Master Programme in European Law (LL.M.)cesl.cupl.edu.cn/upload/200811088535471.pdf · · 2016-05-23PowerPoint Presentation C. Legal acts of the European Union ... - Entry into

Master Programme in European Law (LL.M.)

1st semester

Winter term 2008/09

Module III: Introduction to Law and Politics of

the European Union Module Coordinator: University of Hamburg, Germany

Course title: Legal Foundations of European

Union Law Scholar: Prof. Dr. Armin Hatje, University of Hamburg, Germany

This document has been produced with the financial assistance of the European Union. The contents of this

document are the sole responsibility of Prof. Dr. Armin Hatje and can under no circumstances be regarded as

reflecting the position of the European Union.

Contents:

A. Introduction to module III

B. Legal Foundations of European Union Law

PowerPoint Presentation

C. Legal acts of the European Union

Examples

I. Regulation: “De minimis aid”

II. Directive: “Advertising and sponsorship of tobacco products”

III. Decision: “Microsoft”

IV. Recommendation: “Capital of culture 2011”

D. Judgments of the ECJ

I. ‘Van Gend & Loos’

II. ‘Costa vs. ENEL

III ‘Internationale Handelsgesellschaft’

IV. ‘Algera’

V. ‘Francovich and others’

VI. ‘Brasserie du Pêcheur’

VII. ‘AETR’

VIII. ‘Directive_Advertising and sponsorship of tobacco products’

IX. ‘Stauder’

Introduction to module III:

Descriptions and Aims

The module consists of four courses dealing with the legal foundations of European integration,

the different European political systems which are part of the integration process, and the

economic and political dimension of the EU. The course “European Political Systems” will

present the principal topics leading to the comprehension of the modern European political

systems (political institutions, political behaviour, political ideology, the political culture,

political socialization and the articulation of political interests). The course will consist of the

study of governmental institutions and politics of the different European political systems,

including Continental, Anglo, Southern Nordic and Eastern European systems as well as the

supranational organization, the European Union. The course „Political and economic dimension

of the EU“ analyses the EU as a multi-level governance system fro an economic point of view.

The economic theories of federalism and of systems competition are applied. Furthermore, the

efficiency and democracy of collective decision-making at EC level are analysed. The course

„Legal Foundations of European Union Law“ introduces the fundamental principles of European

law, the institutions and legal instruments. In addition it gives a short introduction to the concept

of internal market and the constitutional perspectives of the EU. In that background the module

aims at providing

● basic knowledge of the historical, theoretical and economic foundations of the European

Union;

● an introduction to the legal system of the European Union;

● better understanding of the characteristics of EU-Law compared to international law

Methodology

The courses will be held as lectures. Supplementing materials such as scripts and readers will be

provided, thus allowing students to deepen their knowledge obtained in class. The introduction to

European Union law shall focus on the case law of the ECJ to emphasize the outstanding role of

this institution has hitherto played in the extraordinary process of European integration. In

addition the method of comparative legal studies as a source of law shall be demonstrated by

means of practical examples.

Examination

The final test will be an essay on topics of the courses.

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Legal Foundations of European Union Law

Prof. Dr. Armin HatjeUniversity of Hamburg

University of Hamburg Legal Foundations of EU Law 2

The European Union and its Member States


Overview

§ 1 The function of law in the European integration

§ 2 History and structure of the European Union

§ 3 The Instituitions of the EU

§ 4 Supranationality of the Communities

§ 5 Legal sources of Community law

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§ 1 The function of law in the European integration

A. Historical and cultural background

- National and cultural diversity

- Political conflicts

- World War I

- World War II

- Consequences


B. Aims of political integration in Europe

- Promoting peace in Europe

- Economic growth and welfare

- Personal freedom and equal treatment

- “Europe as a global player”


C. Theories and instruments of European Integration

� Defining common objectives

� Aiming at more unity in Europe

� Applying integration methods- Functionalism

- “Spill-over-effects”

- “Schuman-plan”

� Use of law as an integration instrument- Law and political decisions

- Law as a binding political decision

- Law as a public political decision (transparency of law)

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§ 2 History and structure of the European Union

A. Historical survey

I. European integration until 1945

II. Development after 1945

- After the horrible experiences of WW II new models of political cooperation were sought

- The destructive forces of nationalism were to be reduced

- 1947: the USA passed the “Marshall-Plan”, the primary plan for rebuilding and creating a stronger foundation for allied European countries


- 1948: the Organization for European Economic Cooperation (OEEC) was founded; in 1960 the Organization for Economic Co-operation and Development (OECD)

- 1949: the North Atlantic Treaty was signed by France, Benelux countries, the UK, and others to establish military cooperation in the treaty organization (NATO)

- 1949 France, Benelux countries, and the UK signed the Western European Union Contract (European defence and security organization), with the accession of West Germany and Italy in 1954


III. Integration by creation of the Communities

1. The European Cole and Steel Community (1951)

- Signed by France, Germany, Italy, and the three Benelux countries, to establish a common market in coal and steel

- Four institutions were set up by the ECSC: High Authority, an Assembly, a Council and a Court of justice

2. Treaties of Rome (1957)

- Treaties of Rome signed in Rome on 25 March 1957, entry into force on 1 January 1958

- Establishing the European Economic Community (ECC)

- At the same time founding of the European Atomic Energy Community (EURATOM)

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3. Single European Act (1986)

- First major amendment to the ECC-Treaty

- Entry into force on 1 July 1987

- Aim: establishment of a common European market

- Significant institutional reforms

4. Treaty of Maastricht (1992)

- Formation of the European Union ( Treaty of the European Union; TEU)

- Entry into force on 1 November 1993

- Modified the former treaties

- Introduced new forms of cooperation; e.g. in the area of “justice and home affairs”

- Created a new structure of the EU with three “pillars”

- Enhanced the co-operation between the Member States

- Led to the creation of the Euro


5. Treaty of Amsterdam (1997)

- Signed on 1 October 1997, entry into force on 2 Mai 1999

- Amended and renumbered the EU and EC Treaties

- Consolidated versions of the EU and EC Treaties attached

6. Treaty of Nice (2001)

- Signed on 26 February 2001, entry into force on 1 February 2003

- Focus on the reform of the institutions in order to secure the functioning of an enlarged Union of 25 Member States

- The Treaty of Nice, the former Treaty of the EU and the Treaty of the EC were merged into one consolidated version


7. Charter on Fundamental rights (2001)

- The first formal EU document declaring the fundamental (economic, social, civil, and political) rights to which EU citizens should be entitled

- Proclaimed in December 2000, supposed to be an incorporated Part of the Treaty establishing a Constitution for Europe of 2004

- The European Council, European Parliament and European Court of Justice

- Adapted version was proclaimed in December 2007, ahead of the singing of the Lisbon Treaty. With the ratification of the Lisbon Treaty the Charter will be binding

8. Treaty establishing a Constitution for Europe (2004)

- Intended to replace all previous treaties with a single document

- Ratification failed because of negative referendums in France and in the Netherlands

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9. Treaty of Lisbon (2007)

- Amends the current EU and EC Treaties, without replacing them

- Will provide the Union with the legal framework and tools

- Signed on 13 December 2007.

- Has to be ratified by all 27 Member States before entry into force

- Main objectives:

� enhancing the democratic legitimacy of the EU,

� meeting the European citizens’ expectations for high standards of accountability, transparency, and participation;

� improving the efficiency of the Union in order to manage currentglobal challenges, such as climate change, international security, and sustainable development

- Rejection of the Treaty on 12 June 2008 in an Irish referendum makes its ratification uncertain; yet, other Member States are still ratifying


B. Objectives of the integration process

I. Primary localization of the objectives: Preambles of the Treaties

- Preamble of the EU-Treaty

- Preamble of the EC-Treaty

II. Further objectives of EU-law (compare Art. 2 und 3 EC)- Article 2 “Task of the Community”

- Article 3 “Activities of the Community”

III. Peace, wealth, and political consensus as basic themes


C. European Communities and European Union

I. Community Law or Union Law?

II. Basis of Community Law

III. Basis of Union Law

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Art. 29 – 42 EU

Police and Judicial Co-operation in Criminal

Matters (PJC)

Art. 11 – 28 EU

Common Foreign and Security Policy

(CFSP)

Art. 8 – 10 EU

EC

(ECSC)

EURATOM

Institutions Art. 7 EC

Final Provisions Art. 43 – 53 EU

Common ProvisionsArt. 1 – 6 EU


D. Diagram of main legal bases

EU Treaty

Protocols

EURATOM

Protocols

EC Treaty

Protocols

Modification

Treaties:

Amsterdam

Nice


Outline of the EC Treaty

Preamble

Part one: Principles

Part two: Citizenship of the Union

Part three: Community policies

Title I: Free movement of goods

Title II: Agriculture

Title III: Free movement of persons, services and capital

Title IV: Visas, asylum, immigration and other policies related

to the free movement of persons

Title V: Transport

Title VI: Common rules on the competition, taxation and

approximation of laws

Title VII: Economic and monetary policy

Title VIII: Employment

Title IX: Common commercial policy

Title X: Customs cooperation

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Title XI: Social policy, education, vocational training and youth

Title XII: Culture

Title XIII: Public Health

Title XIV: Consumer Protection

Title XV: Trans-European Networks

Title XVI: Industry

Title XVII: Economic and social cohesion

Title XVIII: Research and technological development

Title XIX: Environment

Title XX: Development cooperation

Part Four:Association of the overseas countries and territories

Part Five: The institutions of the Community

Part Six: General and final provisions

Final provisions


§ 3 The Institutions of the EU

A. The Commission (Art. 211 et seq. EC)

B. The Council (Art. 202 et seq. EC)

C. The European Parliament (Art. 189 et seq. EC)

D. The European Court of Justice (Art. 220 et seq. EC)


A. The Commission (Art. 211 et seq. EC)

I. Place of residence

- Brussels

II. Composition and structure

- 27 commissioners, one member per each Member State

- collegial organ (comp. Art. 217 (1) EC)

- principle of majority (Art. 219 EC)

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III. Functions

1. „Motor“ of integration- Right of initiative in the legislative procedure

- exept. CFSP and PJCCM

2. Guardian of the Community Law- Control of the legal acting of the institutions, Member States, natural

and juristic persons

- sanctions

3. Executive Power

4. Representative of the Community Law


B. The Council (Art. 202 et seq. EC)


- Brussels

II. Composition

- consists of a representative of each Member State at ministeriallevel, authorised to commit the government of that Member State (Art. 203 (1) EC)

- Presidency (Art. 203 (2) EC) is held in term by each Member State for six months


III. Functions

1.Principals- Federal institution of the European Community / European Union

- connection European Community / Member States

- safes the influence on the common decision processes

2.Legislator- most important institution in the legislation process

- main source of democratic legitimation

- problem: transparency and political blockades

3.Foreign-policy actor- termination of agreements with third countries (Art. 300 (2) EC)

- Important functions in the CFSP

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C. The European Parliament (Art. 189 et seq. EC)


- two meeting places:

Brussels, Strasbourg

- Secretariat is based in

Luxembourg

II. Composition

- 736 delegates (Art. 189 (2) EC)

- number of representatives elected in each Member State (Art. 190 (2) EC)

- problems: small countries are represented in a disproportional way and the electoral process is regulated nationally


III. Functions

1. legislative function

2. creative function

3. control function


D. European Court of Justice (Art. 220 et seq. EC)


- Luxembourg City

- established 1952

II. Composition

1. European Court of Justice (ECJ)

- one judge per each Member State (Art. 221 EC)

- 8 Advocates General (Art. 222 EC)

- sit in chambers or a Grand Chamber

- file management „C“ = Court

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2. Court of First Instance (CFI), Art. 225 (1) EC

- at least one judge per Member State (Art. 224 EC)

- assisted by Advocates General, if the Statue may provide it (Art. 224 (1) EC)

- sit in chambers

- file management “T” = Tribunal

3. Judicial panels, Art. 225 a EC

III. Function

1. legal protection

2. Art. 220 EC: „... shall ensure that in the interpretation and application of this Treaty the law is observed.“


§ 4 Supranationality of the Communities

A. Traditional International Organisations

B. Characteristics of EU-Law

C. Autonomy, direct effect and supremacy


A. Traditional International Organisations

I. Member States as high contracting parties

II. Sovereignity of Member States

III. Individuals in International Law

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I. Member States as high contracting parties

- Member States as contracting parties set up an organisation by concluding an international treaty

- They continue to govern and to control the organisation

- No transfer of sovereignity

- ‚Law making‘ treaties are binding upon the signatorystates

- Rights and obligations arise only for the states


II. Sovereignity of Member States

- Sovereignity entails exclusive jurisdiction over the territory and the population of a state

- Power of international organisations to enact lawdepends on consent of Member States

- Jurisdiction of international tribunals depends on the consent of the parties


III. Individuals in International Law

- Individuals are not parties to international treaties

- Legal acts passed by „traditional“ international organisations are not directly applicable in the MemberStates

- Whether a treaty creates rights and obligations forindividuals (is directly applicable) depends on national law

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B. Characteristics of EU-Law

A supranational organisation is a transnational union equipped with

sovereign rights, conferred to it by its member states.

Therefore it has the competences to take decisions which are binding on its member states.

Characteristics of a supranational organisation:- independent institutions (Art. 7 EC) - principle of majority rule (cp. Art. 251 EC) - general and ample competences (Art. 308 EC)- supremacy of EU-law


C. Autonomy, direct effect and supremacy of Community law

I. Autonomy and direct effect

1. Basis: The Van Gend en Loos judgment of the ECJ (1963, 1)

2. Legal norm to be interpreted: Art. 12 EEC:

“Member States shall refrain from introducing, as between

themselves, any new customs duties on importation or exportation

or charges with equivalent effect and from increasing such duties or

charges as they apply in their commercial relations with each other.”


3. Proceeding: Preliminary ruling of the ECJ according to Art. 177 ECC (234 EC)

- Question , whether “Art. 12 of the ECC Treaty has direct application within the territory of a Member State, in other words, whether nationals of such a state can, on the basis of the article in question, lay claim to individual rights which the court must to protect.”

4. Reasons for the ruling

- New legal order of international public law formed by the treaties

- Common market shall derive an advantage to Member States and their nationals

- Citizens shall elect the members of the convention (1963 still delegated deputies)

- Art. 177 (234) documents the effect of Community law in the domestic legal systems of the Member States – otherwise it would be functionless

- Art. 189 (249) allocates direct applicability in the Member States to EC-regulations

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5. Main declaration of the judgment

“ The European economic community constitutes a new legal order of

international law for the benefit of which the states have limited their

sovereign rights, albeit within limited fields, and the subjects of which

comprise not only the member states bit also their nationals.

Independently of the legislation of Member States, community law

not only imposes obligations on individuals but is also intended to

confer upon them rights which become part of their legal heritage.

These rights arise not only where they are expressly granted by the

treaty but also by reason of the obligations which the treaty imposes

in an clearly defined way upon individuals as well as upon the

member states and upon the institutions of the community.”


6. The criteria of direct effect

- the provision must be sufficiently clear and precisely stated

- it must be unconditional or non-dependent

- the provision must confer a specific right for the citizen to

base his or her claim on

II. First consequences

1. The individual as „guardian“ of the Community law

2. Autonomous interpretation of the Community law


III. The supremacy of the Community law

1. Basis: The Costa E.N.E.L. - judgment of the ECJ (1964, 1251)

2. Proceeding: Preliminary ruling acc. to Art. 177 ECC (234 EC)

3. Reasons for the ruling:

- ECC has created an independent legal order,

- Which became an integral part of the legal systems of the memberstates and which their courts are bound to apply

- EC is equipped with sovereign rights

- Community law is binding for the E(C)C and the Member States

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4. Main declaration of the ruling:

„The integration into the laws of each member state of provisions which

derive from the community and more generally the terms and the spirit of the treaty, make it impossible for the states, as a corollary, to accord precedence to a unilateral and subsequent measure over a legal system accepted by them on a basis of reciprocity. Such a measure cannot therefore be inconsistent with that legal system.”

