K&M had been selling products at a loss (loss leaders) contrary to French law. They claimed that the French law infringed article 28 (quantitative restrictions and equivalent measures prohibited). ECJ held that the French law was NOT an equivalent of quantity restrictions and did not therefore breach article 28.
ECJ: “National legislation imposing a general prohibition on resale at a loss is not designed to regulate trade in goods between Member States.” NB ECJ acknowledged that the rule restricted the amount of imports that could be sold in the French market, especially as it removed a potential marketing strategy. However question was whether this was sufficient to render it equivalent to a quantitative restriction. “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 directly or indirectly, actually or potentially, trade between Member States within the meaning of Dassonville 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”. I.e. national restrictions within a MS do not contravene art. 28 unless (1) the provisions apply to all traders operating within MS, and (2) they affect the marketing of products of traders from within the MS and from other MSs the same. NB if we used a ‘market access’ test as AG Jacobs suggested in another case then this would be decided differently if, say, the competitors had a strong brand and the only way for foreign companies to get into the market was to loss lead. This decision was motivated by a fear of depriving national authorities of competence.
Since Keck we have struggled to understand exactly when free movement law exercises a control over national measures and when by contrast the matter is left in the hands of the local regulator:
As far as goods are concerned, see cases