cases-law

Vertical Direct Effect

CASE: Van Gend en Loos vs governments — Dutch Tax Authority (1963)

A Dutch transport company called Van Gend en Loos imported chemicals from Germany to the Netherlands. When

they did, Dutch customs charged them a new import duty.

But Van Gend en Loos argued:

“This duty breaks EU law— specifically Article 12 of the EEC Treaty (now Article 30 TFEU) — which says EU

countries can’t introduce new customs duties on goods moving between them.”

What did the EU Court say? The European Court of Justice (ECJ) said:

Yes, EU law can give rights directly to individuals, and

Yes, Van Gend en Loos can rely on EU law in a national court, even though it wasn’t specifically written into

Dutch law yet.

Horizontal Direct Effect

This is when an individual invokes an EU law against another individual or a private company.

• Example: An employee relies on an EU provision to challenge their private employer.

Case: Sabena vs

Defrenne (1976)

A woman named Gabrielle Defrenne was a flight attendant for the Belgian airline Sabena. She was paid less than

her male colleagues for doing the same work.

She said this was discrimination and violated EU law— specifically Article 119 of the EEC Treaty (now Article 157

TFEU), which says:

“Men and women should receive equal pay for equal work.”

What did the EU Court say? The European Court of Justice (ECJ) agreed with her:

Yes, Article 119 had direct effect— it was clear and precise enough to be used by individuals in court.

Yes, it could be used against a private employer, not just the state.

Key Legal Takeaway: This meant Article 119 had horizontal direct effect

Case 441/21:Kapniki Mikhailidis

vs Greek State

Kapniki S.A., a Greek company, imported cigarettes from Bulgaria. Greek authorities imposed duties, claiming the

goods were not properly in "free circulation" due to suspected fraud.

Legal issue: Could Greece re-impose customs duties on goods declared in another EU country (Bulgaria), if fraud

was suspected?Article 29 TFEU says that products lawfully imported and in free circulation in one EU country

should move freely throughout the EU.

⚖ What did the EU Court say?

✅ The Court ruled that if a fraud is detected, the goods lose their “free circulation” status, and another Member State can take action (like imposing duties), provided fair procedures are followed.

📌 Key Legal Takeaway: Article 29 TFEU doesn’t shield fraudulent goods from customs checks or duties

Case: EU Commission vs Italy

Following the entry into force of the European Economic Community (EEC) Treaty, Italy continue to impose a

"statistical levy" on goods imported and exported. This levy was intended to fund the collection of trade statistics.

The case concerned the levying of a small fee (only 10 lira) on imports and exports to fund statistical surveys.

⚖ What did the EU Court say?

✅ Although the fee was small it was still found to be an impediment to the free movement of goods and therefore a breach of Article 30 TFEU.

📌 Key Legal Takeaways: It clarified that even charges imposed for non-protectionist purposes, such as funding statistical services, are prohibited if they are levied solely because goods cross a border.

Case 8/74: Belgium vs Dassonville

Dassonville had imported Scotch whisky into Belgium without a certificate of origin required by Belgian law. He argued

that this Belgian rule was a barrier to trade.

⚖ What did the EU Court say?"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 as measures having an effect equivalent to quantitative restrictions.”

✅ This became known as the Dassonville Formula, which broadly defines what constitutes a measure equivalent to a quantitative restriction (MEQR) under Article 34 TFEU.

📌 Key Legal Takeaway: It laid the groundwork for the principle of mutual recognition and the wide interpretation of trade barriers.

Case 442/98: Kapniki Mikhailidis

vs Greek State

Kapniki Mikhailidis AE, a tobacco exporter, was charged a levy on tobacco exports. The money collected was used

to finance a Greek pension fund for workers in the tobacco sector. The company challenged the levy, claiming it

was an unlawful restriction on exports under EU law.

⚖ What did the EU Court say?:The levy was ruled unlawful under EU law.

✅ The Court found that charging an export duty to fund a domestic pension scheme constituted a measure having equivalent effect to a quantitative restriction — prohibited Article 35 TFEU.

📌 Key Legal Takeaway: export levies used to fund social security schemes (even if well-intentioned) are not allowed if they restrict free movement of goods.

Case 178/84: Commission vs

Germany (1987)

The German Biersteuergesetz (Beer Tax Act) from 1516, reflecting the Reinheitsgebot, mandated that only beers brewed using malted barley, hops, yeast, and water could be marketed as "beer" within Germany. This legislation effectively prohibited the sale of beers containing other ingredients, such as those brewed with additives or different cereals like maize or rice, which were commonly used in other EU Member States.

 

The European Commission challenged this restriction, arguing that it constituted a barrier to the free movement of goods as enshrined in Article 34 TFEU.

Germany defended its legislation by citing consumer protection and public health concerns, asserting that the restrictions ensured product quality and safeguarded consumers from potential health risks associated with additives (Article 36 TFEU).​

⚖ What did the EU Court say?

✅ The court held that the German measures were disproportionate and not justified under Article 36 of the Treaty, which allows for exceptions to the free movement of goods on specific grounds, including the protection of health and life of humans.

✅ Breach of Article 34 TFEU and not justified under Article 36 TFEU

 

📌 Key Legal Takeaway: It underscored that national regulations, even those deeply rooted in cultural traditions like the Reinheitsgebot, must comply with EU principles and cannot unjustifiably hinder the free movement of goods.

Case 120/78: Rewe-Zentral AG vs

Bundesmonopolverwaltung für

Branntwein (1979)

Rewe-Zentral, a German company, wanted to import Cassis de Dijon, a French blackcurrant liqueur, into Germany.

German law required a minimum alcohol content for fruit liqueurs (25%), but Cassis de Dijon had a lower alcohol

content (15–20%). The German authorities refused import, citing public health and consumer protection concerns.

⚖ What did the EU Court say? “There is no valid reason why, provided that they have been lawfully produced and marketed in one of the Member States, alcoholic beverages should not be introduced into any other Member State.”

✅ The Court ruled that If a product is legally sold in one EU country, it should be allowed in all others — unless there’s a very strong reason not to. (Principle of Mutual Recognition).

✅ Breach of Article 34 TFEU and not justified under Article 36 TFEU.

📌 Key Legal Takeaway: Principle of mutual recognition: a product for sale in another member state may in principle not be refused

Case 121/85: Conegate Ltd vs

HM Customs & Excise

Conegate Ltd, a UK-based company, attempted to import life-size inflatable sex dolls from Germany into the United Kingdom. UK customs authorities seized the goods, citing national laws that prohibited the importation of indecent or obscene items. Conegate challenged this action, arguing that it infringed upon the principles of free movement of goods as established under EU law 

Legal issue:

The central legal question was whether the UK's prohibition on importing certain goods, justified on grounds of public morality under Article 36 of the Treaty on the Functioning of the European Union (TFEU), was compatible with the EU's rules on the free movement of goods

⚖ What did the EU Court say?

✅ Inconsistency in Domestic Law: The UK could not rely on the public morality exemption to justify the import ban because similar goods were legally manufactured and marketed within the UK, albeit with certain restrictions.

✅ Discriminatory Measure: The import restriction was deemed a measure having equivalent effect to a quantitative restriction, which is generally prohibited under EU law.​

✅ Proportionality and Justification: For a Member State to justify such a restriction on grounds of public morality, it must demonstrate a consistent and non-discriminatory approach. The UK's allowance of similar domestic products undermined its justification for the import ban.​ 

📌 Key Legal Takeaway: This judgment underscores the principle that Member States cannot invoke public morality to justify trade restrictions if they permit the same or similar goods to be produced and sold domestically. It reinforces the importance of consistency and non-discrimination in the application of national laws that might affect the free movement of goods within the EU.​

Case 112/84: Humblot vs France

(1985) (1/2)

In France, a tax system on motor vehicles imposed a progressive tax on cars up to 16 fiscal horsepower. However, for

cars exceeding this threshold, a substantially higher flat-rate tax was applied. This structure disproportionately affected

imported vehicles, particularly high-powered German cars, as domestic manufacturers typically did not produce

vehicles above the 16 horsepower limit. Michel Humblot challenged this taxation scheme, arguing that it indirectly

discriminated against imported cars, thereby violating EU law.

⚖ What did the EU Court say?:

✅ The ECJ ruled that the French tax system was incompatible with Article 110 TFEU. The Court found that, although the tax did not explicitly differentiate between domestic and imported vehicles, its practical effect was discriminatory. By imposing a significantly higher tax on vehicles exceeding 16 fiscal horsepower—a category predominantly comprising imported cars—the system afforded indirect protection to domestic products. Such a measure was deemed to have a discriminatory or protective effect, contravening the principles of the internal market.

📌 Key Legal Takeaway: The Humblot case underscores the principle that Member States must not implement taxation schemes that, in effect, discriminate against imported goods, even if the measures are not overtly protectionist. It reinforces the commitment to ensuring the free movement of goods by prohibiting internal taxation that indirectly favors domestic products over those from other Member States.