� otherwise no more unconditional obligations, only potential ones

� affirmed by Art. 189 EEC [249 EC]:

- regulation is binding in its entirety

- directly applicable in every Member State

- would be of no relevance if the member states were allowed to pass deviating provisions


5. Consequence:

- Supremacy of Community Law over conflicting national law

ECJ: “The law stemming from the treaty, an independent source oflaw, could not because of its special original nature, be overridden by domestic legal provisions, however framed, without being deprived of its character as community law and without the legal basis of the community itself being called into question.”

IV. Legal effects

1. Precedence of EC-law over national law concerning the application vs.

Precedence concerning the validity

2. Extent: to be considered by all national authorities


V. Limits of supremacy

1. ECJ

“…In fact, the law stemming form the Treaty, an independent source of law,cannot because of its very nature be overridden by rules of national law, however framed, without being deprived of its character as Community law and without the legal basis of the Community itself being called into question...“ (Internationale Handelsgesellschaft, 1963, ECR 1125)

2. Federal Constitutional Court of Germany (FCCG)

a) Generally accepting supremacy of EC-law, but:

The primacy of EC-law over national law concerning its applicability or its validity can only arise from national provisions granting EC-law effect in the national legal system, even if the Treaties bind the contracting parties to concede primacy to EC-law.

(FCCG-decision, vol. 73, p. 339, 375)

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b) Limits (FCCG vol. 89, 155 – “Maastricht”)

- “Identity of the constitution”

- “ultra-vires” acts

- insufficient protection of fundamental rights

c) Critizism

- Double-review of Community acts (ECJ & Fed. Const. Court)

- Endangering the security of the law

- Disregarding the uniformity of Community law

- Reducing the efficiency of the EC


3. Other Member States

a) Italy

- Primacy generally accepted

- Exception: infringement of fundamental rights

b) France


- Since 1989 also primacy over Parliament Acts

c) Ireland


- Reservations concerning fundamental rights


d) Denmark


- Exceptions in case of serious and evident ultra vires actions

e) Great Britain


- Is based on „European Communities Act“

- Problem: Sovereignty of Parliament

� British Parliament still has potential universal authority

� Thus also the authority of departing from EC-law

� Pragmatic solution: British courts interpret colliding domestic law in compliance with the Treaties

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VI. Summary

1. Autonomy of the Community law- Original sovereign rights

- Determines its effectiveness itself (arg.)

- Determines its mode of validity and applicability itself (arg.)

2. Direct validity or effect- As a consequence of the autonomy of EC-law (arg.)

- Binding effect on citizens of Member States

- Constituting of subjective rights

3. Supremacy- Consequence of the autonomy (arg.)

- Primacy of application

- Effect of EC-law granted by national law (div. national courts)

- Limits:

- Determined by Community Law (ECJ)

- Determined by Community law and national law


§ 5 Legal sources of Community law

A. Primary law

I. Written law

1. founding treaties

2. additional agreements

3. protocols acc. to Art. 311 EC

“The protocols annexed to this Treaty by common accord of the Member States shall form an integral part thereof.”

II. Unwritten Law1. Existence

2. Examples


a) Common principles of law

- Rule of law (see also Art. 6 (1) EU)

- Democracy (see also Art. 6 (1) EU)

“The Union is founded on the principles of liberty, democracy, respect for human rights and fundamental freedoms, and the rule of law, principles which are common to the Member States.”

- Principle of proportionality (see also Art. 5 (3) EC)

“Any action by the Community shall not go beyond what is necessary to achieve the objectives of this Treaty.”

- Principle of legal certainty and legal protection

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b) Especially: fundamental rights

- Underline the role of the individual as a subject of Community law

- Level of protection comparable to German Basic Constitutional Law

- Codified in the Fundamental Rights Charter

(07.12.2000 – still non-binding)

- Basis of individual rights and duties

- Also: Citizenship of the Union (Art. 17 et seq. EC)


Art. 17 EC

(1) Citizenship of the Union is hereby established. Every person holding the nationality of a Member State shall be a citizen of the Union. Citizenship of the Union shall complement and not replace national citizenship.

(2) Citizens of the Union shall enjoy the rights conferred by this Treaty and shall be subject to the duties imposed thereby.


3. Reasons for the validity of (unwritten) EC-law

a) Hints in written law

- Art. 288 (2) EC:

“In the case of non-contractual liability, the Community shall, in accordance with the general principles common to the laws of theMember States, make good any damage caused by its institutions or by its servants in the performance of their duties.”

- Art. 220 EC:

“The Court of Justice and the Court of First Instance, each within its jurisdiction, shall ensure that in the interpretation and application of this Treaty the law is observed…”

b) Common law

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c) Case law

� Basis:

- Competence of the ECJ

- Art. 220, 288 (2) EC

� Functions

- Closing of “legal loopholes”

- Supplementation of EC-law

- Adjustment of EC-law

� Limits

- Wording of the Treaty

- Prohibition of deferral of competences

- Prohibition of alteration of basic principles

- Separation of powers / checks and balances


4. Methods of law development

a) Judgmental comparison of the law

- ECJ (Algera, 1957, 83):

„The possibility of withdrawing such measures is a problem of administrative law, which is familiar in the case-law and leaned writing of all the countries of the community, but for the solution of which the Treaty does not contain any rules. Unless the court is to deny justice it is therefore obliged to solve the problem by reference to the rules acknowledged by the legislation, the learned writing and the case-law of the member countries”


b) Problems of law development

� minimum or maximum standard?

� independent appointment of the principle:

Hereafter the common principles of law have to be

“…whilst inspired by the constitutional traditions common to

the member states, …must be ensured within the framework

of the structure and objectives of the Community“

(ECJ, Internationale Handelsgesellschaft, 11/70 (1970) ECR

1125)

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III. Primary law as European constitutional law

1. The term „constitution“- Basic legal order of a political sovereign system

- Document character

2. The problems of the „European constitutional law”- Document character is given

- But: missing statehood of the EU (EC)

- However: functional consistency of primary law and “constitutional law”

3. The current discussion about the Constitutiona) Objectives:

- “Maximum” solution: „European Constitution”

- Reorganisation of the Treaties


b) Organisation and procedure

- European Convent (not envisioned in the Treaty)

- Intergovernmental conference (Art. 48 (2) EU):

“If the Council, after consulting the European Parliament and, when appropriate, the Commission, delivers an opinion in favour of calling a conference of representatives of the governments of the Member States, the conference shall be convened by the President of the Council for the purpose determining by common accord the amendments to be made to those Treaties. The European Central Bank shall also be consulted in the case of institutional changes in the monetary area.”

- Acceptance by the Member States (Art. 48 (3) EU):

“The amendments shall enter into force after being ratified by all the Member States in accordance with their respective constitutionalrequirements.”


B. Secondary Community Law– Law based on EU-/EC-Treaties

I. Basic principles - Art. 5 EC

II. Powers of the EU

III. Enumerated powers of the EU

IV. Art. 249 EC as central provision

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Art. 5 EC

„The Community shall act within the limits of the powers conferred

upon it by this Treaty and of the objectives assigned to it therein.

In areas which do not fall within its exclusive competence, the Community shall take action, in accordance with the principle of subsidiarity, only if and in so far as the objectives of the proposedaction cannot be sufficiently achieved by the Member States and cantherefore, by reason of the scale or effects of the proposed action, bebetter achieved by the Community.

Any action by the Community shall not go beyond what is necessaryto achieve the objectives of this Treaty.“


I. Basic principles - Art. 5 EC

1. Principle of limited powers, Art. 5 (1) EC- Community can only act within the powers conferred to it by the Treaty

2. Principle of subsidiarity, Art. 5 (2) EC- Necessity of Community legislation needs to be given in areas of shared

competences

- Principle of comparative efficiency

3. Principle of proportionality, Art. 5 (3) EC- Legitimate objective

- Appropriate measure

- Necessity


II. Powers of the EU

1. Enumerated specific powers in various provisions of the Treaties

- different types of competences (see III.)

2. Implied powers- developed by the ECJ

3. Unspecific powers conferred by Art. 308 EC

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III. Enumerated powers of the EU

1. Exclusive competences

2. Shared competences

3. Parallel competences

4. Other competences- scattered over the Treaties

- e.g. Art. 13, 23 EU


1. Exclusive competences

a) Areas:- Common customs tariff, Art. 26 EC

- Common commercial policy, Art. 133 EC

- Monetary policy, Art. 107 (5), (6) EC

- International transport within the Community, Art. 71 EC

b) Effect:- Member States are pre-empted from legislating in that area, even

if the Community does not make use of its competence

- Legally binding acts can only be passed by the Union


2. Shared competences

a) Areas (e.g.): - Common agriculture policy, Art. 32 et seq. EC

- Common rules on taxation, Art. 90 et seq. EC

- Common rules on approximation of laws, Art. 94 et seq. EC

- Common economic policy, Art. 99 EC

- “Normal case”

b) Effect:- Member States and Community have legislative power in these areas

- Member States are pre-empted from legislating if Community exercises its legislative powers

- Member States are to exercise their competences to the extent to which the Community does not exercise its competences

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3. Parallel competences

a) Areas:- Common rules on competition, Art. 81 et seq. EC

- Rules on economic and social cohesion, Art. 158 et seq. EC

b) Effect:- Community and Member States may legislate concurrently

- In case of conflict Community law takes precedence


4. Other competences

a) Overall competence- Framework legislation

- Rules concerning coordination and cooperation

- E.g. in certain areas of the basic freedoms

b) Contributive competence

- Competence limited to acts contributing to actionsof the Member States

- E.g. Art. 137, 149, 150, 151 EC


IV. Art. 249 EC as the central provision

“In order to carry out their task and in accordance with the provisions of this Treaty, the European Parliament acting jointly with the Council, the Council and the Commission shall make regulations and issue directives, take decisions, make recommendations or deliver opinions.

A regulation shall have general application. It shall be binding in its entirety and directly applicable in all Member States.

A directive shall be binding, as to the result to be achieved, upon each Member State to which it is addressed, but shall leave to the national authorities the choice of form and methods.

A decision shall be binding in its entirety upon those to whom it is addressed.

Recommendations and opinions shall have no binding force”

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C. Legal acts acc. to Art. 249 EC

I. Regulation, Art. 249 (2)

II. Directive , Art. 249 (3)

III. Decision , Art. 249 (4)

IV. Recommendations and opinions , Art. 249 (5)


I. Regulation, Art. 249 (2) EC

1. General validity

2. Effect in the domestic legal system

a) Binding in its entirety

- Difference to direction

b) Direct application

- Transformation in national law is not necessary, not even allowed (Prohibition of transformation)

- Problem: necessary implementing legislation

c) Application in all Member States


II. Directive, Art. 249 (3) EC (overview)

1. Characteristicsa) Wording of the Treaty

b) Handling in the practice of the Community

2. Legal effectsa) Transformation by the member states

b) Direct applicability

c) Liability

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1. Characteristics

a) Wording of the Treaty

- Member States as addressees

- Only binding for the addressee state

- Binding in regard to its aim, member state has the choice of the means instruments of implementation

b) Handling in the practice of the Community

- detailed regulations, hardly leaving leeway for national implementation

- Admissibility: decisive is the interpretation of the term “objective”

� Objective ≠ objective of the Treaties (Art. 2, 3 EC)

� Objective = intended result of the regulation

� Objective = framework regulation, which needs completion / specification

� Objective = exemplary legislation


2. Legal effects

a) Transformation by the Member States

- binding time limit (usually 2 years)

- binding form

� legally binding implementation

� Practice of the administration is not sufficient

- Problems:

� Content of implementation differs from content of directive

� Fragmentary implementation

� No implementation within the given time-limit


b) Direct applicability

aa) Individual Rights

- Directive is intended to provide the individual with a legal advantage

- Content sufficiently precise and formulated in an unconditional manner

- not implemented within time-limit or insufficiently implemented

bb) Individual Duties

- state / citizen (vertical)

- citizen /citizen (horizontal

cc) “objective” effect

- Expiry of the binding time-limit without implementation

- Content sufficiently precise and formulated in an unconditional manner

- directive is binding on the domestic authorities

- differentiation between vertical and direct effect

25


c) Liability

aa) present case- Francovich, (1991) ECR-I5357

- Brasserie du pêcheur, (1996) ECR I-1029

- deficits of the national liability laws

bb) Basis and area of application

- principle of state liability

- Art. 288 (2) EC:

“…In the case of non-contractual liability, the Community shall, in accordance with the

general principles common to the laws of the Member States, make good any damage

caused by its institutions or by its servants in the performance of their duties…”

- idea of coherence

- judicial development of law

- directive and effective law


cc) Requirements

- subjective law

- adequately qualified infringement

- actual damage

dd) Legal consequence

- Compensation for loss and damage


III. Decision, Art. 249 (4) EC

1. Characteristics

- independent form of Community action

- typically used for the regulation of specific situations / individual cases

2. Legal effect

a) Decisions are binding in their entirety upon those to whom they are addressed,

- Member States

- other juristic persons

- individual persons

26


b) Decisions directed at member states can constitute rights to thebenefit of individuals

- Like a directive

- No direct burdening effect

- but indirect burdening effects are possible

3. Area of application (examples)

a) competition law

- interdiction and penalty decisions

- decisions of exemption

- permissions of mergers

- prohibition or permission of benefits

- decisions of reclaim


b) other law of economic administration

- agricultural law

- customs legislation

- law relating to food production and distribution

c) civil service law

- appointment

- relocation

- suspension

EN Official Journal of the European Communities 13.1.2001L 10/30

COMMISSION REGULATION (EC) No 69/2001

of 12 January 2001

on the application of Articles 87 and 88 of the EC Treaty to de minimis aid

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the EuropeanCommunity,

Having regard to Council Regulation (EC) No 994/98 of 7 May1998 on the application of Articles 92 and 93 of the Treatyestablishing the European Community to certain categories ofhorizontal State aid (1), and in particular Article 2 thereof,

Having published a draft of this Regulation (2),

Having consulted the Advisory Committee on State aid,

Whereas:

(1) Regulation (EC) No 994/98 empowers the Commissionto set out in a regulation a threshold under which aidmeasures are deemed not to meet all the criteria ofArticle 87(1) of the Treaty and therefore do not fallunder the notification procedure provided for in Article88(3) of the Treaty.

(2) The Commission has applied Articles 87 and 88 of theTreaty and in particular clarified, in numerous decisions,the notion of aid within the meaning of Article 87(1) ofthe Treaty. The Commission has also stated its policywith regard to a de minimis ceiling, under which Article87(1) can be considered not to apply, most recently inthe notice on the de minimis rule for State aid (3). In thelight of this experience and with a view to increasingtransparency and legal certainty, it is appropriate thatthe de minimis rule be laid down in a Regulation.

(3) In view of the special rules which apply in the sectors ofagriculture, fisheries and aquaculture, and transport, andof the risk that even small amounts of aid could fulfilthe criteria of Article 87(1) of the Treaty in thosesectors, it is appropriate that this Regulation should notapply to those sectors.

(4) In the light of the World Trade Organisation (WTO)Agreement on Subsidies and Countervailing Measures (4),this Regulation should not exempt export aid or aidfavouring domestic over imported products. Aid towardsthe cost of participating in trade fairs, or of studies orconsultancy services needed for the launch of a new orexisting product on a new market does not normallyconstitute export aid.

