Opinion of Mr Advocate General Geelhoed delivered on 7 March 2002. - Criminal proceedings against Gottfried Linhart and Hans Biffl. - Reference for a preliminary ruling: Verwaltungsgerichtshof - Austria. - Approximation of laws - Articles 30 and 36 of the EC Treaty (now, after amendment, Articles 28 EC and 30 EC) - Directive 76/768/EEC relating to cosmetic products - Directive 84/450/EEC concerning misleading advertising - National legislation laying down restrictions on advertising. - Case C-99/01.
European Court reports 2002 Page I-09375
I - Introduction
1. The Verwaltungsgerichtshof (Administrative Court), Austria has referred two questions to the Court further to the relatively strict standard applied by Austrian law as regards the content of the concept of misleading information' in those cases where medicinal effects are ascribed to cosmetic products. At issue is the specification dermatologically tested' indicated on soap and shampoo, cosmetic products which are intended to come into contact with the skin. The referring court asks whether Community law permits national regulations that prohibit such a specification, when it is not accompanied by information about the properties studied and the outcome of this study, or when authorisation to use the specification was not granted by the Minister. It is my opinion that the Court may find the answers to these questions in its earlier case-law.
II - Legal framework
A - Community law
2. Article 6(3) of Council Directive 76/768/EEC of 27 July 1976 on the approximation of the laws of the Member States relating to cosmetic products provides that:
Member States shall take all measures necessary to ensure that, in the labelling, putting up for sale and advertising of cosmetic products, text, names, trade marks, pictures and figurative or other signs are not used to imply that these products have characteristics which they do not have. ... .'
3. According to Article 4 of Council Directive 84/450/EEC of 10 September 1984 relating to the approximation of the laws, regulations and administrative provisions of the Member States concerning misleading advertising Member States shall ensure that adequate and effective means exist for the control of misleading advertising in the interests of consumers as well as competitors and the general public'. Article 7 provides that Directive 84/450 shall not preclude Member States from retaining or adopting provisions with a view to ensuring more extensive protection for the persons mentioned above.
B - National legislation
4. Central to these proceedings is the Bundesgesetz über den Verkehr mit Lebensmitteln, Verzehrprodukten, Zusatzstoffen, kosmetischen Mitteln und Gebrauchsgegenständen (Lebensmittelgesetz 1975) of 23 February 1975 (Federal Law on trade in foodstuffs, products intended for human consumption, additives, cosmetic products and consumer goods; hereinafter: LMG'). Article 26(1)(d) of the LMG prohibits the marketing of cosmetic products which have been incorrectly described.
5. Pursuant to Article 26(2) of the LMG, Article 8(a), (b) and (f) applies by analogy (to the marketing of cosmetic products), while Article 9 applies upon the understanding that non-misleading references to physiological or pharmacological effects, as well as figurative representations and illustrations intended to explain the scope of the use of the product are permissible. Where such effects are ascribed to a product, the authorities must, upon request, be notified of the active ingredients.
6. In accordance with Article 8(f) (in conjunction with Article 26(2)) of the LMG cosmetic products are incorrectly described if they are placed on the market with information which is likely to give rise to misconceptions concerning the products' special features which, according to trade conceptions, and especially consumer expectations, are essential, such as nature, origin, application, durability, date of manufacture, properties, percentage of effective ingredients, quantity, proportions, number or weight, or if they are placed on the market in such form or presentation, or with prohibited health-related information (Article 9).
7. Under Article 9(1) in conjunction with Article 26(2) of the LMG it is an offence, when marketing cosmetic products:
(a) to refer to the prevention, relief or cure of illnesses or symptoms of illnesses, or to physiological or pharmacological effects - in particular in the field of delaying the ageing process, slowing down the symptoms of old age, slimming or ensuring continued good health - or to suggest such effects;
(b) to refer to case histories, recommendations by doctors or medical experts' opinions;
8. Pursuant to Article 9(3) in conjunction with Article 26(2) of the LMG the Minister is to allow, upon request and by decision, health-related information for certain cosmetic products when this is consistent with protecting the consumer from being misled.
9. Under Article 74(1) of the LMG a person who, inter alia, incorrectly describes cosmetic products or who markets incorrectly described cosmetic products shall be guilty of an administrative offence (Verwaltungsübertretung').