Consumption tax on
bananas (1/3)

A new Italian law provides for a tax on the consumption of bananas. Italy produces 120 tonnes of bananas per year and imports 357 500 tonnes of bananas per year. The country produces other fresh fruit, such as apples, pears, oranges and lemons. After the introduction of the tax on the consumption of bananas, the price of bananas increased by 40%, some but not all consumers switched to other fruit. The importers of EU bananas are contesting the new Italian law.

Is this Italian law in line with the EU law on free movement of goods? Which provision applies to this case (Art. 30, 110 or 34 TFEU)? Explain the application of the relevant provision in detail.

https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12012E/TXT:en:PDF

Art. 30 TFEU prohibits customs duties and CEE. Both apply when goods cross a frontier (on importation) and have a value in money. Customs duties are incorporated in a customs tariff. CEE are money paid for e.g. services provided to importers at the border. Not applicable in the case. 5 points

Art. 34 TFEU is about bans or quotas (QRs) on imports and MEQR. Both QRs and MEQRs concern quantities and don’t have value in money so they don’t apply here. 5 points

Art. 110 (1) TFEU is about similar products (based on objective characteristics and consumer needs); it prohibits discriminatory taxation. Taxation is discriminatory when the tax law treats differently the imports in comparison to local produce (less favourable treatment in the law on grounds of origin). 5 points

Art. 110 (2) TFEU is about different but competing products and protective taxation is prohibited. Protective taxation indirectly protects local produce by the higher tax. 5 points

Whether you choose to apply Art. 110 (1) or 110 (2) TFEU – both will be accepted. Strictly speaking, bananas and fresh fruit are different but competing products. Because Italy has a negligible production of bananas, the tax indirectly protects the other locally produced fruit (because some consumers will switch to other fresh fruit).  5 points

Nitrogen emissions by
Dutch farmers (25 pts) (1/3)

The farming sector, especially livestock farming, emits large amounts of ammonia through manure and animal feed. The government considers agriculture a key contributor to the problem. Farmers face increasingly strict rules regarding nitrogen emissions. Many expansion plans or permits are rejected due to limited nitrogen allowances. To cut nitrogen emissions, the government is offering buyout schemes for farmers, sometimes compulsory. In order to recover some of the very substantial cost the Dutch government is considering a temporary charge on diary products imported from Belgium, Germany and Italy. The nationally produced diary products will not be affected by this charge.

 

1. Which TFEU provision, 30, 34 or 110 TFEU is applicable here? (10 pts)

2. Is such a temporary charge on imported diary products lawful according to EU law? (15 pts)

1. Which TFEU provision, 30, 34 or 110 TFEU is applicable here? (10 pts)

This case deals with the free movement of goods. A charge is per definition a form of payment, which is prohibited when goods cross a border in the EU.

• Article 30 TFEU deals text wise with charges having an equivalent (= the same) effect to a customs duty, so this is an article 30 TFEU issue. Member states are not allowed to levy such charges (4 points).

• Article 34 is about quota, which are not relevant here (3 points) and

• Article 110 deals with internal taxation, VAT, once goods have been imported (3 points).

Neither is applicable here.

2. Is such a temporary charge on imported diary products lawful according to EU law? (15 pts)

According to art 30 TFEU it is prohibited for EU member-states to levy import duties and CHEE’s (CEE’s). Any charges (a payments) on goods which are in free circulation in the EU or EEA are prohibited and a clear violation of art 30 TFEU, so The Netherlands would be breaching art. 30 TFEU. The Netherlands will have to find an other way of recovering its costs. Italian statistical levy case.

Case 41/74: United Kingdom vs

Van Duyn (1995) (1/2)

Danish Van Duyn was a Dutch national who wanted to move to the UK to work as a secretary for the Church of Scientology. The UK refused her entry, arguing that Scientology was considered socially harmful. Van Duyn challenged this, claiming that the refusal breached her right to free movement under EU law.

Legal issues:

• Does Article 45 TFEU have direct effect?

• Can a Member State restrict free movement based on association with a group (Scientology)?

public policy=injury to the public good

⚖ What did the ECJ say?

✅ Direct Effect: The ECJ ruled that Article 45 TFEU has direct effect, meaning individuals can rely on it before national courts.

✅ Public Policy Exception: The Court also held that a Member State may restrict entry on grounds of public policy, even if the person has not committed a criminal act, but the interpretation of public policy must be strict. It allowed the UK to deny her entry, even though no ban was placed on the Church of Scientology.

📌 Key Legal Takeaways:

• First case confirming that treaty provisions on free movement of workers have direct effect (Showed that individuals can invoke EU treaty rights against national governments).

• Helped define the limits of public policy as a justification for restricting free movement.

Case 115/81 and 116/81: Adoui

and Cornuaille vs Belgium (1/2)

Adoui and Cornuaille were French nationals working as prostitutes in Belgium, which was not illegal under Belgian law. Despite this, the Belgian authorities ordered them to leave the country on public order grounds. The women challenged the order, arguing it was discriminatory and a breach of EU law, as Belgian nationals were allowed to engage in the same activity.

Legal issues:

• Can a Member State expel EU nationals lawfully residing and working, based on conduct that is not illegal for its own nationals?

• What are the limits of the “public policy” exception under EU law?

⚖ What did the ECJ say?

✅ The ECJ held that public policy derogations (under Article 45) must be interpreted strictly.

✅ Public A Member State cannot expel a foreign EU national based on conduct that is not only tolerated but also not punished when committed by its own nationals.

✅ Public Moral judgments or administrative inconvenience do not justify the use of the public policy exception.

📌 Key Legal Takeaways:

• Equal treatment principle: You can't treat EU nationals differently than your own citizens for the same conduct if that conduct is not illegal.

• Public policy derogation must be based on genuine, present, and sufficiently serious threat to public policy or public security.

• Strengthens the protection of EU citizens’ rights of residence and movement across Member States.

Case 415/93: Jean-Marc Bosman vs
Belgium Football Union (1995)

Jean-Marc Bosman was a Belgian professional footballer. In 1990, his contract with RFC Liège (a Belgian club) expired. He wanted to transfer to Dunkerque, a French club. However, RFC Liège demanded a transfer fee despite his contract ending, and when Dunkerque refused to pay, the transfer was blocked. Bosman sued the Belgium football union, arguing that this system restricted his freedom of movement as a worker in the European Union.

⚖ What did the ECJ say? The European Court of Justice ruled in favor of Bosman, holding that:

✅ Transfer fees for out-of-contract players restricted a player’s ability to move freely between clubs in different EU countries.

✅ Nationality quotas for EU players were discriminatory under EU law

📌 Key Legal Takeaway: The Court held that professional footballers are "workers" under EU law, and so their movement across borders can’t be restricted once their contracts expire. Any rules or practices (like transfer fees or nationality limits) that hinder this movement are incompatible with Article 45

Case 36/75: France vs
Roland Rutili (1/2)

Mr. Rutili, an Italian national born and residing in France, was subjected to a partial restriction by the French Minister of the Interior that prohibited him from residing in certain regions of France due to his political and trade union activities.The French government justified this measure on the grounds of public policy, as permitted under Article Article 45 TFEU which allows for limitations on the free movement of workers for reasons of public policy, public security, or public health.

⚖ What did the EU Court say?The court ruled that while Member States have some discretion in defining public policy, this discretion is not absolute and must be exercised within the limits set by Community law. The Court emphasized several key principles:

​✅ Personal Conduct: Measures restricting free movement must be based exclusively on the personal conduct of the individual concerned.​

✅ Non-Discrimination: Restrictions cannot be imposed on nationals of other Member States unless similar measures can be applied under the same circumstances to the host state's own nationals.

✅ Trade Union Rights: Actions that adversely affect the exercise of trade union rights are not justified under the guise of public policy.​

✅ Personal Right to Information and Legal Remedies: Individuals must be informed of the grounds for any restrictive measures and be afforded the opportunity to pursue legal remedies, unless such disclosure is contrary to the interests of state security.

📌 Key Legal Takeaway: The Rutili judgement underscores the principle that any derogation from fundamental freedoms, such as the free movement of persons, must be interpreted strictly. It established that Member States cannot unilaterally define the scope of public policy without regard to Community law and that any measures taken must respect fundamental rights, including non-discrimination and the right to fair legal procedures.

Case 344/87: Bettray v
Staatssecretaris van Justitie

Mr. Bettray, a German national, was undergoing a drug rehabilitation program in the Netherlands, during which he was engaged in work activities. He applied for a residence permit under the rights of free movement of workers (now Article 45 TFEU), but Dutch authorities denied it, arguing that he was not a "worker" in the sense of EU law.

Legal issue:

Does participation in a rehabilitation program involving work activities qualify someone as a “worker” under EU law (Article 45 TFEU)?

⚖ What did the EU Court say?

​✅ The concept of a “worker” under EU law requires engagement in genuine and effective economic activity, not activities carried out primarily for rehabilitative or social purposes.Since Bettray’s work was not part of a regular labor market, but rather therapeutic in nature, he did not qualify as a worker under Article 45 TFEU.