(5) In the light of the Commission's experience, it can beestablished that aid not exceeding a ceiling ofEUR 100 000 over any period of three years does notaffect trade between Member States and/or does notdistort or threaten to distort competition and thereforedoes not fall under Article 87(1) of the Treaty. Therelevant period of three years has a mobile character, sothat for each new grant of de minimis aid, the totalamount of de minimis aid granted during the previousthree years needs to be determined. The de minimis aidshould be considered to be granted at the moment thelegal right to receive the aid is conferred to the benefi-ciary. The de minimis rule is without prejudice to thepossibility that enterprises receive, also for the sameproject, State aid authorised by the Commission orcovered by a group exemption Regulation.

(6) For the purpose of transparency, equal treatment andthe correct application of the de minimis ceiling, it isappropriate that Member States should apply the samemethod of calculation. In order to facilitate this calcula-tion and in accordance with the present practice ofapplication of the de minimis rule, it is appropriate thataid amounts not taking the form of a cash grant shouldbe converted into their gross grant equivalent. Calcula-tion of the grant equivalent of aid payable in severalinstalments, and calculation of aid in the form of a softloan, require the use of market interest rates prevailingat the time of grant. With a view to a uniform, trans-parent and simple application of the State aid rules, themarket rates for the purposes of this Regulation shouldbe deemed to be the reference rates, provided that, in thecase of a soft loan, the loan is backed by normal securityand does not involve abnormal risk. The reference ratesshould be those which are periodically fixed by theCommission on the basis of objective criteria andpublished in the Official Journal of the European Communi-ties and on the Internet.

(7) The Commission has a duty to ensure that State aidrules are respected and in particular that aid grantedunder the de minimis rules adheres to the conditionsthereof. In accordance with the cooperation principlelaid down in Article 10 of the Treaty, Member Statesshould facilitate the achievement of this task by estab-lishing the necessary machinery in order to ensure thatthe total amount of aid, granted to the same beneficiaryunder the de minimis rule, does not exceed the ceiling ofEUR 100 000 over a period of three years. To that end,it is appropriate that Member States, when granting a deminimis aid, should inform the enterprise concerned of

(1) OJ L 142, 14.5.1998, p. 1.(2) OJ C 89, 28.3.2000, p. 6.(3) OJ C 68, 6.3.1996, p. 9.(4) OJ L 336, 23.12.1994, p. 156.

EN Official Journal of the European Communities13.1.2001 L 10/31

the de minimis character of the aid, receive full informa-tion about other de minimis aid received during the lastthree years and carefully check that the de minimis ceilingwill not be exceeded by the new de minimis aid. Alterna-tively respect of the ceiling may also be ensured bymeans of a central register.

(8) Having regard to the Commission's experience and inparticular the frequency with which it is generally neces-sary to revise State aid policy, it is appropriate to limitthe period of application of this Regulation. Should thisRegulation expire without being extended, MemberStates should have an adjustment period of six monthswith regard to de minimis aid schemes which werecovered by this Regulation,

HAS ADOPTED THIS REGULATION:

Article 1

Scope

This Regulation applies to aid granted to enterprises in allsectors, with the exception of:

(a) the transport sector and the activities linked to the produc-tion, processing or marketing of products listed in Annex Ito the Treaty;

(b) aid to export-related activities, namely aid directly linked tothe quantities exported, to the establishment and operationof a distribution network or to other current expenditurelinked to the export activity;

(c) aid contingent upon the use of domestic over importedgoods.

Article 2

De minimis aid

1. Aid measures shall be deemed not to meet all the criteriaof Article 87(1) of the Treaty and shall therefore not fall underthe notification requirement of Article 88(3) of the Treaty, ifthey fulfil the conditions laid down in paragraphs 2 and 3.

2. The total de minimis aid granted to any one enterpriseshall not exceed EUR 100 000 over any period of three years.This ceiling shall apply irrespective of the form of the aid orthe objective pursued.

3. The ceiling in paragraph 2 shall be expressed as a cashgrant. All figures used shall be gross, that is, before any deduc-tion for direct taxation. Where aid is awarded in a form other

than a grant, the aid amount shall be the gross grant equivalentof the aid.

Aid payable in several instalments shall be discounted to itsvalue at the moment of its being granted. The interest rate tobe used for discounting purposes and to calculate the aidamount in a soft loan shall be the reference rate applicable atthe time of grant.

Article 3

Cumulation and monitoring

1. Where a Member State grants de minimis aid to an enter-prise, it shall inform the enterprise about the de minimis char-acter of the aid and obtain from the enterprise concerned fullinformation about other de minimis aid received during theprevious three years.

The Member State may only grant the new de minimis aid afterhaving checked that this will not raise the total amount of deminimis aid received during the relevant period of three years toa level above the ceiling set out in Article 2(2).

2. Where a Member State has set up a central register of deminimis aid containing complete information on all de minimisaid granted by any authority within that Member State, therequirement in the first subparagraph of paragraph 1 no longerapplies from the moment the register covers a period of threeyears.

3. Member States shall record and compile all the informa-tion regarding the application of this Regulation. Such recordsshall contain all information necessary to demonstrate that theconditions of this Regulation have been respected. Recordsregarding an individual de minimis aid shall be maintained for10 years from the date on which it was granted and regardinga de minimis aid scheme, for 10 years from the date on whichthe last individual aid was granted under such scheme. Onwritten request the Member State concerned shall provide theCommission, within a period of 20 working days, or suchlonger period as may be fixed in the request, with all theinformation that the Commission considers necessary forassessing whether the conditions of this Regulation have beencomplied with, in particular the total amount of de minimis aidreceived by any enterprise.

Article 4

Entry into force and period of validity

1. This Regulation shall enter into force on the 20th dayfollowing that of its publication in the Official Journal of theEuropean Communities.

It shall remain in force until 31 December 2006.

EN Official Journal of the European Communities 13.1.2001L 10/32

2. At the end of the period of validity of this Regulation, de minimis aid schemes falling under thisRegulation shall continue to benefit from it during an adjustment period of six months.

During the adjustment period, these schemes may continue to be applied under the conditions of thisRegulation.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 12 January 2001.

For the Commission

Mario MONTI

Member of the Commission

DIRECTIVE 2003/33/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

of 26 May 2003

on the approximation of the laws, regulations and administrative provisions of the Member Statesrelating to the advertising and sponsorship of tobacco products

(Text with EEA relevance)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THEEUROPEAN UNION,

Having regard to the Treaty establishing the European Commu-nity, and in particular Articles 47(2), 55 and 95 thereof,

Having regard to the proposal from the Commission (1),

Having regard to the opinion of the European Economic andSocial Committee (2),

After consulting the Committee of the Regions,

Acting in accordance with the procedure laid down in Article251 of the Treaty (3),

Whereas:

(1) There are differences between the Member States' laws,regulations and administrative provisions on the adver-tising of tobacco products and related sponsorship. Suchadvertising and sponsorship in certain cases crosses theborders of the Member States or involves events orga-nised on an international level, and are activities towhich Article 49 of the Treaty applies. The differencesin national legislation are likely to give rise to increasingbarriers to the free movement between Member States ofthe products or services that serve as the support forsuch advertising and sponsorship. In the case of pressadvertising, certain obstacles have already been encoun-tered. In the case of sponsorship, distortions of theconditions of competition are likely to increase and havealready been noted as regards the organisation of certainmajor sporting and cultural events.

(2) Those barriers should be eliminated and, to this end, therules relating to the advertising of tobacco products andrelated sponsorship should in specific cases be approxi-mated. In particular, there is a need to specify the extentto which tobacco advertising in certain categories ofpublications is allowed.

(3) Article 95(3) of the Treaty requires the Commission, inits proposals for the establishment and functioning ofthe Internal Market concerning health, to take as a basea high level of protection. Within their respectivepowers, the European Parliament and the Council alsoseek to achieve this objective. The legislation of theMember States to be approximated is intended to protectpublic health by regulating the promotion of tobacco, anaddictive product responsible for over half a million

deaths in the Community annually, thereby avoiding asituation where young people begin smoking at an earlyage as a result of promotion and become addicted.

(4) The circulation in the Internal Market of publicationssuch as periodicals, newspapers and magazines is subjectto an appreciable risk of obstacles to free movement as aresult of Member States' laws, regulations and adminis-trative provisions which prohibit or regulate tobaccoadvertising in those media. In order to ensure free circu-lation throughout the Internal Market for all such media,it is necessary to limit tobacco advertising therein tothose magazines and periodicals which are not intendedfor the general public such as publications intendedexclusively for professionals in the tobacco trade and topublications printed and published in third countries,that are not principally intended for the Communitymarket.

(5) The laws, regulations and administrative provisions ofthe Member States relating to certain types of sponsor-ship for the benefit of tobacco products with cross-border effects give rise to an appreciable risk of distor-tion of the conditions of competition for this activitywithin the Internal Market. In order to eliminate thesedistortions, it is necessary to prohibit such sponsorshiponly for those activities or events with cross-bordereffects which otherwise may be a means of circum-venting the restrictions placed on direct forms of adver-tising, without regulating sponsorship on a purelynational level.

(6) Use of information society services is a means of adver-tising tobacco products which is increasing as publicconsumption and access to such services increases. Suchservices, as well as radio broadcasting, which may alsobe transmitted via information society services, are parti-cularly attractive and accessible to young consumers.Tobacco advertising by both these media has, by its verynature, a cross-border character, and should be regulatedat Community level.

(7) Free distribution of tobacco products is subject to restric-tion in several Member States, given its high potential tocreate addiction. Cases of free distribution have occurredin the context of the sponsorship of events having cross-border effects and should therefore be prohibited.

20.6.2003L 152/16 Official Journal of the European UnionEN

(1) OJ C 270 E, 25.9.2001, p. 97.(2) OJ C 36, 8.2.2002, p. 104.(3) Opinion of the European Parliament of 20 November 2002 (not yet

published in the Official Journal) and Decision of the Council of 27March 2003.

(8) Internationally applicable standards for the advertising oftobacco products and related sponsorship are the subjectof negotiations for the drafting of a World Health Orga-nisation Framework Convention on Tobacco Control.These negotiations are intended to create binding inter-national rules complementary to those contained in thisDirective.

(9) The Commission should draw up a report on the imple-mentation of this Directive. Provision should be made inthe relevant Community programmes to monitor theeffects of this Directive on public health.

(10) Member States should take adequate and effective stepsto ensure control of the implementation of measuresadopted pursuant to this Directive in compliance withtheir national legislation, as provided for in CommissionCommunication to the European Parliament and theCouncil on the role of penalties in implementingCommunity Internal Market legislation and in theCouncil Resolution of 29 June 1995 on the effectiveuniform application of Community law and on thepenalties applicable for breaches of Community law inthe Internal Market (1). Such means should include provi-sion for intervention of persons or organisations withlegitimate interest in the suppression of activities thatare not in conformity with this Directive.

(11) The penalties provided for under this Directive shouldbe without prejudice to any other penalty or remedyprovided under national law.

(12) This Directive regulates the advertising of tobaccoproducts in the media other than television, i.e. in thepress and other printed publications, in radio broad-casting and in information society services. It also regu-lates the sponsorship, by tobacco companies, of radioprogrammes and of events or activities involving, ortaking place in, several Member States or otherwisehaving cross-border effects, including the free ordiscounted distribution of tobacco products. Other formsof advertising, such as indirect advertising, as well as thesponsorship of events or activities without cross-bordereffects, fall outside the scope of this Directive. Subject tothe Treaty, Member States retain the competence toregulate these matters as they deem necessary to guar-antee the protection of human health.

(13) Advertising relating to medicinal products for humanuse is covered by Directive 2001/83/EC of the EuropeanParliament and of the Council of 6 November 2001 onthe Community code relating to medicinal products forhuman use (2). Advertising relating to products intendedfor use in overcoming addiction to tobacco does not fallwithin the scope of this Directive.

(14) This Directive should be without prejudice to CouncilDirective 89/552/EEC of 3 October 1989 on the coordi-nation of certain provisions laid down by law, regulationor administrative action in Member States concerningthe pursuit of television broadcasting activities (3), whichprohibits all forms of television advertising for cigarettesand other tobacco products. Directive 89/552/EECprovides that television programmes may not be spon-sored by undertakings whose principal activity is themanufacture or sale of cigarettes and other tobaccoproducts, or the provision of services, the advertising ofwhich is prohibited by that Directive. Teleshopping fortobacco products is also prohibited by Directive 89/552/EEC.

(15) The transnational character of advertising is recognisedby Council Directive 84/450/EEC of 10 September 1984relating to the approximation of the laws, regulationsand administrative provisions of the Member Statesconcerning misleading advertising (4). Directive 2001/37/EC of the European Parliament and of the Council of 5June 2001 on the approximation of the laws, regulationsand administrative provisions of the Member Statesconcerning the manufacture, presentation and sale oftobacco products (5), contains provisions on the use ofmisleading descriptions on the labelling of tobaccoproducts, the cross-border effect of which has also beenrecognised.

(16) Directive 98/43/EC of the European Parliament and ofthe Council of 6 July 1998 on the approximation of thelaws, regulations and administrative provisions of theMember States relating to the advertising and sponsor-ship of tobacco products (6) was annulled by the Courtof Justice in Case C-376/98 Federal Republic of Germany vEuropean Parliament and Council of the European Union (7).References to Directive 98/43/EC should therefore beconstrued as references to this Directive.

20.6.2003 L 152/17Official Journal of the European UnionEN

(1) OJ C 188, 22.7.1995, p. 1.

(2) OJ L 311, 28.11.2001, p. 67.(3) OJ L 298, 17.10.1989, p. 23. Directive as amended by Directive

97/36/EC of the European Parliament and of the Council (OJ L 202,30.7.1997, p. 60).

(4) OJ L 250, 19.9.1984, p. 17. Directive as amended by Directive 97/55/EC of the European Parliament and of the Council (OJ L 290,23.10.1997, p. 18).

(5) OJ L 194, 18.7.2001, p. 26.(6) OJ L 213, 30.7.1998, p. 9.(7) [2000] ECR I-8419.

(17) In accordance with the principle of proportionality, it isnecessary and appropriate for the achievement of thebasic objective of the proper functioning of the InternalMarket to lay down rules on the advertising of tobaccoproducts and related sponsorship. This Directive doesnot go beyond what is necessary in order to achieve theobjectives pursued in accordance with the third para-graph of Article 5 of the Treaty.

(18) This Directive respects the fundamental rights andobserves the principles recognised in particular by theCharter of Fundamental Rights of the European Union.In particular, this Directive seeks to ensure respect forthe fundamental right of freedom of expression,

HAVE ADOPTED THIS DIRECTIVE:

Article 1

Subject-matter and scope

1. The objective of this Directive is to approximate the laws,regulations and administrative provisions of the Member Statesrelating to the advertising of tobacco products and theirpromotion:

(a) in the press and other printed publications;

(b) in radio broadcasting;

(c) in information society services; and

(d) through tobacco related sponsorship, including the freedistribution of tobacco products.

2. This Directive is intended to ensure the free movement ofthe media concerned and of related services and to eliminateobstacles to the operation of the Internal Market.

Article 2

Definitions

For the purposes of this Directive, the following definitionsshall apply:

(a) ‘tobacco products’ means all products intended to besmoked, sniffed, sucked or chewed inasmuch as they aremade, even partly, of tobacco;

(b) ‘advertising’ means any form of commercial communica-tions with the aim or direct or indirect effect of promotinga tobacco product;

(c) ‘sponsorship’ means any form of public or private contribu-tion to any event, activity or individual with the aim ordirect or indirect effect of promoting a tobacco product;

(d) ‘information society services’ means services within themeaning of Article 1(2) of Directive 98/34/EC of theEuropean Parliament and of the Council of 22 June 1998

laying down a procedure for the provision of informationin the field of technical standards and regulations and ofrules on information society services (1).

