Advertising (Tobacco Products)
1. Subject matter, terminology
European rules on tobacco advertising are but one aspect of international tobacco control policies. As a result of the unprecedented litigation in US courts which aimed at the tobacco industry, previously confidential information totalling over 40 million pages of text has been disclosed to the public. At this point, the serious health consequences of tobacco are undisputed. Furthermore, empirical research has established a statistically significant link between the advertising and consumption of tobacco products, especially cigarettes. It is against this background that Union law regulates all aspects of the tobacco trade.
The term ‘tobacco products’ encompasses all consumption goods made of tobacco that are intended to be smoked, sniffed, sucked or chewed (see Art 2(a) Tobacco Advertising Directive (Dir 2003/33)). Cigarettes are tobacco companies’ primary drivers of revenue. Sniffing, sucking and chewing tobacco sorts are less important economically. Tobacco advertising means any form of commercial communication with the aim or effect of promoting a tobacco product (see Art 2(b) Tobacco Advertising Directive). Sales promotion pursued or entailed by public or private contribution to an event, an activity or an individual constitutes sponsorship (see Art 2(c) Tobacco Advertising Directive).
European rules on tobacco advertising determine the legality of tobacco sales promotion and the forms that such marketing activity may take, where it is permissible. This framework, like the rules on the advertising of human medicines (advertising (human medicines)), includes labelling requirements. One may distinguish between warnings in advertising on the one hand, and labels attached to unit packaging on the other. The latter provisions are not, strictly speaking, part of advertising law. They do, however, raise similar questions, and are thus considered here.
Concerns over tobacco advertising impact all layers of the legal system. Whereas national law contains norms binding on private persons, international and Union law in the field of tobacco advertising applies only to Member States. Union legislation in this area is conditional on the impact it may have on the functioning of the European internal market. This stands in contrast to Member States’ residual and unconditional competence and has sparked a controversy over the proper delineation of the Union law’s ambit. On a higher level of abstraction, European tobacco legislation exemplifies general problems of law-making in a multi-level system (legislative competence of the EU). With ongoing European integration, conflicts of competence will continue to arise in other areas of the law. Hence the urgent need for reform (European Constitution).
2. Union rules on tobacco advertising
Article 4(1) Tobacco Advertising Directive bans all forms of radio advertising for tobacco products. Radio programmes may not be sponsored by tobacco companies (Art 4(2)). The sponsorship of cross-border events or activities as well as the free distribution of tobacco products in the context of such sponsorship are forbidden by Art 5. This comprehensive ban on sponsorship may lead to substantial revenue shortfalls, in automobile racing, for instance. Finally, Art 3(1) prohibits advertising in all but those printed media which are either targeted at tobacco trade professionals or primarily in circulation outside the Union market. Article 3(2) extends this same prohibition to information society services such as the World Wide Web. In sum, the Tobacco Advertising Directive entails a ban of tobacco sales promotion in print media, on the internet, on the radio and by way of sponsorship in all Member States. Television advertising had already been banned earlier by Art 13 of the TV without Frontiers Directive (Dir 89/552). The phenomenon of media convergence led to a broader terminology (see Art 3e(d) TV without Frontiers Directive as amended by Dir 2007/65, prohibiting all forms of audiovisual advertising of tobacco). Furthermore, there is to be no tobacco sponsorship or placement of tobacco products in audiovisual media (Art 3f(2) and Art 3g(3) TV without Frontiers Directive as amended by Dir 2007/65). The few remaining forms of tobacco advertising, such as billboards or intra-state sponsorship, are subject to national law only, (see recital 12 Tobacco Advertising Directive). For the United Kingdom see the Tobacco Advertising and Promotion Act 2002; for France see Arts L3511-1 to L3512-4 Code la santé publique; for the Netherlands see Arts 4 to 6 Tabakswet (Stb. 1988, 342); for Germany see ss 21a to 22a Vorläufiges Tabakgesetz. Notwithstanding a generally restrictive tendency, the national laws differ in details. Notably, German law bans only sponsorship with cross-border effects whereas UK and French law ban all forms of sponsorship.
