EU

Judgment CJEU in Case C-31/16 (Gemeente Appingedam)

News Alert
01 February 2018

Services Directive applicable to retail in goods in internal situations

On 30 January 2018, the Court of Justice of the European Union (CJEU) rendered its landmark judgment on the fundamental questions relating to the scope of directive 2006/123 (the “Services Directive”) and the interpretation of the term “services”. These questions were referred to the CJEU by the Dutch Council of State in the case of Visser Vastgoed Beleggingen v the Municipality of Appingedam.

Visser owns commercial premises at the Woonplein in Appingedam, a commercial zone for retail trade in bulky goods outside the historical commercial district of the city centre. Under Article 18 of the zoning plan of the municipality of Appingedam, the Woonplein has been designated as an area exclusively for retail trade in bulky goods, such as furniture and cars. The primary objective of the zoning plan is to avoid vacant premises in the city centre as far as possible. In this case, the municipality of Appingedam did not allow Visser to let its commercial property at the Woonplein to Bristol B.V., a shoe and clothing retailer, because this retailer does not sell bulky goods. Visser argued that the zoning plan is in conflict with the freedom of establishment as stipulated in the Services Directive. The first question of the Council of State to the CJEU was whether shoe and clothing retail can be qualified as a ‘service” within the meaning of the Services Directive? The CJEU indicates that even though retail concerns trade in goods, the rules of the zoning plan at issue concern not the goods as such, but concern the conditions governing the access to the service activities. Therefore, it must be held that the activity of retail trade in goods such as shoes and clothing falls within the scope of the concept of ‘service’.

According to the CJEU, the zoning plan of the municipality of Appingedam cannot be qualified as an ‘authorisation scheme’ regulating the access to the service activities as defined in Article 4(6) of the Services Directive. However, protection of the urban environment as the objective of the zoning plan, can be considered an overriding reason of public interest that may justify the territorial restriction. In their zoning plans, municipalities may therefore impose restrictions on retailers, such as the Amsterdam policy on the restriction of shops exclusively aimed at tourists (see the judgment in Cheesecompany), provided that all the conditions mentioned in Article 15 paragraph 3 of the Services Directive are fulfilled (non-discrimination, necessity and proportionality).

Since the case concerns a commercial area in Appingedam, with exclusively Dutch parties and without any further cross-border elements, the next question referred to the CJEU was whether the Services Directive applies to such a purely “internal” situation. This fundamental question was referred earlier in the Amsterdam canal cruises and window prostitution cases (Cases C-340/14 en C-341/14 Trijber and Harmsen). In these cases, the CJEU, contrary to the opinion of Advocate general (AG) Szpunar, did not answer that question, as it considered those cases concerned situations that were not purely internal. This time, the CJEU agrees with AG Szpunar that the Services Directive also applies to service providers wishing to establish themselves in their own Member State.

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The Houthoff Buruma EU team is available at eu-office@houthoff.com or +32 (0)2 507 98 00.

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Greetje van Heezik

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Advocaat | Senior Associate
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