Excursus: EU Fundamental Rights in EU Gambling Law

Abstract

EU fundamental rights have so far not been dealt with in the gambling jurisprudence; this chapter discusses their potential role. It starts by presenting the development of EU fundamental rights in the case law and the drafting of the Charter of Fundamental Rights.

The chapter then identifies the relevant fundamental rights. Gambling activities can fall under the ambit of the freedom to conduct a business (Article 16), the freedom to choose an occupation and the right to engage in work (Article 15) as well the freedom of expression and information (Article 11) in relation to advertising. With regard to the rights’ interpretation and their level of protection, the Charter of Fundamental Rights contains guiding principles, which are discussed.

Importantly, the relationship between EU fundamental rights and EU fundamental freedoms is clarified. Where both ‘rights’ and ‘freedoms’ are applicable, a twofold test applies: Are there measures available that would be less restrictive of both intra-Union trade and EU fundamental rights? Additionally, restrictions must respect the essence of fundamental rights (‘Kerngehalt’).

Finally, the last section examines whether the legal situation changed with the Lisbon Treaty, in particular regarding the scope of application. Prior to that treaty, the Court had expanded the scope in the judgments ERT and Familiapress to include facts that ‘fall within the scope of Community law’. At first sight, the Charter seems to re-diminish the scope as it applies to ‘the Member States only when they are implementing Union law’. However, a thorough analysis of the ‘travaux préparatoires’ illustrates that the situation is much more ambiguous.

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According to the judgments of the Court of Justice and the EFTA Court as well as the opinions of the Advocates General, the violation of EU or EEA fundamental rights has so far not been pleaded in the gambling cases.¹ This is somehow surprising: the application of fundamental rights is not excluded from the outset and counsels have argued points that clearly had less chances of success in the gambling cases.² Chapter 11 discusses the potential role of EU fundamental rights in the gambling jurisprudence. The development of EU fundamental rights, mainly done by case law (Sect. 11.1), and the drafting of the Charter of Fundamental Rights of the EU are presented (Sect. 11.2). This lays the basis to analyse, which EU fundamental rights may apply to gambling services and to inquire the level of protection and interpretation under the Charter as well as their relationship to EU fundamental freedoms of the Single Market (Sect. 11.3). Finally, it is examined whether the legal situation changed with the Lisbon Treaty (Sect. 11.4).

1 Development of Fundamental Rights in Case Law

Fundamental rights are a category of law that the drafters of the Rome Treaties did not have in mind. The focus of the EEC Treaty was on the creation of a common market and the policies and supranational institutions that would be necessary to achieve it. The relation between the Court of Justice on the one side and national constitutional courts as well as the ECtHR on the other can be compared to the two-sword doctrine with the religious and the secular leader each holding their swords.³ While the Court of Justice had the reign over European economic law, national constitutional courts – supervised by the ECtHR – held the reign over fundamental and human rights law.

The Court of Justice challenged the initial balance and separation of powers. Five years after the EEC Treaty entered into effect, the Court started to develop its constitutional reading of EEC law with Van Gend en Loos in 1963⁴ and Costa v ENEL in 1964.⁵ The direct effect and supremacy of EU law were a challenge to the constitutional doctrines of many Member States. According to the Court of Justice, direct effect and supremacy of EU law did not depend on approval by national constitutional doctrines. These principles were inherent to the EEC Treaty.

The constitutional reading, based on a predominantly teleological interpretation of Union law and the central role granted to fundamental freedoms raised concerns that Union law might marginalise national law. The case law on supremacy triggered two questions. First, would EU law be held supreme to any national law, including fundamental rights as protected by the constitutional laws of the Member States? Secondly, would EU law even prevail in a situation of conflict where the national legislation was passed subsequent to the relevant EU provision? Both questions were answered in the affirmative; the former in Internationale Handelsgesellschaft ⁶ and the latter in Simmenthal.⁷

This development of the doctrine of supremacy challenged the constitutional courts. Not only did the Court of Justice claim that its sword was superior to that of national courts (Costa v ENEL); it also seemed to question the very relevance of the sword of the constitutional courts. The Court held in Internationale Handelsgesellschaft that the validity of Union law could not be “overridden by rules of national law, however framed,”⁸ meaning in the case at hand fundamental rights protected by national constitutional law.

In the aftermath of the atrocities committed during the Second World War, human rights had been attributed a central role in Western European legal orders. The Council of Europe was founded whose main role has been the promotion of human rights. The ECtHR was adopted to ensure an effective and independent protection of those rights. National constitutions listed the recognised fundamental rights and empowered courts to protect those rights. The Court of Justice’s development of the doctrine of supremacy questioned this central role of fundamental rights. Was the Internal Market a means or a goal in itself? The Court of Justice left the constitutional courts with the impression of ignoring that European economic integration was only a means to avoid a replication of the atrocities of two world wars.