Labelling requirements for unit packaging are prescribed by the Tobacco Products Directive (Dir 2001/37). In addition to maximum yields for tar, nicotine and carbon monoxide as well as applicable measurement methods, the directive establishes detailed labelling requirements. Pursuant to Art 5(1), one slim side of a cigarette packet must bear the tar, nicotine and carbon monoxide yields. Warning labels must be placed on both broad sides of a cigarette packet as well as any additional packaging used in cigarette retailing (Art 5(2)). One broad side has to carry a general health warning (Art 5(2)(a)); the other broad side has to carry an additional, more specific, warning taken from Annex I of the directive (Art 5(2)(b)). The various warnings are to be rotated in such a way as to guarantee their regular appearance. The wordings span from ‘Smoking seriously harms you and others around you’ to ‘Smokers die younger’. Member States may require additional warnings in the form of colour photographs and other illustrations (Art 5(3)). Member States also have discretion to stipulate that warnings on unit packaging are to be accompanied by a reference to the issuing authority (Art 5(8)). Pursuant to Art 7, nothing on the packaging of a tobacco product may suggest that the product is less harmful than others. This provision is aimed at brands containing terms such as ‘mild’, ‘light’ or ‘ultra-light’.
3. Cross-sectional issue: litigation over EC tobacco directives
The European Court of Justice (ECJ) has had to deal with three EC directives regulating the tobacco trade. Its judgments reflect a broader discussion over the European Union’s federal structure in general and the principle of conferred powers in particular (legislative competence of the EU). In addition to the vertical distribution of powers between the Union and its Member States, the discussion touches on the horizontal balance of powers between the Union institutions.
In its first tobacco judgment (ECJ Case C-376/98 – Germany v Parliament and Council  ECR I-8419), the ECJ annulled the 1998 Tobacco Advertising Directive (Dir 1998/43). In promulgating this directive, the Union legislature referred to Art 100a EC (old version) (now Art 114 TFEU/95 EC). Article 114 TFEU/95 EC embodies a functional competence to harmonize the laws of the Member States. Measures adopted on the basis of this provision must aim at ‘the achievement of the objectives set out in Article 114’ (Art 114(1)1 TFEU/95(1)1 EC); they must ‘have as their object the establishment and functioning of the internal market’ (Art 114(1)2 TFEU/95(1)2 EC). As a consequence of this functional model of legislative power, no sector is a priori exempted from Union legislation, ‘save where otherwise provided’ in the treaties (Art 114(1)1 TFEU/95(1)1 EC). In the field of human health protection, however, Art 168(5) TFEU/152(4)(c) EC establishes a special regime, ‘excluding any harmonization of the laws and regulations of the Member States’. In its judgment on the 1998 Tobacco Advertising Directive, the ECJ clarified the relationship between this ban on harmonization in the field of human health protection and the Union’s broad legislative power over the internal market. The Court stressed the need for a literal reading of Art 152(4)(c) EC; other treaty provisions would not justify its circumvention.
This basic premise, however, should not be interpreted as implying a categorical ban on any harmonizing legislation with ancillary effects on matters of health protection. If and where they conform to the requirements set out by Art 95 EC, Union measures would not violate the prohibition against circumventing Art 168(5) TFEU/152 (4)(c) EC merely because they have an additional effect on health protection policies. To reinforce this line of reasoning, the Court points to Art 114(3) TFEU/95(3) EC, which mandates, inter alia, that the Union seek to achieve ‘a high level of protection’ concerning health. One might object, systematically, that this provision concerns the modus operandi of Union legislation, but does not constitute a distinct legislative power. Literal interpretation allows for the same conclusion: a high level of intra-Union health protection is to be achieved by the Commission and Parliament acting ‘within their respective powers’ (Art 114(3)2 TFEU/95(3)2 EC). Expounding further, the ECJ refined the broad wording of Art 114(1) TFEU/95(1) EC by adding a set of unwritten requirements. First, where the Union legislature aims to harmonize national laws, its subjective motivation must be to promote the internal market (European internal market). Secondly, in order to ensure justiciability, a measure adopted on the basis of Art 114(1) TFEU/95(1) EC must have the objective effect of promoting the internal market. According to the Court, the measure in question must remedy ‘impediments to the free movement of goods and the cross-border provision of services or appreciable distortions of competition’. This presupposes that an investigation into the sector targeted by the Union measure in question reveals the actual presence of impediments to trade or distortions of competition.