Article 3

Advertising in printed media and information societyservices

1. Advertising in the press and other printed publicationsshall be limited to publications intended exclusively for profes-sionals in the tobacco trade and to publications which areprinted and published in third countries, where those publica-tions are not principally intended for the Community market.

Other advertising in the press and other printed publicationsshall be prohibited.

2. Advertising that is not permitted in the press and otherprinted publications shall not be permitted in informationsociety services.

Article 4

Radio advertising and sponsorship

1. All forms of radio advertising for tobacco products shallbe prohibited.

2. Radio programmes shall not be sponsored by undertak-ings whose principal activity is the manufacture or sale oftobacco products.

Article 5

Sponsorship of events

1. Sponsorship of events or activities involving or takingplace in several Member States or otherwise having cross-border effects shall be prohibited.

2. Any free distribution of tobacco products in the contextof the sponsorship of the events referred to in paragraph 1having the purpose or the direct or indirect effect of promotingsuch products shall be prohibited.

Article 6

Report

No later than 20 June 2008, the Commission shall submit areport to the European Parliament, the Council and theEuropean Economic and Social Committee on the implementa-tion of this Directive. That report shall be accompanied by anyproposals for amendments to this Directive which the Commis-sion deems necessary.

20.6.2003L 152/18 Official Journal of the European UnionEN

(1) OJ L 204, 21.7.1998, p. 37. Directive as amended by Directive 98/48/EC (OJ L 217, 5.8.1998, p. 18).

Article 7

Penalties and enforcement

Member States shall lay down the rules on penalties applicableto infringements of the national provisions adopted pursuantto this Directive and shall take all measures necessary to ensurethat they are implemented. The penalties provided for must beeffective, proportionate and dissuasive. The Member States shallnotify those rules to the Commission by the date specified inArticle 10 at the latest and shall notify it without delay of anysubsequent amendment affecting them.

Those rules shall include provisions ensuring that persons ororganisations which, under national legislation, can justify alegitimate interest in the suppression of advertising, sponsor-ship or other matters incompatible with this Directive, maytake legal action against such advertising or sponsorship orbring such advertising or sponsorship to the attention of anadministrative body competent either to pronounce oncomplaints or to institute the appropriate legal proceedings.

Article 8

Free movement of products and services

Member States shall not prohibit or restrict the free movementof products or services which comply with this Directive.

Article 9

References to Directive 98/43/EC

References to the annulled Directive 98/43/EC shall beconstrued as references to this Directive.

Article 10

Implementation

1. Member States shall bring into force the laws, regulationsand administrative provisions necessary to comply with thisDirective by 31 July 2005 at the latest. They shall forthwithinform the Commission thereof.

When Member States adopt those measures, they shall containa reference to this Directive or be accompanied by such a refer-ence on the occasion of their official publication. The methodsof making such reference shall be laid down by the MemberStates.

2. Member States shall communicate to the Commission thetext of the main provisions of national law which they adopt inthe field covered by this Directive.

Article 11

Entry into force

This Directive shall enter into force on the day of its publica-tion in the Official Journal of the European Union.

Article 12

Addressees

This Directive is addressed to the Member States.

Done at Brussels, 26 May 2003.

For the European Parliament

The President

P. COX

For the Council

The President

G. DRYS

20.6.2003 L 152/19Official Journal of the European UnionEN

COMMISSION DECISION

of 24 May 2004

relating to a proceeding pursuant to Article 82 of the EC Treaty and Article 54 of the EEA Agreementagainst Microsoft Corporation

(Case COMP/C-3/37.792 — Microsoft)

(notified under document number C(2004) 900)

(Only the English text is authentic)

(Text with EEA relevance)

(2007/53/EC)

On 24 March 2004, the Commission adopted a decision relating to a proceeding pursuant to Article 82 of the EC Treatyand Article 54 of the EEA Agreement. In accordance with the provisions of Article 21 of Regulation No 17 (1), theCommission herewith publishes the names of the parties and the main content of the decision, having regard to thelegitimate interest of undertakings in the protection of their business secrets. A non-confidential version of the full text ofthe decision can be found in the authentic languages of the case and in the Commission’s working languages at DG

COMP’s Web site at http://europa.eu.int/comm/competition/index_en.html.

I. SUMMARY OF THE INFRINGEMENT

Addressee, nature and duration of the infringement

(1) This Decision is addressed to Microsoft Corporation.

(2) Microsoft Corporation has infringed Article 82 of the ECTreaty and Article 54 of the EEA Agreement by:

— refusing to supply interoperability information andallow its use for the purpose of developing anddistributing work group server operating systemproducts, from October 1998 until the date of thisDecision,

— making the availability of the Windows Client PCOperating System conditional on the simultaneousacquisition of Windows Media Player (WMP) fromMay 1999 until the date of this Decision.

The relevant markets

PC operating systems

(3) Operating systems are software products that control thebasic functions of a computer. ‘Client Personal Computers’(PCs) are general-purpose computers designed for use byone person at a time and that can be connected to acomputer network.

(4) A distinction could be made between (i) operating systemsfor so-called ‘Intel-compatible’ PCs and (ii) operatingsystems for non-Intel-compatible PCs. ‘Intel-compatible’ inthat context relates to a specific type of hardware

architecture. ‘Porting’ (that is to say, adapting) a non-Intel-compatible operating system (for example Apple’s Macin-tosh) to run on Intel-compatible hardware is a long andcostly process. However, the question of the inclusion ofoperating systems for Intel-compatible and non-Intel-compatible PCs in the definition of the relevant marketcan be left open since the difference will not be such as toalter the result of the assessment of Microsoft’s marketpower.

(5) Operating systems for handheld devices such as personaldigital assistants (PDA) or ‘intelligent’ mobile phones andoperating systems for servers cannot presently be regardedas competitive substitutes for client PC operating systems.

(6) As regards supply-side substitutability, a software productthat is not presently in the market for client PC operatingsystems would have to be substantially modified in order toadapt to the specific needs of consumers in that market.This entails a development and testing process that involvesa substantial amount of time (often above one year) andexpenses, and entails a substantial commercial risk.Furthermore, as is established when discussing Microsoft’sdominance in the relevant market, such a new entrantwould face significant barriers to entry.

Work group server operating systems

(7) ‘Work group server services’ are the basic services that areused by office workers in their day-to-day work, namelysharing files stored on servers, sharing printers, and having

6.2.2007 EN Official Journal of the European Union L 32/23

(1) OJ 13, 21.2.1962, p. 204/62. Regulation as last amended by Regulation (EC) No 1/2003 (OJ L 1, 4.1.2003, p. 1).

their rights as network users ‘administered’ centrally bytheir organisation’s Information Technology department.‘Work group server operating systems’ are operatingsystems designed and marketed to deliver these servicescollectively to relatively small numbers of PCs linkedtogether in small to medium-sized networks.

(8) Evidence gathered by the Commission in the course of itsinvestigation has confirmed that work group server servicesare viewed by customers as constituting a distinct set ofservices provided by servers. In particular, the provision offile and print services on the one hand and of group anduser administration services on the other hand are closelyinterrelated: if there were no proper group and useradministration, the user would not have efficient and secureaccess to file and print sharing services.

(9) Work group servers (servers that run a work group serveroperating system) must be distinguished from high-endservers that are generally needed to support ‘mission-critical’ tasks, such as inventory control, airline reservationsor banking transactions. Such tasks may involve the need tosupport storage of vast amounts of data and requiremaximum (often termed rock-solid) reliability and avail-ability (2). They are carried out by expensive machines(sometimes called enterprise servers) or by mainframes. Bycontrast, work group server operating systems are generallyinstalled on less expensive computers.

(10) However, not all low-end server machines are used as workgroup servers. For instance, low-end servers can also beinstalled at the ‘edge’ of networks and be specialised in webserving (3), web caching (4) or firewall (5) to the exclusion ofthe core work group server services.

(11) It should also be pointed out that whilst only file, print andgroup and user administration services constitute the corework group server services, work group server operatingsystems can be used to run applications, as is the case withother operating systems. These applications will often be

tightly linked to the provision of group and useradministration services. Since work group server operatingsystems are as a rule used with inexpensive hardware, theseapplications will generally not require extremely highreliability.

Streaming media players

(12) Media players are client-side software applications, the corefunctionality of which is to decode, decompress and play(and further allow the processing of) digital audio and videofiles downloaded or streamed over the Internet (and othernetworks). Media players are also capable of playing backaudio and video files stored on physical carriers such asCDs and DVDs.

(13) As regards demand-side substitutability, classical playbackdevices such as CD and DVD players are not substitutes formedia players as they offer a very limited subset of themedia player functionalities. Media players which dependon third parties’ proprietary technologies are, in contrast toMicrosoft’s WMP, RealNetworks’ RealOne Player andApple’s QuickTime Player, not likely to constrain the thirdparties’ behaviour. Media players unable to receive audioand video content streamed over the Internet are notsubstitutes for streaming media players since they do notsatisfy specific consumer demand for streaming.

(14) As regards supply-side substitutability, the significantnecessary R&D investments, the protection of existingmedia technologies through IP rights and the indirectnetwork effects characterising the market translate intoentry barriers for developers of other software applicationsincluding non-streaming media players.

Dominance

PC operating systems

(15) Microsoft has acknowledged that it holds a dominantposition in the PC operating system market.

(16) This dominant position is characterised by market sharesthat have remained very high at least since 1996 (90 % + inrecent years), and by the presence of very high barriers toentry. These barriers to entry are in particular linked to thepresence of indirect network effects. Indeed, the popularityof a PC operating system among users derives from itspopularity among vendors of PC applications, which inturn choose to focus their development efforts towards thePC operating system which is most popular among users.

L 32/24 EN Official Journal of the European Union 6.2.2007

(2) Reliability is the ability of an operating system to function for a longperiod of time without malfunctioning or having to be rebooted.Availability is the ability of an operating system to function for along period of time without having to be taken out of service forroutine maintenance or upgrades. Another aspect of availability ishow fast an operating system can get back up and running after afailure has occurred.

(3) A web server hosts web pages and makes them accessible throughstandard web protocols.

(4) A cache is a place where temporary copies of web objects are kept.Web caching is therefore a way of storing web files for later re-use ina way that speeds up the access for the end user.

(5) A firewall is a hardware/software solution that isolates organisations’computer networks and thereby protects them against externalthreats.

This creates a self-reinforcing dynamic that protectsWindows as the de facto standard for PC operating systems(applications barrier to entry).

Work group server operating systems

(17) The Commission concludes that Microsoft has achieved adominant position in the work group server operatingsystem market. This conclusion rests in particular on thefollowing findings:

— The Commission has examined a variety of data inorder to measure Microsoft’s market share in the workgroup server operating system market. All thesedatasets confirm that Microsoft holds by far theleading market share, which, under every measure, isabove 50 %, and for most measures, is in the 60 %75 % range.

— There are barriers to entry in the work group serveroperating system market. In particular, the easier it isto find technicians skilled in administering a givenwork group server operating system, the morecustomers are inclined to purchase that work groupserver operating system. In turn, however, the morepopular a work group server operating system isamong customers, the easier it is for technicians (andthe more willing technicians are) to acquire skillsrelated to that product. This mechanism can beformalised from an economic perspective in terms ofnetwork effects.

— There are strong commercial and technical associativelinks between the PC operating system market and thework group server operating system market. As aresult, Microsoft’s dominance over the PC operatingsystem market has a significant impact on the adjacentmarket for operating systems for work group servers.

Refusal to Supply

(18) The Decision makes the following findings.

— Microsoft has refused to provide Sun with informationenabling Sun to design work group server operatingsystems that can seamlessly integrate in the ‘ActiveDirectory domain architecture’, a web of interrelatedclient PC-to-server and server-to-server protocols thatorganise Windows work group networks. It isnoteworthy that, in order to allow Sun to providefor such seamless integration, Microsoft only had toprovide specifications of the relevant protocols, that isto say, technical documentation, and not to give accessto the software code of Windows, let alone to allow itsreproduction by Sun. There are two further factualcircumstances of the refusal at issue that must bepointed out. First, Microsoft’s refusal to Sun is part ofa broader pattern of conduct of refusing the relevant

information to any work group server operatingsystem vendor. Second, Microsoft’s refusal constitutesa disruption of previous levels of supply, since theanalogous information for previous versions ofMicrosoft’s products had been made available to Sunand to the industry at large, indirectly through alicence to AT&T.

— Microsoft’s refusal risks eliminating competition inthe relevant market for work group server operatingsystems because the refused input is indispensable forcompetitors operating in that market. Customerevidence confirms the link between on the one hand,the privileged interoperability that Microsoft’s workgroup server operating systems enjoy with itsdominant PC operating system, and on the otherhand, their rapid rise to dominance (and theincreasing uptake of the features of the ActiveDirectory domain architecture that are incompatiblewith competitors’ products). The Commission’s inves-tigation also shows that there is no actual or potentialsubstitute to the refused input.

— Microsoft’s refusal limits technical development to theprejudice of consumers, in contradiction in particularwith Article 82(b). If competitors had access to therefused information, they would be able to providenew and enhanced products to the consumer. Inparticular, market evidence shows that consumersvalue product characteristics such as security andreliability, although those characteristics are relegatedto a secondary position due to Microsoft’s interoper-ability advantage. Microsoft’s refusal thereby indirectlyharms consumers.

(19) These circumstances of an exceptional nature lead to theconclusion that Microsoft’s refusal constitutes an abuse of adominant position incompatible with Article 82, unless it isobjectively justified.

(20) Microsoft’s claimed justification for its refusal is thatproviding the information at stake and allowing competi-tors to use it in order to make compatible products wouldbe tantamount to licensing intellectual property rights. TheCommission did not take a position on the validity ofMicrosoft’s general intellectual property claims, whichcould in any event only be ascertained on a case by casebasis when Microsoft has prepared the relevant specifica-tions. However, according to the jurisprudence, an under-taking’s interest in exercising its intellectual property rightscannot in itself constitute an objective justification whenexceptional circumstances such as the ones identified aboveare established.

(21) The Commission investigated whether, under the specificcircumstances of this case, Microsoft’s proffered justifica-tion outweighed these exceptional circumstances and


concluded that Microsoft had not provided any evidence tothat effect. In particular, an order to supply the relevantinformation could not lead to the cloning of Microsoft’sproduct. The Commission also took account of the fact thatdisclosure of information of the kind refused by Microsoftwas commonplace in the industry.

(22) Furthermore, the Commission drew inspiration from theundertaking made by IBM to the Commission in 1984 (theIBM Undertaking) (6), and from the 1991 SoftwareDirective (7). Microsoft indeed recognises that the IBMUndertaking and the Software Directive provide usefulguidance for the present case. The Commission concludedthat an order to supply in the present case would beanalogous to the IBM Undertaking, in that it would onlyrelate to interface specifications. The Commission alsoconcluded that the refusal at issue was a refusal to supplyinteroperability information, in the sense of the SoftwareDirective. In that respect, the Commission noted that theSoftware Directive restricted the exercise of copyright oversoftware (including exercise by non-dominant undertak-ings) in favour of interoperability, thereby stressing theimportance of interoperability in the software industry. Italso noted that the Software Directive explicitly providedthat its provisions were without prejudice to the applicationof Article 82, in particular if a dominant undertakingrefused to make information available which is necessaryfor interoperability.

(23) Microsoft further argued that its refusal to supplyinteroperability information could not be aimed atrestricting competition in the work group server operatingsystem market, because the company had no economicincentive to pursue such a strategy. The Commissionrejected Microsoft’s argument, noting that it was based onan economic model that did not fit the facts in this case andwas inconsistent with the views expressed by Microsoft’sexecutives in Microsoft internal documents obtained duringthe investigation.