This approach was unacceptable to a number of constitutional courts and later also to the ECtHR.⁹ It was intolerable to them that the respect of fundamental rights was subject to the grace of the Court of Justice. In the aftermath of Internationale Handelsgesellschaft, several constitutional courts made clear that they were not ready to allow such encroachment on their reign, most prominently the German Bundesverfassungsgericht in its ‘Solange I’ ruling.¹⁰ While constitutional courts were ready to accept the idea of supremacy of EU law, they were not ready to sacrifice fundamental rights on the altar of supremacy.

This seemed to leave the Court of Justice with two options. First, EU law would continue to be of mere economic nature and, as such, would be subject to national fundamental rights as interpreted by constitutional courts. Second, the Court would recognise fundamental rights as forming part of EU law – and as interpreted by the Court of Justice. Wisely, the Court opted for the latter option, which the Bundesverfassungsgericht had indicated in the Solange I ruling. The Court of Justice realised that it could only sustain the doctrine of supremacy of EU law if it effectively protected fundamental rights.

While the Court of Justice had rebutted to discuss fundamental rights in earlier years,¹¹ it started in the 1970s to recognise a number of fundamental rights. Eventually, it also became clear that the protection of fundamental rights gave a level of legitimacy to the constitutional reading of Union law that mere market integration could not.¹²

When the Court of Justice first stated that it would protect fundamental rights under Union law, it did so in a quite unspectacular manner. In Stauder, the Court chose an interpretation of a provision that allowed it to accommodate the claims of the plaintiff that the provision at hand would otherwise violate his human right to privacy. The Court simply stated without further elaboration at the end of the decision:

Interpreted in this way the provision at issue contains nothing capable of prejudicing the fundamental human rights enshrined in the general principles of Community law and protected by the Court.¹³

Certainly, the Court of Justice in Internationale Handelsgesellschaft repeated that “respect for fundamental rights forms an integral part of the general principles of law protected by the Court of Justice.”¹⁴ But the decision was overshadowed by the blunt statement that the validity of Union law could not be “overridden by rules of national law, however framed.”¹⁵ Furthermore, the Court found after a rather superficial analysis that the Union system at hand did “not violate any right of fundamental nature.”¹⁶ Fundamental freedoms took precedence over fundamental rights or were at least protected at a higher level than fundamental rights.¹⁷

In the following years, the Court continued to insist on the autonomous development of EU fundamental rights. Nevertheless, it indicated certain authoritative sources for EU fundamental rights. These rights were “inspired by the constitutional traditions common to the Member States”¹⁸ and “international treaties for the protection of human rights on which the Member States have collaborated or of which they are signatories, can supply guidelines for these rights.”¹⁹ It became evident that particular attention would be given to the ECHR. The Court of Justice started to refer to it in Rutili,²⁰ and finally found that the ECHR had “special significance.”²¹ The Court of Justice has accepted a broad variety of fundamental rights that can be grouped into civil rights, economic rights, rights of defence and (other) general principles of law.²² The two main sources of inspiration for the Court of Justice in defining these rights have been the constitutional traditions common to the Member States and the ECHR, including the case law of the ECtHR.²³

While this excursus focuses on EU fundamental rights, it should be noted that the EFTA Court too has accepted fundamental rights as general principles of EEA law.²⁴ The first such recognition occurred in the case TV 1000,²⁵ which regarded a Norwegian ban on the transmission of pornographic films from Sweden to Norway. The EFTA Court found that this prohibition was a restriction of the freedom of expression, however, justified by public morality concerns. The EFTA Court referred to the case law of the ECtHR, namely the latter’s well known Handyside judgment.²⁶ It held, in very similar terms as the ECtHR, that there was no uniform conception of morals in the domestic laws of the Contracting States.²⁷ The EFTA Court recognised further EEA fundamental rights in subsequent decisions. In Bellona, it held that access to justice constituted an essential element of the EEA legal framework and that the idea of human rights reinforced calls for widening the avenues of access to justice in the EEA.²⁸ In relation to the right to a fair and public hearing within a reasonable time, it noted that the ECHR and the case law of the ECtHR were important sources for determining the scope of EEA fundamental rights.²⁹ Recently, it held that effective judicial protection, including the right to a fair trial, constituted a general principle of EEA law. It was in this light that the EFTA Court assessed the burden of proof and the legality of a fine imposed during a competition law procedure.³⁰ Finally, it should be noted that the EFTA Court has repeatedly referred to the Charter of Fundamental Rights of the EU.³¹

