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Free movement law—a restriction on inter-state trade

The obstacle to free movement was obvious and unashamed. It was the core of the FAPL’s commercial model. As the Court summed it up, the ‘strategy is to bring the competition to viewers throughout the world while maximising the value of the rights to its members, the clubs’.06 To this end the whole system was designed to keep national markets separate: the trade in decoding devices brought competition of exactly the type that undermined the FAPL’s business model. Unchecked, it would eventually result in an inability to charge a price any higher than that capable [1]

of being absorbed by the cheapest market in the whole EU, with the result that the model would need to shift towards a model of territorial exclusivity—for the entire EU. To which the adherent of consumer choice and competition in the EU might respond—a very good thing too. To which a more sceptical observer might respond—if low-price markets are permitted to undermine the value of high-price markets then it is probable that the Premier League will simply withdraw from low-price markets (such as Greece), which will help neither market integration nor consumer choice. So a rather exciting choice about the best way to promote an internal market lurks beneath the surface of the dispute. The core legal question was whether any justification could be found for the attempt to suppress the crossmarket in decoding devices.

The core of the legal case made by the Premier League was copyright infringement.07 In particular, the relevant statutory provisions, sections of the UK Copyright, Designs and Patents Act 1988, allowed for criminal prosecutions in connection with the provision of broadcasting services in this manner in addition to civil claims. Here lies the interest as a matter of EU law. It was argued that EU free movement law defeated any attempt to suppress the practices of which the League complained. Specifically the High Court asked whether Articles 28 or 49 EC, which are now Articles 34 and 56 TFEU, preclude enforcement of a provision of national law which makes it unlawful to import or sell a satellite decoder card which has been issued by the provider of a satellite broadcasting service in another Member State on the condition that the satellite decoder card is only authorized for use in that other Member State. So this pitted free movement law against contractual autonomy and the business model of the Premier League and BSkyB. In similar vein and intent, the preliminary reference asked how to examine the network of exclusive licences involving territorial restriction in the light of Article 81(1) EC, now Article 101 TFEU. So both state measures and contractual networks struck by private parties fell under scrutiny. Moreover, wrapped up in the inquiry were questions about the extent to which relevant EU secondary legislation, the Conditional Access Directive 98/84 and, of most relevance, the Copyright Directive 2001/29Th8 governed action taken to suppress the use of a device in the manner that had occurred beyond the authorization of the service provider.

The Court’s examination of the matters of secondary legislation, and in particular those concerning the protection of intellectual property, are intricate in their detail. However, the essence of the Court’s initial finding was that the Conditional Access Directive was not relevant, for the matter of national legislation which prevents the use of foreign decoding devices escaped its material scope. This then brought the Court to consider the Treaty rules on free movement of goods and services, and it is this which provides the central part of the judgment. [2] [3]

The Court first decided that the legislation fell to be examined in the light of Article 56 TFEU: it concerned at heart services (the broadcasts) rather than goods (the devices).!29 However, this is a point of legal detail with no wider implications of principle. In most, though not all, important respects the provisions on free movement are interpreted in a convergent manner—as they should be, unless strong arguments for their segmentation can be constructed, since all are based on the same idea of the internal market as a legal concept.130 There was, the Court readily proceeded to find, a restriction on the freedom to provide services within the meaning of Article 56 TFEU. It was, in fact, a case of national legislation backing up territorial restrictions located in private contracts.m So the main issue was whether the legislation could be objectively justified.

  • [1] Karen Murphy (n 125) para 32. The commercial model is summarized at paras 32—35 of thejudgment.
  • [2] In detail, ibid paras 46ff.
  • [3] Directive 98/84/EC of 20 November 1998 on the legal protection of services based on, orconsisting of, conditional access [1998] OJ L320/54; Directive 2001/29/EC of 22 May 2001 on theharmonisation of certain aspects of copyright and related rights in the information society [2001]OJL167/10.
 
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