 2004/38/EEC on the right of citizens of the Union and their family members to move and reside freely within the territory of the Member states [2004] OJ L158/77........................................................................174, 184 Dir 2005/29/EC concerning unfair business–to–consumer commercial practices in the internal market (Unfair Commercial Practices Directive) and amending Dir 84/450/EEC, Dirs 97/7/EC, 98/27/EC and 2002/65/EC and Reg 2006/2004 [2005] OJ L 149/22.......................................7–8, 38, 55, 61 Dir 2005/36/EC on the recognition of professional qualifications [2005] OJ L 255/22.....................................................................................................142   Recital 26.............................................................................................................142    Art 1.....................................................................................................................142    Art 45(2)(e).........................................................................................................146    Art 45(2)(g).........................................................................................................146 Dir 2006/123/EC on services in the internal market (Services Directive) [2006] OJ L 376/36...............................................................................8, 38, 136   Recital 21...............................................................................................................38   Recital 33.........................................................................................................38, 40    Art 2(2)(d).......................................................................................................38, 40    Art 20(2)................................................................................................................40 Dir 2007/64 on payment services in the internal market.....................................166 Dir 2007/65/EC amending Dir 89/552/EEC on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the pursuit of tel­evision broadcasting activities [2007] OJ L 332/27......................................................................76, 81 Dir 2009/15/EC [2009] OJ L 131/47........................................................................27 Dir 2009/45/EC on safety rules and standards for passenger ships [2009] OJ L 163/1.........................................................................................................28   Recital 3.................................................................................................................28

xxx  Table of Legislation    Art 2(y)..................................................................................................................39 Dir 2009/136/EC amending Dir 2002/22/EC on universal service and users’ rights relating to electronic communications networks and services, Dir 2002/58/EC concerning the processing of personal data and the protection of privacy in the electronic communications sector and Reg 2006/2004 on cooperation between national authorities responsible for the enforcement of consumer protection laws [2009] OJ L 337/11...............................................................................................50, 165 Dir 2009/140/EC amending Dirs 2002/21/EC on a common regulatory framework for electronic communications networks and services, 2002/19/EC on access to, and interconnection of, electronic communications networks and associated facilities, and 2002/20/EC on the authorisation of electronic communications networks and services [2009] OJ L 337/37.............................................................................50 Dir 2010/13/EU on the co–ordination of certain provisions lay down by law, regulation or administrative action in Member States concerning the provision of audio–visual media services (Audio–Visual Media Services Directive) [2010] OJ L 263/15............................................................76, 81, 165    Arts 3–4.................................................................................................................79    Art 14.....................................................................................................................79 Dir 2011/24/EU on the application of patients’ rights in cross–border health care [2011] OJ L88/45................................................. 6, 88, 101, 107–108, 115, 136–137, 139, 161, 166, 178   Recitals 1–2..........................................................................................................136   Recital 4...............................................................................................................137   Recital 9...............................................................................................................137   Recital 17.............................................................................................................137   Recital 33.............................................................................................................137    Art 1............................................................................................................ 137–138    Art 1(2)–(3).........................................................................................................137    Art 1(3)(a)...................................................................................................107, 137    Art 1(3)(b)–(c)....................................................................................................137    Art 2.....................................................................................................................137    Art 3.....................................................................................................................180    Art 4.............................................................................................................137, 180    Art 5.....................................................................................................................138    Art 5b...................................................................................................................140    Art 6.....................................................................................................................140    Art 6(3)................................................................................................................140    Art 7(1)................................................................................................................138    Art 8(1)........................................................................................................108, 139    Art 8(2)................................................................................................................139    Art 8(3)................................................................................................................138    Art 8(5)................................................................................................................138

Table of Legislation  xxxi    Art 8(6)(a)...........................................................................................................138    Arts 9–15.............................................................................................................137 Recommendations Rec 2007/879/ECon relevant product and service markets within the electronic communications sector susceptible to ex ante regulation in accordance with Dir 2002/21/EC on a common regulatory framework for electronic communications networks and services [2007] OJ L 344/65.........................52 Rec 2011/442/EU on access to a basic payment account......................................166 Regulations Reg 1017/68/EEC applying rules of competition to transport by rail, road and inland waterway [1968] OJ L 175/1.................................................................11 Reg 543/69/EEC on the harmonisation of certain social legislation relating to road transport [1969] OJ L 77/49....................................................................29 Reg 1191/69...............................................................................................................29 Reg 1408/71/EC on the application of social security schemes to employed persons, to self–employed persons and to members of their families moving within the Community (Social Security Regulation) [1971] OJ L 1492................................................................ 90–91, 97–98, 105, 107, 109, 114–116, 118, 124–128, 134, 137–139    Art 19.....................................................................................................................98    Art 22............................................................... 91, 98, 100, 115–119, 123, 128, 135    Art 22(1)(a)................................................................................................ 125–126    Art 22(1)(a)(i)............................................................................................ 126–127    Art 22(1)(c).........................................................................................................125    Art 22(1)(c)(i).....................................................................................................122    Art 22(2)..............................................................................................100, 120–122    Art 36...................................................................................................................128 Reg 954/79/EEC concerning the ratification by Member States of, or their accession to, the UN Convention on a Code of Conduct for Liner Conferences [1979] OJ L 121/1........................................................................26 Reg 4055/86/EEC applying the principle of freedom to provide services to maritime transport between Member States and between Member States and third countries [1986] OJ L 378/1, as amended by Reg (EEC) 3573/90 [1990] OJ L 353/16...................................................................... 25–27    Art 4.......................................................................................................................26 Reg 295/91/EEC establishing common rules for a denied boarding compensation system in scheduled air transport [1991] OJ L 36/5....... 21–22 Reg 3922/91/EEC on the harmonisation of technical requirements and administrative procedures in the field of civil aviation [1991] OJ L 373/4...20 Reg 2407/92/EEC on the licensing of air carriers [1992] OJ L 240/1.....................13

xxxii  Table of Legislation Reg 2408/92/EEC on access for Community air carriers to intra–Community air routes [1992] OJ L 240/8................................................................13, 15–16 Reg 2409/92/EEC on fares and rates for air services [1992] OJ L 240/15..............13 Reg 3577/92/EEC applying the principle of freedom to provide services to maritime transport within Member States (maritime cabotage) [1992] OJ L 364/7.........................................................................................4, 17, 26–27    Art 4.......................................................................................................................26 Reg 3089/93/EEC amending Reg 2299/89/EEC on a code of conduct for computerised reservation systems [1993] OJ L 278/1....................................19 Reg 2027/97/EC on air carrier liability in the event of accidents [1997] OJ L 285/1, as amended by Reg 889/200251...........................22–23, 29–31, 35   Recital 3.................................................................................................................22    Art 2(1)(e).............................................................................................................32    Art 3a.....................................................................................................................32    Art 5.......................................................................................................................32 Reg 323/1999/EC amending Reg 2299/89/EEC on a code of conduct for computer reservation systems [1999] OJ L 40/1.............................................19 Reg 2560/2001/EC on cross–border payments in the Community, repealed and updated by Reg 924/2009 [2009] OJ L 266/11.......................................166 Reg 889/2002/EC amending Reg 2027/97/EC on air carrier liability in the event of accidents [2002] OJ L 140/2.........................................................23, 35    Arts 17–19.............................................................................................................23 Reg 1592/2002/EC.....................................................................................................20 Reg 2320/2002/EC establishing common rules in the field of civil aviation security [2002] OJ L 355/1...............................................................................21 Reg 1882/2003/EC.....................................................................................................19 Reg 261/2004/EC establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, and repealing Reg 295/91/EEC [2004] OJ L 46/1...................................................................................22, 24, 35, 40–43   Recital 1.................................................................................................................22   Recital 4.................................................................................................................22    Art 2(i)...................................................................................................................39    Art 5.......................................................................................................................22    Art 6.................................................................................................................22, 42    Art 7.......................................................................................................................22 Reg 549/2004/EC laying down the framework for the creation of the single European sky (Framework Regulation) [2004] OJ L 90/1.............................19 Reg 550/2004/EC on the provision of air navigation services in the single European sky (Service Provision Regulation) [2004] OJ L 96/10..................19 Reg 551/2004 on the organisation and use of the airspace in the single European sky (Airspace Regulation) [2004] OJ L 96/20.................................................19 Reg 552/2004/EC on the interoperability of the European Air Traffic Management network (Interoperability Regulation) [2004] OJ L 96/26......19

Table of Legislation  xxxiii Reg 785/2004 on insurance requirements for air carriers and aircraft operators [2004] OJ L 138/1, as amended by Reg 285/2010...........................................35 Reg 847/2004/EC on the negotiation and implementation of air service agreements between Member States and third countries [2004] OJ L 195/3.........................................................................................................14 Reg 883/2004 on the coordination of social security systems [2004] OJ L 166/1, replacing Reg 1408/71 on the application of social security schemes to employed persons, to self–employed persons and to members of their families moving within the Community.........................88, 114–115, 137–139    Art 18...................................................................................................................115    Art 20...................................................................................................................115    Art 20(1)..............................................................................................................115    Art 20(1)(a).........................................................................................................116    Art 20(1)(c).........................................................................................................116    Art 20(1)(c)(i).....................................................................................................116    Art 20(2)..............................................................................................................116 Reg 2111/2005/EC on the establishment of a Community list of air carriers subject to an operating ban within the Community and on informing air transport passengers of the identity of the operating air carrier, and repealing Art 9 of Dir 2004/36/EC [2005] OJ L 344/15; Corrigenda [2006] OJ L 186/60 and [2006] OJ L 189/27.........................................................23, 35   Recital 1.................................................................................................................23   Ch II.......................................................................................................................23 Reg 474/2006/EC establishing the Community list of air carriers which are subject to an operating ban within the Community referred to in Ch II of Reg 2111/2005 [2006] OJ L 84/14...............................................................23 Reg 1107/2006/EC concerning the rights of disabled persons and persons with reduced mobility when travelling by air [2006] OJ L 204/1............23, 35   Recitals...................................................................................................................23    Art 2(a)..................................................................................................................39 Reg 717/2007/EC on roaming on public mobile communication networks within the Community (Roaming Regulation) [2007] OJ L 171/32, as amended by Reg 544/2009 [2009] OJ L 167/12....................... 5, 48, 51–52, 55, 63–65, 67–74, 165, 167   Recital 1.................................................................................................................63   Recital 4.................................................................................................................64   Recital 6.................................................................................................................64   Recitals 8–9..................................................................................................... 69–70   Recital 14...............................................................................................................73   Recital 16...............................................................................................................64   Recitals.............................................................................................................68, 72    Arts 1(3)................................................................................................................64    Art 2(2)(f).............................................................................................................65    Art 2(2)(a).............................................................................................................65

xxxiv  Table of Legislation    Art 3.......................................................................................................................64    Art 4................................................................................................................ 64–65    Art 4(a)–(b)...........................................................................................................64    Art 6(3)..................................................................................................................65    Art 7.......................................................................................................................64    Art 10.....................................................................................................................64 Reg 1371/2007 on rail passengers’ rights and obligations [2007] OJ L 315/14......35    Art 3(15)................................................................................................................39 Reg 1490/2007 repealing Reg 954/79 concerning the ratification by Member States of, or their accession to, the UN Convention on a Code of Conduct for Liner Conferences [2007] OJ L 332/1).......................................26 Reg 92/2008 amending Reg 1408/71 on the application of social security schemes to employed persons, to self–employed persons and to members of their families moving within the Community [2008] OJ L 177/1...........114 Reg 216/2008 on common rules in the field of civil aviation and establishing a European Aviation Safety Agency, and repealing Dir 91/670/EEC, Reg 1592/2002 and Dir 2004/36/EC [2008] OJ L 79/1...................................20 Reg 300/2008 on common rules in the field of civil aviation security, and repealing Reg 2320/2002 [2008] OJ L 97/72...................................................21 Reg 1008/2008 on common rules for the operation of air services in the Community [2008] OJ L 293/3 4, 14, 35, 58   Ch III.....................................................................................................................15   Ch IV.....................................................................................................................17    Art 8(2)..................................................................................................................17    Art 15.....................................................................................................................15    Art 16.....................................................................................................................18    Art 19.....................................................................................................................16    Art 19(1)–(3).........................................................................................................16    Arts 22–23.......................................................................................................17, 35    Art 23(2)................................................................................................................40    Art 24.....................................................................................................................35 Reg 80/2009/EC on a code of conduct for computerised reservation systems, and repealing Reg 2299/89 (CRS Regulation) [2009] OJ L 35/47............19, 35 Reg 391/2009 on common rules and stand­ards for ship inspection and survey organisations [2009] OJ L 131/11)..................................................................27 Reg 392/2009 on the liability of carriers of passengers by sea in the event of accidents [2009] OJ L 131/24.........................................................................................................28, 35–36   Recital 13...............................................................................................................36    Arts 4–6.................................................................................................................36    Annexes I–II..........................................................................................................36    IMO Guidelines..........................................................................................28, 36 Reg 924/2009 on cross–border payments in the Community, and repealing Reg 2560/2001 [2009] OJ L266/11...........................................................71, 166

Table of Legislation  xxxv Reg 1211/2009 establishing the Body of European Regulators for Electronic Communications (BEREC) and the Office [2009] OJ L 337/1......................50 Reg 285/201054 [2010] OJ L 87/19..........................................................................35 Reg 996/2010 on the investigation and prevention of accidents and incidents in civil aviation [2010] OJ L 295/35.................................................................35    Art 20(3)................................................................................................................35 Reg 1177/2010 concerning the rights of passengers when travelling by sea and inland waterway, [2010] OJ L 334/1....................................................28, 35, 37    Preamble, Recital 2................................................................................................38    Art 2(1)–(2)...........................................................................................................37    Art 3(a)..................................................................................................................39    Art 4(2)..................................................................................................................40    Arts 7–8.................................................................................................................37    Arts 10–14.............................................................................................................37    Art 15.....................................................................................................................36    Arts 17–20.............................................................................................................37 Reg 181/2011 concerning the rights of passengers in bus and coach transport [2011] OJ L 55/1...............................................................................................35    Art 3(j)...................................................................................................................39    Art 4(2)..................................................................................................................40 Reg 531/2012 on roaming on public mobile communications networks within the Union (recast) [2012] OJ L172/20.......................................................48, 65 Reg 1203/2012 on the separate sale of regulated retail roaming services within the Union [2012] OJ L347/1............................................................................48

France Décret n 92–545 of 17 June 1992    Arts 10–11...........................................................................................................149 Loi n 90–1258 of 31 December 1990, as amended by Loi n 2008776 of 4 August 2008    Art 5.....................................................................................................................149 Public Health Code    Art R 6122–26.....................................................................................................130 Social Security Code    Art R 332–4.........................................................................................................129

Italy Legge n 475 of 2 April 1968, as amended by Legge n 362 of 8 November 1991 and Art 13 of decreto n 1275 of 21 August 1971    Art 1.....................................................................................................................147

xxxvi  Table of Legislation Regio decreto of 27 July 1934, fn 1265, as amended by Legge of 8 November 1991    Art 104.................................................................................................................148

Luxembourg Social Security Code    Art 24...................................................................................................................132 Statuts de l’Union des caisses de maladie    Art 12...................................................................................................................132

Portugal Decreto–Lei n 177/92 of 13 August 1992................................................................134

Spain Decreto 72/2001 regulador de las oficinas de farmacia y botiquines en el Principado de Asturias of 19 July 2001...........................................................141    Art 4.....................................................................................................................141   Annex...................................................................................................................141    Points 6–7........................................................................................................145    Point 7(c)........................................................................................................145 Ley 14/1986, General de Sanidad of 25 April 1986 (the General Law on Health)............................................................................................................124    Art 17...................................................................................................................124    Art 103(3)............................................................................................................140 Ley de Regulación de los Servicios de las Oficinas de Farmacia 16/1997 of 26 April 1997    Art 2.....................................................................................................................140 Ley 34/1998 of 7 October 1998 as amended by Real decreto–ley 4/2006..............154 Ley 16/2003 de cohesión y calidad del Sistema Nacional de Salud of 28 May 2003....................................................................................................124 Royal Decree 63/1995 on the organisation of health benefits within the ‘National Health Service’ (Real Decreto 63/1995 sobre ordenación de prestaciones sanitarias del Sistema Nacional de Salud) of 20 January 1995.................................................................................................................124    Art 5(3)................................................................................................................124 Royal Decree 1030/2006    Art 4(3)....................................................................................................... 124–125

Table of Conventions, Treaties etc Belgium Athens Convention on the carriage of passengers and their luggage by sea 1974.............................................................................................................34    London Protocol 2002..........................................................................................34     Arts 19–20.........................................................................................................34 Athens Convention 2002..............................................................................28, 34, 36    Art 1(6)..................................................................................................................36    Art 3(1)–(4)...........................................................................................................36    Art 3(5)(a).............................................................................................................36    Art 7(1)..................................................................................................................36    Art 8.......................................................................................................................36    Art 14...............................................................................................................31, 33 Chicago Convention. See Convention on International Civil Aviation 1944 Convention on International Civil Aviation 1944 (Chicago Convention)..........................................................................................10–11, 20    Art 1.......................................................................................................................11    Art 44.............................................................................................................. 10–11 Convention on the Standards of Training, Certification and Watchkeeping for Seafarers 1978..............................................................................................27 Convention for the Unification of Certain Rules Relating to International Carriage by Air 1929 as amended at The Hague (1955) and at Guadalajara (1961) (Warsaw Convention 1929)......................................... 4, 22, 30, 32, 164    Hague Protocol (1955).........................................................................................30    Guadalajara Convention (1961)...........................................................................30    Guatemala City Protocol (1971)..........................................................................30    Additional (Montreal) Protocols 1–3 (1975)......................................................30    Montreal Protocol Number 4...............................................................................30 Convention for the Unification of Certain Rules for International Carriage by Air 1999 (Montreal Convention)............... 4, 22–23, 28–34, 38, 41–44, 164    Ch III (Arts 17 to 37)............................................................................................31   Preamble................................................................................................................38    Art 17.....................................................................................................................32    Art 17(1)................................................................................................................32    Art 17(2)–(4).........................................................................................................32    Art 19.........................................................................................................33, 38, 42    Art 20.............................................................................................................. 32–33    Art 21(1)–(2).........................................................................................................32

xxxviii  Table of Conventions, Treaties etc    Art 22...............................................................................................................32, 38    Art 22(1)................................................................................................................33    Art 22(2)......................................................................................................... 32–33    Art 22(5)......................................................................................................... 32–33    Art 22(6)................................................................................................................32    Art 23.....................................................................................................................32    Art 27.....................................................................................................................33    Art 28.....................................................................................................................32    Art 29...................................................................................................31–33, 38, 42    Art 31(1)................................................................................................................32    Art 31(2)–(4).................................................................................................. 32–33    Art 35.....................................................................................................................33    Arts 39–40.............................................................................................................33    Art 47.....................................................................................................................33    Art 49.....................................................................................................................33    Art 52.....................................................................................................................32    Art 53(2)................................................................................................................31 European Convention for the Protection of Human Rights and Fundamental Freedoms 1950 (Human Rights Convention /ECHR)..................................172    Art 10...............................................................................................................76, 81 European Union aviation agreement with the United States [2007] OJ L 134/4.................................................................................................. 14–15 International Convention for the Prevention of Pollution from Ships 1973 (MARPOL).......................................................................................................27 International Convention for the Safety of Life at Sea 1974 (SOLAS),........... 27–28 Montreal Convention. See Convention for the Unification of Certain Rules for International Carriage by Air 1999 UN Convention on the Rights of Persons with Disabilities ............................34, 39 UNIDROIT Convention international relative au contract de voyage (CCV).........30 Warsaw Convention 1929. See Convention for the Unification of Certain Rules Relating to International Carriage by Air 1929 as amended at The Hague (1955) and at Guadalajara (1961)

Introduction

T

HE POSITION OF services in the economy of the Western world and of the European Union in particular, has increased significantly in size and in importance in the last decades. The European Union has therefore had an increasingly important role to play both in the liberalisation of the provision of those services and, in particular, in the protection and care of the recipient, the pas­ senger for transport services, the patient for health care, the viewer for broadcasting, the subscriber for telecommunications, the depositor for banking services and so on. But notwithstanding the panoply of EU rules protecting the consumer, these same passengers, patients, viewers, subscribers and depositors have, in their capa­ city as citizens, shown an increasing disillusionment with the EU and its institu­ tions, when taking part in European Parliament elections in ever-diminishing numbers, or when refusing a new European Constitution upon being consulted by referendum. Mario Monti’s Report on the Single Market in 2010 discussed this disillusionment and recommended that, in order to jump-start the Single Market, inter alia the institutions should put the consumer more centre-stage. This work, with contributions by practitioners, by University professors and by advocates before the European Court, aims to reflect on this problem. Various service sectors will be examined, looking in detail at the rules which favour and protect consumers, rules laid down by the EU legislators as well as in decisions by the Court of Justice. Indeed the Court has looked very favourably upon measures protecting the consumer, the recipient of the services, with decisions ranging from the approval of EU price caps for roaming ‘phone call charges, to the rejection of restrictions on the use of satellite TV decoders and the traveller’s right to receive compensation from the carrier in the case of problems relating to his flight. Indeed in the recent decision of Sturgeon, the Court’s positive approach to measures in favour of the consumer went so far as to introduce an obligation to compensate passengers in a situation not at all included in the texts, namely in the case of flight delays. This ruling has led to significant debate, objections and many new cases presently pending before the Court, all of which will be considered in the following chapters. The discussion of the subject of consumer protection, in particular in the area of health care, raises the question whether the jurisprudence recognising the right to care may not have been guided, unconsciously, by the need to consolidate the notion of EU citizenship. The second part of this work will therefore consider

2  Introduction whether these EU measures protecting the consumer should not be put more centre-stage in order to remedy the increasing malaise of European citizens with regard to the European project. It will then examine whether these consumer advantages may not be seen as forming a constituent part of the rights of the EU citizen, of ‘European Citizenship’, the status introduced by the Treaty of Maastricht in 1992, but without any clear definition of its content. It would seem that the EU institutions, which have been attentive to the need to inform citizens of their rights, are open to including these consumer protection elements when considering the position of the EU citizen. Their reactions to the 2010 Monti Report on the Single Market witness this, as does the Commission’s proposal of August 2011 to make 2013 the European Year of Citizens.

1 Overview FRANK BENYON

I

N TODAY’S BUSINESS world, the centre of gravity in the manufacturing sector is inexorably moving from the developed to the developing countries, whether smoothly – for example the Chinese purchase of MG, the Indian purchase of Jaguar and Land Rover – or with some reluctance – for example the acquisition of Arcelor by the Indian steel company Mittal. At the same time the services sector has expanded significantly in the developed countries, in Europe and in America, where populations, prosperous and now living longer, require increased access to a range of services: health care and social services, financial advice, travel, telecommunications and leisure activities, to name but a few. These services, or at least the vast majority of them, are economic services falling within the purview of the Treaties governing the establishment and functioning of the European Union, and the EU institutions have regulated the provision thereof in varying amounts of detail and intensity depending upon the sectors concerned. The intention of this study, which is drawn from a series of seminars conducted by Frank Benyon and Hans Micklitz, in the Autumn Term of 2010, in the Department of Law at the European University Institute in Florence is therefore to look at such services in relation to the rules of the EU Treaties, and, equally importantly, to consider the same from the point of view of the recipient thereof, the consumer – in other words, the passenger in the case of transport, the patient in the case of health care, the viewer for audio-visual services etc.

I.  DEVELOPMENT OF EU RULES ON SERVICES

Before we look at the detailed rules now applicable in various service sectors, let us look briefly at how the rules in the EU developed. a. The liberalisation of the supply of services in the EU was an extremely slow process since Article 63 of the Treaty of Rome required the establishment of a General Programme to abolish restrictions, which Programme foresaw in turn the need to adopt a large number of harmonising directives. Although this very

4  Frank Benyon slow process was thought to have been rendered otiose by the Court of Justice’s decision that the service freedom had direct effect, this was not, in reality, the result since, although individuals could thus rely on such freedom, the Member States in their turn relied on another element of the Court’s jurisprudence to restrict the freedom by taking measures for the ‘general good’. And the ‘general good’ was frequently pleaded by Member States when it came to measures to protect consumers, whether it concerned how the service was to be provided or specific rights to be accorded to the consumer. b. The process was even slower in the area of transport, whether by land, sea or air, since liberalisation of the supply of services had to await positive legislative measures in accordance with Article 51 EC, now Article 58 of the Treaty on the Functioning of the European Union (TFEU), and these were only adopted in 1986 and completed in 1992 for maritime transport, and in 1992 for air transport; for land transport, especially passenger transport by road, the process is only now nearing completion. Although these measures were essentially aimed at allowing transport operators from one Member State to supply transport services in another, they contained measures, in greater or lesser detail in the different sectors, on public service obligations, in order to carefully limit the restrictive measures desired by Member States in the proclaimed interest of the consumer, or, rather, the passenger. The provisions in Regulation 3577/92 on maritime cabotage and Regulation 1008/2008 on air transport services lay down the procedures to be respected in order to balance the free supply of services and the interests of transport users and these will be examined. Essentially therefore it is the Member States which choose to impose a public service obligation but this must be in an EU framework with Commission control.    Once the EU legislature had achieved and established such liberalisation in transport it then turned specifically to harmonising measures to protect passengers, starting in the air transport sector with protection, and payment of immediate compensation, in the case of denied boarding, and, later, cancellation and delay of flights. Examination of the cases in this area is of great interest, including the recent Case C-402/07 Sturgeon, where some have said that the Court has taken over the role of legislator by extending the carriers’ compensation obligation towards passengers to cover delays too. The protection of the consumer was indeed the leitmotiv of this judgment.1 The international conventions in this area, the Warsaw Convention of 1929, now partly overtaken by the Montreal Convention of 1999, on damages in the event of air accidents, are of note as they are consumer protection measures too. However, there are important differences between the two sets of measures which were considered in detail, in Case C-344/04 IATA.2 This decision has   Case C-402/07 Christopher Sturgeon et al v Condor Flugdienst et al [2009] ECR I-10923.   Case C-344/04 R (on the application of International Air Transport Association et al) v Department of Transport [2006] ECR-I 403. 1 2

Overview  5 been subject to criticism and controversy, as will be seen, in particular, in chapter three. Other measures which protect passengers directly are the regulations on aviation security, which gave rise to an interesting challenge by an individual, Case C-345/06 Heinrich, as well as measures on aircraft safety in general. And lastly, one should not forget the judgments of the Court, this time in the Open Skies cases,3 where the confirmation of the right of establishment of EU airlines in any Member State has led to significant competition, and consequent choices of airlines and tariffs, all to the benefit of the consumer, the passenger!    For bus and coach transport, protection of passenger rights did not advance so quickly, no doubt since this province, notably for local, urban and suburban transport, was jealously guarded by Member States who believed that they alone should decide on what ‘their citizens, their passengers’ can expect in this area, but the differences between the modes of transport have now been greatly reduced.    These subjects will be considered in depth in chapters two and three. c. In the areas of post and telecommunications, the process of liberalisation was initially slow, the Commission having to resort for the first time to taking a binding measure under what is now paragraph 3 of Article 106 TFEU, the article concerning undertakings entrusted with the operation of services of general economic interest, in order to oblige Member States to permit competitors to enter the telecoms market and this in the face of Member States’ claims of the need to continue to ensure universal service obligations imposed by those states. Three packages of detailed legislation based on the internal market provisions have now been introduced, containing specific, but somewhat flexible, measures to respect the right of the consumer to have his letter delivery, his telephone line, his directory information – in short, his universal service. Consideration will need to be given to whether there is any room for more restrictive measures to be introduced by a Member State in the interests of its consumers, ie the subscriber. Certainly the risk of additional Member State restrictions in the actual supply of telecoms services was cut short by the Court’s judgment in C-424/07 Commission v Germany of 3 December 2009.4 Another case of note in this sector is the challenge brought by Vodafone et al against the Roaming Regulation, No 717/2007 capping roaming charges for the benefit of consumers, of subscribers, where the Court held in its judgment of 8 June 2010 that this internal market measure was correctly based on Article 95 EC, now 114 TFEU, irrespective of the fact that it was expressly based on the fact that there were no divergent Member State measures to protect those users separately and that consumer protection was a decisive factor in the choice of the measure.    Chapter four will cover these matters.   eg, Case C-476/98 Commission v Germany [2002] ECR-I 9855.   Case C-424/07 Commission v Germany [2009] ECR-I 11431.

3 4

6  Frank Benyon d. The third telecoms package covers all types of electronic communications, thus including broadcasting, but only from the more technical point of view, not harmonising either the establishment of broadcasters, nor the essence or the substance of broadcasts. Broadcasting itself is the subject of Directive 89/552,5 the Television Without Frontiers Directive, as amended twice and rechristened the Audio-Visual Services Directive, but only to a limited degree as there are no real rules on content, other than certain restrictions concerning minors, tobacco advertising etc. However, the directive does contain a particular provision permitting a Member State to take measures to prevent broadcasts on an exclusive basis of events which are regarded by that Member State as being of ‘major importance to society’; a measure thus in the interests of consumers in their capacity as viewers. EU control procedures have to be followed pursuant to the directive and Commission decisions taken thereunder have been challenged by rights-holders, forming the subject of three recent judgments of the General Court (Cases T-385/07, 55/08 and 68/08).    Examination of these issues in chapter five illustrates well the question of the division of powers and duties between EU and Member States in this area of consumer interests. e. In some other sectors, the possibility of harmonisation measures is limited by the TFEU, but this does not mean that the treatment of consumers lies wholly in the hands of the Member States as the series of past and pending cases on cross-border health care – Kohll, Decker, Smits-Peerbooms, Watts – well illustrate. Indeed, the consumer, a would-be patient, has every interest in knowing whether EU law allows him to seek reimbursement for treatment incurred abroad outside the normal possibilities in his own Member State and the above cases have shed much light on this. To help clarify these different judgments, the Commission proposed a directive in 2008 on the application of patients’ rights in cross-border health care, and this was adopted on 9 March 2011 as Directive 2011/24/EU.6    Of course the whole area of social policy raises many questions as to whether and which Treaty rules apply, and we shall try to see what conclusions may be drawn from various judgments, one finding that one pension fund falls outside the competition rules while another fund falls within, another that a nonprofit making requirement for providers of homes for the elderly is not a restriction on the EU national’s right of establishment etc. The matter of general provision of health care facilities, including the qualifications for ownership, and the geographical distribution, of pharmacies would also seem to remain the exclusive province of the Member State.

5   Directive 89/552/EEC of 17 October 1989 on the co-ordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the pursuit of television broadcasting activities [1989] OJ L298/23. 6   Directive 2011/24/EU of the European Parliament and of the Council of 9 March 2011 on the application of patients’ rights in cross-border health care — OJ L 88 of 4.4.2011.

Overview  7    It is also interesting to note that in the betting and gaming sector, where, in contrast to health, harmonisation is not ruled out, the Court appears to have left wholly to Member States the decision on whether, to what extent, and how, to protect consumers of these services. Although frequently claims of protection of consumer health, be it moral or physical, are brought forward by Member States to defend their restrictive measures, the jurisprudential position is quite different from that of the individual’s right to ‘regular’ health care. It needs to be examined whether this is fully justified.    In-depth consideration of these matters is found in chapters six and seven. f. It should not be forgotten that a specific title on consumer protection was added to the Treaty at Maastricht, now Article 169 TFEU, but this foresaw either the adoption of measures under Article 114 TFEU (ex 95 EC) for the completion of the internal market, or simply measures supporting or complementing Member States’ policies. It is not therefore surprising that paragraph 3 of Article 114 provides that Commission proposals must take as a base a high level of consumer protection. Consumers derive many rights from such horizontal measures, and this irrespective of the sector concerned. Examples of internal market harmonisation measures include the rules on package holidays and on distance selling. There are also more general measures such as Directive 2005/29 on unfair commercial practices7 and the March 2010 judgment in Case C-317/08 Alassini,8 concerning this directive is of interest since it relates to universal service in the telecoms sector, the subject of the detailed packages of sectoral legislation discussed in chapter four.

II.  EU CITIZENSHIP

As mentioned in the Introduction, Professor Mario Monti’s 2010 Report on ‘A New Strategy for the Single Market’, as well as proposing to the EU institutions harmonisation of missing elements in the internal market, reinforced enforcement of the existing rules, and, giving consideration to services of general economic interest, particularly insisted on the necessity ‘to put the consumer at centre-stage’, to make the EU more popular and thus better understood by the EU citizen. The Commission’s response, its 2010 ‘Report on EU Citizenship’,9 endeavours to improve the position of the EU citizen suggesting new rules and better information measures, as well as the enforcement of existing rights. The present study endeavours to examine carefully the nature and extent of these consumer protection measures in different sectors and to consider in chapter eight 7   Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) No 2006/2004 of the European Parliament and of the Council (‘Unfair Commercial Practices Directive’) (Text with EEA relevance) OJ L 149, 11.6.2005, 22–39. 8   Joined cases C-317/08, C-318/08, C-319/08 and C-320/08 Alassini [2010] ECR I-2213. 9   COM (2010) 603 of 27.10.2010.

8  Frank Benyon whether these consumer rights should properly be seen as forming a constituent part of the rights of the EU citizen.

III. CODA

Lastly, before starting out, one should be clear what this work is not going to do. As its title indicates, it will not deal with the protection of the consumer in the area of the production and sale of goods, the numerous directives on dangerous products, cosmetics etc. Nor will it be limited to the narrower category of ‘services of general economic interest’, since these require the imposition of a public service mandate and precise duties, which is not the case, for example, for the vast majority of air transport operators; the Treaty provisions and new Lisbon Protocol on this subject will, however, have a role to play. The study will not cover every measure which can concern the supply of services to consumers – harmonisation measures such as the 2005 Unfair Commercial Practices Directive10 or the 2006 Directive on Services in the Internal Market,11 for instance – as the intention is to concentrate on specific sectors in which the consumer’s interests have mainly been closely harmonised. And it does not aim to be a philosophical thesis for a doctorate, but rather is intended to inform and stimulate others to think and act in order further to integrate the citizen into the European project.

  Above (n 7).   Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market, OJ L 376, 27.12.2006, 36–68. 10 11

2 The Development of the Air Transport Policy of the European Union from the Point of View of the Consumer: From the Creation of the Internal Market to the Regulation of Consumer Rights Proper MIKKO HUTTUNEN1

I.  INTRODUCTION AND SUMMARY

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HIS CHAPTER EXAMINES the development of the European Union’s common air transport policy from the consumer’s point of view. The aim is not to examine the regulation of EU consumer rights proper but rather to paint a picture of how the EU internal aviation market came about and how the consumer has been taken into account in this process. It is argued that the creation of EU passenger rights would not have emerged without first establishing the freedom to provide air services within the EU and without tackling many other obstacles for a truly free EU aviation market that also guarantees a high level of safety and security of airline operations within the EU. Thus, consumer rights proper are put in their more general context, which itself has been strongly motivated by the improvement of the position of the consumer in the marketplace.

1   Mikko Huttunen, LLM (Helsinki), PhD (EUI), Legal Adviser, Permanent Mission of the European Union to the World Trade Organization and Legal Adviser, Legal Service of the European Commission. The author was responsible for all air transport issues in the Commission’s Legal Service between 2000 and 2005 including as the Commission’s agent before the courts of the European Union. The opinions expressed in this chapter are strictly personal.

10  Mikko Huttunen

II.  THE GRADUAL WIDENING OF THE NOTION OF CONSUMER IN AIR TRANSPORT

The notion of a ‘consumer’ is normally taken for granted and refers essentially to everybody who consumes goods and services produced.2 From a legal perspective the notion of a consumer could be slightly narrowed down by referring to the legal capacity to purchase goods and services. However, in reality there are areas where not everybody has truly the means to act as a consumer. Indeed, to act as a consumer, ie to ‘purchase goods and services’ depends on the financial means available to an individual. To take an extreme example, we are witnessing today the first tourist trips into orbit. However, opportunities for space tourism are very limited and extremely expensive. It is fair to predict that it will take some time before academic articles are written on consumer protection in space tourism. However, perhaps space tourism is not, after all, such an extreme example in the context of air transport. Indeed, in the early-twentieth century aviation was very much what space tourism is today: something for the rich and not so fainthearted. And it took some time before travelling by air was truly made available to everybody. Air transport became more widely available only after the Second World War and to a degree it has only been in recent years that one really has been able refer to air transport as a means of transport for everyone – that is of course everyone in the developed world. In the developing world the situation is essentially as it was in the early days of aviation – only very few can travel by air. However, in the European Union and in most parts of the developed world, such as North America and Australia, the emergence of the so-called low cost carriers has made it possible for citizens to consider air transport as a truly alternative means of transport owing to fares no longer being prohibitively expensive. This is a perspective we need to take into account when considering the development of EU consumer protection law in an area such as air transport. Thus, a genuine need to regulate the relationship between a passenger and an air carrier is a relatively recent phenomenon not least because lower fares have changed the market and allowed everyone to take part in it. III.  THE ESTABLISHMENT OF THE COMMON EU AIR TRANSPORT POLICY3

The general legal framework for international air transport was laid down by the Convention on International Civil Aviation (the Chicago Convention) that was signed in 1944 and entered into force in 1947. The Chicago Convention established the International Civil Aviation Organisation (ICAO), which is a specialised organisation of the United Nations. In accordance with Article 44 of the  http://en.wikipedia.org/wiki/Consumer.   Much of the analysis in this chapter is based on the author’s analysis of the common transport policy in Smit and Herzog, The Law of the European Union (Matthew Bender, 2012) ch 153. 2 3

Development of an Air Transport Policy  11 Chicago Convention, the ICAO has the task of, inter alia, ‘developing the principles and techniques of international air navigation’. The Chicago Convention is based on the principle that every state has complete and exclusive sovereignty over its airspace.4 Without going into further details of the Chicago system, it essentially created a system of bilateral air service agreements where states agree on a bilateral basis the specific conditions for the provision of commercial air transport services between them, thus creating a network of thousands of bilateral air service agreements between different states parties to the Chicago Convention.5 In view of the very complex and regulated international system based on the Chicago Convention and the network of bilateral aviation agreements, the establishment of a common EU transport policy in the field of air transport was a particularly complex task, taking into account also that for the great majority of air carriers from the Member States, the EU market was only a part of their overall world-wide operations. Until the common market was liberalised, the provision of air transport services between Member States was governed by the Chicago system and bilateral agreements between Member States. Although ‘a common policy in the sphere of transport’ was originally listed as one of the three common policies in the original EC Treaty, it took significantly longer than the two others, namely the common policy in the sphere of agriculture and fisheries and the common commercial policy, to be properly launched and established. The European Commission can hardly be accused of dragging its feet. Several policy documents were issued that had the objective of paving the way for the establishment of a common transport policy. However, despite several proposals from the Commission the only legislative measure adopted before the 1980s was a regulation applying some basic competition rules in the field of rail, road and inland waterway transport.6 As in many other instances in the history of the European Union, it was through action before the European Court of Justice that the decisive legal impetus for the establishment of the common transport policy was given. Three different cases were needed to clarify certain key provisions of the Treaty. First, in Case 167/73 Commission v France7 the Court addressed the transport title in the general system of the Treaty on an action brought by the Commission against France. The Court concluded that the general rules of the Treaty apply to the transport provisions in the absence of explicit provisions that would provide for their exclusion. On this basis the Court considered that the rules on free movement of workers were applicable to transport.   Chicago Convention, Art 1.   I H Ph Diederiks-Verschoor, An Introduction to Air Law (Kluwer, 1993); Shawcross and Beaumont, Air Law (Lexis Nexis, 2012). 6   Council Regulation (EEC) 1017/68 applying rules of competition to transport by rail, road and inland waterway [1968] OJ L 175/1. The regulation was preceded by Council decision 65/271/EEC of 13 May 1965 on the harmonisation of certain provisions affecting competition in transport by rail, road and inland waterway OJ 088, 24/05/1965, p 1500. 7   Case 167/73 Commission v France [1974] ECR 359. 4 5

12  Mikko Huttunen Second, in Joined Cases 209 to 213/84 ‘Nouvelles frontières’8 the Court had to address the applicability of the competition rules of the Treaty to transport, and in particular air transport. In line with the judgment in Case 167/73 Commission v France, the Court concluded that in the absence of any provisions to the contrary, the competition rules of the Treaty were applicable to transport in general and air transport in particular despite the specific provision dealing with air and sea transport (original Article 84(2) of the EC Treaty; now Article 100(2) TFEU). By confirming the application of the competition rules of the Treaty (now Articles 101 and 102 TFEU) in the absence of implementing regulations, the Court paved the way towards the gradual liberalisation of the highly restrictive framework of bilateral agreements between Member States. However, despite the above mentioned judgments that clarified the scope of the transport provisions of the Treaty, it was the judgment of the Court in Case 13/83 Parliament v Council9 that gave the decisive impetus for legislative action. The European Parliament adopted on 16 September 1982 a resolution on the institution of proceedings against the Council for failure to act in the field of transport policy.10 The resolution noted that only minimal measures of transport policy, which failed entirely to meet the requirements of the common market, had been adopted, so that the provisions of Articles 3(e) and 74 to 84 (now, after amendment Articles 4(2)(g) and 90 to 100 TFEU) of the Treaty had not been complied with. The resolution also noted that ‘the Council has not reached a decision on a large number of Commission proposals on which the European Parliament long ago adopted a favourable opinion’. In the resolution, the Parliament instructed its President to bring an action against the Council pursuant to the first paragraph of Article 175 (now, after amendment, Article 265 TFEU) of the Treaty after calling upon the Council to act pursuant to the second paragraph of that Article. Following an exchange of letters between the Presidents of the two institutions, the Parliament brought an action before the Court for a declaration that the Council had infringed the Treaty by failing to introduce a common policy for transport and, in particular, to lay down the framework of such a policy in a binding manner and further by failing to reach a decision on 16 specified proposals submitted by the Commission in relation to transport. In its judgment, the Court stated that it was common ground that there was not yet a coherent set of rules which may have been regarded as a common transport policy for the purposes of Articles 74 and 75 (now, after amendment Articles 90 and 91 TFEU) of the Treaty.11 The Court continued by stating objective difficulties which, according to the Council, stand in the way of the necessary progress towards a common transport policy are irrelevant for the purposes of the present action12 8   Joined Cases 209 to 213/84 Criminal proceedings against Lucas Asjes and others, Andrew Gray and others, Jacques Maillot and others and Léo Ludwig and others [1986] ECR 1425. 9   Case 13/83 European Parliament v Council of the European Communities [1985] ECR 1513. 10   OJ C 267/62. 11   European Parliament v Council of the European Communities (n 9) para 46. 12   ibid, para 48.

Development of an Air Transport Policy  13 However, the Court accepted that the Council had discretion on the substance of the common transport policy although such discretion is limited by the requirements that stem from the establishment of the common market and by certain precise provisions in the Treaty such as those that laid down certain time limits for the completion of the common market. On this basis, the Court concluded that although the Treaty requires a common transport policy to be brought into being, the absence of such policy does not in itself constitute a failure to act within the meaning of Article 232 of the Treaty (Article 265 TFEU).13 Nevertheless, the Parliament had also made a more specific plea on the failure to bring about the freedom to provide services in the sphere of transport in accordance with Article 51 of the Treaty (now, after amendment Article 58 TFEU). In this respect the Court found that the Council did not have the same discretion on which it may rely in other areas of the common transport policy. Since the result to be achieved was determined by the combined effect of Articles 59, 60, 61 and 75(1)(a) and (b) (now after amendment, Articles 56, 57, 58 and 91(1)(a) and (b) TFEU), the exercise of a certain measure of discretion was allowed only as regards the means employed to obtain that result taking account of the special features of transport. The Council was thus required to extend freedom to provide services to the transport sector before the expiry of the transitional period. On this basis the Court found that in breach of the Treaty the Council had failed to ensure freedom to provide services in the sphere of international transport and to lay down the conditions under which non-resident carriers may operate transport services in a Member State.14 The legislative activity that followed the judgment particularly in the field of air transport was remarkable compared with the time prior to the judgment. The first package of measures was adopted in 1987,15 while a second package of liberalisation measures was adopted in 1990.16 These two packages of measures paved the way for a genuine internal air transport market. However, it was only the third package of measures that finally led to the full liberalisation of the EU internal air transport market.17 This package consisted of three regulations: (1) Council Regulation 2407/92/EEC on the licensing of air carriers;18 (2) Council Regulation 2408/92/EEC on access for Community air carriers to intra-Community air routes;19 and (3) Council Regulation 2409/92/EEC on fares and rates for air services.20   ibid, para 53.   See in particular paras 65, 67 and 70. 15   [1987] OJ L 374. 16   [1990] OJ L 217. 17   J Balfour, European Community Air Law (London, Butterworths, 1995). 18  Council Regulation 2407/92/EEC of 23 July 1992 on the licensing of air carriers [1992] OJ L 240/001–0007. 19   Council Regulation 2408/92/EEC of 23 July 1992 on access for Community air carriers to intraCommunity air routes [1992] OJ L 240/008–0014. 20   Council Regulation 2409/92/EEC of 23 July 1992 on fares and rates for air services [1992] OJ L 240/015–0017. 13 14

14  Mikko Huttunen These three regulations have recently been recast and consolidated in a single regulation, namely Regulation 1008/2008/EC.21 This regulation forms the very basis for the freedom to provide air transport services within the EU. It is in many ways because of the creation of the internal market that the EU consumer has reaped the benefits witnessed today in the form of the variety of services and the unprecedented low fare levels. However, the creation of the EU internal market has also had world-wide implications. Owing to air transport being a genuinely global industry where the majority of EU air carriers also fly to destinations outside the EU, bilateral air service agreements between Member States and third countries continued to form the legal framework for operations outside the Union. As most of these bilateral agreements contained a provision reserving the relevant traffic rights to airlines that were owned and controlled by nationals of the two parties to the agreement, EU carriers majority-owned by interests from outside their home Member State were shut out of international routes from that country. This anomaly, combined with the harmonised EU internal air transport market, prompted the Commission to take legal action against some Member States for violating, on the one hand, the external exclusive competence of the EU and, on the other hand, Article 49 TFEU (ex Article 43 EC) on the right of establishment when they concluded air transport agreements with the United States. In the landmark judgments in the Open Skies cases,22 the ECJ essentially found in favour of the Commission, albeit on the basis of a somewhat different analysis than that pleaded by the Commission as regards the violation of the external exclusive competence of the EU. With regard to the violation of Article 49 of the Treaty, the Court fully upheld the arguments of the Commission. As a result of the judgments, the Council authorised the Commission to negotiate an Open Aviation Agreement with the United States and gave a general authorisation to the Commission for negotiating the replacement of certain provisions, including the ownership and control clauses in the bilateral agreements which the Member States have with third countries. A legal framework on the negotiation and implementation of air service agreements between Member States and third countries has been created. This regulation allows Member States to continue conducting negotiations with third countries within an EU framework.23 It is arguable that the process has led to a fundamental change in the inter­ national legal framework under which air transport has been conducted since the Second World War.24 Indeed, the European Union has concluded a ground­ 21   Regulation 1008/2008/EC of the European Parliament and of the Council of 23 September 2008 on common rules for the operation of air services in the Community [2008] OJ L 292/2–20. 22   eg Case C–467/98 Commission of the European Communities v Kingdom of Denmark [2002] ECR I–9519. 23   Regulation 847/2004/EC of the European Parliament and of the Council of 29 April 2004 on the negotiation and implementation of air service agreements between Member States and third countries [2004] OJ L 195/3. 24   Communication from the Commission on the consequences of the ECJ judgments of 5 November 2002 for European air transport policy, COM (2002) 649 final; Communication from the Commission

Development of an Air Transport Policy  15 breaking aviation agreement with the United States.25 There can be no doubt that these changes have benefited the consumer significantly in terms of the availability of services and lower fares through increased competition.

IV.  CONSUMER INTERESTS AND CONSUMER PROTECTION IN EU AVIATION LAW

Consumer protection laws are typically designed to provide protection for the consumer against fraudulent or unfair practices by those providing and marketing goods and services. The consumer may under certain conditions be regarded as the weaker party to a contract that is in the need of governmental protection in the marketplace. However, consumers benefit also from other governmental regulation, which often precedes the regulation of consumer rights proper. In this respect consumer regulation and protection must be given a wider meaning. Indeed, the air transport consumer protection measures strictu sensu in force today in the EU are in many ways a consequence of other EU regulation, which itself has been very much motivated by the desire to give the European consumer the means to travel within the EU and between the EU and the rest of the world. The emergence of EU passenger rights cannot be understood without the context provided by the single EU aviation market.

A.  Freedom to Provide Services Regulation 2408/92 brought about a genuine revolution in the provision of air transport services between and, after a transitional period, also within Member States. The complex network of bilateral air service agreements between Member States was replaced by a fully liberalised internal air transport market. This element of the third package is today regulated by chapter III of Regulation 1008/2008/EC. The most important provision in this respect is Article 15, which states that ‘Community air carriers shall be entitled to operate intra Community air routes’. After the expiry on 1 April 1997 of the transitional period for cabotage services, the provision of air transport services has been essentially entirely liberalised on on the relationships between the Community and third countries in the field of air transport, COM (2003) 94 final; C O Lenz and N Niejahr, ‘The European Court of Justice and European Air Transport Law’ (2003) European Transport Law XXXVIII, 157 and 271; R Greaves, ‘The Community’s External Competence: Air Transport Services’ (2003) International and Comparative Law Quarterly 52, 499; P J Slot and J Dutheil de la Rochère, ‘Commentary on Case Law’ (2003) Common Market Law Review 40, 697–713; L Grard, ‘La Cour de justice de Communautés européennes et la dimension externe du marché unique des transports aériens, A propos des huit arrêt du cinq novembre 2002 dans l’affaire dite “open skies”’ (2002) Cahiers de droit européen 695–733. 25   [2007] OJ L 134/4.

16  Mikko Huttunen routes within the European Union, that is, between two EU airports irrespective of whether they are located in different Member states or within the territory of a single Member State.26 The ECJ has, on several occasions, confirmed that the predecessor Regulation 2408/92/EEC laid down the conditions for applying the principle of the freedom to provide services in the air transport sector. Of particular relevance is Italy v Commission, where the Court confirmed that the general principles concerning the freedom to provide services apply in the context of air transport and, in particular, Regulation 2408/92/EEC, which covers all matters of market access within the same Regulation.27 In a series of cases concerning discriminatory airport taxes the Court stated: Even though, having regard to Article 61 of the Treaty, Article 59 of the Treaty [now, Articles 58 and 56 TFEU] is not applicable as such to transport services, since those services are governed by the provisions of the title relating to transport, the principle of the freedom to provide services is none the less applicable to that sector. As is clear from the case law of the Court, the very purpose of Regulation 2408/92, which was adopted on the basis of Article 84(2) of the Treaty [now Article 100 (2) TFEU], is to define the conditions for applying in the air transport sector the principle of the freedom to provide services (see, to that effect, Case C–361/98, Italy v. Commission, [2001] ECR I–385, Paragraph 32).28

Another important provision of the Regulation, in practice, is Article 19 and, in particular, its paragraphs 1 to 3.29 Paragraphs 1 and 2 essentially define the lawful conditions that can be imposed on the exercise of traffic rights, whereas paragraph 3 gives the Commission important decision-making powers to control such conditions, ensuring that they are in line with EU law. In particular, the second paragraph concerning distribution of traffic between airports within an airport system has led to a number of decisions of the Commission under the predecessor Regulation 2408/92, some of which have been further submitted to the ECJ.30 26   On the interpretation of the transitional provisions of Regulation 2408/92, see Case C–181/00 Flightline Ltd v Secretário de Estado dos Transportes e Comunicaçö¸es and Transportes Aéreos Portugueses SA [2002] ECR I–6139. 27   Case C–361/98 Italy v Commission [2001] ECR I–385. 28  Case C–92/01 Georgios Stylianakis v Elliniko Dimosio, judgment of 6 February 2003, not yet reported, paras 23 and 24; Case C–70/99 Commission v Portugal [2001] ECR I–4845; C–447/99 Commission v Italy [2001] ECR I–5203. The EFTA Court has recently confirmed that the same principles apply also in the context of the EEA agreement: Case E–1/03 EFTA Surveillance Authority v Republic of Iceland. 29   ‘1. This Regulation shall not affect a Member State’s right to regulate without discrimination on grounds of nationality or identity of the air carrier, the distribution of traffic between the airports within an airport system’. 30   Viva Air Commission Decision 93/347/EEC of 28 May 1993 on a procedure relating to the application of Regulation 2408/92/EEC [1993] OJ L 140/051–0057; Paris (Orly) – London Commission Decision 94/290/EC of 27 April 1994 on a procedure relating to the application of Council Regulation 2408/92/EEC [1994] OJ L 127/022–0031; Airport System of Paris Commission Decision 95/259/EC of 14 March 1995 on a procedure relating to the application of Council Regulation 2408/92/EEC, traffic distribution rules for the airport system of Paris [1995] OJ L 162/025–0036; Paris (Orly) – Marseille and Paris (Orly) – Toulouse Commission Decision 94/291/EC of 27 April 1994 on a procedure relating to

Development of an Air Transport Policy  17 It is clear that the emergence of new carriers that are often referred to as ‘low cost carriers’ would not have been possible without the liberalisation of the EU internal market, which itself has been very much motivated by the desire to improve the position of the travelling public, the consumer. Indeed, the improvement of the position of the consumer has been a very significant motivation for the establishment of the freedom to provide services in air transport as the recitals to the relevant measures of the three packages testify. The very first liberalisation measures stated inter alia that Whereas increased market access will stimulate the development of the Community air transport sector and give rise to improved services for users;31

B.  Fares and Rates A typical issue dealt with in traditional bilateral air service agreements is that of fares and rates which, particularly in more restrictive agreements, are highly regulated. Prior to the liberalisation of the EU market, air fares were comparatively very high. Thus, already the early liberalisation measures had the objectives of reducing air fares taking into account the interests of consumers as demonstrated inter alia by the recitals to the relevant measures: Whereas air carriers should be encouraged to control their costs, increase productivity and provide efficient and attractively priced air services;32 Whereas provision should be made for the regular consultation of consumer groups on matters relating to air fares;33

However, it was only the third element of the third aviation package, that is, Regulation 2409/92/EEC on fares and rates for air services, that truly abolished restrictions in the setting of air fares and rates by EU carriers on intra-EU routes. This issue is now dealt with under chapter IV of Regulation 1008/2008/EC. The main provision in this respect is Article 22. The regulation also lays down requirements on transparency and non-discrimination of air fares in Article 23. On this basis Member States may intervene only in some very limited circumstances in the setting of fares and rates which, in principle, is left to market forces, allowing for genuine price competition between EU air carriers. the application of Council Regulation 2408/92/EEC [1994] OJ L 127/032–0037; Case T–260/94 Air Inter SA v Commission [1997] ECR II–997; Order of the President of the Court of 26 October 1994 in Case C–174/94 R France v Commission [1994] ECR I–5229. As regards the application of Art 8(2), see Access to Karlstad Airport Commission Decision 98/523/EC of 22 July 1998 [1998] OJ L 233/025–0031. 31   Fourth recital to Council Decision 87/602/EEC of 14 December 1987 on the sharing of passenger capacity between air carriers on scheduled air services between Member States and on access for air carriers to scheduled air-service routes between Member States [1987] OJ L 374/19-26. 32   Second recital to Council Directive 87/601/EEC of 14 December 1987 on fares for scheduled air services between Member States [1987] OJ L 374/12-18. 33   Seventh recital to Council Directive 87/601/EEC of 14 December 1987 on fares for scheduled air services between Member States [1987] OJ L 374/12-18.

18  Mikko Huttunen The exception concerns so-called public service obligations, which are regulated in Article 16 of Regulation 1008/2008/EC. Public service obligations provide for an important derogation from the basic premise that it is for the market to regulate air fares and the provision of services in the first place. Some geographically more isolated or less densely populated parts of the EU would not have regular air services at all without a mechanism to guarantee such services. Again, the interest of consumers has been one of the key motivations for the provisions that regulate the provision of air services and the setting of fares when market forces are not able to do so. Although the Member States have the power to decide whether public service obligations are to be imposed on a given route and have some discretion on how to do this, the exercise of this power is subject to specific conditions and strictly controlled by the Commission and, if necessary, the Court.34

C.  Support Services The provision of air transport services stricto sensu is dependent upon the provision of various other services, which for the purposes of a general presentation could be referred to as ‘support services’. Groundhandling services consist of a heterogeneous group of services provided for airport users. Typical groundhandling activities are, for example, ground administration, passenger handling, baggage handling, freight and mail handling, ramp handling, aircraft services and aircraft maintenance, flight operations and crew administration, surface transport and catering services. The provision of groundhandling services at EU airports above a certain size is regulated by Directive 96/67/EC.35 Without going into more detail concerning this somewhat complex instrument, its main provisions aim at guaranteeing minimum competition at airports, providing for non-discriminatory and transparent procedures in selecting the service providers and laying down rules for self-handling, that is, where an airport user wishes to provide for himself one or more categories of groundhandling services. Ultimately the objective has been to reduce the costs for air carriers, which in turn has allowed carriers to compete with lower fares:

34   A good example of such control is Case C-205/99 Asociación Profesional de Empresas Navieras de Líneas Regulares (Analir) and Others v Administración General del Estado, where the Court, albeit in the maritime transport context, set out some basic parameters or principles for the exercise of Member States’ discretion when imposing public service obligations. These principles are undoubtedly applicable mutatis mutandis in the air transport sector. 35  Council Directive 96/67/EC of 15 October 1996 on access to the groundhandling market at Community airports [1996] OJ L 272 as amended. For a list of groundhandling services falling within the scope of the directive, see the annex to the directive. The ECJ has recently interpreted some of the provisions of the directive in two cases, namely, Case C-363/01 Flughafen Hannover-Langenhagen GmbH v Deutsche Lufthansa AG [2003] ECR I-11893 and Case C-181/06 Lufthansa v Aeropuertos de Portugal SA [2007] ECR I-5903.