2 Drafting of the Charter of Fundamental Rights of the EU

After three decades during which the Court of Justice recognised a number of fundamental rights as general principles of EU law, many EU stakeholders felt that fundamental rights should receive a more prominent and visible place. In 1999, the European Council of Cologne decided that a charter of fundamental rights should be composed. That document should combine the rights of the ECHR, those of the common constitutional traditions, EU citizenship rights as well as the social rights enshrined in the European Social Charter and the Community Charter of the Fundamental Social Rights of Workers.³²

Accommodating earlier criticism of a lack of democratic legitimacy and procedural transparency, a completely new method – the Convention – was chosen to draft the charter. The Convention’s meetings were public, attended by various observers, and many groups from civil society were invited to submit contributions.³³ One year after the constituent meeting of the Convention, the Charter of Fundamental Rights was signed and proclaimed by the presidents of the Council, the European Parliament and the Commission during the European Council of Nice in 2000.³⁴ The result was ambiguous. While the Charter contained a broad variety of rights, it was not given legally binding status mainly because it also listed social rights, which not all Member States were ready to accept as binding.

The development of EU fundamental rights profited from a mutual influence between the Court of Justice and the EU legislator, even though the former’s role was dominant up to the new millennium. When the Court in the early 1970s started to develop a jurisprudence of fundamental rights, there was no express legal basis in Union law to base it on. In 1977, the Council, European Parliament and Commission passed a joint declaration in which they stressed

the prime importance they attach to the protection of fundamental rights, as derived in particular from the constitutions of the Member States and the European Convention for the Protection of Human Rights and Fundamental Freedoms.³⁵

The EU legislator expressly referred to the Court’s fundamental rights case law and to the same sources that the Court too indicated as sources of inspiration. Two years later, the Court of Justice in return referred to this declaration in Hauer.³⁶

The other aforementioned documents that influenced the Charter of Fundamental Rights of the EU were the Community Charter of the Fundamental Social Rights of Workers,³⁷ the Maastricht Treaty³⁸ with its citizenship provisions and the European Social Charter.³⁹ The Community Charter was adopted by the European Council in 1989 in the form of a declaration. It established the major principles on which European labour law should be modelled; the Commission was supposed to take action in this matter.⁴⁰ The Maastricht Treaty introduced the Union citizenship, which offered a couple of political rights to EU citizens, including diplomatic protection. By contrast, the European Social Charter⁴¹ was not adopted by the Union but passed by the Council of Europe in 1961 as the natural complement of the ECHR; it contains social and economic human rights and was revised in 1996.⁴²

The Lisbon Treaty and the Charter of Fundamental Rights of the EU also redefined the relationship of the EU to the ECHR. The EU gained legal personality: it can enter legally binding acts and enjoys in each of the Member States “the most extensive legal capacity accorded to legal persons under their laws.”⁴³ According to the revised Treaties, the EU itself shall accede to the ECHR.⁴⁴ Once this occurs, the EU and its institutions will be subjected to the jurisdiction of the ECtHR – a major readjustment of the judicial architecture of the European High Courts. However, the fundamental rights as guaranteed by the Convention and resulting from the constitutional traditions common to the Member States form in any event already general principles of EU law.⁴⁵

At the time of writing, the EU’s accession to the ECHR was not yet finalised, but the entry into force of Protocol No 14 in 2010 provided the necessary legal basis for this step.⁴⁶ A draft accession agreement of the EU to the ECHR was reached in April 2013.⁴⁷ In spite of the yet to finalise accession process, the EU is already indirectly subjected to the ECHR. All EU Member States ratified the ECHR. The ECtHR made it clear that the Signatory States have to comply with the ECHR, irrespective of whether or not they are members of the EU. The question whether the ECHR is directly applicable in a case is a matter for the national law to decide. Some countries follow a dualist, others a monist approach. In any case, the veil of EU law does not prevent the Signatory States from being under a legal obligation to respect the ECHR. The ECtHR has been very outspoken on this point, for instance in the well-known Bosphorus case,⁴⁸ a kind of Solange judgment of the Strasbourg Court similar to that of the German Constitutional Court.⁴⁹ EU law must thus comply with the ECHR.

