EU freedom of provision of services/freedom of establishment

I. Step 1: Defining the Scope and Nature of the Economic Activity 

• Is it a "Service"? Under Article 57 TFEU, services are economic activities normally provided for remuneration, including industrial, commercial, craftsmen, and professional activities. 

• Cross-Border Element: EU law does not apply to "wholly internal" situations (Deliège); there must be an impediment to cross-border mobility. 

• Official Authority Exception: Article 51 TFEU excludes activities connected with the exercise of official authority (e.g., police or certain judicial functions). 

II. Step 2: Distinguishing Between Establishment (Art 49) and Services (Art 56) 

You must categorise the activity based on the criteria in Gebhard: 

• Freedom of Establishment (Art 49): Performing an economic activity from a fixed base for an indefinite period. 

• Freedom to Provide Services (Art 56): Pursuing an activity on a temporary basis. 

• The Gebhard Nuance: A service provider may maintain infrastructure (like an office or chambers) in the host State if it is necessary for the performance of that temporary service. 

III. Step 3: Identifying the Applicable Law (Secondary Law vs. Treaty) 

• Services Directive 2006/123: Applies broadly to general services and establishment, though it excludes sectors like financial services or healthcare. 

• Professional Qualifications (Dir 2005/36): Use this for issues involving the recognition of diplomas or professional titles. 

• The Treaties (Arts 49 & 56): If no secondary law applies, fall back on the Treaty provisions, which are directly effective. 

• Horizontal Direct Effect: Note that the CJEU recognizes a limited hde for the freedoms, meaning they can be invoked against private bodies like trade unions (Viking, Laval). 

Directive 2006/123 (the Services Directive)

• Excluded Sectors: It does not cover financial services, electronic communications, transport, or healthcare. 

• Excluded Service Types: Non-economic services of general interest, social services, and private security are also outside its scope. 

• Interaction: The Directive does not affect MS' rules on criminal law or fundamental rights

• Authorization Schemes: MSs can only make access to a service activity subject to an authorization scheme if it is non-discriminatory, justified by an overriding reason relating to the public interest, and the objective cannot be attained by a less restrictive measure. 

• Prohibited Requirements: Article 14 lists requirements that are strictly prohibited, such as discriminatory nationality requirements or "economic test" requirements (e.g., proving a market need for the service). 

• Narrow Justifications (Art. 16(3)): Crucially for exam analysis, the Directive limits the grounds MSs can use to justify restrictions on temporary services to five specific categories: public policy, public security, public health, environmental protection, and rules on employment conditions. This list is notably shorter than the open-ended "mandatory requirements" recognized by the Court under the Treaty. 

IV. Step 4: Identifying the Restriction 

• The Broad Test: A restriction is any national measure liable to "hinder or make less attractive" the exercise of the freedom (Gebhard, Säger). 

• Types of Restrictions:  

  • Directly Discriminatory: Measures based on nationality or residency requirements (Van Binsbergen). 

  • Indistinctly Applicable: Rules that apply to everyone but impose a greater burden on foreigners (e.g., requiring a specific local qualification). 

  • Market Access: Measures that prevent access to the market or deprive operators of rapid marketing techniques (Alpine Investments on cold-calling). 

  • a restriction on a marketing technique for a service is always a restriction under Article 56 that must be justified

V. Step 5: Justifying the Restriction 

• Justification for Distinctly Applicable Measures: Only the narrow Treaty grounds in Article 52 TFEU (public policy, public security, or public health). 

• Justification for Indistinctly Applicable Measures: Art 52 grounds PLUS the open list of "imperative requirements" (or "mandatory requirements") in the general interest. Examples include:  

  • Maintaining the reputation of the financial sector (Alpine Investments). 

  • Upholding professional rules and ethics (Van Binsbergen, Säger). 

  • Protecting consumer interests (Säger). 

VI. Step 6: The Proportionality Assessment (The Gebhard Test) 

1. It must be applied in a non-discriminatory manner. 

2. It must be justified by imperative requirements in the general interest. 

3. It must be suitable for attaining the objective pursued (appropriateness). 

4. It must not go beyond what is necessary to attain that objective (necessity). 

VII. Step 7: Fundamental Rights Check 

• Carpenter: A deportation order against a spouse can be found disproportionate if it interferes with the right to family life, hindering the provider's economic freedom. 

• Omega: Respect for human dignity can act as a valid justification for banning certain commercial activities (e.g., simulated killing games). 

• Viking/Laval: Fundamental rights like the right to strike must be reconciled with economic freedoms through a proportionality assessment.