Facts
- The case concerned the compatibility of French legislation prohibiting resale at a loss with Article 34 of the Treaty on the Functioning of the European Union (TFEU), which prohibits quantitative restrictions on imports and all measures having equivalent effect between Member States.
- Prior ECJ case law, notably Dassonville and Cassis de Dijon, had broadly defined measures equivalent to quantitative restrictions, leading to challenges against a wide range of national rules, including those not directly affecting product characteristics.
- The issue arose in the context of previous broad application of Article 34, which had impacted Member States' ability to enact rules regulating the sale and marketing of goods.
Issues
- Whether national rules concerning the prohibition of resale at a loss constituted measures having equivalent effect to quantitative restrictions under Article 34 TFEU.
- Whether a distinction should be made between product requirements (affecting the goods themselves) and selling arrangements (regulating the manner of sale).
- If selling arrangements fall outside the scope of Article 34, under what conditions such exclusion is valid.
Decision
- The ECJ held that product requirements mandating modifications to goods are measures having equivalent effect to quantitative restrictions and are prohibited under Article 34, unless justified by specific Treaty derogations.
- The Court established that selling arrangements, which concern only the marketing and sale of goods and do not require product modification, generally fall outside the scope of Article 34.
- However, such selling arrangements are only excluded from Article 34 if they apply equally in law and in fact to all affected traders within the national territory, and do not discriminate against imported products.
- Applying this distinction, the Court found that the French prohibition on resale at a loss was a selling arrangement and, since it applied equally to all traders within France, did not fall foul of Article 34.
Legal Principles
- Article 34 TFEU prohibits quantitative restrictions and measures having equivalent effect upon imports between Member States.
- A distinction exists between product requirements (which fall within Article 34's scope) and selling arrangements (which are generally excluded).
- Selling arrangements are excluded only if they apply equally in law and in fact to all relevant traders and do not impede market access for imported products.
- Product requirements, which alter goods themselves, always fall within Article 34 unless justified by Treaty derogations.
Conclusion
The ECJ judgment in Keck and Mithouard established a foundational distinction within EU law between product requirements, which remain subject to Article 34 TFEU scrutiny, and selling arrangements, which are excluded provided they apply equally without discrimination. This clarified the boundaries between national regulatory autonomy and the free movement of goods, and offered greater legal certainty in the application of Article 34.