III - Facts, procedure and reference for a preliminary ruling
10. By a decision of the Unabhängige Verwaltungssenat Wien dated 22 February 1999, Gottfried Linhart (hereinafter: Mr Linhart') was found guilty of an administrative offence under Article 74(1) in conjunction with Articles 9(1)(a) and 8(f) of the LMG on the ground that he had been responsible for the supply by Colgate Palmolive Gesellschaft m.b.H. of the product Palmolive flüssige Seife Prima Antibakteriell' marked dermatologically tested' to Billa AG. That description of the soap gave consumers the impression that it had a health-maintaining effect and thereby, in the opinion of the Unabhängige Verwaltungssenat, caused the product to be incorrectly described.
11. Dr. Hans Biffl (hereinafter: Dr Biffl') was found guilty by a decision of the Unabhängige Verwaltungssenat for Lower Austria dated 9 May 2000 of an administrative offence under Article 74(1) in conjunction with Articles 9(1)(b) and 8(f) of the LMG, on the ground that he had been responsible for the unauthorised marketing by Haarkos Parfumeriewaren und Kosmetika GmbH of the cosmetic product Keralogie Creme-Peeling Antischuppen regulierendes Haarbad', the packaging of which (a plastic bottle) was marked dermatologically tested'.
12. In the appeal before the Verwaltungsgerichtshof against those decisions, the appellants argued, on the basis of the judgment of the Court of Justice dated 28 January 1999 in Unilever, that, inter alia, the national legislation in question was in breach of Community law, in particular because national provisions which prohibit the advertisement of cosmetics using non-misleading health-related descriptions exceed the limits of the discretion conferred on the Member States by Article 6(3) of Directive 76/768.
13. The Verwaltungsgerichtshof had already been called upon on several occasions to determine the permissibility of the descriptions clinically tested' and dermatologically tested' in cases which arose prior to the Austrian Republic's accession to the European Economic Area and the European Union.
14. According to national case-law, Article 9(1)(b) of the LMG does not permit references to medical opinions upon the marketing of cosmetic products when it is not clearly indicated in such references which of the products' properties have been examined and what were the results. In that context the decisive consideration was that, in the absence of any explanation, reference to a medical report, mentioning a clinical or dermatological test, could suggest to the consumer, at least unconsciously, the vague idea that the product had some effect on health.
15. On the other hand, the reference to medical reports (clinically tested', dermatologically tested') when marketing cosmetic products has been regarded as permissible under Article 26(2) of the LMG, where it is stated that the test - regardless of its consequences on human health - concerned specific physiological or pharmacological effects of the product involved, such as the statement clinically tested for skin tolerability and the removal of the hair together with the root' upon the marketing of a hair removal product.
16. The referring court takes the view that the question whether the Austrian provisions, which apply in the main proceedings, are consistent with Community law has not been fully resolved by the case-law of the Court of Justice, in particular Unilever and the decision dated 13 January 2000 in Estée Lauder.
17. The Verwaltungsgerichtshof is of the opinion that Article 9(1)(b) in conjunction with Article 26(2) of the LMG constitutes a specification of a category of references to medical activity, which, due to their vagueness, the legislature considers misleading in their entirety, as they are intended to give rise to a whole range of impressions concerning the properties and functions of the cosmetic product, associated with medical activity. In the view of the Verwaltungsgerichtshof there is nothing to indicate that this assessment, centred on the presumed expectations of the average consumer who is reasonably well informed and reasonably observant and circumspect, is not correct. The Verwaltungsgerichtshof fails to see why the Member State's legislature would not be permitted to designate a clearly defined category of promotional statements as misleading' due to their vagueness and their connection with medical activity and to do so by means of a generally applicable regulation, if an individual assessment of the misleading characteristic would give rise to the same conclusion. After all, references to medical reports which are sufficiently specific in the sense of Article 26(2) of the LMG and which are unlikely to mislead the consumer are none the less permitted.
18. The Verwaltungsgerichtshof furthermore points out that the prohibition contained in Article 9(1) of the LMG is not absolute; rather, it depends on an authorisation pursuant to Article 9(3) of the LMG. Upon application and by decision the Minister is to allow health-related information with cosmetic products when this is consistent with protecting the consumer from being misled. Article 9(3) of the LMG would therefore have offered the appellants the opportunity to obtain an authorisation for (non-misleading) references to medical reports and thereby avoid being fined.
19. The Verwaltungsgerichtshof has therefore, by an Order of 29 January 2001 registered at the Court of Justice on 28 February 2001, referred the following questions to the Court for a preliminary ruling:
(1) Do Articles 28 and 30 EC, Council Directive 76/768/EEC of 27 July 1976 on the approximation of the laws of the Member States relating to cosmetic products, as amended by Council Directive 88/667/EEC of 21 December 1988 and Council Directive 93/35/EEC of 14 July 1993, in particular Article 6(3) thereof, together with Council Directive 84/450/EEC of 10 September 1984 on the approximation of the laws, regulations and administrative provisions of the Member States concerning misleading advertising, in particular Articles 4 and 7 thereof, preclude national legislation which, in connection with the marketing of cosmetic products, makes it an offence to refer to medical opinions, by the use, in particular, of the description "clinically tested" or "dermatologically tested", if erroneous ideas as to the characteristics and functioning of the cosmetic product could be engendered in the mind of the consumer as a result of a lack of information as to the content and outcome of the opinion in question?