3 EU Fundamental Rights in Gambling Law

3.1 Applicable Rights

The status of the Charter⁵⁰ has been a controversial issue. It became legally binding only with the entry into effect of the Lisbon Treaty and has now the same legal status as the Treaties,⁵¹ thus holding the potential to substantially add to the constitutional reading of the Court. The adoption of the Lisbon Treaty gave the Charter a more prominent place in the legal architecture of the Union.⁵²

It is important to note that, irrespective of its legal status, the Charter reaffirms rights that were already recognised earlier. There are ample indications for this position. The preamble itself reaffirms

the rights as they result, in particular, from the constitutional traditions and international obligations common to the Member States, the European Convention for the Protection of Human Rights and Fundamental Freedoms, the Social Charters adopted by the Union and by the Council of Europe and the case-law of the Court of Justice of the European Union and of the European Court of Human Rights.⁵³

The fact that the Charter reaffirms formerly recognised rights was also noted by members of the Court of Justice. Prior to the entry into effect of the Lisbon Treaty and shortly after the Charter’s initial proclamation in Nice, Advocates General and the General Court began referring to the Charter. According to Advocate General Tizzano

the Charter […] is not in itself binding. However, […] the fact remains that it includes statements which appear in large measure to reaffirm rights which are enshrined in other instruments. […] in particular, we cannot ignore [the Charter’s] clear purpose of serving, where its provisions so allow, as a substantive point of reference for all those involved […] in the Community context.⁵⁴

The General Court⁵⁵ and the Court of Justice⁵⁶ confirmed the reaffirming character of the Charter.

Consequently, even where this chapter refers to provisions of the Charter, the relevant rights were already relied upon prior to the Lisbon Treaty, simply sometimes under a slightly different term. Three fundamental rights are of main interest for the purpose of this analysis: Article 16 (freedom to conduct a business), Article 15 (freedom to choose an occupation and right to engage in work) and Article 11 (freedom of expression and information).

Article 16 protects the freedom to conduct a business.⁵⁷ Unsurprisingly, any business must be conducted “in accordance with Union law and national laws and practices.”⁵⁸ This ‘limitation’ does not further restrict the fundamental right since fundamental rights can generally be limited if provided by law.⁵⁹ The interpretation of the fundamental rights is guided by the Explanations Relating to the Charter of Fundamental Rights.⁶⁰ According to these Explanations, Article 16 is based on the case law of the Court of Justice, which recognised the freedom to exercise an economic or commercial activity⁶¹ as well as the freedom to contract.⁶² In addition – and neglected by the Explanations – the Court also recognised the right to trade.⁶³ The Explanations further refer to Article 119(1) TFEU protecting free competition.⁶⁴

The example of the fundamental right to conduct a business illustrates that the Charter does not simply protect human rights already protected under the ECHR. The two instruments differ in their genesis and purpose. Contrary to the Council of Europe, which was founded to protect a minimum level of classic human rights, the economic dimension has always been central to the EU integration process. While the right to conduct a gambling business is protected under the Charter, it falls outside the scope of the Convention, except where national law determines ‘civil rights’ of gambling operators.

In view of the status of the Convention within the legal order of Sweden, the Court observes firstly that the Convention does not grant to individuals or companies the right to provide betting and gaming services. Such a right can be derived neither from Article 6 § 1 nor from any other provision of the Convention or its Protocols. It follows that the question whether such a right can be said to exist in any particular case must be answered solely with reference to domestic law. In deciding whether a right, civil or otherwise, could arguably be said to be recognised by Swedish law, the Court must have regard to the wording of the relevant legal provisions and to the way in which these provisions are interpreted by the domestic authorities.⁶⁵

Therefore, where national law does not provide for a right to acquire a licence but rather involves a mere allocation of a limited number of concessions, the Convention is regularly not applicable in the absence of any determination of ‘civil rights’. With regard to gambling consumers finally, Article 1 of Protocol No 1 does not confer a right to possess gambling goods such as gaming machines. The provision only protects property but not a right to acquire property.⁶⁶ The different scope of the Convention and the Charter must not be neglected.

The scope of application of Article 16 of the Charter is more general and broader than that of Articles 15 and 11. Generally, it applies to situations where the freedom to conduct a business is somehow restricted. This is significantly the case where monopolistic structures or strict licensing/authorisation systems are in place. Gambling businesses are regularly conducted by legal persons but may exceptionally be conducted by natural persons as well. Article 16 protects both of them.

Article 15 protects the freedom to choose an occupation and the right to engage in work.⁶⁷ As opposed to Article 16, this provision only protects natural persons. The Explanations on Article 15 deal with its three paragraphs separately. Article 15(1) refers first to the case law of the Court of Justice protecting the freedom to choose an occupation.⁶⁸ Moreover, the paragraph draws upon Article 1(2) of the European Social Charter and Point 4 of the Community Charter of the Fundamental Social Rights of Workers. The former protects the right to work and calls the parties “to protect effectively the right of the worker to earn his living in an occupation freely entered upon.” The latter holds that “[e]very individual shall be free to choose and engage in an occupation according to the regulations governing each occupation.” Hence, the first paragraph applies to situations where somebody cannot pursue gambling activities as an occupation (Article 15(1)), either by offering gambling services or by receiving these services in the sense of a professional occupation.⁶⁹

Article 15(2) deals with the fundamental freedoms of workers, services and establishment. The fact that these ‘fundamental freedoms’ are listed in the Charter also makes them take the shape of ‘fundamental rights’.