Case 139/85: Kempf vs
The Netherlands (1/2)

Mr. Kempf, a German national, moved to the Netherlands to work as a music teacher. He worked part-time, earning less than the minimum means of subsistence. To supplement his income, he relied on social assistance from the Dutch government. Dutch authorities tried to deny him a residence permit, arguing that he wasn’t economically self-sufficient and thus didn’t qualify as a "worker" under EU law.

Legal issue:

Can someone who works part-time and supplements their income with public funds still be considered a "worker" under EU law (specifically Article 45 TFEU)?

⚖ What did the ECJ say? The European Court of Justice (ECJ) ruled in favor of Kempf:

✅  The concept of “worker” under EU law is not affected by the amount of income earned.

✅  The concept of part-time workers or those who rely in part on social assistance can still qualify as workers as long as the work is real and genuine (not marginal or ancillary).

✅  The concept Public assistance received does not invalidate a person's status as a worker.

📌 Key Legal Takeaway:

• “Worker” is broadly interpreted in EU law to maximize freedom of movement.

• Economic self-sufficiency is not required to be considered a worker.

• Part-time and low-income workers still enjoy rights of residence and non-discrimination.

Case 33/74: Van Binsbergen vs
Bestuur van de Bedrijfsvereniging voor de Metaalnijverheid (1/3)

Mr. Van Binsbergen was involved in proceedings before the Dutch Centrale Raad van Beroep (Central Appeals Tribunal) and was represented by a legal adviser who, during the course of the proceedings, moved his residence from the Netherlands to Belgium. Dutch law at the time stipulated that only individuals established in the Netherlands could act as legal representatives before Dutch courts. This raised the question of whether such a requirement was compatible with the provisions of the Treaty on the Functioning of the European Union (TFEU) concerning the freedom to provide services.​

Legal issue:

The central legal issue was whether the Dutch requirement for legal representatives to be established within the Netherlands infringed upon Articles 56 and 57 TFEU which guarantee the freedom to provide services across Member States.

⚖ What did the ECJ say?

• ✅  Direct Effect: Article 56 TFEU has direct effect, meaning individuals can invoke it before national courts without the need for further implementation by Member States.​

• ✅  Restriction on Services: The Dutch requirement constituted a restriction on the freedom to provide services, as it prevented service providers established in other Member States from offering their services in the Netherlands.​

• ✅  Justification and Proportionality: While the Court acknowledged that Member States could impose certain requirements to ensure the proper administration of justice (such as maintaining professional standards), such measures must be proportionate. In this case, the objective could be achieved by less restrictive means, such as requiring a service address within the Netherlands, rather than mandating residence.ù

📌 Key Legal Takeaway:

This judgment was pivotal in establishing that the freedom to provide services is directly enforceable by individuals and that Member States cannot impose unjustified restrictions on this freedom. It also underscored the principle that any limitations must be necessary and proportionate to the objectives pursued.​

Anton

Anton is a Dutch national, who works in The Netherlands as bank manager (an employee) for ABN AMRO. He lives in Belgium and travels across the border every day because the house prices there are cheaper. All his income is from The Netherlands. Dutch law allows to deduct the interest paid on the mortgage from one’s taxable income; however the rule applies only to Dutch residents, irrespective of their nationality. Anton doesn’t qualify for this and in Belgium he doesn’t get the same tax benefit.

Is this Dutch tax law in line with the EU law on free movement of persons? Which provision applies to Anton’s case (Art. 45, 49 or 56-57 TFEU)? Explain the application of the relevant provisions in detail.

Arts. 45, 49 and 56-57 TFEU are mutually exclusive provisions, can’t be applied at the same time. Is Anton a worker or self-employed?

Self-employed people fall within the scope of application of Arts. 49 and 56-57 TFEU. Arts. 49 and 56-57 TFEU apply to EU nationals in cross-border situations. The difference is that Art. 49 TFEU applies to permanent economic activities, while Arts. 56-57 TFEU apply to temporary ones. 5 points

In the facts it’s stated that Anton is an employee, so he is a worker. Art. 45 TFEU applies to EU migrant workers in cross border situations. It prohibits both discrimination and restrictions to the market access of workers. A worker is someone who works for remuneration under the guidance and direction of someone else (subordination). A worker doesn’t bear the economic risk for the economic activity, they benefit from labour law protection, unlike self-employed people. 5 points

Does the case concern discrimination or restrictions?

The Dutch law is a residence requirement, it makes no distinction on grounds of nationality. It doesn’t affect Anton’s access to the Dutch labour market. It’s indirectly discriminatory because it treats Dutch residents and non-residents differently. It’s a problem for the Dutch non-residents who have all of their income from the Netherlands.  5 points

Indirect discrimination can be justified either based on Art. 45 (4) TFEU or on case-by-case basis. 5 points

The Dutch law must be proportionate – suitable and necessary – there are no less restrictive options available. 5 points

An Austrian architect in
Germany (25 pts) (1/2)

Wilhelm Stolzbaur is an Austrian architect of some fame. In 2022 Stolzbaur won an architectural contest for designing a new building for the City Council in Munich, Bavaria, (München, Bayern), Germany. According to German law any architect doing a project in Germany must open an office or be domiciled in the same place of the building project. So according to German law, Stolzbaur, whose office is in Salzburg, Austria, (just across the border) is obligated by German law to open an office in Munich. Stolzbaur has no intention to open an office in Germany and simply wants to travel to Germany on a regular basis to supervise building progress.

 

1. Which TFEU articles support the position of Mr. Stolzbaur, art 45, 49 or 56? (10 pts)

2. Is the German requirement in line with EU law? (15 pts)

1.  Which TFEU articles support the position of Mr. Stolzbaur, art 45, 49 or 56? (10 pts)

As an architect, mr Stolzbaur is a professional, and most probably self-employed, so art 45 on employees TFEU is most likely not applicable. Then we have art 49 and 56. Arts. 49 and 56 are mutually exclusive. Art. 49 deals with establishment in another EU member-state (page 120 book, plus PP’s), whereas art. 56 deals with cross border provision of services of non-permanent duration. Since mr Stolzbaur intends to commute art.56 applies here.

2. Is the German requirement in line with EU law? (15 pts)

Art 56 requires not only the elimination of all discrimination on grounds of nationality, but also the abolition of any restriction which is capable of impeding or making more difficult the activities of a service provider established in another member state. (Consten case, page 127 book)  The German law obligating to open an office in Germany makes it more difficult for Stolzbaur to provide his professional services and is thus violation of art 56 TFEU. Binsbergen case.

Patent: an example: Lipitor

Lipitor was once the best-selling drug in the world. It’s a cholesterol-lowering medication (a statin)

developed by Pfizer. Patent expiry: Lipitor's primary U.S. patent expired in 2011. Before expiry, it

was generating over $10 billion per year in sales.

What Happens After Expiration?

Once the patent expired, generic drug manufacturers were allowed to make and sell versions of

atorvastatin.

• Generic versions entered the market quickly (e.g., by companies like Ranbaxy).

• The price of atorvastatin dropped dramatically due to competition.

• Pfizer’s revenue from Lipitor plummeted.

Pharmaceutical companies use several strategies to delay or soften the impact:

1. "Evergreening" Patents

• Filing patents on slight modifications (e.g., new formulations, delivery methods).

• Pfizer had secondary patents for different forms of Lipitor but ultimately couldn’t stop generics.

2. Brand Loyalty Campaigns

• Pfizer ran discount card programs and direct-to-consumer marketing to encourage people to stay on the

brand-name Lipitor.

3. Authorized Generics

• Pfizer partnered with a generic manufacturer to sell"authorized generics" (generic drugs made by the original

manufacturer), allowing them to keep some market share.

4. Product Line Diversification

• Companies like Pfizer invest heavily in developing new drugs before major patents expire.

Case 78/70: Deutsche Grammophon GmbH

vs Metro-SB-Großmärkte GmbH & Co. KG (1/2)

Deutsche Grammophon sold phonogram records in France through affiliated companies. Metro imported those records into Germany without Deutsche Grammophon’s consent. Deutsche Grammophon tried to block the resale in Germany based on its exclusive distribution rights under German IP law. Metro argued that this restriction violated Community rules on the free movement of goods.

Legal issue: Could Deutsche Grammophon use its national intellectual property rights to prevent the import and resale of its own products lawfully marketed in another Member State (France), without infringing Article 34 of the TFEU (prohibiting restrictions on imports between Member States)?

Case 15/74:Centrafarm BV vs Sterling Drug Inc. (1/2)

Sterling Drug Inc. (a U.S. pharmaceutical company) held a patent for a drug in several EU countries, including the Netherlands. Centrafarm, a Dutch company, lawfully purchased the drug in the UK (where it was sold cheaper) and imported it into the Netherlands without Sterling's consent. Sterling Drug tried to block the import based on its Dutch patent rights.

Legal issue: Could Sterling Drug use its national patent rights under Dutch law to prevent parallel imports from the UK into the Netherlands, despite EU rules on free movement?

