In an important ruling on the free movement of goods, in joined cases C-267 and C-268/91 Keck and Mithouard, 24 November 1993, arising from criminal proceedings in France brought under a law which prohibits resale at a loss, the European Court of Justice (ECJ) has explicitly set out to revise and clarify its earlier case law.

It said it was doing so in view of the increasing tendency of traders to invoke art 30 of the EC Treaty (which prohibits measures equivalent to quantitative restrictions on imports) to challenge rules which limited their commercial freedom even if the rules were not aimed at products from other member states.The ECJ drew a sharp distinction between obstacles to the free movement of goods arising from rules laying down requirements to be met by goods - concerning matters such as designation, form, size, weight, composition, presentation, labelling and packaging - and rules relating to method s of sale.Restrictive rules applying to goods as such continue to be governed by Cassis de Dijon (Rewe-Zentral AG v Bundesmonopolverwaltung fur Branntwein, C-120/78 [1979] ECR 649) and will be prohibited even if they apply equally to imported and domestic goods, unless they can be justified by reference to a public interest objective.National rules restricting or prohibiting certain selling arrangements, by contrast, will not be treated as hindering inter-state trade provided they apply to all affected traders operating within the member state concerned and also provided that they 'affect in the same manner, in law and in fact', the marketing of domestic products and imports from other member states.

This marks a departure from the ECJ's earlier case law whereby any prohibition that decreased the volume of sales, and thus of imports from other member states, amounted to an obstacle to the free movement of goods.Recent judgments of the ECJ show in co-operation in the pharmaceuticals sector and as regards Sunday trading.

In case C-292/92 Ruth Hunermund, 15 December 1993, it declared that German rules preventing pharmacists from advertising para-pharmaceutical products except in their dispensaries were pure selling arrangements which did not restrict the free movement of goods.

The advertising restriction would not affect sales to such an extent as to amount to a quantitative restriction on imports from other member states any more than it restricted German products.Case C-315/92 Verband Sozialer Wettbewerb v Clinique Laboratoires and Estee Lauder Cosmetics, 2 February 1994, concerned German proceedings against Estee Lauder's sales of cosmetics under the Clinique brand.

The name 'Clinique' was said to mislead consumers into thinking the products had a therapeutic effect.The 1976 EC Cosmetics Directive - Council Dir 76/768/EEC, 27 July 1976 (OJ 1976 L262/169) - requires member states to prohibit names or descriptions which may be misleading about the properties of goods.

The aims of the Directive include protecting consumers and health, and preventing unfair competition.

The ECJ stated that the Directive had to be interpreted in the light of the EC Treaty, including the free movement of goods rules.Estee Lauder, the ECJ noted, was obliged to market its products in Germany under a different name from that used in other member states and to bear additional packaging and advertising costs, which demonstrated that the German rule constituted an obstacle to inter-state trade.

As such, it fell within the category of rules laying down requirements to be met by goods, which continue to be governed by art 30.

It was in principle an obstacle to inter-state trade, and was not necessary to satisfy the objectives set out in the Cosmetics Directive.In two judgments of 2 June 1994 (joined cases C-401/92 and C-402/92 Tankstation 't Heukske and joined cases C-69/93 and C-258/98 Punto Casa SpA) the ECJ applied the ruling in Keck to national rules restricting Sunday trading and found that art 30 did not apply to the rules in question.

In both cases the traders (respectively, a petrol station and supermarket chain) argued that they were more affected by the restrictions than other categories of traders.

Advocate-general Van Gerven fleshed out the court's rather terse reasoning in Keck and stressed that it could not be inferred from Keck that national rules on opening times which do not apply in the same manner to all traders necessarily hinder imports any more than they hinder domestic products.

The test is that the national legislation must apply in the same manner to domestic and imported products and that, viewed as a whole, and as regards effects, it must not lead to unequal treatment of domestic and imported products.A significant question is the extent to which the Keck ruling may be extended to the services sector given the increasing convergence in the court's case law on goods and services.