According to the Explanations, paragraph 3 is based on Article 153(1)(g) TFEU⁷⁰ and Article 19(4) of the European Social Charter.⁷¹ They both intend to improve the conditions of employment of migrant workers. Whereas the TFEU provision is rather programmatic, the provision from the European Social Charter would appear to provide a right to ‘treatment not less favourable’ than towards nationals. A potential application of Article 15(3) could be the following. If national measures restricted the employment of casino staff to nationals of that country, Union citizens and nationals of third countries entitled to work in the Union (Article 15(3)) would be protected in their seeking for employment and working in this field (Article 15(1–2)).

Finally, Article 11 protects the freedom of expression and information.⁷² Freedom of expression is relevant in that it also covers free commercial speech, at least as interpreted by the ECtHR. According to the Explanations, Article 11 corresponds to Article 10 of the ECHR;⁷³ therefore, the meaning and scope of this right is identical to that of the ECHR. In fact, this is considered to be a minimum threshold and the equivalence requirement does not prevent Union law from providing more extensive protection.⁷⁴ According to the Explanations, restrictions to the freedom of expression and information may not exceed those limitations provided for by the Convention (Article 10(2)).

Freedom of expression and information is most relevant in the field of advertising.⁷⁵ Restrictions to gambling services are very common; usually, only licensed operators are allowed to feature advertising. In some jurisdictions, advertising is supposed to be informative rather than aggressive.⁷⁶

3.2 Level of Protection and Interpretation

Due to the rather complex interplay of EU fundamental rights, ECHR and constitutional laws, the issue of the level of protection is very important. The Lisbon Treaty introduced a couple of aspects that are relevant in this regard. Prior to Lisbon, EU fundamental rights were de iure not necessarily protected at the same level as their corresponding rights at national and ECHR level. The Court of Justice insisted in keeping the autonomy of deciding on the level of protection.⁷⁷ Yet, the Court of Justice, subsequent to Solange I and similar rulings, was aware that it could not simply affront constitutional courts with a low standard of protection. In Omega, it even went as far as to accommodate national sensibilities to the potential detriment of a homogeneous application of EU Internal Market law.⁷⁸

The Charter eliminates some legal uncertainty. It contains four guiding principles that inform the level of protection and the interpretation of EU fundamental rights.⁷⁹ First, Article 53 provides that the protection offered by national constitutions and international treaties is not to be undermined.⁸⁰ According to the Explanations, this provision intends to at least maintain the current level of protection.⁸¹ In the unlikely event of the ECtHR lowering the protection level, the Court of Justice would remain bound by the higher protection level as formerly practised (‘standstill’). On the other hand, if the ECtHR were to raise the protection level, the Court of Justice would arguably have to follow.⁸²

Secondly, the Charter is composed of very different categories of rights, from classic defence rights to social rights. Insofar as rights correspond to rights guaranteed by the ECHR the meaning and scope shall be identical. However, Union law can offer more extensive protection.⁸³ This represents the practice of the Court of Justice in its case law. The Court’s practice was criticised as a ‘cut-out and paste’ reliance on the ECtHR’s jurisprudence⁸⁴ and that it did not take sufficient account of the substantial differences to the ECHR and the Council of Europe whose level of integration for instance was far less deep.⁸⁵

The third and fourth guiding principles can be seen as a kind of safeguard measure by the governments to prevent the Court from becoming ‘too creative’ in its interpretation of EU fundamental rights. Certainly, the Charter does not introduce rights that were unknown earlier to the EU legal order. But considering that the Charter is granted the same legal value as the Treaties and the Court’s affinity for a dynamic and teleological interpretation of EU law, concerns about a further intensified constitutional reading of EU law may not have been completely unfounded. Article 52(7) states that Union and national courts must give “due regard” to the Explanations.⁸⁶ It thus underlines the historic will of the legislator as method of interpretation. However, its significance may be limited since the Explanations mainly point at the source of the respective rights but not the scope and content.⁸⁷ Finally, Article 52(4) prescribes that rights resulting from the constitutional traditions common to the Member States should also be interpreted in harmony with those traditions.⁸⁸ This principle found prominent expression in Omega where human dignity served as justification ground to restrict the freedom to provide services.⁸⁹

3.3 Relationship Between EU Fundamental Rights and EU Fundamental Freedoms

In more recent years, EU fundamental rights raised most attention when they were used to justify national measures restricting EU fundamental freedoms. Prominent cases included Schmidberger, Omega, Viking and Laval. In these cases, the Court of Justices acknowledged that there were additional limits to fundamental freedoms and balanced the interest in the application of fundamental freedoms with the interest in respecting fundamental rights. Especially in Schmidberger, the Court used a methodology and language that is reminiscent of the approach of the ECtHR when it attempts to ‘strike a fair balance’. The diverging interests need to be reconciled. In Viking, the Court summarised its approach.