Development of an Air Transport Policy  19 Whereas the opening-up of access to the groundhandling market should help reduce the operating costs of airline companies and improve the quality of service provided to airport users.36

Another important support service is the provision of air traffic management and related services. The Commission proposed in 2001 a package of regulations for the establishment of a ‘single European sky’. This package consists of four regulations, that is, a framework regulation, a regulation on the organisation and use of the airspace in the single European sky (the Airspace Regulation), a regulation on the provision of air navigation services in the single European sky (the Service Provision Regulation) and a regulation on the interoperability of the European air traffic management network (the Interoperability Regulation). Without again going into the details of this extensive and detailed package, the four regulations aim at optimising the use of the airspace above the EU and guaranteeing a consistently high level of safety in air travel, in keeping with the duty of general interest of air navigation services. The regulations also address the necessary cooperation between civil and military air traffic control.37 Another support service for air transport and, to some extent, rail transport is provided by computerised reservations systems (CRSs), which are regulated by Regulation 80/2009/EC,38 as amended by Regulations 3089/93/EEC39 and 323/99/ EC.40 Although the importance of CRSs has been reduced by direct sales over the internet, the CRS Regulation should be highlighted here because of the very strong consumer objectives pursued. There are many positive consequences for the consumer from the regulation of the support services. For instance, baggage handling is undoubtedly more efficient in a competitive environment than under the old monopolistic conditions and air routes are likely to become more direct and journeys therefore shorter because of the measures harmonising air traffic management and related services.   Fifth recital to the directive as amended by Regulation 1882/2003/EC.   Regulation 549/2004/EC of the European Parliament and of the Council of 10 March 2004 laying down the framework for the creation of the single European sky [2004] OJ L 090/1 (the Framework Regulation); Regulation 550/2004/EC of the European Parliament and of the Council of 10 March 2004 on the provision of air navigation services in the single European sky [2004] OJ L 096/10 (the Service Provision Regulation); Regulation 551/2004 EC of the European Parliament and of the Council of 10 March 2004 on the organisation and use of the airspace in the single European sky [2004] OJ L 096/20 (the Airspace Regulation); Regulation 552/2004/EC of the European Parliament and of the Council of 10 March 2004 on the interoperability of the European Air Traffic Management network [2004] OJ L 096/26 (the Interoperability Regulation). 38   Regulation 80/2009/EC of the European Parliament and of the Council of 14 January 2009 on a code of conduct for computerised reservation systems and repealing regulation 2299/89 [2009] OJ L 35/47-55. 39   Council Regulation 3089/93/EEC of 29 October 1993, amending Regulation 2299/89/EEC on a code of conduct for computerised reservation systems [1993] OJ L 278/001–0009. 40   Council Regulation 323/1999/EC of 8 February 1999 amending Regulation 2299/89/EEC on a code of conduct for computer reservation systems [1999] OJ L 40/001–0008. The validity of the predecessor regulation was challenged by one of the service providers: Case C-96/01 P The Galileo Company and Galileo International LLC v Council of the European Union [2002] ECR I–4025; Case T-113/99 The Galileo Company and Galileo International LLC v Council of the European Union [2000] ECR II–4141. 36 37

20  Mikko Huttunen D.  Safety and Security Aviation safety and security is also increasingly harmonised at EU level. Safety and security are paramount to any provision of air services. Indeed, consumers, ie passengers, will not be willing to even consider flying unless extremely stringent safety and security measures are in place. This area of EU regulation can perhaps be referred to as ‘physical consumer protection’. Various technical requirements and administrative procedures in civil aviation were already harmonised through Regulation 3922/91/EEC.41 Under the regulation, some of the joint aviation requirements (JARs) developed by the Joint Aviation Authorities are incorporated into Community law as mandatory requirements. The system established under Regulation 3922/91/EEC is gradually being replaced by Regulation 216/2008/EC.42 This regulation, including its technical annexes and the implementing provisions adopted through a committee procedure, establishes common safety rules and measures ensuring that products, persons and organisations in the EU comply with such rules and those adopted common rules also protect the environment. Aeronautical products and personnel shall be subject to certification to verify that they meet essential airworthiness and environmental protection requirements relating to civil aviation. In addition, the Regulation establishes an ‘independent European Aviation Safety Agency’ (EASA).43 The Agency plays a central role in guaranteeing aviation safety within the EU. It shall, in particular, carry out on behalf of Member States the functions and tasks of the state of design, manufacture or registry as specified in the Chicago Convention or its annexes. The Agency also has important powers regarding the enforcement of the common safety rules by conducting inspections of Member States’ competent authorities and of undertakings. The Agency took over the certification tasks incumbent upon it on 28 September 2003 on the basis of the predecessor Regulation 1592/2002/EC. In accordance with the agreement reached by the heads of state in the Brussels European Council in December 2003, the Agency is located in Cologne, Germany. Furthermore, Directive 94/56/EC44 establishes the fundamental principles governing the investigation of civil aviation accidents and incidents, while Directive 2003/42/EC45 lays down general EU rules on reporting, collecting, storing, protecting and disseminating relevant information on aviation safety. 41  Council Regulation 3922/91/EEC of 16 December 1991 on the harmonisation of technical requirements and administrative procedures in the field of civil aviation [1991] OJ L 373/4–8. 42   Regulation (EC) 216/2008 of the European Parliament and of the Council of 20 February 2008 on common rules in the field of civil aviation and establishing a European Aviation Safety Agency, and repealing Council Directive 91/670/EEC, Regulation (EC) 1592/2002 and Directive 2004/36/EC [2008] OJ L 79/1–49. 43   EASA is a Community regulatory agency with legal personality within the meaning of Commission Communication of 11 December 2002 on the operating framework for the European Regulatory Agencies: COM (2002) 718 final. 44   Council Directive 94/56/EC of 21 November 1994 establishing the fundamental principles governing the investigation of civil aviation accidents and incidents [1994] OJ L 319/014–0019. 45   European Parliament and Council Directive 2003/42/EC of 13 June 2003 on occurrence reporting in civil aviation [2003] OJ L 167/023–0036.

Development of an Air Transport Policy  21 The events of 11 September 2001 prompted the Commission to propose harmonised rules in the area of civil aviation security. This proposal, which was based on the non-binding standards of the European Civil Aviation Conference (ECAC), was adopted in the form of Regulation 2320/2002/EC.46 This regulation was recently replaced by Regulation 300/2008/EC.47 The regulation lays down common rules for security screening and other appropriate security measures at EU airports. These measures are no doubt sometimes considered by some consumers as painful formalities and it may well be that in some instances they have not been drafted in an ideal way.48 However, terrorists have made it abundantly clear that air transport is one of their main targets. Therefore, the prevention of terrorist attacks through the application of stringent security measures will no doubt receive the approval of the great majority of consumers despite the sometimes unfortunate queues at airport security checks.

E.  Consumer Protection Measures Proper Although some consumer protection measures were already adopted prior to the full liberalisation of the EU aviation market, it is arguably the creation of that market that has turned the attention of the regulators to consumer protection measures proper in which the primary objective is to protect the consumer and more generally deal with the consequences of the liberalised EU market from the consumer’s perspective. Directive 90/314/EEC49 should be mentioned in this context although it is not a measure of the common transport policy. As air transport services are often part of a holiday package, some aspects of it are regulated by the directive. Regulation 295/91/EEC50 in turn provided for common minimum rules applicable where passengers are denied access to an overbooked scheduled flight for which they have a valid ticket and a confirmed reservation.

46   European Parliament and Council Regulation 2320/2002/EC of 16 December 2002 establishing common rules in the field of civil aviation security [2002] OJ L 355/1–22. 47   Regulation (EC) 300/2008 of the European Parliament and of the Council of 11 March 2008 on common rules in the field of civil aviation security and repealing Regulation (EC) 2320/2002 [2008] OJ L 97/72–84. 48   Case C-345/06 Heinrich [2009] ECR I-1659 concerned a situation where Mr Heinrich insisted on having his tennis racket with him in the cabin. He was escorted off the aircraft following his refusal to surrender the tennis racket. He subsequently filed a lawsuit claiming that the prohibition to have his tennis racket with him in the cabin was unenforceable because such prohibition was contained in an annex to a regulation that was not published in the Official Journal of the European Union. The Court interpreted the relevant parts of the regulation as unenforceable against individuals. 49   Council Directive 90/314/EEC of 13 June 1990 on package travel, package holidays and package tours [1990] OJ L 158/59–64. 50   Council Regulation 295/91/EEC of 4 February 1991 establishing common rules for a denied boarding compensation system in scheduled air transport [1991] OJ L 36/5–7.

22  Mikko Huttunen Regulation 295/91/EEC was replaced by Regulation 261/2004/EC.51 This somewhat controversial regulation aims at strengthening the protection of passengers in the event of denied boarding and providing new protection in the event of cancellation and long delays. The validity of the regulation was challenged by the International Air Transport Association (IATA) and the European Low Fares Airline Association (ELFAA) in the landmark case C-344/04.52 Following comprehensive analysis of the regulation under both international law (Montreal Convention – see below) and EU law, the Court found ‘no factor of such a kind as to affect the validity of Articles 5, 6 and 7 of the Regulation’. However, it must be admitted that some parts of the regulation may suffer from ambiguous drafting, which arguably reflects a compromise between pure consumer interests and concerns relating to the cost implications of the regulation on the side of the air transport industry. As a consequence, the regulation has been subject to a number of preliminary rulings from the ECJ. As Regulation 261/2004/EC is analysed more in detail in chapter three, it is sufficient in this context to mention the strong consumer protection objectives behind the regulation together with the explicit link to the creation of the common air transport market: Action by the Community in the field of air transport should aim, among other things, at ensuring a high level of protection for passengers. Moreover, full account should be taken of the requirements of consumer protection in general.53 The Community should therefore raise the standards of protection set by [Regulation 295/91] both to strengthen the rights of passengers and to ensure that air carriers operate under harmonised conditions in a liberalised market.54

The EU has also adopted measures on air carrier liability in the event of accidents, which is governed by Regulation 2027/97/EC.55 Under international law, the matter has been governed for decades by the Warsaw Convention dating back to 1929.56 As clearly stated in recital 3 of the regulation, the EU considered the limits of liability set by the Warsaw Convention as too low by today’s economic and social standards, leading to lengthy legal actions. This legislation by the EU prompted the renegotiation of the Warsaw Convention, which resulted in a new convention, the Montreal Convention, which, to a great extent, follows the provisions of Regulation 2027/97/EC. In addition to all of the Member States, the EU is 51   European Parliament and Council Regulation 261/2004/EC of 11 February 2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, and repealing Regulation 295/91/EEC [2004] OJ L 46/1. 52   Case C-344/04 R (on the application of: International Air Transport Association, European Low Fares Airline Association) v Department for Transport [2006] ECR I-403. 53   Recital 1. 54   Recital 4. 55   Council Regulation 2027/97/EC of 9 October 1997 on air carrier liability in the event of accidents [1997] OJ L 285/1–3. 56   The Convention for the Unification of Certain Rules Relating to International Carriage by Air, signed at Warsaw on 12 October 1929, as amended at The Hague on 28 September 1955 and at Guadalajara on 18 September 1961.

Development of an Air Transport Policy  23 also a party to the Montreal Convention.57 Following the conclusion by the EU of the Convention, Regulation 2027/97/EC was amended by Regulation 889/2002/ EC58 in order to align it with the Convention and the new international obligations of the EU and to extend its provisions on routes within a Member State, as the Montreal Convention only applies to ‘international carriage’. The Convention and the Regulation lay down provisions on the liability of the carrier and the extent of compensation for damage in the event of death and injury of passengers and damage to baggage,59 damage to cargo60 and damage occasioned by delay.61 Regulation 2111/2005/EC62 in turn is both a safety and a consumer protection instrument. As the very first recital to the regulation states Action by the Community in the field of air transport should aim, as a priority, at ensuring a high level of protection for passengers from safety risks. Moreover, full account should be taken of the requirements of consumer protection in general.

On the one hand the regulation establishes common rules for banning air carriers from operating in the EU due to safety reasons. It is often referred to as the ‘black list’ regulation. The actual banning is carried out through Commission regulations adopted on the basis of chapter II of Regulation 2111/2005/EC.63 On the other hand, the regulation establishes common rules for informing the passengers of the identity of the operating carrier or carriers. It also provides for additional rights of reimbursement or re-routing in case of the notified operating carrier being subjected to an operating ban pursuant to the regulation. The EU has also reinforced the rights of disabled persons and persons with reduced mobility when travelling by air through Regulation 1107/2006/EC.64 Once again, the consumer protection objectives are clear in the recitals to the regulation: The single market for air services should benefit citizens in general. Consequently, disabled persons and persons with reduced mobility, whether caused by disability, age or any other factor, should have opportunities for air travel comparable to those of other 57   Council Decision 2001/539/EC of 5 April 2001 on the conclusion by the European Community of the Convention for the Unification of Certain Rules for International Carriage by Air (the Montreal Convention) [2001] OJ L 194/38. 58   European Parliament and Council Regulation 889/2002/EC of 13 May 2002 amending Council Regulation 2027/97/EC on air carrier liability in the event of accidents [2002] OJ L 140/2–5. 59   ibid, Art 17. 60   ibid, Art 18. 61   ibid, Art 19. 62   Regulation (EC) 2111/2005 of the European Parliament and of the Council of 14 December 2005 on the establishment of a Community list of air carriers subject to an operating ban within the Community and on informing air transport passengers of the identity of the operating air carrier, and repealing Article 9 of Directive 2004/36/EC [2005] OJ L 344/15–22. 63   See Commission Regulation (EC) 474/2006 of 22 March 2006 establishing the Community list of air carriers which are subject to an operating ban within the Community referred to in Chapter II of Regulation (EC) 2111/2005 of the European Parliament and of the Council [2006] OJ L 84/14–28. 64   Regulation (EC) 1107/2006 of the European Parliament and of the Council of 5 July 2006 concerning the rights of disabled persons and persons with reduced mobility when travelling by air, [2006] OJ L 204/1–9.

24  Mikko Huttunen citizens. Disabled persons and persons with reduced mobility have the same right as all other citizens to free movement, freedom of choice and non-discrimination. This applies to air travel as to other areas of life.

V. CONCLUSION

The very foundations on which air transport is operated within the European Union and arguably even between the EU and third countries65 have been radically changed over the past 20 or so years. There has been a clear vision to first liberalise the internal air transport market through regulatory and court action coupled with regulatory action in aviation safety and security at the EU level. The results are particularly tangible: air transport services are available essentially to everyone within the EU, including the disabled, because liberalisation has brought about unprecedentedly low fare levels without compromising on safety and secur­ ity standards and because liberalisation has subsequently been coupled with increasingly stringent consumer protection measures. However, as indicated by the Commission in its Communication of 11 April 2011 to the Parliament and Council on the application of Regulation 261/2004,66 there is still work to be done in order to clarify some aspects of the rights of passengers and in particular to ensure their proper enforcement. On the other hand, one should always be very careful when attempting to draw the right balance between the benefits of the liberalised market and the subjective rights granted to the consumer that benefits from that market. If the market is too liberal without appropriate consumer protection measures in place, the likelihood of abuses increases. On the other hand, there is always the risk too that overly stringent consumer protection measures end up compromising the general benefits consumers have enjoyed in the form of lower fares and new routes. This is a tricky balance that needs to be guarded with special care.

65   As a consequence of the internal market, aviation agreements are increasingly negotiated between the EU and third countries. This became necessary following the so-called Open Skies cases (eg Case C-467/98 Commission v Denmark (n 22)) where the Commission took several Member States to Court for breaching EU external competence. See more in detail eg ch § 153.06[5][a] by M Huttunen in Smit and Herzog, The Law of the European Union (n 3). 66   COM (2011) 174 final.

3 Travel and Tourism JENS KARSTEN1

I.  INTRODUCTION AND SUMMARY

T

HE PREVIOUS CHAPTER dealt with air transport policy and explained how EU law had opened the doors for competition, introducing a shift towards service orientation in Europe’s aviation market. It also showed how the Union’s regulator bestowed consumer rules on this market, completing the development of air transport as a harbinger of change for passenger transport as a consumer service. In doing so much of the ground that is the subject of the present chapter has already been covered, with the difference, however, that in the following it is intended to widen the scope of the presentation to include a glimpse at the law on other modes of transport than air transport, notably maritime transport. This allows sketching a wider area of the underlying patterns of the emerging body of law known as ‘EU passenger law’ as the most dynamic and controversial part of EU law on travel and tourism.

II.  FREEDOM TO PROVIDE SERVICES

In the previous chapter, we have seen that the introduction of the freedom to provide services for air transport only began after the Court’s 1985 judgment requiring the legislator to do so in the case brought by the Parliament for failure to act.2 The same was the position in the maritime sector. Regulation (EEC) 4055/86, applying the principle of freedom to provide services to maritime transport between Member States and between Member States and third countries,3 introduced for Community ship-owners the freedom to provide maritime transport services between Member States as well as between Member States and third countries. The third country aspect was novel in the area of Treaty freedoms, but 1  Lawyer in Brussels (bxl-law); Vrijwillig wetenschappelijk medewerker, University of Leuven; Researcher at the Scandinavian Institute of Maritime Law, University of Oslo. 2   Case 13/83 European Parliament v Council [1985] ECR 1513. 3   [1986] OJ L 378/1, as amended by Regulation (EEC) 3573/90 [1990] OJ L 353/16.

26  Jens Karsten reflected the fact that maritime transport is very much a world-wide activity. Indeed questions concerning maritime transport had been the subject of many multilateral treaties concluded under the auspices of the International Maritime Organisation (the IMO), as well as of bilateral agreements, as in air transport, essentially cargo-sharing agreements for trades between two countries. In fact the very first legislative act in the maritime sector, adopted prior to the 1985 judgment, was Regulation (EEC) No 954/79 concerning the ratification by Member States of, or their accession to, the United Nations Convention on a Code of Conduct for Liner Conferences4 which, in order to ensure that Member State accession to a proposed UN Convention on a Code of Conduct for Liner Conferences would be in conformity with their EU Treaty obligations, required them to specify that the restriction on services would not apply to trades between Member States and that a shipping company of a Member State able to benefit from the cargo sharing should also include companies of other Member States which had exercised their right of establishment in the first Member State. Regulation (EEC) No 4055/86 applying the principle of freedom to provide services to maritime transport between Member States and between Member States and third countries5 contained specific provisions dealing with the relation between the new freedom and existing cargo sharing agreements between Member States and third countries, namely Article 4, requiring the same to be aligned onto the new EU freedom; in various infringement cases, brought in the face of difficulties posed by third countries in the adjustment of their agreements, the Court found6 that Member States’ obligations included a requirement even to denounce their international obligations. The first Court pronouncements on Regulation 4055/86 stated clearly that the freedom was the same freedom as that granted by the Treaty article on services in general. The rulings concerned, essentially, as in air transport, Member State restrictions on, or discriminations of, transporters from other Member States,7 and thus only concerned passengers very indirectly, as in the Open Skies cases, by virtue of the greater competition and choice that would result from such rulings. The freedom to provide maritime transport services was extended to traffic between ports of one and the same Member State, cabotage, by Regulation (EEC) 3577/92 applying the principle of freedom to provide services to maritime transport within Member States (maritime cabotage).8 The regulation acknowledged, indirectly, the needs of the passenger, or rather of passengers in vulnerable situations, by containing an Article 4 whereby a Member State could restrict the freedom to 4   OJ L 121, 17.5.1979, p 1. Since repealed by Regulation (EC) No 1490/2007 repealing Council Regulation (EEC) No 954/79 concerning the ratification by Member States of, or their accession to, the United Nations Convention on a Code of Conduct for Liner Conferences (OJ L 332, 18.12.2007, p 1). 5   OJ L 117, 5.5.1988, p 33. 6   Case C-201/98 Commission v Belgium [1998] ECR I-3557; Case C-84/98 Commission v Portugal [2000] ECR I-5215. 7   Cases C-381/93 Commission v France [1994] ECR I-5145; C-18/93 Corsica Ferries Italia [1994] ECR I-1783; C-179/90 Merci Convenzionali Porto di Genova [1991] ECR I-5889. 8   [1992] OJ L 364/7.

Travel and Tourism  27 provide services through the imposition of a public service obligation in relation to island traffic with conditions as to frequency, continuity and regularity of the services. The article contained very few details as to its application, unlike in air transport, but the Court9 clarified the conditions to be fulfilled, in order to prevent Member States acting in the supposed interest of the local travellers in disregard of Community law. Regulations 4055/86 and 3577/92 did not lay down rules concerning maritime safety. However, since Article 91(1)(c) and (d) TFEU provides that, for the purpose of implementing the common transport policy, the EU legislator shall lay down measures to improve safety and any other appropriate provisions, safety measures were introduced. Within the context of the IMO a number of inter­ national conventions had been adopted, including that of 1974 on the Safety of Life at Sea (SOLAS) and MARPOL of 1973 on maritime pollution. Member States were parties to these conventions, the EU was not, but the EU legislator decided to introduce many provisions of the Conventions into EU law since, thus • various guidelines and non-binding elements, useful adjuncts to a convention, could be made binding; • Convention rules only applicable to international journeys could be made applicable to national journeys too, thus ensuring protection to all passengers identical across the EU; and • as part of EU law, uniform enforcement would result. A great number of measures were introduced, dealing, for example, with the qualifications of classification societies, which certify on behalf of Member States the safety of ships constructed,10 and with the training etc of seafarers – of more immediate interest to the passenger when one is concerned with evacuation of ships, for example.11 Other measures were also adopted, such as the directive on Port State Control,12 following upon an existing Memorandum of Understanding between administrations, to ensure that third country flagships calling at EU ports, not subject to the EU rules, were inspected to ensure that they complied with the Conventions. These provisions were regularly strengthened and updated essentially as a result of the accidents along the Community coasts of the oil tankers Erika, Prestige etc.   Case C-205/99 Analir [2001] ECR I-1271.   Directive 94/57/EC on common rules and standards for ship inspection and survey organisations and for the relevant activities of maritime administrations (OJ L 319, 12.12.1994, p 20), now Directive 2009/15/EC (OJ L 131, 28.5.2009, p 47)and Regulation (EC) No 391/2009 on common rules and standards for ship inspection and survey organisations (OJ L 131, 28.5.2009, p 11). 11   Directive 94/58/EC on the minimum level of training of seafarers (OJ L 319, 12.12.1994, p 28) which related to the 1978 Convention on the Standards of Training, Certification and Watchkeeping for Seafarers, STCW, now Directive 2001/25/EC (OJ L 136, 18.5.2001, p 17). 12   Directive 95/21/EC concerning the enforcement, in respect of shipping using Community ports and sailing in the waters under the jurisdiction of the Member States, of international standards for ship safety, pollution prevention and shipboard living and working conditions (port State control) (OJ L 157, 7.7.1995, p 1)now Directive 2009/16 on port State control (OJ L 131, 28.5.2009, p 57). 9

10

28  Jens Karsten In order to ensure that all persons using passenger ships throughout the EU benefit from a high level of security, a directive of 1998 on safety rules and stand­ ards for passenger ships13 extends the application of SOLAS rules to passenger ships engaged in domestic voyages and, in so doing, lays down the safety requirements applicable to such passenger ships. It is of note that the latest version of this directive14 provides in its third recital that (3) The Community is seriously concerned about shipping casualties in which passenger ships were involved resulting in a massive loss of life. Persons using passenger ships and high-speed passenger craft throughout the Community have the right to expect and to rely on an appropriate level of safety on board.

The passenger is no longer simply the indirect general beneficiary of the freedom to provide services and the safety rules, but here is granted a ‘right’, but admittedly only a right to expect! Clear, tangible rights for the passenger are, however, to be found in more recent legislation including Regulation 392/2009 on the liability of carriers of passengers by sea in the event of accidents.15 This regulation, based on the Athens Convention and subsequent protocol, includes also various non-binding IMO Guidelines and extends the Convention’s international transport rules to national transport, to cabotage, thus ensuring one regime for all passengers travelling within the EU. Similarly to the position in aviation with the Montreal Convention, the regulation requires carriers to make payments of specific sums within specific time limits – real, direct, passenger rights. A similar approach is to be seen in Regulation 1177/2010 concerning the rights of passengers when travelling by sea and inland waterway,16 which will be discussed in detail in section III.B. below. This extremely rapid overview shows us that, as in air transport, the introduction of the freedom to provide services, and thus the demise of Member State restrictive regulatory regimes, gave very general, indirect benefits, more competition, to the consumer, the passenger. He benefited more directly from the accompanying safety and security measures – their better enforcement, their EU-wide coverage – and in recent years he has benefited specifically and directly from measures expressly intended to repair any damage or inconvenience which he incurs while travelling. The international dimension has been stressed in the above lines in order to show that international and EU rules in this sector are intimately associated, but different,17 something which will be discussed further in sections III and IV. 13   Directive 98/18/EC on safety rules and standards for passenger ships (OJ L 144, 15.5.1998, p 1) now recast as Directive 2009/45/EC (OJ L 163, 25.6.2009, p 1). 14   Directive 2009/45/EC (n 13). 15   [2009] OJ L 131/24. 16   [2010] OJ L 334/1. 17   See Case C-308/06 R (on the application of the International Association of Independent Tanker Owners (Intertanko), the International Association of Dry Cargo Shipowners (Intercargo), the Greek Shipping Co-operation Committee, Lloyd’s Register, and International Salvage Union) v Secretary of State for Transport [2008] ECR I-4057.

Travel and Tourism  29 The freedom to provide services in land transport was introduced at different times, with different stages and in different ways in view of the very significant differences between the sectors concerned,18 namely between rail transport, commercial road transport and passenger road transport, both long distance and local services.19 Since the object of this study is not to concentrate on the general and indirect benefits to users arising from this liberalisation, but to concentrate on the specific, direct rights granted to passengers, in fact in very recent legislation, in sections III and IV below, we shall not go into the details of the liberalisation of the various modes of transport. However, one decision of the Court in the land transport sector is worthy of note for its horizontal significance. The decision is that in Case-22/70, concerning the European Road Transport Agreement (known in English as ERTA, in French as AETR20) where the Commission challenged a Council decision authorising the Member States, not the Commission, to negotiate the said agreement within the United Nations Economic Commission for Europe (UNECE) concerning the work of crews of vehicles engaged in international transport. In its ‘landmark’ decision, the Court found that since the Community had already legislated in the area of work conditions of road crews in Regulation 543/69/EEC on the harmonisation of certain social legislation relating to road transport,21 one of the first measures in the area, it was no longer possible for Member States to assume international obligations which could affect such common rules and that thus the Community had the exclusive power, an implied power, to assume obligations on that subject.22 This rule of implied EU powers, whenever common rules may be affected by an international agreement, the ERTA doctrine, has of course been the subject of numerous infringement procedures and judgments over the years, including the Open Skies judgments mentioned in chapter two above, which have brought refinements to the doctrine and often, as for the Open Skies cases, led to a sharing of competence between the EU and its Member States, which in turn will lead to the conclusion of an agreement by both, acting as one party, a so-called mixed agreement.23 Unfortunately in the ERTA case itself, this was not the result as the Court found that the dispute and ruling had come too late in the negotiation process, and so the ERTA was 18   Differences acknowledged in the judgment in Case C-344/04 R (on the application of International Air Transport Association (IATA) & European Low Fares Airline Association (ELFAA)) v Department for Transport [2006] ECR I-403 (discussed below). 19   Rules concerning the introduction of public service obligation concerning road, rail and inland waterway were, however, subject to common rules, Regulation 1191/69, in relation to which and to the general rules on state aids, the judgment in Case C-280/00 Altmark Trans GmbH and Regierungspräsidium Magdeburg v Nahverkehrsgesellschaft Altmark GmbH, and Oberbundesanwalt beim Bundesverwaltungsgericht [2003] ECR I-7747, is of great significance. 20   Case 22/70 Commission v Council [1971] ECR 263. 21   OJ L 77, 29.3.1969, p 49. 22   See in particular paragraphs 15–31 of the judgment. 23   Note the Montreal Convention discussed in ch 2, where the EU was able to negotiate, and to become a party to, the Montreal Convention as the subject matter had already been covered by EU Regulation 2027/97.

30  Jens Karsten concluded not by the EU, but by its Member States. Even more astounding is that, 40 years on, the EU has still not become a party to the Convention, notwithstanding the very extensive EU legislation on the subjects covered. This uneven situation may be due to various elements, including that the international convention does not allow the accession of non-states, or that some other parties might not agree to such accession in any event. It is also of note that the EU has not yet become a member of the International Civil Aviation Organisation (ICAO) or the IMO, notwithstanding its vast competences over the subjects covered by them. At times, this situation does not produce a very ‘smooth’ relationship between the international conventions and EU law.

III.  PASSENGER LAW ACQUIS MONDIAL

Apart from the eventually unsuccessful attempt to harmonise travel law through the UNIDROIT Convention international relative au contrat de voyage (CCV), it was mostly conventions on transport services that have led to an internationalisation of the law that, 40 years after the ERTA judgment, form the nascent body of an acquis mondial but also create tensions between different strata of regulation that require a redefinition of the relationship of EU law to international law.

A.  Montreal Convention For most of the twentieth century the point of reference for air transport was the Warsaw Convention of 12 October 192924 with an array of amending protocols.25 The ‘Warsaw system’ thereby created regulated liability for international carriage of persons, luggage or goods performed by aircraft for reward. Its original purpose of protecting a fledgling and financially weak aviation industry from ruinous compensation claims, however, bestowed on the Warsaw system liability caps that were soon considered to be unacceptably low. Attempts to remedy this flaw by protocols with varying adherence among states led to a degree of fragmentation that made the Warsaw system confusing to apply. The jurisprudence that emerged to circumnavigate liability limits or altogether challenge them26 provided further complications. When the EU adopted the original Regulation (EC) No 2027/97 on air carrier liability in the event of accidents27covering the carriage of passengers 24   Convention for the unification of certain rules relating to international carriage by air signed at Warsaw on 12 October 1929. The Convention attracted adherence in more than 150 States. 25   Such as the Hague Protocol (1955), the Guadalajara Convention (1961), the Guatemala City Protocol (1971), the 1975 Additional (Montreal) Protocols, numbers 1–3, and Montreal Protocol Number 4. 26   The Italian Constitutional Court ruled illegitimate limits for the compensation of the death of passengers in carriage by air under the Warsaw Convention (Italian Constitutional Court, Corte costituzionale (www.cortecostituzionale.it) judgment no 132 of 2 May 1985 (N. 132 Sentenza 2 maggio 1985). Also compare judgment no 323 of 18 May 1989 (N. 323 Sentenza 18 maggio – 6 giugno 1989). 27   OJ L 285, 17.10.1997, p 1.

Travel and Tourism  31 and their baggage by air as a one-sided measure to raise liability standards, means were sought and found to overcome this situation by the ICAO calling an inter­ national conference. Thus for the twenty-first century, the point of reference is shifting towards a modernised convention, the Convention for the Unification of Certain Rules for International Carriage by Air of 28 May 199928 (the Montreal Convention). The Montreal Convention was signed and ratified by the EC as a ‘Regional Economic Integration Organisation’29 and entered into force in its jurisdiction on 28 June 2004.30 While the Community insisted on its exclusive competence in acceding to the Convention,31 it was, as a so-called ‘mixed agreement’, also ratified by Member States.32 Transport conventions are global governance for global businesses. Therefore the starting point for of all reflections on air passenger law is international law. As a consequence of the EU’s ratification and as consistently held by the ECJ in subsequent rulings,33 the Montreal Convention is ‘an integral part of Union law’ (Article 216(2) TFEU). Within their scope of application they preclude all laws, national or supranational (Article 29 Montreal Convention 1999; Article 14 Athens Convention 2002). Despite this clear statement, the EU’s relation to passenger conventions remains ambivalent, perhaps because the Union already once, in 1997, had felt free to increase consumer protection without basis in inter­ national law. The issues this creates are discussed below. The Montreal Convention’s chapter III (Articles 17 to 37) on ‘liability of the carrier and extent of compensation for damage’ contains the rights international law gives to air passengers. These are, in a nutshell, its key provisions:

28   Convention for the Unification of Certain Rules for International Carriage by Air of 28 May 1999 [2001] OJ L 194/39. Council Decision of 5 April 2001 on the conclusion by the European Community of the Convention for the Unification of Certain Rules for International Carriage by Air [2001] OJ L 194/38. 29   Art 53(2) of the Montreal Convention. 30  Council Decision of 5 April 2001 on the conclusion by the European Community of the Convention for the Unification of Certain Rules for International Carriage by Air (n 25). 31   The instrument of approval by the EC contains the following declaration (referring to the Air Carrier Liability Regulation discussed below): ‘4. In respect of matters covered by the Convention, the Member States of the EC have transferred competence to the Community for liability for damage sustained in case of death or injury of passenger. The Member States have also transferred competence for liability for damage caused by delay and in the case of destruction, loss, damage or delay in the carriage of baggage. This includes requirements on passenger information and a minimum insurance requirement. Hence, in this field, it is for the Community to adopt the relevant rules and regulations (which the Member States enforce) and within its competence to enter into external undertakings with third States or competent organisations’. 32   For the most part, external powers of the Community are shared with the Member States, rather than being exclusive. Where competence is shared, the international agreements entered in that field are known as ‘mixed agreements’ and both the Community and the Member States may be parties. See for transport generally Case 22/70 Commission v Council [1971] ECR 263 (ERTA judgment) and for air transport specifically the Nouvelles Frontières case (Joined Cases C-209-13/84 Ministère Public v Lucas Asjes, Andrew Gray, Jacques Maillot, Leo Ludwig et al [1986] ECR 1425). 33   IATA (n 18) paras 35–36; Intertanko (n 17) para 42; Case C-173/07 Emirate Airlines Direktion für Deutschland v Diether Schenkel [2008] ECR I-5237, para 43; Case C-549/07 (Walletin-Hermann v Alitalia – Linee Aeree Italiane SpA) [2008] ECR I-11061, para 28.

32  Jens Karsten The Convention introduces the principle of the air carrier’s unlimited civil liability in the event of death and bodily injury (which makes the fundamental change from the Warsaw Convention). This splits into two tiers. A first tier of strict liability is based on Article 17(1) and upon condition only that the accident causing the damage suffered by the passenger took place on board of the aircraft or in the process of embarking or disembarking. Article 21(1) limits the scope of this liability to 100,000 Special Drawing Rights (SDR)34 (now 113,100 SDR). In excess of that amount, a second tier of liability is based on the presumed fault of the carrier, which the latter may avoid only by proving that he was not at fault, the burden of proof of which falls on the carrier (Article 21(2)). In both cases the carrier can exonerate itself if it can prove that the damage was caused or contributed to by fault of the claimant (Article 20). According to Article 28, local law can require that the carrier issues advance payments in order to meet the immediate economic needs of the victim or the person entitled to compensation after an ‘aircraft accident’ (ie not just any accident).35 The notion of damages itself is not determined by the Convention and remains subject to local doctrine. The claimant will, however, only be compensated for damage actually proven. Article 29 (second sentence) excludes the recovery of any form of non-compensatory damages including punitive damages.36 The carrier’s liability for loss and damage of baggage is regulated in Article 17 (paragraphs 2 to 4), Article 20 and Article 22 (paragraphs 2, 5 and 6). Strict liability for checked baggage covers the period within which the carrier was in charge of handling, but is excluded when the damage resulted from the features of the baggage itself (Article 17(2) (first and second sentence)). Liability for unchecked baggage is fault-based (Article 17(2) (third sentence)). Without an (optional) special declaration and payment of a supplementary sum,37 liability is regularly limited to 1,000 SDR (now 1,131 SDR) for each passenger (Article 22(2)) unless the passenger can prove that the damage was done recklessly or intentionally under the conditions stated in Article 22(5). According to Article 31(1) receipt of baggage is prima facie evidence that it has been delivered in good condition, but in order to pursue a claim the passenger has to give timely (Article 31(2) (first sentence)) and written (Article 31(3))38 notice of the damage (not the loss) occurred to his or her baggage, otherwise risking the forfeiture of his or her rights (Article 31(4)). For the loss (not the damage) of checked baggage (Article 17(3)), the passenger has to wait for the admission of the carrier or the expiration of 21 days (Article 52) to enforce his or her rights under the contract of carriage. 34   See Art 23 of the Montreal Convention and Art 2(1)(e) of Regulation 2027/97. A unit of account is defined by the International Monetary Fund (IMF). The daily conversion rates for SDRs can be found on the IMF website (www.imf.org). 35   An option made use of in Art 5 of Regulation 2027/97. 36   On the question of non-compensatory damages see: US Supreme Court in: Zicherman v Korean Airlines 516 US 217 (1996), Dooley v Korean Airlines 524 US 116 (1998). 37   Specified by Art 3a of Regulation 2027/97. 38   Notice dispatched seven days from receipt.

Travel and Tourism  33 The carrier’s liability for damage occasioned by delay of baggage is based on Articles 19, 20 and 31(2) (second sentence), (3) and (4). Against such claims the carrier has the defences of Article 19, second sentence (the carrier proves that he and his people took all measures to avoid the damage or that such measures were impossible to take) and Article 20 (exoneration), while Article 31(2) (second sentence) requires the claimant to file a written complaint within 21 days from the date on which the baggage has been placed at the claimant’s disposal to avoid the forfeiture of his rights (Article 31(3) and(4)). Claims have a liability cap of 1,000 SDR (now 1,131 SDR) for the delay of baggage for each passenger (Article 22(2)). Claiming damage occasioned by delay in the carriage of passengers is subject to Articles 19, 20 and 22 (paragraphs 1 and 2). Article 19 makes the carrier liable for delay, though this is limited by, first, the defence that he and his people took all measures to avoid the damage or that such measures were impossible to take (possibilities for which the carriers bears the burden of proof), second, exoneration under Article 20, and, third, a liability cap of 4,150 SDR (now 4,694 SDR) for compensation for the delay of passengers (Article 22(1)). The payment cap does not apply where the damage was done recklessly or intentionally (Article 22(5)). A two-year time-bar is imposed by Article 35 for claiming damages. These rules of the Convention are mandatory (Article 49). Both the contractual carrier and the actual carrier are bound (Articles 39 and 40) and this includes code-sharing flights (the ticket carries the code of the airlines with which the contract of carriage is made, while another operates the flight under its brand) and flights which are part of a travel package (so establishing the liability of the (package travel) tour operator39). Contractual provisions tending to relieve liability or lower liability limits are invalid (Article 47); the carrier is only allowed to waive carrier defences, ie, to deviate from the Convention’s provisions, in favour of the passenger (Article 27). The Convention’s rules are also exclusive (Article 29). Actions under the Convention can thus only be brought subject to its conditions and limits. Pleading a passenger case under the common law of contract or torts is thereby excluded. That means that where liability is established by the Convention, claims based on other causes of action are pre-empted (‘the coordinated field’).40 To what extent this also means argumentum e contrario that where the Convention is not applicable, it would not be pre-emptive and the passenger would be free to pursue his or her claim under local law (and local law would be free to legislate on the carrier-passenger relationship) – in other words defining ‘the un-coordinated field’ – is unclear. This is the sometimes disputed fault-line between international law and EU passenger law.

39   cf Directive 90/314/EEC on package travel, package holidays and package tours (OJ L 158, 23.6.1990, p 59) 40   cf Art 14 of the Athens Convention 2002.

34  Jens Karsten B.  Athens Convention The Montreal Convention also inspired a revision of the parallel regime of inter­ national law on maritime passengers. Now the 1974 Athens Convention on the carriage of passengers and their luggage by sea as amended by the London Protocol agreed at the IMO intergovernmental conference 200241 is about to acquire the same status. On 12 December 2011, the Council adopted two decisions providing for the accession of the EU, following the consent given by the European Parliament. The decisions, one of which covers the transport part of the protocol and the other one the civil law part, also stipulate that Member States should, if possible, accede to the protocol at the same time as the Union,42 that is, by 31 December 2011. Eventual accession would bring to a conclusion a process begun with the 2001 Transport Policy White Paper43 and the 2002 Maritime Passenger Safety Communication44 and eventually make the EU45 party to the Convention46 in another ‘mixed agreement’. Also the Athens Convention 2002 will rank as an integral part of Union law.

C.  Disability Convention Another international commitment by the EU is the UN Convention on the Rights of Persons with Disabilities47 ratified by the EU and its Member States.48 Providing rules on accessibility and personal mobility, the Convention may also influence passenger law.

IV.  PASSENGER LAW ACQUIS COMMUNAUTAIRE

As stated, conventions ratified by the EU are part of the acquis – of higher rank and status – as will be shown. In the wake of the modernisation of passenger transport conventions, however, and in an attempt to create consumer rights in transport law, secondary Community law has emerged on the basis – or in parallel49 – to inter­ national law, most of it recently: 41   IMO Briefing 34/2002 of 1 November 2002 ‘Liability limits for ship passengers raised with new Athens Convention, compulsory insurance introduced’. 42   Ratification of 10 States is necessary for the Athens Convention to enter into force (Art 20 of the London Protocol). 43   White Paper, ‘European Transport Policy for 2010: Time to Decide’ (COM(2001) 370 final, 82–83). 44  Commission Communication on the enhanced safety of passenger ships in the Community (COM(2002) 158 final 8–15). 45   The process started in 2003: Proposal for a Council Decision concerning the conclusion by the European Community of the Protocol of 2002 to the Athens Convention relating to the carriage of passengers and their luggage by sea (COM(2003) 375). 46   Art 19 of the London Protocol. 47  www.un.org/disabilities. 48   Commission press release IP/11/4 of 5.1.2011, ‘EU ratifies UN Convention on disability rights’. 49   Advocate-General Sharpston in her Opinion on Schenkel (n 30) para 49.

Travel and Tourism  35 • Regulation 2027/97 on air carrier liability in the event of accidents,50 as amended by Regulation 889/200251 • Regulation 261/2004 establishing common rules on the compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights52 • Regulation 785/2004 on insurance requirements for air carriers and aircraft operators,53 as amended by Regulation 285/201054 • Regulation 2111/2005 on the establishment of a Community list of air carriers subject to an operating ban within the Community and on informing air transport passengers of the identity of the operating air carrier55 • Regulation 1107/2006 concerning the rights of disabled persons and persons with reduced mobility when travelling by air56 • Regulation 1371/2007 on rail passengers’ rights and obligations57 • Regulation 1008/2008 on common rules for the operation of air services in the Community [recast]58 (Articles 22 to 24) • Regulation 80/2009 on a Code of Conduct for computerised reservation systems59 • Regulation 392/2009 on the liability of carriers of passengers by sea in the event of accidents60 • Regulation 996/2010 on the investigation and prevention of accidents and incidents in civil aviation61 (Article 20(3)) • Regulation 1177/2010 concerning the rights of passengers when travelling by sea and inland waterway62 • Regulation 181/2011 concerning the rights of passengers in bus and coach transport63 Looking at a dozen regulations, the statement in the Transport White Paper of 28 March 201164 (‘Roadmap to a Single European Transport Area – Towards a competitive and resource efficient transport system’65 and the Commission Staff Working Document accompanying the White Paper66) stating that ‘the EU has   [1997] OJ L 285/1.   [2002] OJ L 140/2. 52   [2004] OJ L 46/1. 53   [2004] OJ L 138/1. 54   [2010] OJ L 87/19. 55   [2005] OJ L 344/15; Corrigenda ([2006] OJ L 186/60 and [2006] OJ L 189/27). 56   [2006] OJ L 204/1. 57   [2007] OJ L 315/14. 58   [2008] OJ L 293/3. 59   [2009] OJ L 35/47. 60   [2009] OJ L 131/24. 61   [2010] OJ L 295/35. 62   [2010] OJ L 334/1. 63   [2011] OJ L 55/1. 64  http://ec.europa.eu/transport/strategies/2011_white_paper_en.htm. 65   COM(2011) 144 final, para 42. 66   SEC(2011) 391 final, 70–74. 50 51

36  Jens Karsten already established a comprehensive set of passengers’ rights’ is entirely justifiable. These rights include, notably, liability rules for corporal damage and damage to luggage as well as for delays and cancellations. Passengers have the right to assistance and to information and persons with reduced mobility (PRMs) are vested with particular rights. Having conceptually much in common, these rights are adapted to the characteristics of each transport module.

A.  The Example of Maritime Transport The example of maritime law shows the typical patterns of EU passenger law that are replicated, in one form or another, in regulation for other modes of transport. i.  Regulation 392/2009 Regulation 392/2009 incorporates the Athens Convention 2002 (AC) in its Annex I (before it is ratified, enters into force and becomes binding as uniform law) and also includes in its Annex II the IMO Reservation and Guidelines for Implementation on the Convention. The regulation extends the (international, ie cross-border) scope of application of the AC to also include domestic maritime transport on larger vessels. Concerning liability for passengers Regulation 392/2009 refers to the AC and the IMO Guidelines according to which the carrier is liable for death and personal injury caused by a shipping incident (Article 3(5)(a) AC). This liability is designed as strict liability up to 250,000 SDR. Liability rises up to 400,000 SDR should the carrier not be able to prove that the incident was caused without his fault or neglect (Article 3(1) and Article 7(1) AC); advance payments are due to be paid (Article 6 of the regulation). For damage not caused by shipping incidents the carrier is liable for its fault proved by the passenger (Article 3(2) AC). A ceiling of 250,000 SDR is applied to damage caused by war and terrorism (IMO Guidelines) and a global limitation of liability (Article 5 of the regulation) covering all claims from a single incident also apply to war and terrorism (IMO Guidelines). Liability for luggage is fault-based (Article 3(3) and (4) AC) while fault is presumed in cases of luggage other than cabin luggage and cabin luggage (that remains in the possession of the passenger, Article 1(6) AC) is presumed in case of shipping incidents. Otherwise the fault of the carrier has to be proved. Liability limits are 2,250 SDR for cabin luggage, 3,375 SDR for other luggage and 12,700 SDR for transported vehicles (Article 8 AC). Mobility equipment, for example a wheel-chair, is considered a sui generis category of luggage remaining in the possession of the passenger (recital 13 to the regulation). For loss or damage the carrier (Article 4 of Regulation 392/2009) or port authority (Article 15 of Regulation 1177/2010) is liable up to the replacement value; the liability ceilings otherwise applicable on luggage are suspended.

Travel and Tourism  37 ii.  Regulation 1177/2010 Regulation 1177/2010 applies both on maritime and fluvial shipping on vessels carrying more than 12 passengers. It applies on services of EU carriers and carriers from third countries where the port of embarkation is situated in the EU (Article 2(1) of the Regulation). Exemptions apply, for instance, for excursions and sightseeing tours (Article 2(2)). In case of considerable delay of departure, Article 17 obliges the carrier of passenger services (ferries) and cruises to provide assistance. In case cancellation or delays make overnight stays necessary the carrier has to provide for accommodation limited to three nights at the cost of not more than 80 Euro each. Ferry passengers have the further right to re-routing and reimbursement according to Article 18. In case of late arrival, passengers can claim compensation in relation to the ticket price and the length of the delay (Article 19). Exemptions from liability are stated in Article 20 of which severe weather conditions appear as being the most relevant. Also addressed in Regulation 1177/2010 is the right of passengers with reduced mobility to travel (Article 7) with limited exemptions (Article 8). Carriers and port authorities are obliged to provide assistance (Articles 10–14). V.  THE RISE OF PASSENGER LAW OR THE ‘CONSUMERISATION’ OF TRANSPORT LAW

Thus the impetus for unharnessing the potential of the transport service market was eventually matched by efforts to vest the travelling citizen (the passenger) with rights against the service provider (the carrier). Whereas market theory holds that liberalisation alone is beneficial for the market citizens, the same market citizen was found to be in need of consumer-law inspired protective measures tailored to fit, case-by-case, the regulated transport module. This, and the modernisation of (sometimes dated) liability conventions between 1999 and 2002, provides the background to the spectacular rise of EU passenger law since the year 2000. The causes and implications have been explained elsewhere.67 When the concept of passenger law emerged, the Community legislator was quick to adopt the justification used for legal intervention into consumer markets for the purpose of legitimising its interference with the passenger-carrier relationship. A perceived information deficit and a ‘weaker party’ status of the passenger 67   J Karsten, ‘Travel Law’ in C Twigg-Flesner (ed), Cambridge Companion to European Union Private Law (Cambridge, Cambridge University Press, 2010) 201–15; J Karsten, ‘The Athens Regulation Is Heading into Harbour – The EU on the Point of Regulating Liability for Maritime Passengers’ (2008) Scandinavian Institute of Maritime Law Yearbook 159–202; J Karsten, ‘EC Passenger Law Running on Track – The Regulation on Rail Passengers’ Rights and Obligations’ (2009) Yearbook of Consumer Law 3, 331–41; J Karsten, ‘European Passenger Law for Sea and Inland Waterway Transport’ (2008) Yearbook of Consumer Law 2, 201–32; J Karsten, ‘Passengers, Consumers and Travellers – The Rise of Passenger Rights in EC Transport Law and its Repercussions for Community Consumer Law and Policy’ (2007) Journal of Consumer Policy 30, 117–36.

38  Jens Karsten generally,68 so the argument went, made the adoption of secondary Community law in parallel to uniform international law necessary. The ECJ went even further in re-interpreting uniform international law to suit the consumer agenda for transport services.69 This was a novel – and, for the drafters of transport conventions, largely unforeseen – development that changed the perception of all layers of passenger law (international, supranational, national) to become a hybrid of transport law and consumer law. The result is that, for a passenger-centred service industry, EU passenger law is consumer law for transport users – or a ‘consumerised’ branch of transport law. For allocating passenger law in the service user context, a number of affirmations have to made.

A.  User Rights Broader than Consumer Rights First there is a question of properly allocating passenger law in primary EU law. In comparison to passenger rights, consumer rights are firmly anchored in the Treaty. Article 169 TFEU is entirely dedicated to it. By virtue of Article 38 of the EU Charter of Fundamental Rights consumer law is placed in the vicinity of human rights; by Article 12 TFEU it claims to be interwoven in the whole of the acquis communautaire. As the ECJ claims, consumer protection is part of the ‘European way of life’ (Cases Claro70 and Asturcom71). By contrast transport services are different from other services. Union law recognises this. They are subject to a separate chapter in the Treaty (Article 58(1) and Articles 90 to 100 TFEU) and exempted from the scope of the Services Directive (Article 2(2)(d) and recital 21 of Directive 2006/123/EC72). One may have thought that the separation of transport law should have secured its immunity from consumer-law inspired thinking. There is no single provision in the Treaty for EU travel law or passenger rights. Instead, reference can be made to the internal market, to transport, consumer protection and tourism (Article 4(2)(a), (f), (g) and 68   See eg recital 2 of the preamble to Regulation 1177/2010: ‘Since the maritime and inland waterway passenger is the weaker party to the transport contract, all passengers should be granted a minimum level of protection’. 69   IATA (n 17) para 41: ‘It is clear from the preamble to the Montreal Convention that the States party thereto recognised “the importance of ensuring protection of the interests of consumers in international carriage by air and the need for equitable compensation based on the principle of restitution”. It is therefore in the light of this objective that the scope which the authors of the Convention intended to give to Articles 19, 22 and 29 is to be assessed’. 70  ‘Moreover, as the aim of the [Unfair Term] Directive is to strengthen consumer protection, it constitutes, according to Article 3(1)(t) EC, a measure which is essential to the accomplishment of the tasks entrusted to the Community and, in particular, to raising the standard of living and the quality of life in its territory’ (Case C-168/05 Elisa María Mostaza Claro v Centro Móvil Milenium SL [2006] ECR I-10421, para 37). 71  Case C-40/08 Asturcom Telecomunicaciones SL v Cristina Rodríguez Nogueira [2009] ECR I- 9579, para 51. 72   Tour operators and travel agents are, however, required to comply with the Services Directive (recital 33).

Travel and Tourism  39 Article 6(d) TFEU). Nevertheless, the germ for the development of user rights was enshrined already in the Treaty of 1958 where Article 95(3) TFEU (ex Article 75(3) EC) referred to the benefit of transport users (‘usagers’ in French and ‘Verkehrsnutzer’ in German). Combined with the Maastricht 1992 innovation, Article 12 TFEU – the integration requirement for consumer concerns – allows for EU intervention. This has implications for the scope of passenger law ratio personae. Whereas the notion of consumer is private-purpose focused, the passenger (or traveller generally) can also be travelling for professional purposes and be taken under the wing of the law designated to protect passengers. If passenger law really is an offshoot of consumer law (or ‘consumerised’ transport law), the notion of ‘user’ has found its expression here for the transport area.

B.  User Rights for Specified Groups of Users While being overall broader, passengers who are PRMs form a sub-group among passengers. Two formulae are used to describe who is meant. The first, originally dating from 1998, is found in Article 2(y) of Directive 2009/45/EC on safety rules and standards for passenger ships [recast]73 that states that a PRM is ‘anyone who has a particular difficulty when using public transport, including elderly persons, disabled persons, persons with sensory impairments and wheelchair users, pregnant women and persons accompanying small children’. The second, found in passenger regulations, states that a PRM is any person whose mobility when using transport is reduced as a result of any physical disability (sensory or locomotory, permanent or temporary), intellectual disability or impairment, or any other cause of disability, or as a result of age, and whose situation needs appropriate attention and adaptation to his particular needs of the services made available to all passengers.74

Whatever description is preferred, the Commission, with the underpinning of Article 26 of the EU Charter of Fundamental Rights, has developed an ambitious agenda.75 It says that about one in six Europeans suffers from disabilities.76 If one adds the elderly in Europe’s ‘silver-tops economy’ a very significant part of transport users fall in this category. With the UN Convention on the Rights of Persons with Disabilities, uniform international law is backing the policy to award tailormade rights to a sub-group of travellers.   [2009] OJ L 163/1.   Art 2(i) of Regulation 261/2004, Art 2(a) of Regulation 1107/2006, Art 3 No 15 of Regulation 1371/2007, Art 3(a) of Regulation 1177/2010, Art 3(j) of Regulation 181/2011. 75   European Commission press release IP/10/1505 of 15.11.2010, ‘Creating a barrier-free Europe: European Commission seeks better access for 80 million people with disabilities’; Commission Communication COM(2010) 636 final. 76   European Commission press release IP/11/1533 of 13.12.2011, ‘European Commission seeks public input on measures to break down barriers to disabled people’. 73 74

40  Jens Karsten C.  User Rights as the Right to Market Access For the travelling individual, the EU is a promise for unfettered access to its service market across intra-Community borders. Tour operators and travel agents have to comply with Article 20(2) of the Services Directive 2006/123/EC,77 which requires Member States to ensure that ‘the general conditions of access to a service, which are made available to the public at large by the provider, do not contain discriminatory provisions relating to the nationality or place of residence of the recipient’. This does not apply to the services provided by carriers.78 An annoyance therefore arises where access is denied. Chapter two referred to rates and air fares and how Article 23(2) of Regulation 1008/2008 addresses the problem. Similar provisions are found in maritime transport and coach transport in Article 4(2) of Regulation 1177/2010 and Article 4(2) of Regulation 181/2011 according to which the contract conditions and tariffs applied by carriers or ticket vendors shall be offered to the general public without any direct or indirect discrimination based on the nationality of the final customer or on the place of establishment of carriers or ticket vendors within the Union.

This amounts to a prohibition of discriminating against the passenger who researches the most favourable deal for transport services across intra-Community borders. The fact that railway transport law does not provide for such a clause appears a mere omission to be remedied at the next opportunity.

VI.  CONFLICT AND RECONCILIATION WITH INTERNATIONAL LAW

The mere seven-year history of Regulation 261/2004 teaches us that the combination of opaque legal drafting and contentious content makes this piece of EU passenger law a font of litigation. Of the staggering number of preliminary procedures on Regulation 261/2004, 14 cases have been decided or closed (IATA,79 Kramme,80 Schenkel (or Emirates),81 Walletin-Hermann,82 Sturgeon & Böck,83 Rehder,84 Bienek,85

  Recital 33 of Directive 2006/123/EC.   Art 2(2)(d) of Directive 2006/123/EC.   Case C-344/04 (n 18). 80   Case C-396/06, Opinion of Advocate-General (removed from register). 81   Case C-173/07 (n 33). 82   Case C-549/07 (n 33). 83   Joined Cases C-402/07, Christopher Sturgeon, Gabriel Sturgeon, Alana Sturgeon v Condor Flugdienst GmbH and C-432/07, Stefan Böck, Cornelia Lepuschitz v Air France SA, judgment of 19.11.2009. 84   Case C-204/08, Peter Rehder v Air Baltic Corporation, judgment of 9.7.2009. 85   Case C-525/08 Sylvia Bienek v Condor Flugdienst GmbH (removed from register). 77 78 79

Travel and Tourism  41 Schulze,86 Sousa Rodríguez,87 Adams,88 Eglitis & Ratnieks,89 Lassooy (or Finnair),90 Nelson,91 TUI Travel,92) while another 16 cases are currently pending (Folkerts,93 McDonagh,94 Cuadrench Moré,95 Büsch et Siever,96 van de Ven et van de Ven-Janssen,97 Rodríguez Cachafeiro et Martínez-Reboredo Varela-Villamor,98 Esteves Coelho dos Santos,99 Espada Sánchez,100 Amend (or Germanwings),101 Schlüsselbauer & Schauß,102 Dörschel,103 Becker,104 Brännström,105 KLM and TUI Airlines Nederland,106 Butz et al,107, Guevara Kamm108). While most of the questions asked relate to the Regulation’s drafting and interpretation, Regulation 261/2004 shows a worrying tendency of disrespecting the boundaries set to the ambition of passenger protection by uniform international law. A number of the cases quoted raise very fundamental questions of its compatibility with international law, in air transport the Montreal Convention.

A.  Bending the Rules: IATA109 The IATA ruling dismayed air carriers because the ECJ (Grand Chamber) defined the boundaries of the Montreal Convention more narrowly than it was assumed it would and found the Community competent to regulate a matter (damage due to

86  Case C-529/08 Friedrich Schulze, Jochen Kolenda, Helmar Rendenz v Deutsche Lufthansa AG (removed from register). 87   Case C-83/10 Aurora Sousa Rodríguez et al v Air France SA. 88   Case C-226/10 Hannelore Adams v Germanwings GmbH (removed from register). 89   Case C-294/10 Andrejs Eglı- tis, Edvards Ratnieks v Latvijas Republikas Ekonomikas Ministrija, judgment of 12.5.2011. 90   Case C-22/11 Finnair Oyj v Timy Lassooy, judgment of 4.10.2012. 91   Case C-581/10 Emeka Nelson, Bill Chinazo Nelson, Brian Cheimezie Nelson v Deutsche Lufthansa AG judgment of 23.10.2012. 92  Case C-629/10 TUI Travel plc, British Airways plc, easyJet Airline Co Ltd, International Air Transport Association, R v Civil Aviation Authority (pending). 93   Case C-11/11 Air France v Heinz-Gerke Folkerts and Luz-Tereza Folkert (pending). 94   Case C-12/11 Danise McDonagh v Ryanair Ltd (pending). 95   Case C-139/11 Joan Cuadrench More v Koninklijke Luchtvaart Maatschappij NV (KLM). 96   Case C-255/11 Nadine Büsch and Björn Siever / Ryanair Ltd. 97   Case C-315/11, A T G M Van de Ven & M A H T Van de Ven-Janssen v Koninklijke Luchtvaart Maatschappij NV (pending). 98   Case C-321/11. 99   Case C-365/11. 100   Case C-410/11. 101   Case C-413/11. 102   Joined Cases C-436/11 and C-437/11. 103   Case C-151/11, Condor Flugdienst GmbH v Jürgen Dörschel. 104   Case C-594/11, Christoph Becker v Société Air France SA. 105   Case C-150/12, Eva Marie Brännström and Rune Brännström v Ryanair Holdings plc . 106   Case C-227/12, Koninklijke Luchtvaart Maatschappij NV, TUI Airlines Nederland BV, v Staatssecretaris van Infrastructuur en Milieu. 107   Case C-212/12, Helmut Butz et al v Société Air France SA . 108   Case C-316/12, J Sebastian Guevara Kamm v TAM Airlines S.A. / TAM Linhas Aereas SA. 109   IATA (n 17) paras 49–63.

