Free Movement of Goods

From Max-EuP 2012

by Oliver Remien

1. Meaning, addressees and structure

The free movement of goods in Art 28 ff TFEU/23 EC comprises, besides the Customs Union in Art 30 ff TFEU/25 EC, the prohibition on quantitative restrictions on imports and exports and on measures of equivalent effect according to Art 34 and 35 TFEU/28 and 29 EC. The latter was fundamental for the development of the fundamental freedoms in general, in which the free movement of goods was the initial driving force. The free movement of goods is considered the most significant fundamental freedom in practice; however, in the meantime, it has been consolidated and in the development of case law it has yielded to the other fundamental freedoms. It is directed to the Member States and also the Union, and scarcely to private individuals. Though the European Court of Justice (ECJ) had held earlier that, ‘it is impossible in any circumstances for agreements between individuals to derogate from the mandatory provisions of the treaty on the free movement of goods’ (ECJ Case 58/80 – Dansk Supermarket [1981] ECR I-181; ECJ Case 78/80 – Deutsche Grammophon [1971] ECR I-487), the free movement of goods only refers to governmental measures and not to actions of undertakings (ECJ Case 311/85 – VVR [1987] I-3801; ECJ Case 65/86 – Bayer [1988] ECR I-5249). Otherwise private autonomy would be curtailed too severely. However, when the conduct of private parties has been actively induced by the government and is to be attributed to the state, it can be deemed an action of the state (ECJ Case 249/81 – “Buy Irish” [1982] ECR I-4005). According to the ECJ, the free movement of goods in conjunction with the principle of Union loyalty in Art 4(3) TEU/10 EC creates obligations to prevent individuals from restricting the fundamental freedoms (ECJ Case C-265/95 – Commission v France [1997] ECR I-6959; ECJ Case C-112/00 – Schmidberger [2003] ECR I-5659). Secondary Union legislation can be measured against the free movement of goods.

Goods are movable, physical products which can be valued in money and which are capable as such of forming the subject of a commercial transaction (ECJ Case 7/68 – Commission v Italy—articles possessing artistic or historic value [1968] ECR I-634, para 642). Electricity (ECJ Case C-393/92 – Almelo [1994] ECR I-1477); carrier materials, such as CDs, DVDs and video cassettes (ECJ Joined Cases 60/84 and 61/84 – Cinéthèque [1985] ECR I-2605) or waste (ECJ Case C-2/90 – Commission v Belgium [1987] ECR I-4431) also are ‘goods’. Services, such as travel (ECJ Case 311/85 – Vlaamse Reisebureaus [1987] ECR I-3801) and ‘know-how’ or capital assets, such as stocks, loans and currency, are subject to the free movement of services or the free movement of capital. To determine whether an action falls within the free movement of goods or services, regard is to be had to the focus of the activity, despite the subsidiarity clause of Art 57(1) TFEU/50(1) EC. Restrictions on the acquisition of a piece of land can infringe the freedom of establishment, but above all the free movement of capital. In accordance with Art 28(2) TFEU/23(2) EC, goods are covered which either originate from the Member States or circulate freely between the Member States (ECJ Case 7/68 – Commission v Italy—articles possessing artistic or historic value [1968] ECR I-634; ECJ Case C-2/90 – Commission v Belgium [1987] ECR I-4431). Partial allowance for special provisions is given in Art 436 TFEU/296 EC for military goods and in Art 38 ff TFEU/32 ff EC for agricultural goods. Cases that involve purely internal situations are not covered, even though the ECJ is very lenient in this area. The nationality of parties is probably irrelevant.

Besides quantitative restrictions—whole or partial prohibition on imports, exports or transit (ECJ Case 2/73 – Geddo v Ente Nazionale Risi [1973] ECR I-865)—the so-called ‘measures having equivalent effect’ also fall within the scope of the free movement of goods. These are not only formally discriminatory provisions, such as import licences, border controls, obligatory registration etc. In fact the ECJ has developed the far-reaching and widely-known Dassonville formula—‘all trading rules enacted by Member States which are capable of hindering, directly or indirectly, actually or potentially, intra community trade’ (ECJ Case 8/74 – Dassonville [1974] ECR I-837, para 12)—which has also been influential for the other fundamental freedoms. The fundamental freedoms thus have become general prohibitions on restrictions. It is not necessary for the restriction to have already begun or to be of an appreciable effect on intra-Union trade, nor that the measure pursues aims of trade policy. Regulations on labelling, packaging and descriptions (beer purity law) and many other provisions are thus covered, and in the ‘Sunday trading cases’ even the British Sunday trading bans were targeted by invoking the free movement of goods.