In that regard, the Court has already held that the protection of fundamental rights is a legitimate interest which, in principle, justifies a restriction of the obligations imposed by Community law, even under a fundamental freedom guaranteed by the Treaty, such as the free movement of goods […].

However, in Schmidberger and Omega, the Court held that the exercise of the fundamental rights at issue, that is, freedom of expression and freedom of assembly and respect for human dignity, respectively, does not fall outside the scope of the provisions of the Treaty and considered that such exercise must be reconciled with the requirements relating to rights protected under the Treaty and in accordance with the principle of proportionality […].

It follows from the foregoing that the fundamental nature of the right to take collective action is not such as to render Article [49 TFEU] inapplicable to the collective action at issue in the main proceedings.⁹⁰

The constellation, which is of interest for this analysis is a different one: Can a party rely on fundamental rights in addition to it relying on fundamental freedoms? As opposed to the earlier mentioned constellation, precedent is scarce in this case. The ‘cause célèbre’ in this context is ERT.⁹¹

Elliniki Radiophonia Tileorassi Anonimi Etairia (‘ERT’) was a Greek radio and television undertaking that was granted exclusive broadcasting rights. Notwithstanding these exclusive rights, Dimotiki Etairia Pliroforissis (‘DEP’), a municipal information company, and Mr Kouvelas, Mayor of Thessaloniki, set up a television station. ERT was seeking an injunction prohibiting the broadcasting as well as an order to seize and sequestrate the technical equipment before the Thessaloniki Regional Court, which referred the case to the Court of Justice. DEP and Kouvelas relied mainly on the provisions relating to competition and the freedom to provide services as well as on the freedom of expression as guaranteed in Article 10 ECHR. The government justified the restrictions by public policy interests (Article 62 referring to Article 52 TFEU). The objective was to avoid disturbances due to a restricted number of channels.

The Court recalled that fundamental rights, such as Article 10 ECHR, formed an integral part of the general principles of EU law. Measures incompatible with those rights could not be accepted. Where rules of the Convention fell “within the scope of Community law,” the Court of Justice had jurisdiction.

In particular, where a Member State relies on the combined provisions of [Articles 52 and 62] in order to justify rules which are likely to obstruct the exercise of the freedom to provide services, such justification, provided for by Community law, must be interpreted in the light of the general principles of law and in particular of fundamental rights. Thus the national rules in question can fall under the exceptions provided for by the combined provisions of [Articles 52 and 62] only if they are compatible with the fundamental rights the observance of which is ensured by the Court.

It follows that in such a case it is for the national court, and if necessary, the Court of Justice to appraise the application of those provisions having regard to all the rules of Community law, including freedom of expression, as embodied in Article 10 of the European Convention on Human Rights, as a general principle of law the observance of which is ensured by the Court.⁹²

ERT is of utmost relevance for several reasons. First of all, as opposed to earlier cases, ERT states that the Court of Justice can assess the compatibility with fundamental rights as soon as the situation “fall[s] with the scope of Community law.”⁹³ In earlier cases, the Court had argued that it did not have jurisdiction over situations where national rules did not implement provisions from Community law.⁹⁴ In ERT, the situation was that the freedom to provide services could have been obstructed, and the government relied on Treaty exceptions to justify the restrictions. Hence, ERT expanded the scope of EU fundamental rights law quite significantly.⁹⁵ This has been met with criticism⁹⁶ but also with more accommodating views.⁹⁷

Second, if national measures fall within the scope of Union law, they become subject to a twofold test. They will not only be assessed by the requirements of the provisions on the fundamental freedoms but also in the light of EU fundamental rights.

