[*PG157]WE’VE COME A LONG WAY BABY (OR HAVE WE?): BANNING TOBACCO ADVERTISING AND SPONSORSHIP IN THE EUROPEAN UNION
Abstract: In October 2000, Europe’s highest court struck down a Community directive that effectively banned advertising and sponsor-ship of tobacco products in the European Union. Regulation of tobacco products has been on the Community’s agenda for over a decade, but it was not until 1998 that the necessary political support to enact any such legislation became available. The broad scope of the ensuing directive reflected the increasing awareness of the harmful health effects of tobacco, but this remains a controversial topic. The court decision may only be a temporary victory for the tobacco lobby since the Community still is determined to regulate tobacco advertising and sponsorship and has other options available in pursuit of this objective.
If tobacco were to be discovered today, its production and use would be illegal, according to anti-tobacco activists in Europe.1 Its highly addictive nature and the extremely adverse health effects associated with its prolonged use make it a dangerous product.2 It is the most dangerous consumer product known, since it is the only one that kills when used as the manufacturers have intended.3 Regulations should therefore attempt to curb activities of tobacco companies that entice the public to use such a dangerous product.4 However, tobacco company lobbyists explain that it is a legal product and, therefore, tobacco manufacturers should have the same rights as manufacturers [*PG158]of other legal products in Europe.5 Thus, tobacco companies should have the right to advertise their brands and logos and sponsor events to attract consumers, who should be permitted to receive legitimate product information.6 As the controversy continues, the issue may actually be decided on more technical legal grounds.
Legislators have relied on studies to justify regulations imposed on tobacco companies.7 An estimated 500,000 people die from tobacco-related causes in the European Union (EU) each year,8 and half of all habitual smokers are eventually killed by tobacco.9 Yet, smoking remains a pervasive habit in Europe, as thirty-three percent of its adult population smokes cigarettes.10 Concern over the link between tobacco advertising and tobacco consumption has prompted individual Member States as well as the European Community (Community) to adopt measures regulating the promotion and advertising of tobacco products, especially when the advertising targets young people.11
Part I of this Note provides the background surrounding the current status of tobacco advertising and sponsorship legislation in the EU. More specifically, it details the Community’s attempt to prohibit all forms of tobacco advertising and sponsorship within the EU by enacting Directive 98/43/EC (Directive). Part II discusses the recent [*PG159]decision by the European Court of Justice (ECJ) to annul this directive. Part III concludes the Note by evaluating a new Commission proposal in response to the ECJ decision and further recommends other options to the Community for prohibiting tobacco advertising and sponsorship.
The first Community-wide legislation regulating tobacco advertising and sponsorship was the 1989 Television Without Frontiers Directive.12 This directive banned tobacco advertising on television in the EU13 and prohibited the sponsorship of television programs by tobacco companies.14 Subsequent proposals by the European Commission (Commission) to the Council of the European Union (Council) prohibiting some forms of tobacco advertising have not been as successful.15 These prohibitions were introduced as internal market initiatives and not as public health measures since the former required only a qualified majority to be adopted by the Council, while the latter required unanimity.16 Yet, these proposals regulating tobacco advertising and sponsorship failed to pass even under qualified majority voting rules until December 1997, when Britain switched its position and supported the prohibition.17 In July 1998, the Community enacted the Directive, which prohibited tobacco advertising and sponsorship in Member States.18 The Directive, which Member States had to imple[*PG160]ment by July 30, 2001, banned all direct and indirect advertising of tobacco products and sponsorship of events.19 Member States were permitted to delay the implementation of print advertising until July 30, 2002 and sponsorship until July 30, 2003.20 In addition, Member States were allowed to continue sponsorship of world-level events for an additional three years but not later than October 1, 2006.21
The Directive stated that differences among national laws of the Member States regulating tobacco advertising and sponsorship created a barrier to free movement of tobacco-advertising media products and freedom to provide services, as well as distortions in competition.22 The legal bases of the Directive were Articles 100a, 57(2) and 66 of the Treaty Establishing the European Community (EC Treaty).23 Article 100a(1) allowed measures to be adopted for approximation of laws in Member States that have as their objective the establishment and functioning of the internal market.24 The EC Treaty characterizes the internal market as the “abolition, as between Member States, of obstacles to the free movement of goods, persons, services and capital . . . .”25 To promote internal market objectives, Article 57(2) provided for the issuance of directives concerning the pursuit of activities by self-employed persons.26 Article 66 applies Articles 55–58 to the provisions on freedom to provide services.27
