Free movement (of gold) meets consumer protection (C-481/12)

In its Judgment of 16 January 2014 in case C-481/12 Juvelta, the Court of Justice of the EU has issued an interesting decision concerned with the delicate balance between free movement of goods under Article 34 TFEU and the protection of consumers.

In the case at hand, gold jewellery was imported into Lithuania. The golden products had been stamped with the Polish hallmark to indicate their quality and fineness. The Polish and Lithuanian hallmarks differed in that Lithuanian rules require the express indication of the per thousand purity of the gold, whereas the Polish hallmark functions on a scale basis. Aware of such a divergence, the importer of the jewellery had complemented the Polish 'official' hallmark with a 'private mark' that expressly indicated the additional information necessary for Lithuanian consumers to understand the quality of the products. However, Lithuanian authorities were not willing to accept the validity of such 'private' second hallmark and required the products to be 'officially' marked again to comply with Lithuanian standards. The importer considered this an unjustified restriction of its free movement of goods rights and challenged the decision.

The CJEU framed the case within the standard Dassonville formula for the assessment of measures of equivalent effect to quantitative restrictions and offered some interesting insights into the limitations that consumer protection may introduce in that analytical framework. It is worth noting that, according to the CJEU,
23 In order to determine whether an indication of a standard of fineness not provided for by legislation of a Member State provides consumers with equivalent and intelligible information, the Court must take into account the presumed expectations of an average consumer who is reasonably well-informed and reasonably observant and circumspect (see, to that effect, Commission v Ireland, paragraph 32).

24 With regard to the proceedings
 [...] it should be noted that [...]
the articles at issue in the main proceedings were stamped with hallmarks by an independent assay office authorised by the Republic of Poland, in accordance with that State’s legislation.

25 Likewise,
[...]
it is not disputed that the hallmark stamped on those articles shows their standard of fineness by means of the mark consisting of the numeral ‘3’ and that, in Poland, that mark is intended to denote articles of precious metals whose standard of fineness, expressed as the number of parts by weight of the precious metal in 1 000 parts by weight of the alloy, is 585.

26 It follows that the information provided by that mark is, as far as the articles of precious metal stamped with a hallmark in Poland are concerned, equivalent to that provided by the numerals ‘585’ on a hallmark stamped by an independent assay office authorised in Lithuania, in accordance with that State’s legislation.

27 That said, consideration must also be given to whether the marking of the numeral ‘3’ on the hallmarks stamped on the articles at issue in the main proceedings provides information intelligible to an average Lithuanian consumer who is reasonably well-informed and reasonably observant and circumspect.

28 In that regard, it must be held that it is probable that that mark is not intelligible to such a consumer, since such a person is not, in principle, deemed to know the Polish system of indicating standards of fineness for articles of precious metal.
29 However, although the restrictive effects of the legislation at issue can thus be justified by the objective of ensuring effective protection for Lithuanian consumers, and providing them with information relating to standards of fineness for articles of precious metal imported into Lithuania which are intelligible to them, such justification can be accepted only if that legislation is proportionate to the objective pursued, that is to say if, while appropriate in order to fulfil that objective, it does not go beyond what is necessary to attain it (C-481/12 at paras 23-29, emphasis added).
 
In Juvelta, then, the CJEU seems to have inserted an intermediate test of adequacy for consumer protection purposes that may need to be applied before the rule of reason analysis of the restrictive measure and in a cumulative manner. Hence, it seems that in situations where the application of free movement rules may leave consumers unprotected, the CJEU may be willing to set a limitation on the standard criteria of mutual recognition.
 
In general, then, it seems that the additional consideration of consumer protection/expectations comes to consolidate a 'suitability check' applied to the free movement rules (not to the measure having equivalent effect, which is still subjected to the traditional proportionality analysis) and, in that regard, seems fit for the purpose of ensuring overall consistency of the EU internal market rules--which, ultimately, should aim to protect consumers as well as allowing them to benefit from the increased efficiency that market competition brings about.
 
It may be that Juvelta does not create a revolution in the way free movement rules are applied (as such considerations had already occasionally been taken into account by the CJEU to a certain extent), but it may have spelled out more clearly the analytical path through which measures having equivalent effect against free movement of goods need to be assessed. In my view, this is a positive (incremental) development.