Case C-355/96: Silhouette International Schmied GmbH & Co. KG vs Hartlauer Handelsgesellschaft mbH (1/2)

Silhouette, an Austrian eyewear manufacturer, sold its products under the "Silhouette" trademark. Hartlauer, another Austrian company, acquired genuine Silhouette frames that had been marketed outside the EU and resold them in Austria without Silhouette's consent. Silhouette sought an injunction, arguing that its trademark rights had not been exhausted because the goods were first marketed outside the EU.

Legal issue: The central question was whether the EU's First Trade Mark Directive (89/104/EEC) allowed for "international exhaustion" —meaning that once goods are sold anywhere in the world by the trademark owner or with their consent, the trademark rights are exhausted—or if it mandated "regional exhaustion," limiting exhaustion to goods first marketed within the EU

Case 56 & 58/64: Consten SARL and

Grundig GmbH vs Commission (1/2)

Grundig (a German electronics manufacturer) appointed Consten, a French company, as its exclusive distributor in France. Grundig also allowed Consten to register the "Grundig" trademark in France. The distribution agreement prohibited parallel imports of Grundig products into France from other EU countries. The arrangement aimed to create absolute territorial protection, blocking independent resellers from importing Grundig products from countries like Germany into France.

Legal issue: Did this exclusive distribution agreement violate EU competition law, particularly Article 101 TFEU which prohibits agreements that restrict competition?

The Court held that the agreement did breach Article 101(1) TFEU because:

1. It restricted intra-EU trade: The ban on parallel imports partitioned the internal market, going against the EU’s fundamental principle of free movement of goods.

2. It distorted competition: By granting absolute territorial protection, it eliminated competition between distributors in different Member States.

3. Trademark misuse: Even though Consten registered the Grundig trademark in France, this could not be used to block parallel imports, as that would undermine the EU internal market.

NB: Parallel imports (also called grey market goods) refer to products that are legitimately produced and sold abroad, and then imported into another country without the permission of the intellectual property (IP) owner in that country.

🧩Key Legal Principles Established:

• Parallel imports cannot be blocked through distribution agreements or trademark rights.

• Article 101(1) TFEU prohibits agreements that restrict competition and trade between Member States, even if the agreement involves intellectual property rights.

The exclusive distribution agreement between Grundig and Consten was ruled anti-competitive under Article 101 TFEU, particularly because it prevented parallel imports and partitioned the EU internal market.

Tulip Bikes (1)

Tulip Bikes, a Dutch manufactuerer of a top of the range ebike, sells its bikes in The Netherlands and Belgium and, recently, in France, under the “Tulip” trademark. In order to gain marketshare in France, Tulip Bikes is selling its bikes at a very low price, in actual fact below the total costs for a bike. Das Fahrrad, a German company was previously engaged in negotiations with Tulip Bikes to sell their bikes in Germany. However, the two parties did not come to an agreement. Now, Das Fahrrad acquired Tulip bikes in France and re-sells the Tulip bikes in Germany, without Tulip Bikes’ consent. Is this allowed?

Yes, it is!

While IP rights are recognized under Article 36 TFEU as a valid justification for restricting trade, they cannot be used to partition the internal market if the goods have already been lawfully marketed within the EEC by the IP holder or with their consent.

Therefore, once the IP holder has put the product into circulation in one Member State, the IP rights are

exhausted, and the holder cannot object to further resale in another Member State.

Use of IP rights to block parallel imports would violate Article 34 TFEU.

See Case 78/70: Deutsche Grammophon.

Tulip Bikes (2)

Tulip Bikes, sells its premium ebike in the United Kingdom under the “Fat Tulip” trademark. In order to gain marketshare in the UK, Tulip Bikes is selling its ebike at a very low price, in actual fact below the total costs for a bike. Das Fahrrad, a German company acquired Tulip ebikes in the United Kingdom and re-sells the Tulip ebike in Germany, without Tulip Bikes’ consent. Is this allowed?

No, it is not!

The directive (doctrine of exhaustion) permits only regional exhaustion. This means that trademark rights are

exhausted only when goods are first marketed within the EU by the trademark owner or with their consent.

Consequently, Tulip Bikes retained the right to prevent the importation and resale of its products that were first marketed outside the EU (the UK is no longer part of the EU)..

Case C-355/96: Silhouette International Schmied GmbH & Co. KG

Excellent — now you’re aiming for precision and granular real-life examples for each category under Article 101(1).

Let’s go step by step.

I will give you one example for each sub-element (where possible) and explain exactly why it falls under that category.

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1(a) — Directly or indirectly fix purchase or selling prices or any other trading conditions

📌 Case:European Smart Card Chips Cartel (2014)

• Firms involved: Infineon, Samsung, Renesas, Philips.

• Facts:

  • The companies coordinated prices for smart card chips (used in mobile SIM cards, bank cards, passports).

  • They exchanged sensitive commercial information to align their pricing strategies.

• Why it applies:

  • The companies fixed selling prices by coordinating price increases and avoiding competition, directly violating Art. 101(1)(a).

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1(b) — Limit or control production, markets, technical development, or investment

1⃣Control of Production

📌 Case:Cathode Ray Tubes (CRT) Cartel (2012)

• Firms involved: Philips, LG, Panasonic, Samsung SDI, etc.

• Facts:

  • The cartel agreed on limiting output of CRTs to keep prices high.

  • Companies coordinated weekly to limit quantities produced.

• Why it applies to “controlling production”:

  • By restricting output, they artificially managed supply levels, directly controlling production volumes — a textbook example of Art. 101(1)(b).

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2⃣Control of Markets

📌 Case:European Beer Cartel (2007)

• Firms involved: Heineken, Grolsch, Bavaria.

• Facts:

  • Brewers secretly divided the Dutch beer market between them.

  • Each brewer committed to limit sales to its agreed share.

• Why it applies to “controlling markets”:

  • By allocating customers and market shares, they prevented genuine competition in the market — this is market control under 101(1)(b).

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3⃣Control of Technical Development

📌 Case:Samsung/Qualcomm (Hypothetical reference, but real elements)

• While no official Article 101 decision exists directly, some investigations considered:

  • Patent licensing agreements that restricted each other’s development of alternative technologies.

  • Samsung allegedly agreed not to develop or promote certain competing mobile technologies.

• Why it applies to “controlling technical development”:

  • If companies collude to avoid innovating certain technologies, this hinders technical progress, violating 101(1)(b).

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4⃣Control of Investment

📌 Case:Visa/Mastercard Multilateral Interchange Fees (MIFs) (2014)

• Firms involved: Visa, Mastercard.

• Facts:

  • Their MIF agreements reduced banks’ incentive to invest in competing payment systems.

  • The fees made it less attractive for new entrants to invest in the payments market.

• Why it applies to “controlling investment”:

  • The agreements limited where and how banks invested in payment infrastructure, thereby controlling investment indirectly — falls under 101(1)(b).

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1(c) — Share markets or sources of supply

📌 Case:European Car Parts Cartel (2014)

• Firms involved: Yazaki, Denso, Sumitomo (automotive wire harness suppliers).

• Facts:

  • The suppliers agreed to divide customers (automakers like Toyota, Honda, etc.)

  • Each supplier took responsibility for specific customers or markets.

• Why it applies:

  • They allocated markets and customers, directly violating 101(1)(c) by sharing sources of demand and supply.

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1(d) — Apply dissimilar conditions to equivalent transactions

📌 Case:British Airways Loyalty Rebates (2007)

• Firms involved: British Airways.

• Facts:

  • BA gave higher commissions to travel agents that sold more BA tickets.

  • Agents selling fewer BA tickets got much lower commissions.

• Why it applies:

  • Travel agents were in equivalent positions, but received unequal treatment, disadvantaging smaller agents — 101(1)(d).

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1(e) — Tie supplementary obligations to contracts

📌 Case:Microsoft Tying Case (2004)

• Firms involved: Microsoft.

• Facts:

  • Microsoft bundled Windows Media Player into the Windows OS.

  • PC manufacturers had to include Media Player if they wanted to install Windows.

• Why it applies:

  • The supplementary obligation (accepting Media Player) was not directly connected to the main contract (Windows OS license).

  • This tying arrangement violated 101(1)(e).

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🔎Summary Table (Very Precise)

Article 101(1)	Sub-Element	Case	Explanation
(a)	Price fixing	Smart Card Chips Cartel (2014)	Firms coordinated prices
(b)	Production control	CRT Cartel (2012)	Firms limited CRT production
(b)	Market control	Dutch Beer Cartel (2007)	Firms divided beer market
(b)	Technical development control	Samsung/Qualcomm Licensing (hypothetical)	Restricted competing technologies
(b)	Investment control	Visa/Mastercard MIFs (2014)	Limited banks’ investment in competitors
(c)	Market/supply sharing	Car Parts Cartel (2014)	Allocated car manufacturer customers
(d)	Dissimilar conditions	British Airways (2007)	Discriminatory rebates to travel agents
(e)	Tying	Microsoft (2004)	Forced bundling of Media Player

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If you’d like, I can also give you:

• More recent cases (2020–2024)

• Court judgments if you need citations (GC, CJEU, Commission decisions)

• Examples for Article 101(3) exemptions

👉 Just say “expand” if you want any of these.