The Court of Justice described this twofold test in more detail in the subsequent judgment Familiapress.⁹⁸ The facts were about a prohibition on selling publications, which offered the chance to take part in competitions of prize games. The government here relied on ‘press diversity’ as an overriding requirement⁹⁹ that could justify restrictions on the free movement of goods. After recalling ERT, the Court described the due assessment:

it must therefore be determined whether a national prohibition […] is proportionate to the aim of maintaining press diversity and whether that objective might not be attained by measures less restrictive of both intra-Community trade and freedom of expression.¹⁰⁰

Certainly, one may argue that the Court of Justice in Familiapress did not separately assess whether the measures where proportionate in relation to intra-Union trade on the one hand and freedom of expression on the other. Sceptics could thus conclude that the Court of Justice would simply apply the same standard of review in relation to both aspects. However, it should not be neglected that the Court left the proportionality assessment to the national court and offered several criteria that this court would have to take into account. It is not unreasonable to argue a stricter standard of review where a national measure restricts both EU fundamental freedoms and EU fundamental rights.¹⁰¹ At least, this is what a grammatical and teleological interpretation of the Preamble of the Charter suggests: The ‘telos’ of ensuring EU fundamental freedoms requires a strengthening of EU fundamental rights.¹⁰²

Future cases will show whether the Court is willing to give guidance that provides separate criteria relating to the proportionality of fundamental freedoms and fundamental rights. The Charter mentions an aspect of fundamental rights that may well justify an assessment that gives special attention to EU fundamental rights. Article 52 on the scope and interpretation of rights and principles states:

Any limitation on the exercise of the rights and freedoms recognised by this Charter must be provided for by law and respect the essence of those rights and freedoms. Subject to the principle of proportionality, limitations may be made only if they are necessary and genuinely meet objectives of general interest recognised by the Union or the need to protect the rights and freedoms of others.¹⁰³

The provision refers to an important aspect of the doctrine on human and fundamental rights. The essence of the right must in principle be respected, the core of a right is not supposed to be violated. The German-speaking literature refers to ‘Kerngehalt’ or ‘Wesensgehaltsgarantie’.¹⁰⁴ While it is difficult to predict where the Court of Justice will draw the line regarding the essence of fundamental rights, the criterion obviously is only relevant in situations of very far-reaching restrictions to economic freedom.

The total ban of an activity, such as gambling services or of a certain type of game, would need to be assessed under a national fundamental rights perspective and not under Union law if there was no intra-Union trade element to it. The other extreme restriction is the complete nationalisation of a sector with only one monopolist remaining. In this situation, other operators (national or foreign) do not have any possibility of exercising this activity.

Article 52(1) did not introduce a novel element to the EU legal order. It can be seen as a confirmation of a doctrine found in the “constitutional traditions and international obligations common to the Member States.”¹⁰⁵ The Court of Justice too had used similar language in its case law prior to Lisbon. It referred to the essence of the right for instance in Wachauf, a case decided two years prior to ERT:

restrictions may be imposed on the exercise of those [fundamental] rights […] provided that those restrictions in fact correspond to objectives of general interest pursued by the Community and do not constitute, with regard to the aim pursued, a disproportionate and intolerable interference, impairing the very substance of those rights.¹⁰⁶

In the following paragraph, the Court seemed to suggest that the core of the fundamental right concerned would indeed be violated if a certain regulatory solution were chosen. It called the Member State to apply the Union law “in a manner consistent with the requirement of the protection of fundamental rights.”¹⁰⁷

4 Scope of Application After the Treaty of Lisbon?

Prior to the abolition of the three-pillar structure, the Court of Justice applied two different tests. It limited its ERT formula (‘fall within the scope of Community law’) to situations under the first pillar. For situations under the third pillar, it applied, even after ERT, the formula ‘when implementing the law of the Union’.¹⁰⁸

With the entry into force of the Lisbon Treaty, the Union acquired legal personality and the pillar structure was abandoned. It is thus clear that the Court may not necessarily continue to make the aforementioned differentiation between the different pillars. The Charter seems to offer guidance in this context.

The provisions of this Charter are addressed to the institutions, bodies, offices and agencies of the Union with due regard for the principle of subsidiarity and to the Member States only when they are implementing Union law.¹⁰⁹

It would appear that this provision indicates that the drafters of the Charter called for a narrower scope of application of EU fundamental rights than the Court of Justice used to give under the ERT formula. However, the Explanations are far from being clear on this point, and it will be – again – for the Court of Justice to find an appropriate interpretation.¹¹⁰ In fact, the Explanations on Article 51(1) make reference to the Court’s case law, noting that

it follows unambiguously from the case-law of the Court of Justice that the requirement to respect fundamental rights defined in the context of the Union is only binding on the Member States when they act in the scope of Union law.¹¹¹

Besides other judgments, the Explanations also expressly refer to the ERT ruling. According to the wording of the Explanations and the express reference to ERT, the drafters seem to nevertheless favour the wider scope of application from ERT. The Explanations, however, take yet a different direction, claiming that the Court of Justice had “confirmed this case law” and referring to the Karlsson case. In that case, the Court had used the formula “binding on Member States when they implement Community rules.”¹¹² This case related to a situation where the Swedish authorities had applied EU secondary law and national law implementing EU law. Thus, there was no need for the Court to resort to the ERT formula, which applied to a situation relating only to the fundamental freedoms from primary law. Considering the facts in Karlsson, the Court could have also resorted to the alternative formula known from Wachauf and other cases. In sum, the Explanations make Article 51(1) much more ambiguous than the provision appears at first sight.

