Critically Discuss the Interpretation of the Prohibition in Article 34 TFEU and its Interpretation for the Regulation of Markets

Example European Law Essay


'The Court of Justice has adopted far too wide an interpretation of the prohibition in Article 34 TFEU whilst not going far enough in its interpretation of that article to accommodate the right of Member States to regulate their own markets and to pursue their own policies.'

Critically discuss this statement with reference to decided cases and academic opinion.


Article 34 TFEU provides that "quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between Member States". In order to consider whether the Court has interpreted the prohibition in the Article too widely, but not gone far enough to allow Member States to regulate their own markets and pursue their own policies, this essay shall consider quantitative restrictions and measures having equivalent effect to such restrictions. After a brief definition of these terms, the work will move on to consider the scope of Article 34 in terms of indistinctly applicable measures, exceptions from the scope of the prohibition and the impact of prominent cases. Finally, an evaluation of defences that may be employed by States in breach of Article 34 will be undertaken. It will be concluded that despite some clawing back of the extent of the prohibition, Article 34 has indeed been interpreted too widely and that Member States have been overly limited in their competence to regulate their own markets and pursue their own policies.

Quantitative Restrictions

The starting point is to consider the meaning of the phrase 'quantitative restriction' which was interpreted in Geddo1 as referring to "measures which amount to a total or partial restraint of, according to the circumstances, imports, exports or goods in transit".2 Clearly, this is a rather broad interpretation encompassing a number of circumstances and it therefore seems that Member States are, on this basis alone limited in their ability to regulate their own markets and pursue their own policies. However, one must ask whether this is necessarily a criticism of the Court's interpretation of Article 34. The Article aims to promote the free movement of goods by prohibiting "measures that prevent or discriminatorily restrict market access".3 Therefore, as a simple matter of fact, Article 34 must operate to limit Member States' competence in regulating their own markets and pursuing their own policies. Given that the free movement of goods is a fundamental tenet of the Community,4 one is inclined to argue that rather than going too far, Article 34 simply promotes this aim, albeit in terms of quantitative restrictions.

Measures Having Equivalent Effect

Despite the analysis above, which asserts that restricting Member State competence is simply part of a larger Community goal, it should be noted that Article 34 does not only apply to quantitative restrictions. It also applies to Measures Having Equivalent Effect to Quantitative Restrictions,5 and it will be shown that criticisms of the Article's broad scope and restrictions on competencies of the Member States may have more merit.

The scope of MEQRs was first defined in Procurer du Roi v Dassonville6 in which it was held that "all trading rules enacted by Member States which are capable of hindering, directly or indirectly, actually or potentially, intra-Community trade are to be considered"7 as MEQRs. The fact that Dassonville holds that MEQRs need be only potentially restrictive has had the result that even where measures only "hypothetically"8 rather than actually impede trade, they may fall foul of the Article. It is of course also true that discriminatory measures will be caught by the Article,9 but due to time constraints and the discussion above regarding the aims of the common market and the free movement principle, these will not be further discussed here. To return to Dassonville, it is perhaps no wonder that early commentators referred to the decision as "audacious";10 it serves to ignore the fact that Member States, although part of a common market, are also important as individual economic nations11 and it is argued that the broad scope of Dassonville, strictly applied, restricts Member States' competences in the economic arena and goes too far in imposing prohibitions.

Of course, it should be remembered that the court has not always been consistent in applying Dassonville, on the one hand seeming to acknowledge that the dicta is too broad, whilst at the same time potentially restricting the scope of the prohibition and allowing Member States more freedom in their own economic policies. A prominent example of this point may be taken from Duphar12 in which despite the restrictive effect of the measure in question, that measure was held to fall outside of Article 30 (as it then was) because it was non-discriminatory. This is not only contrary to Dassonville, but also to Cassis de Dijon13 which had confirmed the "seeds"14 laid in Dassonville that MEQRs in Article 34 could apply to non-discriminatory measures or so-called indistinctly applicable rules. Cassis will be discussed further below but here, it is simply asserted that it is therefore clear that the Court has at times restricted the application of the case (along with Dassonville) and thus it may be that the law does not go too far in terms of the prohibition in Article 34. However, it is also submitted that this is unhelpful in terms of ensuring Member States have the competence to regulate their own markets as inconsistencies in the jurisprudence render the law uncertain as to whether measures fall foul of the Article and Member States are thus likely to be conservative in the exercise of such policies. The analysis contained later in this work will consider if such issues have been overcome by the suggestion that Dassonville and Cassis should be considered applicable only in terms of providing a general principle, rather than in terms of the instances in which it may be permissible to depart from that principle,15 thus providing the certainty needed to give Member States freedom to enact their own market policies.