Tying

(24) The Decision finds that Microsoft infringes Article 82 ofthe Treaty by tying WMP with the Windows PC operatingsystem (Windows). The Commission bases its finding of atying abuse on four elements: (i) Microsoft holds adominant position in the PC operating system market; (ii)the Windows PC operating system and WMP are twoseparate products; (iii) Microsoft does not give customers achoice to obtain Windows without WMP; and (iv) this tyingforecloses competition. In addition, the Decision rejectsMicrosoft’s arguments to justify the tying of WMP.

(25) Microsoft does not dispute that it holds a dominantposition in the PC operating system market.

(26) The Commission Decision finds that streaming mediaplayers and PC operating systems are two separate products(rejecting Microsoft’s argument that WMP is an integralpart of Windows). The Decision first sets out that althoughMicrosoft has been tying its media player with Windows forsome time, there remains today separate consumer demandfor stand-alone media players, distinguishable from demandfor PC operating systems. Secondly, a number of vendorsdevelop and supply media players on a stand-alone basis.Thirdly, Microsoft itself develops and distributes versions ofits WMP for other PC operating systems. Finally, Microsoftpromotes WMP in direct competition with third partymedia players.

(27) As regards the third tying element, the Decision finds thatMicrosoft does not give customers a choice to obtainWindows without WMP. PC manufacturers must licenseWindows with WMP. If they want to install an alternativemedia player on Windows, they can only do so in additionto WMP. If a user buys Windows in a retail store, the sameconsiderations apply. The Decision considers Microsoft’sarguments that customers need not pay ‘extra’ for the WMPand that they need not use it to be irrelevant in the contextof determining whether there is coercion under Article 82of the Treaty.

(28) The Decision then explains why tying in this particular caseis liable to foreclose competition. The Decision sets out thatthe tying of WMP to Windows affords Microsoftunmatched ubiquity of its media player on PCs worldwide.The relevant evidence reveals that other distribution meansare second best. By tying WMP to Windows, Microsoft canoffer content providers and software developers thatsupport the Windows Media technologies the ability torely on the Windows monopoly to reach almost all PCusers worldwide. Evidence shows that supporting severalmedia technologies generates additional costs. As such,WMP’s ubiquitous presence induces content providers andsoftware developers to rely primarily on Windows Mediatechnology. Consumers will in turn prefer to use WMP,since a wider array of complementary software and contentwill be available for that product. Microsoft’s tyingreinforces and distorts these ‘network effects’ to itsadvantage, thereby seriously undermining the competitiveprocess in the media player market. Evidence shows thatWMP usage increases due to tying, while other mediaplayers are rated more highly in terms of quality by users.Market data as regards media player usage, format usage, aswell as content offered by web sites point to a trend infavour of usage of WMP and the Windows Media formatsto the detriment of the main competing media players (andmedia player technologies). Whilst the Decision highlights


(6) Commission Case IV/29.479. The Commission suspended itsinvestigation, which had started in the 1970s, following thatundertaking by IBM.

(7) Council Directive 91/250/EEC (OJ L 122, 17.5.1991, p. 42).

this trend in favour of WMP and the Windows Mediaformat, the Decision also emphasises that, on the basis ofthe case law of the Court, the Commission is, in particular,not required to prove that competition has already beenforeclosed or that there is a risk of the elimination of allcompetition to establish a tying abuse. Otherwise, antitrustscrutiny in certain software markets would come too late asevidence of market impact could only be demonstratedonce the market had ‘tipped’.

(29) Finally, the Decision discusses Microsoft’s arguments tojustify the tying of WMP, in particular the allegedefficiencies of tying WMP to Windows. With regard toalleged distribution efficiencies, the Commission rejectsMicrosoft’s argument that tying lowers transaction costs forconsumers by reducing time and confusion through havinga set of default options in a personal computer ‘out-of-the-box’. The benefit of having a media player pre-installedalong with the client PC operating system does not requirethat Microsoft selects the media player for consumers. PCmanufacturers can ensure that consumer demand for pre-installed media players of their choice is met. The Decisionalso finds that Microsoft has not put forward any technicalefficiency for which ‘integration’ of WMP would prove to bea precondition. The tying of WMP rather shields Microsoftfrom effective competition from potentially more efficientmedia player vendors, which could challenge its position,thus reducing the talent and capital invested in innovationin respect of media players.

II. REMEDIES

Refusal to Supply

(30) The Decision orders Microsoft to disclose the informationthat it has refused to supply and to allow its use for thedevelopment of compatible products. The disclosure orderis limited to protocol specifications, and to ensuringinteroperability with the essential features that define atypical work group network. It applies not only to Sun, butto any undertaking that has an interest in developingproducts that constitute a competitive constraint toMicrosoft in the work group server operating systemmarket. To the extent that the Decision might requireMicrosoft to refrain from fully enforcing any of itsintellectual property rights, this would be justified by theneed to put an end to the abuse.

(31) The conditions under which Microsoft shall disclose theinformation and allow the use thereof must be reasonableand non-discriminatory. The requirement for the termsimposed by Microsoft to be reasonable and non-discrimi-natory applies in particular to any remuneration that

Microsoft might charge for supply. For example, suchremuneration should not reflect the strategic valuestemming from Microsoft’s market power in the PCoperating system market or in the work group serveroperating system market. Furthermore, Microsoft may notimpose restrictions as to the type of products in which thespecifications may be implemented, if such restrictionscreate disincentives to compete with Microsoft, orunnecessarily restrain the ability of the beneficiaries toinnovate. Finally, the terms imposed by Microsoft in thefuture must be sufficiently predictable.

(32) Microsoft must disclose the relevant protocol specificationsin a timely manner, that is to say, as soon as it has produceda working and sufficiently stable implementation of theseprotocols in its products.

Tying

(33) Concerning the tying abuse, the Decision orders Microsoftto offer to end users and OEMs for sale in the EEA a full-functioning version of Windows which does not incorpo-rate WMP. Microsoft retains the right to offer a bundle ofWindows and WMP.

(34) Microsoft must refrain from using any means which wouldhave the equivalent effect of tying WMP to Windows, forexample by reserving privileged interoperability withWindows to WMP, by providing selective access toWindows APIs, or by promoting WMP over competitors’products through Windows. Microsoft is also preventedfrom giving OEMs or users a discount conditional on theirobtaining Windows together with WMP, or de facto,financially or otherwise, removing or restricting OEMs’ orusers’ freedom to choose the version of Windows withoutWMP. The unbundled version of Windows must not be lessperforming than the version of Windows which comesbundled with WMP, regard being had to WMP’s function-ality which, by definition, will not be part of the unbundledversion of Windows.

III. FINES

Basic amount

(35) The Commission considers that the infringement constitu-tes by its nature a very serious infringement of Article 82 ofthe EC Treaty and Article 54 of the EEA Agreement.

(36) Furthermore, the pattern of exclusionary leveragingbehaviour engaged in by Microsoft has a significant impacton the markets for work group server operating systemsand for streaming media players.


(37) For the purposes of assessing the gravity of the abuses, themarkets for client PC operating systems, for work groupserver operating systems and for media players are EEA-wide in scope.

(38) The initial amount of the fine to be imposed on Microsoftto reflect the gravity of the infringement should be, in lightof the above circumstances, EUR 165 732 101. GivenMicrosoft’s significant economic capacity (8), in order toensure a sufficient deterrent effect on Microsoft, this figureis adjusted upwards by a factor of two toEUR 331 464 203.

(39) Finally, the basic amount of the fine is increased by 50 % totake account of the duration of the infringement (five and ahalf years). The basic amount of the fine is therefore set atEUR 497 196 304.

Aggravating and attenuating circumstances

(40) There are no aggravating or attenuating circumstancesrelevant to this Decision.


(8) Microsoft is currently the largest company in the world by marketcapitalisation (see http://news.ft.com/servlet/ContentServer? pagen-ame=FT.com/StoryFT/FullStory&c=StoryFT&-cid=1051390342368&p=1051389855198 and http://specials.ft.com/spdocs/global5002003.pdf — the Financial Times ‘World’slargest Companies’, updated on 27 May 2003, printed on 13 January2004). According to the same measure, Microsoft has held aconsistently high ranking in the list of the world’s largest companiesby market capitalisation, being the largest in 2000, the fifth largest in2001, and the second largest in 2002 (see http://specials.ft.com/ln/specials/global5002a.htm (for 2000, printed on 24 January 2003),http://specials.ft.com/ft500/may2001/FT36H8Z8KMC.html (for2001, printed on 24 January 2003), http://specials.ft.com/ft500/may2002/FT30M8IPX0D.html (for 2002, printed on 24 January2003)). Microsoft’s resources and profits are also significant.Microsoft’s Securities and Exchange Commission filing for the USfiscal year July 2002 to June 2003 reveals that it possessed a cash(and short-term investment) reserve of USD 49 048 million on June30, 2003. As regards profits, this Securities and ExchangeCommission filing indicates that in US fiscal year July 2002 to June2003, Microsoft earned profits of USD 13 217 million on revenuesof USD 32 187 million (profit margin of 41 %). For the Windows PCclient PC operating system product during this period (‘Client’product segment), Microsoft earned profits of USD 8 400 million onrevenues of USD 10 394 million (profit margin of 81 %).

EN EN

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 23.10.2007

COM(2007) 636 final

Recommendation for a

COUNCIL DECISION

on the European Capital of Culture event for the year 2011

(presented by the Commission)

EN 2 EN

EXPLANATORY MEMORANDUM

Decision 1622/2006/EC of the European Parliament and the Council of 24 October 2006

establishing a Community action for the European Capital of Culture event for the years 2007

to 2019,1 lays down the procedure of designation of the European Capitals of Culture.

According to Article 2 of this Decision, from 2009 onwards, two cities of two Member States

will be designated as European Capitals of Culture, in turn, according to the chronological

order set out in the Annex to the Decision.

In accordance with Article 14, the nomination for European Capitals of Culture concerning

the year 2011 is submitted to transitional provisions, as follows.

The nominations are notified to the European Parliament, the Council, the Commission and

the Committee of the Regions by the Member States concerned no later than four years before

the event in question is due to begin.

The Commission forms a selection panel which issues a report on the nominations judged

against the objectives and characteristics of this action. The selection panel is composed of

leading independent figures who are experts on the cultural sector. The selection panel

submits its report to the Commission, the European Parliament and the Council.

The European Parliament may forward an opinion to the Commission on the nominations no

later than 3 months after receipt of the report.

The Council, acting on a recommendation from the Commission drawn up in the light of the

selection panel’s report, officially designates the cities in question for the year for which they

have been nominated.

In accordance with article 2 and the Annex, Finland notified the nomination of Turku and

Estonia nominated Tallinn for the 2011 title before the end of 2006.

The selection panel met on 4 June 2007 to examine the nominations. This examination

included hearings of representatives from the candidate cities. The panel submitted its report

to the Commission on 11 June 2007; at the request of the panel, the Commission forwarded

the report to the other Institutions.

On the basis of an overall evaluation of the applications the panel – while suggesting some

improvements - reached a consensus to recommend to the Institutions of the European Union

that Tallinn and Turku host the European Capital of Culture in 2011.

The Committee on Culture and Education of the European Parliament forwarded a letter to

DG EAC on 13 September, as a follow up to the panel’s report which had been received, to

highlight the relevant aspects of the exchange of views it had on this matter. In conclusion,

the Commission, in accordance with Article 14 of Decision 1622/2006/EC submits to the

Council the appended recommendation for the official designation of Turku and Tallinn

respectively for the 2011 European Capital of Culture event.

1 OJ L 304 of 3.11.2006, p. 1.

EN 3 EN

Recommendation for a

COUNCIL DECISION

on the European Capital of Culture event for the year 2011

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community,

Having regard to Decision n° 1622/2006/EC of the European Parliament and the Council

establishing a Community action for the European Capital of Culture event for the years 2007

to 2019,2 and in particular its Article14,

Having regard to the Selection Panel report of September 2007 submitted to the Commission,

the European Parliament, the Council in accordance with Article 14 paragraph 2 of Decision

n° 1622/2006/EC,

Considering that the criteria referred to in Article 14 paragraph 3 of Decision 1622/2006/EC

are entirely fulfilled,

Having regard to the recommendation from the Commission of the [ ] 2007,

HAS ADOPTED THIS DECISION:

Article 1

Turku and Tallinn are designated as “European Capital of Culture 2011” in accordance with

Article 14 of Decision 1622/2006/EC.

Article 2

The designated cities shall take the necessary measures in order to ensure the effective

implementation of Article 3 of Decision 1622/2006/EC.

Done at Brussels, […]

For the Council

The President

[…]

2 OJ L 304 of 3.11.2006, p. 1.

OPINION OF MR ROEMER — CASE 26/62

THE COURT

in answer to the questions referred to it for a preliminary ruling by the Tariefcommissie by decision of 16 August 1962, hereby rules:

1. Article 12 of the Treaty establishing the European Economic Community produces direct effects and creates individual rights which national courts must protect.

2. In order to ascertain whether customs duties or charges having equivalent effect have been increased contrary to the prohibition contained in Article 12 of the Treaty, regard must be had to the duties and charges actually applied by the Member State in question at the date of the entry into force of the Treaty. Such an increase can arise both from a re-arrangement of the tariff resulting in the classification of the product under a more highly taxed heading and from an increase in the rate of customs duty applied.

3. The decision as to costs in these proceedings is a matter for the Tariefcommissie.

Donner Delvaux Rossi

Riese Hammes Trabucchi Lecourt

Delivered in open court in Luxembourg on 5 February 1963.

A. Van Houtte A. M. Donner

Registrar President

OPINION OF MR ADVOCATE-GENERAL KARL ROEMER

DELIVERED ON 12 DECEMBER 19621

Mr President, the Nederlandse administratie der belas-

Members of the Court, tingen (the Netherlands Inland Revenue Administration) of 6 March 1961 con-

The present proceedings originate in an cerning the application of a particular action before the Tariefcommissie, a customs duty to the import of urea- Dutch administrative court. This action formaldehyde from the Federal Republic is for the annulment of a decision of of Germany. The decision is based on

l — Translated from the German.

16

OPINION OF MR LAGRANGE — CASE 6/64

capable of creating individual rights which national courts

must protect. In so far as the question put to the Court is

concerned, it prohibits the introduction of any new measure

contrary to the principles of Article 37 (1), that is, any

measure having as its object or effect a new discrimination

between nationals of Member States regading the conditions in

which goods are procured and marketed, by means of

monopolies or bodies which must, first, have as their object

transactions regarding a commercial product capable of

being the subject of competition and trade between Member

States, and secondly must play an effective part in such trade;

and further declares:

The decision on the costs of the present action is a matter for

the Guidice Conciliatore, Milan. ,

Donner Hammes Trabucchi

Delvaux Rossi Lecourt Strauß

Delivered in open court in Luxembourg on 15 July 1964.

A. Van Houtte A. M. Donner

Registrar President

OPINION OF MR ADVOCATE-GENERAL LAGRANGE DELIVERED ON 25 JUNE 1964

1

Mr President, are such as to bring in issue the consti- Members of the Court, tutional relations between the European

Economic Community and its Member The preliminary question upon which States. This highlights the importance you have to give a ruling under Article of the judgment you are called upon to 177 of the EEG Treaty does not, for pronounce in this case. The facts are once, come from a Netherlands court, known to you: Mr Costa, a lawyer but from an Italian one, and it is no practising in Milan, Claims that he is not longer a question of social security or of under an Obligation to pay an invoice Regulation No 3, but rather of a certain amounting to 1925 lire demanded of number of provisions of the Treaty him in respect ofthe supply of electricity itself, in respect of which your interpre- by the 'Ente Nazionale per l'Energia tation is requested in circumstances that Elettrica (ENEL)'. He objected to this

l—Translated from the French.