According to Huber, certain members of the Convention tried to narrow the Court of Justice’s formula. He also noted unclear Explanations of the Convention as well as diverging language versions.¹¹³ Kober observed that a systematic limitation of the Court’s jurisdiction could not be identified from the discussions in the Convention nor had any critical discussion of ERT or Familiapress taken place in the Convention. He further argued that at least the German version of the Charter (“Durchführung des Rechts der Union”) also covered the observance of primary law.¹¹⁴ This is all the more remarkable since the attempts to limit the Court’s jurisdiction had come, according to Huber, from two German members (and one French member).¹¹⁵

As a result, it is certainly not excluded that the Court of Justice will hold that the Charter applies where national measures fall within the scope of Union law,¹¹⁶ and that it might abandon the narrower formula formerly used in relation to second and third pillar issues. In any event, a two-tier approach with a narrower scope applying to the Charter’s fundamental rights and a wider scope applying to fundamental rights recognised in the case law as general principles of EU law does not seem to be desirable.¹¹⁷

5 Results

Chapter 11 examined the potential role of EU fundamental rights in the gambling jurisprudence. Section 11.1 outlined the development of fundamental rights in the case law. The Court of Justice’s jurisprudence on the supremacy of EU law triggered opposition from constitutional courts, which saw the effective protection of national fundamental rights endangered. In response, the Court of Justice developed a rich case law on autonomously interpreted EU fundamental rights and referred to two main sources of inspiration: the constitutional traditions common to the Member States as well as international treaties for the protection of human rights on which the Member States have collaborated or of which they are signatories, in particular the ECHR. Similarly, the EFTA Court too recognised fundamental rights as general principles of EEA law.

Section 11.2 showed that the EU legislator and judiciary mutually influenced each other over several decades in the development of the protection of EU fundamental rights. A novel, mixed institution – the Convention – was in charge of drafting the Charter. That document became legally binding with the entry into effect of the Lisbon Treaty. According to the revised EU Treaties, the EU itself shall accede to the ECHR.

Section 11.3 first inquired which EU fundamental rights could apply to gambling activities. The latter can fall within the ambit of three rights. First, the freedom to conduct a business (Article 16) protects in particular the freedom to exercise an economic or commercial activity, the freedom to contract and the freedom to trade, both of natural and legal persons. Secondly, the freedom to choose an occupation and right to engage in work (Article 15) protects natural persons. Thirdly, the freedom of expression and information (Article 11) is relevant for the gambling jurisprudence in that it also covers free commercial speech, including the advertising of gambling services. The Charter contains guiding principles for its interpretation and notes inter alia that the respect for EU fundamental rights is meant to be maintained (at least) at the level of national constitutions and international treaties, namely the ECHR.

Finally, Sect. 11.3 examined the relationship of EU fundamental rights and EU fundamental freedoms. The Court of Justice developed two important points in ERT and Familiapress. First, Member States are bound by EU fundamental rights if the facts of the case “fall within the scope of Community law.” While the abandonment of the pillar structure does not necessarily mean that the Court of Justice will apply this approach to all areas of EU law, gambling activities relate in any event to the Internal Market (formerly under the first pillar). Secondly, in those situations, a twofold test applies to the national measures. Are there measures available that would be less restrictive of both intra-Union trade and EU fundamental rights? In relation to EU fundamental rights, an additional criterion is mentioned both in the Charter and the jurisprudence: Restrictions must respect the essence of fundamental rights (‘Kerngehalt’), a criterion which at least holds the potential to argue against the nationalisation of a national gambling market leading to a total prevention of other operators to exercise their fundamental rights.

Section 11.4 examined whether the scope of application changed with the Lisbon Treaty. Article 51 of the Charter at first sight seems to answer this question in the affirmative, noting that the Charter applies to “the Member States only when they are implementing Union law.” However, the ‘travaux préparatoires’ sent ambiguous signals by using unclear language and an express reference to the ERT judgment, thus suggesting that the broader scope from the case law continues to be applicable, that is, if the facts of the case fall within the scope of Union law. It will be therefore again for the Court of Justice to interpret the ambiguous signals surrounding the scope of application of EU fundamental rights.