Indistinctly Applicable Rules: An Analysis

As observed above, Cassis confirmed that indistinctly applicable rules would also be caught by Article 34. However, Cassis went further than this, establishing the principle of mutual recognition.16 This principle holds that if goods have been marketed in one State, they must be able to be marketed in another State without restrictions even if the goods contravened national rules.17 Indeed, although the Court in Cassis recognised that States did have full competence to regulate their own markets in "all matters",18 this would only apply insofar as it related to "fiscal supervision, the protection of public health, the fairness of commercial transactions and the defence of the consumer".19 This arguably goes much further than simply affirming commitment to the free market principle but severely undermines the competence of the State.20 Indeed, the fact that the four seeming exceptions to the Article outlined above were required to be "justified"21 by the State in order to avoid liability would support this view. It is therefore clear that although Member States may not be prohibited from determining their own policies and regulating their own markets, they may be restricted in applying those rules by Article 34.

Although it was noted earlier in this work that the Court have been inconsistent in applying Cassis, it does seem that the overriding effect of the interpretation of the Article is that Article 34 applies to indistinctly applicable measures and that States are bound by the market regulatory measures of other States where those measures have allowed a product to be lawfully marketed. One such example is Rau, in which it was held that packaging requirements which would make it more difficult for non-Belgian producers to comply with the national market regulation due to the increased cost was caught by Article 34. The difficulty with Rau22 is that on the facts, one is tempted to agree with the decision. The relevant rule was that Belgian law required margarine to be sold in cubed shaped packaging; such a rule seems trivial and one would expect it to comply with the Article. However, one should be wary of focusing on the facts alone. It has also been held for example that rules regarding the requirements of the constituents of food products may fall foul of Article 34. For example, in Deserbais, it was held that a German rule which required cheese to have a fat content of only 34.3% in order to be labelled 'Edam' was a breach of Article 34 due to the fact that it restricted producers from other States from entering the German market. The merits of this rule are beyond the scope of this work, but the example serves to demonstrate that in arguably substantial matters, aside from simple issues about food standards and labelling,23 the Court's interpretation of Article 34 clearly restricts Member States' abilities to regulate their own markets,24 even where ruling that measures fall foul of Article 34 can be considered "absurd".25 Given that it has already been shown that States should still be free to act as autonomous economic actors within the Community, it is thus argued that Article 34, as interpreted in Cassis and later so applied, does go too far in restricting States' abilities to regulate their own market.

Limits to Article 34

Despite this, the Court has made some attempts to limit the scope of Article 34 if it can be shown that such rules "pursue an aim which is justified with regard to Community law".26 However, as noted above, this ostensibly new test put forward by the Court, cannot be considered in reality any different from Cassis;27 such rules are still caught by the Article and the State is bound to justify their own market rules.28 Again, this goes too far in restricting Member States and potentially too far in prohibitive terms; without certainty29 about whether their rules will fall foul of the Article, States may have been inclined to again be more conservative in making regulations.

It has been suggested that the following decision in Keck30 was to be welcomed as representing a step away from Cassis and Dassonville, and going further to limit the scope of Article 34. Indeed, the Court itself recognised that a move away from Cassis would be desirable, recognising the need to limit the prohibitory effect of Article 34 in terms of selling arrangements.31 Such a view is not without difficulty however. It was noted above that cases such as Rau are perhaps justifiably caught by Article 34; effectively discriminating against non-domestic margarine sellers due to packaging appears contrary to the spirit of the freedom of movement principle32 and as such, represent what this author considers a justified use of Article 34. It is clear from Keck however that such arrangements are now excluded from the Article, whereas the more problematic decision in Deserbais would still infringe it as the measure related to the product itself. As noted above, it is such measures which truly restrict the ability of Member States to operate as economic actors and as such, in this respect at least Keck, although limiting the prohibitory effect of Article 34, achieved little in the way of providing regulatory freedom for Member States.

However, despite not being directly overruled, the status of Keck as providing the leading legal test has been questioned.33 This was exemplified in Commission v Italy:34 Selling arrangements are not caught by Article 34 if they do not hinder market access35 where they do not apply differentially in law or fact to the marketing of domestic products or products from other Member States.36 It seems that this may mean that cases such as Rau, will once again be caught by Article 34, despite relating to selling arrangements; beneficial in itself but once again extending the scope of the prohibition. Of course, as noted above, measures which do hinder market access as related to product quality and those which are discriminatory, although these have not of course been discussed in this work, will still be covered by Article 34.