600

JUDGMENT OF 12. 7. 1957 - JOINED CASES 7/56 AND 3 TO 7/57

I — On application for annulment 7/56

(1) Annuls the decisions contained in the letter sent to the applicants on 12 July 1956 by Mr Vanrullen, the Vice-President of the Common Assembly.

(2) Annuls the decision of the Bureau of the Common Assembly, in so far as it withdraws from the applicants the application of the Staff Regulations.

(3) Dismisses the application for the annulment of the decision of the Bureau of the Common Assembly in so far as that decision withdraws from the applicants the grades and ranks which had been granted to them by the Orders of 12 December 1955.

(4) Remits the matter to the Common Assembly, in so far as the decisions of the Vice-President, Mr Vanrullen, and of the Bureau of the Common Assembly have been annulled.

(5) Orders that the applicants are entitled to the reimbursement of four-fifths of their costs by the defendant, and orders the defendant to bear its own costs.

II — On applications for damages 3 to 7/57

Orders the defendant to pay the sum of 100 EPU units of account to each of the applicants.

Orders the defendant to bear the costs.

Delivered in open court in Luxembourg on 12 July 1957.

Hammes Serrarens Riese

Rueff Van Kleffens

Ch. L. Hammes O. Riese

President Judge-Rapporteur A. Van Houtte

Registrar

JUDGMENT OF 19. 11. 1991— JOINED CASES C-6/90 AND C-9/90

2. A Member State is required to make good loss and damage caused to individuals

by failure to transpose Directive 80/987/EEC.

Due Slynn Joliet Schockweiler

Grévisse Kapteyn Mancini

Moitinho de Almeida Rodriguez Iglesias Diez de Velasco Zuleeg

Delivered in open court in Luxembourg on 19 November 1991.

J.-G. Giraud O. Due

Registrar President

1-5418

OPINION OF MR DUTHEILLET DE LAMOTHE — CASE 22/70

THE COURT hereby:

1. Dismisses the application;

2. Orders the parties to bear their own costs.

Lecourt Donner Trabucchi

Monaco Mertens de Wilmars Pescatore Kutscher

Delivered in open court in Luxembourg on 31 March 1971.

A. Van Houtte

Registrar

R. Lecourt President

OPINION OF MR ADVOCATE-GENERAL

DUTHEILLET DE LAMOTHE

DELIVERED ON 10 MARCH 197l1

Mr President, Members of the Court,

As the Court is aware this is the first occasion on which a dispute has been brought before it arising out of the curious 'ménage' formed by the Council of Ministers and the Commission of the European Communities. The unusual and exceptional nature of this dispute indicates the fundamental good relationship which obtains between a couple whose fertility is evinced by some seven .thousand Community regula-tions and the several thousand decisions or directives which they have together engendered. This dispute arose out of negotiations carried on with third countries on a particularly delicate subject: the work-ing conditions of crews of vehicles engaged in international road transport. A review of the hitherto fruitless

l — Translated fiom the Frcach.

endeavours to settle this matter at the international level shows clearly the difficulties which it presents. A convention was proposed in 1939 by the International Transport Bureau which was only ratified by two countries and never entered into force. In 1951 the matter was taken up again by the International Labour Organization which in 1954 succeeded in obtaining an agreement, but this agreement likewise never entered into force since it was not ratified by a sufficient number of States. Then the United Nations Economic Commission for Europe tackled the problem. In 1962 it submitted for signature by the governments of several European States an agreement concerning the work of crews of vehicles engaged in inter-national road transport, commonly refer-red to by the initials AETR. This agree-

284

JUDGMENT OF THE COURT

5 October 2000

(Directive 98/43/EC - Advertising and sponsorship of tobacco products - Legal basis - Article 100a of the EC Treaty (now, after amendment, Article 95 EC))

In Case C-376/98,

Federal Republic of Germany, represented by C.-D. Quassowski, Regierungsdirektor in the Federal Ministry of Finance, acting as Agent, assisted by J. Sedemund, Rechtsanwalt, Berlin, Federal Ministry of Finance, Referat EC2 Graurheindorfer Straße 108, D - 53117 Bonn,

applicant,

v

European Parliament, represented by C. Pennera, Head of Division in the Legal Service, and N. Lorenz, of the same service, acting as Agents, with an address for service in Luxembourg at the General Secretariat of the European Parliament, Kirchberg,

and

Council of the European Union, represented by R. Gosalbo Bono, Director in the Legal Service, A. Feeney and S. Marquardt, of the Legal Service, acting as Agents, with an address for service in Luxembourg at the office of A. Morbilli, General Counsel, Directorate for Legal Affairs of the European Investment Bank, 100 Boulevard Konrad Adenauer,

defendants, supported by

French Republic, initially represented by J.-F. Dobelle, Assistant Director in the Legal Affairs Directorate of the Ministry of Foreign Affairs, and R. Loosli-Surrans, Chargé de Mission in the same Directorate, and then by K. Rispal-Bellanger, Head of Subdirectorate in the same directorate, and R. Loosli-Surrans, acting as Agents, with an address for service in Luxembourg at the French Embassy, 8b Boulevard Joseph II,

by

Republic of Finland, represented by H. Rotkirch and T. Pynnä, Valtionasiamiehet, acting as Agents, with an address for service in Luxembourg at the Finnish Embassy, 2 Rue Heinrich Heine,

by

United Kingdom of Great Britain and Northern Ireland, represented by M. Ewing, of the Treasury Solicitor's Department, acting as Agent, and N. Paines QC, with an address for service in Luxembourg at the British Embassy, 14 Boulevard Roosevelt,

and by

Commission of the European Communities, represented by I. Martínez del Peral and U. Wölker, of its Legal Service, acting as Agents, with an address for service in Luxembourg at the office of C. Gómez de la Cruz, also of its Legal Service, Wagner Centre, Kirchberg,

interveners, APPLICATION for the annulment of Directive 98/43/EC of the European Parliament and of the Council of 6 July 1998 on the approximation of the laws, regulations and administrative provisions of the Member States relating to the advertising and sponsorship of tobacco products (OJ 1998 L 213, p. 9),

THE COURT,

composed of: G.C. Rodríguez Iglesias, President, J.C. Moitinho de Almeida (Rapporteur), D.A.O. Edward, L. Sevón and R. Schintgen (Presidents of Chambers), P.J.G. Kapteyn, C. Gulmann, A. La Pergola, J.-P. Puissochet, P. Jann, H. Ragnemalm, M. Wathelet and F. Macken, Judges,

Advocate General: N. Fennelly,

Registrar: H. von Holstein, Deputy Registrar, and L. Hewlett, Administrator,

having regard to the Report for the Hearing,

after hearing oral argument from the parties at the hearing on 12 April 2000, at which the Federal Republic of Germany was represented by C.-D. Quassowski, assisted by J. Sedemund, the Parliament by C. Pennera and N. Lorenz, the Council by R. Gosalbo Bono, A. Feeney and S. Marquardt, the French Republic by R. Loosli-Surrans, the Republic of Finland by T. Pynnä, the United Kingdom of Great Britain and Northern Ireland by G. Amodeo, of the Treasury Solicitor's Department, acting as Agent, and Professor R. Cranston QC, MP, Her Majesty's Solicitor General for England & Wales, and N. Paines, and the Commission by I. Martínez del Peral and U. Wölker,

after hearing the Opinion of the Advocate General at the sitting on 15 June 2000,

gives the following

1. Judgment

1. By application lodged at the Registry of the Court on 19 October 1998, the Federal Republic of Germany brought an action under Article 173 of the EC Treaty (now, after amendment, Article 230 EC) for the annulment of Directive 98/43/EC of the European Parliament and of the Council of 6 July 1998 on the approximation of the laws, regulations and administrative provisions of the Member States relating to the advertising and sponsorship of tobacco products (OJ 1992 L 213, p. 9, hereinafter 'the Directive).

2. By orders of the President of the Court of 30 April 1999, the French Republic, the Republic of Finland, the United Kingdom of Great Britain and Northern Ireland and

the Commission of the European Communities were granted leave to intervene in support of the European Parliament and the Council of the European Union.

3. The Directive was adopted on the basis of Article 57(2) of the EC Treaty (now, after amendment, Article 47(2) EC), Article 66 of the EC Treaty (now Article 55 EC) and Article 100a of the EC Treaty (now, after amendment, Article 95 EC).

4. Article 2 of the Directive provides:

'For the purposes of this Directive, the following definitions shall apply:

1. tobacco products: all products intended to be smoked, sniffed, sucked or chewed inasmuch as they are made, even partly, of tobacco;

2. advertising: any form of commercial communication with the aim or the direct or indirect effect of promoting a tobacco product, including advertising which, while not specifically mentioning the tobacco product, tries to circumvent the advertising ban by using brand names, trade-marks, emblems or other distinctive features of tobacco products;

3. sponsorship: any public or private contribution to an event or activity with the aim or the direct or indirect effect of promoting a tobacco product;

4. tobacco sales outlet: any place where tobacco products are offered for sale.

5. According to Article 3 of the Directive:

'1. Without prejudice to Directive 89/552/EEC, all forms of advertising and sponsorship shall be banned in the Community.

2. Paragraph 1 shall not prevent the Member States from allowing a brand name already used in good faith both for tobacco products and for other goods or services traded or offered by a given undertaking or by different undertakings prior to 30 July 1998 to be used for the advertising of those other goods or services.

However, this brand name may not be used except in a manner clearly distinct from that used for the tobacco product, without any further distinguishing mark already used for a tobacco product.

3. (a) Member States shall ensure that no tobacco product bears the brand name, trade-mark, emblem or other distinctive feature of any other product or service, unless the tobacco product has already been traded under that brand name, trade-mark, emblem or other distinctive feature on the date referred to in Article 6(1);

(b) the ban provided for in paragraph 1 may not be circumvented, in respect of any product or service placed or offered on the market as from the date laid down in Article 6(1), by the use of brand names, trade-marks,emblems and other distinguishing features already used for a tobacco product.

To this end, the brand name, trade-mark, emblem and any other distinguishing feature of the product or service must be presented in a manner clearly distinct from that used for the tobacco product.

4. Any free distribution having the purpose or the direct or indirect effect of promoting a tobacco product shall be banned.

5. This Directive shall not apply to:

- communications intended exclusively for professionals in the tobacco trade,

- the presentation of tobacco products offered for sale and the indication of their prices at tobacco sales outlets,

- advertising aimed at purchasers in establishments specialising in the sale of tobacco products and on their shop-fronts or, in the case of establishments selling a variety of articles or services, at locations reserved for the sale of tobacco products, and at sales outlets which, in Greece, are subject to a special system under which licences are granted for social reasons (periptera),

- the sale of publications containing advertising for tobacco products which are published and printed in third countries, where those publications are not principally intended for the Community market.

6. Pursuant to Article 4 of the Directive:

'Member States shall ensure that adequate and effective means exist of ensuring and monitoring the implementation of national measures adopted pursuant to this Directive. These means may include provisions whereby persons or organisations with a legitimate interest under national law in the withdrawal of advertising which is incompatible with this Directive may take legal proceedings against such advertising or bring such advertising to the attention of an administrative body competent to give a ruling on complaints or to institute the appropriate legal proceedings.

7. Article 5 of the Directive provides:

'This Directive shall not preclude Member States from laying down, in accordance with the Treaty, such stricter requirements concerning the advertising or sponsorship of tobacco products as they deem necessary to guarantee the health protection of individuals.

8. Pursuant to Article 6 of the Directive:

'1. Member States shall bring into force the laws, regulations, and administrative provisions necessary to comply with this Directive not later than 30 July 2001. They shall forthwith inform the Commission thereof.

When Member States adopt these measures, they shall contain a reference to this Directive or shall be accompanied by such reference on the occasion of their official publication. The methods of making such reference shall be laid down by Member States.

2. Member States shall communicate to the Commission the text of the main provisions of domestic law which they adopt in the field covered by this Directive.

3. Member States may defer the implementation of Article 3(1) for:

- one year in respect of the press,

- two years in respect of sponsorship.

In exceptional cases and for duly justified reasons, Member States may continue to authorise the existing sponsorship of events or activities organised at world level for a further period of three years ending not later than 1 October 2006, provided that:

- the sums devoted to such sponsorship decrease over the transitional period,

- voluntary-restraint measures are introduced in order to reduce the visibility of advertising at the events or activities concerned.

9. In support of its application, the Federal Republic of Germany puts forward seven pleas in law alleging, respectively, that Article 100a of the Treaty is not an appropriate legal basis for the Directive, infringement of Article 57(2) and Article 66 of the Treaty, breach of the principles of proportionality and subsidiarity, breach of fundamental rights, infringement of Articles 30 and 36 of the EC Treaty (now, after amendment, Articles 28 EC and 30 EC) and infringement of Article 190 of the EC Treaty (now Article 253 EC).

10. The applicant and the defendants state that their arguments regarding Article 100a also apply to the interpretation of Articles 57(2) and 66 of the Treaty.

11. It is therefore appropriate to consider the pleas alleging that Articles 100a, 57(2) and 66 of the Treaty do not constitute the proper legal basis for the Directive together.

The pleas alleging that the legal basis is incorrect

Arguments of the parties

12. The applicant, relying both on the characteristics of the tobacco products advertising market and on its analysis of Article 100a, considers that Article 100a of the Treaty is not the proper legal basis for the Directive.

13. As regards, first, the characteristics of the market, the applicant submits that tobacco products advertising is essentially an activity whose effects do not extend beyond the borders of individual Member States.

14. Whilst tobacco products advertising is often conceived by the manufacturer, the specific presentation of advertising media to consumers is the result of a strategy based on the particular features of each market. The decision regarding the specific form of the advertising, musical background, colours and other features of advertising products is taken at national level so that they conform with the cultural idiosyncracies of each Member State.

15. Trade in so-called 'static advertising media (such as posters, cinema advertising and advertising for the hotel and catering sector, for example, via parasols and ash-trays) between Member States is practically non-existent and has to date not been subject to any restrictions. For tax reasons, advertising involving free distribution is also limited to national markets.

16. The applicant submits that the press is the only significant form of 'non-static advertising media in economic terms. Admittedly, advertising magazines and daily papers serve as media for tobacco products, but intra-Community trade in such products is very limited. Considerably less than 5% of magazines are exported to other Member States and daily newspapers are used to a much lesser extent than magazines for carrying tobacco advertising. In Germany, in 1997, the share of total advertising revenue of daily papers accounted for by tobacco products advertising was 0.04%.

17. The limited extent of cross-frontier trade in newspapers accounts for the fact that they are not subject to restrictions by Member States which prohibit their national press from accepting advertisements for tobacco products. Belgian and Irish law expressly authorise imported press carrying such advertising and actions before French courts seeking to prohibit such imports have been unsuccessful.

18. As regards 'diversification products covered by Article 3(2) of the Directive, the applicant claims that, as a result of its imprecise nature, different interpretations of that provision may give rise to new restrictions on trade. In any event, the Directive does not contain any free-trade clause preventing Member States which do not take advantage of the opportunity offered by that provision from objecting to the marketing of products from other Member States which have availed themselves of that opportunity.

19. The applicant claims that the development of centralised advertising strategies and the intellectual work inherent in advertising services provided by advertising agencies do not fall within the scope of the Directive. Article 2(2) of the Directive defines advertising merely as the actual use of advertising facilities directed towards consumers.

