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European internal market.

Module D: Regulation of the internal market.

Chapter 4: Legal basis and legislative procedural issues relating to internal market legislation.

Choice of legal basis
An act must be based on a single legal basis if one purpose is identifiable as predominant or if the procedural requirements clash: Case C-300/89 Commission v Council (titanium dioxide), Case C-137/12 Commission v Council (Conditional Access Convention). The catch-all Article 114 and Article 352 TFEU are not the appropriate legal basis if the purpose is covered by some other Treaty provision: Case C-533/03 Commission v Council (VAT), Case C-377/98 Netherlands v Parliament and Council (biotechnological inventions).

Article 114 TFEU
Article 114 does not vest the Union legislature with a general power to regulate the internal market: Case C-376/98 Germany v Parliament and Council (tobacco advertising I); Article 114(1) can be used: A readopted directive was unsuccessfully challenged in Case C-380/03 Germany v Parliament and Council (tobacco advertising II).
 * the elimination of likely obstacles to the exercise of fundamental freedoms; or when the legislation contributes to
 * the removal of appreciable distortions of competition which are likely to arise from the diverse national rules.

But if the legislation contributes to the functioning of the internal market, it is no bar that a public good was a decisive factor in choosing the measure: Case C-491/01 British American Tobacco, Case C-210/03 Swedish Match. The measure does not have to be liberalizing: Joined cases C-154/04 and C-155/04 Alliance for Natural Health. The legislative act can be timed to prevent divergence: Case C-350/92 Spain v Council (supplementary protection certificate); see also Case C-301/06 Ireland v Parliament and Council (data retention directive).

Article 114 could be used for indirect harmonization: Case C-66/04 UK v Parliament and Council (smoke flavourings), Alliance for Natural Health, Case C-217/04 UK v Council (ENISA). But not where there is no approximate of laws (e.g. only minimum harmonization): Case C-436/03 Parliament v Council (European cooperative society), Case C-547/14 Philip Morris. The measures can apply horizontally: Case C-58/08 Vodafone. The exclusion of fiscal provisions in Article 114(2) covers all areas of taxation, whether material or procedural rules; the Council acted correctly by replacing it with Articles 113 (tax) and 115: Case C-338/01 Commission v Council (recovery mutual assistance directive).

Paragraphs 4 to 9 of Article 114 TFEU allows for Member State exemptions from the harmonizing measures. But a directive does not lose its direct effect when a Member State launches an approval procedure for an exemption: Case C-41/93 France v Commission (German PCP), Case C-319/97 Kortas. If the Commission finds one of conditions not fulfilled, it is not obliged to examine the others; right to be heard cannot be invoked by the applying Member State: Case C-512/99 Germany v Commission (mineral wool), Joined cases T-366/03 and T-235/04 Land Oberösterreich (GMO ban) appealed unsuccessfully as Joined cases C-439/05 P and C-454/05 P (but see Article 193 TFEU). The Court may annul the decision if the Commission does not take committee views into account: Case C-3/00 Denmark v Commission (food additives). The Commission must notify the Member State of its decision; the six-month time-limit is not interrupted by an internal decision: Case T-69/08 Poland v Commission.

Legislative procedures
The ordinary legislative procedure (Article 294 TFEU) involves the Parliament and the Council: Qualified majority voting (Article 16 TEU; Protocol 36) in the Council requires that: Parliament only needs to be consulted in the special legislative procedure for Articles 103(1) and 115 TFEU (for the latter, unanimity is required in Council); cf. Articles 43 (agriculture and fisheries), 168 (public health), 192 (environment), 352. The cooperation procedure has been abolished. Alternatives to legislative procedures include enhanced cooperation (Article 20 TEU and Articles 326–334 TFEU) and the open method of coordination.
 * 1) The European Commission submits a proposal to the Council and the European Parliament
 * 2) The Council and the Parliament adopt a legislative proposal either at the first reading or at the second reading
 * 3) If the two institutions do not reach an agreement after the second reading a conciliation committee is convened
 * 4) If the text agreed by the conciliation committee is acceptable to both institutions at the third reading, the legislative act is adopted.
 * 55 % of member states vote in favour – in practice this means 16 out of 28, and
 * the proposal is supported by member states representing at least 65 % of the total EU population.