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INTERNET LAW – Free Movement of Goods within the EU vs. Member States’ Law Restrictions on Mail Orders

The EU Directive on Electronic Commerce, articles 28 and 30, in general terms, purport for a free movement of goods and services among the EU Member States and prohibit quantitative or qualitative restrictions on imports from other Member States. Member States may not legislate to impose barriers or quantitative restrictions on goods or services from other EU countries.

The German law for the protection of young persons (Jugendschutzgesetz) prohibits the sell of unlabelled image storage media (DVDs, videos, cassettes, etc), through mail orders- which include Internet sales,- to children and adolescents. Those sales are allowed if the image storage media has been leveled by the proper authorities as information or educational programs. Image storage media that have not been labeled according to the children’s age, and by the proper government or private regulatory agency, cannot be accessible, transferred, or made available to a child or adolescent through mail orders or over the Internet.

A German company imported image storage media (DVDs and videos) from the United Kingdom (UK) and sold them on the Internet, through mail others and other means. These goods were properly labeled by the UK authorities but they were not labeled by the German’s authorities. A German competitor merchant accused this company of violating the German law for the protection of young persons by selling these imported goods over the Internet. The accused Internet merchant claimed that the goods were properly labeled in UK and that his actions were protected under the EU Directive on E-commerce.
The initial question was whether the principle on free movement of goods within the meaning of article 28 EC precludes the German law prohibiting the sale by mail order of unlabeled image storage media to children and adolescents. Then, the European Court of Justice (ECJ) considered whether, under article 30 EC, the fact that the image storage media had been examined by another Member State and properly labeled still violated the German law.

The ECJ held that the German’s prohibition of selling unlabeled storage media by mail order to children and adolescents does not impose quantitative restrictions on imports within the meaning of article 28 EC. The reason for this decision is based on the fact that the law for the protection of young persons applies indiscriminately to domestic sales and imports. Thus, there is not restriction as long as the law affects both products originating in the state and products originating in other Member States. Further, even if the German court had determined that its law establishes a quantitative restriction on imports within the meaning for Article 28 EC, that prohibition is justified by article 30 EC on the grounds of public morality, public policy, and protection of health of humans; even if the image storage media has been examined and labeled by the authorities of other Member State.