Forces Interantional
The Eu Tobacco Advertising Ban Decision

A Victory For Europhiles And Euroskeptics


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October 7th, 2000

Last Thursday's decision by the European Court of Justice, annulling the 1998 EU Tobacco Ad Ban Directive was not only correct , but is a reminder of the importance of the Rule of Law, and of the Principle of Subsidiarity. It should also serve as a lesson to those who would knowingly try to circumvent the law that it is not acceptable to attain their desired goals, by claiming that the 'the ends justifies the means'.

In striking down the EC Commission's ill-conceived tobacco ad ban, the ECJ, quite rightly, noted that the sole purpose for which the Union was created was, and remains, to promote trade and commerce . Its decision recognized that in signing the various treaties which brought the Union into being, and which have modified it over time, the polestar which has guided the signatories has been trade promotion and commerce among themselves -- not other goals.

Since its inception, the Union has had only those powers that member nations have delegated to the EU Commission and Parliament. Naturally, and as the Court correctly noted, the exercise of some of the delegated powers will, necessarily, have 'ripple' effects into areas or activities that the members have not expressly given to the Union. This is unavoidable in a complex world. Indeed, national laws regarding education, and school-leaving ages, will necessarily have some effect on levels of employment ; the two cannot totally and neatly be separated. However, the Court noted that, in order for rulings, laws, and regulations from the center to be 'constitutional', i.e. in keeping with the treaties that created the Union, these sorts of effects must be merely ancillary to the law laid down by the center.

In last week's ruling, the Court quite rightly held that the tobacco ad ban directive was an attempt to regulate or affect public health -- and , under the treaties which created the EU, this is expressly a competency of the member nations, not of the center. Not surprisingly, the ban's advocates had attempted to disguise the Directive as one promoting trade and harmony within the Union. The Court saw through such legal fictions and chicanery . In doing so, it served the highly important principle of subsidiarity, which underscores the very existence of the Union.

While the ban's advocates will doubtless decry the ruling, its implications are exceptionally important ; and the Court deserves credit for recognizing what these are. The ruling and the acknowledgement by the Court that the Union's powers are limited to those which are delegated by the various treaties has prevented the EU from falling into a legal 'trap' into which the United States has fallen. Specifically, the Court's ruling will serve as a break on continual and endless expansion of the power of the center, relative to member states, under the guise of promoting trade and commerce. In contrast, in the United States, legal rulings in the 1930's regarding the power of the central government under the Constitution's 'Commerce Clause ( " Congress shall have the power to regulate commerce between the states" ) has permitted chronic and arguably unlimited, expansion of power of the political center while, necessarily, curbing the power of the various states. Indeed, it might reasonably be said that this continual expansion of the center's power, under the Commerce Clause, has converted the United States from a federal state, in which power is shared between the center and the states, into a unitary one, in which the various states are little more than administrative appendages of the center. In upholding the subsidiarity principle -- in recognizing that the center has only those powers, granted to it under the treaties -- the Court has struck a blow for democracy . It is a decision that both Europhiles, and Euroskeptics can applaud for it has both limited the power of the center vis-à-vis the member nations, and has, by demonstrating that the Court of Justice is committed to the Rule of Law, and will not permit the EU Parliament to run amok, has enhanced its prestige. The ruling serves notice on those who would circumvent the requirements of the law so as to pander to their perceptions of popular opinion that the EU Court of Justice will not oblige them.

The Tobacco Ad ban has a long and inglorious history dating back to at least 1989. In 1993, the EU Council's Legal Service said the proposed directive was unlawful, and this was the conclusion of a 1995 report commissioned by the Directorate-General for Research of the EU Parliament. Despite this, in Dec. 1997 anti-tobacco zealots with the assistance of members of the newly elected Labour government in Britain, successfully persuaded the Council of Health Ministers to adopt the now -annulled advertising ban. It should be obvious that a discussion of the proposal before the Health Ministers demonstrated that it was seen as a health measure and not one which was designed to promote trade within the community.

This tactic initially succeeded . But in May 1998 the Legal Affairs Committee cautioned that the proposed Directive exceeded the EU's powers. This caution went unheeded by the EU Parliament, which approved the Directive in the summer of 1998. It was promulgated a few months thereafter.

The ban required all member nations to prohibit tobacco advertising, sponsorship, and the like. Unsurprisingly, its legality was questioned in lawsuits brought by the government of Germany, as well as various tobacco companies, which had brought suit as a consequence of earlier litigation which had taken place in Britain. In furtherance of his duties, the Advocate-General of the EU rendered an opinion in which he, like the Research Directorate in 1995 and the Legal Affairs Committee in 1998, said he thought the Directive exceeded the EU's powers and should be annulled.

In striking down this ill-conceived ban last week, with its tortured history, the Court served notice that it would not be unduly influenced by verbiage and boilerplate in legislation , rulings and directives coming from Brussels, but would look to the substance of them. And the substance of the proposed Directive was to attempt to regulate for public health - a competency reserved for the member nations, as its advocates well knew, and were repeatedly told. As well as ruling that the tobacco advertising ban was an illegal attempt to regulate about a matter best left to member states, the Court noted that ironically, it was anti-competitive.

The idea that a total ban on advertising would somehow promote, rather than stultify, trade and commerce is an exceptionally curious one. The very purpose of advertising is to induce people to purchase one's product. While there is virtually no evidence that tobacco advertising serves to increase the total consumption of tobacco products, there is evidence that it induces people to shift brands between tobacco products. This makes it a crucial vehicle for competition between vendors of tobacco products. A ruling prohibiting tobacco advertising would, as the Court noted, tend to lock in existing tobacco products and dampen, rather than increase, competition and trade between the member nations. One would have thought this rather obvious.

Thursday's ruling , in upholding the principle of subsidiarity, and in recognizing that the very purpose of the Union is promotion of trade and commerce, will serve to enhance the health of the Union. More importantly, it is a clear indication at the European Court of Justice values highly the Rule of Law.
Hugh High is a lawyer and economist. His book Does Advertising Increase Smoking" Is published by the Institute of Economic Affairs. Mr. High is a contributing member of FORCES

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