42  Jens Karsten late departure of a flight110) that carriers thought was exhaustively and bindingly regulated by international law (Article 19 of the Montreal Convention on damage due to delay). Indeed, in IATA, the Court saved Regulation 261/2004 by placing it outside the coordinated field of international law. It did so by distinguishing between two realms: that of the coordinated field of international law, which local legislators cannot change, and that of the uncoordinated field in which the local, in this case European, legislator maintains a margin of manoeuvre. In IATA the Court recognised the exclusivity of the Montreal Convention (Article 29), but it also established that for claims falling outside its scope the local regulator is not pre-empted from acting. This distinction – and the role of the Court in making such a distinction – is crucial for the whole concept of EC passenger law in the context of its international law origins.

B.  Breaking the rules: Sturgeon/Böck111 The fine line that the IATA ruling meticulously drew between the coordinated field of international law and the uncoordinated area which it left free for the supranational legislator to fill was overstepped by what followed in Sturgeon/Böck (Fourth Chamber). Without delving into the details of the ruling the Court found that a passenger claim for compensation was justified when a flight reaches its destination more than three hours later than scheduled, the reason being, first, equal treatment with passengers suffering loss of time due to cancellations and, second, the overall aim of consumer protection. However, as the AdvocateGeneral pointed out, the Regulation did not provide the basis for such a bold extension of passenger rights.112 Hence the judgment clearly overstepped the limits of what judges can add to the law and also broke with the distinction between late departure and late arrival that, in the view of the IATA ruling, made Regulation 261/2004 capable of reconciliation with the Montreal Convention.

C.  Mending the Rules?: Pending Cases The discomfort felt with the Sturgeon ruling is palpable. German (Nelson113), British (TUI Travel114) and Dutch (van den Ven115) courts are challenging the find110   Art 6 (‘delay’) of Regulation (EC) 261/2004 establishing common rules on the compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, and repealing Regulation (EEC) 295/91 [2004] OJ L 46/1. 111   Sturgeon and Böck (n 83). 112   Advocate-General Sharpston [2009] ECR I-10923. 113   Case C-581/10 Emeka Nelson, Bill Chinazo Nelson, Brian Cheimezie Nelson v Deutsche Lufthansa AG (pending). 114   TUI Travel plc, British Airways plc, easyJet Airline Co Ltd, International Air Transport Association, R v Civil Aviation Authority (n 92) (pending). 115   A T G M Van de Ven & M A H T Van de Ven-Janssen v Koninklijke Luchtvaart Maatschappij NV (n 97) (pending).

Travel and Tourism  43 ings, thereby offering a possibility to rectify what the Court’s Fourth Chamber had decided. Nelson inter alia asks how compensation payments for late arrival fit with the exclusivity of the provisions on delay of the Montreal Convention. The validity of the regulation’s provisions is challenged for the same reason of exclusivity in TUI Travel and again for the same reason in van den Ven.

D.  Possibilities of the Court The eventual decision (and reaction to the widespread criticism) of the ECJ is yet unknown. If it were to reverse the Sturgeon/Böck, and possibly also the IATA rulings, it is necessary to ask, however, how this could be done. Annulling earlier decisions would not achieve the result of reconciling Regulation 261/2004 with the Montreal Convention. Legal deadwood would have to be cut. But how? If it holds true that international uniform law is replacing, within the remit of what it regulates, local (national and supranational) law related to the same subject matter, incompatible local law should be inapplicable. Preparing the Court’s IATA ruling Advocate-General Geelhoed explained: The Community is party to the Montreal Convention and there is no doubt that the Community is bound by this Convention. The Convention was signed and concluded on the basis of Article 300 EC. Agreements concluded in accordance with Article 300 EC are binding on the institutions and the Member States and form an integral part of the Community legal order once they have entered into force [quoting the Haegeman116 and Kupferberg117 cases]. The fact that the Regulation was adopted before the entry into force, for the European Community, of the Montreal Convention does not change the obligations of the Community institutions under international law. The Montreal Convention is an international agreement and as such is binding on the parties thereto and must be performed in good faith. Therefore, even though the Community has not yet formally deposited its instrument of ratification, the Community institutions may not act against international agreements. The institutions were obliged, as from 9 December 1999, the date of signature, to refrain from acts which would defeat the object and purpose of the Convention. Thus, there was an obligation to refrain from adopting Community legislation which could be incompatible with the Montreal Convention.118

The IATA ruling firmly established that the Montreal Convention (1) has been validly concluded by the EC; (2) prevails over secondary EC law; and (3) is an integral part of the acquis communautaire. Henceforth mere reiterations may suffice to corroborate this character. The ensuing Schenkel ruling119 produced a condensed formula:   Case 181/73 Haegeman v Belgium [1974] ECR 449.   Case 104/81 Hauptzollamt Mainz v Kupferberg [1982] ECR 3641. 118   Opinion of Advocate-General Geelhoed of 8 September 2005, para 32. 119   Emirate Airlines Direktion für Deutschland v Diether Schenkel (n 33). Opinion of AdvocateGeneral Sharpston. 116 117

44  Jens Karsten It is true that the Montreal Convention forms an integral part of the Community legal order. Moreover, it is clear from Article 300(7) EC that the Community institutions are bound by agreements concluded by the Community and, consequently, that those agreements have primacy over secondary Community legislation.120

No such privileged status was awarded to maritime conventions in Peralta,121 Intertanko122 and Commune de Mesquer.123 Of these rulings Intertanko stands out as providing guidance how the Court is inclined to decide if Community law conflicts with international law. The judgment developed a test wherein the conditions are set out under which the Court may be prepared to review the validity of a secondary Community law against the background of an international treaty: (42)  It is clear from Article 300(7) EC that the Community institutions are bound by agreements concluded by the Community and, consequently, that those agreements have primacy over secondary Community legislation. (43)  It follows that the validity of a measure of secondary Community legislation may be affected by the fact that it is incompatible with such rules of international law. Where that invalidity is pleaded before a national court, the Court of Justice thus reviews, pursuant to Article 234 EC, the validity of the Community measure concerned in the light of all the rules of international law, subject to two conditions. (44)  First, the Community must be bound by those rules. (45)  Second, the Court can examine the validity of Community legislation in the light of an international treaty only where the nature and the broad logic of the latter do not preclude this and, in addition, the treaty’s provisions appear, as regards their content, to be unconditional and sufficiently precise” [quoting the IATA ruling, paragraph 39].124

Accordingly, if two conditions are met (‘ratification by the EU’ plus ‘content unconditional and sufficiently precise’) primacy over secondary Union law could be established. As shown, the Montreal Convention fulfils both criteria with ease. If an enlightened decision of the ECJ would have the courage to overrule what has earlier somewhat negligently been decided (and it might be easier for the full court to decide against a chamber decision (Sturgeon/Böck) and against a grand chamber decision (IATA), the result must be against provisions of an EU regulation. A novelty indeed, but worthwhile for maturing the relationship of European law and international law. VII. CONCLUSION

Service user rights in transport have a name: passenger law. Different from most other pieces of legislation presented in this compilation as the law governing   Case C-173/07 Emirate Airlines Direktion für Deutschland v Diether Schenkel (n 33) para 43.  Case C‑379/92 Criminal proceedings against Matteo Peralta [1994] ECR I‑3453. Opinion of Advocate-General Lenz. 122   Intertanko (n 17). 123   Case C-188/07 Commune de Mesquer v Total France & Total International Ltd. 124   Intertanko (n 17) paras 42–45. 120

121

Travel and Tourism  45 consumer services, it comes along in the form of conventions and regulations, not directives which go through the filter of the national legislator in transposition. That makes faults in their structure more glaringly visible. But their hierarchical structure is still poorly understood in some quarters and the globalisation of law it represents sometimes ignored. Yet it must be asked what service is done to the European consumer if this complex law is bent and perhaps broken when the tendency clearly is – at the next stage possibly in the area of electronic commerce – to globalise consumer law.

4 Electronic Communications and the EU Consumer ALBERT NIJENHUIS1

I. INTRODUCTION

D

URING THE LAST two decades the EU electronic communications sector has shifted away from state-owned monopolies and is now characterised by increased competition, falling prices, more choice and steep innovation. Although crucial for the world of business, the same developments have been very much to the benefit of the EU consumer. Electronic communications services such as mobile and fixed phones, internet access, whether fixed or wireless, and television are extensively used by consumers in the EU. Most EU consumers now have mobile phones, calling both domestically as well as cross-border. The internet offers numerous possibilities for consumers to obtain information and to purchase goods and services. Television channels can now be viewed on all sorts of mobile devices. It is therefore no surprise that the electronic communications sector is an important sector since, in economic terms, it currently accounts for an annual turnover of around €332 billion, and 4 per cent of the jobs in the Union.2 It is also a sector which has traditionally been heavily regulated. The focus of this chapter is on consumer rights in the EU electronic communications or, briefly, telecoms sector. The ultimate question is if there is a true ‘EU telecom consumer’. This chapter will first of all provide a short history of the development of the EU telecom rules (section II.A.–C.). This is in order to understand better the role of EU electronic communications regulation and the ensuing rights and benefits for consumers. It will also present a very brief overview of the current EU electronic communications rules (section II.D.). Subsequently, the chapter will deal with the rules on market regulation which, although not creating direct consumer rights, are specifically aimed at benefiting the consumers (section 1   Member of the Legal Service of the European Commission. The opinions expressed in this chapter are purely personal and do not necessarily reflect those of the European Commission or of its Legal Service. 2  Source: website European Commission, DG INFSO, http://ec.europa.eu/information_society/ policy/ecomm/eu-rules/index_en.htm.

48  Albert Nijenhuis III.B.). Finally, this chapter will address those EU telecom rules that grant rights to consumers in a more direct way (section III.C.), for example the price caps for roaming imposed by the so-called Roaming Regulation.3 In that context, this chapter will examine in an elaborate manner the very important judgment of the European Court of Justice in Case C-58/08 Vodafone, in which the Court upheld the validity of the Roaming Regulation4 (section IV.).

II.  BRIEF OVERVIEW OF THE EU ELECTRONIC COMMUNICATIONS RULES

A.  The First Efforts Twenty years ago the European telecom sector was still characterised by public service monopolies. Since then, largely driven by revolutionary technical developments, privatisation and competition have very much increased. In parallel, the regulation of the sector has evolved drastically leading to its liberalisation and thus allowing and fostering competition. It started in 1988 when the Commission adopted the Terminal Equipment Directive (Directive 88/201/EC5). This directive required the Member States to remove the special or exclusive rights they granted to undertakings for the importa­ tion and certain other activities relating to telecommunications terminal equipment and/or maintenance of such equipment. It was the first liberalisation directive to be adopted under Article 90(3) EC, now Article 106(3) TFEU. Several Member States resisted this move and brought the question of whether the Commission could adopt such a directive under Article 90 before the European Court of Justice in Case 202/88.6 The Court upheld the directive of the Commission and its legal base holding that the Commission was empowered under Article 90(3) to require the abolition of special and exclusive rights on the basis that such rights could distort competition and could restrict trade between Member States. Two years later, the European Commission adopted a further liberalisation directive, the Services Directive (Commission Directive 90/388/EEC). This directive required Member States to withdraw special and exclusive rights for the supply of telecommunications services other than voice telephony.7 3   Regulation (EC) 717/07 of the European Parliament and the Council of 27 June 2007 on roaming on public mobile communication networks within the Community [2007] OJ L 171/32, as amended by Regulation (EC) 544/2009 of the European Parliament and the Council of 18 June 2009 [2009] OJ L 167/12. This regulation is replaced by Regulation (EU) no 531/2012 of the European Parliament and the Council of 13 June 2012 on roaming on public mobile communications networks within the Union (recast) [2012] OJ L172/20, followed by Commission implementing Regulation (EU) no 1203/2012 of 14 December 2012 on the separate sale of regulated retail roaming services within the Union [2012] OJ L347/1. 4   Case C-58/08 Vodafone [2010] ECR I-4999. 5   Directive 88/201/EC of the Commission of 16 May 1988 on competition in the markets in telecommunications terminal equipment [1988] OJ L131/73. 6   Case 202/88 France v Commission [1991] ECR 1223. 7   Commission Directive 90/388/EEC of 28 June 1990 on competition in the markets for telecommunications services [1990] OJ L 192/10.

Electronic Communications  49 In 1998, all remaining special and exclusive rights for telecommunications markets were withdrawn. In parallel with the liberalisation process, a first package of harmonisation measures was progressively established. This package was designed to complement the withdrawal of special and exclusive rights by actively ensuring interconnection by open network provision, while also harmonising rules on universal service to ensure a number of basic telecom services for all citizens. B.  The 2002 Common Regulatory Framework Although the above package of harmonised measures for electronic communications had been successful in creating the conditions for effective competition in the telecommunications sector during the transition from monopoly to full competition, continuous technological innovation overtook the regime. ‘Digitalisation’ allowed many kinds of content to be transmitted over different networks and the internet had become a global infrastructure for a range of electronic communication services. Thus, the European Parliament and the Council adopted in 2002 the Commission proposals for a second regulatory package which is referred to as the common regulatory framework. Based on the experience of telecoms liberalisation, policy-makers believed that extending competition and ensuring opportunity and reward for innovative companies was the key to further progress. However, letting market forces act alone was not possible given that Europe’s telecommunications industry originated in state-run monopolies, leaving a legacy of imperfect competitive conditions. Continued regulation was therefore essential for as long as these former mono­ polists had market power, to ensure a level playing field for new market entrants. Another reason was that market forces alone may lead to the exclusion of some social groups from essential public services. The regulatory system therefore continues to recognise a universal service obligation to ensure basic services at affordable prices to all in cases where the market alone does not provide them. Accordingly, the EU common regulatory framework establishes a harmonised framework for the regulation of electronic communications services and electronic communications networks. The objectives of the regulatory framework for electronic communications are essentially to create an internal market, to promote and enhance the rights of consumers in this sector, to strengthen competition leading to lower prices and more innovation and to ensure basic telecoms services for all consumers. C.  The 2009 Reform of the Regulatory Framework In 2007 the Commission proposed to reform the 2002 common regulatory framework. This reform, which was adopted by the European Parliament and the Council in 2009, aims at even better consumer rights, more effective regulation of telecom operators, achieving more consistency in the application of the EU telecom rules for the benefit of the internal market and strengthening the security of

50  Albert Nijenhuis communication networks. At the same time, an EU telecom agency has been created to help achieving more consistency in the application of the telecom rules. The 2009 reform rules were to be transposed into national legislation in the 27 Member States by 25 May 2011.

D.  The Current Regulatory Framework The current EU regulatory framework consists of a number of directives which are all based on Article 114 TFEU. The overarching directive is Directive 2002/21/ EC, the Framework Directive, setting out the framework for telecoms legislation. It contains rules on market regulation, radio frequencies, standards and a range of related topics. Directive 2002/20/EC, the Authorisation Directive, essentially deals with the authorisation for providing telecom services including wireless services. Directive 2002/19/EC, the Access Directive, provides the national regulatory authorities or supervisors in the telecom sector with the necessary tools and powers to control dominant operators. Directive 2002/22/EC, the Universal Service Directive, essentially guarantees basic telecom services to everybody in the EU and introduces a range of consumer rights. Directive 2002/58/EC, the e-Privacy Directive, introduces special data protection rules for the telecoms sector. Regulation (EC) 1211/2009, the BEREC Regulation, has set up a body of European Regulators for Electronic Communications (BEREC), principally to contribute to a consistent application of the regulatory framework throughout the European Union.8 8   Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 on a common regulatory framework for electronic communications networks and services [2002] OJ L 108/33 (Framework Directive); Directive 2002/19/EC of the European Parliament and of the Council of 7 March 2002 on access to, and interconnection of, electronic communications networks and associated facilities [2002] OJ L 108/7 (Access Directive); Directive 2002/20/EC of the European Parliament and of the Council of 7 March 2002 on the authorisation of electronic communications networks and services [2002] OJ L 108/21 (Authorisation Directive); Directive 2002/22/EC of the European Parliament and of the Council of 7 March 2002 on universal service and users’ rights relating to electronic communications networks and services [2002] OJ L 108/51 (Universal Service Directive); Directive 2002/58/EC of the European Parliament and of the Council of 12 July 2002 concerning the processing of personal data and the protection of privacy in the electronic communications sector [2002] OJ L 201/37 (Directive on privacy and electronic communications); and Regulation (EC) 1211/2009 of the European Parliament and the Council of 25 November 2009 establishing the Body of European Regulators for Electronic Communications (BEREC) and the Office [2009] OJ L 337/1–10. Directive 2009/140/EC of the European Parliament and of the Council of 25 November 2009 amending Directives 2002/21/EC on a common regulatory framework for electronic communications networks and services, 2002/19/EC on access to, and interconnection of, electronic communications networks and associated facilities, and 2002/20/EC on the authorisation of electronic communications networks and services [2009] OJ L 337/37–69 has amended directives 2002/21/EC, 2002/19/EC and 2002/20/EC. Directive 2009/136/EC of the European Parliament and of the Council of 25 November 2009 amending Directive 2002/22/EC on universal service and users’ rights relating to electronic communications networks and services, Directive 2002/58/EC concerning the processing of personal data and the protection of privacy in the electronic communications sector and Regulation (EC) 2006/2004 on cooperation between national authorities responsible for the enforcement of consumer protection laws [2009] OJ L 337/11–36 has amended directives 2002/22/EC and 2002/58/EC.

Electronic Communications  51 The Roaming Regulation can also be regarded as part of the regulatory framework. This regulation caps mobile roaming charges both at the wholesale (between operators) and the retail (consumer) level. As already indicated above, the common regulatory framework applies to electronic communications services and electronic communications networks. Electronic communications service is defined in Article 2(c) of the Framework Directive as a service which consists ‘wholly or mainly in the conveyance of signals on electronic communications networks’. Electronic communications networks are defined in Article 2(a) as systems ‘which permit the conveyance of signals . . . irrespective of the information conveyed’. It follows, as recital 5 of the Framework Directive also makes clear, ‘that the framework does therefore not cover the content of services delivered over electronic communications networks using electronic communication services, such as broadcasting content’. It is thus very important to keep in mind this distinction between the service for conveyance of signals and the content of what is being conveyed. Content is as such not subject to the regulatory framework. As the focus of this chapter is on the consumer, it is necessary to know how this notion is defined in the regulatory framework. The framework defines the term ‘consumer’ in Article 2(i) of the Framework Directive as ‘any natural person who uses or requests a publicly available electronic communications service for purposes which are outside his or her trade, business or profession’. It should, however, be noted that in particular in the Universal Service Directive many rights are not only granted to consumers but to ‘end-users and ‘subscribers’ which are more general notions, encompassing that of ‘consumer’. ‘End-user’ is defined in Article 2(n) of the Framework Directive as ‘a user not providing public communications networks or publicly available electronic communications services’. ‘Subscriber’ is defined in Article 2(k) as ‘any natural or legal person who or which is a party to a contract with the provider of publicly available electronic communications services for the supply of such services’.

III.  CONSUMERS UNDER THE ELECTRONIC COMMUNICATION RULES

A.  Distinction between Rights and Benefits In its Article 8, the Framework Directive sets out the precise objectives which the EU telecom rules aim to achieve. Among those objectives is the promotion of competition by ‘ensuring that users . . . derive maximum benefit in terms of choice, price, and quality’ and the promotion of the interests of citizens by ‘ensuring that all citizens have access to a universal service’ and ‘ensuring a high level of protection for consumers in their dealings with suppliers’. Delivering maximum benefit in terms of choice, price and quality for consumers as well as ensuring a high level of consumer protection in their dealings with suppliers are thus vital objectives of the EU electronic communications rules.

52  Albert Nijenhuis Consumer protection is essentially ensured by granting consumers a number of rights in their dealings with suppliers. A high level of consumer protection, in its ultimate form, is provided by the Roaming Regulation which directly imposes on mobile operators obligations to cap prices of voice, text messaging (SMS) and data roaming. Users can invoke the corresponding rights before a national court in case an operator were to breach its obligations under the regulation. This is an exception as consumer rights in telecoms are mainly provided in directives, which require implementation into national law. Giving consumers a better deal, essentially as a result of healthy competition in the market, is not the same but equally important as granting rights to consumers. It is principally achieved by the regulation of a number of electronic communications markets where competition is considered not to be effective, in other words, where there are dominant operators. In such a situation national regulatory authorities can, ultimately to the benefit of the consumer, impose on dominant operators a number of so-called ‘remedies’ in order to help tackle market failures, including price control measures. This chapter will first, under section III.B., deal with the latter electronic communications rules that, although not creating direct consumer rights, are specifically aimed at benefiting consumers. Thereafter, it will address consumer rights under section III.C. Obviously, other parts of the common regulatory framework than market regulation are also ultimately in place for the benefit of consumers, such as the important rules on spectrum management (including the allocation of frequencies). As market regulation is however principally pertinent for consumers, this chapter will focus on these rules.

B.  Benefits to Consumers through Market Regulation Often as a legacy to the era of state monopolies, in certain telecoms markets there are still dominant players that can charge very high prices, or obstruct access to their dominant network to other market players and by doing so restrict competition. The regulatory framework has been designed to address such situations where, despite the liberalisation process, effective competition is still lacking. To that end, the Framework Directive contains the following mechanism. Under Article 15 and 16 of the Framework Directive, national regulatory authorities are obliged to examine a number of telecom markets that may need so-called ex ante regulation. These markets are basically those where competition may not be effective. They are listed in the Commission Recommendation on relevant markets such as the market for wholesale broadband access.9 National market 9   Commission Recommendation of 17 December 2007 on relevant product and service markets within the electronic communications sector susceptible to ex ante regulation in accordance with Directive 2002/21/EC of the European Parliament and of the Council on a common regulatory framework for electronic communications networks and services 2007/879/EC, [2007] OJ L 344/65.

Electronic Communications  53 authorities may, however, also examine markets that are not listed in this recommendation. It is first for them to define relevant markets appropriate to national circumstances, taking account of the Guidelines on market analysis and the assessment of significant market power10 (Article 15 Framework Directive). The national regulatory authorities subsequently have to analyse the relevant markets and determine on the basis of this market analysis whether a market is effectively competitive (Article 16 Framework Directive). In other words, national regulatory authorities must determine whether or not any operators hold significant market power (SMP). SMP has the same meaning as dominance under EU competition law. If such SMP is found, the national regulator disposes of a number of remedies (including price control and access obligations) that can be imposed on dominant operators to help tackle market failures. These remedies are set out in the Access Directive and in the Universal Service Directive. Article 7 of the Framework Directive establishes a special cooperation procedure between national regulatory authorities, the Commission and BEREC which also applies in relation to Articles 15 and 16 of the Framework Directive (the socalled ‘Article 7 procedure’). Under Article 7(3) of the Framework Directive, national regulatory authorities have to make accessible any so-called ‘draft measures’ to the Commission, the national regulatory authorities of other Member States and BEREC. Such draft measures concern market definition, market analysis and remedies. The Commission, the other national regulatory authorities and BEREC have one month to provide their comments on such draft measures. Comments may concern for example the precise delineation of the service or geographical markets or the sort of remedies to be imposed on dominant operators. The relevant national regulatory authority has to take utmost account of such comments but the latter are not legally binding on such authority. Consequently, in its order Vodafone España the General Court decided that such comment letters are not challengeable acts.11 The Commission can however, as far as draft measures on market definition and market analysis are concerned, enter into a second phase where it considers that a draft measure would create a barrier to the single market or if it has serious doubts as to its compatibility with EU law. This only applies to those measures aimed at defining a relevant market that differs from those listed in the recommendation referred to above or deciding whether or not to designate an undertaking as having, either individually or jointly with others, SMP, and would affect trade between Member States. For example, a national regulatory authority defines as a relevant market the market for wholesale broadband access and concludes that a particular operator is dominant in that market. If the Commission considers that the national regulatory authority does not have sufficient evidence to establish dominance, it could decide to take the case into second phase. The 10   Commission guidelines on market analysis and the assessment of significant market power under the Community regulatory framework for electronic communications networks and services [2002] OJ C 165/6. 11   Case T-109/06 Vodafone España, SA and Vodafone Group plc v Commission [2007] ECR II-5151.

54  Albert Nijenhuis Commission will indicate in its so-called ‘letter of serious doubts’ addressed to the relevant national regulatory authority why it considers that there is not sufficient evidence. In that scenario, national regulatory authorities are not allowed to adopt the measure for a further two months. The Commission can within this period take a decision requiring the national authority concerned to withdraw the draft measure and/or take a decision to lift its reservations in relation to the draft measure. The Commission therefore essentially has a veto power vis-à-vis the national regulatory authorities as to market definition and market analysis. The Commission has no such veto power as far as remedies are concerned. As a result of the 2009 reform, the regulatory framework in its Article 7(a) does, however, allow the Commission to enter into a second phase of investigation if it considers that the draft measure on remedies would create a barrier to the single market or has serious doubts as to the compatibility of the draft measure with EU law. In that case the national regulatory authority cannot adopt its intended measure for a further three months. The aim of Article 7(a) is to ensure the consistent application of remedies throughout the EU. BEREC has to facilitate this by providing an opinion on the Commission’s concerns and cooperating closely with the Commission and the national regulatory authority concerned to identify the most appropriate and effective measure in the light of the objectives of the EU telecoms rules laid down in Article 8 of the Framework Directive. Where the national regulatory authority ultimately amends or maintains its draft measure, the Commission may issue a recommendation requiring the national regulatory authority concerned to amend or withdraw the draft measure or take a decision to lift its reservations. Such a recommendation is, however, as such not legally binding on the national regulatory authority. Member States were thus apparently not willing to grant a veto power to the Commission as far as remedies are concerned. A very important objective in all of this is to protect effective competition throughout the EU from which consumers should generally only profit. Competition should lead to lower prices and better quality as well more innovation. The ‘Article 7 procedure’ is therefore an important instrument to secure benefits for consumers through consistent regulation of electronic communications markets where there is no effective competition. This has also been confirmed by the Court of Justice. In Case C-424/07 Commission/Germany the Commission challenged German legislation which basically aimed at exempting certain new innovative telecom markets from telecom regulation.12 The result of the law was that the national regulatory authority could not examine such markets and impose any remedies, if necessary. The Court ruled, however, that there is no general principle of non-regulation of such markets provided in the telecom rules (see in particular paragraph 73 of the judg  Case C-424/07 Commission v Germany [2009] ECR I-11431.

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Electronic Communications  55 ment). In other words, there are no ‘regulatory holidays’ foreseen by the regulatory framework. This means that such new innovative markets are also subject to the Article 7 procedure and, where SMP is established, national regulatory authorities must be able to impose appropriate remedies on dominant under­ takings. This means that consumers will also ultimately benefit from effective competition in such novel and innovative telecom markets. The judgment shows that the Court will not take a very lenient approach vis-à-vis Member States that try to avoid the application of the regulatory supervision of electronic communications markets.

C.  Consumer Rights EU electronic communications law provides a considerable number of rights to consumers. It should be noted however that also the general EU legislation on consumer protection applies to the telecoms sector such as the Unfair Commercial Practices Directive and the Misleading Advertising Directive.13 Article 1(4) of the Universal Service Directive clearly states that the provisions in the directive on endusers’ rights shall apply without prejudice to EU rules on consumer protection and national rules in conformity with Union law. The EU regulatory framework provides in addition thereto specific rights for the electronic communications sector. As already mentioned, the ultimate example of direct consumer protection is the Roaming Regulation (see section IV. below). In addition, the e-privacy Directive provides the rules for the protection of privacy and of personal data processed in relation to communications over public communication networks (see section III.C.ii. below). This chapter will, however, first, under section III.C.i., address in more detail the Universal Service Directive, which provides for a variety of important consumer rights. i.  The Universal Service Directive The aims of the Universal Service Directive, as expressed in its Article 1, are first to ensure the availability of good quality publicly available services through effective competition and choice (chapter IV of the directive) and second, to deal with circumstances where end-users are not satisfactorily met by the market (chapter II of the directive). 13   Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) 2006/2004 of the European Parliament and of the Council [2005] OJ L 149/22–39; Directive 97/55/EC of European Parliament and Council of 6 October 1997 amending Directive 84/450/EEC concerning misleading advertising so as to include comparative advertising [1997] OJ L 290/18. Also relevant are Directive 97/7/EC of the European Parliament and of the Council of 20 May 1997 on the protection of consumers in respect of distance contracts [1997] OJ L 144/19–27 and Regulation (EC) 2006/2004 on cooperation between national authorities responsible for the enforcement of consumer protection laws [2009] OJ L 337/11–36; see also n 7.

56  Albert Nijenhuis a.  Chapter IV – End-user Interests and Rights Chapter IV of the Universal Service Directive introduces a number of consumer rights which the Member States have to ensure, either directly or by way of their national regulatory authorities. As already indicated, many of such rights are, however, provided for a wider group of addressees than merely consumers. The Universal Service Directive often refers to ‘end-users’ or ‘subscribers’ when defining the addressees of the various rights which Member States have to ensure in their jurisdictions. Also chapter IV is not entitled ‘Consumer rights’ but ‘End-user interests and rights’. As stated above, the terms ‘end-users’ and ‘subscribers’ clearly include consumers but interestingly enough many articles of the Universal Service Directive refer to end-users and consumers simultaneously as if consumers are not caught by the term ‘end-users’. To follow the same approach as the directive, this chapter will hereinafter also separately refer to end-users and consumers. It is not the intention to describe all the rights provided for end-users and consumers in the Universal Service Directive but a number of the most important ones are addressed below. As far as these rights are concerned, the question can be asked whether such rights provided for in directives that have to be implemented into national law by the Member States, do not have direct effect. Given the way the rights are formulated in the directives, they appear to leave little discretion for Member States as far as their implementation is concerned. It is therefore a good case to argue that these rights have direct effect and can be invoked before a national court in case a Member State would not have implemented them in time. Right to a Contract and Transparency (Article 20 and 21) The EU legislator has recognised the need for telecom consumers to have a contract that clearly specifies the services and the most important conditions under which the services are provided. Article 20 therefore basically provides that where subscribing to services providing connection to a public communications network and/or publicly available electronic communications services, consumers and other end-users have a right to a contract with providers of such connection and/or services. Such a contract must specify, amongst others, the services provided including the minimum service quality levels offered (Article 20(1)(b)), details of price and tariffs (Article 20(1)(d)), the duration of the contract and the conditions for renewal and termination of the services and of the contract, including any charges due on termination of the contract (Article 20(1)(e)). Another important issue is transparency and publication of information. In this respect, Article 21 provides that telecom operators are to publish transparent, comparable, adequate and up-to-date information on applicable prices and tariffs. In addition, as it is often difficult for consumers and end-users to compare the offers made by telecom operators, national regulatory authorities have to encourage the provision of comparable information to enable consumers to make an independent evaluation of the cost of alternative usage patterns.

Electronic Communications  57 Quality of Services (Article 22) The EU legislator has also been keen in securing the quality of services. Article 22 ensures that national regulatory authorities are able to require telecom operators to publish accurate and up-to-date information for end-users on the quality of services, although normally a competitive market should ensure that end-users enjoy the quality of service they require. As far as networks are concerned, the powers of national regulatory authorities are even more extensive. National regulatory authorities must also be able to set minimum quality of services requirements on undertakings providing public communications networks to prevent degradation of the service or slowing down of traffic over networks. For the sake of clarity, it should be noted that the exercise of such powers by national regulatory authorities is not limited to situations where there is a lack of effective competition, as discussed under section III.B. above. Disabled End-users (Article 23a) In particular the 2009 reform has given special attention to disabled end-users by ensuring equivalence in access and choice for those users. National regulatory authorities must be empowered to specify requirements to be met by telecom operators not only to ensure that disabled end-users have access to electronic communications services equivalent to those enjoyed by the majority of endusers, but also that they can benefit from the choice of undertakings and services available to the majority of end-users. This is provided by Article 23a of the Universal Service Directive. Access to Directory Enquiry Services and Directories and Emergency Numbers (Articles 25 and 26) Article 25 provides for a right for subscribers to publicly available telephone services to have an entry in the publicly available directory and to have their information made available to providers of directory enquiry services and/or directories. All end-users provided with such telephone services should also be able to access directories and directory enquiry services. An important right for end-users that are provided with an electronic communications service to make national calls is access to emergency services (Article 26). Also calls to the emergency call number ‘112’ have to be appropriately answered and handled, just like calls to the national emergency numbers. In addition, emergency services must receive from telecom operators information enabling them to find where the caller is located, so-called ‘caller location information’. This will help them to find the persons in need. As a result of the 2009 reform, these numbers must be accessible from any phone, anywhere in the European Union. Change of Provider (Article 30) In order to promote competition as well as consumer choice, subscribers should have the possibility to switch provider without being hindered by technical, legal

58  Albert Nijenhuis or practical obstacles. Article 30 has been included to achieve this aim. In that respect, the 2009 reform introduced a very important improvement for subscribers to facilitate switching. Article 30(4) provides namely that subscribers who have concluded an agreement to port a number to a new undertaking shall have that number activated within one working day. This is a substantial improvement as activation could take several days in some Member States. Changing provider is also facilitated by Article 30(1) providing for a right for subscribers to change provider while keeping their number. In addition, Article 30(2) foresees that pricing between operators and/or service providers relating to number portability is cost-oriented and that direct charges to subscribers do not act as a disincentive for subscribers. In this respect, the Court has in Case C-99/09 Polska Telefonia Cyfrowa ruled that national regulatory authorities, which have to determine whether direct charges do not act as a disincentive for subscribers, have the possibility to set a maximum amount that operators can charge that is lower than their actual cost, if such an amount of direct charges can act as a disincentive for subscribers to switch.14 It goes without saying that this entails a very high level of consumer protection. Must-carry Obligations (Article 31) Essentially to ensure that parts of the population can view or listen to their often local radio or television channels, Article 31 allows Member States to impose reasonable so-called ‘must-carry’ obligations. This means that Member States can oblige undertakings providing electronic communications networks used for the distribution of radio or television broadcast channels to the public to carry certain radio or broadcast channels where a significant number of end-users of such networks use them as their principal means to receive radio and television broadcast channels. Any such must-carry obligations must, however, be necessary to reach the public interest objectives as well as proportionate and transparent. As indicated above, must-carry obligations ensure that certain groups of endusers are guaranteed that they can watch their specific channels of interest. It also entails, however, that the relevant networks operators are obliged to use part of their capacity for channels that may be commercially less interesting for them to transmit. This divergence of interests has led to several court cases. The most recent is case C-336/07 Kabel Deutschland Vertrieb.15 In this judgment the European Court of Justice sheds light on the boundaries of the must-carry obligation. The reference to the Court was made in proceedings between Kabel Deutschland Vertrieb und Service GmbH & Co KG and the media authority for private radio of the Land of Lower Saxony regarding the obligation imposed on Kabel Deutschland by the media authority to broadcast over its analogue cable network the television channels of certain broadcasters designated by the authority.   Case C-99/09 Polska Telefonia Cyfrowa, judgment of 1 July 2010, not yet reported.  C-336/07 Kabel Deutschland Vertrieb [2008] ECR I-10889.

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Electronic Communications  59 The Court ruled that such must-carry obligations must serve a general interest objective such as the preservation of the plurality of the television channel service in this particular case. The obligations on a network operator must, however, be proportionate to such objective. The ‘must-carry status’ must be limited to those channels that have an overall content which is appropriate for attaining the objective of preserving media pluralism, at issue in this particular case. Also, it has to be determined whether the obligations imposed on the cable operator are not economically unreasonable. The Court leaves this determination to the national court. Out-of-court Dispute Resolution (Article 34) Finally, this chapter mentions Article 34 that obliges Member States to ensure transparent, non-discriminatory and inexpensive out-of-court procedures for dealing with disputes between consumers and electronic communications network and/or service providers. It essentially targets those disputes that concern contractual conditions and/or performance of contracts concerning the supply of those networks and/or services. Such procedures may, however, not deprive the consumer of the legal protection offered by national law. On this latter aspect, the Court has in Joined Cases C-317/08, C-318/08, C-319/08 and C-320/08 Alassini ruled that Article 34 must be interpreted as not precluding legislation of a Member State under which the admissibility before the courts of actions relating to electronic communications services between endusers and providers, is conditional upon an attempt to settle the dispute out of court.16 The Court considered that as the Universal Service Directive does not determine the precise content of the out-of-court procedures it is for the Member States to lay down those rules and also to decide on their mandatory nature. However, the Court added that in so far as the establishment of a mandatory settlement procedure is a condition for the admissibility of actions before the courts, it is necessary to examine whether it is compatible with the right to effective judicial protection. This means that the procedure must, amongst others, not result in a decision binding on the parties, not cause substantial delay for bringing legal proceedings, and only give rise to no or very low costs. b.  Chapter II – Universal Services As already indicated above, the liberalisation process and the ultimate functioning of market forces alone may lead to the exclusion of some social groups from essential public services. In order to avoid this, chapter II of the Universal Service Directive (Articles 3–15) has been introduced. This chapter essentially provides that the Member States have to ensure that certain electronic communications services are made available where the market cannot satisfactorily deal with the   Joined Cases C-317/08, C-318/08, C-319/08 and C-320/08 Alassini [2010] ECR I-2213.

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60  Albert Nijenhuis provision of telecom services at an affordable price. These services include connection of access at a fixed location to a public communications network and provision of telephone services and access to directory and directory enquiry services. It is in principle up to the Member States to determine the most efficient and appropriate approach for ensuring the implementation of universal services. Member States may designate undertakings to guarantee the provision of the universal services. Many Member States have indeed done so. Importantly, Member States may then also require that such designated undertakings provide to consumers tariff options or packages which depart from those provided under normal commercial conditions for the universal services provided. As the provision of universal service obligations is likely to lead to losses for the designated undertakings, the Universal Service Directive contains a number of provisions regarding the financing of the universal service obligations provided by such undertakings.17 This can either be done through the introduction of a mechanism to compensate such undertakings for the net costs from public funds and/or to share the net cost between providers of electronic communications networks and services. c.  National Consumer Protection Measures An important question is whether Member States can go further in taking national measures to protect consumers than provided for in the EU electronic communications directives. In other words, do the directives provide for full harmonisation or not? This issue was at stake in Case C-522/08 Telekomunikacja Polska SA.18 This case concerned the prohibition imposed, by the Polish national regulatory authority, on Telekomunikacja Polska SA on making the conclusion of a contract for the provision of services contingent on the conclusion, by the end-users, of a contract for the provision of other services. This tying was prohibited by the Polish law on telecommunications in order to protect consumers. The Polish operator argued that, in view of inter alia Articles 15 and 16 of the Framework Directive, such a general prohibition is not legally possible without an assessment of the degree of competition on the market and of its position thereon. This would amount to the situation where only the national regulatory authority could impose a ban on tying if the Polish operator were dominant on given market. Reference is made to 17   The Court has rendered a number of judgments concerning the universal service obligation. Reference is made to Cases C-220/07 Commission/France [2008] ECR I-95 and C-154/09 Commission/ Portugal, judgment of 7 October 2010, not yet reported, both concerning the designation of undertakings to guarantee the provision of the universal service and Case C-222/08 Commission/Belgium, judgment of 6 October 2010, not yet reported, and C-389/08 Base and others [2010] ECR I-9073 both concerning the financing of the universal service obligation. 18   Case C-522/08 Telekomunikacja Polska SA [2010] ECR I-2079. See also Case C-543/09 Deutsche Telekom AG v Bundesrepublik Deutschland, judgment of 5 May 2011, not yet reported.

Electronic Communications  61 section II. above on market regulation where Articles 15 and 16 of the Framework Directive are explained. The Court did not, however, agree. It ruled that the Framework Directive and the Universal Service Directive do not provide for full harmonisation of consumer protection aspects. Member States are allowed to take additional general and non-discriminatory measures to protect consumers. In this respect, the Court refers to Article 20 of the Universal Service Directive on contracts which states that it applies without prejudice to EU rules on consumer protection and national rules in conformity with European Union law.19 It should be noted that, instead of Article 20, which is limited to contracts, since the 2009 reform it has been Article 1(4) of the Universal Service Directive that provides in general that the provisions in the directive on end-users’ rights shall apply without prejudice to EU rules on consumer protection and national rules in conformity with Union law. This clarifies that the possibilities for Member States to provide more protection to consumers than provided in the Universal Service Directive are not limited to the area of contracts. ii.  The e-privacy Directive In the modern world of electronic communications and increasing use of the internet, the protection of personal data and the right of privacy of consumers has come very much to the forefront. Digital networks have large capacity and possibilities for processing personal data. The EU legislator considers that users should therefore be assured that their privacy will not be at risk. No consumer wants, for example, to run the risk that any email he or she sends, is also read by persons other than the addressee. Directive 95/46/EC20 requires Member States to ensure the rights and freedoms of natural persons with regard to the processing of personal data, and in particular their fundamental right to privacy, in order to ensure the free flow of personal data in the EU. Given the particularities of the electronic communications sector, the e-privacy Directive specifies and complements the general data protection directive. The e-privacy Directive introduces specific protection of personal data processed in connection with the provision of publicly available electronic communications services in public communications networks in the European Union. It provides for high standards of data protection for personal data stored or transmitted over such communications networks. Unlike Directive 95/46, it also provides for the protection of subscribers who are legal persons, but does not cover non-public communications services. 19   It should be noted that Directive 2005/29 now applies and this directive precludes national legislation which, with certain exceptions, and without taking account of the specific circumstances, imposes a general prohibition of combined offers made by a vendor to a consumer. 20   Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data [1995] OJ L 281/31.

62  Albert Nijenhuis The essential criterion which allows data to be stored and processed by a telecom operator is the effective consent of the person providing its data. This is the same concept as defined in Directive 95/46. Recital 17 of the e-privacy Directive clarifies that ‘Consent may be given by any appropriate method enabling a freely given specific and informed indication of the user’s wishes, including by ticking a box when visiting an Internet website’. This chapter will only highlight some of the most important provisions in the e-privacy Directive imposing obligations on operators and creating corresponding rights for subscribers. First, in its Article 3, the e-privacy Directive protects the confidentiality of communications. Also the confidentiality of what is stored on the terminal equipment of users needs to be protected. Devices such as ‘spyware’, ‘web bugs’ and ‘cookies’ can enter the terminal equipment of the user ‘without their knowledge, to store hidden information or to trace the activities of the users and may seriously intrude on the privacy of these users’, as pointed out by recital 25 of the directive. Devices such as ‘cookies’ are, however, very important nowadays in, for example, analysing the effectiveness of website design and advertising by recording user preferences and the provision of information on society services in general. Their use should therefore, as recital 25 puts it, be ‘allowed on condition that users are provided with clear and precise information . . . about the purposes of cookies or similar devices so as to ensure that users are made aware of information being placed on the terminal equipment they are using’. The directive makes clear that cookies or similar devices can only be stored in the terminal equipment of users if the users have been given clear information about the purpose of such devices and consent to have a cookie or similar device stored in their terminal equipment. How precisely this consent has to be given, is not provided for by the directive. Recital 25 limits itself to stating that the methods for giving information, offering a right to refuse or requesting consent should be made as user-friendly as possible. It thus remains to be seen which methods of giving consent in this context satisfy the test of ‘effective consent’ and which not. Second, the e-privacy Directive contains in its Article 4 an obligation for service providers to safeguard the security of their services. Importantly, the 2009 reform introduced in Article 4 an obligation on service providers to inform the competent national authority and their customers about security breaches affecting their personal data. The providers should at the same time also recommend measures to mitigate the possible adverse effects of the personal data breach. The idea is that this will increase the incentives for better protection of personal data by telecom operators. Third, the e-privacy Directive also contains rules on traffic data relating to subscribers and users processed and stored by the electronic communications services and network providers. Traffic data are data processed for the purpose of the conveyance of a communication on an electronic communications network or for the billing thereof. Article 6 of the e-privacy Directive stipulates that such data must be erased or made anonymous when they are no longer needed for the

Electronic Communications  63 transmission of a communication, subject to some exceptions such as the use of data for billing purposes. Finally, the e-privacy Directive contains, in its Article 13, safeguards for subscribers against intrusion of their privacy by unsolicited communications for direct marketing purposes such as ‘spam’. In the modern time of internet and use of email spam has become very common and a nuisance to many consumers. The directive requires that prior explicit consent of the recipients is obtained before such communications are addressed to them. In order to enhance the enforcement of such rules the 2009 reform foresees that electronic communications providers (such as internet service providers) protecting their legitimate business interests may also take legal actions in respect of any infringements thereof.

IV.  THE ROAMING REGULATION

A.  What Does it Provide? The Roaming Regulation, based on Article 95 EC, was adopted in June 2007. The Roaming Regulation caps the wholesale and retail charges terrestrial mobile operators may charge for the provision of roaming services on public mobile networks and initially only did so for voice calls between Member States. Roaming is essentially making or receiving mobile phone calls, writing text messages (SMS) or surfing the internet and downloading content while the user is in a different Member State than his or her own. When persons travel to another Member State, they can still use their mobile phones. The calls, SMS and other data services are operated by a network in the other Member State (the foreign host or visited network) because the home provider does not normally operate in that Member State. To that end, the home provider has entered into a wholesale agreement with the foreign host network. For providing this service, the foreign network operator charges the home provider (wholesale charge) and the home provider passes this additional cost on to the user usually with a mark-up (retail charge). The use of a mobile phone in another Member State was very expensive (see in particular recital 1 of the Roaming Regulation). Many users had little idea of the final cost of such use. Although extensive competition had brought the price of domestic mobile calls down within national borders, pricing for international calls were on average four times higher than domestic calls. In addition, a significant difference for roaming charges compared to domestic calls is that users are charged to receive calls whilst abroad, as well as to make them. The difference in price between domestic and international calls could not be explained by increased costs for operators. As recital 1 of the Roaming Regulation puts it: ‘The excessive retail charges are resulting from high wholesale charges levied by the foreign host network operators and also, in many cases, from high retail mark-ups charged by the customer’s own network operator’ and ‘there is

64  Albert Nijenhuis still evidence that the relationship between costs and prices is not such as would prevail in fully competitive markets’. Recital 16 clearly states that a ‘common approach should be employed for ensuring users of terrestrial public mobile telephone networks when travelling within the Community do not pay excessive prices for Community-wide roaming services when making or receiving voice calls’. As recital 4 of the Roaming Regulation indicates, the regulatory framework had not provided the national regulatory authorities with sufficient tools to take effective and decisive action with regard to the pricing of roaming services. It had not proved possible to impose price control measures on mobile operators under the market regulation rules because, as recital 6 puts it, ‘of the difficulty in identifying undertakings with significant market power in view of the specific circumstances of international roaming, including its cross-border nature’. The regulatory framework therefore had to be amended to remedy this situation.21 The Roaming Regulation was thus adopted precisely to address this problem of excessive prices by capping mobile roaming charges both at the wholesale and the retail level. In addition, the Roaming Regulation ensured that clear information on the cost of international roaming became available to all roaming customers. Operators must send details of roaming charges to customers when they need it most – that is upon entering another Member State – via mechanisms such as text messages. In 2009 the Roaming Regulation was amended by Regulation (EC) 544/2009. Under the revised roaming rules, roaming prices for voice were further cut in instalments.22 In addition, price caps and transparency measures for roaming SMS messages were introduced as well as transparency and safeguard mechanisms for data roaming services.23 As far as data roaming services are concerned (basically services enabling roaming customers to surf the internet through a mobile connection while abroad), the regulation sets a maximum financial limit of use by roaming customers per monthly billing period unless they have chosen another limit – higher or lower. Operators have to send users a warning when they reach 80 per cent of their dataroaming bill limit. The operator has to cut off the mobile internet connection once the limit has been reached, unless the roaming customer has indicated that he or she wants to continue data roaming that particular time period. In addition, maximum average wholesale charges for data roaming have been introduced. The national regulatory authorities must ensure that operators comply with the rules laid down in the Roaming Regulation.24 As the regulation is directly applicable, roaming customers are also able to invoke directly the provisions of the Roaming Regulation in court.   Arts 1(3) and 10 and recital 4 of the Roaming Regulation.   Arts 3 and 4 of the Roaming Regulation, as amended. 23   Arts 4(a) and 4(b) of Roaming Regulation, as amended. 24   Art 7 of Roaming Regulation, as amended. 21 22

Electronic Communications  65 The roaming saga has however not come to an end with the amending reg­ ulation of 2009. In July 2011, the Commission presented yet another proposal introducing structural measures to boost competition by allowing customers from 1 July 2014, if they so wish, to sign up for a cheaper mobile roaming contract, separate from their contract for national mobile services, whilst using the same phone number. The proposal would also give mobile operators (including so-called virtual mobile operators, who do not have their own network) the right to use other operators’ networks in other Member States at regulated wholesale prices, and so encourage more operators to compete on the roaming market. To cover the period until structural measures become fully effective and competition drives retail prices down, the proposal would progressively lower current retail price caps on voice and texting (SMS) services and introduce a new retail price cap for mobile data services.25 It goes without saying that the Roaming Regulation has strengthened consumer rights in the area of electronic communications to an unprecedented extent. By adopting the Roaming Regulation, for the first time the EU legislator has directly imposed very precise price caps on market operators on the basis of Article 95 EC (now 114 TFEU). Not only consumers, as defined in the Framework Directive, benefit from these rights but roaming customers in general (see Article 2(2)(f) for the definition of ‘roaming customer’ which is not limited to consumers). It follows that undertakings also enjoy the protection granted by the Roaming Regulation. B.  Case C-58/08 Vodafone – legal validity of the Roaming Regulation Not surprisingly, the Roaming Regulation provoked a court case on its legal validity brought by major operators of public mobile telephone networks, as claimants, who saw their freedom to charge prices seriously curtailed. They questioned before the High Court of Justice of England and Wales the legality of the Roaming Regulation in the context of its implementation in the United Kingdom. The High Court asked the Court the following two questions: (i) Is Regulation (EC) 717/2007 invalid, in whole or in part, by reason of the inadequacy of Article 95 EC as a legal basis? (ii) Is Article 4 of Regulation (EC) 717/2007 (together with Articles 2(2)(a) and 6(3) insofar as they refer to the Eurotariff and obligations relating to the Eurotariff) invalid on the grounds that the imposition of a price ceiling in respect of retail roaming charges infringes the principle of proportionality and/or subsidiarity? 25   See press release CIP/11/835 of the European Commission of 6 July 2011 and the proposal for a regulation of the European Parliament and the Council on roaming on public mobile communications networks within the Union (Recast), 2011/0187 (COD) as published on the website of DG INFSO (http:// ec.europa.eu/information_society/activities/roaming/docs/roaming_recast11.pdf). This proposal was adopted by Regulation (EU) No 531/2012 (see footnote 3).

66  Albert Nijenhuis The judgment is very important for the sector and users of mobile phones and devices, but also in more general terms. It concerns the use of Article 95 EC and the extent of the Union’s authority to legislate on the basis of that article, in particular to protect consumers. Under Article 95(1) EC, The Council shall, acting in accordance with the procedure referred to in Article 251 and after consulting the Economic and Social Committee, adopt the measures for the approximation of the provisions laid down by law, regulation or administrative action in Member States which have as their object the establishment and functioning of the internal market.

Under Article 95(3), The Commission, in its proposals envisaged in paragraph 1 concerning . . . consumer protection, will take as a base a high level of protection, taking account in particular of any new development based on scientific facts. Within their respective powers, the European Parliament and the Council will also seek to achieve this objective.

According to consistent case law, the object of measures adopted on the basis of Article 95 EC must genuinely be to improve the conditions for the establishment and functioning of the internal market. Does this article of the Treaty allow the Union to regulate prices and, if so, to what extent and under which conditions? The answers to these questions are equally important for the protection of consumers in other sectors of the EU economy and thus surpass the boundaries of the electronic communications sector. Before discussing the judgment, this section will also examine the Opinion of the Advocate-General, Mr Poiares Maduro. As both the Opinion and the judgment refer to Article 95 EC as they predate the adoption of the Lisbon Treaty, this section will hereafter do the same. Obviously, the considerations below are equally valid for Article 114 TFEU, as the successor to Article 95 EC. i.  The Use of Article 95 EC as Legal Base (First Question of the Referring Court) a.  The Opinion of the Advocate-General The Advocate-General first of all reminds the Court of certain important principles such as that the powers of the Community are restricted to those specifically granted to it.26 The Advocate-General also makes clear that other goals than removing the risk of free movement or distortions of competition may be pursued, provided such goals are part of an overall framework which has as its object the establishment and functioning of the internal market by means of the harmonisation of Member States laws. In other words, the exercise of the Commission’s competence must not be limited to the goal of market integration.27 Consumer   Para 7 of the Opinion.   Para 9 of the Opinion.

26 27

Electronic Communications  67 protection, a very important objective underlying the Roaming Regulation, can thus be a legitimate goal under Article 95. This is entirely in line with Article 95(3) and also with former Article 153(2) EC, which expressly provided that the Union shall contribute to the attainment of a high level of consumer protection through measures adopted pursuant to Article 95 in the context of the completion of the internal market. The Advocate-General then makes clear that the Community legislature can amend or adopt rules it has already adopted or introduce new rules so as to better attain the objectives of the original harmonising measures. To assume otherwise, would in his view, be absurd.28 He therefore clearly rejects the reasoning of the claimants on this point who had argued that since the regulatory framework had already provided for comprehensive harmonisation of the Member States regulation of the mobile phone industry, the Roaming Regulation cannot be based on Article 95 EC as this regulation could not have had the object of harmonising Member States rules in this area.29 The Advocate-General also rebuts the argument of the claimants that as the Roaming Regulation adopted an approach which differed significantly from that set out in the regulatory framework, the regulation cannot be considered an amendment thereto. According to the Advocate-General, even if the amending measure may be inconsistent with the approach in the common regulatory framework, it is still an amendment.30 He adds, however, that any amending measure should concern subject matters that fall inside the scope of Article 95.31 Importantly, the Advocate-General continues his analysis by arguing that although the amendment does not have to be justified by the need to eliminate obstacles to trade or distortions of competition, the measure as amended must still serve the purposes of Article 95. After having set out these general considerations, the Advocate-General effectively presents three legal theories on the basis of which the Roaming Regulation could possibly be justified under Article 95 EC, two of which he considers to be effective. In order to find a basis under Article 95, the Advocate-General examines first whether there existed a risk of obstacles arising from divergent national price control measures.32 He takes the approach that the existence of such a risk should not be assessed after the adoption of the harmonised measure. The test is a different one and should be whether in the absence of any harmonised measure, there would be such a risk.33 The Advocate-General comes to the conclusion that such a risk has not been established.34 The common regulatory framework was not   Para 11 of the Opinion.   Para 10 of the Opinion. 30   Para 12 of the Opinion. 31   Para 13 of the Opinion. 32   Para 15 of the Opinion. 33   Para 15 of the Opinion. 34   Para 18 of the Opinion. 28 29

68  Albert Nijenhuis intended to prevent differences on national price controls nor was it based on a specific finding of a likely emergence of obstacles to trade from future national price controls. Second, he proposes a novel and interesting approach for justifying the legal basis of the Roaming Regulation and that is that the legislator could regulate roaming prices in order to remove restrictions to free movement arising from the behaviour of private parties which disfavours cross-border economic activity. Such behaviour has the potential to impede the establishment of the internal market by discouraging customers from engaging in cross-border activity such as making use of roaming services. In this respect, he refers to the case law on the horizontal application of free movement rules where the Court recognised that in certain circumstances actions of private parties constitute restrictions to free movement.35 In more concrete terms, the Advocate-General considers that the Roaming Regulation targeted such acts (the high retail charges) of private parties (the mobile operators) that disfavoured a cross-border economic activity (roaming) compared to intra-state activity (domestic roaming). Only when the actions of private parties directly affect cross-border trade and would be in a position to restrict effectively that cross-border activity and free movement could Community action be founded on Article 95.36 Third, although very briefly, the AdvocateGeneral states that the Roaming Regulation may be justified if it is necessary to correct a particular problem that the initial harmonising measure prevents the Member States from addressing effectively. This is essentially the legal theory resorted to by the European institutions which is apparent from the recitals of the Roaming Regulation. It follows the approach taken by the Court in Cases C-491/01 British American Tobacco and C-374/05 Gintec.37 b.  The Court The Court, on the contrary, while concluding that Article 95 EC is a valid legal basis for the Roaming Regulation, follows neither the Advocate-General nor the European institutions. The Court starts off by setting the legal framework in the light of which the question has to be examined. It emphasises that according to consistent case law the object of measures based on Article 95 must be to improve the conditions for the establishment and functioning of the internal market.38 The legislator may have recourse to Article 95 in particular where there are actual or likely differences between national rules which are such as to obstruct the funda35  Para 21 of the Opinion. The Advocate-General specifically refers to C-438/05 International Transport Workers’ Federation and Finnish Seamen’s Union v Viking Line [2007] ECR I-10779 and C-341/05 Laval un Partneri [2007] ECR I-11767. 36   Para 21 of the Opinion. 37   Case C-491/01 British American Tobacco [2002] ECR I-11453, paras 77 and 78, and C-374/05 Gintec International Import-Export GmbH v Verband Sozialer Wettbewerb eV [2007] ECR I-09517, para 29. 38   Para 32 of the judgment. The Court refers to British American Tobacco (n 35) para 60, and to Case C-217/04 United Kingdom v Parliament and Council [2006] ECR I-3771, para 42.

Electronic Communications  69 mental freedoms or to cause significant distortions of competition and thus have a direct effect on the functioning of the internal market.39 In addition, the Court refers to the British American Tobacco line of case law quoted above pursuant to which in a situation where an act based on Article 95 has already removed any obstacle to trade in the area that it harmonises, the Community legislator cannot be denied the possibility of adapting that act to any change in circumstances or development of knowledge having regard to its task of safeguarding the general interests recognised by the Treaty.40 The Court further states, as did the Advocate-General, that consumer protection can be a decisive factor in choices to be made under Article 95,41 which is a very clear statement confirming that market integration does not have to be the only decisive factor in order to rely on Article 95 as a legal basis. It follows that the Court mentions two legal theories on the basis of which the Roaming Regulation could be possibly be justified on the basis of Article 95 EC. It clearly does not mention the legal theory regarding restrictions by private parties as advocated by the Advocate-General. The Court notes that the regulatory framework was not equipped to deal with the situation of very high charges and that the legislator decided to complement the framework with the Roaming Regulation to tackle the situation while taking account of the unique characteristics of the roaming market.42 Instead of resorting to the legal theory principally advanced by the Roaming Regulation itself and also recognised by the Advocate-General – the British American Tobacco line of case law – the Court focuses on the residual competence of Member States to adopt consumer protection rules, as indicated in recitals 8 and 9 of the regulation. Residual competence is to be understood as the Member States being allowed to take measures additional to those provided for in the relevant directives in order to protect consumers. In recital 8 the legislator stated that the special circumstances of roaming could diminish the effectiveness of measures taken by the Member States on the basis of their residual competence.43 In recital 9 the Community legislator concluded from recital 8 that there was pressure for Member States to take measures to address the problem of high charges. The Court draws from these recitals the conclusion that the Community legislator was actually confronted with a situation in which it appeared likely that national measures were to be adopted aiming to address the problem of high charges through rules fixing the rate of retail charges.44 To back this conclusion, the Court refers to the explanatory memorandum to the Commission’s proposal and the Commission’s 39   Para 32 of the judgment. The Court refers to Case C-380/03 Germany v Parliament and Council [2006] ECR I-11573, para 37 and Case C-376/98 Germany v Parliament and Council [2000] ECR I-8419, paras 84 and 106. 40   Para 34 of the judgment. 41   Para 36 of the judgment. 42   Para 42 of the judgment. 43   Para 43 of the judgment. 44   Para 45 of the judgment.

