One step beyond? from sodemare to docmorris: The eu's freedom of establishment case law concerning healthcare

Common Market Law Review

Volumn 47, Issue 1, 2010, Pages 117-146

  Hancher, Leigh ^a   Sauter, Wolf ^a  

^a TILBURG UNIVERSITY   (Netherlands)

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EID: 77953888290     PISSN: 01650750     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (96)

1. European Commission, Proposal for a Directive of the European Parliament and of the Council on services in the internal market 2004/0001 (COD) [SEC(2004) 21] COM(2004)2 final/3, 5 March 2004, especially Art. 23 thereof. Cf. Directive 2006/123/EC of the European Parliament and of the Council of 12 Dec. 2006 on services in the internal market, O.J. 2006, L 376/36 (Services Directive), Art. 2(2) sub f, and the Preamble, recital 23.
2. See more generally Davies, "The Services Directive: Extending the country of origin principle and reforming pub- lic administration", 32 EL Rev. (2007), 232.
3. Case C-158/96, Raymond Kohll v. Union des caisses de maladie, [1998] ECR I-1931; and Case C-120/95, Nicolas Decker v. Caisse de maladie des employés privés, [1998] ECR I-1831.
4. Case C-372/04, The Queen, ex parte Yvonne Watts v. Bedford Primary Care Trust and Secretary of State for Health, [2006] ECR I-4325.
5. Proposal for a Directive of the European Parliament and of the Council on the application of patients' rights in cross-border healthcare, COM(2008)414 final. Cf. Sauter, "The proposed Patients' Rights Directive and the reform of (cross-border) healthcare in the European Union", 36 LIEI (2009), 109.
6. A noteworthy exception is Stöger, "The freedom of establishment and the market access of hospital operators", (2006) EBLR, 1545
7. Cf. earlier Kaldellis, "Freedom of establishment ver- sus freedom to provide services: an evaluation of the case-law developments in the area of indis- tinctly applicable rules", 28 LIEI (2001), 23.
8. The draft Patients' Rights Directive only makes passing reference to this issue, as one of the four parts of the definition of cross-border services in recital 10 of its Preamble (alongside mobility of patients, mobility of healthcare providers and cross border provision of the service as in telemedicine)
9. Cf. in relation to establishment: Case C-442/02, CaixaBank France v. Ministère de l'Économie, des Finances et de l'Industrie, [2004] ECR I-8961.
10. Joined Cases C-94/04 & C-202/04, Federico Cipolla v. Rosaria Fazari, née Portolese (C-94/04) and Stefano Macrino and Claudia Capoparte v. Roberto Meloni (C-202/04), [2006] I-11421.
11. He sets out how this is the same logic as that in the context of free movement in Joined Cases C-267 & C-268/91, Criminal proceedings against Bernard Keck and Daniel Mith- ouard, [1993] ECR I-6097
12. Case C-174/04, Commission v. Italy (voting rights), [2005] ECR I-4933.
13. C-503/99, Com- mission v. Belgium, [2002] ECR I-04809.
14. Case E-2/06, EFTA Surveillance Authority v. Norway (waterfalls), judgment of 26 June 2007
15. Case C-141/07, Commission v. Germany (hospital pharmacies), judgment of 11 Sept. 2008, nyr, para 41.
16. Hervey and McHale, Health Law and the European Union (Cambridge University Press, 2004); Mossialos et al., Health systems Governance in Europe: the Role of Law and Policy (Cambridge University Press, forthcoming).
17. Mossialos et al., Health systems Governance in Europe: the Role of Law and Policy (Cambridge University Press, forthcoming).
18. One example where the two are compatible is provided by the risk equalization systems in Ireland and The Netherlands. This was examined in detail in Case T-289/03, British United Provident Association Ltd (BUPA) et al. v. Commission, [2008] ECR II-81.
19. On solidarity more generally see: Newdick, "Citizenship, free movement and health care: Cementing individual rights by corroding social solidarity", 43 CML Rev. (2006), 1645.
20. Prosser, "Regulation and social solidarity", 33 Journal of Law and Society (2006), 364
21. Cf. e.g. Davies, "The effect of Mrs Watts trip to France on the National Health Service", 18 King's Law Journal (2007), 158.
22. van de Gronden, "Cross-border healthcare in the EU and the organization of the national health systems of the Member States: The dynamics resulting from the European Court of Justice's free movement and competition law", (2009) Wisconsin Inter- national Law Journal, 705
23. Hatzopoulos, "Killing national health and insurance systems but healing patients? The European market for healthcare services after the judgments of the ECJ in Vanbraekel and Peerbooms", 39 CML Rev. (2002), 683.