Case 27/76: United Brands Company

vs commission 1978 (1/2)

United Brands Company (UBC) was a U.S.-based company trading under the brand name Chiquita. It controlled a large share of the banana market in the European Economic Community (EEC), especially in six of the then-nine Member States. The European Commission found that UBC had abused its dominant position in several ways:

• Refusing to supply bananas to a distributor (Olesen) in Denmark who was trading with UBC’s competitors.

• Unfair pricing practices—charging different prices in different Member States without justification.

Legal issue:

• Did UBC hold a dominant position in the relevant market?

• If so, did it abuse that position, contrary to what is now Article 102 TFEU?

⚖ What did the ECJ say?

✅ Dominant Position: The ECJ held that United Brands did have a dominant position, noting its control over supply, branding strength (Chiquita), and vertical integration.

✅ Market Definition: The Court defined the relevant market as the market for bananas, a separate market from other fresh fruit due to its characteristics (availability year-round, ease of consumption, etc.).

✅ Abuse of Dominance: The Court confirmed some abuses:

• Refusal to supply a long-standing customer without objective justification was an abuse.

• Discriminatory pricing could be abusive if it distorted competition.

📌 Key Legal Takeaway: Defined dominance as a position of economic strength allowing a company to act independently of competitors, customers, or consumers..

Case 6/72: Continental Can Company

vs Commission (1/2)

Continental Can, a U.S.-based company, acquired a competing packaging company (Tönder), raising competition concerns.The European Commission challenged the merger, arguing it would lead to dominant market power in certain packaging sectors (especially metal containers). The Commission tried to prevent the merger based on Article 102 TFEU.

Legal issue: can the Commission prohibit a merger on the grounds of abuse of dominant position under Article 102 TFEU?

At the time, there was no dedicated EU merger control regulation—this came later with the Merger Regulation 4064/89 (now replaced by 139/2004).

⚖ What did the ECJ say?

✅ The ECJ upheld the Commission's decision and confirmed that mergers can be scrutinized under Article 102 TFEU if they lead to abuse of dominance.

✅ Competitors have easy access to the market: thus no dominance and therefore no reason the prohibit the merger.

📌 Key Legal Takeaway: establishing that certain mergers may violate Article 102 TFEU if they strengthen or abuse a dominant position ​

Examples of  infringement of Articles
101 (1) and 102 and fines

Elevator cartel (ThyssenKrupp, Otis, Schindler, Kone: 992 mio EUR)

Beer cartel (Heineken: 219 mio EUR, Bavaria: 23, Grolsch 32, Inbev (not 84)

Perfect — let’s go deeper into the facts of each case, without immediately stating whether it was a breach. That way, you can assess the situation using Articles 101(1) and 102 TFEU yourself, based on the legal tests.

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🔍 Case 1:Elevator Cartel(EU Commission Decision 2007)

📍Context:

Major manufacturers of elevators and escalators — ThyssenKrupp, Otis, Schindler, Kone — were operating in Belgium, Luxembourg, the Netherlands, and Germany. These companies are direct competitors.

🧠 Alleged Behavior:

• Held secret meetings to discuss and agree on upcoming construction projects involving elevators/escalators.

• Shared future bid information, including who would bid and at what price.

• Agreed in advance which company would win certain contracts and compensated others who lost out.

• Exchanged market data, sales figures, and pipeline information regularly.

• The conduct lasted for several years, typically coordinated locally in each country by their subsidiaries.

❓ Ask Yourself:

• Did these companies coordinate prices or divide markets?

• Did they restrict competition by agreeing on who would win bids?

• Was their intent or effect to distort the market?

You can now judge whether it falls under Article 101(1).

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🔍 Case 2:Beer Cartel in the Netherlands

📍Context:

Four major Dutch beer producers — Heineken, Grolsch, Bavaria, and InBev — all had strong positions in the Netherlands. The alleged collusion happened between 1996 and 1999.

🧠 Alleged Behavior:

• Met informally at trade association events or small-group meetings.

• Shared future pricing plans, including discounts and price increases for:

  • Supermarkets

  • Bars and restaurants

• Allegedly agreed not to target each other’s clients (a form of customer allocation).

• Tried to maintain market stability, avoiding undercutting each other.

InBev eventually cooperated with the EU Commission, providing key evidence of these practices and receiving immunity from fines.

❓ Ask Yourself:

• Were prices being fixed or harmonized?

• Was there customer or market sharing?

• Would this reduce consumer choice or competition?

This helps you decide whether Article 101(1) is breached.

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🔍 Case 3:Intel (Article 102)– Rebates and Exclusivity

📍Context:

Intel was the dominant chipmaker in the market for x86 CPUs (central processing units for PCs).

🧠 Alleged Behavior:

• Intel gave rebates and financial incentives to big PC makers like Dell, HP, and Lenovo.

• But those rebates were conditional: manufacturers had to buy most or all of their CPUs from Intel.

• Intel also paid Media-Saturn, a major retailer, to only stock Intel-based computers.

• Competitor AMD had limited ability to compete, despite offering lower prices.

This lasted from 2002 to 2007, during which Intel’s market share was consistently above 70%.

❓ Ask Yourself:

• Was Intel dominant in the market?

• Did it abuse that dominance by making it harder for rivals to compete?

• Did its conduct harm consumer choice or foreclose the market?

You can now analyze this under Article 102.

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⚖ Quick Legal Refresher

✅ Article 101(1) TFEU:

Prohibits agreements or concerted practices between undertakings that:

• Fix prices

• Limit or control production/markets

• Share markets/customers

• Distort competition by object or effect

✅ Article 102 TFEU:

Prohibits abuse of a dominant position, such as:

• Imposing unfair pricing or trading conditions

• Limiting production, markets, or technical development

• Applying dissimilar conditions to similar transactions (discrimination)

• Tying or exclusive dealing that forecloses competition

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Would you now like to test yourself on whether these meet the legal thresholds — or shall I walk you through one of them step by step as a practice exercise?

Dutch beer cartel of Heineken, Inbev,
Crolsch and Bavaria (late 1990s)

Between 1996 and 1999, these four major brewers—who collectively controlled approximately 95% of the Dutch beer market—engaged in coordinated activities that included:

• Fixing prices and orchestrating price increases for beer sold in the Netherlands.

• Occasionally coordinating other commercial conditions offered to individual customers in the on-trade sector, such as loans to businesses.

• Occasionally coordinating customer allocation in both the on-trade and off-trade sectors.

These practices were deemed to restrict competition within the internal market, thereby violating Article 101 TFEU.

COORDINATED=AGREEMENT

In April 2007, the European Commission imposed fines totaling €273.7 million on the participating companies:

• Heineken: €219.3 million

• Grolsch: €31.65 million

• Bavaria: €22.85 million

InBev (formerly Interbrew) was also implicated but received full immunity from fines under the Commission's leniency program for providing decisive information about the cartel.

All three fined companies appealed the Commission's decision. The General Court of the European Union ruled on these appeals in 2011:

• Heineken: The fine was reduced to €198 million, acknowledging that the Commission had not sufficiently proven certain aspects of the alleged coordination and that the duration of the administrative procedure was unreasonably long. 

• Bavaria: The fine was reduced to €20.71 million for similar reasons. 

• Grolsch: The fine was annulled entirely. The Court found that the European Commission had failed to adequately demonstrate why the parent company, Koninklijke Grolsch NV, should be held liable for the actions of its subsidiary, Grolsche Bierbrouwerij Nederland BV.

Conclusion

• The coordinated actions of InBev, Heineken, Bavaria, and Grolsch in the Dutch beer market were determined to be in breach of Article 101 TFEU, leading to significant fines by the European Commission.

• • Article 102 is for when one or more company is dominant and misuses its market power.

  • High market share ≠ automatic collective dominance under Article 102.

Examples of  infringement of Articles
101 (1) and 102 and fines

• Elevator cartel (ThyssenKrupp, Otis, Schindler, Kone: 992 mio EUR)

• Beer cartel (Heineken: 219 mio EUR, Bavaria: 23, Grolsch 32, Inbev (not 84)

• Copper fittings cartel (Aalberts Industries: 100 mio EUR)

• Bitumen cartel (Shell: 300 mio EUR)

• Washing powder cartel (Unilever EUR 150 mio, P&G 350, Henkel 0) in 8 countries, 2002-2005 “Purity”)

• Mondeléz (337,5 mio)  Snacks: Oreo, Milka, Toblerone, Cadbury, Philadelphia (May 2024)

• Transo-Pharm (-/- 50%), Linnea (-/- 30 %), Boehringer, Alkaloids (-/-10%), total of (13,4 mio) C2-Pharma (0) for N-Butylbromide (2005-2019)

• German Japanese (YKK) zipper cartel (329 mio EUR)

• Siemens (396,6 mio EUR); Intel (1.06 bn EUR); 70% market share-30% EU 2002-07

KLM Air France merger in 2004

Notification under the EU Merger Regulation (Regulation 4064/89, later 139/2004).

• The European Commission approved the merger, subject to remedies.

• Concerns were raised about dominant positions on certain European flight routes where both airlines previously competed.