70  Albert Nijenhuis impact assessment which states that such measures would have been likely to lead to a divergent development of national laws. Such divergent measures seeking to lower retail charges only, without affecting the level of costs for the wholesale provision of Community-wide roaming services would, according to the Court, have been liable to cause significant distortions of competition and disrupt the Community-wide roaming market in view of the functioning of the roaming market and the large interdependence of retail and wholesale charges for roaming.45 Unlike the AdvocateGeneral, the Court does not examine the situation in the absence of any harmonised measure but as it is after the adoption of the regulatory framework, and appears to consider that there is sufficient evidence of the likelihood that Member States would adopt national measures to target the high retail charges, thereby causing significant distortions of competition. This judgment invites a number of comments. First of all, the question can be asked why the Court took the classic approach as to the use of Article 95 EC as a legal basis. It did not resort to the BritishAmerican Tobacco line of case law, whereas the European institutions, as illustrated by the recitals of the Roaming Regulation, considered this case law to be very pertinent for justifying the recourse to Article 95 as legal basis. Also the Advocate-General appears to consider that recourse to Article 95 as a legal basis of the Roaming Regulation could be justified by this legal theory. It would appear that recitals 8 and 9 were only introduced by the EU legislator as a safety net in case, in any future challenge of the regulation, the Court would not follow the British-American Tobacco approach to justify Article 95 EC as a legal basis for the Roaming Regulation. And this is precisely what happened. The reason why the Court did not follow this approach but resorted to classic reasoning seems due to the fact that divergences between national laws and resulting obstacles to trade and/or distortions of competition were still to be expected, as illustrated by recitals 8 and 9. Indeed, the Court appears to interpret the British American Tobacco line of case law in such a way that recourse can only made to Article 95 EC if ‘any obstacle to trade’ in the area the legislative act at issue harmonises, has already been removed. This could mean that this line of case law is only to be used when there is full harmonisation and Member States cannot take any national laws in the area that has been harmonised. It is, however, questionable whether this case law can only be resorted to in cases of full harmonisation. There is no reason why the legislator could not equally come to the conclusion that the (partial) harmonising measure is not effective and that it should be improved without the legislator having to wait until Member States take or are likely to take national laws to address the matter. Second, the Court did not adhere to the Advocate-General’s request to apply the logical consequences of its case law on the horizontal application of free movement rules to its analysis of Article 95 in the present case. As indicated above, under this case law, in certain circumstances, the actions of private parties can   Para 47 of the judgment.

45

Electronic Communications  71 constitute restrictions to free movement. The reason for not following the Advocate-General’s request could be that the Court did not consider it necessary to apply this theory to the Roaming Regulation as it already found that divergent national laws leading to distortions of competition were likely. Another reason could, however, be that the Court simply did not want to take this line. Unlike in International Transport Workers’ Federation and Finnish Seamen’s Union and Laval un Partneri, quoted by the Advocate-General, where restrictions followed from collective agreements which are embedded in a statutory context and therefore, although maybe arguably, ultimately emanating from the state, any restriction to free movement in the roaming situation strictly results from the pricing behaviour of private parties.46 Article 95 EC clearly does not address the approximation of the behaviour of private parties but the approximation of the laws of Member States. It would therefore perhaps go too far for the Court to follow the approach suggested by the Advocate-General. In addition, sufficient proof should be available that the actions of private parties directly affect cross-border trade and would be in a position to effectively restrict that cross-border activity and free movement. In particular, the latter requirement, although prima facie appearing reasonable, comes close to a competition law type of evidence-based approach of the behaviour of private parties. It goes without saying that this would require the EU legislator to meet a very high threshold, which would appear difficult in practice. Third, the question can be asked what the consequences of the judgment on legal basis are for other sectors of the economy. Could the same type of price caps also be imposed on the basis of Article 114 TFEU in sectors such as energy or financial services?47 The way for the Court to justify recourse to Article 95 EC in the roaming case was by resorting to its traditional line of reasoning on Article 95 EC as legal basis: Member States had adopted or were likely to adopt divergent measures on price control liable to create obstacles to trade in the internal market. Once the evidence of actual or likely divergent national price control measures is there, it still needs to be demonstrated that such divergences result in obstacles to trade. It may, however, not be very easy for the legislator to demonstrate that national prices control measures could lead to such obstacles or distortions of competition. In paragraph 47 of the judgment the Court clearly refers to the special characteristics of roaming in coming to the conclusion that national prices controls at retail level without affecting the wholesale charges would have been liable to cause significant distortions of competition and to disrupt the orderly 46   International Transport Workers’ Federation and Finnish Seamen’s Union v Viking (n 35); Laval un Partneri (n 35). 47  In the financial services sector there is already a precedent in the form of Regulation (EC) No 924/2009 of the European Parliament and of the Council of 16 September 2009 on cross-border payments in the Community and repealing Regulation (EC) No 2560/2001 [2009] OJ L266/11 , based on Art 95 EC. This regulation provides that the charges for payment transactions offered by a payment service provider have to be the same whether the payment is national or cross-border. This regulation was never legally challenged. It is, however, less intrusive than the Roaming Regulation that sets direct price caps.

72  Albert Nijenhuis functioning of the roaming market. This is due to the fact that a Member State may regulate the charges imposed by its ‘own’ operators, both at wholesale and retail level, but it cannot regulate the wholesale charges imposed by operators established in a different Member State. Although roaming constitutes a special case, such distortions of competition resulting from divergent national price control measures in a different sector than roaming are, however, not to be excluded. If the Court were in this sort of price control case to resort to the principal defence of the legal basis as illustrated by the recitals of the Roaming Regulation, the British American Tobacco line of case law, instead of resorting to its classic reasoning, it may be easier to justify price intervention by the Union in other sectors (provided of course that there is no breach of the principles of proportionality and subsidiarity). The reason is that it would not be necessary to show any risk of divergent measures as the relevant measure would concern an already harmonised area, albeit maybe not fully. What has to be demonstrated, however, is that any amendment to an already harmonised regime is in one way or the other linked to this regime in order to maintain the latter’s consistency. This was not very difficult to establish in the specific case of roaming. The point is that price control was already foreseen by the regulatory framework; it simply did not work for international roaming and this had to be repaired. It remains to be seen how difficult this would be to establish in other sectors. ii.  Proportionality and Subsidiarity (Second Question of Referring Court) a. Proportionality The claimants argued that the Roaming Regulation infringes the principle of proportionality as it does not confine itself to imposing ceilings for wholesale charges but also lays down ceilings for retail charges.48 After recalling that the legislator is accorded a margin of discretion as far as the proportionality of decisions is concerned, the Advocate-General did not find a breach of the principle of proportionality. He took account of the fact that the Community legislator perceives the Roaming Regulation as a last resort measure, the fact that there is evidence that without a retail cap reductions in reductions in wholesale prices were not likely to be passed on to the customers and the limited duration of the regulation of three years.49 Also the Court agreed that the intervention at issue to protect consumers is proportionate to the aim pursued.50 The Court refers explicitly to the impact assessment of the Commission and the fact that retail prices were five times higher than wholesale prices and consequently concludes that the provision of retail ceilings is appropriate for protecting consumers. The Court also considers that the measure does not go beyond what is necessary to achieve this objective. The Court   Para 54 of the judgment.   Paras 39–42 of the Opinion. 50   Para 69 of the judgment. 48 49

Electronic Communications  73 points to recital 14 of the Roaming Regulation where it is stated that reductions in wholesale prices might not be reflected in lower retail prices for roaming and the lack of competition and competitive pressure on operators to pass on that reduction. Interestingly enough, the Court recalls that the Community legislature recognised that the measures adopted were exceptional and justified by the unique characteristics of the roaming market.51 Finally, the Court took into account the limitation in time of the regulation.52 The marginal review applied by the Court to examine any breach of the principle of proportionality is generally in line with previous case law. The Court verified both the appropriateness and the necessity of the retail measures (retail cap and information provision). The Court concentrated its review mainly on whether the objective of consumer protection was met, without explicitly mentioning the objective of market integration. As it had already concluded that the measure approximated likely divergent national price control measures, it apparently considered that the measure was both appropriate and necessary to achieve also the objective of market integration. It is worth mentioning, as already indicated above, that the Court explicitly refers in quite some detail to the Commission’s impact assessment.53 This enhances the importance of impact assessments for substantiating the proportionality of legislation but begs at the same time the question what the consequences could be of the legislator opting for a different solution than foreseen in the proposal of the Commission. The point is that the latter would mean that there is no impact assessment available backing up the ultimate option chosen by the legislator. b. Subsidiarity On the question regarding the compliance with the principle of subsidiarity of the retail charges provisions of the Roaming Regulation – is the EU better placed to regulate the high retail charges than the national legislators – the AdvocateGeneral first questions whether the Community could not have empowered national regulators to set maximum retail prices for roaming services if they felt that the retail rates charged by providers in their state were excessive. In paragraph 33 of his Opinion, he agrees nevertheless that the cross-border nature of roaming makes the Community legislator more apt than national authorities to tackle the problem. In this respect, he also considers that it is not certain whether the Member States would have given priority to tackling the high prices of roaming. The Court, while referring to Article 5 EC on the principle of subsidiarity, refers once again to the interdependence of retail and wholesale roaming charges, so that any measure seeking to reduce the retail caps alone without affecting the wholesale costs, would have been liable to disrupt the smooth functioning of the   Para 68 of the judgment.   Para 69 of the judgment. 53   Paras 55, 58 and 65 of the judgment. 51 52

74  Albert Nijenhuis Community-wide roaming market.54 Given that interdependence the Community legislator could legitimately decide to intervene at the level of retail charges as well.55 It follows that, except for the claimants, all actors in the case consider that the Community was best placed to deal with the retail caps. The interdependence argument is important but actually it would seem that the most prevailing reason is that if one wishes to be sure that retail charges are brought down all over the EU in a timely manner, the EU approach chosen, instead of leaving the setting of retail prices to national regulators, is the best and most secure way to do so.

V. CONCLUSION

This chapter has set out the rights and benefits for consumers under the EU regulatory framework on electronic communications services. Given the numerous rights and benefits granted to consumers under this regulatory framework, it appears that the ‘European telecom consumer’ has gradually been shaped with the development of this framework. The ultimate example of direct consumer protection is clearly the Roaming Regulation. The Court has approved this ambitious and quite revolutionary approach by the Commission and the EU legislator which clearly shows the Court’s determination in protecting consumers in the electronic communications sector.

  Para 77 of the judgment.   Para 78 of the judgment.

54 55

5 Broadcasting and the EU Consumer The Consumer as Viewer FRANK BENYON

T

HE LARGEST AMOUNT of time devoted to one single activity each day by citizens of developed countries is given to watching the television.1 Furthermore the importance of such broadcasting cannot be exaggerated; television delivers news, gives entertainment and provides education: it is, for example, often maintained that in the 1950s and 60s it was the new instrument of television which succeeded in imposing the use of a single Italian language over the numerous dialects which prevailed in Italy until that time. It is therefore important to see exactly how the viewer and his interests are taken into account within the European Union. Can one speak of an EU viewer or are we concerned with 27 audiences arranged on national lines and subject to national decisions alone? The answer is neither black nor white (in this age of colour TV!) so the legal situation should be examined closely.

I.  THE TELEVISION WITHOUT FRONTIERS DIRECTIVE.

In order to be covered by the Treaty freedom to provide services, a service must be provided across borders and such a service needs to be normally provided for remuneration – an economic service (Articles 57 and 59 TFEU, ex 50 and 52 EC). In 1974 the Court of Justice found that the transmission of television signals did indeed fall within the Treaty chapter on services2 and in 1988, in its judgment in 1   In the Commission’s Sixth Report on the application of Directive 89/552/EEC COM (2007)452 final, it is indicated, as for the EU, that ‘Hungary remains the country where audience levels are the highest (265 minutes/day) while Denmark is where viewers spend the least time watching TV (153 minutes/day)’. These Commission reports contain valuable information on the legal, as well as business, aspects of the application of the directive and its amendments and reference will be made to parts of the Fifth, Sixth and Seventh Reports below, where appropriate. 2   Case 155/73 Giuseppe Sacchi [1974] ECR 409.

76  Frank Benyon Bond van Adverteerders,3 it interpreted widely the notion of services provided for remuneration – economic services – as including the case of subscribers paying cable operators for relaying to them programmes broadcast to the cable operators by broadcasters established in another Member State; this indirect economic link was found to be sufficient in order for it to fall under the Treaty rules. After wide Commission consultations, a degree of legal certainty was brought to this area by the adoption, in the year following the Adverteerders judgment, of Directive 89/552/EEC on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the pursuit of television broadcasting activities.4 This development thus came in the same decade as that in which secondary law was being adopted in the fields of air and maritime transport and, timidly, in telecommunications; however, the approach was not the same, for the simple reason that this activity, with its connections to freedom of speech and to culture, called for a different approach. In order to follow the rationale of the legislation, it is useful to examine some recitals of the 1989 directive, together with some enacting provisions, and this notwithstanding its amendment by two subsequent directives5 and its consolidation in 2010.6 The 1989 directive’s second recital explains that the Treaty requires the abolition of restrictions on the freedom to provide services, but the third recital immediately states that the measures are without prejudice to the public interest role to be discharged by the television broadcasting services.

The seventh recital explains that free movement concerns all broadcasting ‘without exclusion on grounds of their cultural or other content’ and the next tells us that broadcasting is a specific manifestation in Community law of a more general principle, namely the freedom of expression contained in Article 10 of the Council of Europe Human Rights Convention of 1950. It goes on, therefore, to introduce the ‘country of origin’ principle, the ‘backbone’ of the legislation, providing, namely, that if a broadcaster complies with the laws of its home state, the state where it is established, then it cannot be prevented from broadcasting into other   Case 352/85 Bond van Adverteerders and others v The Netherlands State [1988] ECR 205.   Directive 89/552/EEC of 17 October 1989 on the co-ordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the pursuit of television broadcasting activities [1989] OJ L298/23 (the Television Without Frontiers Directive). 5   Directive 97/36/EC of the European Parliament and of the Council of 30 June 1997 amending Council Directive 89/552/EEC on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the pursuit of television broadcasting activities, OJ L 202, 30.7.1997, 60–70; Directive 2007/65/EC of the European Parliament and of the Council of 11 December 2007 amending Council Directive 89/552/EEC on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the pursuit of television broadcasting activities (Text with EEA relevance), OJ L 332, 18.12.2007, 27–45 (BG). 6   Directive 2010/13/EU of the European Parliament and of the Council on the co-ordination of certain provisions lay down by law, regulation or administrative action in Member States concerning the provision of audio-visual media services (Audio-Visual Media Services Directive), OJ L 263, 6.10.2010, 15. 3 4

Broadcasting and the EU Consumer  77 Member States. However, recital 13 goes on to set out the caveats, namely that the directive lays down minimum rules and does not affect the responsibility of the Member States . . . with regard to the organisation – including the systems of licensing, administrative authorisation or taxation – financing and the content of programmes; whereas the independence of cultural developments in the Member States and the cultural diversity in the Community must therefore remain unaffected.

With regard to the ‘independence of cultural developments in the Member States’ it should be recalled that the Title on Culture, in fact one single Article 167 TFEU (ex 151 EC), was only introduced with the Maastricht Treaty in 1992 and gives a very subsidiary role to the Union. Its first paragraph provides that The Union shall contribute to the flowering of the cultures of the Member States, while respecting their national and regional diversity and at the same time bringing the common cultural heritage to the fore.

The ‘operative’ Treaty provisions are aimed simply at ‘encouraging co-operation between Member States’ and allow the EU legislator only to adopt incentive measures ‘excluding any harmonisation of the laws and regulations of the Member States’. It is, however, of no mean significance that the Television Without Frontiers Directive did take a significant step towards ‘bringing the common cultural heritage’ to the fore, since it contains provisions obliging – albeit in a somewhat loose way – Member States to ensure that broadcasters reserve for European works a major proportion of their transmission time.7 Furthermore Member States were also to ensure, when practicable and by appropriate means, that broadcasters reserve at least 10 per cent of their transmission time for European works created by producers who are independent of broadcasters.8 Whether both these provisions were taken in the interest of consumers/viewers in the EU, or to address what might have been seen as an external threat, would seem to be a question of personal appreciation. However, the directive does contain a number of actions which are clearly expressed to be in favour of the consumer: Whereas in order to ensure that the interests of consumers as television viewers are fully and properly protected, it is essential for television advertising to be subject to a certain number of minimum rules and standards and that the Member States must maintain the right to set more detailed or stricter rules and in certain circumstances to lay down different conditions for television broadcasters under their jurisdiction. (recital 24)

Television advertising and sponsorship were regulated as to their identity, frequency and content; advertising was not to prejudice respect for human dignity or be offensive (Articles 10 to 12), advertising of cigarettes and medical products   Art 4.   Art 5.

7 8

78  Frank Benyon were prohibited (Articles 13 and 14) and advertising of alcoholic beverages was subjected to strict conditions (Article 15). The position of minors was protected (Articles 16 and 22) and a right of reply was foreseen (Article 23). The consumer is thus very much in the forefront.9 However, it is difficult to consider that a uniform ‘EU consumer’ can be concerned when Article 19 expressly provides that Member States may take stricter measures concerning advertising, taking account of the role of television in providing education etc and the protection of pluralism of the media. In addition, Article 3 allows each Member state to lay down stricter rules for the broadcasters subject to its own jurisdiction. With regard to the essence of the directive – the freedom to provide services enshrined in the broadcasters’ obligation simply to respect the laws of the home state in Article 2 – this basic rule is diluted by the clear rights given to a host, or receiving, state, to provide for the suspension of transmissions from other states, subject, however, to the fulfilment of certain conditions. A 2011 judgment of the Court in Mesopotamia Broadcast10 illustrates, however, the very restricted nature of such Member State powers, in that case in relation to the provisions of Article 22(a) of the directive, requiring Member States to ‘ensure that broadcasts do not contain any incitement to hatred on grounds of race, sex, religion or nationality’. The authorities of the state of broadcast, Denmark, had found that the relevant programmes did not incite to hatred within the meaning of Article 22(a), whereas the authorities of Germany, a Member State where the broadcasts could be received, had taken a decision banning the companies from carrying out any activities falling within the scope of a German law prohibiting associations which infringe, inter alia, the principles of international understanding. Insofar as this notion of incitement to hatred, admittedly undefined, was found to fall within the field coordinated by the directive, the Court confirmed that it is for the Member State whence the broadcast emanates to verify this matter. However, in view of the minimal nature of the rules contained in the directive, it was found that this does not preclude a receiving Member State, pursuant to general legislation other than rules specifically relating to broadcast programmes, to adopt a measure prohibiting activities of the broadcaster in that Member State, such as production of programmes or organisation of events such as screening of programmes in a public place, provided that this does not prevent retransmission per se on its territory of the programmes broadcast from the originating Member State. A fine, but nevertheless clear, line is thus drawn between Member State powers and the freedom to provide services laid down in the directive.11 No mention was made of the consumer, the viewer, in this decision, but since he is the recipient of the broadcasts 9   One should note that it was only subsequently, in the Maastricht Treaty in 1992, that consumer protection attained a specific Treaty status. 10   Cases C-244/10 and C-245/10 Mesopotamia Broadcast A/S METV and Roj TV A/S v Bundesrepublik Deutschland. 11   The Court made reference to its judgment in Joined Cases C-34, 35, and 36/95 Konsumentombudsmannen v De Agostini and TV Shop [1997] ECR I-3843 and stated that the judgment in Mesopotamia was indeed consonant with the former decision.

Broadcasting and the EU Consumer  79 in question, the confirmation of the right to broadcast here must inevitably be of concern to him. When considering the first directive as a whole, and notwithstanding the numerous provisions favouring the freedom to provide services and the protection of the consumer, the viewer, as such, it is not possible to speak of one uniform ‘EU consumer’ or ‘EU viewer’.

II.  AMENDING DIRECTIVES: ‘EVENTS OF MAJOR IMPORTANCE FOR SOCIETY’

Let us see if the position improved under the amending directives of 199612 and 2007. The first amending directive of 1996, Directive 97/36/EC, introduced two changes which may, indeed, be of concern to the consumer, the viewer, namely Articles 2a and Articles 3 and 3a.13 The directive also made changes to clarify problems which had arisen concerning the criteria to be used to decide which Member State should exercise home state jurisdiction, thus to avoid broadcasters setting up in one Member State simply in order to broadcast into another and avoid the prescriptive rules of the latter. The directive also made adjustments to keep abreast with phenomena such as tele-shopping and the funding of European works. Article 2, permitting Member States in certain circumstances to prevent broadcasts from other Member States, was strengthened by the grant of a power to the Commission to take a decision as to whether the restrictive measures were in conformity with Community law, replacing the possibility of a simple request being made by the Commission to that effect. Thus a much stronger EU dimension was introduced to control individual Member State actions.14 A new paragraph 3 was added to Article 3 requiring Member States to introduce appropriate procedures for third parties, directly affected, to apply to the competent judicial and other authorities to seek effective compliance by broadcasters with their home state rules; certainly an EU measure in favour of the consumer. More pertinent would, however, be the introduction, at the instigation of the European Parliament, of a new Article 3a. Recitals 18 to 22 explain that it is essential to protect the right of information to certain events etc from the exclusive rights of certain broadcasters; the right to information to be protected is, of course, the right of the consumer, the viewer. It is worth setting out in full the first paragraph of Article 3a, as this has just been the subject of clarification by the General Court. 12   For a closer examination of the genesis, negotiation and adoption of this directive, see B J Drijber, ‘The Revised Television Without Frontiers Directive: Is it Fit for the Next Century?’ (1999) Common Market Law Review 36, 87–122. 13   Now Articles 3, 4 and 14 of the 2010 consolidating directive. 14   For more details on these disputes between Member States in the Commission’s Fifth Report COM (2006)49 final, para 2.1, prior to the strengthening of the Commission powers, the Sixth and the Seventh Reports COM (2009)309 final, para 2.1.

80  Frank Benyon 1.  Each Member State may take measures in accordance with Community law to ensure that broadcasters under its jurisdiction do not broadcast on an exclusive basis events which are regarded by that Member State as being of major importance for society in such a way as to deprive a substantial proportion of the public in that Member State of the possibility of following such events via live coverage or deferred coverage on free television. If it does so, the Member State concerned shall draw up a list of designated events, national or non-national, which it considers to be of major importance for society. It shall do so in a clear and transparent manner in due and effective time. (last sentence omitted)

The judgment in question was handed down on 17 February 2011 in Case T-68/08 FIFA v Commission.15 FIFA, the Federation Internationale de Football Association, the owner of exclusive rights to broadcast World Cup events, challenged a Commission decision of 2007, Decision 2007/730/EC,16 which, pursuant to Article 3a(1), decided that measures taken by the United Kingdom to put all World Cup matches on a list of events of major importance to UK society, thus preventing FIFA from fully commercialising such rights, was compatible with Community law.17 While FIFA did not object to inclusion of the World Cup ‘prime matches’ ie the semi-finals, finals etc on the UK list of designated events of major import­ance for society, it did object to the inclusion in the list of ‘non-prime’ matches. It put forward a number of pleas in law, amongst which the following are noteworthy. As to the plea that the UK procedure for establishing its list breached the requirement for ‘clear and transparent procedures’, the Court firstly found that Article 3a(1) leaves Member States a considerable margin of discretion as regards the stages of their procedures, possible consultation of parties concerned and allocation of administrative competence, but, in accordance with EU law, simply required that the procedure be based on objective criteria, known in advance (recitals 84 to 87).18 As for FIFA’s plea that non-prime matches were not of major importance for UK society, the Court began by confirming that ‘it is for the Member state to define’ such events, for which it has therefore considerable discretion (recital 112) and continued by stating that the World Cup in its entirety may reasonably be regarded as a single event. As to the argument that the UK followed a different approach to that which it followed in other sports, or that pursued by other Member States for the World Cup, the Court repeated that since Article 3a does not harmonise which events may be considered to be of major importance, a number of different approaches are equally compatible with the directive. With the caveat that the judgments cover an event which, exceptionally, is expressly mentioned in the recitals to the directive, these decisions nevertheless 15  [2011] ECR II-349. See also Case T-55/08 Union des Associations Européennes de Football v Commission [2011] ECR II-271 16   [2007] OJ L295/12. 17  An abridged history of this dispute can be found in paras 2.2 of the Commission’s Sixth and Seventh Reports. 18   It, however, clearly ruled that the requirement of clarity etc. does not ‘oblige the competent national authority to set out the reasons why it did not follow the opinions or observations put forward to it during the consultation procedure’ (recital 91), particularly in view of the reference to the World Cup in the directive’s recitals.

Broadcasting and the EU Consumer  81 make clear that, provided only that there are clear criteria, it is for each Member State to decide on the substance and the applicable procedure and that challenges at EU level, be they by rights owners or perhaps even by viewers, would not seem possible. As the Court indicated early in its judgment, (recitals 51 to 53), in relation to Article 3a(1) generally, freedom of expression, as protected by Article 10 of the European Convention of Human Rights, is one of the fundamental rights protected by the Community legal order and is an overriding reason in the public interest capable of justifying Member States’ restrictions. Such questions of freedom of expression, fundamental rights and culture of the different Member States cannot therefore be equated with the more ‘simply economic’ and deeply harmonised sectors in Member States, such as transport and telecommunications described in the preceding chapters, where rules restricting freedom to provide services only allow a Member State to impose a public service obligation, and restrict other operators, for specific, carefully described, reasons, such as the regularity, frequency and cost of, for example a regional air service, the respect of which has been closely scrutinised by the Court.19 The second amending directive, Directive 2007/65/EC , did not make changes to the above-mentioned provision on major events, but rather concentrated on more technical updates.20 To take account of the increased possibilities for viewers to access entertainment by new technical means, the internet, mobile ’phones, videoon-demand etc, the amendment included within the directive’s scope on-demand audio-visual services as well as mere linear television. Since these non-linear services are under the control of the viewer, and not simply streamed by the broadcaster, the rules applicable thereto are generally less strict than those for linear services. The amending directive introduced a reference to satellite up-links in order to determine a broadcaster’s place of establishment. The advertising rules were amended, including some of the time restrictions etc, and a regime, not too restrictive, added for the new phenomenon of product placement. The amendment also introduced a provision to oblige exclusive right broadcasters to provide to others short extracts of events of high interest to be used in their news programmes. All of the above amendments clearly concern the viewer, the last two especially, and are introduced at EU level, but still with freedom given to Member States to complement minimal rules, decide on their viewers’ requirements etc. This impression of a not insignificant level of Member State freedom under the Television Without Frontiers (TWF), now re-baptised Audio-Visual Media Services Directive, is not, however, a complete view as shown by two recent judgments, the first of 2008, Centro Europa 7,21 and the second of 4 October 2011, Football Association Premier League.22   See eg Case C-205/99 Analir v Administracion del Estado [2001] ECR I-1271.   See paras 2.1–2.6 of the Commission’s Seventh Report for a more detailed summary of the changes.   Case C-380/05 Centro Europa 7 v Ministero delle Comunicazioni e Autorità per le garanzie nelle comunicazioni [2008] ECR 349. 22   Joined Cases C-403/08 and C-429/08 Football Association Premier League Ltd et al v QC Leisure et al and Karen Murphy v Media Protection Services Ltd (nyr). 19 20 21

82  Frank Benyon The TWF Directive did not harmonise the rules for the establishment of broadcasters but left each Member State the freedom to lay these down for those wishing to start business there. However, as has been shown in the preceding chapter, the package of directives on electronic communications does not only apply to telecommunications providers, but also to broadcasters, who are also ‘electronic communicators’! All the rules of such package apply to broadcasters,23 with the one exception, namely Article 1(3) of the Framework Directive24 clearly states that This Directive as well as the Specific Directives are without prejudice to measures taken at Community or national level, in compliance with Community law, to pursue general interest objectives, in particular relating to content regulation or to audio-visual policy.

The question of the extent of the application of the electronic communications rules was referred to the European Court by the Italian Council of State in the Centro Europa 7 case. Centro Europa 7 had been granted rights for terrestrial television broadcasting, but had never been allocated the frequencies necessary to broadcast since the allocation of frequencies had been made dependent upon the implementation of a national allocation plan for radio frequencies, the adoption of which was continually postponed by national legislation. Pending the adoption of such legislation, existing broadcasters were nevertheless permitted to continue broadcasting. The package of electronic communications directives did not explicitly deal with this question of frequency allocation. Accordingly, the Court proceeded to examine various directives, including competition directives. It began by stating that although the Treaty does not require the abolition of national monopolies having a commercial character but only to adjust them to eliminate discrimination between suppliers, Article 49 EC (now Article 56 TFEU) precludes the application of national rules making the provision of services between Member States more difficult than within Member States: such principles had been implemented by the electronic communications package of directives. It then proceeded to examine various provisions of these, namely • the obligation on Member States to take all reasonable measures to promote competition; • the obligation to ensure that any undertaking is entitled to provide electronic services; and • that broadcasting should only be subject to a general authorisation (recitals 81 to 84) • in order to find that • the freedom to provide services in television broadcasting requires not only the grant of the authorisation, but also the allocation of the necessary frequencies; and   Arts 1 and 2 of the Framework Directive 2002/21/EC OJ 2002 L108 p 33.   Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 on a common regulatory framework for electronic communications networks and services [2002] OJ L 108/33. 23 24

Broadcasting and the EU Consumer  83 • provisions may not make the use of frequencies subject to the grant of individual rights (recitals 85 to 87). Such restrictions could, of course, be justified if found to have been introduced in the pursuit of general interest objectives, and if based upon objective, transparent and non-discriminatory criteria (recitals 103 to 107). However the allocation de facto to the incumbent operators was not found to constitute such clear, objective criteria, and this irrespective of whether the objective of the relevant Italian legislation could be regarded as pursuing a general interest objective. Following that judgment, Centro Europa 7 received frequencies and now broadcasts programmes. The recent judgment of 4 October 2011 in Football Association Premier League and Karen Murphy and the cases joined thereto have clarified how the basic Treaty rules on the freedom to provide services restrict the powers of Member States in the area of television broadcasts. The essence of the disputes in these cases concerned the rights to the retransmission of Premier League football matches, which the League grants on a strictly territorial basis to broadcasters in different Member States, such territorial basis being reinforced in the United Kingdom by legislation which prevents foreign decoding devices, which give access to satellite broadcasting services from another Member State, from being imported into, and sold in the United Kingdom. The Court stated clearly that such legislation constituted a restriction on the freedom to provide services. Although the objective of protecting intellectual property in sporting events could have justified such restriction, this would only be possible provided that the UK legislation did not go beyond what was necessary to attain such objective of protection. Considering the various Community directives in this area, the Court found that the remuneration for the protection of such intellectual property rights had to be reasonable in relation to the economic value of the service provided,25 such as relating the same to the actual and potential audiences both in the Member State of broadcast and in any other states where the programmes could be received. A premium would not be excluded. However, 115.  . . ., here such a premium is paid to the right holders concerned in order to guarantee absolute territorial exclusivity which is such as to result in artificial price differences between the partitioned national markets. Such partitioning and such an artificial price difference to which it gives rise are irreconcilable with the fundamental aim of the Treaty, which is completion of the internal market. In those circumstances, that premium cannot be regarded as forming part of the appropriate remuneration which the right holders concerned must be ensured. 116.  Consequently, the payment of such a premium goes beyond what is necessary to ensure appropriate remuneration for those right holders. 117.  Having regard to the foregoing, it is to be concluded that the restriction which consists in the prohibition on using foreign decoding devices cannot be justified in light of the objective of protecting intellectual property rights.   Paras 102–09.

25

84  Frank Benyon The only reference to the TVWF Directive was in the concluding paragraph of this part of the judgment where the Court stated that account had to be taken of the development of EU law resulting in particular from the TVWF Directive intended to ensure the transition from national markets to a single programme production and distribution market.

Moving on from the rules on services, the Court found further that the exclusive licence system also breaches the competition rules of the Treaty if it prevents broadcasters from effecting any cross-border provision of services – ie the supply of decoder cards to viewers for use outside the Member State for which the licence was granted – since all competition between broadcasters in the field of those services would be eliminated. With regard to the particular position of the consumer, of the viewer, nowhere brought to the fore in the judgment, it can be noted that in the last paragraphs of the judgment examining the competition rules of the Treaty, the Court finds that the conditions for an exemption of the licence agreements under paragraph 3 of Article 101 TFEU would not be fulfilled for the same reasons as were discussed concerning justification of the restriction on the provision of services, namely the partitioning of national markets which give rise to artificial price differences, thus to prices for the consumer, the viewer, which are unjustified. As for the question whether Mrs Murphy’s making the broadcasts available to the customers in her public house constituted a ‘communication to the public’ within the terms of Article 3 of the Copyright Directive 93/83/EEC,26 the Court’s positive answer to this question,27 indirectly strikes a positive note for the consumer, for the viewer, when it contrasts that public situation with that of the average viewer, as follows When those authors authorise a broadcast of their works, they consider, in principle, only the owners of television sets who, either personally or within their own private or family circles, receive the signal and follow the broadcasts.28

Although the full consequences of this judgment remain to be assessed,29 clearly the use of foreign cards and decoders cannot be prohibited in relation to private viewers; equally, new arrangements for the distribution of encoded broadcasts must take into account the EU dimension and thus, in principle, lead to lower prices. To conclude, the ever-increasing programme choice in a national context, together with the freedom to select programmes from other Member States, as well as an ever-increasing choice of technical means to access the same, without 26   Council Directive 93/83/EEC of 27 September 1993 on the coordination of certain rules concerning copyright and rights related to copyright applicable to satellite broadcasting and cable retransmission, OJ L 248, 6.10.1993, 15–21. 27   Para 196. 28   Para 198. 29   See article ‘Win for pub landlady but Premier League may take a second leg,’ by Ian Burrell, Media Editor, in the Independent of 5 October 2011 p 18.

Broadcasting and the EU Consumer  85 territorial restrictions, clearly benefits the consumer, the viewer. The viewer is further protected when it comes to advertising,30 to alcohol, to programmes concerning minors etc. However, in the light of the minimal nature of certain rules and of the possibilities for Member States, in the interests of their own culture, of their different societies, to take divergent measures, one cannot, yet, speak of a uniform status of ‘EU viewer’. Nevertheless, Member State actions in the interests of national society or culture are not without EU law limits, in particular the basic Treaty rules on freedom to provide services and the competition rules, as the three cases discussed above clearly show. Further the part of the Treaty competition rules concerning state aids payable to broadcasters also limit Member State actions, although for broadcasters obliged to perform a public service, there is more flexibility, as witnessed by the protocol added to the Treaty at Amsterdam specifically devoted to public service broadcasting.

30   In its judgment of 24 November 2011 in the infringement Case C-281/09 condemning Spain for tolerating broadcasting of certain types of advertising in excess of the limits laid down in the Directive the Court stressed the position of the consumer as television viewer, stating that ‘49 . . . the concept of ‘advertising spots’ stemming from Article 18 of Directive 89/552 must be interpreted taking into account that directive’s objective, which is to reconcile the exercise of the freedom to broadcast television advertising announcements with the requirement that television viewers be protected from the broadcasting of excessive advertising’.

6 The Case Law of the European Court of Justice on the Mobility of Patients: An Assessment JULIO BAQUERO CRUZ1

I. INTRODUCTION

T

HESE PAGES ARE devoted to a particular aspect of the relationship between the free movement rules and the provision of health services in the European Union: the freedom of individuals to receive health services in Member States other than that in which they are affiliated for health purposes. My aim is to offer an overview and an assessment of the leading judgments in the field. More than 10 years have passed since Decker and Kohll2 and it may be good moment for this kind of exercise. I shall also reflect on whether the case law is exhausted or still has some space and potential for development. A final aim of this chapter is to assess the line of case law from the point of view of a common critique, according to which these judgments could endanger the solidarity aims of national health systems by putting pressure on their territorial character.3 This means that I shall not deal with other interesting issues such as the free movement of health care providers, with the other free movement rules relevant to health policy (for example, the free movement of pharmaceutical products or the freedom of establishment), and with the influence of the competition rules on 1   Member of the Legal Service of the European Commission and visiting Professor at Sciences Po (Paris). The opinions expressed in this chapter are purely personal and do not necessarily reflect those of the European Commission or of its Legal Service. I should like to thank Chiara Cattabriga for her comments and suggestions on a first draft. A version of this chapter has been published in J W van de Gronden and others (eds), Health Care and EU Law (The Hague, TMC Asser Press-Springer, 2011) 79–102. 2   Case C-120/95 Decker [1998] ECR I-1831; Case C-158/96 Kohll [1998] ECR I-1931. 3   On these issues, see the general argument of F Scharpf, ‘The European Social Model: Coping with the Challenges of Diversity’ (2002) Journal of Common Market Studies 645, and his more recent views in ‘Legitimacy in the Multilevel European Polity’ (2009) European Political Science Review 173; see also my critique in ‘The Socioeconomic Model of the European Union: Stuck with the Status Quo?’ in G Amato, H Bribosia and B de Witte (eds), Genèse et destinée de la Constitution européenne (Brussels, Bruylant, 2007) 1105.

88  Julio Baquero Cruz health care. In all these areas, it seems to me, health is secondary or at most as important as the underlying economic interests. In the cases about the free movement of patients, in contrast, health and the liberty of individuals to receive treatment where they prefer are the main concern, and the economic issues seem to be secondary. This might be the reason for the specificity of the case law on the mobility of patients, and also what makes it so unusual, problematic and interesting. In addition, I shall only deal in passing with Regulation 833/2004 on social security,4 which is often invoked in the cases concerning the mobility of patients alongside the Treaty provision on services. I shall also refer only very briefly to the recently adopted directive on the mobility of patients,5 an act of secondary law which, in my view, merely codifies and supplements the case law based on the Treaty, rather than replacing it. The case law can be read like a chain novel of interconnected episodes, from Luisi and Carbone,6 of 1984, to the more recent judgments of 2009 and 2010, like von Chamier-Glisczinski,7 Commission v Spain,8 Commission v France 9 and Elchinov.10 The leading cases, besides these, seem to me to be the following: Kohll,11 of 28 April 1998 (rendered the same day as Decker,12 which concerned the free movement of goods), Vanbraekel and Smits-Peerbooks,13 of 12 July 2001, Müller-Fauré and van Riet,14 of 13 May 2003, and Watts,15 of 16 May 2006. I will leave aside other less important cases which more or less repeat the established case law, such as Inizan,16 Leichtle17 or Stamatelaki,18 Keller19 or Acereda Herrera.20

4   Regulation (EC) 883/2004 of the European Parliament and of the Council of 29 April 2004 on the coordination of social security systems [2004] OJ L 166/1, which replaces Council Regulation (EEC) 1408/71 of 14 June 1971 on the application of social security schemes to employed persons, to selfemployed persons and to members of their families moving within the Community [1971] OJ L 1492. 5   Directive 2011/24/EU of the Parliament and the Council of 9 March 2011 on the application of patients’ rights in cross-border healthcare [2011] OJ L88/45. 6   Joined Cases 286/82 and 26/83 Luisi and Carbone [1984] ECR 377. 7   Case C-208/07 von Chamier-Glisczinski [2009] ECR I-6095. 8   Judgment of 15 June 2010, Case C-211/08 Commission v Spain, not yet reported. 9   [2010] ECR I-8833, Case C-512/08 Commission v France. 10   [2010] ECR I-8869, Case C-173/09 Elchinov. 11   See n 2. 12  ibid. 13   Case C-368/98 Vanbraekel and others [2001] ECR I-5363); Case C-157/99 Smits and Peerbooms [2001] ECR I-5473. 14   Case C-385/99 Müller-Fauré and van Riet [2003] ECR I-4509. 15   Case C-372/04 Watts [2006] ECR I-4325. 16   Case C-56/01 Inizan [2003] ECR I-12403. 17   Case C-8/02 Leichtle [2004] ECR I-2641. 18   Case C-444/05 Stamatelaki [2007] ECR I-3185. 19   Case C-145/03 Keller [2005] ECR I-2529. 20   Case C-466/04 Acereda Herrera [2006] ECR I-5341.

The Mobility of Patients  89

II.  AN ANALYSIS OF THE LEADING CASES

A.  Luisi and Carbone Perhaps this whole line of case law would have been impossible without the Luisi and Carbone judgment of 1984, in which the Court held, after a complex reasoning and seemingly contrary to the wording of the provision on services, that the freedom to provide services includes the freedom, for the recipients of services, to go to another Member State in order to receive a service there, without being obstructed by restrictions, even in relation to payments and that tourists, persons receiving medical treatment and persons travelling for the purpose of education or business are to be regarded as recipients of services.21

This seemingly minor judgment actually changed the whole perspective of the Treaty of Rome on services. After it, it was no longer just the freedom of the provider of services which was protected by the provision on services: the freedom of recipients was also considered to be protected by means of a judicially enforceable subjective right. This makes sense in economic terms. Indeed, the freedom of service recipients to get those services that they consider better or cheaper in a common market is as conducive to an efficient allocation of resources in service markets as the free movement of providers. Even more so, perhaps, for it may be easier for an individual to move to another Member State in order to receive a service. It was also properly justified in an extensive interpretation by reference to the economic law of the Treaty and to the legislation enacted at the time pursuant to it, even if it seemed to run against the wording of Article 56 TFEU (former Article 49 EC). But the judgment has a deeper meaning than its technical legal meaning or its economic meaning. The Court was beginning to change its perspective, moving beyond the purely economic dimension of trade in services, opening a door towards the subjective rights of citizens as citizens and not just as economic actors. This intention is clear, in my view, in the fact that the Court expressly mentions education and medical treatment as examples of services that can be received pursuant to the free provision of services. The judgment paved the way to new developments which may have been quite unthinkable had the Court decided that only providers of services and not their recipients benefited from a subjective right based on the Treaty. But that possibility remained open for many years without anybody using it. Only in 1998, in Decker and Kohll, did the Court have a chance to move forward.

  Luisi and Carbone (n 6) para 16.

21

90  Julio Baquero Cruz B.  Decker and Kohll In Decker and Kohll the Court confirmed that social security as such is not excluded from the purview of the free movement rules, even though the Member States have retained their competences to regulate their social security systems. The Court made it clear that Regulation 1408/71 on social security does not exhaust the field and has to be compatible and interpreted in accordance with the free movement rules. It held that prior authorisation systems are incompatible with the free movement rules insofar as they concern non-hospital treatment, such as orthodontic treatment, or the acquisition of health goods, such as a pair of spectacles with corrective lenses. In such cases, the Member State of affiliation must reimburse the patient on the same terms as if the spectacles had been bought or the treatment had been received within its territory. A prior authorisation condition cannot be justified for reasons related to the quality and guarantee of health services, because the access to the profession has been harmonised at Union level. It cannot be justified either by the need to preserve the financial balance of the medical and hospital system of the Member State. As a matter of fact, since reimbursement is governed by the rules of the Member State of affiliation, the cost remains constant for the national health system concerned regardless of the fact that the spectacles are bought or the treatment is received in another Member State. Finally, as regards the orthodontic treatment, the Court held that the Member State did not prove that prior authorisation was indispensable to maintain a balanced medical and hospital service accessible to all or for the mainten­ ance of an essential treatment facility or medical service on national territory. Read today, these judgments may appear to be timid exploratory judgments, but in 1998 they were catalytic decisions which, like Luisi and Carbone, pointed to new and unforeseen doors that would soon be opened. They introduced the important distinction between hospital and non-hospital treatment. They are also important in that they do not dwell upon the issue of the economic nature of the service provided; it is almost taken for granted. According to Kohll, the service of the orthodontist, ‘provided for remuneration, must be regarded as a service within the meaning of Article [57 TFEU], which expressly refers to activities of the professions’.22 No particular importance was attached to the fact that that remuneration was then to be reimbursed by the Caisse de Maladie and thus cancelled out in economic terms, or to the fact that the Caisse de Maladie operated according to principles of solidarity and not along strictly economic interests. The decision to interpret expansively the notion of economic activity and to consider only the part of a complex triangular economic relationship in which there is remuneration will have important consequences for the future development of the case law. The bottom line of these two judgments was to pierce, for the first time, the territorial veil of national health systems, which until then were only connected   Kohll (n 2) para 29.

22

The Mobility of Patients  91 through Regulation 1408/71. The free movement rules could thus open up new possible and necessary bridges between those systems. As in Luisi and Carbone, the individuals concerned were not seen only, or mainly, as economic actors (in this case, workers affiliated to a system of social security). They were seen as citizens who want to move to receive health services in another Member State and who have a right, subject to justified limitations, to receive such services under the same conditions as if they had not moved.

C.  Vanbraekel and Smits-Peerbooms The next significant step came only three years later, in July 2001, when the Court decided the Vanbraekel and the Smits-Peerbooms cases. Let us first consider the facts. Mrs Vanbraekel wanted an operation of bilateral gonarthrosis in France, to avoid the long waiting lists of Belgian hospitals. She sought authorisation from the Belgian ‘Institut national d’assurance maladie-invalidité’, but it was refused on the grounds that she had not produced the opinion of a Belgian university professor stating that the operation would be performed in France under better medical conditions than in Belgium. She decided nonetheless to have the operation performed in France and then requested reimbursement of the expenses from the Belgian health insurance organisation. In the course of the national litigation, the necessity of the hospital treatment in France was recognised and also that she had a right to be reimbursed. But the Belgian court did not know whether she should be reimbursed within the limits of the scheme of her State of affiliation (Belgium) or according to the French rules, which were less generous than those of Belgium. Mrs Smits suffered from Parkinson’s disease. She underwent treatment in Germany. The reimbursement of the expenses was refused by the health fund to which she was affiliated in the Netherlands, because a similar treatment existed in the Member State of affiliation and there was no additional advantage and no medical necessity in the treatment provided in Germany. Mr Peerbooms fell into a coma after a road accident. He was transferred to Innsbruck where he was given special intensive therapy using neurostimulation. In the Netherlands such technique was only used experimentally in two clinics and only for persons under the age of 25 years (he was older so he would not have received such a treatment in the Netherlands). The request to pay the cost of his treatment in Austria was rejected by his sickness fund. In the meantime Mr Peerbooms came out of the coma. The refusal was based on similar reasons as in the case of Mrs Smits: adequate treatment existed in the Netherlands, the treatment received was not regarded as ‘normal’ in the Netherlands, and there was no scientific evidence of its effectiveness. Part of the Vanbraekel case concerned again Article 22 of Regulation 1408/71 on social security, whereas the Smits-Peerbooms cases were focused exclusively on the free movement rules. According to the regulation, Mrs Vanbraekel should

92  Julio Baquero Cruz have been reimbursed following the French rules, which established a lower scale of reimbursement than the Belgian rules. When confronted with the issue, the Court confirmed the view it held in Decker and Kohll to the effect that that regulation was not the end of the matter. One still had to see whether the freedom to receive services granted Mrs Vanbraekel the right to receive the higher reimbursement offered by the French system. The application of primary law, in other words, is not pre-empted by the regulation, which does not intend to harmonise and exhaust the field, but only aims at coordinating the existing national regimes of social security. At the same time the Court avoided ruling on the compatibility of the regulation with the Treaty. The two regimes thus appear to be parallel and alternative, and sometimes also complementary. An important decision taken by the Court in all three cases was, I think, the confirmation of its expansive approach to the notion of economic activity when confronted with health services provided in hospitals. In these cases, the AdvocatesGeneral strongly argued that no economic activities were involved. In Vanbraekel, Advocate-General Saggio had considered, following Humbel 23 (on public education) and the arguments of a number of intervening Member States, that the fact that these services are provided within the framework of the system of public health, established and organised by the state, and financed with public funds, meant that they were not carrying out economic activities within the purview of the free movement rules. The reasoning, in other words, proposed to extend to the free movement rules the rationale that we find in the context of the competition rules in order to exclude from their scope those entities whose activities are predominantly based on solidarity (the Poucet and Pistre 24 line of case law). In his Opinion about SmitsPeerbooms, Advocate-General Ruiz-Jarabo Colomer defended similar ideas. The Court disregarded these arguments and in a single paragraph limited itself to affirm that these services constitute an economic activity: It is settled case-law that medical activities fall within the scope of Article [57 TFEU], there being no need to distinguish in that regard between care provided in a hospital environment and care provided outside that environment.25

As has been argued, this is a mere assertion backed by no reasoning.26 At no point did the Court consider the possibility that these services may be provided under a system of solidarity and thus be a non-economic activity excluded from the scope of the free movement rules. After finding that it was in the presence of an economic activity covered by the free movement rules, and with the hole on territoriality opened by Decker and Kohll, it was not difficult for the Court to go on to decide the cases.   Case 263/86 Humbel [1988] ECR 5365.   Joined Cases C-159/91 and C-160/91 Poucet and Pistre [1993] ECR I-637.   Vanbraekel and Smits-Peerbooms (n 13) paras 41 and 53. 26   See V Hatzopoulos, ‘Killing National Health and Insurance Systems but Healing Patients? The European Market for Health Care Services after the Judgments of the ECJ in Vanbraekel and Peerbooms’ (2002) Common Market Law Review 683, 693. 23 24 25

The Mobility of Patients  93 In Vanbraekel the Court held that the lower level of reimbursement when a patient moves to France to receive hospital treatment constitutes a potential barrier to free movement, and that no overriding reason could justify it. In particular, the payment of the additional reimbursement due could not possibly affect the mainten­ ance of a balanced medical and hospital service open to all or of a treatment capa­city or medical competence on national territory: as such it did not impose any additional financial burden by comparison to the reimbursement due if Mrs Vanbraekel had decided to have the treatment performed in the state of affiliation. The most important decision taken by the Court in Smits-Peerbooms was to consider justified as a matter of principle the requirement of prior authorisation for hospital services to be received in another Member State. This introduced a distinction between intramural services, for which the requirement of prior authorisation may in principle be warranted as long as it satisfies the principle of proportionality, and extramural services, for which such a requirement would be in breach of the Treaty. But the Court was not content to stop there. In order to consider a system of prior authorisation compatible with the principle of proportionality, the Court framed, and interpreted, the conditions imposed by the system of the Netherlands. The standard to determine what is considered to be a normal treatment has to be that of ‘international medical science and medical standards generally accepted at international level’.27 Authorisation can be refused on the ground of lack of medical necessity only if the same, or equally effective, treatment can be obtained without undue delay at an establishment having a contractual arrangement with the insured person’s sickness insurance fund.28

Finally, the Court introduced a number of well-known procedural requirements that are needed for a prior administrative authorisation scheme to be considered proportionate under a fundamental freedom of the Treaty: the system must ‘be based on objective, non-discriminatory criteria which are known in advance, in such a way as to circumscribe the exercise of the national authorities’ discretion, so that it is not used arbitrarily’. Such a system must also be based on a procedural system which is easily accessible and capable of ensuring that a request for authorisation will be dealt with objectively and impartially within a reasonable time and refusals to grant authorisation must also be capable of being challenged in judicial or quasi-judicial proceedings.29

D.  Müller-Fauré and Van Riet The next important case was Müller-Fauré and van Riet, of May 2003. It concerned the reimbursement of non-hospital medical costs incurred in Belgium and   Smits-Peerbooms (n 13) para 49.   ibid, para 108. 29   ibid, para 90. These requirements were first mentioned in Case C-205/99 Analir [2001] ECR I-1271, para 38. 27 28

94  Julio Baquero Cruz Germany, respectively. Ms Müller-Fauré received dental treatment while on holiday in Germany, provided without recourse to any hospital facilities. The reimbursement of the expenses was refused, since no exceptional circumstances justified receiving the treatment in another Member State. Ms Van Riet had an arthroscopy carried out in a Belgian hospital because there it could be performed much sooner than in the Netherlands. Reimbursement was also refused because there was no urgency and she could have waited for the treatment. The judgment of the Court is a confirmation of the previous case law. Reading it one has the impression that the main principles were already well-established. The issue of the existence of an economic activity is again taken for granted. The judgment develops further the distinction between hospital services and non-­ hospital services. Even though the Court admits that that distinction ‘may sometimes prove difficult to draw’,30 it decided to stick to such a distinction, confirming that it accepts the requirement of prior authorisation with regard to hospital treatment, in view of the need of forward planning. As regards non-hospital services, however, the Court sees no evidence that prior authorisation is really needed to maintain the financial balance of the national social security system. As a result, a prior authorisation requirement is deemed to be in breach of the Treaty. Finally, the Court addressed the issue of the essential characteristics of the system of access to health care in the Netherlands (benefits in kind rather than reimbursement), which was presented as a possible justification. Against the position of AdvocateGeneral Ruiz-Jarabo Colomer, who thought the system of prior authorisation would be justified even for non-hospital treatment in a system such as that of the Netherlands, where services are provided free of charge, the Court held that the removal of the prior authorisation requirement for non-hospital treatment does not undermine it. The specific problem in Müller-Fauré was that a Member State operating under a system of reimbursement (Belgium) opposed the position of a Member State operating under a system of services in kind (the Netherlands). The former argued that the applicability of the free movement rules should not depend on the specific nature of each system.31 Thus, what Müller-Fauré does is to guarantee a common solution and a level playing field for both kinds of systems. The same issue was to reappear in Watts with regard to a third type of system: a purely national health service. The rationale of the common approach and of the level-playing field was to have the upper hand once again.

E.  Watts Watts, decided in May 2006, concerned the United Kingdom and its National Health Service (NHS), which, unlike the other systems examined by the Court in   Müller-Fauré and van Riet (n 14) para 75.   In this sense, T K Hervey, ‘The Current Legal Framework on the Right to Seek Healthcare Abroad in the European Union’ (2006–07) The Cambridge Yearbook of European Legal Studies 261, 268. 30 31

The Mobility of Patients  95 previous cases, is a completely public system in its organisation and in the way it is financed. There is no contribution from workers or companies to the system. For obvious reasons, there are no reimbursements in such a system. Ms Watts had osteoarthritis and needed a hip replacement, but the treatment could only be provided by the NHS within a year. She wanted to have the operation performed sooner abroad but authorisation under the Social Security Regulation was refused. She had the operation in France anyway instead of waiting and then asked for reimbursement, which was duly refused. She started litigation and a preliminary reference reached the Court. The first issue to be considered was whether there was an economic activity at all. The Court, following Advocate-General Geelhoed, had no doubts that this was the case, because she paid for the treatment received. Indeed, the case was not about a service received within the NHS, which could be excluded in view of the fact that it is financed entirely or mainly by public funds. For the Court, the operation in France was a service received for consideration, ‘regardless of the way in which the national system with which that person is registered and from which reimbursement of the cost of those services is subsequently sought operates’, ‘there being no need [. . .] to determine whether the provision of hospital treatment in the context of a national health service such as the NHS is in itself a service within the meaning of those provisions’.32 Once again, this approach may seem somewhat simplistic: in economic terms the whole transaction is more complex than that. A service is received, paid for, and then reimbursed from a national health system. If you see it as one complex transaction, may the fact that part of it, the reimbursement, comes from a noneconomic actor in a system characterised by solidarity really be seen as irrelevant? According to Spaventa, the Court wrongly focused on the economic transaction (between Ms Watts and the French hospital), but this was just an ‘hermeneutic trick’ to avoid tackling the real issue: ‘The relevant relationship to establish entitlement to reimbursement for health services obtained abroad is, in this case, that between patient and health provider/social security fund’; ‘there is no economic aspect in the provision of medical services by the NHS since they are not “bought” by other providers, and are therefore not part of an economic transaction’. The thrust of her criticism is the following: The rulings in Peerbooms and Müller-Fauré affect the determination of the circumstances in which the State has to recognize a right to seek health care outside the national health system, rather than just imposing an obligation of non-discrimination between health care providers once this right is recognized by national law [this would be the case of Kohll and Decker].33

Oddly enough, the provision on the free movement of services applies because the patient pays first, making it an economic transaction, and then that provision   Watts (n 15) paras 90 and 91.  E Spaventa, Free Movement of Persons in the European Union: Barriers to Movement in their Constitutional Context (Alphen aan den Rijn, Kluwer, 2007) 56–58. 32 33

96  Julio Baquero Cruz obliges the NHS to reimburse, which means that when Community law is complied with the treatment comes to be financed entirely or mainly by public funds, and thus would normally cease to be an economic transaction. There is something odd in that reasoning. On other hand, it is true that once one has admitted that the systems of the Belgian and Dutch kind are economic in nature, it would be difficult to say that the treatments received by persons affiliated to a national health system in another Member State are not economic, thus insulating these particular systems from all others because of their specific nature. Once the door of the notion of economic activity has been opened, it is difficult to close it for just one kind of system. For the rest, Watts is a mere repetition of Smits-Peerbooms and Müller-Fauré. In the application of the principle of proportionality, the system of the United Kingdom is held to be incompatible with the Treaty because the regulations of the NHS do not set out the criteria for the grant and refusal of the prior authorisation necessary for reimbursement of the cost of hospital treatment provided in another Member State, and therefore do not circumscribe the exercise of the national competent authorities’ discretionary power in that context. The lack of a legal framework in that regard also makes it difficult to exercise judicial review of decisions refusing to grant authorisation.34

In addition, the refusal cannot be based merely on the existence of waiting lists: an objective individual medical assessment of the medical condition of the patient is needed.35 And where the delay arising from such waiting lists appears to exceed in the individual case concerned an acceptable period having regard to an objective medical assessment of all the circumstances of the situation and the clinical needs of the person concerned, the competent institution may not refuse the authorisation sought on the grounds of the existence of those waiting lists.36

F.  Von Chamier-Glisczinski The most recent judgment in this field is the one rendered in the von ChamierGlisczinski case on 16 July 2009. It is a chamber judgment and it is not easy to say whether it is a leading case. But whether a case is ‘leading’ or not can only be known when some years have passed and one can see whether it has been followed consistently by the Court itself and by the other legal and political actors it was intended to lead. The facts are complex, but we must get acquainted with them in order to understand the underlying issues. Mrs von Chamier-Glisczinski, a German   Watts (n 15) para 118.   ibid, para 119. 36   ibid, para 120. 34 35

The Mobility of Patients  97 national resident in Munich and reliant on care, received from the Deutsche Angestellten-Krankenkasse, the social security organisation with which she was insured through her husband, combined benefits in kind and in cash as provided for by German law. When her husband decided to move to Austria in order to look for a job or to start a business there, he put her in a care home in Austria. The Krankenkasse, at that point, continued to give her a cash benefit but no longer gave the full in-patient care which she had been receiving in Germany, since that was a benefit in kind that could not be exported to Austria, for it was not provided for by Austrian law. The Krankenkasse argued that according to the case law of the European Court of Justice only the care allowance, a cash benefit, could be ‘exported’ to Austria. In the end the couple went back to Germany, but Mrs von Chamier-Glisczinski continued the litigation until reaching the Bayerisches Landessozialgericht, seeking repayment of the costs linked to her stay in the Austrian care home in the amount of the difference between the care allowance granted pursuant to German law and the amount provided for by the German legislation for full in-patient care. Her argument was that benefits in kind actually correspond to cash benefits, and that nothing could prevent the possibility of ‘exporting’ them. The refusal to provide benefits in kind in another Member State would be an infringement of Community law. The German court stayed the proceedings and sent a preliminary reference to the Court, asking whether the Social Security Regulation or the provisions on the free movement of citizens, workers or services were opposed to such a situation. In his Opinion, Advocate-General Mengozzi concluded that the provision on Union citizenship precluded such differential treatment. He argued that Mrs von Chamier-Glisczinski would have been treated better if she had stayed in Germany, that there was no justification for this different treatment, and that the refusal on the part of the Krankenkasse was not based on proper grounds. The Court did not follow his Opinion as regards the solution. Concerning the regulation, it simply confirmed what was already clear from Molenaar:37 that inhouse care is a benefit in kind and the regulation does not require the state of affiliation to continue serving it. It added, however, that the regulation does not mean that the competent institution is prevented from granting it,38 probably meaning, as in Bosmann,39 that the regulation does neither require nor preclude it. Concerning the second question, the Court began recalling its case law according to which its interpretation of Regulation No 1408/71 [. . .] must be understood without prejudice to the solution which flows from the potential applicability of provisions of primary law [. . .]. The finding that a national measure may be consistent with a provision of a secondary law measure, in this case Regulation No 1408/71, does not necessarily have the effect of removing that measure from the scope of the Treaty’s provisions [. . .]. It   Case C-160/96 Molenaar [1998] ECR I-843.   Von Chamier-Glisczinski (n 7) para 55. 39   Case C-352/06 Bosmann [2008] ECR I-3827. 37 38

98  Julio Baquero Cruz follows that the applicability, as the case may be, of Articles 19 or 22 of Regulation No 1408/71 to a situation such as that at issue in the main proceedings does not of itself prevent the person concerned from claiming, pursuant to primary law, the payment of certain costs relating to care received in a care home situated in another Member State, under rules different to those provided for in those articles [. . .].40

This is nothing new: we have known this since Decker and Kohll. The Court went on to exclude the applicability of the provisions on the free movement of workers and on services. There was no element, the Court said, proving Mr von Chamier-Glisczinski’s status as a worker. The provision on services was not applicable either, since Mrs von Chamier-Glisczinski moved to Austria on a permanent basis, and that rules out the applicability of the services provision. But there was no doubt, held the Court, that ‘in any event, Mrs von Chamier-Glisczinski, as a German national, enjoyed the status of a citizen of the Union pursuant to Article 17(1) EC [now Article 20(1) of the TFEU]’.41 It was just then, when that declaration on citizenship could have created good hopes in the mind of the reader, that the judgment took a surprising turn and the Court departed from the Opinion of Advocate-General Mengozzi. One might have expected the Court to analyse the measure according to the classical technique of barrier, justification and proportionality, as it would have done in the context of Article 56 TFEU, as it did, for example, in all the other cases of this saga, and as it usually does in cases concerning Union citizenship. What the Court did was different: first it admitted that Mrs von Chamier-Glisczinski found herself in a less favourable situation after her move to Austria.42 ‘However’, added the Court, as Article 42 EC provides for the coordination, not the harmonisation, of the legislation of the Member States, substantive and procedural differences between the social security systems of individual Member States, and hence in the rights of persons who are insured persons there, are unaffected by that provision.43

The conclusion: In those circumstances, Article 18(1) EC cannot guarantee to an insured person that a move to another Member State will be neutral as regards social security [. . .]. As the Commission states, in view of the disparities existing between the schemes and legislation of the Member States in this field, such a move may, depending on the case, be more or less advantageous or disadvantageous for the person concerned, according to the combination of national rules applicable pursuant to Regulation No 1408/71.44

  Von Chamier-Glisczinski (n 7) para 66.   ibid, para 78. 42   ibid, para 83. 43   ibid, para 84. 44   ibid, para 85. A similar approach was followed in Case C-403/03 Schempp [2005] ECR I-6421, concerning EU citizenship, non-discrimination on the basis of nationality and deductions from the revenue tax. 40 41

The Mobility of Patients  99 In other words, it was bad luck that the movement of Mrs von Chamier-Glisczinski and the interaction between the German and the Austrian systems were unfavourable to her. It could have been otherwise. This could seem to be in contradiction with what the Court itself had held before in paragraph 66 to the effect that the regulation does not pre-empt the application of primary law. In Vanbraekel, a similar case, the disparity of legislations, the negative answer under the regulation and the fact that Ms Vanbraekel’s movement could have been either advantageous or disadvantageous for her did not prevent the Court from entering into the logic of barrier, justification and proportionality. One wonders why the Court accepted that kind of argument now, instead of following the usual path. Why is that final with regard to the free movement of citizens and not final with regard to the free provision of services? Time will tell us whether this approach will be consolidated as good law.

