Facts
- Mr. Gebhard, a German lawyer, sought to practice law in Italy.
- He established a 'chambers' in Italy and used the professional title 'avvocato,' which is protected under Italian law.
- The Italian Bar Council challenged his right to use the title and to practice law in Italy.
- The dispute centered on whether Mr. Gebhard’s activities constituted the exercise of the freedom of establishment or the freedom to provide services within the meaning of EU law.
- The European Court of Justice (ECJ) was asked to clarify the distinction between these freedoms in the context of Mr. Gebhard’s situation.
Issues
- Whether Mr. Gebhard’s activities in Italy fell under the EU freedom of establishment or the freedom to provide services.
- What legal criteria distinguish the freedom of establishment from the freedom to provide services under EU law.
- What implications the proper classification of Mr. Gebhard's activities would have for national regulatory requirements and market access.
Decision
- The ECJ held that Mr. Gebhard’s activities in Italy constituted an establishment, not merely the provision of services.
- The Court defined establishment as pursuing an economic activity in another Member State through a fixed establishment for an indefinite period, implying a stable and continuous presence.
- The Court noted that the freedom to provide services involves temporary activity without permanent physical presence, evidenced by time-limited, irregular, periodic, or non-continuous operations.
- The ECJ introduced a four-part test—duration, regularity, periodicity, and continuity—to distinguish between establishment and services.
- The Court found that Mr. Gebhard’s activities satisfied the conditions of establishment due to their indefinite and stable nature.
Legal Principles
- The distinction between freedom of establishment and the freedom to provide services in EU law depends on the nature and manner of the economic activity.
- Establishment involves a stable, continuous, and indefinite presence in the host Member State’s market.
- Provision of services is characterized by a temporary, time-limited, or periodic engagement in economic activity without a persistent physical establishment.
- The four criteria for classification are duration, regularity, periodicity, and continuity (the “Gebhard test”).
- Member States possess greater regulatory competence over establishment, but regulations on service providers must respect EU law and avoid unnecessary restrictions.
Conclusion
The Gebhard case established clear criteria for differentiating between freedom of establishment and the freedom to provide services, introducing a four-part test of duration, regularity, periodicity, and continuity. These principles continue to guide the application of EU freedoms and national regulation concerning cross-border professional activities within the internal market.
