Germany was challenging a directive issued pursuant to article 95, which sought to ban tobacco advertising in all forms except at the point of sale. Germany argued that the directive was unlawful, as those articles did not provide the legal basis for issuing a directive on tobacco advertising. ECJ agreed, and annulled the directive.
ECJ Judgment: Article 95 conferred on the council/commission the power to promote the internal free market, but did not imply a power to regulate the market. Measures adopted under Article 95 must have the specific objective of improving the conditions for the establishment and functioning of the internal market – and they must be designed to remove genuine obstacles to free movement rather than being concerned with purely abstract risks. It would be contrary to article 5 to allow EP to assume a power not conferred on it. ECJ said that (settled case law) art.95 may not be used to merely remove ‘incidental’, rather than ‘appreciable’ barriers to competition. No such appreciable distortions of competition were addressed by this directive. Good- the power to remove internal obstacles to free trade of a product (tobacco advertising here) does not include the power to ban the product itself. It cannot be seriously claimed that this directive was intended to remove internal barriers/obstructions to free trade, as individual member states would be permitted to take even harsher steps under the directives.