The ECJ tried to limit the vast extent of potential challenges based on the prohibition on restrictions in Keck. In this judgment on the prohibition of resale below purchase price (resale at loss), the ECJ held that ‘contrary to what has previously been decided, the application to products from other Member States of national provisions restricting or prohibiting certain selling arrangements is not such as to hinder … trade between Member States …, so long as those provisions apply to all relevant traders operating within the national territory and so long as they affect in the same manner, in law and in fact, the marketing of domestic products and of those from other Member States’ (ECJ Joined Cases C-267 and 268/91 – Keck [1993] ECR I-6097, para 16). This is of importance for the scope of review under the fundamental freedoms.

The boundary between product-related measures and sales-related ‘selling arrangements’ is difficult to draw. Provisions regarding description, form, size, weight, composition, presentation, labelling and packaging of products clearly are product arrangements. Restrictions on advertising outside pharmacies (ECJ Case C-292/92 – Hünermund [1993] ECR I-6097) and a prohibition of marketing of processed milk for infants other than by pharmacies have been seen as selling arrangements (ECJ Case C-391/92 – Commission v Greece [1995] ECR I-1621), whereas a prohibition of television advertising broadcast directed at children for a magazine about dinosaurs (ECJ Joined cases C-34/95–36/95 De Agostini [1997] ECR I-3843) was not. If a prohibition of offering consumers free gifts linked to the sale of goods or the supply of services leads to the prohibition of the sale of periodicals with a prize puzzle competition, this surpasses being a mere selling arrangement (ECJ Case C-368/95 – Familiapress [1997] ECR I-3689). Selling arrangements of a discriminatory character, even according to Keck, clearly fall within the scope of application of the prohibition of restrictions. A national prohibition on the mail-order sale of authorized medicinal products would affect domestic and foreign medicines in different ways and in a cross-border case would therefore touch upon Art 34 TFEU/28 EC (ECJ Case C-322/01 – Deutscher Apothekenverband v 0800 Doc Morris [2003] ECR I-144887); the same has been held in the matter of national rules relating to the selling of contact lenses (ECJ Case C-108/09 – ker-Optika, nyr).

An interference with the free movement of goods may be justified according to Art 36 TFEU/30 EC and in cases of non-discriminatory measures also according to the Cassis de Dijon formula. According to the latter, ‘obstacles to movement within the Community resulting from disparities between the national law… must be accepted in so far as those provisions may be recognised as being necessary in order to satisfy mandatory requirements relating in particular to the effectiveness of fiscal supervision, the protection of public health, the fairness of commercial transactions and the defence of the consumer’ (ECJ Case 120/78 Cassis de Dijon [1979] ECR I-649, para 8). However, justification is subject to the test of proportionality so that there can be a justification only if the measure is suitable and necessary; thus, proportionality is—in a manner of speaking—a limit to the limit of the fundamental freedom (‘limit-limit’ or ‘Schranken-Schranke’). Where consumer protection is invoked, the ECJ tends to be rather strict, often applying the much cited ‘concept of the average consumer, reasonably well informed and reasonably observant and circumspect’ and declaring further protection as not necessary. A justification may also be based on fundamental rights.

In the matter of the free movement of goods Art 28 EC/34 TFEU covers the freedom to import, whereas the freedom to export is here, contrary to other fundamental freedoms, specifically regulated in Art 29 EC/35 TFEU. According to consistent case law from the ECJ, the freedom to export has not been seen as a wide prohibition on restrictions, but instead has included only measures which have as their specific object or effect the restriction of patterns of exports and thereby the establishment of a difference in treatment between the domestic trade of a Member State and its export trade in such a way as to provide particular domestic advantage (ECJ Case 15/79 – Groenveld [1979] ECR 649; ECJ Case 251/83 – Haug-Adrion [1984] ECR 4277). This can be explained by the possibility of political participation. In Gysbrechts this case law was attacked by the Advocate-General; the ECJ then refrained from making a clear statement on the matter in general terms. It held that a national law prohibiting distance sellers from requiring a consumer’s payment card number before expiry of the withdrawal period in cross-border distance selling affects exports stronger than it does the national market and is not a justified restriction (ECJ Case C-205/07 – Gysbrechts [2008] ECR I-947).