The distinction between services themselves and the way in which those services may be provided - selling arrangements - is often less easy to draw than in the case of goods.In its recent interpretative communication on the free movement of services across frontiers (OJ C 334/3, 19 December 1993), the Commission states that a member state cannot normally prohibit the provision in its territority of a service lawfully provided in another member state, even if the conditions in which it is provided are different in the country where the service provider is established.The Commission also sets out the test for the treatment of services, drawn from the ECJ's case law.

National rules which discriminate between domestic and non-domestic service providers are contrary to art 59 (the provision of the EC Treaty which guarantees freedom to provide services) unless they can be justified by reference to a public interest objective.National rules which apply equally to domestic and non-domestic service providers may be justified by certain mandatory requirements: by this the Commission allows, for example, professional rules designed to protect consumers, the recipients of services, or intellectual property rights.In other words, provided a service does not offend against a legitimate public policy objective of the member state in which it is provided, that member state cannot prohibit the provision of the service on the grounds that the way in which it fulfils that objective is different from that required of domestic service providers or service providers established in other member states.The ECJ's ruling in Schindler, case C-275/92, 24 March 1994, is its most recent relevant judgment in a services case.

Prior to the adoption of the National Lottery Act 1993, the UK banned larger scale lotteries and the sale or advertising of foreign lottery applications and tickets.

In 1990 the Customs authorities seized a batch of German lottery tickets belonging to the Schindler brothers.

The Schindlers challenged the seizure in the High Court which asked the ECJ whether the UK ban was compatible with the EC Treaty provisions on the free movement of goods and services.The ECJ concluded that the advertising and sale of lottery tickets with a view to the participation by residents of a member state in a lottery operated in another member state related to a 'service' and fell under art 59.

It did not choose to categorise the lottery applications as 'goods' or attempt, as it might have done, a distinction between the services provided (participation in a lottery) and the way in which those services were provided (the advertising and application arrangements).

Instead, the court applied its existing case law on the freedom to provide services with much the same result.The court held that national legislation, such as the former UK legislation on lotteries, which wholly precluded lottery operators from other member states from promoting their lotteries and selling their tickets in the member state which enacted that legislation, falls within the scope of art 59, even where it applies equally to domestic and non-domestic service providers, and when it is liable to prohibit or otherwise imped e the activities of service providers lawfully providing similar services in other member states.The UK's former legislation on lotteries had been adopted to prevent crime and to ensure that gamblers would be treated honestly; to avoid stimulating demand in the gambling sector which had damaging social consequences when taken to excess; and to ensure that lotteries could not be operated for personal and commercial profit but solely for charitable, sporting or cultural purposes.

The court concluded that rules which prohibit lotteries in a member state were rules adopted to protect the recipients of a service and consumers generally and were justified restrictions on the freedom to provide services.Schindler is a case in which the court has allowed a member state, on legitimate public policy grounds, to place a total ban on the provision in its territory of a service which is lawfully provided in another member state.

In case C-159/90, Grogan [1991] 3 CMLR 849, the ECJ allowed Ireland to prohibit the advertising in its territority of UK abortion services which were banned in Ireland.

However, in Grogan, the prohibited advertisements were being placed by student associations, non-commercial bodies which were independent of the abortion clinics in the UK.

That avoided the necessity for a decision on the issue of whether the legitimate provision of the services in the UK, or the right on the part of Irish women to receive the services in the UK, might entail the right to provide or receive information in Ireland about the services.In a case in which there was no doubt about the legitimacy of the services, might the ECJ now follow its approach in Keck in the services sector, and treat non-discriminatory national rules on the advertising of services in the same way as 'selling arrangements' relating to goods as in the Hunermund case? It is to be hoped that, in such cases, the court will look more sceptically at national restrictions on advertising or other selling methods.

Those active in cross-border services will wish to keep an eye on developments.