The Federal Republic of Germany (Germany), which had opposed passage of the Directive, and several British tobacco companies had indicated their intentions to mount a legal challenge to the Directive.28 The initial concern cited was that the Directive violated guarantees of freedom of expression by prohibiting the advertising of a legally manufactured and distributed product, and as such, violated [*PG161]Article 10 of the European Convention of Human Rights.29 However, their complaints eventually rested on the premise that the Council and the Parliament overstepped their authority in adopting the Directive.30 Germany and the tobacco companies challenged the legality of the Directive in two separate cases.31 In the first case, Germany v. Parliament and Council (the Tobacco Advertising Case), Germany brought an action before the ECJ to annul the Directive.32 In the second case, Ex parte Imperial Tobacco, a British court requested a preliminary ruling from the ECJ arising from proceedings in Britain brought by the tobacco companies.33
The primary issue in the Tobacco Advertising Case was whether Articles 100a, 57(2), and 66 of the EC Treaty were proper legal bases for the Directive prohibiting tobacco advertising and sponsorship in the EU.34 Germany contended that the Parliament and the Council exceeded their legal competence in introducing the prohibition on tobacco advertising and sponsorship as an internal market measure.35 Germany challenged the legal bases of the Directive on two grounds. First, Germany argued that the Directive was, in reality, a measure designed to protect public health, and that Article 129 (now Article 152 of the Treaty of Amsterdam) expressly prohibited harmonizing measures in the laws and regulations of Member States in this area.36 Second, even if the goal of the Directive were to improve conditions for the establishment and functioning of the internal market, it would not have accomplished this goal.37 Germany claimed that the provisions in the Directive did not contribute to facilitating free movement of goods and services but actually hindered them, and that any distortions of competition that existed were merely incidental and not appreciable.38
Germany pointed to the legislative history of the Directive to support its first argument that the directive was essentially a public health measure.39 In the deliberations preceding the Directive, the Community legislators often invoked public health considerations to justify their decision to adopt a ban on tobacco advertising and sponsorship.40 Specifically, they discussed the importance of protecting the health of European youths, who are important targets of tobacco advertising and promotion.41 Germany also noted that those in the Community credited with the passage of the Directive were involved [*PG163]with public health matters.42 For instance, the Council adopted the common position largely due to the efforts of Irish Commissioner, Padraig Flynn, who was in charge of Employment and Social Affairs, including public health.43 Furthermore, the Parliament Committee on the Environment, Public Health and Consumer Protection figured prominently in the Parliament’s adoption of the Council’s common position.44 This Committee insisted that Article 100a was a proper legal basis for the Directive despite the contrary opinion of the Parliament’s Legal Affairs Committee.45 Germany urged the ECJ to find that Article 100a should not have been cited as the legal basis of the Directive because it was largely a public health legislation.46 In addition, because Article 129(4) expressly prohibited harmonization of laws in public health matters, they argued that neither Parliament nor the Council had the authority to adopt the Directive.47
The ECJ declined to conclude that the Directive was in essence a public health measure.48 Instead, it opted to first determine whether the Directive was designed to promote the establishment and functioning of the internal market in tobacco advertising and promotion.49 If so, then Article 129 would not pose a legal obstacle since it provided that “human health protection shall be ensured in the definition and implementation of all Community policies and activities.”50 Similarly, Article 100a(3) expressly required proposals to take a high level of human health protection.51 The ECJ, therefore, did not see a problem in using Article 100a to implement a public health measure to prohibit tobacco advertising and sponsorship, so long as this prohibition was calculated to improve conditions for the establishment and functioning of the internal market.52
In evaluating whether the Directive in fact was designed to improve the conditions for the establishment and functioning of the internal market in tobacco advertising and sponsorship, the ECJ examined the Directive’s purpose. Specifically, the ECJ questioned whether the Directive aimed to prevent the emergence of future trade obstacles resulting from multifarious development of national laws.53 The Preamble defined the obstacles as barriers to: (1) the movement of products serving as the media for tobacco advertising and sponsorship; (2) the freedom to provide services in that area; and (3) the removal of distortions of competition.54 Thus, the Directive would have been properly adopted in light of Articles 100a, 57(2), and 66 if it contributed to the prevention of obstacles to free movement of goods, the freedom to provide services, and the removal of distortions of competition.55
