Legal principles and points:
- This case concerns the free movement of services within the European Union.
- In the case of Alpine Investments BV v Minister van Financien , the Court of Justice of the European Union held that Alpine Investments BV were able to be prevented from ‘cold calling’, on the basis of (i) consumer protection, and (ii) preserving good reputation of the Dutch financial sector.
Facts of the case:
- On the 1st October 1991, the Dutch Ministry of Finance (D), prevented Alpine Investments BV (C) from ‘cold calling’ consumers to sell futures contracts, without consumers’ prior consent. This was following a number of complaints about the cold calling, including complaints from people from other member states.
- C claimed, to the Dutch Administrative Court, that this restriction was an unjustifiable restriction on the freedom to provide services under Article 56 of the Treaty on The Functioning of the European Union (TFEU).
- The Dutch Administrative Court referred the issue to the European Court of Justice, asking whether the protection of consumers and the protection of the Dutch banking services’ reputation could be a public interest to stop cold calling, and whether a ban was necessary.
Issues in Case C-384 Alpine Investments BV v Minister van Financien :
- The issues in this case were as follows:
- Did Article 56 of the TFEU allow restrictions to be imposed on the provider of offers by telephone from the Member State of his establishment, to potential clients in another Member State?
- Can the concern to protect consumers and safeguard the reputation of the Netherlands’ securities trading sector be regarded as legitimate reasons in the public interest to justify a restriction on a firms’ ability to provide offers by telephone to potential customers?
- Is the ban on cold calling to be regarded as objectively necessary to protect consumers and the reputation of the Netherlands’ securities trading sector, and is it proportionate to the objective pursued?
Held by the Court of Justice of the European Union (CJEU):
- Whilst the imposition of a restriction on cold calling to potential clients in other Member States could indeed constitute a hindrance on the free trade of services under Art 56 of the TFEU, the restriction was justified and proportionate, in that it pursued a legitimate purpose.
The CJEU stated with respect to each issue that:
- Article 56 TFEU did encapsulate services where the provider offers by telephone to potential recipients established in other Member States. (I-1173)
- Rules of a specific Member State which prevents firms from making unsolicited telephone calls to potential clients in another Member State is a restriction on the freedom to provide services within Article 56 TFEU, because it directly affects access to the market in services in the other Member States, and thus is capable of hindering intra-Community trade of services. (I-1178)
- “Article 56 does not preclude national rules which, in order to protect investor confidence in national financial markets, prohibit the practice of making unsolicited telephone calls to potential clients resident in other Member States to offer them services linked to investment in commodities futures”. (I-1183)