G.  The Judgments of 2010 I will only deal very briefly with the Grand Chamber judgments rendered in this area in 2010.45 In Commission v Spain, of 15 June 2010,46 the Court dismissed the first infringement action brought by the Commission in this field. The Commission had asked the Court to declare that Spain had breached Article 56 TFEU, on the free provision of services, by refusing persons insured under the Spanish national health scheme the reimbursement of medical expenses which they have incurred in another Member State for hospital treatment received in accordance with the regulation on the coordination of national social security regimes, insofar as the level of cover applicable in the Member State of treatment would be lower than that provided in Spain. To resolve the case, the Court distinguished cases of ‘unscheduled hospital treatment’ from cases of ‘scheduled hospital treatment’. For the latter, we already know from Vanbraekel that the patient has a right, based on Article 56 TFEU, to a complementary payment in order to be reimbursed in the same terms as if the treatment had taken care in the state of affiliation.47 One important ground for this is that such complementary reimbursement does not by definition impose any additional financial burden on the sickness insurance scheme of that Member State as compared with the reimbursement to be made or the costs to be borne if hospital care had been provided in that State.48

This, however, does not extend to cases of unscheduled hospital treatment, because in such cases, according to the Court, there would be no restriction: the 45   I shall not deal with the chamber judgment of 27 January 2011, Case C-490/09 Commission v Luxembourg, [2011] ECR I-247. 46   See n 8. 47   See section II.C. above. 48   See n 8, para 57.

100  Julio Baquero Cruz effect on the freedom to receive services would be ‘too uncertain and indirect’.49 What the Court means is that it is highly unlikely that a tourist or a student decides not to travel to another Member State because, if his or her health suddenly deteriorates and an unscheduled health treatment is needed, he or she will have a lower cover of the cost than if the treatment had been received in Spain. That would not be true of cases of scheduled health treatments, in which the level of cover could indeed have an influence on the decisions taken by patients concerning the place in which they wish to receive their treatment. In addition, in contrast with the Vanbraekel situation, complementary reimbursement in cases of unscheduled treatment could entail a heavier and unforeseeable financial burden for the Member State of affiliation.50 In Commission v France, of 5 October 2010,51 the Court dismissed another infringement case brought by the Commission. The case concerned two issues: first, the French provision according to which prior authorisation was needed not only for the reimbursement of hospital services provided in another Member State but also for non-hospital services available at a general practitioner’s surgery and requiring the use of major medical equipment; secondly, the Commission claimed that France did not allow for complementary reimbursement in the circumstances set out in Vanbraekel. The Court rejected both claims. With regard to the first, it concluded that it was a restriction but that it was justified and proportionate: the same arguments that justify a prior authorisation requirement for treatments provided in a hospital setting apply ‘with regard to medical services involving the use of major medical equipment, even if those services [. . .] are supplied outside such a setting’.52 For such equipment, the Court considers that it must be possible to have a planning policy, in order ‘to avoid, so far as possible, any waste of financial, technical and human resources’,53 and that planning policy is only possible if a prior authorisation is required before receiving such services in other Member States. Concerning the second claim, the Court basically concluded that the Commission had not sufficiently established that the applicable French provisions deprived persons insured in France of the right to an additional reimbursement pursuant to the Vanbraekel case law. In Elchinov, finally, the Court dealt, among other things, with the thorny issue of the reimbursement of treatments received in another Member State which cannot be provided in the Member State of affiliation. The Court based its ruling on this issue on Article 22 of Regulation 1408/71 (the regulation coordinating the social security regimes of the Member States), and not on the Treaty provision on services. According to the Court, with regard to medical treatment which cannot be provided in the Member State of affiliation, Article 22(2) of Regulation 1408/71 must be interpreted as meaning that that authorisation required cannot be refused:   ibid, para 72.   ibid, para 78. 51   See n 9. 52   ibid, para 34. 53   ibid, para 37. 49 50

The Mobility of Patients  101 – if, where the list of benefits for which the national legislation provides does not expressly and precisely specify the treatment method applied but defines types of treatment reimbursed by the competent institution, it is established, applying the usual principles of interpretation and on the basis of objective and non-discriminatory criteria, taking into consideration all the relevant medical factors and the available scientific data, that the treatment method in question corresponds to types of treatment included in that list, and – if no alternative treatment which is equally effective can be given without undue delay in the Member State on whose territory the insured person resides. That article precludes the national bodies called upon to rule on an application for prior authorisation from presuming, in the application of that provision, that the hospital treatment which cannot be given in the Member State on whose territory the insured person resides is not included in the benefits for which reimbursement is provided for by the legislation of that State or, conversely, that the hospital treatment included in those benefits can be given in that Member State.54

Together with von Chamier-Glisczinski, these three judgments could stand for a more restrictive approach of the Court regarding the free movement of patients. Indeed, von Chamier-Glisczinski shows the limits of the citizenship rules in this area and the special difficulties involved in long-term care; Commission v Spain stands for a more limited interpretation of the notion of restriction, which so far the case law had interpreted rather broadly; Commission v France renders more flexible the distinction between hospital and non-hospital treatment, admitting that for some non-hospital treatment involving major medical equipment a prior authorisation may be required; and Elchinov, while seeming to favour the rights of the patient involved, in reality gives a wide margin both to the national court and to national authorities when they define the types of treatment and the treatment methods which are available in the national system; in the end, Elchinov stands for the more limited principle that no absolute presumption can be established in such cases against the rights’ of patients and that the discretion of health authorities must be bound by procedural rules. A possible explanation for the approach taken by the Court in these judgments could be that they were decided during the negotiations on the draft Directive on Patients’ Rights in Cross-Border Healthcare, where some of the same issues, like long-term care or non-hospital treatment involving major medical equipment, were being discussed. It could be, therefore, that the Court did not want to preempt the ongoing political negotiations with its rulings, that it decided to restrain itself in order to leave sufficient space for the democratic deliberation that was taking place. That would also mean that, now that the directive has been adopted, the Court could again adopt a more active role.

  See n 10 at para 73.

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III.  SOME REFLECTIONS ON THE CASE LAW

After this review of the case law, which has not been exclusively descriptive, I should like to offer a more general reflection structured around various issues: one more technical, on the notion of economic activity; and the others more general: the place of this line of case law in the general case law on free movement; the relationship with Union citizenship and with the fundamental right to health; the room for growth of the case law; its relationship with the directive on patients’ mobility; and finally the more general theme of the assessment of the case law from the point of view of the socio-economic model of the European Union.

A.  The Notion of Economic Activity A striking characteristic of this line of case law is the wide notion of economic activity employed by the Court. This catch-all notion, coupled with the usually wide concept of restriction, means that almost everything will be caught and decided at the stage of justification, normally through the application of the proportionality principle. On economic activity, the Court could have decided to follow a more cautious approach, as proposed by Advocates-General Saggio and Ruiz-Jarabo Colomer. At present that would take a dramatic overruling which is very unlikely, but it may be interesting to take a look at the road not taken. It seems to me that in these judgments the notion of economic activity was quite crucial, because the Court could have chosen to stop there, and the position of its Advocates-General was far from far-fetched. Once that door was crossed, however, many things were bound to happen, especially in view of the wide notion of restriction. The Member States would be bound to justify themselves, a difficult exercise, for their measures in this field had never or only rarely taken into account the existence of a world beyond their borders and the interests of people not affiliated to their health systems. A first point to be made on the notion of economic activity is that this line of case law seems to sit rather uncomfortably with two other lines of case law: the Sodemare judgment of 1997 and the competition cases on activities based on the solidarity principle, starting with Poucet and Pistre. In Sodemare, the Court declared that as Community law stands at present, a Member State may, in the exercise of the powers it retains to organize its social security system, consider that a social welfare system of the kind at issue in this case [based on solidarity] necessarily implies, with a view to attaining its objectives, that the admission of private operators to that system as providers of social welfare services is to be made subject to the condition that they are nonprofit-making.55 55   Case C-70/95 Sodemare [1997] ECR I-3395, para 32. See, in contrast, Case C-169/07 Hartlauer [2009] ECR I-1721.

The Mobility of Patients  103 Sodemare was not, however, an application of the Poucet and Pistre line of case law to the field of free movement. In Poucet and Pistre,56 the important elements of solidarity of the system in hand meant that the companies involved were not carrying out an economic activity and thus were not undertakings subject to the competition rules of the Treaty (an issue, then, related to the personal and objective scopes of application of the Treaty). In Sodemare, in contrast, the Court found that the provisions on establishment were indeed applicable to the state regulation at issue, but the restriction was justified in view of the aims of solidarity of the system. The Court was happy with the fact that the measure applied in a nondiscriminatory fashion to both Italian and non-Italian operators. One could argue, therefore, that Sodemare remains good law with regard to health operators and professionals, and that that line of case law can be distinguished from that of the free movement of patients, whose rights, connected to issues of citizenship and to the fundamental right to health, deserve stricter protection than the rights of companies looking for economic profit. A difference between services received by patients and the establishment of health companies may be warranted, for the interests at stake and the balance among them are clearly different. In Poucet and Pistre, followed by other judgments such as Albany,57 the Court has made clear that a national security system is not an undertaking when it provides services under a system which is predominantly based on solidarity and not on profit. What does this mean for our case law? Is there not a contradiction? Is the solidarity of the health system not relevant for the definition of the scope of the free movement rules? The Court, as we have seen, has not paid much attention to the issues of solidarity in the context of the patients’ mobility cases. In all of them, there was consideration provided against the services received in the cases considered, and that was enough for the activity to be considered economic. In particular, the fact that that consideration would be offset by the reimbursement of the cost of the service in full or in part did not exclude the economic character of the activity. I have already highlighted the somewhat paradoxical character of this argument. By looking just at one segment of a complex transaction, the Court qualifies it as economic and drives it into the scope of application of the free movement rules. This step, in turn, obliges the Member State of affiliation to reimburse, as a result of which the transaction ceases to be strictly economic, for it will then be ‘financed entirely or mainly by public funds’,58 according to a system based on solidarity. But without that step, the transaction would not be reimbursed and would remain economic. Now, the economic or non-economic nature of the transactions depends basic­ ally on the point of view and on the aspects one takes into account. In concentrating on just one part of a transaction, the Court is taking the point of view of the person moving abroad to receive a medical treatment, that is, the point of view of   See n 24.   Case C-67/96 Albany [1999] ECR I-5751. 58   See Case C-318/05 Commission v Germany [2007] ECR I-6957, para 68. 56 57

104  Julio Baquero Cruz the person holding a subjective right of free movement. This choice shows once again that this line of case law is moved by considerations related to the fundamental freedoms of individuals. It has another advantage: it creates a level playing field and ensures limited openings in all the various systems regardless of the particular technical solutions adopted by each of them. Indeed, a more restrictive notion of economic activity could have meant that some systems would have been insulated against the application of the free movement rules while others would have been subject to them. One may also wonder about whether there is a justification to having a different notion of economic activity under the free movement rules and under the competition rules. Against the common sense intuition that the notion might be the same throughout the Treaty, the case law now seems to accept that the notion is different for both sets of rules. The judgment of the Court on appeal in the Meca-Medina case makes it clear: the Court of First Instance held that the fact that purely sporting rules may have nothing to do with economic activity, with the result that they do not fall within the scope of Articles 39 EC and 49 EC, means, also, that they have nothing to do with the economic relationships of competition, with the result that they also do not fall within the scope of Articles 81 EC and 82 EC. In holding that rules could thus be excluded straightaway from the scope of those articles solely on the ground that they were regarded as purely sporting with regard to the application of Articles 39 EC and 49 EC, without any need to determine first whether the rules fulfilled the specific requirements of Articles 81 EC and 82 EC [. . .], the Court of First Instance made an error of law.59

Is this approach justified? Can the elements of solidarity of a health system never shield that system from the application of the free movement rules? My impression is that the general notion of economic activity should remain the same for the whole Treaty, but that the different aim and structure of the free movement rules and of the competition rules could entail different consequences of that very same notion.60 This is compatible with a possible reading of the MecaMedina judgment of the Court of Justice: a distinct analysis is needed for both sets of rules to see whether the activity is to be considered economic. As a result, the same activity or regulation could be economic in its cross-border aspects and remain non-economic in its other aspects. 59   Case C-519/04 P Meca-Medina and Majcen v Commission [2006] ECR I-6991, paras 32 and 33. The same distinction is made in the communication of the Commission on Services of general interest, including social services of general interest: a new European commitment, of 20 November 2007, COM(2007) 725 final, p 5. On these issues, see O Odudu, ‘Economic Activity as a Limit to Community Law’ in C Barnard and O Odudu (eds), The Outer Limits of European Union Law (Oxford, Hart, 2009) 225. 60   Compare with V Hatzopoulos (n 26) 723, for whom the existence of a ‘core’ solidarity activity will have a different bearing on free movement and on competition. For the competition rules, it would entail their inapplicability. For the free movement rules, the presence of such a conduct would mean that they ‘are only infringed by discriminatory measures, not mere hindrances’. The existence of ‘core’ solidarity activities would thus become ‘yet another ‘overriding reason’.

The Mobility of Patients  105 In sum, what the Court is trying to open up with this wide notion of economic activity is the closed territorial character of national systems. If one remains within the narrow logic of territoriality, then everything can be accepted and natural, even the non-economic nature of the system. But once one starts to look at the issue from a European point of view, where closure is a potential violation of the free movement of individuals, then the economic dimensions come out, as do the restrictive aspects of national regimes based on territoriality, and also the need to justify national policy choices. A similar thing happens with the notion of restriction. From the national point of view, there is no restriction: the obstacle is just a consequence of the territorial character of social security systems, such consequences do not have any protectionist intent or effect, and they would not be a restriction relevant for the purposes of Article 56 TFEU. If you take the European point of view and that of the individual, however, which are the points of view the European Court of Justice is bound to take, the existence of a restriction goes without saying. The case law is thus aimed at forcing some limited openings into the national health systems, whose closure, beyond the even more limited openings of the Social Security Regulation, is considered to be problematic from the perspective of the freedom of patients to receive their treatments throughout the Union. The Member States have to justify their choices and no longer think only in national terms when they regulate their health systems.

B.  The Relationship with General Free Movement Law and with Union Citizenship The case law on the mobility of services was one of the chances the Court had to revitalise its free movement jurisprudence after Keck.61 In a way, it also sits uncomfortably with Keck. The latter was meant to restrict the interpretation of the provision on the free movement of goods and to refocus its aim towards protectionist measures. In contrast, the case law on the mobility of patients rests on an expansive interpretation of all the normative elements of the provision on services. The only reason for such disparity is that the line of case law on the mobility of patients, while using an economic freedom, is hybrid, since it also pursues objectives which are not economic. The same happens with the free movement of workers. These non-­ economic dimensions may justify the more expansive approach the Court followed in these cases. They are related, it seems to me, to the citizenship of the Union and to the fundamental right to health. The same reason can explain other controversial judgments such as Carpenter.62 These are the elements that make a difference with regard to the case law on the free movement of purely economic factors.   Joined Cases C-267/91 and C-268/91 Keck and Mithouard [1993] ECR I-6097.   Case C-60/00 Carpenter [2002] ECR I-6279. On this judgment, see S Acierno, ‘The Carpenter Judgment: Fundamental Rights and the Limits of the Community Legal Order’ (2003) European Law Review 398. 61

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106  Julio Baquero Cruz In this line of case law, which indeed evolved hand in hand with the case law on citizenship, the deep discourse of the Court is about Union citizenship and about the fundamental right to health, enshrined in Article 35 of the EU Charter of Fundamental Rights, even if these are never expressly mentioned in the judgments. The paradox is that, as we have just seen, the first time that citizenship could be applied because the economic provisions were not applicable, in von Chamier-Glisczinski,63 the Court did not follow the argument to its natural conclusion: an analysis from the angle of the free movement of citizens according to the scheme of restriction/discrimination, justification and proportionality. This judgment shows that the provisions on citizenship are not a panacea. In addition, in contrast with the case law on the mobility of patients seen from the angle of the reception of services, the case law on citizenship has referred to the citizenship directives as accepting ‘a certain degree of financial solidarity between nationals of a host Member State and nationals of other Member States’.64 This element of solidarity does not seem to exist in the case law on patients’ mobility, in view of the system of payments and reimbursements involved, which, if applied correctly, would mean that patients’ mobility would have, in the long run, a neutral effect on the health expenditure of national systems. This difference explains another contrast with the case law on citizenship, in which the grant of a welfare advantage can be made conditional by the host Member State on the existence of a ‘genuine link’ between the Union citizen and that state. A residence requirement is in principle appropriate in that regard, although the length of residence required must not go beyond what is necessary in accordance with the proportionality principle.65 Such a ‘genuine link’ is not required by the case law on the mobility of patients, which is more flexible: since there is no actual supranational solidarity involved, a ‘genuine link’ is not needed; the very idea of a reception of a punctual service is opposed to a requirement of that nature. This is related to some of the problems that the Court may have faced in von Chamier-Glisczinski, which concerned long-term care and not a one-off medical intervention. This is also the reason why the inclusion of long-term care in the draft directive on the crossborder rights of patients is one of the most disputed issues in the course of the ongoing negotiations. Even so, the approach of the Court in the latter case may be problematic, as a degree of coherence must be kept between the interpretation and techniques of adjudication used in the framework of the provisions on Union citizenship and those used with regard to the economic freedoms.

C.  Is There Room for Growth? It is important to ask whether there is still room for growth in the case law or whether we may see it as established and almost exhausted. I think most of the   See n 7.   Case C-184/99 Grzelczyk [2001] ECR I-6193, para 44. 65   Case C-138/02 Collins [2004] ECR I-2703, paras 67 to 72. 63 64

The Mobility of Patients  107 important issues have already been settled, and it is not likely that the Court will overrule those decisions, although there is always room for a distinguishing and for various nuances. The other points that remain to be decided are minor but not completely negligible. One important issue that has arisen only recently is what happens when the state of affiliation does not even provide a more expensive or more advanced treatment which is covered in another Member State. Peerbooms moves from the assumption that the public health systems of all Member States should take into account the state of ‘international medical science’ when they decide what treatments to provide, but we now have in the European Union Member States which are very different and have very different degrees of economic development, medical capacities, and even cultural attitudes to medical treatment. This issue has arisen in Elchinov,66 where, as we have seen, the Court has adopted a rather cautious approach. Another unresolved issue is the possibility for the Member State in which the treatment is provided to limit the number of non-nationals that can use its system, since this may have negative effects on the capacity of its facilities to offer treatment to those who are affiliated to it. A further issue is the contours of the proportionality principle. In the case law, the Court seems to imply that authorisation would always be justified in the case of hospital treatment, but the judgments could also be read to mean that the authorisation requirement has to be analysed case-by-case, and that in some cases it could well be that proportionality does not justify the requirement of prior authorisation, even for some kinds of hospital treatment, or that it does justify it for some kinds of non-hospital treatment (as happened in Commission v France and also in the directive on patients’ rights). Some may wonder whether the distinction between hospital and non-hospital treatment makes sense at all, for the need for forward planning may apply equally to non-hospital and hospital treatment. Indeed, the need for forward planning has to do with the financial stability of the system, and this is taken care of by controlling in advance all costs, not only those related to hospital services. The distinction between hospital and non-­ hospital treatment has the advantage of being clear, but its normative basis is fuzzy and its consequences are not necessarily correct in all cases. The scope of application of this line of case law is not totally clear either: are long-term and in-house care included or excluded? Are paramedical activities included? What is the role of the citizenship provisions in this area? Von ChamierGlisczinski does not really settle the issue. The directive on patients’ rights excludes long-term care from its scope of application in Article 1(3)(a), but the Treaty rules remain applicable. And finally, the relationship between the Social Security Regulation, the Directive and Treaty rules will be important, and also the very interpretation of the directive, which will probably involve new and difficult questions. So there are   See n 10.

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108  Julio Baquero Cruz a number of important issues that will most probably come out. This naturally leads us to a very brief discussion of the draft directive in its relationship with the case law.

D.  The Directive on Patients’ Rights in Cross-Border Healthcare As the press release on the Commission’s proposal recognised, the draft directive was ‘prompted after judgments of the European Court of Justice in a number of cases, concerning the mobility of individual citizens from different Member States’.67 That already bears witness to the catalytic effect of the case law. The directive68 is basically a codification of the case law. According to its Article 8(1), the system of prior authorisation [. . .] shall be restricted to what is necessary and proportionate to the objective to be achieved, and may not constitute a means of arbitrary discrimination or an unjustified obstacle to the free movement of patients.

If applied strictly, this provision could mean that the states would have to justify case-by-case their choice for a system of prior authorisation, and could not just decide that all hospital services require prior authorisation. It is just one possible interpretation of the case law of the Court. The added value of the directive is clear insofar as it will have to be transposed into national law and will become better known and respected by national legal and health actors than the case law. The added value of the directive is less clear concerning its substance, for it does not do much to develop what we already find in the case law: it is not really much more precise or detailed than the case law; and as a result it would do little to ensure increased legal certainty, which is, after all, one of the main functions and advantages of legislation when compared with case law. In other words, the directive remains mired in the logic of negative integration, without progressing much in the path of positive integration. Some may consider that legal certainty would have required a more ambitious exercise and not just a pragmatic and timid codification of the case law. This view comes out with force in the Opinion of the Committee on the internal market and consumer protection of the European Parliament: The Commission proposal provides only a very partial answer to this equation, by merely codifying the decisions of the Court of Justice, which are precisely the consequence of an acknowledged legal vacuum. . . . As regards defining the key concepts . . . the text is totally insufficient, and increases the legal uncertainty rather than removing it.69 67  ‘Commission adopts proposal for directive on patients’ rights in cross-border healthcare’, IP/08/1080, Brussels, 2 July 2008. 68   See n 5. 69   European Parliament, ‘Report on the proposal for a directive of the European Parliament and of

The Mobility of Patients  109 These are, in any event, just provisional remarks, as everything will of course depend on how the directive is transposed in the Member States, and then interpreted and applied by national administrations and courts, and by the Court of Justice, together with the Treaty provision and with the Social Security Regulation. IV. CONCLUSION

To conclude I shall address the more general question of how this line of case law fits with the socio-economic constitutional model of the European Union. The questions I ask myself here are whether it is guided by neo-liberal concerns and whether it is an example of what some have called the social deficit of the Union; and whether the limited deterritorialisation of national health systems really endangers those systems.70 Whatever we say has, I think, to be based on the practical consequences of the case law rather than on purely theoretical and abstract considerations. The case law is certainly risky, and it could lead to three different outcomes. First, opening up could mean ‘pick and choose’, undermining the solidarity element of the public health systems of the Member States, penalising the good ones and relieving the bad ones, distorting the priorities established by the managers of national health systems and leading to unequal access to care.71 But it could well be the other way around. The case law could promote ‘a more efficient use of the EU’s health care resources’ and a degree of virtuous competition between health systems.72 A third possibility, which few seem to be considering, is that the use of the case law and of the directive, if adopted, will remain so marginal that it will only have a negligible impact with no transformative potential, for good or for bad, on the health systems of the Member States. Only time will tell. The impact of this line of case law is sometimes exaggerated, in a sensationalistic fashion. Thus, to give only one example among many, it has been argued that with this line of case law the Court has ‘launched a conceptual transformation in the territorial identity of the national welfare state’, and that this may lead to a ‘legal deterritorialisation of the welfare state’.73 Lurking behind is, once again, the fear that this may endanger welfare provision in the Member States. I think that may be an overstatement, for at least two reasons. The first one is that, with the exception of international agreements, commercial policy measures, tariffs, quantitative restrictions and the like, most of the legislation the Council on the application of patients’ rights in cross-border healthcare’ (rapporteur: John Bowis, A6-0233/2009, of 3 April 2009, 147). 70   See the references in n 3. 71   For this view, see C Newdick, ‘Citizenship, Free Movement and Health Care: Cementing Individual Rights by Corroding Social Solidarity’ (2006) Common Market Law Review 1645. 72   For this second view, see Hervey (n 31) 285; editorial comment (2008) Common Market Law Review 1326; and the Report of the European Parliament (n 69) 77. 73   M Dougan, ‘Expanding the Frontiers of Union Citizenship by Dismantling the Boundaries of the National Welfare States?’ in Barnard and Odudu, The Outer Limits of European Union Law (n 59) 121 and 132.

110  Julio Baquero Cruz and policy measures taken by a state are territorial in nature, and necessarily so, for the powers of a state are circumscribed to its own territory. If the territorial character of state legislation and policy measures were a valid justification or excluded the presence of a restriction in the context of the application of the free movement rules, these rules would be emptied of most of their normative content. The fact is that many territorial measures related to many policy fields produce externalities of some sort or another and end up having restrictive and protectionist effects. Such measures are clearly caught by the free movement rules. In those cases the Member States are bound to justify their choices, and that is the correct way to introduce a concern into their policy practice: the concern for the interests of those living in other Member States and the consideration of the possible negative externalities of their policy measures. The second reason is that the territorial identity of the national welfare states is kept, certainly not intact, but neither radically altered by the Court’s case law. What the Court tries to achieve in the name of the freedom of individuals are limited openings into those systems. To make some openings into previously closed systems cannot be equated with a transformation or a ‘deterritorialisation’ of the welfare state. What the Court is saying is the following: in the context of the European Union, the welfare states (in our case their health systems) can no longer operate as if they were isolated units. They have to take into account what lies beyond their borders, the other European citizens not affiliated with their systems, and the other systems in the Union. A ‘deterritorialisation’ of the welfare state would require the creation of an autonomous ‘welfare Union’, and the blurring of the borders of the Member States. But there is no such thing as a European Union health system or a Union welfare identity. The systems remain national, and the intervention of the Union does not even begin to coordinate the regimes but limits itself to remedy some problems experienced by the few persons that want to move for health care purposes. With these limited openings, the welfare state remains a welfare state, and its territorial boundaries remain visible, no longer as absolute borders, but as borders nonetheless. Realistically, the third possibility mentioned above, that the case law will have little or no impact, for good or for bad, on national health systems, could be the most likely outcome. This means that in any case, whatever the practical effects or lack of effects of the case law, the liberalisation has not been ‘wild’ and that the accusation of a neo-liberal bias is not justified in this field. The aim of the Court, as with the case law on citizenship, is individual freedom and freedom of choice, not the liberty of economic actors. Indeed, the intervention of the Court has in principle been neutral with regard to the debate on the socio-economic model of the Union. The case law then would only be positive for those few individuals that make use of it. As I have argued, the reduced number of patients, the requirement of prior authorisation for hospital treatment, and the cross-payments involved between national systems (which are based on the rules of the Member State of affiliation), ensure that those systems know in advance the tendencies of crossborder health care and are able to plan accordingly, and also that their priorities

The Mobility of Patients  111 and the overall level of expenditure will not be distorted or affected in the medium- and long-term. Taking that financial neutrality into account, since the perspective of individuals and their rights is that which the Court vindicates and defends, that would already be enough justification for the existence of this line of case law. For the Court is properly engaged in law, rights and justice, not in policy-making, even though its decisions will have a bearing on policy. It should not overdo it, some may want to add, and there might also be a point in that. For if the Court goes too far we may end up with a situation in which the people that decide to move, those Union citizens who fall under the scope of application of the Treaty, end up having a privileged status. The difficult exercise is to find an interpretation that serves to fight against discriminations and unjustified restrictions of movement without giving a privileged status to those Union citizens that do exercise their rights. In each case, one should ask oneself: is this interpretation leading to the suppression of an unfair or unjustified limit on freedom of movement or are we giving privileged rights to Union citizens just because they happen to move from one Member State to another? That does not give us the answer, but it may be a good starting point.

7 Limits to Rights to Health Care and the Extent of Member States’ Discretion to Decide on the Parameters of Their Public Health Policies ROBERTO CISOTTA1

I.  PRELIMINARY POINTS AND LIMITS OF THE ANALYSIS

T

HIS CHAPTER IS aimed at investigating some recent judgments of the Court of Justice of the European Union (hereinafter CJEU, or simply the Court), in order to evaluate whether the limits to rights to health care of EU citizens have been reached or not, and to assess the extent of the residual powers of Member States to regulate their national health care systems. The first part of this work will deal with the recent case law on ‘patients’ mobility’. In some pioneering judgments,2 the CJEU, by interpreting EU law – particularly 1   This chapter is based on the presentation made at the seminar ‘Health Care, Social Security’, at the European University Institute (EUI), Fiesole, Florence, 15 November 2010 (within the series of seminars on ‘Services and the EU Consumer’). I am grateful to Frank S Benyon and Hans-W Micklitz, respectively Visiting Fellow and Professor at the EUI, for having kindly extended me an invitation to join the seminar, and to the other speakers and all participants for the very fruitful debate. 2   See in particular the following judgments: Case C-120/95 Nicolas Decker v Caisse de maladie des employés privés (Decker) [1998] ECR I-1831; Case C-158/96 Raymond Kohll v Union des caisses de maladie (Kohll) [1998] ECR I-1931; Case C-368/98 Abdon Vanbraekel and Others v Alliance nationale des mutualités chrétiennes (ANMC) (Vanbraekel and Others) [2001] ECR I-5363; C-157/99 BSM GeraetsSmits v Stichting Ziekenfonds VGZ and HTM Peerbooms v Stichting CZ Groep Zorgverzekeringen (Smits and Peerbooms) [2001] ECR I-5473; Case C-385/99 VG Müller-Fauré v Onderlinge Waarborgmaatschappij OZ Zorgverzekeringen UA and E.E.M. van Riet v Onderlinge Waarborgmaatschappij ZAO Zorgverzekeringen (Müller Fauré and van Riet) [2003] ECR I-4509; Case C-56/01 Patricia Inizan v Caisse primaire d’assurance maladie des Hauts-de-Seine (Inizan) [2003] ECR I-12403; Case C-372/04 on the application of Yvonne Watts v Bedford Primary Care Trust and Secretary of State for Health (Watts) [2006] ECR I-4325. For an evaluation of this case law, see, among many others, P Koutrakos, ‘Healthcare as an Economic Service under EU Law’ in E Spaventa and M Dougan (eds), Social Welfare and EU Law (Oxford – Portland, Hart, 2005) 105–30; A-C Simon, ‘La mobilité des patients en droit européen’ in P Nihoul and A-C Simon, L’Europe et les soins de santé – Marché intérieur, Securité sociale, Concurrence (Brussels, Larcier, 2005) 147–88; P van Nuffel, ‘Patients’ Free Movement Rights and Cross-Border Access to

114  Roberto Cisotta Regulation (EC) 1408/71, now replaced by Regulation (EC) 883/20043 and the freedom of movement rules, mainly freedom to provide services4 – had granted EU citizens the right, subject to certain conditions, to receive medical treatments in Member States other than the one with which they are affiliated for health care. As we will see, this line of jurisprudence has been experiencing a renaissance in 2010 and 2011, revitalising the quest for the definition of individual rights in this field. Furthermore, the development of the Court’s case law, by addressing the issue of cross-border health care, has also been influencing, to some extent, the right to Healthcare’ (2005) Maastricht Journal of European and Comparative Law 3, 253–70; A Dawes, ‘“Bonjour Herr Doctor”: National Healthcare Systems, the Internal Market and Cross-Border Medical Care within the European Union’ (2006) Legal Issues of Economic Integration 2, 167–82; S Van Raepenbusch, ‘L’état de la jurisprudence de la CJCE relative au libre accès aux soins de santé à l’intérieur de l’Union européenne après l’arrêt du 16 mai 2006, Watts, C-372/04’ Gazette du Palais (9 December 2006) 3699– 3705; R Cisotta, ‘Principi giurisprudenziali e nuove iniziative della Commissione in materia di patient mobility nell’Unione Europea: un piccolo (o grande?) terremoto è in atto’ (2007) Studi sull’integrazione europea 1, 161–82; K Sieveking, ‘ECJ Rulings on Health Care Services and Their Effects on the Freedom of Cross Border Patient Mobility in the EU’ (2007) European Journal of Migration and Law 1, 25–51; F A Cancilla, Servizi del welfare e diritti sociali nella prospettiva dell’integrazione europea (Milan, Giuffré, 2009) 224 ff; W Gekiere, R Baeten and W Palm, ‘Free Movement of Services in the EU and Health Care’ in E Mossialos, G Permanand, R Baeten and T K Hervey (eds), Health Systems Governance in Europe – The Role of European Union Law and Policy (Cambridge, Cambridge University Press 2010) 461–508; S Van Raepenbusch, ‘Évolution de la jurisprudence de la Cour de justice de l’Union européenne en matière de soins transfrontaliers’ Gazette du Palais (30 October 2010) 9–15; J Baquero-Cruz, The Case Law of the European Court of Justice on Mobility of Patients: an Assessment, in this collection. 3   Council Regulation (EC) 1408/71 of 14 June 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community, consolidated version [1997] OJ L 28/1; see now Regulation (EC) 883/2004 of the European Parliament and of the Council of 29 April 2004 on the coordination of social security systems [2004] OJ L 166/1. For a list of all acts amending Reg 1408/71, see the appendix to Regulation (EC) 92/2008 of the European Parliament and of the Council of 17 June 2008 amending Council Regulation (EEC) 1408/71 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community [2008] OJ L 177/1. On Reg 883/2004, see F Marhold, ‘Modernisation of European Coordination of Sickness Benefits’ (2009) European Journal of Social Security, 1–2, 119–32; J-P Lhernould, ‘Les nouvelles règles de coordination pour les soins de santé – « Tout va très bien, Madame la marquise . . . »’ (2010) Revue de droit sanitaire et social 1, 29–37. 4   The origin of a recipient-driven approach in the case law concerning the freedom of movement of services has been traced back to the judgment of 31 January 1984, Joined Cases 286/82 and 26/83 Graziana Luisi and Giuseppe Carbone v Ministero del Tesoro (Luisi and Carbone) [1984] ECR 377. See Baquero-Cruz (n 2); Koutrakos, (n 2) 106. Not all possible cases of the application of freedom of movement rules to health care-related situations will be analysed in this chapter, but only those dealt with by the most recent and significant developments of the case law of the CJEU; in addition, not only freedom of movement rules may have an impact on health care, but also other EU law provisions (for some incidental observations in this respect, regarding the case law that will be analysed, see section III.B, esp n 152.); for all these other issues, see L Hancher and W Sauter, ‘One step beyond? From Sodemare to DocMorris: The EU’s Freedom of Establishment Case Law Concerning Healthcare’ (2010) Common Market Law Review 1, 117, esp 123 ff; D Gallo, I servizi di interesse economico generale: Stato, mercato e welfare nel diritto dell’Unione europea (Milan, Giuffré, 2010) 608 ff; T Prosser, EU Competition Law and Public Services, J Lear, E Mossialos and B Karl, EU Competition Law and Health Policy, V G Hatzopoulos, Public Procurement and State aid in National Health Care Systems, L Hancher, The EU pharmaceuticals Market: Parameters and Pathways, all in Mossialos, Permanand, Baeten and Hervey (eds), Health Systems Governance in Europe – The Role of European Union Law and Policy (n 2); D Gallo, ‘Social Security and Health Services in EU Law: Towards Convergence or Divergence in Competition, State Aids and Free Movement?’ EUI Working Paper, RSCAS 2011/19, 2 ff and references cited therein.

Limits to Rights to Health Care  115 receive health care in the Member State of affiliation and some principles concerning health care systems organisation. As it is still for Member States to finance and organise their own health care system (see Articles 6a and 168 TFEU), it is worthwhile investigating the interplay between the exercise of those powers and EU law as it has been shaped in the most recent developments of the aforementioned line of case law.5 In order to complete the picture, we will then dedicate a few words to the new directive on the application of patients’ rights in cross-border health care (hereinafter the new directive on cross-border health care, or Directive 2011/24)6 and its impact both on rights of individuals and on powers of Member States. In the second part of this work, some other recent judgments of the CJEU related to health care, this time dealing with freedom of establishment, will be presented. This strand of case law also has relevant effects on the organisation of national health systems and, indirectly, on patients’ rights.7

II.  PATIENTS’ MOBILITY

A.  Patients’ Mobility: the Legal Framework The legal framework for patients’ mobility is based on the Treaty provisions on the freedoms of movement – namely freedom of movement of goods and freedom to provide services – and on some provisions of Regulation 1408/71, now replaced, as has been already noted, by Regulation 883/2004. As we will see in section II.D., the legal framework to be considered now also includes Directive 2011/24. However, at this stage of the research it is sufficient to make reference only to the legislation in force when the judgments I will analyse were delivered. In particular, several times reference will be made to Article 22 of Regulation 1408/718 (see now Article 20 of Regulation 883/2004), which reads as follows: 1.  An employed or self-employed person who satisfies the conditions of the legislation of the competent State for entitlement to benefits, taking account where appropriate of the provisions of Article 18, and:

5   I will not analyse the CJEU judgment of 16 July 2009, Case C-208/07 Petra von Chamier-Glisczinski v Deutsche Angestellten-Krankenkasse (von Chamier-Glisczinski) [2009] ECR I-6095, as it is treated in Baquero-Cruz (n 2). 6   Directive 2011/24/EU of the European Parliament and of the Council of 9 March 2011 on the application of patients’ rights in cross-border health care [2011] OJ L 88. 7   Once again, the analysis will not cover all judgments of the CJEU with regard to health and health care provision, but only some recent ones I have considered interesting in the light of the problems highlighted of defining individuals’ right of access to (cross-border) medical treatments and of the delimitation of Member States’ powers in the field. 8   Art 22 of Reg 1408/71 was entitled: ‘Stay outside the competent State — Return to or transfer of residence to another Member State during sickness or maternity — Need to go to another Member State in order to receive appropriate treatment’. Other provisions of this regulation that are relevant to some cases will be mentioned in the following.

116  Roberto Cisotta (a)  whose condition requires benefits in kind which become necessary on medical grounds during a stay in the territory of another Member State, taking into account the nature of the benefits and the expected length of the stay (. . .) (c)  who is authorised by the competent institution to go to the territory of another Member State to receive there the treatment appropriate to his condition, shall be entitled: (i)  to benefits in kind provided on behalf of the competent institution by the institution of the place of stay (. . .) in accordance with the provisions of the legislation which it administers, as though he were insured with it; the length of the period during which benefits are provided shall be governed, however, by the legislation of the competent State; (. . .) 2. (. . .) The authorisation required under paragraph 1(c) may not be refused where the treatment in question is among the benefits provided for by the legislation of the Member State on whose territory the person concerned resides and where he cannot be given such treatment within the time normally necessary for obtaining the treatment in question in the Member State of residence taking account of his current state of health and the probable course of the disease. (. . .)

Regulation 1408/71 is clearly aimed at facilitating the mobility of workers by establishing the rules concerning some essential social benefits. Besides, the CJEU, in its first judgments on the mobility of patients, by giving a particular interpretation of the free movement provisions, granted to all European citizens the right to resort to other health care systems should the one with which they are affiliated fail to meet certain standards. Such standards result from national legislations and from some criteria laid down by EU law. A basis to assess the proper functioning of national health care systems in single cases was provided by Article 22 of Regulation 1408/71, just quoted.

B.  Latest Judgments on Mobility of Patients: the Elchinov Case, or ‘Everything You Do Not Say May Be Used against You’ I will start the analysis from a judgment delivered in a preliminary ruling: the Elchinov 9 case. According to Bulgarian legislation, reimbursement in part or in full of expenses incurred for medical treatment abroad is subject to prior authorisation. Bulgarian   Case C-173/09 Elchinov n 10.

9

Limits to Rights to Health Care  117 citizens are compulsorily covered for health care with NZOK10 and the types of health care treatments covered are laid down in a list.11 As a Bulgarian citizen, Mr Elchinov was covered by NZOK. In the main proceeding, Mr Elchinov challenged NZOK’s refusal to authorise him to receive hospital treatment for the serious disease from which he suffered in one of his eyes. He had asked for authorisation to receive in a clinic in Germany a medical advanced treatment which was not available in Bulgaria. In particular, in the aforementioned list, reference is made to ‘other operations on the eyeball’ and to ‘high-technology radiotherapy for oncological and non-oncological conditions’, but treatments available in Bulgaria would have been more radical and much less effective than the one which he finally underwent in Germany, without waiting for NZOK’s response because of the actual course of his disease. In his view, the treatment for which he applied was reimbursable by NZOK and therefore he should have been entitled to authorisation. Mr Elchinov’s case arrived before the Supreme Administrative Court which established the treatment in question was not included in the list, unless it was demonstrated that it could be given in a Bulgarian health care institution. Only then, and if the waiting period in Bulgaria was too long for the probable course of the disease of Mr Elchinov according to Article 22 of Regulation 1408/71, could an authorisation be given. In the course of the new phase of the proceeding, where the unavailability of the treatment in question was confirmed, the Administrative Court of Sofia referred the case to the CJEU.12 The first problem addressed by the CJEU was to establish whether Article 49 EC Treaty (Article 56 TFEU) and Article 22 of Regulation 1408/71 preclude national legislation which requires prior authorisation for reimbursement of hospital treatment given in another Member State. The Court referred to some points of its settled case law which can be summarised as follows.13 Firstly, medical services, and even hospital treatments, fall within the scope of the provision on free movement of   Natsionalna zdravno osiguritelna kasa: Law on health (DV n. 70 of 10 August 2004).   Art 45, para 2 of the Law on sickness insurance: see para 11 of the Court’s decision. 12   According to Bulgarian legislation, a lower court to which a case has been referred back is bound by the guidance given by a higher court that has set aside its previous judgment. With one of the questions referred with the preliminary ruling, the Administrative Court of Sofia asked if it should have been bound by the rulings of a higher court, if they were inconsistent with EU law. This chapter does not cover these aspects. However, the CJEU responded that such rulings should not be followed by a lower court if it considers them inconsistent with EU law having regard to the interpretation it has sought from the CJEU (see paras 21–32 of the Court’s decision; Advocate-General Cruz Villalòn had taken the opposite view: see his Opinion, paras 18–38). On these issues see O Lynskey, ‘Revising the Role of National Courts in Judicial Dialogue in the EU; Elchinov, a Missed Opportunity? (Georgi Ivanov Elchinov/Natsionalna zdravnoosiguritelna kasa, ECJ (Grand Chamber), Judgment of 5 October 2010, C-173/09)’ (2011) European Law Reporter 1, 5–10, esp 9. 13   In fact, this judgment provides a good summary of the preceding case law of the Court on patients’ mobility, which is constantly recalled and to which I will make reference in the footnotes. According to P Mavridis, ‘Derniers développements jurisprudentiels en matière de soins transfrontaliers et de coordination des régimes de securité sociale – Le rôle inestimable de la Cour dans la protection du patient européen’ (2011) L’Observateur de Bruxelles 1, 8–16, esp 14, the Elchinov judgment is an ‘arrêt très didactique’ and so its analysis provides an excellent introduction to the enquiry to be carried out in this chapter. 10 11

118  Roberto Cisotta services.14 Secondly, the Court made it clear that even if secondary legislation applies the provision on the freedom to provide services may apply at the same time. It follows that if national legislation is in conformity with a provision of EU secondary legislation, it still falls within the scope of the Treaty provision,15 which, I would add, may have the effect of further expanding individuals’ rights.16 More specifically, 14   Para 36 of the Court’s decision. As to the preceding case law, see eg the judgment in Watts (n 2) para 86. This can now be considered a classical statement of the case law of the Court, but nevertheless controversial. The issue will not be discussed thoroughly, as it is treated in Baquero-Cruz (n 2); however, some general observations will be provided in section IV. 15   Para 38 of the Court’s decision. See also Watts (n 2) paras 46 and 47. 16   See Joined Opinion of Advocate-General Tesauro in cases Decker (n 2) and Kohll (n 2) points 11 and 12. According to Advocate-General Tesauro, not only has national legislation to be scrutinised with reference to the relevant Treaty provisions once it has been assessed that it is in conformity with Art 22 of Reg 1408/71, but the latter also has to undergo a similar scrutiny should it give rise to a restriction to fundamental freedoms (together with national legislation). It can be argued that Treaty provisions intervene in the second step of the legal analysis carried out by the Court and that they may confer on individuals additional rights to the ones originated by secondary legislation (which could be even annulled in case it turned out to restrict fundamental freedoms). In the aforementioned cases, however, the CJEU, in line with its well-established position, preferred not to set aside the secondary law provision, but gave to the latter an interpretation which is not inconsistent with the Treaty rules: see K Engsig Sørensen, ‘Reconciling secondary legislation with the Treaty rights of free movement’ (2011) European Law Review 3, 339–61, esp 345, fn 36. According to E Spaventa, ‘Seeing the Wood Despite the Trees? On the Scope of Union Citizenship and its Constitutional Effects’ (2008) Common Market Law Review 1, 13–45, esp 43, fn 120, a trend can be detected in EU law – and examples can be found in cases regarding EU citizenship – that the peculiar situation of the claimant has to be taken into account to assess the exact content of EU law in a specific case; on this ground, national authorities have the duty to review the denial of reimbursement on the basis of Art 49 EC (56 TFEU), even when it is consistent with Reg 1408/71 (reference is made in particular to Smits and Peerbooms (n 2) and Müller-Fauré and van Riet (n 2)). More generally, the direct application of the Treaty rule has been interpreted as a call delivered by the Court for appropriate secondary EU law to be implemented; therefore the existing legislation (Reg 1408/71) should be considered ‘out of date and inappropriate’: see A Biondi, ‘Recurring Cycles in the Internal Market: Some Reflections on the Free Movement of Services’ in A Arnull, P Eeckhout and T Tridimas (eds), Continuity and Change in EU Law – Essays in honour of Sir Francis Jacobs (Oxford, Oxford University Press, 2008) 228–42, esp 233 f. A similar kind of stimulus for the legislator was seen in the early case law of the Court on patients’ mobility – but in the context of a more critical perspective – also by V G Hatzopoulos, ‘Killing National Health and Insurance Systems but Healing Patients? The European Market for Health Services after the Judgments of the ECJ in Vanbraekel and Peerbooms’ (2002) Common Market Law Review, 4, 683–729, esp 696–98. Potential clashes between primary and secondary law in this context have been envisaged by M Dougan, ‘Expanding the Frontiers of Union Citizenship by Dismantling the Territorial Boundaries of the National Welfare States?’ in C Barnard and O Odudu (eds), The Outer Limits of European Union Law (Oxford – Portland, Hart, 2009) 119–65, esp 143; according to this author, this system has nevertheless the advantage of ‘promoting greater exportation’ (of health care benefits). However, as we will see, successively the case law seems to have blurred the distinction between rights to cross-border health care respectively originating from freedoms of movement provisions and secondary legislation, when such rights are ‘based on the “undue delay” criterion’: W Sauter, ‘The Proposed Patients’ Rights Directive and the Reform of (Cross-Border) Healthcare in the European Union’ (2009) Legal Issues of Economic Integration 2, 109–31, esp 119. See, to this effect, Inizan (n 2) para 46, Watts (n 2) para 60. Nonetheless, according to Advocate-General Mengozzi, the distinction is not clear in EU legislation anymore (see Opinion in Case C-211/08 Commission v Kingdom of Spain, point 71). Moreover, the point seems to be called into question also by the new directive on cross-border health care: see section II.D. As to the right to reimbursement, the distinction of the two sets of rights, one stemming from Reg 1408/71 and the other, additional, arising from freedom of movement provisions is quite clear in the case law; this has been recently confirmed in the judgment of 15 June 2010, Case C-211/08 Commission v Kingdom of Spain, not yet published in ECR. See once more Opinion of Advocate-General Mengozzi in that case, points 39, 56–58 and 70. On all these issues, see also section II.C.i.

Limits to Rights to Health Care  119 Article 22 of Regulation 1408/71 is simply aimed at establishing the cases in which the competent national authorities are obliged not to refuse the authorisation to undergo a health care treatment abroad.17 Finally, the CJEU recalled that Member States retained the power to organise their social security systems. Nevertheless, in exercising that competence, Member States have to comply with EU law and in particular with the free movement provisions.18 In particular, a system of prior authorisation for hospital treatment in another Member State at the expense of the Member State of affiliation is not, in principle, precluded by EU law.19 Moreover, the Court recognised that grounds for justification (in the public interest) for an obstacle to the freedom to provide services might be provided by ‘the possible risk of seriously undermining the financial balance of a social secur­ ity system’; other restrictions may be possible in relation to derogations admissible by virtue of Article 46 EC Treaty (see now Article 52 TFEU), namely the ones related to ‘the objective of maintaining a balanced medical and hospital service open to all’ and ‘the maintenance of treatment capacity or medical competence on national territory’.20 An important point was made as regards the planning of hospital services in Member States, which must be carried out, once more in line with the established case law, with a view to granting ‘sufficient and permanent access to a balanced range of high quality hospital treatment’ and to avoiding wastages.21 Finally, the Bulgarian legislation was subjected to an articulated proportionality test: a system of prior authorisation for hospital treatment abroad at the expense of the Member State of affiliation – ‘based on objective, non-discriminatory criteria which are known in advance, in such a way as to circumscribe the exercise of the national authorities’ discretion, so that it is not used arbitrarily’22 – has to be evaluated in the light of the needs of a national health care system as spelled out by the Court itself and just summarised. According to the CJEU, EU law precludes 17   Paras 38–39 of the Court’s decision. See Vanbraekel and others (n 2) paras 30–31. As has been noted, Elchinov provides a confirmation that the requirement of prior authorisation in itself is not ‘absolute’: see A P van der Mei, ‘Case C-512/08, Commission v France, Judgment of the European Court of Justice (Grand Chamber) of 5 October 2010, nyr, and Case C-173/09, Georgi Ivanov Elchinov v Natsionalna zdravnoosiguritelna kasa, Judgment of the Court of Justice (Grand Chamber) of 5 October 2010, nyr’ (2011) Common Market Law Review 4, 1297–1311, esp 1306. 18   Para 40 of the Court’s decision. See Smits and Peerbooms (n 2) paras 44–46, Müller-Fauré and van Riet (n 2) para 100, Inizan (n 2) para 17, Watts (n 2) para 92. For the first significant statements in the case law of the CJEU to the effect that Member States have maintained the powers to organise their health care systems see Case 238/82 Duphar BV et al v The Netherlands State (Duphar) [1984] ECR 523, para 16; Joined Cases C-159/91 and C-160/91 Poucet and Pistre v AGF and Cancava [1993] ECR I-637, para 6; Case C-70/95 Sodemare et al v Regione Lombardia (Sodemare) [1997] ECR I-3395, para 27. 19   Para 41 of the Court’s decision. See Smits and Peerbooms (n 2) para 82 and Watts (n 2) para 113. 20   Para 42 of the Court’s decision. See, also for other possible grounds for justification, Kohll (n 2) paras 41, 50 and 51, Smits and Peerbooms (n 2) paras 72–74, Müller-Fauré and van Riet (n 2) paras 67 and 73 and Watts (n 2) paras 103–05. 21   Para 43 of the Court’s decision. See Smits and Peerbooms (n 2) paras 76–79 and Watts (n 2) paras 108 and 109. 22   Para 44 of the Court’s decision. See Smits and Peerbooms (n 2) paras 82–90, Müller-Fauré and van Riet (n 2) paras 83 and 85 and Watts (n 2) paras 114–16.

120  Roberto Cisotta legislation (such as the Bulgarian one appears to be23), that excludes reimbursement for hospital treatment in another Member State when a citizen has been forced to resort urgently to such a treatment because of his clinical condition. Thus, the Court seems to affirm that a system of prior authorisation, although admitted in principle by EU law, should always provide a solution for those cases in which such an authorisation cannot be obtained in due time. The most innovative part of the CJEU’s decision in the Elchinov case regards the lack of definition in the national legislation of the precise treatment to be applied in each case (and, in particular, in the one concerning the applicant). This circumstance, combined with the fact that the treatment available in Bulgaria would have been more radical and much less effective for Mr Elchinov, made it difficult to assess whether the more advanced treatment which the applicant underwent in Germany had to be considered among those (not available but) covered by Bulgarian legislation. The CJEU’s line of reasoning starts from the analysis of the second subparagraph of Article 22(2) of Regulation 1408/71, which lays down two conditions that, if met, preclude national authorities from refusing the authorisation to undergo the treatment in question abroad. As to the first condition, such treatment should be ‘among the benefits provided for by the legislation of the Member State on whose territory the person concerned resides’. Member States are allowed to list the treatments available in their health care systems and it is for the competent authorities to assess whether a certain treatment is among those included in such lists or not. Nonetheless, the CJEU took the view that national legislation has to be applied in conformity with the proportionality test, in the form just summarised.24 Thus the CJEU stated that: where the list of medical benefits reimbursed does not expressly and precisely specify the treatment method applied but defines types of treatment, on the one hand, (. . .) it is for the competent institution of the Member State of residence of the insured person to assess, applying the usual principles of interpretation and on the basis of objective and non-discriminatory criteria, taking into consideration all the relevant medical factors and the available scientific data, whether that treatment method corresponds to benefits [‘prestations’ in the French version] provided for by the legislation of that Member State. It also follows, on the other hand, that, if such is the case, an application for prior authorisation cannot be refused on the ground that such a treatment method is not available in the Member State of residence of the insured person, since such a ground, if it were accepted, would imply a restriction on the scope of the second subparagraph of Article 22(2) of Regulation No 1408/71.25 23   The CJEU finds that the Bulgarian legislation is ambiguous and thus underlines that it is for the national court to assess whether it is incompatible with EU law or not and, should the relevant provision (Art 36 of the Law on sickness insurance) be interpreted in different ways, to choose the one that is consistent with EU law (see paras 50–51 of the Court’s decision). 24   Paras 56–60 of the Court’s decision. See Smits and Peerbooms (n 2) para 87. 25   Para 44 of the Court’s decision, emphasis added. The ‘insurance package’ may not always be precisely defined, eg ‘because of constantly and rapidly changing developments in medical circles’: van der Mei (n 18) 1304. Before the Elchinov judgment, a similar observation was made by C Newdick,

Limits to Rights to Health Care  121 As to the second condition set out in the second subparagraph of Article 22(2) of Regulation 1408/71, concerning the undue delay within which the health care can be provided, the CJEU firstly stated that where the treatment to be given in another Member State is not available in the Member State of affiliation, it cannot be automatically deduced that that condition is met. In fact, should a different treatment with a comparable ‘degree of effectiveness’ be available without undue delay in the Member State of affiliation, the authorisation could be refused.26 The consequence that stems from this reasoning is that in the case of Mr Elchinov, given the unavailability in Bulgaria of a treatment as effective as the one that had been given in Germany, the Bulgarian authorities had to (grant authorisation and) cover the relative costs. The scrutiny to be carried out by national authorities has thus to refer to the benefits provided for by the national legislation, regarded, one may say, as referring to the objective of the recovery from a certain disease. This appears to be the real meaning of the reference to the ‘degree of effectiveness’ and to the ‘benefits’ provided for in the national list (where – bien entendu! – treatment methods are not clearly specified). At the end, this recovery-oriented interpretation of national legislation seems to reduce the powers of the Member State, which have been in principle recognised, to organise its own health care system by listing the available treatments.27 Where such a list is not sufficiently precise, it could be interpreted as to be based on the recovery from the disease related to each listed ‘benefit’. I shall come back briefly to this point later on, when assessing the significance of the whole judgment.