In assessing whether the Directive eliminated obstacles to the free movement of tobacco-advertising products and the freedom to provide services in this area, the ECJ considered two types of advertising: static advertising and print advertising.56 In the case of static advertising (e.g., posters, parasols, ashtrays and other articles used in hotels, restaurants, cafes, and cinema advertising spots), the ECJ found that the general prohibitions contained in the Directive were not calculated to eliminate obstacles to free movement of advertising media or freedom to provide advertising services.57 It did not contribute to facilitating trade in these products.58 In the case of print advertising, such as periodicals, magazines, and newspapers containing advertising for tobacco products, the ECJ concluded that, although there are currently no obstacles to prevent importation of such items into those Member States that prohibit tobacco advertising in printed materials, the trend among Member States toward more restrictive regulations on tobacco product advertising could foreseeably give rise to future obstacles to free movement of these products.59
[*PG165] The ECJ also concluded that the distortion of competition that the Directive purported to eliminate must be appreciable in order for Article 100a to be validly invoked.60 Variations in national laws create differences in conditions under which activities are regulated.61 If these differences are not appreciable, then they do not give rise to trade barriers, and it would be improper to invoke Article 100a to regulate such activities.62 The ECJ observed that differences in national regulations of advertising agencies and producers suggest that some businesses have an advantage over others established in Member States with more restrictive laws.63 However, these advantages only indirectly and remotely affect competition and, thus, do not constitute appreciable distortions.64
The case of tobacco product sponsorship may be different according to the ECJ.65 Tobacco companies commonly sponsor cross-border European events such as Formula One auto racing and football matches.66 The differences among Member States’ regulations regarding tobacco sponsorship of such events may give rise to appreciable distortions of competition.67 For instance, it could foreseeably lead to certain sporting events being relocated from a Member State with more restrictive regulations to one with less restrictive regulations.68 This has an appreciable effect on competition for undertakings associated with such events, and Article 100a would be a proper legal basis for Community regulation in this area.69
Thus, the ECJ found that Articles 100a, 57(2), and 66 did not support the overreaching prohibitions on tobacco advertising and sponsorship contained in the Directive.70 However, a prohibition with a more limited scope, confined to areas where there are actually foreseeable obstacles to free movement of goods and services and where distortion of competition would be appreciable, would be valid under these Articles of the EC Treaty (and also under the corresponding [*PG166]articles of the Treaty of Amsterdam).71 The ECJ specifically cited prohibitions on tobacco advertising in printed products and prohibitions on tobacco sponsorship of cross-border events as examples of the types of advertising that would be permitted under the EC Treaty.72 According to the ECJ, it was not possible to annul the Directive partially, so instead, it was annulled in its entirety.73
The Community’s disappointment over the ECJ decision to annul the Directive did not prevent the Commission from implementing tougher tobacco advertising laws in the EU.74 On May 30, 2001, the Commission proposed a new directive on tobacco advertising and sponsorship (Proposal) to replace the Directive that had been annulled by the ECJ.75 The Commission had taken great precaution in ensuring the Proposal would be valid under the current Treaty of Amsterdam by complying with the standards set forth by the ECJ in the Tobacco Advertising Case.76 The Proposal excludes provisions in areas the ECJ had found as not facilitating trade in the Community, such as cinema, poster, and indirect advertising of tobacco.77
The Tobacco Advertising Case represents the ongoing struggle between tobacco companies, which are determined to remain in the European market, and the Community institutions, which are equally determined to keep them out.78 Although the Tobacco Advertising Case was a victory for the tobacco lobby,79 it may be a short-lived victory for two reasons. First, in light of the ECJ decision, the proposal for a new directive prohibiting certain forms of tobacco advertising and sponsorship, if adopted, is likely to withstand a legal challenge to its validity.80 Second, the Directive would be valid under the Treaty of [*PG167]Amsterdam if it uses Article 152 (formerly Article 129), which deals with public health, as a legal basis.81
As in the Directive that was annulled, the Proposal uses Articles 47(2), 55, and 95 (formerly Articles 57(2), 66, and 100a, respectively) as the legal bases to harmonize laws promoting the internal market in tobacco advertising and sponsorship in the EU.82 It identifies four areas of advertising where there are obstacles to the free movement of goods and services or distortions of competition: print advertising, information society services (Internet) advertising, radio broadcasting advertising, and sponsorship for the benefit of tobacco products with cross-border effects.83