The judicial handling of these unwritten requirements has a direct effect on the horizontal balance of powers between the Union institutions as well as the vertical distribution of powers between the Union and Member States. The stricter the review the ECJ conducts as to the existence of trade impediments or distortions of competition, the less weight it attaches to the assessments advanced by the Commission and Parliament. Conversely, the Court grants more authority where it engages in a more flexible review. On the vertical axis, such judicial self-restraint in the assessment of legislative powers tends to weaken the position of the Member State legislatures. In its judgment concerning the 1998 Tobacco Advertising Directive, the ECJ adopted a strict posture. Referring essentially to excessively broad prohibitions in the directive, the Court held that the unwritten conditions for legislation based on Art 114(1) TFEU/95(1) EC had not been fulfilled, see ECJ Case C-376/98 – Germany v Parliament and Council  ECR I-8419 para 99.
In its preliminary ruling on the Tobacco Products Directive (Dir 2001/37), the ECJ upheld its interpretation of Art 114(1) TFEU/95(1) EC as developed in the above-discussed case. The Court reasserted that obstacles to free trade, on the one hand, and distortions of competition on the other may justify a harmonizing Union measure that remedies either of these impediments to the internal market, see ECJ Case C-491/01 – BAT  ECR I-11453 para 60.
Like its 1998 predecessor, the Second Tobacco Advertising Directive (Dir 2003/33) was promulgated on the basis of Art 114(1) TFEU/95 (1) EC. Subsequently, the German government filed an action for annulment of its Art 3 (ban on print and online advertising) and Art 4 (ban on radio advertising and sponsorship). Again, the dispute centred on the correct interpretation of Art 114(1) TFEU/95(1) EC and its unwritten conditions. Pointing to modifications in the 2003 Tobacco Advertising Directive, the ECJ held that these conditions had been complied with. In doing so, the Court accords much significance to Art 8 of the directive, which guarantees the free movement of products or services complying with the directive’s other provisions. The Court had already hinted at this drafting technique in its decision on the 1998 Tobacco Advertising Directive, see ECJ Case C-376/98 – Germany v Parliament and Council  ECR I-8419 paras 101, 104.
The effect of Art 8 is rather limited. It ensures the free movement of print and online publications intended exclusively for professionals in the tobacco trade. In the interpretation of the Court, however, this provision evidences that the European legislature pursued the cure of impediments to the free movement of goods and the cross-border provision of services as the central goals rather than the protection of human health. Hence, the Union legislature did not violate the ban on harmonization in the field of human health protection as laid down in Art 168(5) TFEU/152(4)(c) EC. Finally, as the directive remedies trade impediments, the Court held that it was not necessary to also prove distortions of competition in order to justify recourse to Art 114 TFEU/95 EC, see ECJ Case C-380/03 – Germany v Parliament and Council  ECR I-11573 para 67.