✅ Key Conditions (Remedies):

• Slot surrender at congested airports (e.g. Paris Charles de Gaulle and Amsterdam Schiphol).

• Access for competitors to certain routes.

• Code-sharing limitations to preserve competition.

BlackRock / Vopak / US Gulf Coast

Terminals (Case M.9999, 2020)

Parties Involved: BlackRock and Vopak

• Transaction: Joint acquisition of control over certain US Gulf Coast terminal assets

• Commission Decision: Declared compatible with the internal market under Article 6(1)(b) of Regulation 139/2004

• Procedure: Simplified procedure

• Details: The Commission concluded that the transaction would not raise competition concerns, as the joint venture's activities were primarily outside the European Economic Area (EEA), and the parties' combined market shares within the EEA were limited

Microsoft

In 2009 Microsoft was fined appr. 500 million euros by the European Commission for a violation of EU competition law. Microsoft has a market share of 80% or higher in 13 EU MS. Their Windows operating system was bundled with the applications Windows Media Player and Internet Explorer. Microsoft didn’t share the technical specification needed to develop applications for Windows with its competitors which want to develop computer applications for Windows.

Which TFEU provision(s), 101 or 102 TFEU are applicable here?

• Microsoft held a dominant position in the PC operating systems market with Windows.

• Bundling Internet Explorer (IE) with Windows abused that dominance by:

  • Limiting the ability of competing web browsers (like Firefox and Opera) to compete fairly.

  • Distorting consumer choice and stifling innovation.

  • Discouraging PC manufacturers from pre-installing competing browsers.

• This was seen as “limiting markets or technical development to the prejudice of consumers”, as per Article

Europ Tea GmbH (25 pts.)
TCL Exam April 2025 (1/3)

Europ Tea GmbH (ET) is the leading tea company by revenues in the EU. ET has a 40-50% market for teabags in Germany, France, Poland, Belgium and The Netherlands, and between 20-30% in all other EU states. ET is active in all 27 EU member states.

Currently, ET (in all of its distribution contracts) requires its customers (supermarkets, cafés, and other resellers) not to buy from any of its competitors. Furthermore, the customers are not allowed to resell any of ET’s products to other businesses (so, no B2B resales allowed) and only to consumers/end users. Then, the ET products must be displayed on eye catching places in supermarkets, to be approved by ET, and substantial minimum orders must be placed.

1. Which TFEU provision(s), 101 or 102 TFEU are applicable here? Please explain. (10 pts)

2. Is the above conduct by Europ Tea GmbH allowed by EU law? (15 pts)

1. The single company with a given market share points to 102 TFEU (4 pts), which article deals with abuse of a dominant position in the (relevant product) market (2 pt). The prohibition of reselling to other businesses is a prohibited agreement under art. 101 TFEU, which could potentially distort trade between Member States, Consten & Grundig case (4 pts).

2. Relevant geographical market: at least 2 EU member states (2 points). Relevant product market: teabags market (40-50%). (3 points) Is the company dominant? As a rule of thumb, in case the market share is above 50% is it assumed that the company is dominant in absolute terms (2 points). One does have to check the relative aspect of the competition as well though, if there is “perfect competition”, the company might no tbe considered dominant.(3 points) Does ET abuse its dominant market position? Yes, the contractual obligation not to re-sell B2B (which is prohibited under art. 101 TFEU, see above under a), if no points there, then here, (2 pts) ), and the requirement of minimum quantities and prominent “in store displays” can be regarded as unfair trading conditions. (3 points) There is also effect on trade between the member states because more than 2 MS are concerned. (3 points) Relevant case law: UBC  (banana case) (2 pts).

Jumbo vs Heineken

The price war between supermarkets and major brands has now reached the courtroom. This Thursday, May 15, 2025 supermarket chain Jumbo has to defend itself in court because it is boycotting certain types of Heineken beer, in solidarity with two supermarkets in France. The boycott initiative comes from the purchasing organization Everest, which Jumbo and other supermakets in France and Germany joined last year. Within this organization — which controls about a third of the grocery market in France and Germany — members support each other in negotiations with major brands. The French supermarket chains Auchan and Intermarché are currently involved in a dispute over prices.

Is the above conduct prohibited by EU competition law, in particular Art. 101 and/or 102 TFEU?

The boycott of Jumbo or Heineken beer could potentially be related to Article 102 of the Treaty on the Functioning of the European Union (TFEU), but only under specific conditions.

Article 102 prohibits abuse of a dominant position within the internal market that may affect trade between EU Member States. This includes:

• Imposing unfair purchase or selling prices or unfair trading conditions.

• Limiting production, markets, or technical development to the prejudice of consumers.

• Applying dissimilar conditions to equivalent transactions (discrimination).

• Making contracts subject to unrelated obligations ("tying").

• For a boycott to fall under Article 102, two conditions must be met:

1. Dominant Position: Heineken or Jumbo would need to hold a dominant position in a relevant market (e.g., beer supply or supermarket retail).

2. Abuse: The boycott must constitute an abuse, such as:

• Refusal to supply aimed at excluding competitors.

• Collective boycott by dominant players to eliminate a competitor or discipline another market participant.

• Discriminatory treatment that harms competition.

If it's a consumer-led boycott:

• If the boycott is initiated by consumers or interest groups (e.g., for political, ethical, or environmental reasons), Article 102 TFEU would not apply, as it only governs the conduct of undertakings (i.e., businesses), not consumers.

If it's a business-led boycott:

If, for instance, Jumbo (as a retailer) refused to stock Heineken products in a way that harms market competition, and either party is dominant, then competition law could be relevant, including:

• Article 102 TFEU (abuse of dominance),

• Article 101 TFEU (anti-competitive agreements), if it's a coordinated action among firms.

French Lasagna case (1995)

French buyer buys frozen lasgna from an Italian seller. The frozen lasagna is delivered from Italy to France. After receiving the lasagna, the French buyer alleged that the product did not meet French food safety standards due to the presence of certain additives. The buyer claimed the lasagna was non-conforming under Article 35 of the CISG, which requires that goods:

• Fit for the purposes for which goods of the same description would ordinarily be used.

• Be fit for any particular purpose made known to the seller.

• Conform to any sample or model.

1. Non-Conformity (Art. 35):

The buyer argued the lasagna didn’t conform because it violated French food regulations.

2. Reasonable Time and Notice (Art. 38 & 39):

The CISG requires the buyer to examine goods and notify the seller of any lack of conformity within a reasonable time. The court examined whether the buyer gave notice in a timely and adequate manner.

3. Public Law Standards vs. Contractual Obligations:
   The case raised the issue: is a product conforming if it meets the seller's country's regulations but not the buyer's? The court ruled no—if the buyer informed the seller about the destination market’s requirements, the seller should comply.

The court (French Cour de cassation, 1995) held that the seller was liable because:

• The lasagna did not conform to French health standards.

• The seller was or should have been aware the goods were intended for France.

• Therefore, the goods needed to meet French regulations, not just Italian ones.

​

Case: Machinery Parts Case

(Austria, Oberster Gerichtshof, 6 February 1996)

CISG-online No. 135 | Docket: 2 Ob 191/95

An Austrian buyer purchased machinery parts from a German seller. The delivered goods were defective, but not completely useless. The buyer granted a Nachfrist under Article 47 CISG. The seller did not cure the defect within the Nachfrist period. The buyer then declared the contract avoided.

⚖ Key Legal Issues:

1. Was there a fundamental breach (Art. 25 CISG)?

2. Was the Nachfrist notice effective under Art. 47 CISG?

3. Was the buyer entitled to avoid the contract under Art. 49(1)(b)?

In the case Machinery Parts Case (Austria, Oberster Gerichtshof, 6 February 1996, CISG-online No. 135), the Austrian Supreme Court addressed key issues under the United Nations Convention on Contracts for the International Sale of Goods (CISG). Here’s an analysis of the key legal issues:

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⚖1. Was there a fundamental breach (Art. 25 CISG)?

Answer: No, not automatically.

Under Article 25 CISG, a fundamental breach occurs if it results in such detriment to the buyer as substantially to deprive them of what they are entitled to expect under the contract.

In this case:

• The machinery parts delivered were defective, but not completely useless.

• The Court held that the defect did not amount to a fundamental breach on its own, since the parts could still be used to some extent.

➡ Conclusion: There was no fundamental breach under Art. 25 at the time of delivery because the goods were not entirely unusable.

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⚖2. Was the Nachfrist notice effective under Art. 47 CISG?

Answer: Yes.

Under Article 47 CISG, the buyer may fix an additional period of time of reasonable length (Nachfrist) for the seller to perform.

In this case:

• The buyer granted a Nachfrist, requesting the seller to cure the defect within a reasonable time.

• The seller failed to remedy the non-conformity within that period.

➡ Conclusion: The Nachfrist notice was effective, satisfying the requirements of Art. 47 CISG.

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⚖3. Was the buyer entitled to avoid the contract under Art. 49(1)(b) CISG?

Answer: Yes.

Under Article 49(1)(b) CISG, a buyer may declare the contract avoided if the seller does not deliver within the additional period fixed under Article 47.

