2015 ZA Q2

The free movement of services is one of the four freedoms established by the Treaty of Rome. According
to this, restrictions on providing services is prohibited. The issue at hand in this question is whether the
annual tax that has been applied on satellite dishes causes a hinderance to the free movement of
services or not.

According to Article 56 TFEU, all restrictions on the free movement of services are abolished. This was
further seen in the case of Van Binsbergen (1974) which stated that Article 56 applied to a situation
where a service provider was prevented from providing a service because of their residence in another
member state. In the case of Cowan (1989) it was seen that Article 56 could also be applied to the
freedom to receive services. Thus, in this question Mr Bellamy can argue his case on the basis of Article
56. However, in order for Mr Bellamy to have a successful claim he would need to show that such a
restriction imposed cannot be justified and is disproportionate. Considering the case of Alpine
Investments (1995), it can be argued that as Article 56 can be pleaded against the home state and, in
this question, as satellite services are generally available to other member states, then Mr Bellamy can
have a successful claim against the restriction placed.

In order to consider whether the law is justified or not, Article 52 TFEU needs to be looked at. This
Article provides derogation for the free movement of services on the grounds of public health, policy
and security. In this question as the law only applies to satellite dishes and not cable services it can be
said that the law works in an indistinctly applicable manner as there is an indirect protection of tax on
domestic products. In order for an indistinctly applicable measure to be valid it needs to be shown that
it is objectively justified. Considering the case of De Coster (2001) it can be argued that as cable services
are not subject to the same taxation, then the taxation on satellite services can not be justified as the
principle of proportionality is affected due to the law using a more restrictive method compared to what
is required. Furthermore, in the case of Omega (2004), the Court of Justice held that constitutional
values protecting fundamental human rights could be a justifiable limitation of the freedom to provide
or receive services. However, in this question it can be argued that there is no serious risk of harm to the
public as the law only applies a tax and does not restrict the service completely. Thus, the law should no
be held to be justifiable. Hence, in conclusion, it can be said that the law adopted by the LCC in 2014
acts as a restriction to the free moment of services as the residents of the home state cannot freely
receive the service of satellite dishes, compared to cable services which a re domestic in nature.

Lastly, considering Directive 2006/123 it can be said that provision of services can only be restricted if
they are non discriminatory, objectively justified and proportionate. Hence, the law by LCC creates a
barrier to receive services and should not be allowed on the basis that it is not justified or proportionate.