Throughout the decision, the Court emphasizes the discretion of the Union legislature when acting on the basis of Art 114 TFEU/95 EC, ECJ Case C-380/03 – Germany v Parliament and Council  ECR I-11573, paras 42, 145. This judicial self-restraint has been widely criticized. It shall be recalled here that the extent to which the ECJ reviews the conditions for Union legislation does not only affect the horizontal balance between Union institutions. It also affects the vertical distribution of powers between the Union and the Member States. The latter aspect is all the more important with regard to Union acts based on Art 114 TFEU/95 EC, as these can be subject to majority vote within the Council. Critics of the ECJ’s decision on the second Tobacco Advertising Directive fear that a limited judicial review of Union legislation could shift competences from the Member States to the Union and erode the principle of conferred powers as expressed in Art 5 EU/5 EC. Another point of criticism is the way in which the Court handles the unwritten requirement that measures based on Art 114 TFEU/95 EC must remedy an impediment to the functioning of the internal market. Whereas the ECJ effectively upholds a ban on tobacco product advertising as contributing to the internal market, the Court, in all other areas, has rejected advertising bans for legally traded products as inadmissible barriers to the internal market, see most recently, ECJ Case C-143/06 – Ludwigs-Apotheke  ECR I-9623.
The ban on harmonization of laws in the field of human health protection formerly contained in Art 152(4)(c) EC is explicitly extended by Art 168(5) TFEU to ‘measures which have as their direct objective the protection of public health regarding tobacco’. Regarding the qualifying adjective ‘direct’, this provision in the TFEU can be interpreted as a codification of the ECJ’s jurisprudence on the tobacco directives. Article 168(5) TFEU unambiguously prohibits measures unrelated to the internal market, such as a directive establishing an EU-wide ban on smoking in restaurants and pubs. Hence, the redrafting of Art 152(4) EC via the TFEU is testimony to the importance of the ECJ’s jurisprudence at the intersection of tobacco policy and legislative powers.
4. The WHO Framework Convention
27 February 2005 marks the entry into force of the World Health Organization Framework Convention on Tobacco Control (WHO FCTC) adopted on 21 May 2003. Based on Arts 114, 207, 218 TFEU/95, 133, 152 EC, the European Union is a party to the Convention, see the Council Decision of 2 June 2004 (2004/513). The Convention contains, inter alia, provisions on the packaging and labelling of tobacco products (Art 11), and on tobacco advertising, promotion and sponsorship (Art 13). As most parties negotiating the Convention were less constrained by considerations of legislative power than the EC, the Convention states its ultimate aim more openly than secondary European law in the field: Art 7 regroups the above-mentioned provisions under the heading ‘non-price measures to reduce the demand for tobacco’. The definition of tobacco advertising in Art 1(c) resembles the definition contained in Art 2(b) of the second Tobacco Advertising Directive (Dir 2003/33). The same is true of the definition of tobacco sponsorship in Art 1(g) in the Convention and Art 2(c) in the directive. Article 11 of the Convention is congruent with the Tobacco Products Directive (Dir 2001/37) in that it establishes labelling requirements and prohibits the use of misleading terms such as ‘light’ and ‘mild’. Article 13(2) calls for a comprehensive ban of all tobacco advertising, promotion and sponsorship. Parties are exempt from this obligation where they are not in a position to undertake a comprehensive ban due to their constitution or constitutional principles (Art 13(3)). Nonetheless, Art 13(4) mandates the implementation of certain minimum standards in the field of tobacco advertising. The parties are to report their legislation to the World Health Organization so as to enable international comparisons.
The FCTC proves that the need to regulate tobacco advertising is recognized on the global level. With both the European Union itself and the Member States being parties to the Convention, it is of particular importance in the EU. The controversy over an appropriate distribution of powers is likely to carry over into other fields of tobacco policy. Article 8 of the Convention shall be pointed out here. It mandates effective measures for the protection from exposure to tobacco smoke. Notwithstanding the Convention’s constitutional provisos, it does increase the pressure to act on all parties, including the EU. Concerning the allocation of responsibilities between the Union and the Member States, Union organs have thus far made few observations. Council Decision 2004/513, recital 4 calls for Union and Member States ‘to carry out together the obligations laid down in the Convention and exercise together the rights it confers in cases of shared competence in order to guarantee uniform application of the Convention’. This declaration leaves open the details of a shared tobacco policy in the EU. Until the entry into force of the TFEU or another reform treaty which establishes legal certainty, the controversy over Union powers in the field of tobacco politics will continue to carry some significance.
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