If the Proposal is adopted as a directive, the Tobacco Advertising Case indicates that it can withstand a legal challenge to its validity. Such a challenge could be defeated if the ECJ finds that there are either barriers to the free movement of goods and services or distortions of competition in each of the four targeted advertising areas. Furthermore, the ECJ must find that the proposal actually eliminates these trade barriers or distortions of competition.84 In the case of print advertising and sponsorship of cross-border events, the ECJ has expressly stated in the Tobacco Advertising Case that these areas are valid since they both satisfy the ECJ’s two-pronged requirement.85 As with the Directive, the Proposal would only be upheld if the remaining provisions are equally valid.86 The ECJ should also uphold the prohibition on tobacco advertising in radio broadcasts and on the Internet in light of the Television Without Frontiers Directive, which, among other things, prohibits tobacco advertising on television.87 The Community adopted this directive as a harmonizing measure in the internal market created by the cross-border characteristics of television broadcasting, and its validity has not been questioned.88 So, presumably, the Television Without Frontiers Directive contributed to eliminating distortions in competition in tobacco advertising on tele[*PG168]vision.89 In addition, the cross-border features of radio broadcasting and the Internet may lead to distortions of tobacco advertising competition.90 The ECJ is thus likely to find that the Proposal actually contributes to eliminating these distortions for the same reasons that the Television Without Frontiers Directive eliminates distortions in tobacco advertising on television.91
The Commission has effectively accomplished two important objectives in the Proposal.92 First, in using the Tobacco Advertising Case as a road map, it ensured that tobacco advertising in print and sponsorship of cross-border events will be prohibited in the EU.93 Second, it added two more areas in which tobacco advertising will be prohibited—radio broadcasting and the Internet—by analogizing to a legally sound preexisting prohibition on television tobacco advertising.94 Although the Tobacco Advertising Case was not a victory for the Community, the opinion of the ECJ has virtually assured that a more limited prohibition is valid under the Treaty of Amsterdam.95 While the prohibition is less extensive than the Community had originally wanted, it is more restrictive than the current EU regulations.
This note recommends that, in addition to redrafting the Directive to cover a more limited scope, the Community should also consider redrafting it under Article 152, the public health provision of the Treaty of Amsterdam.96 This solution has the advantage of falling outside the ambit of the Tobacco Advertising Case since it does not use internal market provisions.97 In other words, the scope of such a proposal does not have to be limited to the areas the ECJ had indicated were valid in the Tobacco Advertising Case.98 By using the public health provision, the redrafted directive therefore may be identical in scope and substance to the one annulled. The Treaty of Amster[*PG169]dam now makes it easier to adopt public health regulations in the EU by requiring only a qualified majority instead of unanimity.99 Now that there appears to be a qualified majority to approve such a proposal, adopting a directive similar to the one struck down by the ECJ that uses a different legal basis should not be a problem.100
The more serious concern is whether Article 152 permits the Community to adopt a proposal similar in substance to the Directive. Article 152 allows Community action directed towards “improving public health, preventing human illness and diseases, and obviating sources of danger to human health.”101 However, Article 152(4)(c) specifically forbids any harmonization of the laws and regulations of the Member States for the protection and improvement of human health.102
A new directive under Article 152 should not be interpreted as a harmonization measure but as an outright prohibition. Although the Treaty forbids harmonization of Member State laws in the field of public health protection,103 it should be argued that, in this case, a prohibition is distinguishable from harmonization of laws. Instead of harmonizing the laws of the Member States, the prohibition simply creates minimum standards for tobacco advertising and sponsorship within the EU. Member States still may adopt more restrictive national regulations. A new directive will not preempt these regulations but will ensure that each Member State provides for its citizens the same minimum protection from the dangerous health consequences of tobacco smoking.
The Tobacco Advertising Case remains a significant victory for the tobacco companies because it nullified the most ambitious attempt by the Community to limit the marketing of tobacco products. It took almost ten years for the Directive to become law in Europe, and it was annulled on technical grounds before it ever took effect. The tobacco interest may have won the battle when the ECJ overturned the Directive, but it is likely to lose the war regarding tobacco advertising and sponsorship in the EU. The new proposal for a prohi[*PG170]bition of tobacco advertising and sponsorship, which has a more limited scope than the Directive, would most likely withstand a legal challenge to its validity. Finally, the Community should propose a new directive similar in scope to the one annulled under the public health provisions of the Treaty of Amsterdam.