‘Citizenship, Free Movement and Health Care: Cementing Individual Rights by Corroding Social Solidarity’ (2006) Common Market Law Review 6, 1645–68, esp 1661. 26   Paras 64 and 65 of the Court’s decision. See Inizan (n 2) paras 45, 59 and 60 and Watts (n 2) paras 59–61. The medical history of the patient, his current condition, the degree of pain or the disability from which the patient might suffer (and that might affect, for example, his capacity to carry out a professional activity), as well as the probable course of his disease are to be taken into account: para 66 of the Court’s decision. See Inizan (n 2) para 46 and Watts (n 2) para 62. The CJEU thus interprets the expression ‘such treatment’ (see the exact wording of the provision in section II.A.) extensively. A restrictive interpretation would have entailed that authorisation may be refused when there is an available treatment in the state of affiliation, even if not as effective as the one available in the other Member State considered: van der Mei (n 18) 1305. 27   There had been other cases in which patients were recognised as having the right to receive a treatment abroad to which they would not have had access in their state of affiliation: see Smits and Peerbooms (n 2) paras 89–98. In that case, EU law had the effect of imposing a certain interpretation of a national provision. See E Spaventa, Free Movement of Persons in the European Union: Barriers to Movement in their Constitutional Context, (Alphen aan den Rijn, Aspen, 2007) 58. As to the problem of the cover of treatments not offered by domestic health systems, T Sokol, ‘Rindal and Elchinov: A(n) (Impending) Revolution in EU Law on Patient Mobility?’ (2010) Croatian Yearbook of European Law and Policy 6, 167–208, esp 192 ff has drawn attention also to the judgment of the EFTA Court of 19 December 2008, Joined Cases E-11/07 and E-11/08 Olga Rindal and Therese Slinning v The Norwegian State, EFTA Ct Rep 319. According to the author, the case was similar to Elchinov to some extent. However, when he wrote, the Elchinov case was still pending and he hoped the CJEU would have ruled in a way more favourable to the Bulgarian state than it actually did.

122  Roberto Cisotta The CJEU then analysed the presumption formulated by the Bulgarian Supreme Administrative Court28 and which may be summarised as follows: as the hospital treatment in question cannot be given in Bulgaria, it should not be considered as being among those reimbursed by NZOK.29 The CJEU rejected this presumption on the basis of some elements flowing from the points already made. Firstly, it established that the correspondence of the treatment in question with the benefits granted by national legislation (cannot be presumed but) has to be assessed; however, as I have just pointed out, the unavailability of the treatment in Bulgaria cannot justify, per se, the refusal of the prior authorisation. In addition, a refusal may be based on the availability of an alternative treatment in Bulgaria with a comparable degree of effectiveness. Therefore, the unavailability of that particular treatment does not entail that it is not reimbursed by NZOK. Moreover, the CJEU noted that, in substance, such a presumption would amount to an inadmissible restriction – because not founded on the imperatives spelled out by the Court itself and summarised above – to the freedom to provide services, as well as to a restriction to the scope of the second subparagraph of Article 22(2) of Regulation 1408/71.30 As a last step, the Court dealt with the issue of the amount of the reimbursement and the related powers of the national competent court.31 Such amount has to be calculated with reference to the legislation governing the institution of the Member State on whose territory the hospital treatment was given.32 Moreover, the CJEU recalled its preceding case law, according to which the insured person is entitled also to receive a complementary reimbursement should the amount of the sum resulting from the application of the legislation of the Member State where hospital treatment has been given be less than that that should have been provided in the Member State of affiliation.33 However, as a general rule, persons who have received hospital treatment in another Member State, without applying 28   This was one legal point made by the Supreme Administrative Court and which, according to Bulgarian law, should have been followed by the lower court. 29   It would follow that when a treatment is reimbursed by NZOK it can be given in Bulgaria. 30   Paras 69–72 of the Court’s decision. 31   Once the hospital treatment has already been given, the issue of the form E112 to the insured person is unnecessary (although the referring court had asked the CJEU to clarify the point), unless the treatment has still not been paid by the insured person or he has not been given the invoice yet (para 72 of the Court’s decision). 32   Para 77 of the Court’s decision. See Vanbraekel and others (n 2) para 32. According to the CJEU, it is for the national court to order the competent institution, following the national procedural rules, to reimburse such amount. 33   Para 77 of the Court’s decision. See Vanbraekel and others (n 2) paras 38–52 and of 15 June 2010, Case C-211/08 Commission v Kingdom of Spain (n 16) paras 56–57. If, in the Member State of affiliation, hospital treatment is provided free of charge under the national health care system, and if the legislation of that state does not provide for reimbursement in full for health treatments received abroad (authorised or that should have been authorised), the complementary reimbursement would amount to the difference between the following two amounts: on the one hand, the cost of the treatment (objectively quantified) in the Member State of affiliation up to the total amount invoiced for the treatment abroad; on the other hand, the sum the institution of the host Member State has to reimburse under Art 22(1)(c) i of Reg 1408/71 on behalf of the competent institution according to the legislation of that Member State. See para 79 of the Court’s decision and judgment in Watts (n 2) para 143.

Limits to Rights to Health Care  123 for prior authorisation or where a refusal to issue such an authorisation is justified (according to Article 22 of Regulation 1408/71), are only entitled, on the basis of Article 49 EC (56 TFEU), to claim costs of that treatment within the limits of the cover provided by the insurance scheme of affiliation.34 The Elchinov judgment has been subject to criticism because it may be considered only apparently favourable to patients’ rights, as it leaves wide room for manoeuvre to national courts and authorities, namely with regard to the definition of the types of treatment methods available in the system.35 This is true, evidently. However, the interpretation I have proposed is more oriented in the sense that national discretion also has to be driven by a rights-based approach. As it has been pointed out, the CJEU seems to have given quite precise guidance to national authorities by implicitly defining the recovery of the patient as the central interpretative principle in the case of lack of a specific list of treatments in national legislation. According to some other scholars, by affirmimg the existence of the obligation for Member States to cover the most effective treatment existing – in the case in which types of treatments are not defined specifically, like in the Bulgarian legislation – the Court potentially created problems especially for the newly-entered Member States.36 Those states in fact are probably the ones which may have more difficulties in providing the most advanced health treatments and such mechan­ ism may trigger considerable outflows of patients. The CJEU – as will be even clearer after the analysis of the other judgments below – is chiefly concerned with the preservation of the Member States’ power to plan in the health care sector. Accordingly, once Member States have had the chance of organising their own health care system within the limits recognised by EU law, they are forced to accept the competition with the other national health systems triggered by the mobility of patients. In particular, if they have failed to define specifically the treatments available, they have to bear the consequences of this imprecise organisation. Paraphrasing a famous movie sentence, ‘everything Member States do not say may be used against them’! One may argue that, in the Court’s view, Member States can always re-organise their systems and list each specific available treatment. By this means, they would also regain effective control over patients seeking more advanced treatments (and over the related expenses). On the one hand, Member States may be ‘forced’ by EU Law to adjust37 their health care systems and that would not necessarily result in an authentic limit to 34   Para 80 of the Court’s decision. See Müller-Fauré and van Riet (n 2) paras 98 and 106. The cited point of the Elchinov judgment is important as it clearly stipulates that complementary reimbursement does not cover differences in tariffs. Otherwise, in case of lower tariffs in the state of treatment, the patient would benefit from a subsidy which would not be easy to justify: see van der Mei (n 18) 1308. 35   See Baquero-Cruz (n 2). 36   See T Sokol, ‘Rindal and Elchinov: A(n) (Impending) Revolution in EU Law on Patient Mobility?’ (2010) Croatian Yearbook of European Law and Policy 6, 167–208, esp 197; Lynskey, (n 12) 8. 37  See Müller-Fauré and van Riet (n 2) para 102: ‘achievement of the fundamental freedoms guaranteed by the Treaty inevitably requires Member States to make some adjustments to their national systems of social security. It does not follow that this would undermine their sovereign powers in this field’.

124  Roberto Cisotta the policy options available, but flows from the circumstance that national health systems are in competition. On the other hand, they may be given the possibility of shaping their health care system in such a way as to avoid some undesired effects of this competition. Hence, the real drawback of the Elchinov judgment may be that newly-entered Member States can establish more precise lists of treatments,38 which leave no room for interpretation to the CJEU and, especially, to national authorities, with this resulting in a substantial compression of the potentialities of expansion of their citizens’ rights.

C.  Latest Judgments on Mobility of Patients: the Infringement Procedures against Spain, France, Luxembourg and Portugal Recently, the Commission has brought before the CJEU four infringement procedures against respectively Spain, France, Luxembourg and Portugal, whose legislation it deemed to be inconsistent with Regulation 1408/71 and the Treaty provisions on freedom of movement, as interpreted by the CJEU itself in the domain of patients’ mobility. i.  Commission v Spain – The Limiting Effects of the Planning Needs of Member States as Regards the Cover for Unscheduled Health Care Treatments Abroad Following chronological order, I will now analyse the judgment concerning Spain.39 The action was dismissed and with this judgment the Court acknow­ledged the existence of some limits – stricter than one might have thought – to the rights to cross-border health care. The Spanish health care system provides benefits entirely free of charge to people covered by it. However, as a general rule, insured persons have to pay for their own benefits provided outside the system and no reimbursement is provided.40 The benefits and services available within the system are listed by a national law.41 Against this background, attention must be drawn in particular to Article 5(3) of Royal Decree 63/1995 on the organisation of health benefits within the ‘National Health Service’,42 which establishes that reimbursement is provided only where ‘immediate, urgent, life-saving treatment has been administered outside the

  van der Mei (n 18) 1306.   Case C-211/08 Commission v Kingdom of Spain (n 16).   Ley 14/1986, General de Sanidad of 25 April 1986 (‘the General Law on Health’). See in particular Art 17 for the exclusion of reimbursement of treatments provided outside the system. 41   Ley 16/2003, de cohesión y calidad del Sistema Nacional de Salud of 28 May 2003. 42   Real Decreto 63/1995, sobre ordenación de prestaciones sanitarias del Sistema Nacional de Salud of 20 January 1995. Furthermore, Art 4(3) of Royal Decree 1030/2006 – which has similar wording to Art 5(3) of Royal Decree 63/1995, just quoted – clarifies that such rule will be ‘without prejudice to the provisions of international agreements to which Spain is party or the provisions of domestic law governing treatment in the event of services being provided abroad’. 38 39 40

Limits to Rights to Health Care  125 national health system’ and where it was not possible to resort to a treatment to be given by the latter in good time.43 In substance, should a person covered by the Spanish health care system need hospital treatment during a temporary stay in another Member State (as an outcome of changes in the condition of his or her health during the course of such stay), costs of such a treatment would be covered by the institution of affiliation only within the limits of the obligations stemming from Regulation 1408/71. Therefore, the Spanish institutions would not reimburse the part of the cost of the treatment which is not covered by the institution of the host Member State,44 the only exception being that envisaged by Article 4(3) of Royal Decree 1030/2006 (‘urgent, life-saving treatment’). In the Commission’s view, such limits are in breach of Article 49 EC Treaty (Article 56 TFEU), from which stems the right of complementary reimbursement, as recognised by the case law of the Court, and in particular by the Vanbraekel and Others judgment.45 The Court started by recalling the well-established legal framework governing patients’ mobility: first, conformity of national legislation with Regulation 1408/71 does not exclude the applicability of Article 49 EC Treaty, and, second, health services (even hospital treatments, including for persons who initially move for other purposes, and regardless of the payment system and the possibility of reimbursement) certainly fall within the scope of it. The Court concluded by reaffirming that Member States have retained the competence to organise their national health care system and by briefly summarising the mechanism of reimbursements for health care treatments abroad according to Regulation 1408/71 and Article 49 EC Treaty, as interpreted in its case law.46 The CJEU considered that the legislation at issue concerned ‘unscheduled [hospital] treatment[s]’ (envisaged by Article 22(1)(a) of Regulation 1408/71), while in other cases brought before it ‘scheduled treatment[s]’ (regulated by Article 22(1)(c) of Regulation 1408/71) were at stake.47 In the case of scheduled treatment, a comparison between the one available abroad and the one which could be provided in the state of affiliation has to be made, particularly as regards their 43   See paras 11–19 of the Court’s decision for a presentation of both EU law applicable provisions and Spanish legislation. Despite the numerous EU law provisions invoked, the action was brought for an infringement of Art 49 EC Treaty (Art 56 TFEU); given this circumstance, the Kingdom of Spain also contested the admissibility of the action, but according to the CJEU, the Commission had specified clearly enough the obligations Spain had allegedly failed to fulfil and their source, that is to say Art 49 EC Treaty. Clearly, the Court’s considerations regarded the clarity of the whole legal framework against which national legislation had to be set; nevertheless, this line of reasoning may also be considered as a confirmation that the Court regards the Treaty provisions on freedom of movement as the ultimate source of the rights of EU patients to be given health care treatments in another Member State. 44   The problem arises where the level of cover in the host Member State is lower than that provided by Spanish legislation, as the person affiliated with the Spanish health care system would not be entitled to ask for complementary reimbursement. 45   Vanbraekel and Others (n 2) paras 36–37 ff. 46   Paras 45–53 and 56–57 of the Court’s decision. See section II.B. for references to preceding case law. 47   See section II.A. for the wording of the two provisions. Reference is made in particular to Vanbraekel and others (n 2) and Watts (n 2).

126  Roberto Cisotta effectiveness and the delays within which they would respectively be given. The right to a complementary reimbursement may arise from such comparison. In fact, if a treatment with a degree of effectiveness comparable to the one available in the other Member State could not be provided in the Member State of affiliation without undue delay, the latter state would be obliged to ensure a level of cover which causes no disadvantages to the insured person. Such level cannot be lower than the one that would have been ensured in the state of affiliation, had the treatment been provided there. In case of unscheduled treatment, no previous assessment has been made: the patient has not been forced to travel because of an ascertained ‘inadequacy in the health service to which he is affiliated’ and, therefore, EU law provides no guarantee to the effect that any kind of unplanned hospital treatment would be ‘neutral in terms of cost’, as a result of the lack of harmonisation in the field (Regulation 1408/71 merely coordinating national legislations). In case of scheduled treatment, the Member State of affiliation has had the chance to carry out the planning activity of its own health care system and, one may say, it has failed, as an effective and timely (hospital) treatment is not available. In other terms, complementary reimbursement, even if in principle financially neutral for the state of affiliation, can be intended as a sanction charged on it. On the other hand, a planning activity can be carried out by the patient too, who can compare in advance the two available treatments in terms of timeliness, effectiveness and cost. In these conditions, the lack of reimbursement for a possible positive difference between the two costs would amount to a restriction to the freedom to provide services, as the patient would probably be induced to renounce the (maybe already planned) treatment in the other Member State, which may be more expensive, but available earlier and/or more effective. The CJEU took the view that, in cases of unscheduled treatments, the Spanish legislation does not have restrictive effects on the freedom to provide (hospital) services; in fact, in ‘an indefinite number of cases’, hospital treatment in the host Member State would be the only real possibility, owing to the health conditions of the patient (‘the state of health of the insured person makes hospital treatment necessary’).48 Therefore, the Court interpreted Article 22(1)(a) of Regulation 1408/71 as a provision that merely confers upon the insured person the right to undergo an unscheduled hospital treatment in another Member State in case of need.49   Paras 59–65 of the Court’s decision.  Para 67 of the Court’s decision. The Court referred to Decision 194 of the Administrative Commission of the European Communities on Social Security for Migrant Workers of 17 December 2003 concerning the uniform application of Art 22(1)(a)(i) of Regulation 1408/71 in the Member State of stay [2004] OJ L 104/127, which reads as follows: ‘1. Benefits in kind which become medically necessary and which are granted to a person staying temporarily in another Member State, are covered by the provisions of Article 22(1)(a)(i) (. . .) with a view to preventing an insured person from being forced to return before the end of the planned duration of stay to the competent State to obtain the treatment he/she requires. – The purpose of benefits of this type is to enable the insured person to continue his/ her stay under safe medical conditions, taking account of the planned length of the stay. – However, the situation where the aim of the temporary stay is to receive medical treatment is not covered by these 48 49

Limits to Rights to Health Care  127 The Court strongly stressed the fact that the need to undergo a hospital treatment is, in the end, an uncertain event (even for elderly insured persons and for persons suffering from chronic illness). The fact that such an event would induce persons insured under the Spanish system to return to Spain or that the possibility that such an event occurs would make them cancel a planned trip – which constitutes a restriction to the freedom to provide services in case of scheduled hospital treatments – is deemed ‘too uncertain and indirect’.50 Nevertheless, it has been wondered why ‘financial implications’ should be envisaged only in case of unscheduled treatment. An early commentator on this judgment found that the reason behind the differentiation in treatment between scheduled and unscheduled health care remains ‘unclear and unexplained’.51 The last important point made by the Court concerns the possible planning each Member State can put in place as regards the cases of scheduled treatments: when exercising its competence to organise its health care system, the state can improve the effectiveness of hospital health care treatments available, also in order to control the number of treatments in other Member States it would have to authorise. On the contrary, unscheduled treatments cannot be foreseen and there are no measures the state can adopt to reduce the number of treatments it would have to reimburse. Finally, as far as unscheduled hospital treatments are concerned, it may be predicted that cases in which the mechanism set up by Regulation 1408/71 gives rise to a heavier burden would be counterbalanced by cases in which the cost would be lower for the Member State of affiliation (provided that compensatory reimbursements are not to be paid).52 Therefore, declaring the necessity to pay when the cost abroad is less than in the state of affiliation would undermine the proper functioning of the mechanism. This line of reasoning of the CJEU is not totally persuasive. The underlying assumption is that the costs of the national system considered are somewhere around the average of the costs at the EU level. This automatic compensation would not work should the costs paid for hospital treatment in a state be lower or higher than the average (where the state would respectively overpay or underpay for the unscheduled hospital treatments provided abroad).53 It is true that this judgment deals with some general problems – the distinction between scheduled and unscheduled treatments – that the Court had not had the chance to consider before. Nonetheless, and apart from the relevance of that distinction – already questioned above –, it also seems not to pay proper regard to provisions. – 2. In order to determine whether a benefit in kind meets the requirements set out in Article 22(1)(a)(i), (. . .) only medical factors within the context of a temporary stay, taking into account the medical condition and past history of the person considered, shall be considered’. 50   Paras 68–72 of the Court’s decision. 51  See A P van der Mei, ‘Cross-border access to healthcare and entitlement to complementary “Vanbraekel reimbursement”’ (2011) European Law Review 431–39, esp 437. 52   Paras 75–79 of the Court’s decision. 53   van der Mei (n 51) 438.

128  Roberto Cisotta a practical question which was, by contrast, raised in the Opinion of AdvocateGeneral Mengozzi54 and which can be summarised as follows. This case actually originated from the complaint addressed to the Commission by a French citizen, insured with the Spanish health system, who received health care in France and to whom reimbursement of medical expenses which were been charged to him by the French authorities was refused. According to the Spanish government, such failure to reimburse had been caused by a violation of Article 36 of Regulation 1408/71 – in which the reimbursement obligation is laid down – by the French authorities, which invoiced part of the cost of the treatment to the patient, while they should have invoiced the entire amount directly to the competent Spanish institution. As we have seen, Spanish law authorises the reimbursement only within the limits imposed by Regulation 1408/71, so an extra payment to the patient was not considered possible. As correctly pointed out by Advocate-General Mengozzi, this argument is drawn from a formal and incorrect reading of Article 36 of Regulation 1408/71.55 It is clear, however, that the Court, in the context of an infringement procedure, was obviously more concerned with the preservation of the integrity of national law, which seemed at stake in the case, than with the specific problem which stimulated the Commission to bring the case before it. In doing so, the Court underlined that Member States are able to control authorisations to be issued for scheduled treatments, while they cannot do it for unplanned ones. In such planning, due account has clearly to be taken of the degree of efficiency of the health systems of the other Member States. Even in this judgment, which might seem to mark a reconsideration of the preceding case law (or maybe of the general approach adopted), the CJEU did not renounce, at least implicitly, the assumption (and toleration) that a race between Member States to achieve efficient organisation of health care systems is triggered by the provision of cross-border scheduled health care. Hence, and always bearing in mind that it was an infringement procedure, one may say Commission v Spain might mark the start of a re-thinking of the patients’ mobility case law, but to a relatively limited extent, that is to say solely with regard to the emphasis given by the CJEU to some already well-known aspects: patient

54   Opinion of Advocate-General Mengozzi (n 16). Advocate-General Mengozzi, moreover, considered that Spanish legislation had a restrictive effect on the exercise of fundamental freedoms and in particular on the freedom to provide services, on the basis, principally, of the preventive effect of the incomplete coverage of the medical expenses to be sustained abroad: see points 84 ff. 55   As acknowledged by the preceding case law of the Court, the authorities of the place of stay have to apply their national legislation when providing the treatment at issue: Vanbraekel and others (n 2) para 55. In this particular case, the French authorities had to invoice part of the cost to the patient if this was provided by their legislation for national patients. However, Art 36 has to be read in conjunction with Art 22 of Reg 1408/71 with a view to ensuring real full reimbursement to the migrant patient. In such a case, the search for complementary reimbursement under the rules laid down in the case law of the Court and derived from Art 49 EC (56 TFEU) can be linked functionally to the simple right of full reimbursement under the provisions of Reg 1408/71: see Opinion of Advocate-General Mengozzi (n 16) points 62–65.

Limits to Rights to Health Care  129 mobility is not just an individual’s affair, but a question of opportunities to be given to Member States to counteract potentially dangerous patient flows, and, as usual, a matter concerning competition among national health systems. The relative weights of such considerations have simply been considered different in the case of unscheduled treatment.56 It has been noted that unscheduled treatments should fall within the scope of the new directive on cross-border health care,57 so that complementary reimbursement might now be possible on that basis. ii.  Commission v France – Health Care Treatments Abroad Concerning the Use of Major Medical Equipment and the National Implementation of the Vanbraekel Rules for Complementary Reimbursement Another infringement procedure in the field of patients’ mobility was brought against France58 and the judgment was delivered on the same day as Elchinov. Faced again with a problem concerning the crucial issue of planning the organisation and utilisation of structures and resources in the health care sector, the CJEU once more showed favour to Member States’ claims, and at the end the Commission lost the case. The most important remarks were made by the Court with reference to the first head of claim, based on Article 49 EC (56 TFEU), and that concerned the requirement of prior authorisation for non-hospital treatment proposed in another Member State – with the exception of unforeseen treatments – and involving the use of major medical equipment.59 After having recalled the usual legal background in the field of patients’ mobility with which we are now well acquainted,60 the Court stated that the prior authorisation required by French law amounts to a restriction to provide services, as it ‘is capable of deterring, or even preventing, persons insured under the French system from applying to providers of medical 56   Some scholars had noted, before the delivery of the judgment, that complementary reimbursement for unscheduled treatments could have caused a considerable growth of administrative flow to be managed by competent national authorities. See M Coucheir and Y Jorens, ‘Patient Mobility in the European Union – the European Framework in relation to patient mobility’, report written for the European Sixth Framework Project Europe for Patients, European Commission, DG Research, 2007, reported by Palm and Glinos, ‘Enabling Patient Mobility in the EU: Between Free Movement and Coordination’ in Mossialos, Permanand, Beaten and Hervey (n 2) 509–60, esp 538. According to van der Mei (n 51) 438, this consideration might have been taken into account by the CJEU in Commission v Spain, even if the exclusion of unscheduled treatments was not proposed by any Member State during the negotiations for the new directive on cross-border health care. 57   van der Mei (n 51) 438. 58   Case C-512/08 Commission v France [2010] ECR I-8833. 59   See Art R 332-4 of the social security code. See para 3-9 of the Court’s decision for a presentation of the French legislation relevant to the case. 60   Paras 29–31 of the Court’s decision. The main points are: the re-affirmation of Member States’ competences in the health care sector and the parallel statement to the effect that they have, nevertheless, to respect EU law, the inclusion of all medical services in the scope of free movement provisions and the right of recipients to move to another Member State to undergo health care treatments. See paras 3 and 4.

130  Roberto Cisotta services established in (. . .) another Member State in order to obtain’ the planned treatment.61 Following the usual line of reasoning, the Court wondered whether a justi­ fication for such a restriction could have been provided. Grounds that may provide justification for a prior authorisation requirement for hospital treatments according to the preceding case law of the Court were transferred to the field of non-hospital treatments involving the use of major medical equipment, assuming the same rationale can support the discipline of the two different kind of health care provision.62 Therefore, the restriction caused by the French legislation may be justified by ‘the object[ive] of ensuring sufficient and permanent access to a balanced range of high-quality treatment’ and ‘the wish to control costs and avoid, so far as possible, any waste of financial, technical and human resources’.63 In the Müller-Fauré and van Riet64 case, the question had already arisen as to whether it was always possible to draw a neat dividing line between hospital and non-hospital services and the Court had started to elaborate on that problem. According to the position taken by the Commission in the Commission v France proceeding, the difficulty in drawing a dividing line should lead to affirm that, as treatments involving major medical equipment may be given in a non-hospital setting, concerns over planning requirements should be regarded as quite irrelevant in the case at issue. On the contrary, taking into account the huge expenses related to the use of major medical equipments, the Court stipulated that Member States are to be given the possibility to plan their quantity and geographical distribution.65 Against this background, the Court considered that a free system in which insured persons could undergo the treatments considered in another Member State at the expense of French institutions with no restrictions (‘freely and in any circumstances’66) would lead to undermining the efficacy of the plans of the authorities and to a possible under-use of those expensive equipments, with negative financial effects.67 The Court thus confirmed its approach – called ‘functional’ by the legal doctrine68 – and which was actually already sketched in Müller-Fauré and van Riet: when it has to be stated if the Member State has the right to require prior authorisation for the reimbursement of the provision of certain treatment in another Member State on the grounds that proper planning for the relative equipment is   Para 32 of the Court’s decision.   Para 34 of the Court’s decision. The Court recalls that such a system has, however, to be based on objective, non-discriminatory criteria that have to be established in advance: see Elchinov (n 9) para 44 (see section III. with references to the preceding case law). 63   Para 33 of the Court’s decision. See Smits and Peerbooms (n 2) paras 76–81, Müller-Fauré and van Riet (n 2) paras 76–81 and Watts (n 2) paras 108–10. 64   Müller-Fauré and van Riet (n 2) para 75. 65   Paras 36–37 of the Court’s decision. A detailed list of major medical equipments as well as the planning policy to which they are subjected is provided by French law: Art R. 6122-26 of the Public Health Code. 66   Para 40 of the Court’s decision. 67   Paras 40–42 of the Court’s decision. 68   van der Mei (n 18) 1302. 61 62

Limits to Rights to Health Care  131 needed, it is not decisive whether such treatment has to be provided in a hospital setting or not. In fact, the Court had already stipulated that prior authorisation cannot be required for treatments provided in a hospital, but that could have been provided in a different setting.69 Now in Commission v France, the Court clarified that the opposite case is also possible: treatments provided outside a hospital setting with the use of equipment for which appropriate planning is necessary justify the requirement of prior authorisation (to those patients who ask to undergo those treatments in another Member State). The CJEU also rejected the second head of claim, regarding the lack of an explicit provision in the French legal order to the effect that persons insured in France are entitled, in case of health care received abroad, to an additional reimbursement according to the conditions laid down in the Vanbraekel and others judgment.70 The Court held that the Commission had failed to demonstrate the non-compliance of France. In particular, no French court decision contrary to the aforementioned principle had been mentioned by the Commission and the latter had provided no evidence of the existence of provisions of French law (or administrative practices) that might preclude such a reimbursement.71 Furthermore, the Commission did not demonstrate the existence of any case of alleged refusal by a French authority to recognise the right of an insured person to a complementary reimbursement under the conditions spelled out in the Vanbraekel and others judgment.72 What is, prima facie, striking, is that the Court paid much more attention to the praxis of French administration and the judiciary, than to the national legal framework. In fact, France maintained that national judges have to protect the rights to a complementary reimbursement of insured persons as it flows directly from Article 49 EC (56 TFEU), given the direct effect of that provision. The Commission held that some provisions of the complex legal framework governing health care in France could have caused ambiguities and given rise to practices in contrast with the right to reimbursement at issue.73 Moreover, the fact that the right to complementary reimbursement was envisaged only in some administrative circulars74 was not considered sufficient to demonstrate that France had failed to provide such a reimbursement to persons in the situation referred to in the   Müller-Fauré and van Riet (n 2) para 75.   Vanbraekel and others (n 2) para 53. See section III.   Paras 60–61 and 63 of the Court’s decision. 72   On the contrary, France had mentioned a judgment of the Cour de Cassation in which the right to a complementary reimbursement was recognised as stemming from Art 49 EC (paras 40–42 of the Court’s decision), as well as several cases of insured persons in a situation like the one referred to in para 53 of the Vanbraekel and others case (n 2) who had obtained (or were about to obtain) the complementary reimbursement in the terms laid down in that judgment (para 68). 73   See respectively paras 49 and 59 of the Court’s decision. 74   On these circulars, see Opinion of Advocate-General Sharpston of 15 July 2010, Case C-512/08 Commission v France, points 13–16. The Commission only relied on the fact that, in the jurisprudence of the CJEU, administrative instruments are considered insufficient of to ensure legal certainty with regard to the implementation of EU law: see eg judgment of 15 March 1983, Case 145/82 Commission v Italy [1983] ECR 711. 69 70 71

132  Roberto Cisotta Vanbraekel and others judgment, because, as already pointed out, no evidence of administrative practices in contrast with EU law was given by the Commission. However, because of the Commission’s failure to meet the burden of proof, the unsatisfactory praxis of French authorities as regards the ‘Vanbraekel’ reimbursement was not properly addressed and concerns over such praxis remain.75 iii.  Commission v Luxembourg – The Powers of Member States to Set Conditions for the Cover of Medical Analyses Carried Out Abroad The infringement procedure brought against Luxembourg directly concerned the right of patients to cross-border health care:76 the legislation of this state does not allow reimbursement of the costs of medical analyses carried out in another Member State, providing ‘only for liability for those analyses to be accepted only by a paying third party’.77 It follows that the sickness insurance funds cannot reimburse such costs, as there is no scale of charges for benefits.78 In addition, reimbursement of medical analyses carried out in another Member State is possible only provided that dispensing conditions laid down in Luxembourg national agreements have been fully respected by the foreign provider.79 The Commission maintained that this legislation was inconsistent with Article 49 EC (Article 56 TFEU). The problem arose with reference to the acceptance of liability for health care treatments given by providers which had not signed an agreement with the Luxembourg sickness insurance funds, as the system of direct billing under Luxembourg law works only for treatments provided by a contractual provider. The CJEU noted that providers which have made an agreement with the sickness insurance funds are chiefly those established in the territory of the Member State, when the social security scheme is based on a system of compulsory agreements with providers, like in Luxembourg. In fact, providers established in other Member States, although in principle permitted to enter into such agreements, would have little possibility of giving treatments to persons insured by those funds. The Court, in the light of the usual legal background, took the view that this system amounts to a restriction to the freedom to provide services.80 75   See C Boutayeb, ‘Les soins médicaux envisagés dans un cabinet de ville d’un autre État membre requièrent un autorisation préalable, Note sous CJUE, Gde ch., 5 oct. 2010, Commission européenne c/ France, aff. C-512/08’ Revue de droit sanitaire et social 67–75. 76   Case C-490/09 Commission v Luxembourg [2011] ECR I-247. 77   Para 1 of the Court’s decision. See Art 24 of the Luxembourg Social Security Code. 78   The procedure started as two complaints were referred to the Commission: the first concerned a situation like the one envisaged in the text, in which reimbursement was refused through the lack of a scale of charges (see para 6 of the Court’s decision). 79   Art 12 of the Statuts de l’Union des caisses de maladie. This was the situation regarding the second complaint: samples for blood analyses were taken directly by a doctor in Germany and reimbursement was not possible as Luxembourg’s law requires that such samples are taken in a ‘separate analysis laboratory’ (see para 7 of the Court’s decision). 80   Paras 39–41 of the Court’s decision.

Limits to Rights to Health Care  133 The attempts carried out by Luxembourg to provide a justification for such a restriction failed. Firstly, the argument that the whole system would be jeopardised81 should insured persons be free to receive health care abroad was rejected. According to Luxembourg, if an insufficient number of persons resorted to the providers established in the Grand Duchy, such providers would refuse to fulfil the obligations stemming from the system of agreements. However, the Court found that it was not demonstrated that by granting reimbursement to persons who have received medical care abroad the Luxembourg system would be undermined. Secondly, Luxembourg maintained that, although it is still for Member States to set up their national social security system, it would be forced to abandon the chosen model and the operation of the system would be negatively affected if a system of reimbursement for health care received in another Member State had to be established. This argument was rejected, too, as the Court recalled that, even if the competence of Member States to shape their social security system is not at issue, some adjustments are ‘inevitably’ required in order to achieve the fundamental freedoms guaranteed by the Treaty. In particular, the existence of the obligation for Member States with a system providing benefits in kind to establish mechanisms for ex post facto reimbursement for treatments provided in other Member States had already been affirmed in the case law of the CJEU.82 Luxembourg claimed that some ‘instructions’ issued by the Inspectorate General of Social Security would have avoided any infringement of EU law, but, in this case – in line with its long-standing jurisprudence (although apparently contradicted in Commission v France, just examined) – the Court stated that such instructions ‘cannot be regarded as constituting the proper fulfilment of obligations under the Treaty’.83 Therefore, no justification was found for the restriction caused by Luxembourg’s legislation to the freedom to provide services. As to the necessary compliance, for the reimbursement of analyses carried out abroad, with the dispensing conditions laid down in Luxembourg national agreements, the CJEU found that the Commission had failed to demonstrate that such conditions were incompatible with article 49 EC.84 81   As we know, ‘the objective of maintaining a balanced medical and hospital service open to all’ as well as ‘the possible risk of seriously undermining the financial balance of a social security system’ can, in principle, provide grounds for justification for restrictions in the health care sector (para 43 of the Court’s decision; for references to preceding case law, see n 20). 82   Paras 42–45 of the Court’s decision. See section II.B. In fact, in Member States providing benefits in kind, the amounts of reimbursement that can be claimed by insured persons who have received health care treatments abroad could be fixed in advance, ‘provided that those amounts are based on objective, non-discriminatory and transparent criteria’ (para 46 of the Court’s decision; see Müller-Fauré and van Riet (n 2) paras 105 and 107). 83   Para 47 of the Court’s decision. 84   Given the retention by Member States of the competence to establish the ‘conditions on which social benefits are granted’, they can be deemed to be inconsistent with EU law only where it is demonstrated that they turn out to be discriminatory or to create an obstacle to freedom of movement of persons (para 52 of the Court’s decision). Apart from the requirement of taking samples for blood analyses in a ‘separate analysis laboratory’ (see n 79), the Commission had neither indicated the provision in which the aforementioned condition is required, its scope and the benefits to which it applies

134  Roberto Cisotta With this judgment – delivered without an Opinion by the Advocate-General, as deemed not to raise difficult legal problems – the CJEU seems to come back to the usual pathways of its jurisprudence in the freedoms of movement field, and in particular of the cases regarding patients’ mobility. What is more, Commission v Luxembourg takes into account the position of foreign health care providers, with positive effects on the supply side. While in preliminary rulings – on which the traditional case law on patients’ mobility was based – the attitude of the CJEU appears to be very much in favour of individuals (but we have seen the possible shortfalls of the Elchinov jurisprudence), it seems to take a rather prudent stance in infringement procedures, even though the picture becomes quite mixed with the judgment in Commission v Luxembourg. One may wonder whether this was related to the intention of avoiding having to set aside directly entire pieces of national legislation and to be accused of openly challenging Member States’ competences to shape and organise their national social security systems. Nevertheless, on the one hand, the pathway followed by the Court appears to be, in substance, consistent with the aim of respecting the right of insured persons to obtain health care treatments spelled out in each single national legislation and which allows them to recover from their illnesses in due time. On the other hand, the CJEU took into the highest consideration the need to ensure Member States enough room for manoeuvre in the activity of organising and planning their national health care systems, sometimes not paying enough attention to legal uncertainty resulting from national administrative practices. iv.  Commission v Portugal – Confirming the Preceding Case Law The last infringement procedure in the field of patients’ mobility was brought against Portugal85 and, given the general background offered in the preceding paragraphs and given that the Court simply had to apply its case law consistently, it can be summarised quite briefly. The Commission maintained that there was no provision in Portuguese law granting reimbursement of non-hospital medical expenses incurred in another Member State, in circumstances other than those specified in Regulation 1408/71. Reimbursement was only provided for ‘highly specialised’ health care which could not be provided by the national system, and, moreover, prior authorisation was required to obtain such reimbursement86 with a long and complex procedure to obtain it.87 Following the delivery of the judgment in the Commission v France case, the Commission partially withdrew the action, thus limiting its claims to (para 55 of the Court’s decision), or other conditions allegedly discriminatory or restrictive (para 53 of the Court’s decision). 85   Judgment of 27 October 2011, Case C-255/09 Commission v Portuguese Republic, not yet published in ECR. 86   Decreto‑Lei n 177/92 of 13 August 1992. 87   Paras 5 and 29 of the Court’s decision.

Limits to Rights to Health Care  135 non-hospital medical treatments not implying the use of major equipment, listed in national legislation.88 Against the usual background, the Court examined separately the case in which ‘highly specialised’ non-hospital medical care abroad, not involving the use of major and costly medical equipment and which could not be given in Portugal, was subject to prior authorisation, and the case of non-hospital medical care not involving the use of the described equipment, which was not covered by Portuguese legislation (ie treatments which could have been given in Portugal). As to the first situation, the Court clearly stated that the legislation at issue constitutes a restriction, even more so because it makes authorisation possible only for ‘highly specialised’ treatments and given that Portugal failed in its attempt to demonstrate that a similar procedure is envisaged to undergo specialised care within the national system.89 The restriction was not considered justified, firstly, because the Portuguese government brought no evidence of adverse effects on the financial balance of the social security system.90 Secondly, the claim based on the supposed need to control the quality of the health care provided was rejected making reference to the preceding case law of the Court and to the fact that prior authorisation is required for treatments not available in Portugal, with no evaluation required of the quality of the services to be given abroad.91 Similarly, the arguments of the Portuguese government concerning the organisation of the national system and in particular the fact that no mechanism for reimbursement was provided and that attending a general practitioner first is compulsory in order to be visited by a specialist, was rejected on the basis of the preceding case law of the CJEU.92 As to the second situation, the Portuguese government did not put forward any argument to sustain its view that its system was not in breach of Article 49 EC (56 TFEU), as interpreted by the Court. The latter, however, recalled its own arguments on the existence of a restriction and on the lack of justification concerning   Paras 19–20 of the Court’s decision.   Paras 60–66 of the Court’s decision. The Portuguese government also tried to compare the situation of patients undergoing health care abroad given by foreign providers to the one of health care abroad given by providers established in Portugal, in which patients have to pay the entire cost. Correctly, the Court held that the comparison ‘should be made with the conditions in which the [national health system] provides [. . .] services in its own hospitals (Watts, para 100)’ (paras 67–68). In addition, Portugal failed also to demonstrate that according to Art 22 of Reg 1408/71 every treatment abroad should be authorised preventively (paras 69–70). 90   According to the case law of the court, prior authorisation systems can be acceptable, as we know, for hospital care or non-hospital care involving the use of major medical equipment. In this case, specific evidence of financial imbalances should have been brought by Portugal. See paras 73–79 of the court’s decision. 91   Paras 80–83 of the Court’s decision. Since the Kohll judgment (para 43), the control of the quality of the health care cannot be invoked to justify a prior authorisation system, given the several EU harmonisation instruments existing in the field. 92   Paras 84–87 of the Court’s decision. According to Müller-Fauré and van Riet (n 2) paras 105–07, Member States are in any event obliged to provide mechanisms for ex post facto reimbursement, which can include the amounts to be reimbursed for care given abroad; conditions under which benefits are granted, like the requirement of a preliminary visit by a general practitioner, are enforceable also when treatment is given in another Member State. 88 89

136  Roberto Cisotta the first situation, as valid a fortiori in the present one, in which there was no possibility of reimbursement.93

D.  The New Directive on Cross-Border Health Care If we wanted to use a ‘clinical metaphor’, we would say that the recently adopted directive on cross-border health care94 has had a very long incubation period, since the Commission delivered its proposal in 200895 and the bargaining between the European Parliament and the Council has been particularly long and hard. The exaggerated number of recitals of the directive can be regarded as a residuum of such negotiations, while the final achievements seem to have failed to live up to the expectations of commentators. A thorough analysis of the new piece of legislation cannot be provided here, and obviously only its implementation and application would provide reliable data,96 which will allow a more detailed enquiry. However, a brief presentation would be useful to show that the directive has probably not contributed to effectively clarify the legal framework and it has actually turned out to be a low-impact instrument. The legal basis of the directive is provided by Article 114 TFEU (former Article 95 EC),97 which allows the European Parliament and the Council to adopt secondary legislation with the aim of approximating legislations (or regulations or administrative practices) for the achievement of the single market. This choice is logical as the protection and improvement of human health is an area in which the Union has competence only to support, coordinate and supplement Member States’ action (Article 6a and 168 TFEU98) and obviously no Treaty provision endows the EU with substantial competences in the health care sector.99 The   Paras 90–92 of the Court’s decision.   Directive 2011/24/EU (n 6). 95   Commission Communication of 2 July 2008, Proposal for a Directive of the European Parliament and of the Council on the application of patients’ rights in cross-border health care presented by the Commission, COM (2008)414 final. See: J-L Clergerie and C Karathanasi, ‘La proposition de directive sur les droits des patients dans les soins transfrontaliers’ Petites affiches (20 January 2009) 6–9; Sauter, (n 16). The failed attempt to include cross-border health care among the matters disciplined by the ‘Services Directive’ also has to be taken into account. 96   See Baquero-Cruz (n 2). 97   See recital 2. According to D Wyatt, ‘Community competence to Regulate Medical Services’ in Spaventa and Dougan (eds), Social Welfare and EU Law (n 2) 131–43, esp 134, the attraction of medical services within the scope of internal market regulation is a consequence of the qualification of such services as economic activities (and thus regulated by the Treaty provision on freedom to provide services): see n 14 and n 195. For a discussion on the possible legal bases in the Treaties that could be used in the field of health care, see also G Davies, ‘The Community’s Internal Market-based Competence to Regulate Healthcare: Scope, Strategies and Consequences’ (2007) Maastricht Journal of European and Comparative Law 3, 215–38, esp 218 ff. 98   See section I. 99   Recital 1 makes reference to Art 168 TFEU just to remind that a high level of health protection has to be ensured in every policy and activity of the Union, even where the relevant act is based on a different Treaty provision. The same objective is now included in the horizontal clause of Art 9 TFEU: see R Cisotta, ‘Articolo 9 TFUE’ in C Curti Gialdino (ed), Commentario Operativo dell’Unione europea (Naples, Simone, 2012) 458–70. 93 94

Limits to Rights to Health Care  137 retention of competences by Member States, although formally indisputable, is often recalled in the text of the directive:100 this reveals the attitude of the EU legislator, which was clearly more concerned with minimising the level of harmonisation to be introduced with the directive than with providing effective and clear solutions for cross-border health care. Article 1 of the directive clarifies that it ‘provides rules for facilitating the access to safe and high-quality cross-border healthcare and promotes cooperation on health care between Member States in full respect of national competencies in organising and delivering health care’. Paragraph 2 of the same provision adds that the directive applies ‘to the provision of healthcare to patients, regardless of how it is organized, delivered and financed’.101 According to some of the earliest commentators, the most innovative part of the directive should be considered that which relates to the commitment to implement the operating principles set by the Council in its Conclusion on common values and principles in EU health systems102 (see in particular Article 4, entitled ‘Responsibilities of the Member State of treatment’).103 However, those authors note that the power of the Commission to adopt acts to ‘facilitate the implementation of the original quality and safety provisions was replaced by some sort of soft law governance’ and that difficulties have been encountered in setting up a European framework of norms in the field of quality and safety.104 Some other provisions of the directive also aim, in a broader sense, at enhancing cooperation between Member States and increasing health care services availability, quality and effectiveness at a continental level. It is worth recalling that there are rules on administrative procedures regarding cross-border health care (Article 9), on mutual assistance and cooperation (Article 10), on recognition of prescriptions (Article 11), on European reference networks (Article 12), rare diseases (Article 13), ‘eHealth’ (Article 14) and cooperation on the evaluation of health technology (Article 15). Directive 2011/24 may appear to be juxtaposed with the existing secondary EU law for coordination of social security systems (that is to say Regulation 883/2004, which replaced Regulation 1408/71105), but the relationship between the two sets of norms is far from being clear. Therefore, I will now consider further the

  See eg recital 4 and 33, and, among others, Art 1.   According to Art 1(3), services in the field of long-term care for people who need (a) support for everyday tasks, (b) allocation and access to organs with the aim of transplantation, (c) vaccination, all fall outside the scope of the directive. Moreover, recital 17 states that the directive ‘should not affect Member States’ rules concerning the sale of medicinal products and medical devices over the Internet’. 102   Council Conclusions on Common values and principles in European Union Health Systems [2006] OJ C 146/1–3. 103   See W Palm and R Baeten, ‘The Quality and Safety Paradox in the Patients’ Rights Directive’ (2011) European Journal of Public Health 3, 272–74. 104   Meanwhile, according to recital 9, Member States have retained the power to limit reimbursement on grounds related to the quality and safety of the health care provided. Palm and Baeten (n 103) 273 affirm this sounds paradoxical. 105   See n 3. See also Art 2 of the Directive. 100 101

138  Roberto Cisotta relationship of the new directive with all the existing rules and principles in EU law in the field of patients’ mobility. The legal doctrine had interpreted the original proposal by the Commission as aimed at establishing a system for cross-border health care replacing – or, more correctly, implementing – the one the CJEU had derived from Article 49 EC (56 TFEU) and parallel to the already existing one based on Regulation 1408/71.106 In substance, the Commission proposal was aimed at re-establishing two separate systems, which, on the contrary, the Court had sometimes considered as constituting a whole, as regards the right to cross-border health care.107 This separation had been criticised, because, by doing so, the new legislation would have abandoned an important achievement of the Court’s case law. In fact, by virtue of such achievement it was not necessary to undertake a preliminary assessment of which was the applicable set of norms.108 However, the text has been amended and, as just noted, in the adopted directive the relationship with the legislation on the coordination of social security systems is not very clear, even if considerable efforts were put into drawing a sharp dividing line between the two systems. For instance, Article 1 states that the ‘Directive also aims at clarifying its relationship with the existing framework on the coordination of social security systems’. Furthermore, in Article 5 Member States are requested to clearly distinguish the rights flowing from the two sets of norms when providing information on cross-border health care. Firstly, as regards patients’ rights, some clarification is given on reimbursement, which is granted, according to Article 7(1) ‘[w]ithout prejudice to Regulation (EC) 883/2004’. Therefore, the distinction between the two sets of norms has to be considered reasonably clear as far as rights to reimbursement are concerned.109 Secondly, as far as prior authorisation is concerned, Article 8(3) prescribes that preference has to be given to authorisation granted according to Regulation 883/2004, provided that the conditions laid down therein are met and ‘unless the patient requests otherwise’. Besides, the course of the illness and other elements related to the ‘undue delay’ criterion – as well as some specifications which have been provided by the Court’s case law – are also mentioned in the same Article (paras 5 and 6(a)). However, the directive substantially codifies the case law of the CJEU when it comes to conditions for reimbursement and prior authorisation. Hence the new directive seems to aim at establishing a comprehensive framework (and to be applied to all cross-border health care treatments: see Article 1, 106   Sauter (n 16) 119; Van Raepenbusch, Évolution de la jurisprudence de la Cour de justice de l’Union européenne en matière de soins transfrontaliers (n 2) 9 ff. 107   See Commission Communication of 2 July 2008 (n 95) Arts 3(2) and 9(1). 1. As Sauter (n 16) 119 explains, in the CJEU’s case law, the two systems were merged ‘as far as the right to treatment was concerned, based on the “undue delay” criterion’ (in particular with reference to Inizan (n 2) para 46, Watts (n 2) para 60). See also Lhernould, (n 3) 34. 108   Sauter (n 16) 119. 109   See sections II.B., III.C.i. and III.C.ii., text and footnotes.

Limits to Rights to Health Care  139 just quoted), probably without abandoning the possibility of considering patents’ rights within a unique legal scheme. Nevertheless, pursuing such a legal unique reconstruction would not be easy. I will recall very briefly some of the main differences between the two systems and then sketch the main features of a possible model for systematic interpretation. As has been underlined, the two regimes appear in particular to be different as regards prior authorisation,110 a field in which, as in many others, the directive essentially makes reference to the case law of the CJEU. As far as conditions for reimbursement are concerned, the rights arising from the two sets of norms can be distinguished, in principle, more easily, or at least the additional rights flowing from freedom to provide services have been clearly spelled out by the case law of the CJEU. The dual-track system now in force thus remains not very well defined and the two instruments seems to be inspired by very different conceptions of EU law intervention in the health care sector. Article 56 TFEU and, in general, freedom of movement provisions may in any case be invoked (as has already been done in preceding cases) and therefore new possible developments in the case law of the Court which may cross the boundaries of the existing rules – as they are codified in the directive – can be envisaged. Such developments may concern cases in which codified aspects are not the only issues at stake.111 In other words, Article 56 TFEU should act as a unifying factor, as it may apply alongside secondary legislation. As to this joint application, the difficult coexistence between Regulation 1408/71 and Article 49 EC (56 TFEU) has to be recalled.112 Little effort was put into the drafting of Regulation 883/2004113 to codify the jurisprudence of the Court in order to make it co-exist better with primary law, while Directive 2011/24 can be even more easily considered a derived product of the case law of the Court. Under these circumstances, it may be predicted that the Court will still have to work by starting from Article 56 TFEU – which, at the interpretation level, should reduce to unity the two systems – so to avoid inconsistencies.114 Another general interpretative question arises as to whether the new comprehensive framework set up by the directive may trigger further developments, namely a stimulus in the supply side of health services and in particular as regards

110   See Lhernould (n 3) 34, who – with reference to a text preceding the adopted one, but which should not be substantially different in this respect – highlights that for hospital treatments prior authorisation is required by Reg 883/2004, while the new directive only specifies that the system for prior authorisation has to ‘be restricted to what is necessary and proportionate to the objective to be achieved, and may not constitute a means of arbitrary discrimination or un unjustified obstacle to the free movement of persons’ (Art 8(1)). In addition, Member States seem to be given the option (and not the obligation) to establish a prior authorisation system for the cases envisaged (among which we find treatments that ‘involves overnight hospital accommodation (. . .) for at least one night’): see Art 8(2). 111  Take Elchinov as an example of the past judicial experience in which, in particular, timeliness of the treatment was not the only problem to be solved. 112   See section II.B. and footnotes. 113   See Marhold, (n 3) 128. 114   Take the issue of prior authorisation (see n 110).

140  Roberto Cisotta the exercise of the freedom of establishment by health care providers,115 an issue not directly falling within its scope. From the starting point of granting clearer and new rights to patients, a new and more efficient EU market of health care services could begin to develop. Such a market could originate from patients’ better awareness of their rights and from a more efficient cooperation between Member States.116 In this respect, several provisions of the directive oblige Member States to give better and more complete information to patients as regards cross-border health care: see for example Article 5b, on information on cross-border health care to be provided to patients and Article 6 on ‘national contact points’ for cross-border health care to be established ‘in order to enable patients to make use of their rights’ (paragraph 3). It is however evident that these kind of measures may have an indirect impact on the supply side. As will be clear in the following, major obstacles for health care providers derive from national legal structures (and, maybe, vested interests).

III.  FREEDOM OF ESTABLISHMENT IN THE FIELD OF HEALTH CARE: PÉREZ, POLISSENI, COMMISSION V FRANCE

A.  Pérez – The Powers of Member States to Plan the Territorial Distribution of Pharmacies The analysis of some other recent judgments of the CJEU regarding freedom of establishment can contribute to complete the picture of the powers Member States can actually exercise in the field of health care, and, indirectly, the rights conferred upon citizens. In Pérez,117 the Court had to assess the compatibility with EU law of the Autonomous Community of Asturias legislation concerning the issue of licences to open new pharmacies. Pharmacies are subject to planning constraints under Spanish law, according to criteria to be established by the Autonomous Communities. National law lays down general requirements for territorial distribution: population density, geographical characteristics and distribution of inhabitants. The territorial distribution of pharmaceutical services has to be determined by the Autonomous Communities, in accordance with the aforementioned general criteria, based on units of population and distance between pharmacies.118 Smaller   See Hancher and Sauter, (n 4) 117 ff.   As for the possibility of providing cross-border health care treatments, it must be recognised that national health system are not always foreign providers-friendly (for some examples and for further analysis, see section III.). Clearly, the development of cross-border health care – based on whatever provision but especially when reimbursement has to be provided to insured persons – would put pressure on national health care systems by enhancing competition among them. See section II.C.i. 117   Judgment of 1 June 2010, Joined Cases C-570/07 and C-571/07 José Manuel Blanco Pérez et Marìa del Pilar Chao Gómez v Consejerìa de salud y Servicios Sanitarios (C-570/07), Principado de Asturias (C-571/07) (Pérez), not yet published in ECR. 118   See Art 103(3) of Ley General de Sanidad 14/1986 of 25 April 1986 and Art 2 of Ley de Regulación de los Servicios de las Oficinas de Farmacia 16/1997 of 26 April 1997. A minimum unit of population to 115 116

Limits to Rights to Health Care  141 units of population may be established by the Autonomous Communities ‘for rural, mountainous or tourist areas or for areas where, by reason of their geographical, demographic or public health characteristics, pharmaceutical services would not be possible if the general criteria were applied’. As for minimum distance, Spanish law sets a standard of 250 metres, the Autonomous Communities being responsible, on the one hand, to authorise shorter distances depending on the concentration of the population and, on the other hand, to determine stricter limits on the establishment of pharmacies in the proximity of public health centres. The Autonomous Community of the Asturias has divided its territory into basic health areas which coincide with pharmaceutical areas; in each of such areas, the distribution of pharmacies is planned on the basis of units of population equivalent to the general rule provided by national law. However, there may be at least one pharmacy in all the basic areas and in all municipalities.119 As for the minimum distance, the rule of 250 metres is maintained and is applied also to distances between pharmacies and health centres.120 The Autonomous Community of Asturias has the obligation to launch, at least once a year, a competitive procedure for the issue of authorisations to open new pharmacies, taking into consideration changes in population density. After having obtained a licence, the successful pharmacists have to declare the premises in which they would like to establish the pharmacy, in order to allow the competent authorities to check the application of the minimum distance requirements. Moreover, the legislation of the Autonomous Community of Asturias lays down the criteria according to which applicants are to be evaluated.121 In different proceedings before the Tribunal Superior de Justicia de Asturias, two plaintiffs – both qualified pharmacists – challenged the legality of the legislation of the Autonomous Community. In their opinion, such legislation had the effect of preventing pharmacists from opening new pharmacies in the territory and spelled out unlawful criteria to be applied in the annual selection of applicants.122 The starting point of the CJEU was, as in the cases concerning patients’ mobility, the retention by Member States of the powers to shape their social security system, and in particular the health services including pharmacies. Furthermore, the Court added, in line with its preceding case law, the important remark that open a new pharmacy should be, under the general Spanish rules, 2800 inhabitants, but the Autonomous Communities may establish higher minimum units up to 4000; in any case, a new pharmacy can be opened once the threshold has been exceeded per fraction above 2000 inhabitants. For a presentation of the Spanish legislation relevant to the case, see para 7-21 of the Court’s decision. 119   Decreto 72/2001 regulador de las oficinas de farmacia y botiquines en el Principado de Asturias of 19 July 2001. 120   However, in this case, it was not applied ‘in pharmaceutical areas in which there is only one pharmacy or in towns or villages which currently have only one pharmacy and in which it is not foreseeable, in the light of the characteristics, that new pharmacies will be opened’ (ibid, Art 4). 121   In an annex to Decreto 72/2001. 122   In the first proceeding, the two plaintiffs claimed the right to open a new pharmacy without having to respect the territorial planning rules of the Autonomous Community of the Asturias; in the second proceeding, they challenged (although indirectly by way of an implied decision) the criteria laid down in the Decreto 72/2001 and in the annex.