24. Hervey, "The current legal framework on the right to seek healthcare abroad in the European Union", 9 CYELS (2007), 261
25. Case C-169/07, Hartlauer Handelsgesellschaft mbH v. Wiener Landesregierund and Oberösterreichischer Landesregierung, judgment of 10 March 2009, nyr.
26. For an earlier formulation cf. Case C-271/92, Laboratoire de Prothèses Oculaires v. Union Nationale des Syndicats d'Opticiens de France et al. (LPO), [1993] ECR I-2899, para 10.
27. Joined Cases C-1/90 & C-176/90, Aragonesa de Publicidad Exterior SA and Publivía SAE v. Departamento de Sanidad y Seguridad Social de la Generali- tat de Cataluña, [1991] ECR I-4151, para 16.
28. Case C-108/96, Criminal proceedings against Dennis Mac Quen et al, [2001] ECR I-837, para 33
29. with reference to Case C-384/93, Alpine Investments, [1995] ECR I-1141, para 51
30. and Case C-3/95, Reisebüro Broede, [1996] ECR I-6511, para 42
31. Case C-110/05, Commission v. Italy (motorcycle trailers), judgment of 10 Feb. 2009, nyr, para 65.
32. The freedom of movement of workers will not be dealt with in this paper. 21.
33. Cf. Case C-496/01, Commission v. France (laboratories), [2004] ECR I-2351.
34. If they are normally provided for remuneration, then such services fall under the scope of the free movement rules, although this does not require direct payments in benefits in kind and NHS systems
35. The Court has also formulated the essence of Art. 43 EC (now 49 TFEU) as "the actual pursuit of an economic activity through a fixed establish- ment in another Member State for an indefinite period" in Case C-221/89, R. v. Secretary of State for Transport, ex parte Factortame (Factortame II), [1991] ECR I-3905, para 20.
36. Thus cited in Barnard, The substantive law of the EU: The four freedoms, 2nd ed. (OUP, 2007), p 308.
37. Cf. Sauter and Schepel, State and market in European Union law: The public and private spheres of the Internal Market before the EU Courts (Cambridge University Press, 2009) and the references cited there.
38. Cf. e.g. Case C-176/96, Jyri Lehtonen and Castors Canada Dry Namur-Braine ASBL v. Fédération Royale Belge des Sociétés de Basket-ball ASBL (FRBSB), [2000] ECR I-2681.
39. Case 36/74, B.N.O. Walrave and L.J.N. Koch v. Association Union cycliste internationale, Koninkli- jke Nederlandsche Wielren Unie and Federación Española Ciclismo, [1974] ECR 1405.
40. Case C-309/99, J. C. J. Wouters, J. W. Savelbergh and Price Waterhouse Belastingadviseurs BV v. Algemene Raad van de Nederlandse Orde van Advocaten, [2002] ECR I-1577.
41. Joined Cases C-51/96 & C-191/97, Christelle Deliège v. Ligue francophone de judo et disciplines associées ASBL et al. (C-51/96) and François Pacquée (C-191/97), [2000] ECR I-2549.
42. Case C-411/98, Angelo Ferlini v. Centre hospitalier de Luxembourg, [2000] ECR I-8081; and Case C-281/98, Roman Angonese v. Cassa di Risparmio di Bolzano SpA, [2000] ECR I-4139.
43. BUPA, cited supra note 11. Noted by Sauter in 46 CML Rev. (2009), 269.
44. Case C-475/99, Firma Ambulanz Glöckner v. Landkreis Südwestpfalz, [2001] ECR I-8089.
45. Case 267/86, Pascal Van Eycke v. ASPA NV, [1988] ECR 4769.
46. Case C-198/01, Consor- zio Industrie Fiammiferi (CIF) v. Autorità Garante della Concorrenza e del Mercato, [2003] I-8055.
47. Case C-35/99, Criminal proceedings against Manuele Arduino, [2002] I-1529. Arts. 3, 5, 10 and 81 EC have all been replaced by different provisions in the TFEU and Arts. 4 and 5 TEU.
48. Cf. Case C-446/05, Criminal proceedings against Ioannis Doulanis (Belgian dentists), [2008] ECR I-1377.
49. In Case C-292/92, Ruth Hünermund and others v. Landesapothekerkammer Baden-Württemberg, [1993] ECR I-6787, self-regulation that barred pharmacists from adverti- sing was found to constitute a "selling arrangement" and to fall outside the scope of Art. 28 EC (now 34 TFEU).
