## Facts

- After an earlier, broader EU tobacco advertising directive was annulled for exceeding internal-market powers, the EU adopted Directive 2003/33/EC with a narrower scope.
- The directive relied on then-Article 95 EC (now Article 114 TFEU) to approximate Member State laws affecting the internal market.
- Article 3 restricted tobacco advertising in the press, other printed publications, and information society services, with limited exceptions (including certain trade publications and certain third-country publications not principally aimed at the EU market).
- Article 4 restricted tobacco advertising and sponsorship in radio broadcasting and regulated certain cross-border sponsorship of events.
- Germany brought an annulment action challenging Articles 3 and 4, arguing lack of EU competence (wrong legal basis), disproportionality, inadequate reasons, and interference with freedom of expression.
- The Parliament and Council (supported by the Commission and several Member States) defended the directive as targeting cross-border barriers and distortions caused by divergent national rules and likely future divergence.

## Issues

1. Whether Article 95 EC validly supported Directive 2003/33/EC, including Articles 3 and 4, notwithstanding that health protection strongly motivated the measures.
2. Whether Article 95 EC permits approximation by prohibitory measures (bans) when necessary for internal-market functioning.
3. Whether Articles 3 and 4 were proportionate to the internal-market objective of preventing barriers to trade and distortions of competition.
4. Whether the directive adequately stated reasons and whether any restriction on commercial expression was justified.

## Decision

- The Court of Justice (Grand Chamber) dismissed Germany’s action and upheld Articles 3 and 4.
- Article 95 EC was a proper legal basis because the measures addressed existing or likely obstacles to free movement and to the freedom to provide services arising from divergent national rules in cross-border media.
- Article 95 EC allows discretion as to the method of approximation; depending on the subject, approximation may include conditions of marketing or prohibitions.
- The directive was sufficiently limited to cross-border contexts (press, radio, information society services, and certain sponsorship) and therefore differed from the earlier annulled directive’s overbreadth.
- The measures were proportionate: they were suitable to prevent circumvention and did not go beyond what was necessary, given their limited scope and defined exceptions; broader exemptions (e.g., for local or regional publications) could undermine harmonisation.
- The recitals adequately explained the internal-market rationale, satisfying the duty to state reasons.
- Any interference with expression was limited to commercial advertising and was justified and proportionate in light of internal-market aims and the requirement to ensure a high level of health protection.

## Legal Principles

- Internal-market harmonisation powers may be used even where health protection is a decisive policy consideration, provided the measure genuinely contributes to removing or preventing barriers to trade or distortions of competition.
- “Approximation of laws” under Article 95 EC can, where appropriate, take the form of prohibitions, not only the setting of common standards.
- The EU legislature may legislate to address not only current obstacles to trade but also likely future obstacles where Member State divergence is foreseeable.
- In areas involving complex policy choices, proportionality review is limited; the legislature retains broad discretion absent manifest error or misuse of powers.
- A legislative act satisfies the duty to state reasons when its recitals and scheme disclose the internal-market problem addressed and the logic of the chosen measures.
- Restrictions on commercial advertising may be justified when limited in scope and proportionate to legitimate objectives, including internal-market functioning and a high level of health protection.

## Conclusion

The Court upheld Directive 2003/33/EC’s targeted restrictions on cross-border tobacco advertising and sponsorship, ruling that internal-market harmonisation powers supported even prohibitory measures where divergent national rules impede or are likely to impede cross-border trade and services, and where the resulting limits are proportionate and adequately explained.


Germany v. European Parliament & Council, Case C-380/03, 2006 E.C.R. I-11573 (Ct. Just. 2006)