142  Roberto Cisotta the health and life of humans rank foremost among the assets and interests protected by the Treaty and that it is for the Member States to determine the level of protection which they wish to afford to public health and the way in which that level is to be achieved

Given that this level may not be the same in all Member States, ‘a measure of discretion’ has to be afforded to them.123 Nonetheless, the Court recalled that EU law also imposes limits to the exercise of Member States’ discretion in this particular field. As for the criteria for territorial distribution, the Court stated that the national legislation laying down such criteria has to be set solely against Article 49 TFEU, granting the freedom of establishment, since secondary EU legislation has not harmonised these aspects.124 In the case law of the CJEU a system of prior authorisation has always been considered as amounting to a restriction to the freedom of establishment. In this case, the national legislation at issue, by establishing limits regarding units of population and distances, certainly had the effect of a restriction to the freedom of establishment. Then, the Court applied its usual test in which it is examined whether the restriction caused by the national legislation can be justified. Firstly, the Court verified that such national legislation applied without discrimination on grounds of nationality.125 Secondly, the Court recalled once again the objective of granting a ‘high level protection for human health’ – as laid down in Article 168(1) TFEU and Article 35 of the Charter of Fundamental Rights of the European Union126 – when regarding the objective of ‘ensuring that the provision of medicinal products to the public is reliable and of good quality’, as included in the grounds providing justification for restrictions in accordance with Article 52 TFEU.127 Thirdly, the national legislation was subject to the proportionality test.128 123   Paras 43–44 of the Court’s decision. In this respect, the Court recalled its following judgments: Case C-141/07 Commission v Germany [2008] ECR I-6935, para 51; Joined Cases C‑171/07 and C‑172/07 Apothekerkammer des Saarlandes et al v Saarland (Apothekerkammer des Saarlandes et al) [2009] ECR I-4171, para 19. See also Case C-322/01 Deutscher Apothekerverband v 0800 DocMorris NV et al [2003] ECR I-14887, para 103; Case C-169/07 Hartlauer Handelsgesellschaft mbH v Wiener Landesregierung, Oberösterreichische Landesregierung (Hartlauer) [2009] ECR I-1721, para 30. 124   Paras 45–51 of the Court’s decision. See Directive 2005/36/EC of the European Parliament and of the Council of 7 September 2005 on the recognition of professional qualifications [2005] OJ L 255/22, in particular recital 26 and Art 1, and Council Directive 85/432/EEC of 16 September 1985 concerning the coordination of provisions laid down by Law, Regulation or Administrative Action in respect of certain activities in the field of pharmacy [1085] OJ L 253/34. These two pieces of legislation were invoked by the Court with reference to the second part of the questions asked by the referring court. 125   Paras 54–60 and 62 of the Court’s decision. 126   See section I. 127   Paras 63–66 of the Court’s decision. Apart from the aforementioned case law concerning patients’ mobility, see, in the context of freedom of establishment, Hartlauer (n 123) para 46. 128   In this context I mean by proportionality test the assessment in two phases as to whether first, the national legislation at issue is ‘appropriate’ to attain the declared public interest objective and second, that it does not exceed what is ‘necessary’ for the achievement of that objective. If the proportionality test is considered as providing two separate parts of the general test, this would be composed of four parts. Such test is sometimes called the Gebhard test, from the name of the judgment to which it is often traced back: Case C-55/94 Reinhard Gebhard v Consiglio dell’Ordine degli Avvocati e Procuratori di Milano (Gebhard) [1995] ECR I-4165. See L Daniele, ‘Non-discriminatory restrictions to the free movement of persons’ (1997) European Law Review 3, 191–200, esp 193 ff; Hancher and Sauter (n 4) esp 129.

Limits to Rights to Health Care  143 As already stated, the choices of Member States may be different and therefore the territorial distribution of pharmacies may be a matter of regulation in some Member States only. Besides, the crucial point made by the Court seems to be once more that regarding the right/power to plan ‘public health establishments and infrastructures’: it has been formulated with regard to hospital facilities – as well as also being invoked several times in the case law on mobility of patients, as we have seen – and here transposed to pharmacies. The following considerations in the decision flowed directly from that point. The first concerned the aim of counterbalancing the possible drawbacks caused by market forces (ie the choices of pharmacists, who may favour, and thus overcrowd, densely populated areas, while neglecting ‘rural, geographically isolated or otherwise disadvantaged areas’129). Secondly, the Court authorised Member States to put in place preventive measures in order to avoid such drawbacks taking place130 and ‘to improve the reliability and the quality of the provision of medicinal products to the public’. In this light, the CJEU judged the requirement based on units of population and the one regarding minimum distances to be permissible. The Court judged the combination of the two requirements and in particular the second one as a proper countermeasure to excessive concentration of pharmacies, allowing customers always to be able to rely on the presence of a pharmacy nearby. According to the Court, the whole system governing pharmacies in the Asturias seemed to pursue the objectives at issue coherently, as the criteria establishing the order of priority for granting licences favour candidates who have held a licence to operate a pharmacy in area or towns with a population of fewer than 2800 inhabitants. Pharmacists should be encouraged to take licences in these small towns, as they would be treated preferentially when a competition procedure for licences had to be run again. The objection of the applicants that with such criteria access to the market will become more difficult for pharmacists who have not held a licence previously, was rejected. In that respect, the Court remarked that a restriction can stand if justified, but it would, of course, have adverse effects: the overall balance of Spanish law seemed not to put an excessive burden on new pharmacists, as in the system some kinds of preferential treatment for them were combined with the described rule; what is more, having a procedure at least once a year ensured good opportunities also for those who have never held a licence.131 As to the way the legislation of the Asturias pursues its objectives, it has to be, according to the case law of the Court, not inconsistent, meaning that ‘the various rules – and the national legislation as a whole – are appropriate for ensuring attainment of the objective relied upon only if they genuinely reflect a concern to attain that objective in a consistent and systematic manner’.132 The line of reasoning of the Court in applying this part of the test could be fairly summarised simply   Paras 68–73 of the Court’s decision.   The Court uses the expression ‘protective measures’: para 74 of the decision; see also paras 75–78. 131   Paras 78–87 and 90–93 of the Court’s decision. 132   Para 94 of the Court’s decision, see also Hartlauer (n 123) para 55. 129 130

144  Roberto Cisotta by saying that a rigid application of the method of units of population and minimum distances would lead, in certain cases, to an inefficient provision of medicinal products in some not very densely populated areas; in other cases, inefficiencies would result from the area being, on the contrary, very densely populated.133 The approach of the Spanish legislator was, however, judged to be balanced, as some adjustment mechanisms were provided, allowing the competent authorities to use some flexibility in applying the criteria. However, the real attitude of those authorities and the actual usage of such flexibility have to be verified by the referring court.134 The last branch of the proportionality test to which the legislation at issue was subjected concerned the enquiry into possible less restrictive measures to which the national legislator could have resorted to achieve the same objectives. The plaintiffs and the Commission proposed a system governed by the rule of a minimum number of pharmacies per area, that would, in their opinion, grant the attainment of the objectives without limiting access to the profession. Apart from recalling once more the powers of Member States to shape their public health systems, the Court – although not very clearly and coherently – seems keen to preserve the right of national legislators to establish systems with a permanent leaning against the wind mechanism. In other words, Member States should have the right to set up systems that permanently produce incentives in favour of disadvantaged areas, without just granting them a minimum standard and then leaving market forces free to operate. The Court, with its apparently clear and straight reasoning, did not take into consideration a possible different evaluation of the Spanish system for the establishment of pharmacies. Three doubts, in particular, were raised by AdvocateGeneral Maduro in his Opinion.135 First, the question was raised as to whether regular competition conditions would really lead to lower quality services in the pharmacies sector, as, according to the Advocate-General, no clear evidence had been brought to that effect by Spain.136 Second, as it was undisputed that in less populated areas ‘there is a low probability of profit’,137 the mechanism would have been consistent only if pharmacists with a licence in those areas had had the prospect of moving to more densely populated areas. Advocate-General Maduro called into question whether Spanish law consistently set up a system of incentives of this kind. In fact, a provision of Spanish legislation granted higher priority to pharmacists without a licence, than to those working in less populated areas. The

133   In the first case customers would not have a pharmacy nearby, because of the limit of 2800 inhabitants, while in the second case a pharmacy may have to serve an excessive number of inhabitants, given the rules on minimum distances (paras 96–99 of the Court’s decision). 134   Paras 100–102 of the Court’s decision. See also the beginning of this section. 135   See Opinion of Advocate-General Maduro of 30 September 2009, Joined Cases C-570/07 and 571/07 in Case C-458/03, José Manuel Blanco Pérez et Marìa del Pilar Chao Gómez v Consejerìa de salud y Servicios Sanitarios (C-570/07), Principado de Asturias (C-571/07) (Pérez). 136   See points 26–29 of Advocate-General Maduro’s Opinion. 137   Point 31 of Advocate-General Maduro’s Opinion.

Limits to Rights to Health Care  145 latter, moreover, would lose the benefits related to their professional experience, once they obtained a licence. Only the higher number of points granted for experience gained in less populated areas compensated for these disincentives.138 In addition, licences for pharmacies in well-populated areas could be sold or transferred, thus restricting real possibilities to access that market for professionals who had agreed to work in under-served areas. Such selling would be reasonably concluded at an inflated price, so further enriching their holders, who had already benefited from rent for a certain number of years. Therefore, in contrast with the position subsequently adopted by the CJEU, Advocate-General Maduro maintained that, as it did not give clear benefits to pharmacists accredited in less populated areas (and not to those merely waiting to obtain a licence), the Spanish law should have been precluded by EU law. However, apart from the drawbacks outlined, the Advocate-General acknowledged that, in abstract, no more efficient system than the one based on population units was proposed by the parties. The Advocate-General gave a more favourable, although still mixed, judgment of the mechanism of minimum distances. In essence, his concerns related to the possibility that such system could increase the advantage of some pharmacies positioned in particularly favourable places in urban areas. The other pharmacies in the same areas would suffer from clients being naturally attracted to the former, with the system of incentives being actually impaired (as the really profitable pharmacies in urban areas would be only the well-positioned ones). According to the Advocate-General, it should have been for the national court to assess whether the Spanish mechanism went beyond what is necessary to achieve its aim.139 These remarks make clear how difficult it may be in practice to apply the ‘consistency criterion’, especially when national legislation is particularly complex and the overall effect has to be evaluated. The position held by the Advocate-General was certainly quite radical. The judges, on their side, took a more moderate stance, probably in order to ‘save’ the system, which did not appear, on the whole, unreasonable. Finally, the CJEU dealt with the second question asked by the Tribunal Superior de Justicia de Asturias, concerning the lawfulness of two criteria laid down in the legislation of the Autonomous Community of Asturias for the qualifications to be taken into account in the competition for granting licences. According to the first criterion at issue, a further 20 per cent had to be added to points for professional qualifications for experience gained as a pharmacist in the territory of the Autonomous Community.140 The other criterion established a preference to be given, in the case of several candidates scoring the same points on the scale, after other categories, to pharmacists who had carried out professional activities in the territory of the Community.141 Such preference was granted on conditions that   Point 7 of the Annex, see point 32 of Advocate-General Maduro’s Opinion.   Points 33–38 of Advocate-General Maduro’s Opinion. 140   Point 6 of the Annex to Decree 72/2001. 141   Point 7(c) of the Annex to Decree 72/2001. 138 139

146  Roberto Cisotta could be clearly met more easily by local professionals and the CJEU stated that EU law precludes this kind of criteria.142 This judgment has been considered balanced, as it set aside the provisions which most obviously violated the non-discrimination principle, while substantially preserving the right of Member States to pursue some fundamental objectives in the health care field.143 As to the means by which such objectives may be achieved, the organisation of national systems is always subject to EU law criteria, in particular in terms of proportionality and consistency. The application of such criteria is not, however, uncontroversial, as is shown by the Opinion of AdvocateGeneral Maduro. This is even more evident in a judgment like Commission v Spain, in which no element of transnational nature was actually present in the main proceedings.144 The openness of the national health structures – that is to say the liberalising principles imposed by EU law – stands together with the planningrelated rules which Member States can establish.

B.  Polisseni and Grisoli – Territorial Distribution of Pharmacies in Italy Very soon the CJEU had the chance to confirm the Pérez jurisprudence in the Polisseni145 case, with reference to the Italian legislation on the establishment of pharmacies which is very similar to the Spanish one. In fact, authorisation to open new pharmacies (and to move an existing pharmacy to new premises, like in the case at issue before the referring court) is subjected in Italy to two parameters based on the numbers of inhabitants and a minimum distance between the other

142  The Consejería de Salud y Servicios Sanitarios and the Pricipado de Asturias contended that such criteria were justified by ‘the need to maintain a level of quality in the pharmaceutical service, given that its quality would be impaired if pharmacists who had set up in business were not immediately capable of providing pharmaceutical services. If pharmacists are to be able to operate immediately in this way, they need, in particular, to be acquainted with the health programmes provided for by the regional administration, and the way in which the pharmacies in that region operate’ (para 123 of the Court’s decision). The Court rejected the argument, because harmonisation at the EU level of the professional activity of pharmacist does not allow discrimination among professionals who hold formal qualifications in pharmacy. In particular, reference was made to Art 1(1) and (2) of Council Directive 85/432/ EEC of 16 September 1985 concerning the coordination of provisions laid down by Law, Regulation or Administrative Action in respect of certain activities in the field of pharmacy [1985] OJ L 253/34 and to Art 45(2)(e) and (g) of Directive 2005/36/EC of the European Parliament and of the Council of 7 September 2005 on the recognition of professional qualifications [2005] OJ L 255/22. 143   Moreover, having substantially promoted the national system, this judgment was positively welcomed in Spain; see: J A Razquin Lizarraga, ‘La ordenación territorial de las oficinas de farmacia en España y el Derecho de la Unión Europea (sentencia del Tribunal de Justicia de 1 de junio de 2010, C-570/07 y C-571/07, Blanco Pérez y Chao Gómez)’ (2010) Revista Unión Europea Aranzadi 7, 7–13. 144   Mr Pérez and Mr Gómez were both Spanish nationals. Nevertheless, the CJEU, apart from exceptional cases, normally responds to the questions asked by national courts – which are, at the end, responsible for assessing the relevance of EU law aspects for the main proceeding (para 35) – and ‘questions concerning EU law enjoy a presumption of relevance’ (para 36). 145   Order of 17 December 2010, Case C-217/09 Maurizio Polisseni v Azienda Sanitaria Locale n. 14 VCO et Antonio Giuliano (Polisseni), not yet published in ECR.

Limits to Rights to Health Care  147 existing pharmacies.146 As to the part of the judgment related to Article 49 TFEU, the Court did nothing but recall its precedent,147 thus deciding the case with an order. However, the flexibility granted by the Spanish legislation with regard to underor over-populated areas (with reference to the average implicitly considered by the legislator) that is deemed necessary to overcome inefficiencies in medicinal products provision, seemed to be lacking in Italian law. As in Pérez,148 the CJEU asked the referring court to verify whether the competent authorities enjoy the necessary discretion in applying the criteria laid down in national law.149 It is worthwhile noting that Italian law requires less numerous minimum units of population for larger municipalities.150 This choice is apt to allow pharmacists to overcrowd larger urban areas, which are, of course, more densely populated, and to neglect small municipalities, less densely populated and, in many cases situated in rural areas. This mechanism seems contrary to what was stated in Pérez,151 and unable to ensure a proper access to medicinal products in all areas, as it allows a lower concentration of pharmacies in the disadvantaged ones. The Court did not even detect these possible drawbacks of Italian legislation. Although the CJEU judged the general framework to be per se in line with EU law, one may expect such possible drawbacks to arise before the referring court when carrying out its scrutiny over the actual management of the system.152 Neither did the Court solve the same problem in the Grisoli153 case, where the Italian legislation was once more at issue. In particular, on this occasion, the 146   In municipalities with up to 12,500, there should be one pharmacy per unit of 5000 inhabitants, and one pharmacy per unit of 4000 in all the others municipalities; the minimum distance is 200 ms. See Art 1 of legge n 475 of 2 April 1968, as amended by legge n 362 of 8 November 1991 and Art 13 of decreto n 1275 of 21 August 1971. 147   Paras 15–32 of the Court’s decision. 148  See Pérez (n 117) para102. 149   Para 30 of the Court’s decision. 150   More than 12,500 inhabitants – see n 146. 151  See Pérez (n 117) para 3, in which is clearly stated that smaller units of population may be established ‘for rural, mountainous or tourist areas, or for areas where, by reason of their geographical, demographic or public health characteristics, pharmaceutical services would not be possible if the general criteria were applied’. See also paras 72–73 and esp 96–98. 152   In paras 12–13 of the Court’s decision, the Court also ruled over a ‘new’ aspect (at least in comparison with Pérez). The referring court asked the CJEU to ascertain also if EU competition law – generically and as a whole – precluded legislation such as that in issue. Making reference to its classical case law in this field, the CJEU found that no element in what the referring court had reported could have ‘rendered ineffective’ EU competition rules applicable to undertakings. As for the aforementioned classical case law, see Case C-35/99 Arduino, [2002] ECR I-1529, para 34 and cited case law; Case C-198/01 Consorzio Industrie fiammiferi v Autorità Garante della Concorrenza e del Mercato (CIF) [2003] ECR I-8055, para 45; Case C‑250/03 Giorgio Emanuele Mauri v Ministero della Giustizia and Commissione per gli esami di avvocato presso la Corte d’appello di Milano (Mauri) [2005] ECR I-1267, para 29; Joined Cases C-94/04 and C-202/04 Cipolla et al [2006] ECR I-11421, para 46. On this issue, see, in general, J Baquero-Cruz, Between Competition and Free Movement – The Economic Constitution of the European Communities (Oxford – Portland, Hart 2002) esp 105 ff and, in the specific area of health care, the writings cited in n 4. 153   Order of 29 September 2011, Case C-315/08 Angelo Grisoli v Regione Lombardia (Grisoli), not yet published in ECR.

148  Roberto Cisotta referring court asked the judges of Luxembourg to examine the Italian provision granting the regions the possibility, where particular topographic and connections conditions exist, of derogating from the ordinary criterion by requiring that a new pharmacy has to be situated at least 3000 metres apart from the existing one, even if they are in different municipalities.154 The referring court had drawn attention to the possible shortfalls in the medicinal products provision, and remarked on the fact that in this case the only aim of the legislation was, actually, to avoid the loss of clients by the existing pharmacy,155 but the CJEU preferred to resort to the easy solution of referring the problem back to the national court. In fact, after recalling the general statement of Pérez that a combination of demographic and geographic criteria is (in principle) not in breach of EU law, it left to the referring court the task of assessing if, according to national law, competent authorities are allowed to authorise supplementary openings of pharmacies and if they actually exercise such power in conditions in which the rigid application of the basic rules would not grant an adequate pharmaceutical service.156 Even if the Court found the presentation of national legislation not to be exhaustive, it might at least have more obviously underlined that Italian legislation established, as far as discretionary powers of the administration are concerned, a mechanism which actually pursues objectives opposite to those stemming from EU law.

C.  Commission v France – Between who Invests and who Takes Technical Responsibility: Rules on Ownership and Management of Medical Analyses Laboratories The last judgment I will analyse was delivered by the CJEU in another infringement procedure brought against France.157 Despite the failure to comply with EU law declared with reference to the second complaint brought by the Commission, the judgment is on the whole favourable to France. The Commission maintained that two limitations contained in the rules on biomedical analysis laboratories under French law were in breach of Article 43 EC (Article 49 TFEU). The first was the limit on the number of shares, hence of the voting rights – namely a maximum of 25 per cent – that may be held by nonbiologists in a société d’exercice libéral à responsabilité limitée (SELARL)158 operat154   Art 104 of Regio decreto of 27 July 1934, fn 1265, as amended by legge of 8 November 1991, fn 362. This provision is applicable to municipalities with less than 12,500 inhabitants and with the limit of one pharmacy per municipality. 155   Para 12 of the Court’s Order. 156   Para 37 of the Court’s Order. 157   Case C-89/09 Commission v France [2010] ECR I-1294. 158   ‘Limited liability company or firm formed by persons practising a profession’ (para 1 of the Court’s decision).

Limits to Rights to Health Care  149 ing biomedical analysis laboratories; the second concerned the prohibition against biologists holding capital in more than two companies formed in order to operate jointly one or more biomedical analysis laboratories.159 According to the CJEU, the aforementioned limit160 of shares in a SELARL for non-biologists clearly amounted to a restriction to the freedom of establishment, as it was capable of hindering or rendering less attractive for natural (non-­ biologists) or legal persons established in other Member States moving to France to hold capital in such companies or to establish themselves there. However the Court, by applying the usual test, considered the regime at issue to be justified according to Article 46 (Article 52 TFEU), which is applicable for restrictions to the freedom of establishment. The steps of the reasoning of the Court can be summarised as follows. Firstly, the provisions at issue applied without discrimination on grounds of nationality. Secondly, the Court judged such measures to be appropriate for the achievement of maintaining the quality of medical services, which has to be considered among the exceptions laid down in Article 46 EC (Article 52 TFEU), as it contributes to ensuring a high level of health protection.161 Before moving to the presentation of the reasoning of the Court concerning the last two parts of the test – that is to say those concerning the proportionality criterion – it is worth recalling the discussion between the parties on the issue of justification for the restriction. The applicability of different lines of case law was in dispute between the Commission and France. According to the former, the case of a SELARL in France should have been assimilated to the case concerning Greek legislation on opticians’ shops that the Court decided was in breach of the Treaty provision on freedom of establishment, as regards the limit of 50 per cent of shares which could be held by natural or legal persons other than the opticians operating a shop.162 In the view of the Commission, although the requirement under French law that taking of samples and other specific operations are to be carried out by biologist appeared reasonable, the regulation on ownership of a SELARL should not have followed a similar rule. On the contrary, France maintained that medical biology is of the utmost importance in its health care system and the activity of biologists covers all the phases of biomedical testing.163 Therefore, the Court should have 159   See Art 5 of loi n 90-1258 of 31 December 1990, as amended by loi n 2008776 of 4 August 2008 and Arts 10 and 11 of décret n 92-545 of 17 June 1992. For a presentation of the French legislation relevant to the case, see para 2-5 of the Court’s decision. 160   As usual, the Court firstly recalled the retention by Member States of powers in the health care field, as well as of their duty to respect EU law and of the relevance of health protection in the latter: paras 40–42 of the Court’s decision. 161   Paras 44–53 of the Court’s decision. 162   See Case C-140/03 Commission v Greece [2005] ECR I-3177. We should bear in mind the authoritative opinion according to which in this judgment the Court applied a ‘strict’ test, by affirming, at the end, that the objective of protecting public health could have been attained by ‘less restrictive means’: see Hancher and Sauter (n 4) esp 134–36, 140. 163   Paras 21–22 of the Court’s decision.

150  Roberto Cisotta referred to its case law concerning pharmacies,164 in which it was stated that pharmacists have to enjoy real professional independence and thus Member States can adopt measures apt to ensure such independence. The CJEU, in the light of the risks and the possible harmful effects that inappropriate performance (or incorrect record) of biomedical analyses may cause to patients, shared France’s position. Neither did the Court endorse the argument of the Commission that the need for the prescription of a doctor to have biomedical analyses carried out would have avoided biologists’ responsibility for possible negative effects for patients’ health: a prescription is also required for (at least, most) medicinal products in pharmacies, so this circumstance could not have prevented the Court from applying the mentioned case law on pharmacies. What is more, in France biologists and doctors work in close cooperation, the former being in a position to add further analyses to complement those prescribed by the doctor.165 The case law on pharmacies, which was applied in Commission v France, with a view to looking more favourably at national legislation prescribing that certain activities have to be exercised by specially qualified categories has been subject to criticism. In fact, although reasonable in principle, it normally applies without any requirement that (also) ‘specific obligations and verifiable performance measures’166 are to be met. In other words, Member States are allowed to treat as relevant only the element of the formal qualification, which could be seen also as a means to protect vested interests. Once the qualification requirement has been met, the public would be substantially deprived of an effective and constant assessment of the respect of a quality standard (that might be fixed by the Member State). On the mere economic plane, the CJEU found that the Commission had failed to demonstrate that the biomedical sector had higher financing needs compared to the pharmacy sector and that the French legislation at issue would have prevented amalgamations.167 In France analyses are paid by the social security system at the rate decided by the State, with no reference to the cost for providing that service and the Court stated that the Commission had brought no evidence that the opening-up of the capital of SELARLs operating biomedical analysis laboratories would have led to benefits, as it claimed, in terms of quality of service or economies of scale. In this respect, the line of argumentation of the Court seems to be not perfectly clear. In the first place, it appears quite clear that ensuring the opening-up of capital in a certain sector would lead to more investments and competition, with 164   Reference was made in particular to Case C-531/06 Commission v Italy [2009] ECR I-4103 and Apothekerkammer des Saarlandes et al (n 123). 165   Paras 56–61 of the Court’s decision. 166   Hancher and Sauter (n 4) 138–39. Nevertheless, according to the authors, Apothekerkammer des Saarlandes et al (n 123) should be positively welcomed, as the Gebhard test is fully applied in it, while such test was not used in the traditional case law concerning health care (in particular in Sodemare (n 18)). 167   Paras 62–64 of the Court’s decision.

Limits to Rights to Health Care  151 positive effects in terms of efficiency. Thus, even in a system where a standard price is paid by the state for each service provided, a reduction of the costs sustained by the undertaking would lead to an increase in the quality of the service provided to citizens, and/or to a more efficient management, on a macro scale, of the entire business. Indeed these are the kind of benefits to which the single market should lead: more opportunities for investors, more efficient management of businesses and better quality. Even if the argument of the Commission might have been better sustained, it seems the Court itself did not bring enough evid­ ence in favour of its thesis. In the second place, the Court judged that only biologists, given their training, experience and responsibilities, can provide appropriate safeguards in the field concerned. According to the Court, Member States are to be given the discretion to protect their independence – which is crucial for the quality of medical services – for example with a system like the French one, in which the most relevant decisions in SELARLs are to be taken with the votes of at least 75 per cent of the shares. Should the non-biologists be allowed to hold more than 25 per cent of the shares, their position would become decisive.168 One may wonder whether the capital limit of 25 per cent for non-biologists is an appropriate measure to ensure ‘that biomedical analyses [are] carried out by biologists enjoying genuine professional independence’. In fact, it should be borne in mind that an investor holding up to 25 per cent of the shares may at any time resort to the ultimate weapon of withdrawing his financial and know-how contribution, and therefore, even if his position is not decisive, his interest cannot be completely neglected when taking important decisions for the company.169 It was questioned by the Commission whether, because of the French legislation at issue, SELARLs operating biomedical analysis laboratories could be deprived of the necessary flow of financial and know-how investments, that – as already said – was assumed to be higher than those needed by pharmacies. The Court found such alleged negative effect to be not adequately demonstrated. Not being my task here to provide a more accurate demonstration, I can simply note that the need for sophisticated and costly equipments to carry out medical analyses is well-known and maybe even self-evident. Thus, even without calling into question the fact that the Commission had failed to meet its burden of proof, the statement of the Court that no substantial difference exists between the analysis laboratory and pharmacy sectors in terms, inter alia, of financing needs (and that therefore the case law regarding the latter is transposable to the former) is far from being indisputable. In other words, we have no specific data which show that the financing needs in the analysis laboratory sector are higher (or lower) than in pharmacies and neither had the Court such data. Therefore, the point   Paras 66–68 of the Court’s decision.   See eg Opinions of Advocate-General Kokott in Case C-458/03 Parking Brixen GmbH [2005] ECR I-8585, points 51–53 and footnotes, and in Case C-97/08 P Akzo Nobel and Others v Commission [2009] ECR I-8237, point 48 and footnotes, where it is also made clear that the influence of minority shareholders is not always evaluated in the same way in different fields of EU law. 168 169

152  Roberto Cisotta would be still debatable in the future, should a similar question arise and relevant and reliable data be available. The Commission also failed in its attempt to demonstrate that the French legislation did not reflect, as requested by the case law of the CJEU, ‘a concern to attain [its] objective in a consistent and systematic manner’.170 To this end, the Court found to be insufficient the fact that the presence of a biologist in the premises where biomedical analyses are carried out is not constantly required and the possibility of circumventing, in some ways, the limit of 25 per cent of shares in SELARLs for non-biologists. As for the first problem, it was deemed sufficient that biologists are de facto responsible for the supervision of the work of the laboratory and obliged to carry out their duties in person, a constant presence in the premises of the laboratory not being indispensable. What might be less persuasive is the solution given by the CJEU to the second problem, which arose on the one hand from the possibility granted to legal persons to be considered as biologists by French legislation and on the other hand from the right – stemming from EU law – of legal persons managing biomedical analysis laboratories in other Member States to be treated in the same way as French legal persons enjoying the status of biologists. Given the lack of limits in the shareholding of the capital of these companies for non-biologists, the limit of shareholding for non-biologists in SELARLs might be eluded. In fact, such companies could hold capital in a SELARL, which may result indirectly in non-biologists holding more than 25 per cent.171 The Court acknowledged that where those companies regularly practise the profession of biologist in other Member States, they should be treated as French legal persons engaging in the same kind of activity.172 Even if this implies the authorisation of a sort of exception to the ordinary system of limits in shareholding, the Court found no inconsistency in French law’s attempt to achieve the objective of protecting public health, as the companies in question ‘validly engage in the activity of biologist’ in other Member States, and therefore, as already stated, they have to enjoy equal treatment with French legal persons enjoying the status of biologists. Coming back to the test to verify the lawfulness of a national non-discriminatory provision allegedly contrary to freedom of establishment, the French legislation successfully also underwent the assessment regarding proportionality. The line of 170   Para 70 of the Court’s decision. See also Hartlauer (n 123) para 55; Case C-531/06 Commission v Italy (n 164) para 66 and case law cited therein. 171   Paras 75–76 of the Court’s decision. 172   The Court also found that no inconsistency may arise from the possibility that voting rights in SELARLs may be severed from the holding of shares. In fact, such possibility is granted in order to allow biologists not carrying out their profession in laboratories operated by that company to maintain a majority share (para 77). Furthermore, under French law, only limited partnerships are allowed to operate biomedical analysis laboratories without respecting the limit of 25% of capital held by nonbiologists. France’s statement that procedural rules specific to these kind of companies, where up to 49% of the capital may be held by non-biologists, ensure biologists maintain decisive influence over the most important decisions was not contradicted by the Commission (para 78).

Limits to Rights to Health Care  153 argumentation followed by the Court can be divided, as usual, into two branches. The first one is the more important in the light of the analysis to be carried out in these pages. Given that economic interests of non-biologists may be liable to undermine the respect for the professional independence of biologists, the Court took the view that it is for Member States to evaluate whether such independence has to be granted by means of a regulation like the one existing in France and summarised above. The judgment of ‘appropriateness’ thus appears to fall within a field in which choices are left almost entirely to national discretion. As to the second branch, the Court found that no other less restrictive measure ensuring the same degree of effectiveness in the protection of public health can be envisaged. In particular, incompatibility measures suggested by the Commission may, according to the Court, be useful only to avoid conflicts of interest. They do not seem to be appropriate to tackle situations, such as those hypothesised by France, in which genuine independence for biologists has to be ensured, even when no conflict of interest exists according to formally pre-determined rules. Neither did the Commission succeed in demonstrating that supervision provided by doctors and pharmacists as public health inspectors can provide guarantees that biologists enjoy adequate independence in decision-making.173 The last suggestion of the Commission was to establish mechanisms for severing voting rights from financial rights, and it was considered inadequate, too, as the influence of financial decisions of minority shareholders on the decision-making process of the company would, albeit indirectly, increase.174 Finally, the French system was considered to be balanced: by providing that the most important decisions for a SELARL are to be taken by shareholders holding at least 75 per cent of the voting rights, and establishing the 25 per cent limit of shares for non-biologists, it does not deny any possibility to gain external funding, while preserving at the same time the independence of technical staff in decisionmaking.175 A few words were spent on the second complaint brought by the Commission, unchallenged by France, and concerning the prohibition under French law for biologists from holding shares in more than two companies formed for the purpose of operating jointly one or more biomedical analysis laboratories. A limitation on the number of companies in which biologists may hold shares was considered a restriction to freedom of establishment and the absence of justification was undisputed.176 Therefore, the CJEU declared a failure to comply with   Paras 82–84 of the Court’s decision.   The CJEU also recalled, to the same effect, Opinion of Advocate-General Mengozzi, Case C-89/08 Commission v French Republic, point 220. Minority shareholders are, in any case, in a position to exercise a certain degree of influence on the decisions of the company: see n 169. 175   Para 88 of the Court’s decision; the same consideration had been used to judge the appropriateness of the system to achieve the protection of public health: see above and paras 66–68 of the Court’s decision. 176   Paras 99–101 of the Court’s decision. What is more, France had removed the provision at issue, but it was still applicable at the end of the period established in the reasoned opinion delivered by the Commission (para 98). 173 174

154  Roberto Cisotta obligations stemming from Article 43 EC (Article 49 TFEU) with regard to this head of claim. i.  Ownership Frameworks and Deference to Member States’ Discretion: a Reappraisal The judgment in Commission v France, just analysed, can probably be better understood if set against the line of case law of the CJEU’s on Golden Shares and other particular rights of Member States to control the ownership of some enterprises working in strategic sectors. I will make reference in particular to the judgments in Commission v Belgium, Commission v Spain and Commission v Italy, which, amongst other and also more recent cases, I consider particularly useful for this purpose.177 Just a few words on each of the cases will be enough to draw a simple picture, which would be useful for highlighting some specific differences with Commission v France. In these judgments the Court took a stricter attitude towards Member States, as far as justifications for restriction of fundamental freedoms are concerned. In Commission v Belgium, although the action was ultimately dismissed, the Belgian legislation on the Golden Share in Société nationale de transport par canalisations178 was subject to an articulated test and the Court set some precise boundaries for this kind of control instrument. First, the Court recalled that the public interest exception must be interpreted strictly. Second, great importance was attached to the fact that the regime established by the legislation at issue was one of opposition, namely to decisions concerning the change of destination of the company’s system of lines and conduits, as well as any transfer, use as security or change in the company’s strategic assets. Hence, the decision-making process of the undertaking concerned could keep on functioning autonomously, with no requirements for prior approval by government organs. Only after the undertaking had taken its decision, could the government, within strict time limits, exercise its opposition rights. Third, the system concerned only decisions regarding the strategic assets of the company in question. Finally, an intervention from the Belgian government was possible only if reasoned and where a threat to the attainment of the objectives of the energy policy arises; it was also subject to judicial review.179 The severe approach was confirmed in the other two judgments. In Commission v Spain, the Court declared that the prior approval system established by Spanish law for the acquisition of certain participations in undertakings exercising particular regulated activities in the energy sector, as well as the acquisition of the assets necessary for the exercise of such activities,180 was in 177   Case C-503/99 Commission v Kingdom of Belgium [2002] ECR I-4809; Case C-207/07 Commission v Kingdom of Spain [2008] ECR I-111; Case C-326/07 Commission v Italian Republic [2009] ECR I-2291. 178   Décret Royal of 10 June 1994: see para 1 of the Court’s decision. 179   Paras 47 and 49–51 of the Court’s decision. 180   Ley 34/1998 of 7 October 1998 as amended by Real decreto-ley 4/2006. See para 1 of the Court’s decision.

Limits to Rights to Health Care  155 breach of the Treaty provisions on freedom of circulation of capital and of freedom of establishment. The CJEU considered that the simple fact of the acquisition could not constitute a threat serious enough to justify a prior authorisation system. Moreover, the Commission demonstrated that such system was not reliable where a serious threat arose after a certain operation had been author­ ised. Thus the powers granted to the Spanish authorities were considered dis­ proportionate.181 In Commission v Italy, the Court stated that the Italian legislation conferring on some governmental authorities extensive powers as regards public bodies’ shareholdings in joint stock companies operating in the defence, transport, telecommunications, energy resources and other public service sectors was in breach of the Treaty provisions on freedom of circulation of capital and of freedom of establishment. In particular, the Italian provisions at issue granted the government the power to oppose the acquisition of significant shareholders and the conclusion of contracts or agreements between shareholders exceeding a certain threshold of voting rights, to veto resolutions for the dissolution of the company and many other operations, as well as to appoint a non-voting director. In the Golden Share cases the powers envisaged by national laws seem more pervasive than in Commission v France, as those laws did not just establish a certain threshold for ownership of non-professionals, but allowed governments the right to intervene in different phases of the life of the undertakings concerned. Even more obviously, the legislation concerning analysis laboratories in France established some – maybe not negligible – limits to the action of market forces, nevertheless making clear in advance how these limits would have to work. In the Golden Share cases, Member States enjoyed wide discretion in their intervention powers (although to a different extent in each case); therefore, the Court tried to assess more precisely the suitability of such framework to attain the relevant public objectives. The Member States-friendly trend of the CJEU in cases of freedom of establishment concerning health care might be traced back to the Sodemare judgment,182 in which the Italian legislation reserving some health care-related services to nonprofit operators was considered to be not inconsistent with EU law. The judgment of the Court was based on the consideration that the Italian measure was not discriminatory, as it prohibited the provision of those services both to national and foreign for-profit undertakings. It has to be remembered, however, that the Court started to analyse also non-discriminatory measures (take Pérez!).183 Hence the judicial control has become more pervasive. As a consequence, the preference for national measures with protective effects in the health care sector can prompt the Court to uphold some (more or less) subtle mechanisms existing in that field, which might have not been forgiven in other sectors.   Paras 51–56 of the Court’s decision.   Sodemare (n 18) para 32. 183   See section III.A.; on the early case law of the Court on non-discriminatory measures, see Daniele, Non-discriminatory restrictions to the free movement of persons (n 128) 191 ff. 181 182

156  Roberto Cisotta All that said, it is sufficiently evident that the CJEU can take very different attitudes towards national laws on ownership of companies over which Member States claim to keep particular control rights and thus foreign investors face differentiated sets of limits in the various sectors. To a certain extent, the internal market seems to suffer from more intrusive state intervention in the health care sector. ii.  A Comparison with the Gambling Cases Before concluding this chapter, it is worthwhile drawing a brief comparison also with the judgments delivered by the CJEU in the gambling cases. This would be helpful mainly for two reasons. Firstly, as far as gambling is concerned, there is no harmonisation, not even a sectoral attempt; the situation in the health care domain is similar, although – as we will see in the last section – an embryonic form of harmonisation seems to exits, despite the lack of legal basis. Secondly, one may consider gambling a sensitive sector in some ways similar to the one with which this study deals, and, to a certain extent, it is once more health that is at stake. Of course, I am talking here of health as psychological equilibrium (ie freedom from addiction) and of behaviours which are considered reprehensible from a moral point of view. Member States have relied on the necessity of taking care of this aspect of health and moral sanity to justify certain restrictions to freedoms of movement granted under EU law. In this connection, and before recalling some of the most important judgments, it is important to highlight that, according to the CJEU, moral religious or cultural factors, as well as the morally and financially harmful consequences for the individual and for society associated with betting and gaming, may serve to justify a margin of discretion for the national authorities, sufficient to enable them to determine what is required in order to ensure consumer protection and the preservation of public order.184

The background inducing the CJEU to leave ‘a margin of discretion’ to Member States may be regarded as similar to the one existing in the health care sector. Nevertheless, some – maybe obvious – points have to be made as regards the role of the state in these two sectors. These observations, as I will repeat at the end of this short analysis, do not amount to mean that differences in the Court’s approach are always justified. Firstly, health care is at the core of the welfare state, involving the planning and organisation of complex and expensive services to the benefit of citizens. In the gambling sector, public finances aspects are at stake only to the extent that some states exploit the tendency of many people to participate in lotteries, etc to raise 184   Case C-243/01 Gambelli et al (Gambelli) [2003] ECR I-13031, para 63; Joined Cases C-338/04, C-359/04 and C-360/04 Placanica et al (Placanica) [2007] ECR I-1891, para 47; see also Case C-42/07 Liga Portuguesa de Futebol Profissional, Bwin International Ltd v Departamento de Jogos da Santa Casa da Misericórdia de Lisboa (Liga Portuguesa) [2009] ECR I-7633, para 57.

Limits to Rights to Health Care  157 funds for particular purposes. There is no planning need in gambling comparable to the one existing in health care. Secondly, Member States claim to establish some sort of regulated system for the gambling sector to control the aforementioned tendencies and prevent psychological disorders, money squandering and related social drawbacks. Therefore, the measure of discretion does not concern the level of health care each Member State chooses to guarantee to insured persons under its health care system, but the level of tolerance for these activities existing in each nation. A touch of paternalism may be found in this approach – sometimes mixed with other intents, as just mentioned – and it might be wondered to what extent a modern state should be engaged in preventing such risks. The point of the CJEU is probably that it is for each single Member State to choose the measure of the intrusion it would carry out (to be, hopefully, fine-tuned in the context of an appropriate mix of interventions to tackle the risks arising from gambling). Making reference to the most important and well-known cases only, it has to be noted that, in principle, the usual test to assess the admissibility of a non-­ discriminatory restriction – with which we are now familiar – has been applied.185 However, in Gambelli – recalling its preceding case law – the CJEU left to the national court the task of verifying if the legislation at issue actually served the aim which allegedly justified it and if it was not in breach of the proportionality criterion.186 In that judgment the Court also set a specific limit to the assessment to be carried out by the national court: public order concerns could not be invoked by a state which at the same time encouraged ‘consumers to participate in lotteries, games of chance and betting to the financial benefit of the public purse’, so in any case a sort of a consistency requirement has to be met by the state concerning its general policy in the gambling field. In Placanica, there was no dispute on the fact that the Italian legislature [was] pursuing a policy of expanding activity in the betting and gaming sector, with the aim of increasing tax revenue, and that no justification for the Italian legislation [was] to be found in the objectives of limiting the propensity of consumers to gamble or of curtailing the availability of gambling.

The Italian legislation was subject to scrutiny aimed at determining whether the limitation of operators in the betting and gaming sector genuinely con­tributed to achieving the second declared aim, that is to say avoiding the use of activities in the sector for criminal and fraudulent purposes. The CJEU acknowledged that in order to attract players – thus drawing them away from clandestine games – authorised operators should represent a valid and appealing alternative, and the expansion of authorised gaming activities pursued by the Italian legislator seemed 185   In general, on the case law on gambling, see S Van den Bogaert and A Cuyvers, ‘“Money for nothing”: The Case Law of the EU Court of Justice on the Regulation of gambling’ (2011) Common Market Law Review 4 1175–1213. For more recent case-law on gambling activities, see M Lugato and R Cisotta, ‘Commentaries on articles from 56 to 62 of the TFEU’, A Tizzano (ed), I Trattati dell’Unione europea (Milan, Giuffrè, forthcoming). 186   Gambelli (n 184) paras 65–66 and 70–75.

158  Roberto Cisotta to be upheld, although the final judgment on this point was left to the national judge. What is more, in order to prevent the exploitation of gaming activities for criminal and fraudulent aims, the Court upheld the licensing system, too. As to the limited number of such licences, the Court stated that it ‘[did] not have sufficient facts before it to assess that limitation, as such, in the light of the requirements flowing from Community law’ and therefore, once more, it left it to the national referring court, ultimately to assess whether such limitation was consistent with EU law.187 In Placanica the Court nevertheless declared the unlawfulness of the provision of Italian law establishing the exclusion of companies whose shares are quoted on regulated markets from the gaming sector and laying down criminal penalties for carrying out those activities without licence where such a licence was refused in breach of EU law.188 Finally, in Liga Portuguesa, the Court took a further step in favour of Member States,189 directly affirming the lawfulness of the exclusive rights of Santa Casa da Misericórdia de Lisboa in Portugal to organise games of chance. It is interesting to note that it explicitly stated the presumption that ‘games of chance involve a high risk of crime or fraud, given the scale of the earnings and the potential winnings on offers to gamblers’.190 Given the particular status of the Santa Casa – established more than five centuries ago –, which conferred on it great reliability and the strict public control exercised over its activities,191 the Court found the whole Portuguese system not to be inconsistent with EU law. To sum up, the CJEU has often entrusted national courts with the task of assessing the compatibility of national laws with EU law. In any event, it seems that, almost systematically, the test applied by the Court has a positive outcome for Member States in the gambling sector. The differences with the health sector have been already pointed out. Now it has to be underlined that where cultural attitudes are at stake the Court is keen to leave much more room for manoeuvre to Member States. The functioning of the internal market and, accordingly, the freedom of choice of consumers are thus evidently hampered.

IV.  CONCLUDING REMARKS

This research has shown that the constant refrain of the CJEU that Member States have retained the powers to organise their national health care systems cannot be

  Placanica (n 184) paras 49, 54–55 and 57–58.   Placanica (n 184) paras 62–63 and 68–70. 189  A difference in approach with the preceding case law has sometimes been emphasised: see L Grynbaum, ‘Jeux et paris en ligne – Revirement de la CJCE: faites vos jeux’ (2009) Revue Lamy Droit de l’immateriel 53, 44–46. 190   Liga Portuguesa (n 184) para 63. As to the justification of the restriction in general, see para 55 ff. 191   Liga Portuguesa (n 184), paras 65–67. 187 188

Limits to Rights to Health Care  159 read literally.192 It has also to be noted that the picture drawn by the CJEU with the judgments examined above can hardly, at first glance, be considered clear. In order to give a final overview, I will outline and then make some general observations on the main critical points, without claiming nevertheless to provide here an exhaustive reconstruction. Some (at least apparent) inconsistencies have been already pointed out, such as the difference in the approach adopted in the jurisprudence on patients’ mobility between judgments delivered respectively in preliminary rulings and infringements procedures. Besides, if one shared the view that even in Elchinov the attitude of the Court was rather prudent193 or even ‘patient-unfriendly’,194 the entire strand of case law on patients’ mobility, hitherto considered the most vital and innovative in the health care field, would appear to be in the process of losing momentum. Is the tide, therefore, turning now? Other problematic issues have to be highlighted. Taking a small step backwards, it has to be borne in mind that the case law on patients’ mobility had been criticised by a part of the legal doctrine. Firstly, the qualification of medical treatments as economic activities and their consequent inclusion within the scope of the Treaty provision on freedom to provide services had been considered not to be in line with other patterns of case law of the CJEU.195 Despite the hypothesised weakening of the impetus of the case law on patients’ mobility referred to above, the basic assumption that medical services fall within the scope of the provision of freedom to provide services is not likely to be reviewed by the Court in the future. It is sufficient here to recall the opinion expressed in the literature that ‘broadly speaking, the free movement of workers, establishment and services provisions can be described as rights-conferring’.196 This can explain the attitude of the CJEU in the patients’ mobility cases, where the

192   See Wyatt, ‘Community competence to Regulate Medical Services’ (n 97) 131 ff; Davies, ‘The Community’s Internal Market-based Competence to Regulate Healthcare’ (n 97) 215 ff; L Dubois, ‘Les États membres de l’Union Européenne ont-ils conservé la maîtrise de leur système de soins?’ in E Belliard, Mélanges en l’honneur de Jean-Pierre Puissochet: l’État souverain dans le monde d’aujourd’hui (Paris, Pedone, 2008) 77–84. 193   See section II.B. 194   van der Mei (n 18) 1306. 195   See Hatzopoulos, (n 16) 685 ff; Newdick, (n 25) 1654 ff; Spaventa, (n 27) 50 ff; Cancilla, (n 2) 230 ff; Gallo, I servizi di interesse economico generale: Stato, mercato e welfare nel diritto dell’Unione europea (n 4) 351 ff, 623 f; Gallo, ‘Social Security and Health Services in EU Law: Towards Convergence or Divergence in Competition, State Aids and Free Movement?’ (n 4) 11 f and references cited therein. Differences which have been pointed out between the free movement and competition lines of case law in the assessment of the existence of an economic activity have been considered, in many cases, inherent to the EU law legal system: see O Odudu, ‘Economic Activity as a Limit to Community Law’ in The Outer Limits of European Union Law (n 16) 225–45, esp 235 ff; Hancher and Sauter (n 4) 127 ff and, once more, Gallo, I servizi di interesse economico generale: Stato, mercato e welfare nel diritto dell’Unione europea (n 4) 356 ff. See also Gekiere, Baeten and Palm, (n 2) 465 ff. For a detailed analysis of these problems with reference to the case law on patients’ mobility, see Baquero-Cruz (n 2). 196   Odudu, ‘Economic Activity as a Limit to Community Law’ in The Outer Limits of European Union Law (n 16) 237.

160  Roberto Cisotta conferral upon citizens – as recipients of services – of rights by the Treaty provisions on free movement has always been the starting point. Secondly, the case law of the CJEU on patients’ mobility had been criticised because it could generate incentives for a special kind of ‘social tourism’197 especially for middle-class cultured patients,198 and with potential financial imbalances for national health systems. The other citizens, in particular the poorer and those with little or no consciousness of certain possibilities – which should, theoretically, be those who benefit the most from social protection systems – should bear the increasing burden generated by the mobility of patients, without actually taking advantage of cross-border health care. As a consequence, a serious threat to the very essence of territoriality and solidarity of national health systems would be triggered.199 In the most recent judgments which have been presented in this chapter, the indulgence vis-à-vis Member States has often been excessive, but it is questionable whether this could be considered a response to the referred criticisms expressed by the legal doctrine. On the other hand, these recent judgments can be interpreted as a necessary refinement of the groundbreaking line started with the Decker and Kohll cases. The Court acknowledged the existence of some limits upon the rights of patients, in a way, which, as has been pointed out, at least sometimes appears to be reasonable. In this light, the case law examined can be welcomed as a positive development of the CJEU’s elaboration on some important points. As to the idea of solidarity, I will just touch upon the problem – which is a sensitive and tough one. As the legal framework for health care is increasing its multilevel character, it should build on a new, supranational, idea of solidarity which would be complementary to the national ones. The more intense is the interaction between EU and national legislations, the more a new private and public economic fabric will be created. Such a complex socio-economic reality needs governance. The CJEU can provide only one of the elements with which it has to be built and some uncertainties arise when it comes to the other ones. Similarly to the case law of the Court, the new directive on cross-border health care is focused on patients’ rights. This new piece of legislation has been inserted alongside the existing secondary law on coordination of social security schemes and, of course, of primary law, but without bringing greater clarity. Hence, the ‘patchwork’ has become even more complicated. Given the irreducible differences between national health systems and the difficulties in interpreting the case law (not only the line concerning patients’ mobility), far-reaching legislative innovations had been hypothesised by some scholars.200 Another part of the literature had focused on sophisticated and innovative multilevel mechanisms of interaction between law (as well as case law) and governance –   Hatzopoulos (n 16) 695 ff.  M L Flear, ‘Developing Euro-Biocitizens Through Migration for Healthcare Services’ (2007) Maastricht Journal of European and Comparative Law 3, 239–61 argued that the case law on patients’ mobility gave rise to a new European generation of patients and the potential destabilisation of national health systems should have been managed through adequate EU-driven governance and legislation. 199   Newdick (n 25) 1645 ff. 200   Wyatt (n 97)139 ff; Davies (n 97) 215 ff. 197 198

Limits to Rights to Health Care  161 among others – in the field of health care.201 Only a comprehensive and effective legal apparatus could re-balance the potential drawbacks of the jurisprudence on patients’ mobility highlighted by the legal doctrine referred to above. On top of that, the case law on cross-border-health care itself has been correctly interpreted as a pretorial attempt to set up some embryonic lines of a more appropriate secondary legislation.202 Meanwhile, the high expectations referred to seem not to have been met, as the current legal framework suffers from a lack of clarity and excessive fragmentation, while the effectiveness of the mechanisms put in place by the new directive for providing information and ensuring coordination need a practice test to be carefully evaluated. The other side of the coin regards the establishment of an efficient single market of health care, in which medical services providers too are given greater possibility of providing their services in other Member States with no (or little) hindrance. Such a market has not been achieved yet.203 This is confirmed by the other cases examined, where national legislations were scrutinised with reference to rights to be granted to the (national and especially) foreign providers of medical services (pharmacies, analysis laboratories). Patients’ rights could have been affected only indirectly, through a probable increase in prices (and, maybe, a decrease in the quality of services), should Member States have been granted greater room for manoeuvre. And the Court decided, actually, to run this risk. Restrictions have often been considered justified.204 Member States discretion has thus regained a great part of its breadth.

201   G de Búrca and J Scott, ‘Narrowing the gap? Law and New Approaches to Governance in the European Union’(2007) Columbia Journal of European Law 513–17; T Hervey and L Trubek, ‘Freedom to Provide Health Care Services Within the EU: An Opportunity for a Transformative Directive’ (2007) Columbia Journal of European Law 623–47; M Dawson, Three Waves of New Governance in the European Union (2011) European Law Review 2, 208–25, esp 214. See also the Monti Report: ‘A new Strategy for the Single Market – At the Service of Europe’s Economy and Society’, Report to the President of the European Commission José Manuel Barroso, by Mario Monti–9 May 2010, 54, available at www.ec.europa.eu. Prof Monti recommended adopting ‘urgently’ the directive on cross-border health care. It is also worth quoting the following passage: ‘In addition, a number of supporting actions should be taken in order to foster market integration in the health sector. The Commission should launch, together with the Member States a detailed benchmarking of health systems across the European Union. It should develop and spread knowledge on best technologies in the health care sector, building on the health technology pilot project. The use of e-health technologies to support decision-making within health systems should be encouraged in order to systematise the uptake of identified best practices. Targeted rules to further facilitate the free movement of patients in the EU should be developed’. 202   Biondi, (n 16) 234. 203   As to health care professionals, for an analysis of the EU legislation on their circulation see: M Peeters, M McKee and S Merkur, ‘EU Law and Health Professionals’ in Mossialos, Permanand, Beaten and Hervey (n 2) 589–634. 204   Furthermore, probably the potentially intrusive character of the scrutiny carried out by the CJEU on the ‘concern’ of the Member State to attain its declared objectives in a consistent and systematic manner – the so-called ‘consistency’ criterion – has not always been fully exploited in the preceding case law of the CJEU, see Hancher and Sauter (n 4) 136–37. Hence, on this important point the orientation of the Court has evolved over recent years. Yet, a more courageous approach might be adopted in some cases.

162  Roberto Cisotta The proposition, according to which freedoms of movement are to be interpreted as ‘rights-conferring’, in the field of health care, is basically true when patients’ rights are at stake. When the Court deals with economic rights to be granted to people making business out of health care, it usually takes a much more prudent stance. With reference to the case law on freedom of establishment in the health care field preceding the judgments examined in this chapter, it has also been noted that this attitude might have been induced by the concerns over the great number of providers which could have exploited the opportunities triggered by more opened national markets: while in fact the number of patients – acting as services recipients – going abroad is not normally too high, in the case of freedom of establishment the impact of foreign providers on national markets may be remarkable.205 Nevertheless, the Member States’ powers of intervention in the health care sector are tempered, to a certain extent, by the judicial scrutiny of the CJEU and the harmonisation at the EU level, which is in some way present, despite the lack of a specific – and proper – legal basis in the Treaties and, as already pointed out, is not very well structured. This marks a clear difference from sectors such as gambling, in which Member States do not encounter the limit of harmonisation, while judicial scrutiny is much less rigorous and the Court – as we have seen – tends to leave the floor to national regulation. In all cases, however, the Member States’ need to plan plays a very important role and acts as the fundamental limit to rights both of patients and, even more intensely, of providers. As a very final remark, I would stress that in my view it is obvious that the Court was guided by the need to protect the right to health of EU citizens, which holds the highest rank in the national legal orders as well as in EU law.206 This is made even clearer by the fact that such right to health is also laid down in Article 35 of the Charter of Fundamental Rights of the EU. Despite the disclaimer, contained in the aforementioned provision, about the right to health being subject to the ‘conditions established by national laws and practices’, to define its entire substance, in many cases, reference now also has to be made to EU law.

205   See J A Gutierrez-Fons, ‘Case Hartlauer: Testing the Consistency of Entry barriers to National Health Systems’ (2010) European Journal of Consumer Law – Revue Européenne de droit de la Consommation 2, 305–16, esp 314 f. 206   See Cisotta, (n 2) 177–78; Cancilla (n 2) 238.

8 Services and the EU Consumer – or the EU Citizen? FRANK BENYON

A

READING OF the preceding chapters indicates that in a number of areas the rules on the provision of services have been adopted exclusively at the EU level, whether by the legislator or by the judiciary, with rights and other advantages, identical across the EU given to the consumer. It would seem therefore that one can use the term the ‘EU consumer’, rather than simply a consumer in the EU. In other areas, EU rules have their part to play, but the actions and choices of the Member States have their role to play too. We need to be clear in which areas the EU consumer is to be found, and for which reasons, and in which areas such EU consumer is not present, since this information may be the key to remedy the malaise of a large number of citizens towards the EU, a malaise which has been recognised at the highest level. And this is not an intellectual debate, but a practical problem to be solved in the relatively short term if the EU is not to lose more popular support. One should be clear about what the EU can do, and has done, for the individual and what tasks rather lie with the Member States, so that approval, or blame, may be correctly attributed. And in the areas where the EU has taken actions clearly protecting individuals receiving services, it should be considered if such actions, whether essentially economic or more attached to the person’s safety and well-being, make up a part, perhaps even an important part, of the panoply of rights of EU citizenry. To see whether EU consumer rights should properly be seen as among EU citizens’ rights, it is proposed that • we first see in which of the sectors discussed above, the notion of the ‘EU consumer’ can be said to exist at all, together with the reasons for its absence in other sectors; • we then examine how the position of the individual, whether labelled citizen or consumer, has been considered ‘officially’ of late, in particular in the Mario Monti Report of May 2010, prepared with a view to solving the important challenges presently before the EU institutions – namely how to strengthen its single market and at the same time remedy the disillusionment of many of the

164  Frank Benyon citizens. We shall also look at the reactions of the Commission to this report, namely the separate, but complementary, measures put forward in 2010 concerning the single market and concerning EU citizenship; • lastly the concept of EU citizenship should then be considered, looking at the history of its development, the Treaty provisions on the subject and, of course, the jurisprudence of the Court; this should help to see whether the contours thereof are fixed or fluid, able to adapt to developing situations within the EU, such as that the subject of the present study, and whether this would present advantages. I.  IN WHICH SERVICES SECTORS CAN WE FIND THE ‘EU CONSUMER?’