50. Opinion in Joined Cases C-180/98 to C-184/98, Pavel Pavlov et al. v. Stichting Pen- sioenfonds Medische Specialisten, [2000] ECR I-6451, para 89.
51. As the A.G. had confirmed there was no evidence in the documents before the Court to suggest that the law in question reinforced a pre-existing agreement and the referring court pro- vided no indication as to the circumstances in which the Law of 1958 was adopted, which would have supported the assumption that Belgium had delegated to economic operators responsibility for taking a decision on advertising in the dental care sector and that the Law of 1958 simply codified that decision.
52. See e.g. Case C-157/94, Commission v. France (electricity and gas import/export licences), [1997] ECR I-5699, at para 115.
53. Case C-67/96, Albany International BV v. Stichting Bedrijfspensioenfonds Textielindus- trie, [1999] ECR I-5751.
54. In Albany, cited supra note 37, the Court held that a compulsory pension fund engaging in competition with insurance companies was an undertaking (paras. 72 et seq.) but exemptable on the basis of the exception for services of general economic interest in Art. 86(2) EC (now 106(2) TFEU).
55. The latter finding was based on the reasoning that otherwise risk selection would occur and the solidarity within the fund would be undermined. Similar reasoning applied in relation to compulsory sickness insurance in Case 222-/98, Hendrik van der Woude v. Stichting Beatrixoord, [2000] ECR I-7111.
56. By contrast, in Case C-350/07, Kattner Stahlbau GmbH v. Maschi nenbau- und Metall- Berufsgenossenschaft, judgment of 5 May 2009, nyr, the Court held that a (comparable) compulsory employers liability insurance association which is solidarity based and subject to State supervision is not an undertaking. (Even although potential competi- tors from another Member State had made an offer to provide the services concerned). On the other hand, the Court also held that such rules might well be caught by Art. 56 (ex 49 EC) on the freedom to provide services.
57. Generally contrasted in this context are Case C-41/90, Klaus Höfner and Fritz Elser v. Macrotron GmbH, [1991] I-1979 (defining the concept of undertaking); and Poucet, cited supra note 15 (defining solidarity).
58. Joined Cases C-264, 306, 354 & 355/01, AOK Bundesverband et al. v. Ichthyol-Gesell- schaft Cordes et al., [2004] ECR I-2493.
59. The Court based its findings on the existence of a "Solidärgemeinschaft" in the form of risk equalization, and obligatory statutory benefits
60. Case C-205/03 P, Federación Española de Empresas de Tecnología Sanitaria (FENIN) v. Commission, [2006] ECR I-6295.
61. This can be contrasted with a bolder approach by national authorities. Cf. that of the UK compe- tition authority in Better Care, [2002] CAT 7, para 234.
62. Asociación Profesional de Empresas Navieras de Líneas Regulares et al. v. Administración General del Estado (Analir), [2001] ECR I-1271, para 21.
63. Case C-208/05, ITC Innovative Technology Center GmbH v. Bundesagentur für Arbeit, [2007] ECR I-181, para 55.
64. Case C-451/03, Servizi ausiliari dottori commercialisti v. Calafiori, [2006] ECR I-2941.
65. Council Regulation (EC) No. 1/2003 of 16 Dec. 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, O.J. 2003, L 1/1. However, the Commission may reject complaints based on the Automec case law of the CFI, assigning prior- ity based on its assessment of the Community interest: Case T-64/89, Automec v. Commission, [1990] ECR II-367 and Case T-24/90, Automec v. Commission, [1992] ECR II-2223. Where the Commission rejects a complaint, the complainant is entitled to a decision of the Commission without prejudice to Art. 7(3) of Reg. 773/2004 (O.J. 2004, 123/18).
66. See further the Commission Notice on the handling of complaints by the Commission under Articles 81 and 82 of the EC Treaty, O.J. 2004, C 101/05.
67. Case C-55/94, Reinhard Gebhard v. Consiglio dell'Ordine degli Avvocati e Procura- tori di Milano (Gebhard), [1995] ECR I-4165, para 37.
68. citing Case C-19/92, Kraus v. Land Baden-Wuerttemberg (Kraus), [1993] ECR I-1663, para 32.
69. This case law has been perceived as revolutionary precisely since it brings non-discriminatory regulation within the scope of free movement. Cf. Spaventa, "From Gebhard to Carpenter: towards a (non-)economic European Constitution", 41 CML Rev. (2004), 743.
