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The free movement of services

Previous: The free movement of persons

Whilst the EU was initially conceived as an organisation which would help the facilitation of goods only, it is clear from Article 26 TFEU (establishing the internal market) that the free movement of services is also to be facilitated. Unlike goods, persons, establishment and capital, the scope of services is not well defined: it is a residual category of movement usually applicable where neither the free movement of goods nor the free movement of establishment is in question.

According to Art 56 TFEU, restrictions on the free movement of services between Member States are prohibited. Van Binsbergen [1974] confirmed that this treaty provision is directly effective. It is therefore important to know what a service is, and whether a restriction can be justified.

The scope of ‘services’

On the assumption that a particular activity is not caught by the scope of the free movement of goods, the free movement of persons or another freedom, the scope of ‘services’ will be an applicable question.

Transnational dimension

Firstly, a service for the purpose of Art 56 TFEU must have an transnational dimension. If services are not being provided (or received) between Member States, the EU will have no jurisdiction to find that an activity is a service. However, the Court of Justice of the European Union (CJEU) has given this scope requirement a very broad interpretation. In Anomar [2003], it was enough that it was possible for a foreign person or company to supply and install gambling machines in the future for Art 56 to be invoked to try and prohibit a restriction limiting where gambling machines could be placed. Similarly, in Regione Sardegna [2009], a stopover tax applicable to non-residents only when passing through an airport was classed as a restriction on free movement even though it only applied within Sardinia.

Private actors

Secondly, restrictions on services imposed by private actors (not Member States themselves) are usually excluded from the scope of Art 56, unless the private actor in question is responsible for regulating a collective service. For example, in Walrave v Koch [1974], Art 56 was applied to prohibit a discriminatory restriction imposed by the organisers of a cycling event. Such a private restriction must have an economic effect to be prohibited. As a result, in Meca-Medina [2004], a restriction preventing a swimmer from participating in an event after failing a drug test was not prohibited as it apparently had only ‘sporting’ and not economic effect.

Previous case law shows that also within the scope of Art 56 are private actors providing insurance funds (Kohl [1998]) and medical services (Gereats-Smits [2001]). Also in the scope of Art 56 are trade unions, according to Laval un Pertneri [2007] and charities, and LPFP & Bwin International [2009].

Next: Competition law

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