The Treaty laid down from the very beginning that transport should be the subject of a Common Transport Policy; since the opening of the market took place by EU instrument, it was possible to regulate the pursuit of the activity comprehensively. As we saw in chapter two, in the air transport sector this occurred essentially by directly applicable regulations, rather than by directives, thus avoiding variations among Member States. Consumer interests were either in the background, sometimes mentioned in the recitals of a measure,1 where for example it was shown that lower fares or better service were to result from the measure, or more in the foreground, for example when the Commission took decisions requiring Member States to permit competing carriers to fly on a particular route or from a specific airport,2 thus improving the service and the choice for the passenger. However the more recent raft of measures, including those expressly obliging operators, air carriers, to compensate passengers for delay and cancellation, or make payments under the updated Warsaw Convention,3 as well as the regular publication by the Commission of ‘black lists’ banning air carriers from operating in the EU for safety reasons, surely show that in this sphere it is the EU which has taken over the task of protecting the consumer. And the consumer would appear to be aware of his EU rights, judging, for example, by the number of compensation claims introduced against flight operators, many eventually finding their way to the European Court of Justice, which has adopted a very consumer-friendly approach in a number of cases. That may be one of the reasons why more than a dozen references from national courts concerning claims are currently pending!4 Further, in some areas it was precisely the weight of the EU that helped to lead to improved protection, including at the world level; for example the increase, by the 1999 Montreal Convention, of the accident compensation limits in the 1929 Warsaw Convention followed closely upon the increase of such limits which the EU introduced for its own carriers by autonomous EU regulation.5   See ch 2.   See ch 2, n 30 and following. 3   ch 2, n 52. 4   ch 3, section VI. 5   ch 2, n 55. 1 2

The EU Consumer – or the EU Citizen?  165 So here one can indeed speak of the ‘EU consumer’. The maritime sector presents a similar picture, with liberalisation occurring by regulations and with a comprehensive number of measures dealing with both ship security and with passenger safety and compensation, as detailed in chapter three. Although telecommunications, an essential network service too, are not the subject of a common policy and the liberalisation of such services took place in a different way from transport, we have seen in chapter four that the present situation is that the sector is so closely regulated, that differing Member State measures are essentially excluded. And as for EU measures, the Court found, in its decision in Vodafone,6 that measures to protect the user/subscriber from excessive roaming charges, namely EU Regulation 717/2007, where consumer protection was the decisive factor, were fully in conformity with the Treaty. The fact that every subscriber in the EU regularly receives a text message on his mobile telephone to the effect that the charges are capped at x Euro cents with reference to the EU regulation must mean that he is fully aware that here his position as consumer/subscriber is indeed established at EU level. Further, clear EU consumer protection measures include those on number portability as well as the obligations laid down in the Universal Service Directive7 requiring access to a ’phone, directories etc. Here we would appear, again, to be in the presence of the ‘EU consumer’. We have seen in chapter five that, although the audio-visual sector follows, on the technical level, the same provisions on electronic communications as those for telecommunications, in contrast, in the area of establishment, of programme content and of rules for home broadcasters, it is for each Member state to decide what it wishes. The reasons for this are to be found in the limited Treaty provision on culture and are further referred to in the Audio-Visual Media Services Directive and the various judgments. Overall, therefore, and notwithstanding the Court’s clear application to the sector of the Treaty rules on services and on competition, one would not seem to be in presence of an ‘EU viewer’, at least as regards the substance of national broadcasts. Health care services present a position not dissimilar to that of the audio-visual sector, with the Member States free to choose how, generally, these services are to be provided and how auxiliary services in the area of pharmacies and of social services are to be made available,8 in view of the powers reserved to Member States under the Treaty in the area of public health.9 There is, however, the specific   See ch 4, section IV.B.   Directive 2009/136/EC of the European Parliament and of the Council of 25 November 2009 amending Directive 2002/22/EC on universal service and users’ rights relating to electronic communications networks and services, Directive 2002/58/EC concerning the processing of personal data and the protection of privacy in the electronic communications sector and Regulation (EC) No 2006/2004 on cooperation between national authorities responsible for the enforcement of consumer protection laws (Text with EEA relevance) OJ L 337, 18.12.2009, 11–36. 8   See ch 7. 9   Arts 52 and 62 TFEU. 6 7

166  Frank Benyon exception to this Member State freedom arising from the Court’s requirement that a Member State must, in general, permit a patient to obtain treatment in another Member State and be reimbursed therefor. Here the Court, while pushing outwards the borders within which each Member State must pay for the health care of its citizens, seems also to be pushing back the borders of Member State competence in favour of EU-wide rights, and this notwithstanding the provisions of Article 168 of the Treaty, which excludes all harmonisation, and the text of the Charter which refers to individuals’ rights to health care ‘under the conditions established by national laws’. This situation is now the subject of Directive 2011/24,10 aimed at consolidating the jurisprudence, which puts very much to the fore the rights of the patient. In the discussion in chapters six and seven, it was suggested that the notion of EU citizenship did perhaps underlie the Court’s reasoning, but admitted that this was never mentioned. For the purposes of the discussion at this stage, it would nevertheless appear that one can certainly speak of a ‘EU consumer’, or rather an ‘EU patient’ for this cross-border care and we shall consider later how this may be able to relate to the EU citizenship debate. Measures to protect the consumer have, of course, been taken by the EU in other service sectors, which have not been the subject of the preceding chapters. For example in banking and financial services, various EU rules have been introduced to protect the consumer. In 2001, Regulation 2560/200111 required charges for cross-border payments in Euro to be the same as for corresponding payments within a Member State; the result was a significant reduction, or, more generally, an elimination of such charges. Directive 2007/64 on payment services in the internal market now ensures that the rules on electronic payments are the same throughout the EU, enabling payments to be made across the EU as easily and as safely as in one’s home country. Although these two measures apply equally to businesses and to private persons, they are clearly of great interest to the consumer, providing for one clear EU-wide rule. A measure reserved specifically to consumers, or rather to non-professional investors, is Directive 94/19/EC on deposit guarantee schemes, as amended by Directive 2009/14, providing for a minimum guaranteed sum of 100,000 Euro, to be paid within a specific time limit to depositors of monies by banks etc, who are unable to repay depositors. And, lastly, the Commission has adopted a Recommendation (2011/442/EU) on 16 July 2011 on access to a basic payment account, a measure expressly aimed at less privileged consumers, to enable them to have access to a bank account and associated basic services in order to benefit from the single market fully. These positive measures do not, however, allow us to establish the presence of a uniform ‘EU consumer’ in the sector. Not only are the deposit guarantee rules only minimum rules and the Commission Recommendation a non-binding measure, which fore10   Directive 2011/24/EU of the European Parliament and of the Council of 9 March 2011 on the application of patients’ rights in cross-border health care [2011] OJ L88/45. 11   Repealed and updated by Regulation (EC) No 924/2009 of the European Parliament and of the Council of 16 September 2009 on cross-border payments in the Community and repealing Regulation (EC) No 2560/2001 (Text with EEA relevance) OJ L 266, 9.10.2009, 11–18.

The EU Consumer – or the EU Citizen?  167 sees that Member States will choose different ways of achieving their aims, but also the whole sector is still subject to numerous measures which vary between Member States. In other sectors, for example services such as betting and gaming, considered briefly in chapter seven,12 the pendulum swings almost entirely to the side of the Member States, since apparently one is concerned with a question of national culture, national health care, national crime prevention; there is no ‘EU gambler’ to be seen! Finally, it is important to note that the EU rules, uniformly protecting the EU consumer, have been adopted not only to deal with cross-border situations which the Member States were unable to protect alone – for example the Roaming Regulation – but also, indeed most frequently, to protect the EU consumer irrespective of any particular cross-border movement of the consumer.13 An example is number portability in telecommunications, which, by definition, essentially concerns transfers of clients between national telecoms providers, or, for example, the passenger safety and compensation rules in transport, which were expressly transposed from the international to the EU level in order to cover journeys both between Member States and within one Member State. The measures have been taken to cover the citizen as such, irrespective of the cross-border element which is essential when considering situations under the Four Freedoms. This would indeed seem to be something additional to the national citizenship rights, mentioned in Article 20 TFEU!

II.  THE MONTI REPORT ‘A NEW STRATEGY FOR THE SINGLE MARKET.  AT THE SERVICE OF EUROPE’S ECONOMY AND SOCIETY’

This report was prepared pursuant to a mandate given to Professor Monti by the President of the European Commission to examine the challenges which would be faced by an initiative to re-launch the single market.14 Of the three major challenges,15 it is proposed to look closely at the first one, namely the erosion of the political and social support for market integration in Europe. The report, presented to the Commission and European Parliament in May 2010, states that The single market is seen by many Europeans – citizens as well as political leaders – with suspicion, fear and sometimes open hostility. Two mutually reinforcing trends are at work: ‘integration fatigue’, eroding the appetite for more Europe; and more recently, a   See ch 7, in particular section III.C.   Although in the case of use of the internal market legal base, there will need to be a cross-border aspect concerning, for example, the establishment of the service supplier, in the basic measure governing the matter. 14   ‘A new Strategy for the Single Market – At the Service of Europe’s Economy and Society’, Report to the President of the European Commission José Manuel Barroso, by Mario Monti–9 May 2010, available at www.ec.europa.eu. 15   Monti Report, Executive Summary. 12 13

168  Frank Benyon ‘market fatigue’, with a reduced confidence in the role of the market. The single market today is less popular than ever, while Europe needs it more than ever.

The concerns of individuals are set out subsequently, divided into different areas, including ‘consumers’ concerns’, where it is stated that in many cases . . . benefits are late to materialize because the single market has been introduced but there is still insufficient competition, or because access to the single market is precluded or difficult, or because there is inadequate consumer protection

and then ‘citizens’ concerns’, where it is stated that the single market also has a non-economic dimension, which citizens of the EU want to be able to enjoy.

To address these concerns, the report goes on to state that ‘the first challenge is thus to empower citizens, whether consumers or entrepreneurs, to become full actors within the internal market’.16 It then looks at measures to assist free circulation, falling under civil, commercial or family law, and then measures to empower consumers. It unfortunately does not seem to take due account of the numerous consumer protection measures already taken by the EU institutions, including those described in these chapters. However, it is a different observation that we wish to make here. Throughout, the report seems to leave the capacity, or the role, of the individual in the single market dilemma vague. There is mention of citizens as consumers, a distinction is made between an economic and non-economic dimension of the single market, and nowhere is it said whether we are considering citizens of Member States or EU citizens. Upon presentation of the report to the European Parliament, Professor Monti stated that the single market must ‘serve citizens, consumers and small and medium-sized enterprises’. This conclusion of the strategy is similar to that of the report by MEP Louis Grech , which advocates ‘giving a single market to citizen-consumers’ and states Parliament’s view on how best to revitalise the single market. From this, can one infer that citizens are recognised, at least in political terms, as having economic interests, including thus consumer interests, as well as noneconomic interests, but that the general approach does not specify whether we are dealing with Member State citizenship or EU citizenship.17 The Commission responded to the Monti Report with, essentially, two communications, namely

  Monti Report, para 2.2.   And this is not without significance, since if we are talking about Member State citizens, they have enjoyed rights as ‘Market citizens’, as Michelle Everson describes them in her article ‘The Legacy of the Market Citizen’, essentially under the Four Freedoms since the entry into force of the Treaty of Rome. If, on the other hand, we are speaking of Union citizens, the additional status awarded under the Maastricht Treaty, then the approach would seem to need to be different; see Michelle Everson, ‘The Legacy of the Market Citizen’ in Jo Shaw and Gillian More (eds), New Legal Dynamics of the European Union (Oxford, Oxford University Press, 1995). 16 17

The EU Consumer – or the EU Citizen?  169 • a Communication to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions, ‘Towards a Single Market Act, For a highly competitive social market economy, 50 proposals for improving our work, business and exchanges with each other’;18 and • an EU Citizenship Report 2010, ‘Dismantling the obstacles to EU Citizens’ rights’19 At the same time, the Commission produced its • Report under Article 25 TFEU on progress towards effective EU Citizenship 2007–201020 This last report, required to be produced every three years pursuant to Article 25 TFEU, deals only with rights listed in the Treaty citizenship chapter, namely free movement and residence, electoral rights, consular protection and rights to petition the European Parliament, approach the Ombudsman etc. The first element to note in the Single Market Act is the clear statement that that Act and the Citizenship Report complement each other, being intended to overcome the continuing fragmentation of the European Union in areas of direct interest to citizens and in so doing give concrete form to the commitment to create a people’s Europe and an efficient single market to meet the needs and expectations of citizens and businesses.21

It speaks of the need to restore confidence in Europe, for a commitment of ‘all the players, European, national or regional’ to solve problems, private, economic and social (page 5) and goes on to state that ‘the single market also helps to develop the identity of each citizen . . . all of us irrespective of whether we are consumers, workers, students, savers, entrepreneurs, users of public services, patients, pensioners etc. We are all Europeans’. (page 19). Notwithstanding this interaction, or inter-relation between citizen and market, the Single Market Act Report subsequently states that citizens’ non-economic rights are dealt with elsewhere, namely in the Citizenship Report.22 However, the Citizenship Report, in discussing the obstacles to be dismantled, would seem to include not only what might have been considered more easily as ‘non-economic’ rights, such as questions of civil status, criminal law, European Parliament election procedures, etc, but also the facilitation of cross-border health care (Action 7 in the concluding list),23 modernisation of the rules to protect consumers for package travel (Action 9) and air passenger rights (Action 10), all quite clearly types of consumer protection matters, as discussed in the preceding chapters.  COM(2010)608.  COM(2010)603.  COM(2010)602. 21  Introduction. 22   Para 2. 23   pp 24–27. 18 19 20

170  Frank Benyon The reports are thus not just complementary, they overlap – and overlap significantly! So, must one not conclude from the above that neither the author of, nor the institutions involved with, the Single Market Report, in particular the Commission, appear to possess any firm lines of demarcation between what are a citizen’s economic and non-economic concerns? And further, they do not seem to think that this is of any importance in the drive to draw the citizens closer to the EU and its institutions. Accordingly, it seems quite possible to claim that the rights and benefits attached to the ‘EU consumer’ status as described above in air travel, in maritime transport, in telecommunications and other fully harmonised areas as well as those in cross-border health care, have been, and continue to be, a striking way to bring the citizen closer to the EU institutions, which institutions alone, to the exclusion of the Member States of which such EU citizens are also citizens, regulate these matters in the interest of the citizen? Is this not an important aspect of a ‘People’s Europe’, of being a ‘European’? Is this not a status ‘additional to’ that of Member State nationality, as provided in Article 20 TFEU? Could this not be part, indeed an important part, of EU citizenship? Let us therefore consider whether EU law permits or prevents such a claim, or at least is agnostic, and what would be the advantages or disadvantages of expanding the list of citizenship rights set out in the Treaty.

III.  CITIZENSHIP OF THE UNION

In the Title on Democratic Principles in the Treaty of European Union, Article 9 states that Every national of a Member state shall be a citizen of the Union. Citizenship of the Union shall be additional to and not replace national citizenship.

Article 19 TFEU ‘establishes’ EU citizenship. Article 20 TFEU lists rights and duties concerning the right to move and reside freely within the territory of the Member States, to vote in European Parliament and local elections, to enjoy consular protection from other Member States in third countries and to petition the European Parliament etc. This list begins with the words ‘inter alia’. It is, thus, not exhaustive. What else could be included?24 24   There is no shortage of ideas, articles and whole books on this subject. These include: N Reich, ‘A European Constitution for Citizens: Reflections on the Rethinking of Union and Community Law’ (1997) 3 European Law Journal 131–64; ‘The Constitutional Relevance of Citizenship and Free Movement in an Enlarged Union’ (2005) 11 European Law Journal 675–98; N N Shuibhne, ‘The Resilience of EU Market Citizenship’ (2010) 47 Common Market Law Review 1597–628; L Azoulai, ‘Constitution economique et citoyennet de l’Union Revue Internationale de Droit economique a paraitre’; ‘La citoyennet europeenne, un statut díntegration sociale’ in Chemins d’Europe, Melanges en

The EU Consumer – or the EU Citizen?  171 To find an answer to this question, let us consider the following elements:

A.  What Does the Notion of ‘Citizenship’ Entail? Until now, the notion of citizenship has related to sovereign states and the requirements therefor are contained in the national law of the state which accords the same, and these laws are not identical. However, some common denominators can be seen, namely the sharing of burdens, such as taxation or conscription, in return for the enjoyment of rights such as police and military protection, perhaps the provision or organisation of health care – in other words, solidarity – and the right to participate in the taking of decisions concerning these matters – in other words, democracy.25

B.  History of the Notion of Citizenship in the EU and its Predecessors As the nature of the European Economic Community slowly developed from an international, to a nascent supranational organisation following judgments of the European Court of Justice on the primacy of Community law over national law and on the direct effect of certain of its provisions,26 attention began to be paid to the citizens, or rather, initially, to the peoples which made up the states which were the members of the Community. By decision of the Council of 20 September 1976,27 it was decided that, ‘The representatives in the European Parliament of the peoples28 of the States brought together in the Community shall be elected by universal suffrage’, with elections to be held every five years, and a uniform electoral procedure to be laid down by the Community. At about the same time, in 1986, as the Single European Act was concluded (essentially concerning the single market and European foreign policy cooperation, not of apparent immediate concern to the citizen), consideration was being given to the position of the citizen. An ad hoc committee, ‘Europe des Citoyens’, chaired by Pietro Adonnino, had been established to consider appropriate measures to reinforce and promote the Community’s identity and its image with regard to its citizens and the world. The 1985 Milan European Council duly l’honneur de Jean Paul Jacque (Paris, Dalloz, 2010) 1–28; F Jacobs, ‘Citizenship of the European Union – A Legal Analysis’ (2007) 13(5) European Law Journal 591–610; Everson, ‘The Legacy of the Market Citizen’ (n 17) 73–90; C Barnard, ‘EU Citizenship and the Principle of Solidarity’ in E Spaventa and M Dougan, Social Welfare and EU Law (Oxford – Portland, Hart, 2005) 157–80. 25   See R Bellamy, European Law Journal , Vol 12, No 6, December 2006 , 725–42 . 26   Case 26/62 Van Gend en Loos v Nederlandse Administratie der Belastingen [1963] ECR 1; Case 6/64 Costa v Enel [1964] ECR 585. 27   Decision 76/787/ECSC, EEC, Euratom OJ L 326/32. 28   Note the reference to the ‘peoples of the Member States’, and not to citizens, whether of Member States or the Community.

172  Frank Benyon approved29 proposals to use the Council of Europe flag and emblem by the Community institutions and took note of the proposal that Beethoven’s Ode to Joy be the Community anthem. With the Maastricht Treaty of 1992, a quantum leap was made with regard to the citizen, not only indirectly, by the extension of the competences of the EU to areas such as consumer protection, the environment and health, subjects, no doubt closer to the concerns of the individual, but also by the introduction into the EC Treaty of a new Part, entitled ‘Citizenship of the Union’. The provisions, (now to be found in Part Two, ‘Non Discrimination and Citizenship of the Union’, of the TFEU), contain six articles (now Articles 20 to 25), which establish citizenship of the Union for every person holding the nationality of a Member State and provide that citizens of the Union shall enjoy the rights and shall be the subject of the duties provided for in the Treaties. Under paragraph 2 of Article 20, they shall have ‘inter alia’ the right to move and reside freely within the territory of the Member States, the right to vote and stand at European Parliament and municipal elections in their state of resid­ ence, the right to consular protection in third countries from the diplomatic authorities of other Member States and the right to petition the European Parliament and the Ombudsman and to address EU institutions in any EU language. The four subsequent articles spell out these rights in more detail.30 The Amsterdam Treaty completed this Article by the addition to its first paragraph of the following sentence: ‘Citizenship of the Union shall be additional to and not replace national citizenship’.31 The Draft Treaty Establishing a Constitution for Europe signed in Rome on 29 October 2004 essentially reproduced the above provisions on citizenship in its Article 1-10 but also contained an Article 1-8 on the symbols of the Union, namely the blue- and gold-starred flag, the anthem, the motto, the currency and a fixed Europe Day.32 This draft Treaty was abandoned following the negative referendum results in France and the Netherlands. The Treaty of Lisbon took over the Maastricht provisions on citizenship, combining them with the article prohibiting discrimination. It did not take over the draft Constitution provision on the various Union symbols. It also introduced a number of provisions, outside the citizenship chapter, but of importance to the individual. It raised to Treaty level the 2007 Charter of Fundamental Rights of the European Union, the recitals of which note in particular that the Union places the individual at the heart of its activities by creating Union citizenship and an area of freedom, security and justice and provides for the accession of the Union to the European Convention for the Protection of Human Rights and Fundamental Freedoms, thus allowing direct recourse by individuals against Union acts. Such accession will make the Union responsible for its own acts, no longer having to be   Note that this did not have any binding effect.   The last article, Art 25, provides for three yearly Commission reports on the application of Part Two, to which reference was made in the 2010 Report referred to in para II above. 31   Art 20(1) TFEU. 32   Treaty Establishing a Constitution for Europe, Part I, Title, I, ‘Definitions and Objectives of the Union’, Art 1-8 [2004] OJ 310/P 0013 – 0013. 29 30

The EU Consumer – or the EU Citizen?  173 defended by its Member States,33 since, importantly for the present discussion, it will permit recourse to the Human Rights Court for all persons subject to the jurisdiction of the EU: thus not only by citizens but also by others. Further, the Title in the Treaty on European Union on Democratic Principles, which in its Article 9 re-states the provision on EU citizenship, introduces, in its Article 11, the Citizens’ Initiative, whereby not less than one million citizens of different Member States, and ‘representative organisations’, may take the initiative of inviting the Commission to make appropriate proposals. More generally, in the Institutional Provisions of the TFEU concerning the Court, the Lisbon Treaty makes challenges by natural or legal persons of regulatory acts easier by dispensing with the requirement that such act be of individual concern to such persons.34 From this rapid overview, one can see that the position of the individual, the citizen, has been a matter of continuing concern for the Community. But the effort to involve the citizen in a similar way to involvement with a state through a Parliament has given mixed results; there is still no uniform election procedure, no single voting day; and, for whatever reason – difficulty in identifying with parties, the technical nature of the European Parliament’s powers or a lack of information about them – voting participation in European Parliament elections has decreased steadily since 1979.35 The effort to promote the Community’s image with its citizens by means of the ‘trappings of state’ – flag, anthem, etc – elevated to Treaty level, has not been appreciated either. So, since the Community, now the EU, is not a state – indeed for a start, it is not even the EU which grants its citizenship, it simply has to take over all those who are nationals of its Member States36 – one cannot evaluate EU citizenship in the same way as for a state,37 so surely other elements – perhaps the significant collection of consumer rights discussed in the earlier chapters – could enter into the equation? Does not the EU need to look for alternative dimensions to citizenship if the traditional state-bound version does not seem to work? However, before examining whether these EU consumer rights could be considered as EU citizenship rights, let us first look at how the Court has dealt with claims for EU citizenship rights.

C.  The Court and EU Citizenship In its seminal judgment of 1989 in Cowan,38 the Court found that it was discriminatory of the French authorities not to pay to a British tourist attacked in Paris an   Art 6(1) and (2) TEU.   Art 263 TFEU (ex 230 EC). 35   See EU Citizenship Report 2010 (n 15). 36   R Baubck, ‘Regulating the Gates to European Citizenship’ EUI Review (Winter 2010) 9. 37   See also the judgment of the German Constitutional Court of 30 June 2009 concerning the Lisbon Treaty, recital 276 and following. 38   Case 186/87 Cowan v Tresor Public [1989] ECR I-5145. 33 34

174  Frank Benyon indemnity to compensate for his injury simply because he did not have a French residence permit. He was considered to be a potential recipient of tourist services and thus fell within the scope of the Treaty and the prohibition of discrimination. France’s argument that such form of payment was a manifestation of the principle of national solidarity and thus required a closer link with the state than that of a tourist was expeditiously rejected. With such a broad approach, based on non-discrimination and followed on other occasions, it was not obvious what the new citizenship provisions of Maastricht would cover. Furthermore, as to the right to move and reside freely in the territories of other Member States, secondary legislation had been in place for a number of years dealing not only with those Member State nationals benefiting from the Treaty freedoms, but also with retired persons and students.39 Subsequent judgments of the Court have shown that the matter is complex, in particular because of the very diverse situations brought before it. From these decisions, one can start by observing that the Court’s general approach has stayed very close to that followed in the Four (economic) Freedoms, ie examination of whether there is a cross-border element, a restriction (or, more commonly, discrimination) and a justification; indeed it is often worthwhile to see whether the question can be answered under the Four Freedoms alone.40 An example of this inter-relation is the judgment in Bickel & Franz,41 where the Court found that Italy’s reservation of the use of the German language in criminal proceedings in the German speaking regions of Italy only to residents of such regions breached the non-discrimination article and was within the scope of the Treaty both on the Cowan basis, namely tourist recipients of services, and because Bickel and Franz had the freedom to move and reside freely under the citizenship article – two separate grounds therefore. Following the Four Freedoms approach, the Court examines whether there is a cross-border aspect, ie that it is not a wholly internal question; it has, however, adopted a quite broad approach, since exercise of free movement rights prior to the problem arising has been regarded as sufficient.42 43 Indeed, the requirement for cross-border movement seems to have assumed less importance, for example, for the residence rights granted in Baumbast,44 where the citizenship provisions

39  Council Directive 90/365/EEC and 93/96 since repealed and replaced by Council Directive 2004/38/EEC on the right of citizens of the Union and their family members to move and reside freely within the territory of the Member states [2004] OJ L158/77. 40   Case C-137/09 Josemans [2010] ECR I-13019. This was dealt with under the Services freedom and no answer was given to the national court’s questions concerning Art 20. Was this because approval of the Dutch discrimination of nationals of other Member States in soft-drug consumption in coffee shops would have sat unhappily with, for example, the ruling on discrimination in Martinez-Sala? (Case C-85/96 María Martínez Sala v Freistaat Bayern [1998] ECR I-2691). 41   Case C-274/96 Criminal proceedings against Horst Otto Bickel and Ulrich Franz [1998] ECR I-7637. 42   Case C-224/98 D’Hoop v Office national de l’Emploi [2002] ECR I-6191. 43  Case C-212/06 Government of the French Community and Walloon Government [2008] ECR I-1683. 44   Case C-413/99 [2002] 1-ECR 7091.

The EU Consumer – or the EU Citizen?  175 were found to have direct effect, and, of late, in relation to EU national minors in the Ruiz Zambrano case, where the infant EU nationals in question had not crossed a border.45 Here, perhaps, one begins to perceive a ‘status’, separate from the market freedoms, but without any significant examination or development by the Court of concepts or theories of what EU citizenship entails beyond the aspect of a need for integration into the (27 different) societies within the EU. It is important also to note two different approaches in the Court’s judgments, one concerning questions relating to more ‘non-economic’ matters, questions of status, the right to a name, and the other relating to payments or allowances. As for the former, in Garcia-Avello the Court rejected the refusal of the Belgian authorities to register dual nationality children under the double name of the Spanish father as being in breach of Articles 18 and 20 TFEU,46 and this notwithstanding the argument of Belgium that the principle of the immutability of surnames was a founding principle of social order, of which it continued to be an essential element. In Grunkin-Paul,47 the Court went further finding a breach of Article 20 TFEU in the refusal by the German authorities to register the name of a German child of German parents under the double name given on his Danish birth certificate; all arguments as to German conflict laws and their connection to rules of the state of nationality were rejected. However, against this generous attitude, one must contrast the recent judgment in Sayn-Wittgenstein,48 concerning the refusal by the Viennese authorities to register the name ‘Grafin von SaynWittgenstein’ in respect of an Austrian national, who had been adopted by a German count, a ‘Graf’, and who had, since then, lived and worked in Germany for many years under that name, on the grounds that titles of nobility were not permitted in Austria. Having found that the free movement provisions of Article 21 applied to her as a citizen of the Union, the Court went on to look at the question of justification, as for free movement of persons in general. It found that ‘in the context of Austrian constitutional history, the law on the abolition of the nobility, as an element of national identity, may be taken into consideration . . . and be interpreted as a reliance on public policy’.49 Noting the Austrian argument that the law constitutes implementation of the more general principle of equal treatment, which is to be found also in the EU Charter provisions to the same effect, that every Member State may have different conceptions of public policy and that Article 4(2) TEU requires the EU to respect the national identities of its Member States, the Court found the restriction to be justified. Insofar as the Court follows the same approach in citizenship cases as for the Freedoms, and in view of the terms of the secondary legislation, one cannot really criticise such recourse to a public policy justification; however, the stressing of the

  Case C-34/09,Ruiz-Zambrano v ONEM judgment of 8 March 2011, paras 40–45.   Case C-148/02 Garcia-Avello [2003] ECR I-11613. 47   Case C-353/06 Stefan Grunkin and Dorothee Regina Paul [2008] ECR I-7639. 48   Case C-208/09 I Sayn-Wittgenstein [2010] ECR I-13693. 49   Recitals 83 and 84. 45 46

176  Frank Benyon questions of national identity, admittedly inserted into the provisions of the TEU, does not augur in favour of the creation of an independent EU citizenship when confronted by strong citizenship provisions in a Member State.50 Other cases limiting the impact of the citizenship rules concern economic claims, for an allowance or a grant. These decisions contain subtle elements. In the Grzelczyk case, concerning a Belgian refusal to pay a minimum subsistence allowance to a French national studying at a Belgian University, on the grounds that he did not fall under EU rules on workers, the Court51 declared that 31. Union citizenship is destined to be the fundamental status of nationals of the Member States, enabling those who find themselves in the same situation to enjoy the same treatment in law irrespective of their nationality, subject to such exceptions as are expressly provided for.

and found that the prohibition of discrimination in all situations falling within the scope of EU law now includes the right to move freely and reside in other Member States and the right to receive assistance under the same conditions as nationals. However, it also looked at the question of requirements for resources included in the directives on residence, but without taking a position thereon. Such position can be found in two subsequent decisions. In Collins52 the Court found that Articles 20 and 22 TFEU would not be breached in respect of a national of a Member State entering the UK applying for a job-seekers allowance, where entitlement thereto was made conditional on a residence requirement, in so far as that requirement may be justified on the basis of objective considerations that are independent of the nationality of the persons concerned and proportionate to the legitimate aim of the national provisions.53

This was interpreted as a requirement for an appropriate connection – length of residence – between the individual and the labour market of that Member State, to which market the payment was related. In Bidar a similar approach was followed.54 Careful reading of the judgments is necessary to see exactly what sort of solidarity with the host state, perhaps some elements akin to national citizenship, is required in order to benefit from the rights given under EU citizenship. What is, however, rather clear is that this is a much more nuanced position in relation to economic benefits than the blunt rejection of the Member State’s arguments in Cowan! Thus, the approach of the Court to the articles on citizenship has followed that used for the Four Freedoms. For questions of movement and residence of citizens, the problem is complex because we are concerned with the insertion into, and 50   Another recent judgment of 12 May 2011, in Case C-391/09 Malgozata Runevic-Vardyn, has also moved the pendulum back a little in favour of national authorities dealing with name registration. 51   Case C-184/99 Grzelczyk v Centre public d’aide sociale d’Ottignies-Louvain-la-Neuve [2001] ECR I-6193. 52   Case C-138/02 Collins [2004] ECR I-2703. 53   Ibid, para 73. 54   Case C-209/03 Bidar [2005] ECR 1-2703.

The EU Consumer – or the EU Citizen?  177 ongoing presence of a person in, the society of another state, and thus submission to host state rules – more akin to the Establishment Freedom. In the absence of harmonisation of the citizenship or societal rules of the Member States, the Court has had to consider each national provision as problems have arisen and has accepted, and thus preserved, Member State rules that ‘go to the heart of the identity’ of the proposed state of residence (Sayn-Wittgenstein), while rejecting others as unnecessary.55 It has also admitted the application of national provisions which require a ‘contribution’ to the societal privileges offered in the host Member State where these privileges appear to be based on a certain solidarity within the society of that host Member State. The debate has depended almost entirely on the actions, or perhaps, rather, the values, of the different Member States and certainly not on any specific notion of the content of EU citizenship. But in the absence of a critical mass of judgments, it would in any event seem to be too early to attempt any synthesis.

IV.  EU CONSUMER OR EU CITIZEN?

Is the protection of the EU consumer simply an end in itself? Do we stop here? Or do these consumer protection measures have more meaning? Do they form part of the panoply of rights of the EU citizen? Let us weigh up the different arguments.

A.  Arguments Favouring the Inclusion of EU Consumer Rights in the Unfinished List of Article 20: There is no accepted definition of a citizen outside the framework of a state. So already the notion of ‘EU citizen’, undefined in the treaties, is a free spirit; it has ‘no strings attached’. The trappings of statehood do not seem to be able to be transferred to the EU, as explained by many learned writers and ‘confirmed’ by the German Constitutional Court, and are perhaps not desired by individuals either, as the results of referenda and the fate of the Draft Constitution seem to show; so one should not be limited by state-inspired notions of citizenship. Rather, the EU has taken steps to come closer to the citizen which are different from the classic elements of a state, for example by the new Citizens’ Initiative, by facilitating access to the Court of Justice etc. So why not include consumer protection measures within the notion too? The jurisprudence of the Court, which so far concentrates on free movement, does not seem to rule out consideration of the provision of EU-wide protection in certain service sectors as being able to be a part of citizenship.

  Although, again, see Case C-391/09 Malgozata Runevic-Vardyn (n 50).

55

178  Frank Benyon However a number of questions related to such jurisprudence need to be answered as to whether the two areas can really be ‘connected’. The overall result of the Court’s decisions, so far at least, does not establish a clear, unique ‘status’ of EU citizenship. As we have just seen, it resembles more a ‘Fifth Freedom’, an additional freedom, a freedom from discrimination, to sweep up any matters which could not fall into the Four (economic) Freedoms. ‘Citizenship’ and the status56 that this term implies seems so far to be too ambitious a term, chosen by Treaty writers: if citizenship here were to be equated to an actual ship, it seems rather to be a ship on the slipway, not yet able to float on its own, still moored to the vessels of the Member States! Totally different from the provisions dealt with in the Court’s decisions on EU citizenship are the rules protecting and giving rights to users, to consumers, described in these chapters: these are harmonised rules, mostly totally harmonised. Furthermore, rather than dictating conduct to Member States – to admit persons, to register their names, to pay them allowances – these rules impose obligations to provide protection upon operators, for example air carriers or telecommunications companies, therefore upon private parties. These operators are of course citizens, and the obligations imposed on them are obligations towards users, who are citizens too. Could this not be seen to be one form of the solidarity which citizenship usually entails (even if, as we just saw, it is difficult to borrow notions from the national context!)? What is more, such solidarity, of the operator-citizen towards the user-citizen, could also be considered to be in line with judgments of the Court, both more57 and less recent,58 requiring entities other than states, including companies, thus citizens too, to respect various provisions of EU law, and this in relation to other citizens. Or is this another debate? After the adoption of Directive 2011/24, the question of cross-border health care now has similarities with the harmonised areas of transport, telecommunications etc, but still is based upon 27 different national health systems. Unlike the judgments on allowances and benefits under the citizenship provisions, based on non-discrimination and not access to services, where the Court opened the possibility of requiring some sort of ‘contribution’ to the society of the host Member State in which the citizen intends to reside – a sort of solidarity with that society – the decisions and directive on patient care do not require any extra payments or contributions for care abroad, but this is because one is concerned always with the same Member State, the state in which the patient is covered for health care, so there would seem to be no contradiction with those rulings.59 Rather the health   See in particular, Everson (n 17).   Case C-438/05 ITWF v Viking Line ABP [2007] ECR I-10779; Case C-341/05 Laval v Svenska Byggnadsarbetareforbundet [2007] ECR I-11767. 58   Case C-281/98 Roman Angonese v Cassa di Risparmio di Bolzano [2000] I-ECR 4139. 59   Barnard, (n 24) 175 writes ‘The Court’s sensitivity to these issues . . . (ie solidarity required for payment of allowances) . . . in its case law on citizenship can be contrasted directly with its robust attitude to Article 49EC cases on students and health, which, it considers, concern the single market but which directly impact on citizens’ rights. In these contexts the Court has not considered the issue in terms of transnational solidarity. Instead it has focused on its concern to ensure market 56 57

The EU Consumer – or the EU Citizen?  179 care judgments, in a way, ‘extend’ the territory in relation to which the care, and the subsequent reimbursement of the costs, is provided. Might one not see this ‘EU-wide’ health care area, but financed by each Member State separately and differently, as having something to do with EU citizenship? Yet, as we saw in chapter six, the Court did not enter into any general debate on questions of health care or citizenship, restricting itself to the narrow provisions on the freedom to provide an economic service.60 And lastly insofar as Member states in a number of the areas considered above can no longer take measures to take care of their citizens as they are no longer competent under EU law to do so due to total harmonisation, these areas can no longer fit easily into the notion of protection inherent in national citizenship; are they to float in a void, outside Member State powers, or could they not rather be attached to the EU as part of its citizenship?

B.  Challenges or difficulties associated with incorporating consumer protection into citizenship.  Firstly, which are the consumer measures in question? It would be extremely difficult to identify exhaustively the consumer protection rights in question, since not only do service sectors other than those discussed above also form part of the panoply of protective measures – for example, banking and financial services, postal services and the multitude of services of general economic interest (or even general interest!) – but also consumer measures in relation to goods should possibly need to be included too. Further, all of the measures are developing constantly. Secondly, and most importantly, what would be the advantage in calling the rights granted in these service sectors ‘EU citizenship rights’? It has been suggested that inclusion of a citizenship consideration could add another dimension to the preparation and consideration of measures in other areas. But would this be necessary? In the area of transport, the Treaty already contains provisions favourable to consumers, to users, and the legal bases in that chapter permit the EU institutions to take ‘any appropriate measures’.61 For measures based upon the internal market article, Article 114 TFEU (ex 95 EC), which contains a special paragraph devoted to consumer protection, the Court has accepted the pre-eminence of consumer protection in the motivation for taking a measure62 and has given a access and equal treatment. Long term these decisions might have a serious impact on citizenship building’. 60   Azoulai in Constitution economique (n 24) criticises this absence of references to citizenship by the Court as timid, in relation to the Vodafone judgment too, but might one not defend the Court as choosing to rely on a solid, if narrow, legal basis, rather than embarking on an intellectual debate in uncharted territory? 61   Arts 91 and 100 TFEU. 62   Vodafone, see ch 4.

180  Frank Benyon wide interpretation to the Treaty provision, allowing measures even in the absence of divergent national laws, or which do not directly harmonise Member State laws. There would seem therefore to be no need to search for a new legal basis for consumer protection measures. And would there not be a danger in blurring the boundaries between different Treaty rules?63, namely the danger of Member States requiring the EU to act strictly within the limits of its attributed competences and not ‘stray’ into areas reserved to Member States such as health care etc. Thirdly, although the Four Freedoms, for example the services freedom relating to cross-border health care, essentially grant rights restricted to EU citizens only, closer reflection shows that they in fact cover all persons covered by Member State health care rules, citizens or otherwise (see now Articles 3 and 4 of Directive 2011/14). The passenger rights, the capped call charges for telecoms roaming etc are not restricted to EU citizens either: they cover all persons within the reach of the EU rules. Would it thus not be strange to ‘elevate’ the consumer rights to the rank of EU citizenship, surely supposed to be a special status, in such circumstances? Admittedly – as one might be surprised to realise – many of the rights given in the Treaty in the EU citizenship chapter are in the same situation. The rights to petition the European Parliament, the Ombudsman and to use languages listed in Article 20 are extended to all persons resident in the EU by Articles 227 and 228. Rights of appeal to the European Court of Human Rights will also apply irrespective of citizenship. So, perhaps the presence, or absence, of the element of exclusivity – of granting rights exclusively to EU citizens – would not therefore seem to matter too much in the debate whether to include EU consumer rights within the purview of EU citizenship rights. x      x      x      x In view of the difficulties involved in evaluating all the considerations set out above and of the essentially fluid, ever-developing, nature of the notion of EU citizenship, the following practical, tactical, solution to the question raised, namely whether the EU consumer rights form part of the panoply of rights of EU citizenry, may be the optimal approach. Since no problems of legal base or competence appear to have been found in relation to the tangible advantages provided by the EU to its citizens in the important areas of health, safety, minimum service, maximum charges, travel conditions, compensation for damage and more, and in the absence of any dispute before the Court linking these matters to the citizenship provisions, it seems that there is nothing to be gained (perhaps rather, something to be lost by provoking competence arguments as well as confusion as to the beneficiaries of these rights) in making a legal construct to officially ‘elevate’ these advantages, somehow, into rights of the EU citizen. 63   See N N Shuibhne, ‘The Resilience of EU Market Citizenship’ (2010) Common Market Law Review 1597–628.

The EU Consumer – or the EU Citizen?  181 Rather, like the positions taken by the various institutions recently involved with the Monti Report, the Single Market Act Report etc, EU consumer rights should simply be put forward as part of what the citizen expects from Europe – without any firm label. The harmonised, EU-wide, identical protection of the consumer introduced and developed by the EU, in the place of the Member States, is very tangible evidence of what the EU can deliver to its citizens. The fact that it is identical across the entire Union implies a real EU ‘status’, extremely appropriate in any discussion of citizenship. These EU consumer rights are granted as identical rights to every EU citizen irrespective of any cross-border movement, to be exercised often not against Member States or, even, the EU institutions, but against other EU citizens upon whom, in a certain fashion, they depend. They are different from, complementary to, but in no way contradict, the rights of each citizen, essentially in cross-border situations, exercisable against a Member State by virtue of the rights granted in the citizenship chapter of the Treaty. Together could they not constitute EU citizenship? One thing which does not, however, appear to be disputed is the pressing need for the important EU consumer achievements to be brought clearly to the attention, to the knowledge, of the EU citizen indeed to ‘all players in Europe’, as the Commission has stated in one report examined earlier in this chapter – to tell them clearly what the EU has done, and is continuing to do, to improve the provision of services and thus, it is to be hoped, to reverse the ‘Europe fatigue’ of the citizen.

Epilogue FRANK BENYON

T

HE MAJOR OBJECTIVE of this study, set out in chapter one, was to examine in detail various service sectors where the breadth and depth of EU rules of all types is such that one can talk of an ‘EU consumer’, the beneficiary of EU-wide protection. The descriptions contained in chapters two to seven, with their multitude of references to Treaty articles, secondary legislation and decisions of the Court, would appear to have fulfilled that aim. From the discussions, one can perhaps distil three elements. Firstly the number of areas in which the EU acts to protect its consumers, and the extent of the measures being taken, is very wide and in perpetual expansion. Indeed we saw in the discussion of the Vodafone case in chapter four that the Court expressly found, against the firm arguments of the telecommunications operators, that it was possible to update protective measures taken, even where the conditions for the adoption alone of the updating measures might only with difficulty have been able to be fulfilled. And the extent of the protection given is widely interpreted, indeed some would even say stretched, by the Court as the Sturgeon judgment shows, where an extra ‘forgotten?’ case for compensation was read into the regulation. EU consumer action is thus wide and deep. The areas in which each Member State can take its own measures to protect its consumers are reducing in inverse proportion to the increased powers of the EU. Further, even in areas apparently reserved to each Member State, such as health care discussed in chapters six and seven, or broadcasting, examined in chapter five, whilst Member States’ planning powers or choices do indeed remain, the detailed measures which concern the patient or the viewer cannot ignore the EU dimension. In health care certainly, the territorial aspect and boundaries of Member State provision have been set aside, or at least diluted, in favour of an EU-wide approach. Next, numerous measures have been taken aimed at informing EU citizens of these EU protection measures, namely specific, detailed information contained in the EU legal measures themselves, and positive action obligations towards the consumer have been imposed on the operator of the services in question – the

184  Frank Benyon screen messages for roaming charges, the notices in airports concerning passengers’ rights in case of delays etc. EU consumer action is thus not only wide and deep – but also clear. So thirdly, following on from the above, and provided of course that this information reaches him, does the consumer regard all these measures as simple measures of consumer protection, or is there ‘something more’ involved? Does this ‘consumer care and protection’ form part of the EU citizenship rights upon which the Treaty sets such store, for example in the basic principles of Articles 20 (and following) TFEU? Should this not be seen as the ‘bright side of the coin’ for EU Citizens of the freedoms granted to EU operators to provide services EU wide? Clear answers to these questions elude us. Although the Treaty articles on citizenship would not seem to exclude such an approach, the jurisprudence of the Court, admittedly fairly recent and responding to very diverse national situations, has not gone down this path. Indeed a rather different path seems to have been trodden so far, with no mean deference being accorded to Member State citizenship values and with a price to be paid in terms of solidarity before a non-national can be ‘incorporated into’, can receive benefits from, another Member State’s society. Yet these applications of paragraph (a) of Article 20(2) TFEU do not mean that the uniform EU consumer rights cannot also be considered as part of the citizenship rights introduced in Article 20, the text of which begins with the clear words ‘inter alia’.

POSTSCRIPT

After the EUI seminars were held, the Commission adopted a Proposal for a Decision of the European Parliament and the Council on the European Year of Citizens (2013).1 The legal basis of the proposal is Article 21(2) TFEU, which provides that if action should prove necessary to attain the objective set out in its first paragraph, namely the right of every citizen of the Union to move and reside freely within the Member States, the co-legislators may adopt provisions with a view to facilitating the exercise of such right. This article, it will be recalled, is one of the several legal bases for Directive 2004/38, referred to in the previous chapter. Essentially it is proposed that 2013 be designated as the ‘European Year of Citizens’, the general purpose of which shall be to enhance awareness of the rights attached to Union citizenship; initiatives are listed, coordination foreseen etc. The interesting aspects for the purposes of the present debate are the explanations of the reasons for the proposal contained in the recitals and seen also in the explanatory memorandum and the ex ante evaluation.2

  COM (2011) 489 final of 11 August 2011.   Commission Staff Working Paper SEC(2011)996 final of 11.8.2011.

1 2

Epilogue  185 The recitals3 explain that since 1957 the right to free movement and residence has benefited citizens: if one is speaking of the Treaty of Rome, one must therefore be concerned with the free movement of workers, of establishment of individuals and of services, not the Maastricht citizenship provisions. Recital 7 indeed confirms the point about workers, while going on to indicate that free movement either enables, or stimulates, citizens’ rights as consumers, as passengers and as tourists. Recitals 13 and 14 then explain that Union citizens wishing to make use of their right to free movement should be informed of their entitlements to social security, of recognition of their professional qualifications, of their rights as passengers, of consumer rights, of product safety and of their rights to cross-border health care. It would thus appear that the Commission, as already illustrated in its response to the Monti Report discussed in the previous chapter – and, upon adoption of the decision, the Parliament and the Council, – have no problem in considering these elements, in particular those concerning various services, as part of the Treaty provisions on citizenship, upon which legal base the measure is being proposed. The ex ante evaluation, at paragraph 5.2.1, tells us that Support for EU membership has dropped to the lowest levels recorded in the last decade. On the other hand, the Eurobarometer shows clearly, that citizens feel that the EU is best able to take effective action against the effects of the financial and economic crisis

As explained above, the EU has taken many actions to protect the citizen: he needs to know about these: the proposed decision foresees this: they need to be explained as part of the rights of the citizen: nothing in the Treaty forbids this. The important point is that the beneficiaries, the consumers, the citizens, whatever label is used, are aware of the significant benefits they derive from the EU and its institutions. If these are regarded as a whole, thus measures taken under different legal bases, this ‘total care’ must result in a greater impact for the citizen. When the citizen leaves on his annual holiday (for the great majority the only occasion upon which the world of ‘cross-border exchanges’ is approached), he wants to know which airline not to fly with, what happens if the flight is cancelled and which Member State consulate he can contact in the third country in case of need. The EU has taken care of all these matters. That is what needs to be known.

  See in particular recitals 6, 7, 12, 13 and 14.

3

Index acquis mondial (passenger law), 30–4 air carrier liability:    accidents and, 22–4    delay of baggage, 33    delay of passengers, 33    loss and damage of baggage, 32 air carriers:    ECJ ruling on boundaries, 41–2    EU, operations in, 23 air fares and rates, 17–18    public service obligations, 18    transparency and non-discrimination, 17 air passengers:   protection, 4–5   rights, 31–3 air service agreements:    negotiations with third countries, 14    Open Aviation Agreement with US, 14 air traffic management, 19 air transport:    boarding delays, 22    cancellation and delays, 22    consumer protection, 15–24     measures for, 21–4    consumer rights, 164–5    development of, 10    EC legislation, 4    11th September 2001 effect, 21    European Parliament resolution (16/9/82), 12    ground handling services, 18–19    internal air transport market, 13–14    provision of services, 15–17    safety and security, 20–1    scheduled flights overbooked, 21–2   see also common air transport market air transport policy, 9–24    common transport policy, 10–15   introduction, 9 air transport services:    support services 18–19 airline passengers:   protection, 22

Alassini Case (C-317/08), 7    out-of-court dispute resolution, 59 Amsterdam Treaty (1999), 172 Article 7 procedure, 54–5 Article 95 EC:    Advocate-General’s opinion, 66–8    authority of EU to legislate, 66–74    free movement rules, 70–1   harmonisation, 70    judgment of Court, 68–72     comments and consequences, 70–2    residual competence, 69    use as legal base, 66–72 Athens Convention (1974), 34 audio-visual services:    consumer rights under, 165 Audio-visual Services Directive (89/552), 6, 75–9    amendments to, 79–85 baggage handling, 19    liability for, 36 banking and financial service, consumer rights and, 166–7 benefits and rights, 51–2 betting and gaming:    consumer protection, 7    consumer rights, 167    gambling cases considered, 156–8 bilateral air services agreements, 14 biologists (in France):    professional independence, 152–3    share holding in France, 153–4    status in France, 152 biomedical analysis laboratories:    financial support, 150–2    ‘limitations in rules’, 148–50    qualification requirement, 150 broadcasting and Audio-visual Services Directive, 6 Bulgaria, health care policy, 116–24 children:    dual nationality, 175

188  Index citizenship:    case law, 106   definition, 171    EU citizenship and patient mobility, 106    EU Citizenship Report (2010), 169    proportionality, 98, 99, 101    single market strategy, 7–8 common air transport market, 22 common minimum rules and overbooked scheduled flights, 21 Common Regulatory Frameworks:   2002, 49   2009, 49–50   2013, 50–1 common transport policy, 10–15    case law, 11–12   development, 11–13    European Parliament Resolution (16/9/82), 12–13 Community law and international law, 44 compensation, air passengers’, 4–5 consumer benefits and market regulation, 52–5 consumer protection:    air transport measures, 21–4    EU citizenship, 179–80    EU measures, 7    Roaming Regulation (2007), under, 51, 52, 63–74 consumer rights, 163–81    air transport, 164–5    banking and financial services, 166–7    betting and gaming, 167    electronic communications law, under, 55–63    EU citizenship, 177–9    health care services, 165–6   introduction, 163–4    passenger law, user rights, 38–9 ‘consumerisation’ of transport law, 37–40 consumers:    definition, 10, 51    electronic communications rules, under, 51–63 contracts:    right to, and transparency, 56 Convention on International Civil Aviation (Chicago Convention) (1947), 10–11 cross-border health care:    Directive (2011/24/EU), 6, 136–40      EU health systems considered, 137

    legal basis, 136–7    EU citizenship, 178–9    non-hospital (Portugal), 135 disabled persons and air travel rights, 23–4, 34, 39   see also persons with restricted nobility dispute resolution out-of-court (telecommunications), 59 draft measures:    EU Commission’s powers of veto, 54 Draft Treaty Establishing a Constitution for Europe (2004), 172 dual nationality of children, 175 ECJ and EU citizenship, 173–7 economic transactions and free movement, 103–4 Elchinov case (patients’ mobility), 116–24 electronic communications:    EU consumers and, 47–74     introduction, 47–8    regulatory framework, 48–51     early development, 48–9    rules, consumers under, 51–63 end-users:   definition, 51   disabled, 57    interests and rights, 56–9 e-Privacy Directive (95/46/EC), 50, 61–3    confidentiality of communications, 62    security of services, 62    traffic data safeguards, 62–3    unsolicited communications, 63 EU citizenship, 170–7    consumer protection, 179–80    consumer rights, 177–9    cross-border health care, 178–9   definition, 171    electronic considerations, 176    EU Citizenship Report (2010), 169    Four Freedoms, 176–7    history and development, 171–3    legislative background, 170    national identity, 175–6 ‘EU citizenship rights’, 179–80 ‘Europe des Citoyens’ Committee, 171 European Aviation Safety Agency (EASA), 20 European Civil Aviation Conference (ECAC), 21

Index  189 European Court of Justice see ECJ European Union see EU ferries, passengers on, 37 Four Freedoms approach, 174–5    citizenship articles, 176–7 Framework Directive (2002), 50–1    Article 7 procedure, 53–4    market regulation, 52–3 freedom of establishment in health care, 140–58 gaming see betting and gaming Golden Shares case, 155    case law following, 154–6    ownership frameworks, 154 Harmonisation of Consumer Protection Communications Directive, 60–1 health care:    case law, 106–7    cross-border health care reimbursement (France), 131–2    single market of health care, 161    undue delay, 121 health care rights, limits to, 113–62    freedom of establishment in health care, 140–58   introduction, 113–15    patients’ mobility, 115–40 health care services:    complementary reimbursement, 99, 100    consumer rights under, 165–6    Cross-Border Health Care Directive (2011), 137    economic activity, 102–5    free movement of citizens, 98–9    free movement of services, 98–9    free movement rules, 104    patient mobility case law, 110–11    prior authorisation, 90, 100, 108    scheduled and unscheduled health treatments, 99–100   solidarity, 102–3 health care system in Spain, 124–5 health care treatment:   Commission v France, 129–32    restrictions on provisions (Luxembourg), 132–3 health costs in Spain, reimbursement, 125 hospital services:    economic activity, 92, 95–6

   financial transactions, 94–6    non-hospital services, 94     France, in, 130–1    planning of, 119    prior authorisation, 93    proportionality, 107, 119   reimbursement, 93 hospital treatment:   Bulgaria:      legislation, national effect of, 120     unavailabilty in, 122    proportionality, 107, 119    reimbursement for, 117–19, 122–3   Spain, in,      health care system, in, 125     scheduled treatment, 127–8     unscheduled treatment, legislation for, 125–7 IATA ruling, 41–2 ICAO see International Civil Aviation Organisation International Air Transport Association (IATA), 22 international carriage and Montreal Convention, 23 International Civil Aviation Organisation (ICAO), 10–11 International Convention on Maritime Pollution (MARPOL) (1973), 27 international law and Community law in conflict, 44 joint aviation requirements (JARS), 20 joint stock companies, shareholdings, 155 ‘letter of serious doubts’, 54 liability:    accident liability at sea, 28    air carriers, 30–3    baggage, for, 36    passengers, for, 36    tour operators, for, 33 Liner Conference, UN Convention on a Code of Conduct for (2007), 26 Luxembourg:    health care treatment provisions, 132–3    medical analyses, 132–4    social security, 133 Maastricht Treaty (1992), 172 maritime cabotage, 26–7

190  Index maritime pollution (MARPOL) (1973), 27 maritime services, freedom to provide, 25–30 maritime transport:    member states and third countries, between, 26    passenger law, 36–7    public service obligation, 27 market regulation:    consumer benefits, 52–5    Framework Directive (2002), 52–3 medical analyses:   Commission v Luxembourg, 132–4    cross-border health care, 132–4   laboratories, Commission v France, 148–58    proportionality, 93, 96, 149 medical equipment, use of in France, 129–32 medical expenses:    non-hospital reimbursement (Portugal), 134–5    specialised (Portugal), 135 Milan European Council (1985), 171–2 Monti Report (2010), 167–70    EC Commission’s response, 168–9   summary, 167–8 Montreal Convention (2004), 23, 31–3    Regulation 261/2004, reconciliation with, 43–4 ‘must-carry’ obligations, 58–9 ‘New Strategy for Single Market’ (2010), 7–8 non-biologists, economic interests (France), 152–3 non-hospital services:    hospital services (France), and, 130–1    prior authorisation, 94 Open Aviation Agreement, 14 ownership frameworks reappraisal, 154–6 passenger law:   acquis communautaire, 34–7    compensation for delays, 42–3    consumer rights and user rights, 38–9    ECJ decisions on, 43–4    EU law and, 38–9    international law, reconciliation with, 40–4    maritime transport, 36–7    specified groups’ rights, 39

  summary, 44–5 passengers:    disabled passengers, 39    EU citizenship rights, 180    ferries, on, 37    liability for, 36    maritime and fluvial vessels, on, 37    market, right to access, 40 patients:    benefits in kind, 97–8    cross-border health cases, 6    free movement of, 101     case law, 102–9     law, 105   rights, Elchinov judgment effect, 123–4 patients’ mobility, 115–40, 159–60    case law, 89–101     European, 87–111     health systems, on, 109     2010, 99–101    citizenship in EU, 106   Commission v Portugal, 134–6    Cross-Border Health Care Directive 2011, in, 138    EC Regulation 1408/71, Article 22, 115–16    legal framework, 115–16    legal judgments, 116–24    Spain, infringement procedures, 124–9 Patients’ Rights in Cross–Border Health Care (draft directive) (2008), 101, 108 persons with restricted mobility:    air travel rights, 23–4   definition, 39 pharmacies:    case law, 140–58   territorial distribution,     consistency criterion, 145     Italy, in, 146–8     minimum distances, 145     Spain, planning in, 140–6 Portugal:    medical expenses 134–5    non-hospital cross-border health care, 135    patients’ mobility, 134–6   reimbursement, 134–5 prior approval scheme, 154–5 prior authorisation:    Cross-Border Health Care Directive 2011, 138–9

Index  191 proportionality:    citizenship, 98, 99, 101    hospital services and treatment, 107, 119    medical services, 93, 96, 149    Roaming Regulation, in, 65–6, 72–3 proportionality tests, 142, 144    articulated proportionality test, 119–20    territorial distribution of pharmacies, 144 public health:    policy parameters, 113–62     introduction, 113–15    protection in France, 153 public interest:    ownership frameworks, reappraisal, 154–6 public service obligations:    air fares and rates, 18 reimbursement:    complementary, 99, 100, 129–32    Cross-Border Health Care Directive 2011, 138–9    cross-border health care (France), 131–2    home state, treatment unavailable in, 100–1    hospital treatment, for, 117–19, 122–3    non-hospital medical expenses (Portugal), 134–5    Portugal, in, 135–6    Spain, health costs in, 125 ‘Report on EU Citizenship’ (2010), 7–8 reservation systems, computerised, 19 ‘residual competence’ defined, 69 rights and benefits, 51–2 ‘roaming’ defined, 63 Roaming Regulation (2007) (Vodafone Case), 51, 63–74    competition, distortion of, 70    consumer protection under, 52   definition, 63    proportionality principle, 72–3   provisions, 63–5    subsidiarity principle, 73–4    validity challenged, 65–74 Safety of Life at Sea Convention (SOLAS) (1974), 27    extension of, 28 security measures (aviation), 21 SELARL, 148–50, 152, 153

services:    freedom of providers (Luisi and Carbone judgment), 89    freedom of recipients, 89    quality in electronic communication, 57    supply and EU rules, 3–7    support, air transport services, 18–19 single market, 169, 170    barriers to, 53–4    Monti Report (2010), 167–70 social security in Luxembourg, 133 société d’exercice libéral a responsabilité limitée see SELARL Spain:    health care system, 124–5    patients’ mobility, infringement proceedings, 124–9 Special Drawing Rights (SDR), 32 ‘subscriber’ defined, 51 subsidiarity, Roaming Regulation and, 73–4 telecommunications:    consumer rights under, 165   liberalisation, 5   market,     regulation of, 54–5     rights (1998), 49   operators,     charges, 58, 63–4     consumer protection extended, 60–1     e-Privacy Directive, 61–3     ‘must-carry’ obligations, 58–9     price-capping, 64–5     universal services provision, 59–60    rules, objectives, 51    services, security for, 62    specialised medical services, 135 telephone subscribers:    directory enquiries, access to, 57    emergency services, access to, 57    out-of-court dispute resolution, 59    providers, right to change, 57–8 television:    advertising regulation, 77–8    broadcasting and EU consumers, 75–85    culture and, 77    electronic communications directives applicable, 82–3    exclusive broadcasting restricted, 79–81    freedom of expression, 76–7    satellite broadcast decoders ban, 83–4    service, as, 75–6

192  Index television (cont.):    transmission, suspension of, 78–9 Television Without Frontiers Directive see Audio-Visual Services Directive Terminal Equipment Directive (1988), 48 TFEU see Treaty on the Functioning of the European Union tour operators, liability of, 33 transparency rights, 56 transport law, consumerisation, 37–40 transport services, passenger rights, 38–9 travel and tourism, 25–45   introduction, 25 Treaty of Lisbon (2009), 172–3 Treaty on the Functioning of the European Union (2010), 4, 5, 7, 48 UN Convention on a Code of Conduct for Liner Conferences (2007), 26 UN Convention on the Rights of Persons with Disabilities (2008), 34

Universal Service Directive (2002), 50, 55–61   aims, 55    change of provider, 57–8    contract rights, 56    directory enquiry services, 57    disabled end-users, 57    electronic communication services, 59–60    end-user interests and rights, 56–9    must-carry obligations, 58–9    out-of-court dispute resolution, 59    quality of service, 57    transparency in contracts, 56 Vanbraekel rules (complementary reimbursement), 129–32 Warsaw Convention (1929), 30 welfare states, territorial identity, 110