70. This is especially evident in the reasoning set out in the Commission's 2004 Guidelines on the Application of Article 81(3) EC, O.J. 2004, C 101/98. "The first step is to assess whether an agreement between undertakings, which is capable of affecting trade between Member States, has an anti-competitive object or actual or potential anti-competitive effects. The second step, which only becomes relevant when an agreement is found to be restrictive of competition, is to determine the pro-competitive benefits produced by that agreement and to assess whether these pro-competitive effects outweigh the anti-competitive effects. The balancing of anticompetitive and pro-competitive effects is conducted exclusively within the framework laid down by Article 81(3)." (para 11).
71. E.g. Case C-319/92, Salomone Haim v. Kassenzahnärztliche Vereinigung Nordrhein (Haim I), [1994] I-425.
72. Case C-154/93, Abdullah Tawil-Albertini v. Ministre des Affaires Sociales, [1994] ECR I-451.
73. Case C-277/93, Commission v. Spain (stomatology), [1994] I-5515.
74. Case C-424/97, Salomone Haim v. Kassenzahnärztliche Vereinigung Nordrhein (Haim II), [2000] ECR I-5123.
75. Case C-35/02, Landeszahnärztekammer Hessen v. Markus Vogel, [2003] ECR I-12229.
76. A comparable case outside the context of harmonization but centred on a require- ment to take experience acquired in other Member States into account is Case C-456/05, Com- mission v. Germany (psychotherapists), [2007] ER I-10517.
77. Case 96/85, Commission v. France, [1986] ECR 1475.
78. Case C-351/90, Commission v. Luxembourg, [1992] I-3945.
79. Respectively: Case C-140/03, Commission v. Greece (opticians), [2005] ECR I-3177.
80. Case C-294/00, Deutsche Paracelsus Schulen für Naturheilverfahren GmbH v. Kurt Gräbner, [2002] ECR I-6515. 67.
81. On 29 August 2001 the Wiener Landesregierung rejected the application by Hartlauer, a company established in Germany, for authorization to set up a private health institution in the form of an outpatient dental clinic in the Vienna. The Wiener Landesregierung based its decision on applicable State law and a report produced by an official medical expert. According to the report, dental care was adequately ensured in Vienna by public and private non-profit-making health institutions and other contractual practitioners offering comparable services. On similar grounds, the Oberösterreichische Landesregierung on 20 Sept. 2006 rejected Hartlauer's appli- cation for authorization to set up an outpatient dental clinic in Wels. Hartlauer brought proceed- ings against those decisions before the Verwaltungsgerichtshof (Administrative Court), which joined the two cases.
82. Referring to Smits and Peerbooms, cited supra note 23; Case C-385/99, V.G. Müller- Fauré v. Onderlinge Waarborgmaatschappij OZ Zorgverzekeringen UA and E.E.M. van Riet v. Onderlinge Waarborgmaatschappij ZAO Zorgverzekeringen, [2003] ECR I-4509.
83. E.g. in the Netherlands these account for up to 20% of pharmacists' income and in total over €500 million for 2007. Douven and Meijer, Prijsvorming van generieke geneesmiddelen: forse prijsdalingen in het nieuwe zorgstelsel, CBP Document No. 175, Nov. 2008.
84. E.g. Danzon and Furukawa, "Prices and availability of pharmaceuticals: Evidence from nine countries", (2004) Health Affairs, 521.
85. Vaccheri et al., "Antibiotic prescribing in general practice: striking differences between Italy (Ravenna) and Denmark (Funen)", 50 Journal of Antimicrobial Chemotherapy (2002), 989.
86. For a detailed discussion of the services cases and further references see Sauter, TILEC Discussion Paper No. 2008-034, available at SSRN:.
87. for more on free movement of services and goods in an establishment context see Hancher and Sauter, TILEC Discussion Paper No. 2009-28, available at SSRN: .
88. The notion behind this is that the EU has instruments to promote market efficiency, but not to promote social protection
89. This is the broad view of market failure from the perspective of welfare economics. According to classic economics, market failure is limited to a market that fails to produce an effi- cient outcome both in static and dynamic terms as a result of market power, externalities, public goods, imperfect information or property rights.
90. At
91. Cf. Lipsey and Lancaster, "The General Theory of the Second Best", 24 The Review of Economic Studies (1956), 11.
92. Treaty of Lisbon amending the Treaty on European Union and the Treaty establishing the European Community, signed at Lisbon, 13 Dec. 2007, O.J. 2007, C 306/1.
93. Cf. Commission Communication on the consequences of the Court's judgment in Cassis de Dijon, O.J. 1980, C 256.
94. Commission Communication of cross border services, O.J. 1993, C 334.
95. Commission Communication on concessions, O.J. 2000, C 121.
96. For an analysis of the value of such texts cf. Smulders, "Institutional aspects of European Commission guidance in the area of antitrust law", (2009) Competition Policy International, 25.