20. The applicant also submits that the relationship between the sponsor and the organiser largely operates at national level since both are normally established in the same Member State. Moreover, even where that is not the case, there is no barrier to sponsorship under national legislation since arrangements for making advertising space available at event venues are made locally. Nor is television broadcasting of sponsored events subject to any restrictions.

21. As regards distortion of competition as a result of differences between national laws, the applicant claims that, in view of the first recital in the preamble, the Directive does not purport to eliminate such distortion in the tobacco sector.

22. As regards competition between manufacturers of advertising products, the applicant argues that they operate only to a negligible extent beyond national borders and there is no competitive relationship between them because tobacco advertising strategies are primarily nationally orientated. As far as the press is concerned, imported products do not compete with local products and in any event they do not achieve market shares which may be regarded as significant in the importing Member State.

23. With respect, second, to its analysis of Article 100a of the Treaty, the applicant submits, first, that Article 100a grants the Community legislature competence to harmonise national legislation to the extent to which harmonisation is necessary in order to promote the internal market. A mere reference to that article in the preamble to the measure adopted is not sufficient, otherwise judicial review of the selection of Article 100a as a legal basis would be rendered impossible. The measure must actually contribute to the improvement of the internal market.

24. That, the applicant submits, is not the case here. Given that the sole form of advertising allowed, namely advertising at the point of sale, accounts for only 2% of the tobacco industry's advertising expenditure, the Directive constitutes, in practice, a total prohibition of tobacco advertising. Consequently, instead of promoting trade in advertising media for tobacco products and freedom to provide services in that area, the Directive almost entirely negates those freedoms. Moreover, according to the applicant, the Directive creates new obstacles to trade which did not exist previously. Thus, the prohibition of tobacco advertising makes it almost impossible to import and market new products and will result in stagnation of inter-State trade.

25. As to whether the harmonisation pursued by the Directive was necessary to remove distortions of competition, the applicant expands upon the above considerations concerning the tobacco products advertising market by asserting that the Directivedistorts competition in markets outside the tobacco industry in ways that did not exist beforehand.

26. That is also the case with diversification products referred to in Article 3(2) of the Directive, which imposes such restrictive conditions that undertakings manufacturing those products must either close their establishments or bear heavy additional costs, with the possible loss of substantial market shares to competitors.

27. Admittedly, as is clear from the case-law of the Court, the harmonisation of laws may legitimately aim to prevent the emergence of future obstacles to trade resulting from heterogeneous development of national laws. However, the Directive has the sole result of introducing new permanent obstacles to trade, whether immediately or in the future.

28. Other directives based on Article 100a of the Treaty which prohibit certain activities, in the applicant's contention, differ from the Directive. Thus, the prohibition of misleading advertising is intended to promote cross-border trade by guaranteeing fair advertising across the Community; similarly, the prohibition on using product

components, manufacturing processes or forms of marketing which are harmful to health is intended to create an internal market for the products concerned by allowing them to be manufactured, marketed or consumed without risk to health.

29. The applicant also contends that Article 100a should be available as a legal basis only in cases where obstacles to the exercise of fundamental freedoms and distortion of competition are considerable. The case-law of the Court on Articles 30 and 36 of the Treaty to the effect that those provisions prohibit even minimal obstacles to trade cannot be transposed to an area where it is necessary to define the respective powers of the Community and the Member States. If the Community legislature were permitted to harmonise national legislation even where there was no appreciable effect on the internal market, it could adopt directives in any area whatsoever and judicial review of the legislation's compliance with Article 100a would become superfluous.

30. The applicant submits that its interpretation of Article 100a of the Treaty also finds support in the case-law of the Court (see Case 91/79 Commission v Italy [1980] ECR 1099, paragraph 8, and Case C-300/89 Commission v Council [1991] ECR I-2867 - the Titanium Dioxide judgment - paragraph 23).

31. The applicant considers that its views, summarised in paragraphs 13 to 22 of this judgment, clearly demonstrate that there are no appreciable obstacles to trade in tobacco advertising media or to the exercise by advertising agencies of their freedom to provide services and that there is no appreciable distortion of competition between such agencies.

32. Finally, the applicant submits that recourse to Article 100a is not possible where the 'centre of gravity of a measure is focused not on promoting the internal market but on protecting public health.

33. According to settled case-law, the Community may not rely on Article 100a when the measure to be adopted only incidentally harmonises market conditions within the Community (Case C-70/88 Parliament v Council [1991] ECR I-4529, paragraph 17; Case C-155/91 Commission v Council [1993] ECR I-939, paragraph 19; Case C-187/93 Parliament v Council [1994] ECR I-2857, paragraph 25; and Case C-84/94 United Kingdom v Council [1996] ECR I-5755, paragraph 45).

34. However, both the legislative history of the Directive and its content and purpose show that the 'centre of gravity of the measure is public health protection.

35. The applicant observes that the Directive differs from the one at issue in the Titanium Dioxide case, cited above. In that case, implementation of environmental policy and attainment of the internal market were pursued at the same level and each of those Community objectives had its own legal basis, namely Article 130r of the EC Treaty (now, after amendment, Article 174 EC) and Article 100a, of the Treaty respectively, enabling national laws to be harmonised. However, that is not the case here: public health policy is the 'centre of gravity of the Directive yet harmonising measures in that field are expressly prohibited by Article 129(4) first indent, of the EC Treaty (now, after amendment, Article 152(4), first paragraph, EC).

36. The Parliament, the Council and the parties intervening in support, relying, first, on the existence of an internal market in the tobacco products advertising sector and,

second, on an analysis of Article 100a, consider that the Directive was validly adopted on the basis of Article 100a of the Treaty.

37. The Parliament, the Council and the Commission contend that there is an internal market in the tobacco products advertising sector in which advertising campaigns are often centralised and designed by agencies established in the Community. Although the chosen advertising strategies and the advertising themes are put into effect at national level, the choice of themes and the selection of symbols, logos and other elements are decided upon and offered at cross-border level and reach consumers in several Member States.

38. As regards the hotel and catering sector, the Council contends that, even if the effect of such advertising is limited to the local population, identical advertising media can be used in several Member States since the language used is often English.

39. The Parliament and the Council draw attention to the cross-border aspects of advertising via free distribution, which forms part of a uniformly defined advertising concept put into effect for a particular brand. The Parliament adds that the prohibition of promotional gifts is justified by the need to prevent circumvention of the rules.

40. The free movement of magazines, in particular those which airlines make available to passengers on intra-Community flights and newspapers published in one Member State and distributed in other Member States, which contain tobacco advertising, is also likely to be hindered as a result of the existing legislative differences between Member States.

41. As far as diversification products are concerned, the Parliament and the Council contend that, contrary to the applicant's assertion, Article 3(2) of the Directive is a precise provision which must be construed as meaning that a Member State may not prevent the marketing of a product lawfully marketed in another Member State which has availed itself of the exemption provided by that provision.

42. The Parliament and the Council contend that sponsorship also involves cross-border elements. They observe that the impact of the advertising media used in sponsored events, such as cars, drivers' clothing and hoardings set up along the circuit, is not confined to the local population. In any event, according to the Council, if the sponsor and the sponsored undertaking are established in different Member States, that is sufficient to establish a cross-border context.

43. The Parliament, the Council and the Commission emphasise, finally, that in view of the disparate national legislation, advertising agencies cannot devise and offer uniform publishing concepts at Community level.

44. In their view, the Directive, which, as a result of the approximation of laws, creates a uniform framework for the advertising of tobacco products in the internal market, could validly be adopted on the basis of Article 100a of the Treaty.

45. In that connection, the Parliament, the Council and the Commission contend that the power conferred on the Council by that provision is not necessarily concerned with the liberalisation of trade but rather with market regulation. That explains why it has been

possible for directives containing certain prohibitions to be adopted on the basis of Article 100a.

46. Thus, Council Directive 92/41/EEC of 15 May 1992 amending Directive 89/622/EEC on the approximation of the laws, regulations and administrative provisions of the Member States concerning the labelling of tobacco products (OJ 1992 L 158, p. 30) prohibited the marketing of certain types of tobacco for oral use and Council Directive 91/339/EEC of 18 June 1991 amending for the 11th time Directive 76/769/EEC on the approximation of the laws, regulations and administrative provisions of the Member States relating to restrictions on the marketing and use of certain dangerous substances and preparations (OJ 1991 L 186, p. 64) imposed a total prohibition on use of the listed substances.

47. In the advertising field, directives such as Directive 97/55/EC of the European Parliament and of the Council of 6 October 1997 amending Directive 84/450/EECconcerning misleading advertising so as to include comparative advertising (OJ 1997 L 290, p. 18) and Council Directive 92/28/EEC of 31 March 1992 on the advertising of medicinal products for human use (OJ 1992 L 113, p. 13) were likewise not designed to liberalise trade. The latter directive, in particular, imposed wide-ranging prohibitions on advertising, especially that of medicinal products for which a marketing authorisation complying with Community law had not been issued (Article 2(1)) and medicinal products which can be supplied only on prescription (first indent of Article 3(1)).

48. The Parliament, the Council and the Commission also mention other directives, which impose partial prohibitions, such as that of television advertising of tobacco products (Council Directive 89/552/EEC of 3 October 1989 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 1989 L 298, p. 23)) and measures displaying an indirect link to fundamental freedoms, such as those concerning summer time (Seventh Directive 94/21/EC of the European Parliament and of the Council of 30 May 1994 on summer-time arrangements (OJ 1994 L 164, p. 1)) or access to the international telephone network in the Community (Council Decision 92/264/EEC of 11 May 1992 on the introduction of a standard international telephone access code in the Community (OJ 1992 L 137, p. 21)).

49. Recourse to Article 100a of the Treaty is not limited to cases where legislative differences actually give rise to obstacles to the exercise of fundamental freedoms or distortion of competition. As the Court held in Case C-350/92 Spain v Council [1995] ECR I-1985, paragraph 33, it is sufficient if the disparities between the laws of the Member States are liable to hinder the free movement of goods. Recourse to Article 100a is even possible in order to prevent the heterogeneous development of national laws leading to further disparities (ibid., paragraph 35).

50. As regards the applicant's argument that recourse to Article 100a as a legal basis should be possible only in cases where differences in legislation give rise to appreciable obstacles to trade or appreciable distortion of competition, the Council contends that that distinction, which is based on competition law, cannot be used within the sphere of Article 100a. Objective and universal criteria must be used to define the scope of powers.

51. The Commission also contends that, in this case, there is real distortion of competition. Because of existing differences in legislation, the potential profit of advertising agencies differs according to the place where they are established or the market in which they carry on business. Where newspapers or periodicals from other Member States are simply tolerated, despite restrictive legislation affecting the press in the Member State in question, there is distortion of competition in that State.

52. As regards sponsorship, such differences have an impact on the choice of venue for events sponsored by tobacco manufacturers, which has significant economic repercussions in the case of sports events such as Formula 1 racing.

53. Finally, producers and sellers of tobacco products do not enjoy the same conditions of competition which have an influence on their market position. In Member States with restrictive legislation, economic operators can only maintain or improve their market position by price competition.

54. In response to the applicant's argument that public health protection is the 'centre of gravity of the Directive, the Parliament, the Council and the Commission state that it is clear from the case-law of the Court that the essential factor to be relied on in assessing the choice of the legal basis for a measure is the text of the measure in question. It is clear from the wording of the third and fourth recitals in the preamble to the Directive and the place occupied by them that the protection of human health is one of its objectives, pursued in the context of the provisions of Article 100a(3) and (4) of the Treaty, but that it is not the principal one.

55. Similarly, the second recital and Article 5 of the Directive, by recognising the right of Member States to adopt provisions more stringent than those laid down in the Directive to ensure public health protection, also clearly demonstrate that the concern for the protection of human health is an incidental and subordinate one.

56. The Commission observes, in that connection, that the emphasis on public health protection in the Directive can be explained by the fact that it constituted the main, or indeed even the sole, objective of the national measures being harmonised, but, in the context of that harmonisation, it became a secondary objective.

57. The Parliament, the Council and the Commission state, finally, that the fact that the Directive imposes a broad prohibition on tobacco advertising derives from the obligation imposed by Article 100a(3) of the Treaty to take as a base a high level of human health protection and from the need to prevent circumvention of the prohibition.

58. The United Kingdom Government challenges the applicant's assertion that the Directive is incorrectly based on Article 100a of the Treaty because its principal objective is not the elimination of obstacles to trade in advertising media and associated services but the protection of human health.

59. According to the case-law of the Court, the choice of the legal basis for a measure must be guided by objective factors which are amenable to judicial review, including, in particular, the aim and content of the measure.

60.

Objectively, the Directive pursues objectives which are inseparably linked with the protection of human health and others linked with elimination of disparities in conditions of competition and liberalisation of trade. The applicant's approach of seeking to determine which of those objectives is most important is not only contrary to the objective test propounded by the Court but also unworkable.

61. The United Kingdom Government submits that Article 100a of the Treaty confers power on the Council and the Parliament to adopt measures concerned with the establishment and functioning of the internal market and considers that in this case the measure concerned falls into that category.

62. For a measure to be validly based on Article 100a, it is not necessary to demonstrate that it has the effect of increasing the volume of cross-border trade. It is sufficient for the measure to eliminate disparities in conditions of competition.

63. The Directive is intended to remove distortion of competition not only in the advertising market but also in the tobacco products market, by harmonising the conditions under which manufacturers may promote their products. It also harmonises the conditions under which cultural and sports events can be sponsored by the tobacco industry.

64. Professional sports teams are undertakings competing with each other, and the conditions of such competition would be affected if teams in different Member States could not receive the same subsidies from the tobacco industry, which is particularly willing to sponsor sports events in order to counteract the association of those products with bad health.

65. The Court has held that a measure may be adopted with a view to anticipating the adoption of disparate national rules involving serious obstacles to trade. The present situation of tolerating publications which contain tobacco advertising may change in view of the evolution of national regulations, which are becoming more strict. There is, therefore, a risk of increased obstacles to trade which the Directive is intended to eliminate.

66. With regard to the applicant's argument that recourse to Article 100a of the Treaty should be possible only where there are appreciable restrictions on the exercise of fundamental freedoms or appreciable distortion of competition, the United Kingdom Government observes that no specific criterion is capable of being used to draw such a distinction.

67. It emphasises that its suggested interpretation of Article 100a is confirmed by the case-law of the Court according to which a directive which confines itself to prohibiting certain activities with a view to eliminating distortion of competition may be adopted on the basis of that article (Titanium Dioxide, cited above).

68. The French Government considers that the Directive was validly adopted on the basis of Article 100a of the Treaty. It bases that view on arguments drawn from legislative precedents relating to harmonisation in the area of public health, the case-law of the Court on Article 129 of the Treaty and, finally, the legal basis chosen for new harmonising measures now in the process of being adopted.

69.

As legislative precedents, it refers to the directives on pharmaceutical products, from Council Directive 65/65/EEC of 26 January 1965 on the approximation of provisions laid down by law, regulation or administrative action relating to proprietary medicinal products (OJ, English Special Edition 1965-66, p. 20) to Council Directive 90/220/EEC of 23 April 1990 on the deliberate release into the environment of genetically modified organisms (OJ 1990 L 117, p. 15) and Council Directive 76/768/EEC of 27 July 1976 on the approximation of the laws of the Member States relating to cosmetic products (OJ 1976 L 262, p. 169). In those directives, the aims of public health protection co-exist with the objective of free movement of products and the removal of distortion of competition, and the validity of the provisions thereof which harmonise national laws on public health has not been challenged.

70. As regards the case-law of the Court on Article 129 of the Treaty, the French Government cites Case C-180/96 United Kingdom v Commission [1998] ECR I-2265 and Case C-269/97 Commission v Council [2000] ECR I-0000, in which the Court made it clear that human health protection requirements are a constituent part of other Community policies, in particular the internal market policy.