In this case:

• Since the Nachfrist was validly granted and the seller did not cure the defect within that period,

• The buyer became entitled to declare the contract avoided under Art. 49(1)(b), even though there was no fundamental breach at the outset.

➡ Conclusion: The buyer was entitled to avoid the contract under Art. 49(1)(b) due to the seller’s failure to perform within the Nachfrist.

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✅Final Summary:

Legal Issue	Court’s Conclusion
Fundamental breach (Art. 25)	❌ No fundamental breach at the time of delivery
Nachfrist notice (Art. 47)	✅ Valid and effective
Avoidance under Art. 49(1)(b)	✅ Justified after seller’s failure to cure within Nachfrist

Case: Machinery Parts Case

(Austria, Oberster Gerichtshof, 6 February 1996)

CISG-online No. 135 | Docket: 2 Ob 191/95

An Austrian buyer purchased machinery parts from a German seller. The delivered goods were defective, but not completely useless. The buyer granted a Nachfrist under Article 47 CISG. The seller did not cure the defect within the Nachfrist period. The buyer then declared the contract avoided.

⚖ Key Legal Issues:

1. Was there a fundamental breach (Art. 25 CISG)?

2. Was the Nachfrist notice effective under Art. 47 CISG?

3. Was the buyer entitled to avoid the contract under Art. 49(1)(b)?

🧑‍⚖ Ruling:

• The court ruled that although the parts were not completely unusable, the defects significantly impaired their purpose, resulting in a fundamental breach.

• The buyer had properly granted a Nachfrist, and upon its expiration without cure, avoidance under Article 49(1)(b) was valid.

Italian shoes

An Italian shoe manufacturer sells a shipment of shoes to a Swedish buyer. After the arrival of the shoes in Sweden, it appears the shoes are not in pairs, as only right foot shoes are supplied. Furthermore, sizes are different from those being ordered and many of the seams of the shoes are not properly stitched. The quality of paint and leather is also below standard.

Before buying the shipment, the Swedes have asked for samples and received those. After inspecting the samples, the Swedes have found those to be OK, and have ordered by the sample.

The Swedes are of the opinion the Italian seller is fundamentally breaching the contract of sales: the shipment is not what the Swedes have ordered and is furthermore not the quality the Swedes might expect. Last but not least the defects are irreparable according to the Swedes.

1. Suppose the CISG (the UN Convention on Contracts for the International Sale of Goods) is applicable to the contract between the Swedish company and the Italian company. Is the Italian company indeed breaching the contract according to the CISG? (10 pts)

1.

According to Article 25 CISG a breach of contract committed by one of the parties is fundamental if it results in such detriment to the other party as to substantially deprive him of what he is entitled to expect under the contract (3 pts), unless the party in breach did not foresee such a result (1 pts).

From the case text it can be taken that the shoes are not at all as could have been reasonably expected by the Swedes (2 pts) art. 35 CISG on non-conformity as to quantity and quality, and usefulness for purpose (2 pts) so indeed the Italians are fundamentally breaching the contract of sale. (2 pt.)

2.

What claims do the Swedes have against the Italians according to the CISG? (10 pts)

Require Performance art.  46 CISG (2 pts);

Avoid the contract art. 49 CISG. (2 pts);

Reduction of price 50 CISG (2 pts);

Claim Damages (art 74-77 CISG) (2 pts);

Or combine Performance or Avoidance with damage. (2 pts). If avoidance is possible, then the Swedes could also ask for specific performance (e.g., delivery of all the left foot shoes). Here not likely, as shoes delivered are already non conform and not fit for purpose.

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Case: European Commission vs Scania,

MAN, Volvo/Renault, Iveco and DAF (1/3)

The case involving Scania, MAN, Volvo/Renault, Iveco and DAF against the European Commission pertains to a significant antitrust investigation into a cartel among major truck manufacturers. The European Commission found that these companies colluded on pricing and the timing of introducing emission technologies for medium and heavy trucks in the European Economic Area (EEA) from 1997 to 2011.

What the Commission found:

The truck manufacturers:

• Colluded on pricing of medium and heavy trucks;

• Agreed on the timing for introducing emission-reducing technologies (Euro III to Euro VI standards);

• Passed on the costs of these technologies to customers in a coordinated way;

• Engaged in these practices for over 14 years (1997–2011).

In July 2016, the European Commission imposed fines totaling €2.93 billion on MAN, Volvo/Renault, Daimler, Iveco, and DAF for participating in the cartel. 

MAN was not fined as it revealed the cartel's existence and cooperated with the Commission. The other companies received reductions in their fines for cooperating under the Commission's leniency program.

Scania, however, chose not to settle and contested the allegations. As a result, the Commission continued its investigation separately and, in September 2017, fined Scania €880.5 million for its involvement in the cartel .

Scania appealed the Commission's decision to the General Court of the European Union, arguing that the Commission's procedure violated its rights, including the presumption of innocence and impartiality. Scania also contended that it did not participate in a single and continuous infringement throughout the entire period.

On February 2, 2022, the General Court dismissed Scania's appeal, upholding the Commission's decision and fine. The Court found that Scania had participated in a single and continuous infringement aimed at restricting competition in the truck manufacturing market.

Scania further appealed to the Court of Justice of the European Union (CJEU), which, on February 1, 2024, confirmed the General Court's judgment, rejecting all of Scania's arguments and maintaining the €880.5 million fine

Beer

Pilzen Pivo is a Czech beer producer, based in Pilzen, Czech Republic. Pilzen Pivo sells a large shipment of beer to Bierres de France, a French beer importer based in Lyon, France. At the –contractually- agreed time Bierres de France does not receive any beer from Pilzen Pivo. Bierres de France now sends a message to Pilzen Pivo, which contains the following message: “did not receive any beer. Please ship the beer ultimately end of November 2022; we must receive the beer on ultimately December 1st, 2022, otherwise we will take legal action”. Bierres de France still does not receive anything at all on and after December 1st, 2022. Can Bierres de France avoid the contract?

Suppose the CISG is applicable to the contract of sales between these two parties. Is Pilzen Pivo fundamentally breaching the contract according to the CISG? Substantiate the answer with reference to the CISG!

Yes, Bierres de France can avoid the contract with Pilzen Pivo.

 

Avoidance is justified after a Nachfrist has expired without performance, (Art. 49(1)(a)) which was clearly established in this case.

Portuguese shorts

A Portuguese producer of apperal, based in Porto, enters into a contract of sale of with a Dutch seller in Amsterdam. The sales contract entails the sale of two pallets of in total 1,400 shorts, condition EXW Porto INCOTERMS 2020. The pallets has to be picked up on May 20 2024 at 1 PM, but the buyer is late and comes the next day. During the night there is a fire in the factory and the pallets of shorts were destroyed.

Who has to pay for the 1,400 shorts that were destroyed in the fire?

The condition specified in the contract is EXW Porto (Ex Works Porto) under INCOTERMS 2020. This means that:

• "EXW Porto" designates the seller's location (Porto, Portugal) as the place where the goods are made available for pickup.

• Under EXW, the seller’s obligation is fulfilled once the goods are made available at their premises (e.g., factory, warehouse) on the agreed date and time.

• The buyer bears all risks and costs from that point forward, including loading the goods onto a vehicle and all subsequent transport, insurance, customs clearance, etc.

In this scenario

• The pickup time was May 20, 2024 at 1 PM.

• The buyer arrived a day late.

• A fire destroyed the goods during the night after the agreed pickup time.

Legal and logistical implication:

• Because the goods were made available at the agreed time and place, and the buyer failed to collect them on time, the risk passed to the buyer as per EXW terms. Therefore:

• The loss of the goods (shorts destroyed in the fire) is the buyer’s responsibility, not the seller’s.

Case: Damaged Machinery Shipment –

CIF Incoterms 2020 (1/3)

A German machinery manufacturer, the seller, arranged shipment of the machinery of a value of $ 500,000 via a third-party carrier and took out marine cargo insurance as required under CIF terms. During the voyage, the container holding the machinery was subjected to rough sea conditions. When the cargo arrived in Santos, a Brazilian construction firm, the buyer,  discovered significant water damage had rendered the machinery inoperable.

The buyer filed a claim with the insurer but was surprised to find that the insurance coverage was insufficient—it covered only minimum clauses, which did not include damage from sea water ingress due to rough weather unless the ship sank or was stranded. The buyer demanded compensation from the seller, believing that the seller was responsible for the damage.

The seller argued that:

• They had fulfilled their obligations: delivered the goods, paid freight to Santos, and obtained insurance with minimum cover.

• The damage occurred after risk transfer, and the buyer had not requested higher insurance coverage.

• The buyer lost the case, as the CIF contract did not specify more comprehensive insurance coverage. The buyer bore the loss despite the goods never reaching them in usable condition.

Lessons Learned

• Buyers under CIF should negotiate broader insurance if the goods are high value or sensitive.

• Clear contractual clauses regarding insurance scope can prevent disputes.

• CIF doesn't mean the seller is responsible until delivery at destination—risk transfers at loading.

• Risk transfers from seller to buyer when the goods are loaded on board the vessel at the port of shipment (Hamburg).