2. Private law provisions and the free movement of goods

The free movement of goods made an early appearance in private law in industrial and intellectual property rights when the ECJ derived the principle of Union-wide exhaustion from the free movement of goods (ECJ Case 78/70 – Deutsche Grammophon [1971] ECR 487; ECJ Case 119/75 – Terrapin [1976] ECR 1039): industrial and intellectual property rights cannot be used to prevent the domestic sale of a product which has already lawfully been marketed in another Member State. Otherwise, a common market could not be attained. The free movement of goods in this context can even require that rules of evidence be qualified where the question of putting a good on the market is at issue (ECJ Case C-244/00 – van Doren [2003] ECR I-3051). The ECJ has rejected allowing a choice for the Member States between Union-wide and international exhaustion in trademark law (ECJ Case C-355/96 – Silhouette [1998] ECR I-4799). However, the assignment of a national industrial or intellectual property right for only a part of Union territory is—if not contrary to competition—not void and does not hinder the owner of the right from making use of his right arising under national law to prohibit its exploitation in other parts (ECJ Case C-9/93 – Ideal-Standard [1994] ECR I-2789). Also, neither copyright law nor unfair competition law can be used for market sharing (ECJ Case 58/80 – Dansk Supermarket [1981] ECR 181). Furthermore, far-reaching conclusions were for a certain period of time deducted from the free movement of goods in the area of unfair competition law (ECJ Case C-126/91 – Yves Rocher [1993] ECR I-2361; ECJ Case 362/88 – GB-INNO-BM [1990] ECR I-667). But for a good part this has been overruled by the Keck case law on selling arrangements, at least insofar as the measure in question only affects the way of selling. However, for other factual scenarios, unfair competition law can also affect the product itself and can thus constitute a restriction on the free movement of goods, namely when it prohibits the design of the imported product itself (ECJ Case C-315/92 – Clinique [1994] ECR I-317; ECJ Case C-470/93 – Mars [1995] ECR I-1923). The characterization of the description ‘lifting’ as misleading has not been objected to, but was left to the assessment of the Member State court, and clarification by expert opinion or by a survey of public opinion are allowed (ECJ Case C-220/98 – Estée Lauder [2000] ECR I-117). The prohibition of sales yielding very low profit margins is a selling arrangement (ECJ Case C-63/94 – Belgapom [1995] ECR I-2467).

An obligation to purchase domestic electricity from renewable energy sources set upon electricity supply undertakings has despite the discrimination of foreign suppliers been upheld by the ECJ, evidently on grounds of environmental protection (ECJ Case C-379/98 – PreussenElektra [2001] ECR I-2099, paras 73 ff). Price regulations have arguably tended to be seen as selling arrangements by the ECJ; in the case of maximum and minimum price regulations the Court was initially reluctant to exercise its power to review (ECJ Case 82/77 – van Tiggele [1978] ECR 25; differentiating ECJ Case 177/82 – van de Haar [1984] ECR 1797); provisions on price fixing for imported and re-imported books were seen as an infringement (ECJ Case 229/83 – Leclerc [1985] ECR 1; recently ECJ Case C-531/07 – LIBRO [2009] ECR I-03717). Interesting developments concerning price regulations have also arisen in cases on the free movement of services. A German provision which limited the summary order for payment procedure to debts expressed in domestic currency has not been regarded as indirect discrimination (of the French seller) on grounds of nationality where the contracting parties have the freedom to select the currency and ordinary proceedings remain available (ECJ Case 22/80 – Boussac [1980] ECR 3427; Art 18 TFEU/12 EC); that the Italian summary order for payment procedure was excluded where service of process abroad was necessary has been regarded as being of a too indirect and uncertain effect that it could limit the freedom to export (ECJ Case C-412/97 – ED Srl v Fenocchio [1999] ECR I-3845).