Defences and Exceptions

As noted above, Article 36 applies to discriminatory provisions in addition to the potentially indistinctly applicable rules discussed in this work; it should be noted that there are also defences which may be employed by a Member State seeking to justify the use of such measures although, as the measures themselves have not been considered, the defences will not be discussed here.

Defences to the indistinctly applicable rules which are still covered by Article 34, even after Keck and subsequent clarification, or indeed divergence37 in Commission v Italy, are instead covered by the mandatory exceptions briefly outlined in Cassis. As noted above, these exceptions are fiscal supervision, consumer protection, public health and the fairness of commercial transactions.38 Further discussion is outside the scope of this work, but for the sake of completeness, it is prudent to observe that the Court has been reluctant to accept such justifications in many cases39 and this serves to confirm the argument made throughout that the prudent State will be forced to act conservatively in regulating their markets to ensure that such measures do not infringe the wide prohibition in Article 34.


In conclusion, it has been shown that despite some restrictions on the prohibition, it is clear that the Courts continue to interpret Article 34 too widely in terms of its prohibitive effect, but have failed to ensure that Member States are protected in their competence to regulate their own markets and set their own policies.


1 Case 2/73 Geddo v Ente Nazionale Risi 1971 ECR 865

2 ibid at 879

3 P Wenneras and K Boe Moen, 'Selling Arrangements: Keeping Keck' (2010) EL Rev 35(3) 387-400, 387-388

4 P Craig and G de Burca, EU Law: Text, Cases and Materials (Fifth Edition, Oxford University Press 2012) 637


6 Case 8/74 Procurer du Roi v Dassonville 1974 ECR 837

7 ibid at 5

8 D Chalmers, 'Free Movement of Goods Within the European Community: An Unhealthy Addiction to Scotch Whisky?' (1993) ICLQ 42(2) 269-294, 275

9 See for example Case C-531/07 Fachervand der Buch-und Medienwirtschaft v LIBRO Handelsgesellschaft mbH 2009 ECR I 3717 and Case 50/85 Schloh v Auto Controle Technique 1986 ECR 1855

10 ibid

11 ibid at 273

12 Case 238/82 Duphar BV et al v The Netherlands 1984 ECR 523

13 Case 120/78 Rewe-Zentral AG v Bundesmonopolverwaltung fur Branntwein (Cassis de Dijon) 1979 ECR 649

14 Craig and de Burca (n4) 640

15 L Woods, 'Consistency in the Chambers of the ECJ: A Case Study on the Free Movement of Goods' (2012) CJQ 31(3) 339-367, 354

16 Cassis de Dijon (n13) at 14

17 ibid

18 ibid at 8

19 ibid

20 M Ortino, 'The Role and Functioning of Mutual Recognition in the European Market of Financial Services' (2007) ICLQ 56(2) 309-338, 311-312

21 Craig and de Burca (n4) 649

22 Case 261/81 Walter Rau Lebensmittelwerke v de Smedt Pvba 1982 ECR 3961

23 HC von Heydebrand e.d Lasa, 'Free Movement of Foodstuffs, Consumer Protection and Food Standards in the European Community: Has the Court of Justice Got it Wrong?' (1991) EL Rev 16(5) 391-315, 408

24 ibid at 414-415

25 Craig and de Burca (n4) 651

26 Case 145/88 Torfaen BC v B&Q plc 1989 ECR 3851 at 13

27 Craig and de Burca (n4) 651

28 T Horsley, 'Unearthing Buried Treasure: Article 34 and the Exclusionary Rules' (2012) EL Rev 37(6) 734-757, 754

29 ibid at 755

30 Case C-267 and 268/91 Criminal Proceedings Against Keck and Mithouard 1993 ECR I 6097

31 ibid at 17

32 P Koutrakos, 'On Groceries, Alcohol and Olive Oil: More on Free Movement of Goods After Keck' (2001) EL Rev 26(4), 391-407, 392-393

33 E Spaventa, 'Leaving Keck Behind? The Free Movement of Goods After the Rulings in Commission v Italy and Mickelsson and Roos' (2009) EL Rev 34(6) 914-932, 916

34 Case C 110/05 Commission v Italy 2009 ECR I 519

35 T Conor, 'Accentuating the Positive: The Selling Arrangement - the First Decade and Beyond' (2005) ICLQ 54(1) 127-160, 127

36 Commission v Italy (n34) at34-37

37 I Lianos, 'In Memoriam Keck: The Reformation of EU Law on the Free Movement of Goods' (2015) EL Rev 40(2) 225-248, 227-228

38 Cassis (n13) at 8

39 See for example, 'Case 178/84 Commission v Germany 1987 ECR 1227 at 32-25