• Seller is obligated to provide insurance only to minimum cover, unless otherwise agreed.

Case: Delayed Delivery Due to Import

Licensing Issues – DDP Incoterms 2020 (1/3)

A  Canadian electronics company sold high-end networking equipment valued at $300,000 to an Indian IT distributor (Air freight from Toronto to New Delhi, contract Terms: DDP New Delhi, India, INCOTERMS 2020).

Upon arrival in India, the shipment was held at customs because the goods required a special import license for high-frequency equipment due to Indian telecom regulations. The seller had not obtained this license, assuming it was the buyer’s responsibility as the party familiar with local import regulations.

As a result, the shipment was stuck at customs for three weeks, incurring demurrage charges and causing the buyer to miss a key government tender. The buyer claimed damages and refused to pay for the equipment until the issue was resolved.

The seller had to:

• Hire a local customs broker to secure the import license (which took time and money).

• Pay demurrage and storage costs.

• Offer the buyer a significant discount to avoid litigation.

• This caused reputational damage and wiped out most of the seller’s profit on the transaction.

Lessons Learned

• Under DDP, sellers must understand destination country import requirements, including licenses and restrictions.

• If the seller lacks the ability to manage customs clearance in the buyer’s country, DDP is a risky and possibly unsuitable Incoterm.

• It's critical to consult with local experts or brokers when delivering DDP in jurisdictions with complex regulations

The seller bears all costs and risks until goods are delivered to the agreed destination.

The seller is responsible for import customs clearance, including duties, taxes, and any necessary licenses or permits.

Specialized automotive parts (1/2)

A German manufacturer of specialized automotive parts sells to a Canadian car company. The sales contract is under FCA Stuttgart Plant, Germany, INCOTERMS 2020. During the transport, by ship, the container with the specialized automotive parts falls overboard and sinks to the bottom of the ocean.

The carrier is obviously liable, but who will hold the carrier responsible? The German manufacturer or the Canadian car company?

Responsibility:

Seller (Germany):

• Packs goods, clears them for export.

• Delivers goods to a carrier nominated by the buyer at the seller's facility.

Buyer (Canada):

Arranges and pays for main carriage, insurance, and import clearance.

Great follow-up — the phrasing “Who will hold the carrier liable?” simply means:

Who has the right and legal standing to bring a claim or sue the carrier for the damage/loss?

So it’s not asking who is liable, but rather:

• Who has the contractual relationship with the carrier?

• Who is entitled to file a claim (e.g., insurance, compensation, lawsuit) because the carrier was negligent or at fault?

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🚢 In Your Case: FCA Stuttgart Plant

• The buyer (Canadian company) arranges the transport (under FCA terms, the buyer typically contracts the carrier).

• Therefore:

  • The buyer bears the risk after handover at the plant.

  • The buyer has the contractual relationship with the carrier.

  • So the buyer (Canadian company) is the one who can hold the carrier liable (file a claim or sue).

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✅ So when the question asks:

“Who will hold the carrier liable?”

The clear answer is:

👉 The Canadian car company (the buyer) — because it arranged the shipping and bore the risk once the goods left the seller’s plant.

Let me know if you’d like a sample diagram of risk transfer or how INCOTERMS impact carrier liability!

A Game consoles (1/2)

Chinese electronics manufacturer ships to a Brazilian distributor. The contract is under CIF Port of Santos, Brazil, INCOTERMS 2020. During the transport, by ship, the container with the game consoles falls overboard and sinks to the bottom of the ocean.

The carrier is obviously liable, but who will hold the carrier responsible? The Chines manufacturer or the Brazilian distributor?

Responsibility:

Seller (China):

• Arranges and pays for carriage to Santos and marine insurance.

• Risk transfers to the buyer once goods are loaded on the vessel in China.

Buyer (Brazil):

• Bears the risk during sea transit (despite not arranging the transport).

• Handles import clearance and delivery from the port.

Industrial generators (1/2)

A U.S. company sells industrial generators to a French distributor. The contract is under DDP Lyon, France, INCOTERMS 2020. At the French customs there is a delay because the documentation is incomplete, As a result, the French distributor temporarily has to rent a few industrial generators.

Can the French distributor hold the U.S. company responsible for the costs?

Responsibility:

Seller (USA):

Handles everything: export clearance, main carriage, import duties, and delivery to the buyer’s location in France.

Buyer (France):

Only receives the goods at the agreed destination.

Greek tobacco (1/8)

Greek Tobacco Industries, based in Thessaloniki, Greece enters into a contract of sale with Reemtsma AG, a German company based in Hamburg Germany. The sales contract entails the sale of 60 pallets, each pallet loaded with a package of 1300 kgs of Tobacco leafs, condition FCA Warehouse Greek Tobacco, Thessaloniki, Greece. Reemtsma enters into a contract of carriage with the Dutch company SpeedTrans B.V., based in Rotterdam-NL. Speedtrans will use 3 trucks to transport the 60 pallets to Hamburg, so each truck will take 20 pallets on board.

Unfortunately, at the start of the loading in Thessaloniki, the first batch of 20 pallets, designated to be loaded in the first truck, catches fire before being loaded and therefore is totally useless and unfit to be transported and used. Truck nr 1 returns to NL without having been used at all.

1. Is Reemtsma AG entitled to replacement tobacco from Greek Tobacco for the first fire destroyed batch?

1. Is Reemtsma AG entitled to replacement tobacco from Greek Tobacco for the first fire destroyed batch?

• According to the INCOTERM FCA, risk passes from seller to buyer after loading of the first vehicle.

• The fire breaks out before the truck is loaded so risk has not yet passed from the seller to the buyer.

• The consequence of all this is that Greek Tobacco has not made any delivery to Reemtsma, so Reemtsma is at least entitled to receive replacement tobacco.

Greek tobacco

The second batch of 20 pallets is being loaded in truck nr 2. En route, near Belgrade, Serbia the entire shipment is stolen during a rest stop of the driver in public parking space along the motorway. The driver has decided to spend an afternoon in town, Belgrade that is and leaves the trailer on the parking place.

2. Is Reemtsma AG entitled to replacement tobacco from Greek Tobacco for the second stolen batch?

2. Is Reemtsma AG entitled to replacement tobacco from Greek Tobacco for the second stolen batch?

• First of all, the case deals with international truck (road) transport within Europe, so CMR applies.

• According to article 17.1 CMR the carrier is generally liable in case of damages to the goods during transport.

• SpeedTrans (hired by Reemtsma)  can be held liable.

Greek tobacco

The third truck catches fire on the German highway because of a blocking of the break system of the trailer which runs extraordinarily hot then. The trailer has just been overhauled 6 weeks before.

3. Is Reemtsma AG entitled to replacement tobacco from Greek Tobacco for the third fire destroyed batch?

4. Suppose Speedtrans is liable for the loss of the third shipment in the third, which is the maximum amount on money that could be claimed by Reemtsma?

3. Under art. 17-2 CMR (1 pts) the carrier cannot be relieved from liability for damages as a result of vehicle defects (3 pts),

• so yes SpeedTrans is liable according to CMR. (3 pts).

4.

According to article 23 CMR the maximum claim is 25 Goldfrancs or 8.33 SDR per kg cargo, depending which law, Greek or German is applicable and whether Greece or Germany have signed and ratified the 1978-protocol to CMR (both Germany and Greece signed and ratified that Protocol).

German steel carrier

Bachmann GmbH is a German road carrier, hired by British Steel to transport 8.000 kgs of steel (worth € 180.000) from Sheffield, UK to Poznan in Poland. According to the sales contract the goods need to be delivered in Poznan, Poland. As agreed, the truck is loaded by British Steel employees, who do not properly fix the steel to the truck. The driver does not notice this mistake.  En route, somewhere in Germany, in bad weather the cargo starts to slide on the motorway, the trailer bends over and loses its cargo. The steel is totally distorted, and damaged beyond repair.

 

1. Is Bachmann GmbH liable for the loss of the steel? (10 pts.)

2. Would it be relevant for the position of the buyer the INCOTERM CPT had been agreed upon in this case and the carrier would have loaded the steel? (10 pts.)

1. In the case it is a given fact (see case text) British Steel employees made a loading error, leading to fatal consequences. (2 pts.)

Because the case deals with international transport by road between EU places, the CMR applies. (2 pts)

According to art. 17.1 the carrier has to make sure the goods arrive undamaged and in time. He is generally liable in case of damages to the goods during transport (2 pts.)

However, under art. 17.4 CMR the carrier is relieved from liability for damages during transport if the faulty loading by the sender is the cause of the mishap/damage. (2 pts).

So, no, in this case Bachmann is not liable according to CMR. (2 pts)

2. Under the INCOTERM CPT (carriage paid to Poznan) (2 pts), British Steel would have delivered the goods to the agreed location for loading into the custody of the carrier. (2 pts) The carrier would then have taken care of the loading and stowing (2 pts) and indeed would have been liable for the damage (2 pts). The damages would then have have been limited to 8.33 SDR per kg. (x 8.000). Limitation of liability art. 23 under 3 CMR. (2 pts)