In the law of sales, the warranty for defects, which according to French case law on Art 1643 Code civil was mandatory between business people not in the same industry, was not seen as a restriction on the free movement of goods (ECJ Case C-339/89 – Alsthom Atlantique [1991] ECR I-107). A duty of disclosure in pre-contractual relations regarding difficulties with services under guarantee for ‘parallel import’ motorcycles (ECJ Case C-93/92 – CMC Motorradcenter [1993] ECR I-5009) was seen as having too indirect an effect and not as an obstacle to trade. Rules on the monitoring of standard contract terms have been addressed in legal writing. A duty to inspect imports deriving from product liability rules perhaps could constitute a restriction; how product liability is to be regarded from the point of view of the free movement of goods is disputed, but at any rate an approximation of law has occurred in this area.

In the area of security rights the ECJ has been cautious (ECJ Case 69/85- Krantz [1990] ECR I-583) while some academic writers have called for intervention by means of the fundamental freedoms. At any rate, the reservation of the rules governing the system of property ownership in the Member States pursuant to Art 345 TFEU/295 EC probably does not exclude the influence of the free movement of goods. If a change of the applicable law occurs as a result of the conflicts rule designating the lex rei sitae and this leads to the extinction of a security right, a restriction on the free movement of goods seems apparent as rules on selling arrangements are to be applied in a non-discriminatory manner. Though a justification is not excluded, a transposition of the imported security right into the new legal order must first be considered in a generous manner and, according to practical experience, is often suitable to avoid problems in the internal market. For the importation of non-possessory and undisclosed security rights, eg those of German law, into stricter countries, it should, according to the principle of proportionality, be verified whether a certain toleration or a period for adaptation for registration are sufficient measures. Some scholars have tried to question the situs rule with reference to, in particular, the free movement of goods and have advocated freedom of choice of law. For the internal market, the sector of security rights seems to suggest itself for legislative approximation of laws due to its importance and the complexity of issues of the fundamental freedoms. Isolated rules in the law on mortgages have already been closely examined in light of the free movement of capital. As private law norms only very rarely affect the free movement of goods itself, but rather its arrangements, the effect of the free movement of goods is, up until now, rather limited.


Eva-Maria Kieninger, Mobiliarsicherheiten im Binnenmarkt, Zum Einfluß der Warenverkehrsfreiheit auf das nationale und internationale Sachenrecht der Mitgliedstaaten (1996); Peter von Wilmowsky, Europäisches Kreditsicherungsrecht: Sachenrecht und Insolvenzrecht unter dem EG-Vertrag (1996); Stephen Weatherill, ‘After Keck: Some Thoughts on How to Clarify the Clarification’ (1996) 33 CMLR 885–906; Peter Oliver, ‘Some Further Reflections on the Scope of Articles 28–30 (ex 30–36) EC’ (1999) 36 CMLR 783–806; Malcolm Jarvis, Peter Oliver, Free Movement of Goods in the European Community (4th edn, 2002); Oliver Remien, Zwingendes Vertragsrecht und Grundfreiheiten des EG-Vertrages (2003); Anne Röthel, ‘Internationales Sachenrecht im Binnenmarkt’ (2003) JZ 1027; Torsten Körber, Grundfreiheiten und Privatrecht (2004); Astrid Epiney, ‘Free Movement of Goods’ in Dirk Ehlers and Ulrich Becker (eds), European Fundamental Rights and Freedoms (2007); Catherine Barnard, The Substantive Law of the EU (2nd edn, 2007); Peter Oliver and Stefan Enchelmaier, ‘Free Movement of Goods: Recent Developments in the Case Law’ (2007) 44 CMLR 649–704; (2007–08) 31 Fordham Int’l LJ 1637–91; Luca Prete, ‘Of Motorcyle Trailers and Personal Watercrafts: The Battle over Keck’ (2008) 35(2) Legal Issues of Economic Intergration 133–55.

Retrieved from Free Movement of Goods – Max-EuP 2012 on 19 May 2022.

Terms of Use

The Max Planck Encyclopedia of European Private Law, published as a print work in 2012, has been made freely available in 2021 as an online edition at <>.

The materials published here are subject to exclusive rights of use as held by the Max Planck Institute for Comparative and International Private Law and the publisher Oxford University Press; they may only be used for non-commercial purposes. Users may download, print, and make copies of the text files being made freely available to the public. Further, users may translate excerpts of the entries and cite them in the context of academic work, provided that the following requirements are met:

  • Use for non-commercial purposes
  • The textual integrity of each entry and its elements is maintained
  • Citation of the online reference according to academic standards, indicating the author, keyword title, work name, and date of retrieval (see Suggested Citation Style).