71. Finally, the legal basis of the proposal for a directive on the approximation of provisions laid down by law, regulation or administrative action relating to the manufacture, sale and presentation of tobacco products is Article 100a of the Treaty. Moreover, negotiations have been started under the auspices of the World Health Organisation with a view inter alia to concluding a protocol on the advertising of tobacco products. The legal basis of the authority vested in the Commission to participate in those negotiations is Article 228 of the EC Treaty (now, after amendment, Article 300 EC).

72. The Finnish Government states that, in view of the obstacles to trade and distortion of competition caused by disparate national legislation, the Directive was validly adopted on the basis of Article 100a the Treaty.

73. It draws attention to the cross-border features of the advertising market and of sponsorship of tobacco products referred to by the Parliament, the Council and the Commission, and adds that the internationalisation of that market is intensified by electronic communications, in particular advertising on the Internet. With the benefit of media such as television, the advertising of tobacco products penetrates Member States where such advertising is prohibited. Thus, in a Member State like Finland, where direct advertising of tobacco products has been prohibited since 1976, studies show that in 1996, for example, sports programmes broadcast on the three national television channels over a period of one month included four hours of advertising for such products.

74. The Finnish Government also refers to distortion of competition in the tobacco products and sponsorship sectors. Sponsorship, which is not available to small undertakings, creates inequality which is incompatible with the common market.

75. As regards the importance of health protection in the Directive, the arguments put forward by the Finnish Government are the same as those expounded by the Parliament, the Council and the Commission, which are summarised in paragraphs 54 to 57 of this judgment.

The Court's analysis

The choice of Articles 100a, 57(2) and 66 of the Treaty as a legal basis and judicial review thereof

76. The Directive is concerned with the approximation of laws, regulations and administrative provisions of the Member States relating to the advertising and sponsorship of tobacco products. The national measures affected are to a large extent inspired by public health policy objectives.

77. The first indent of Article 129(4) of the Treaty excludes any harmonisation of laws and regulations of the Member States designed to protect and improve human health.

78. But that provision does not mean that harmonising measures adopted on the basis of other provisions of the Treaty cannot have any impact on the protection of human health. Indeed, the third paragraph of Article 129(1) provides that health requirements are to form a constituent part of the Community's other policies.

79. Other articles of the Treaty may not, however, be used as a legal basis in order to circumvent the express exclusion of harmonisation laid down in Article 129(4) of the Treaty.

80. In this case, the approximation of national laws on the advertising and sponsorship of tobacco products provided for by the Directive was based on Articles 100a, 57(2) and 66 of the Treaty.

81. Article 100a(1) of the Treaty empowers the Council, acting in accordance with the procedure referred to in Article 189b (now, after amendment, Article 251 EC) and after consulting the Economic and Social Committee, to adopt 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.

82. Under Article 3(c) of the EC Treaty (now, after amendment, Article 3(1)(c) EC), the internal market is characterised by the abolition, as between Member States, of all obstacles to the free movement of goods, persons, services and capital. Article 7a of the EC Treaty (now, after amendment, Article 14 EC), which provides for the measures to be taken with a view to establishing the internal market, states in paragraph 2 that that market is to comprise an area without internal frontiers in whichthe free movement of goods, persons, services and capital is ensured in accordance with the provisions of the Treaty.

83. Those provisions, read together, make it clear that the measures referred to in Article 100a(1) of the Treaty are intended to improve the conditions for the establishment and functioning of the internal market. To construe that article as meaning that it vests in the Community legislature a general power to regulate the internal market would not only be contrary to the express wording of the provisions cited above but would also be incompatible with the principle embodied in Article 3b of the EC Treaty (now Article 5 EC) that the powers of the Community are limited to those specifically conferred on it.

84. Moreover, a measure adopted on the basis of Article 100a of the Treaty must genuinely have as its object the improvement of the conditions for the establishment and functioning of the internal market. If a mere finding of disparities between national rules and of the abstract risk of obstacles to the exercise of fundamental freedoms or of distortions of competition liable to result therefrom were sufficient to justify the choice of Article 100a as a legal basis, judicial review of compliance with the the proper legal basis might be rendered nugatory. The Court would then be prevented from discharging the function entrusted to it by Article 164 of the EC Treaty (now Article 220 EC) of ensuring that the law is observed in the interpretation and application of the Treaty.

85. So, in considering whether Article 100a was the proper legal basis, the Court must verify whether the measure whose validity is at issue in fact pursues the objectives stated by the Community legislature (see, in particular, Spain v Council, cited above, paragraphs 25 to 41, and Case C-233/94 Germany v Parliament and Council [1997] ECR I-2405, paragraphs 10 to 21).

86. It is true, as the Court observed in paragraph 35 of its judgment in Spain v Council, cited above, that recourse to Article 100a as a legal basis is possible if the aim is to prevent the emergence of future obstacles to trade resulting from multifarious development of national laws. However, the emergence of such obstacles must be likely and the measure in question must be designed to prevent them.

87. The foregoing considerations apply to interpretation of Article 57(2) of the Treaty, read in conjunction with Article 66 thereof, which expressly refers to measures intended to make it easier for persons to take up and pursue activities by way of services. Those provisions are also intended to confer on the Community legislature specific power to adopt measures intended to improve the functioning of the internal market.

88. Furthermore, provided that the conditions for recourse to Articles 100a, 57(2) and 66 as a legal basis are fulfilled, the Community legislature cannot be prevented from relying on that legal basis on the ground that public health protection is a decisive factor in the choices to be made. On the contrary, the third paragraph of Article129(1) provides that health requirements are to form a constituent part of the Community's other policies and Article 100a(3) expressly requires that, in the process of harmonisation, a high level of human health protection is to be ensured.

89. It is therefore necessary to verify whether, in the light of the foregoing, it was permissible for the Directive to be adopted on the basis of Articles 100a, 57(2) and 66 of the Treaty.

The Directive

90. In the first recital in the preamble to the Directive, the Community legislature notes that differences exist between national laws on the advertising and sponsorship of tobacco products and observes that, as a result of such advertising and sponsorship transcending the borders of the Member States, the differences in question are likely to give rise to barriers to the movement of the products which serve as the media for such

activities and the exercise of freedom to provide services in that area, as well as to distortions of competition, thereby impeding the functioning of the internal market.

91. According to the second recital, it is necessary to eliminate such barriers, and, to that end, approximate the rules relating to the advertising and sponsorship of tobacco products, whilst leaving Member States the possibility of introducing, under certain conditions, such requirements as they consider necessary in order to guarantee protection of the health of individuals.

92. Article 3(1) of the Directive prohibits all forms of advertising and sponsorship of tobacco products and Article 3(4) prohibits any free distribution having the purpose or the effect of promoting such products. However, its scope does not extend to communications between professionals in the tobacco trade, advertising in sales outlets or in publications published and printed in third countries which are not principally intended for the Community market (Article 3(5)).

93. The Directive also prohibits the use of the same names both for tobacco products and for other products and services as from 30 July 1998, except for products and services marketed before that date under a name also used for a tobacco product, whose use is authorised under certain conditions (Article 3(2)). With effect from 30 July 2001, tobacco products must not bear the brand name, trade-mark, emblem or other distinctive feature of any other product or service, unless the tobacco product has already been traded under that brand name, trade-mark, emblem or other distinctive feature before that date (Article 3(3)(a)).

94. Pursuant to Article 5, the Directive is not to preclude Member States from laying down, in accordance with the Treaty, such stricter requirements concerning the advertising or sponsorship of tobacco products as they deem necessary to guarantee the health protection of individuals.

95. It therefore necessary to verify whether the Directive actually contributes to eliminating obstacles to the free movement of goods and to the freedom to provide services, and to removing distortions of competition.

Elimination of obstacles to the free movement of goods and the freedom to provide services

96. It is clear that, as a result of disparities between national laws on the advertising of tobacco products, obstacles to the free movement of goods or the freedom to provide services exist or may well arise.

97. In the case, for example, of periodicals, magazines and newspapers which contain advertising for tobacco products, it is true, as the applicant has demonstrated, that no obstacle exists at present to their importation into Member States which prohibit such advertising. However, in view of the trend in national legislation towards ever greater restrictions on advertising of tobacco products, reflecting the belief that such advertising gives rise to an appreciable increase in tobacco consumption, it is probable that obstacles to the free movement of press products will arise in the future.

98. In principle, therefore, a Directive prohibiting the advertising of tobacco products in periodicals, magazines and newspapers could be adopted on the basis of Article 100a of the Treaty with a view to ensuring the free movement of press products, on the lines of Directive 89/552, Article 13 of which prohibits television advertising of tobacco products in order to promote the free broadcasting of television programmes.

99. However, for numerous types of advertising of tobacco products, the prohibition under Article 3(1) of the Directive cannot be justified by the need to eliminate obstacles to the free movement of advertising media or the freedom to provide services in the field of advertising. That applies, in particular, to the prohibition of advertising on posters, parasols, ashtrays and other articles used in hotels, restaurants and cafés, and the prohibition of advertising spots in cinemas, prohibitions which in no way help to facilitate trade in the products concerned.

100. Admittedly, a measure adopted on the basis of Articles 100a, 57(2) and 66 of the Treaty may incorporate provisions which do not contribute to the elimination of obstacles to exercise of the fundamental freedoms provided that they are necessary to ensure that certain prohibitions imposed in pursuit of that purpose are not circumvented. It is, however, quite clear that the prohibitions mentioned in the previous paragraph do not fall into that category.

101. Moreover, the Directive does not ensure free movement of products which are in conformity with its provisions.

102. Contrary to the contentions of the Parliament and Council, Article 3(2) of the Directive, relating to diversification products, cannot be construed as meaning that, where the conditions laid down in the Directive are fulfilled, products of that kind in which trade is allowed in one Member State may move freely in the other Member States, including those where such products are prohibited.

103. Under Article 5 of the Directive, Member States retain the right to lay down, in accordance with the Treaty, such stricter requirements concerning the advertising or sponsorship of tobacco products as they deem necessary to guarantee the health protection of individuals.

104. Furthermore, the Directive contains no provision ensuring the free movement of products which conform to its provisions, in contrast to other directives allowing Member States to adopt stricter measures for the protection of a general interest (see, in particular, Article 7(1) of Council Directive 90/239/EEC of 17 May 1990 on the approximation of the laws, regulations and administrative provisions of the Member States concerning the maximum tar yield of cigarettes (OJ 1990 L 137, p. 36) and Article 8(1) of Council Directive 89/622/EEC of 13 November 1989 on the approximation of the laws, regulations and administrative provisions of the Member States concerning the labelling of tobacco products (OJ 1989 L 359, p. 1)).

105. In those circumstances, it must be held that the Community legislature cannot rely on the need to eliminate obstacles to the free movement of advertising media and the freedom to provide services in order to adopt the Directive on the basis of Articles 100a, 57(2) and 66 of Treaty.

Elimination of distortion of competition

106. In examining the lawfulness of a directive adopted on the basis of Article 100a of the Treaty, the Court is required to verify whether the distortion of competition which the measure purports to eliminate is appreciable (Titanium Dioxide, cited above, paragraph 23).

107. In the absence of such a requirement, the powers of the Community legislature would be practically unlimited. National laws often differ regarding the conditions under which the activities they regulate may be carried on, and this impacts directly or indirectly on the conditions of competition for the undertakings concerned. It follows that to interpret Articles 100a, 57(2) and 66 of the Treaty as meaning that the Community legislature may rely on those articles with a view to eliminating the smallest distortions of competition would be incompatible with the principle, already referred to in paragraph 83 of this judgment, that the powers of the Community are those specifically conferred on it.

108. It is therefore necessary to verify whether the Directive actually contributes to eliminating appreciable distortions of competition.

109. First, as regards advertising agencies and producers of advertising media, undertakings established in Member States which impose fewer restrictions on tobacco advertising are unquestionably at an advantage in terms of economies of scale and increase in profits. The effects of such advantages on competition are, however, remote and indirect and do not constitute distortions which could be described as appreciable. They are not comparable to the distortions of competition caused by differences in production costs, such as those which, in particular, prompted the Community legislature to adopt Council Directive 89/428/EEC of 21 June 1989 on procedures for harmonising the programmes for the reduction and eventual elimination of pollution caused by waste from the titanium dioxide industry (OJ 1989 L 201, p. 56).

110. It is true that the differences between certain regulations on tobacco advertising may give rise to appreciable distortions of competition. As the Commission and the Finnish and United Kingdom Governments have submitted, the fact that sponsorship is prohibited in some Member States and authorised in others gives rise, in particular, to certain sports events being relocated, with considerable repercussions on the conditions of competition for undertakings associated with such events.

111. However, such distortions, which could be a basis for recourse to Article 100a of the Treaty in order to prohibit certain forms of sponsorship, are not such as to justify the use of that legal basis for an outright prohibition of advertising of the kind imposed by the Directive.

112. Second, as regards distortions of competition in the market for tobacco products, irrespective of the applicant's contention that such distortions are not covered by the Directive, it is clear that, in that sector, the Directive is likewise not apt to eliminate appreciable distortions of competition.

113. Admittedly, as the Commission has stated, producers and sellers of tobacco products are obliged to resort to price competition to influence their market share in Member

States which have restrictive legislation. However, that does not constitute a distortion of competition but rather a restriction of forms of competition which applies to all economic operators in those Member States. By imposing a wide-ranging prohibition on the advertising of tobacco products, the Directive would in the future generalise that restriction of forms of competition by limiting, in all the Member States, the means available for economic operators to enter or remain in the market.

114. In those circumstances, it must be held that the Community legislature cannot rely on the need to eliminate distortions of competition, either in the advertising sector or in the tobacco products sector, in order to adopt the Directive on the basis of Articles 100a, 57(2) and 66 of the Treaty.

115. In view of all the foregoing considerations, a measure such as the directive cannot be adopted on the basis of Articles 100a, 57(2) and 66 of the Treaty.

116. In those circumstances, the pleas alleging that Articles 100a, 57(2) and 66 do not constitute an appropriate legal basis for the Directive must be upheld.

117. As has been observed in paragraphs 98 and 111 of this judgment, a directive prohibiting certain forms of advertising and sponsorship of tobacco products could have been adopted on the basis of Article 100a of the Treaty. However, given the general nature of the prohibition of advertising and sponsorship of tobacco products laid down by the Directive, partial annulment of the Directive would entail amendment by the Court of provisions of the Directive. Such amendments are a matter for the Community legislature. It is not therefore possible for the Court to annul the Directive partially.

118. Since the Court has upheld the pleas alleging that the choice of Articles 100a, 57(2) and 66 as a legal basis was inappropriate, it is unnecessary to consider the other pleas put forward by the applicant. The Directive must be annulled in its entirety.

2. Costs

119. Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party's pleadings. Since the Federal Republic of Germany has applied for costs to be awarded against the Parliament and the Council, and the latter have been unsuccessful, they must be ordered to pay the costs. The French Republic, the Republic of Finland, the United Kingdom and the Commission must bear their own costs pursuant to Article 69(4) of the Rules of Procedure.

On those grounds,

THE COURT

hereby:

1. Annuls Directive 98/43/EC of the European Parliament and of the Council of 6 July 1998 on the approximation of the laws, regulations and administrative provisions of the Member States relating to the advertising and sponsorship of tobacco products;

2. Orders the European Parliament and the Council of the European Union to pay the costs, and the French Republic, the Republic of Finland, the United Kingdom of Great Britain and Northern Ireland and the Commission of the European Communities to bear their own costs.

Documents

Master Programme in European Law (LL.M.)cesl.cupl.edu.cn/upload/200811088535471.pdf · · 2016-05-23PowerPoint Presentation C. Legal acts of the European Union ... - Entry into