(2) Do Articles 28 and 30 EC, Directive 76/768, in particular Article 6(3) thereof, and Directive 84/450, in particular Articles 4 and 7 thereof, preclude national legislation which permits information coming within the terms of question 1 to be used only after prior authorisation by the competent Federal Minister?'
20. Written observations have been submitted by Mr Linhart, Dr Biffl, the Government of the Republic of Austria and the European Commission. No oral arguments were heard.
IV - Assessment
A - Preliminary observations
21. Mr Linhart, Dr Biffl and the Commission have criticised the way in which the Verwaltungsgerichtshof has reasoned and worded its reference for a preliminary ruling.
22. This criticism is partly factual in character. Mr Linhart has argued that apart from the description dermatologically tested' the packaging of the soap in question did actually give additional information. Below the words Schutz gegen Bakterien' (protection against bacteria) the product carried information concerning the subject and outcome of the dermatological tests. Mr Linhart and Dr Biffl have further argued that the description dermatologically tested' appearing on their products is in itself correct and that, contrary to what the first question suggests, given the way in which the description is used on the packaging, it could not give the consumer the wrong impression.
23. In that respect, I would merely point out that it is for the national court to establish the facts in the main proceedings and to assess the relevance of the questions to be put to the Court of Justice. The scope of the concept of misleading advertising, furthermore, concerns a matter that is in fact central to the first question.
24. Moreover, the Commission has rightly noted that the reference to the description clinically tested' raised in the reference for a preliminary ruling bears no connection to the two cases in the main proceedings, where the dispute exclusively concerns the description dermatologically tested'. The national court has, however, dealt with the description clinically tested' before, as described in the order for reference. It is conceivable that the Verwaltungsgerichtshof would appreciate receiving a broader judgment from the Court of Justice concerning the permissibility under Community law of its current or earlier case-law. However, according to settled case-law the Court is not competent to answer questions which demonstrate no connection between Community law and the facts of the case in dispute. Given that the description clinically tested' is not in any way connected with the facts in the main proceedings, this part need not be taken into any further consideration.
25. The referring court thus essentially asks whether Community law precludes national legislation which, in the interpretation given to it by national case-law, prohibits the use of the description dermatologically tested' in cases where (a) those tests are not described and no indication is given as to which properties of the product were tested with what results, and (b) no authorisation for its use was applied for.
26. The two preliminary questions concern the interpretation of Articles 28 and 30 EC, Directive 76/768 and Directive 84/450. For that reason, I must first discuss the mutual relationship between those three areas of Community law in relation to national legislation which prohibits the description dermatologically tested' on cosmetic products.
27. The Court has previously established on several occasions that Directive 76/768 has exhaustively provided for the harmonisation of national rules on the packaging and labelling of cosmetic products. Once a certain matter has been exhaustively harmonised at the Community level, all national rules concerning that matter have to be tested against the provisions of the harmonising measures and not against - as is relevant in this case - the provisions of Articles 28 and 30 EC. The present national regulations must therefore, in my view, be assessed exclusively in the light of Article 6(3) of Directive 76/768, and not in the light of Articles 28 and 30 EC, even though that provision of the directive must, like all secondary legislation, be interpreted in the light of the Treaty provisions concerning the free movement of goods. As will emerge below, that latter point is important in determining the scope of Article 6(3) of Directive 76/768 and the Member States' discretion on the basis of that provision.
28. In that regard, the Court's case-law on the labelling and advertising of cosmetic products proves to be somewhat inconsistent. In the decisions in Clinique and Estée Lauder the Court assessed the national rules in question both in the light of Articles 28 and 30 EC and in the light of the relevant provision from Directive 76/768. On the other hand, in Unilever the national rules were, rightly in my view, tested only against the Directive and not against the primary legislation, even though the referring Austrian court in that case also sought an interpretation of Article 28 EC.
29. Concerning the relationship between Directive 76/768 and Directive 84/450, it is my opinion that the Commission, Mr Linhart and Dr Biffl are right to argue that Article 6(3) of Directive 76/768 has priority over the provisions of Directive 84/450 according to the principle of lex specialis derogat legi generali'. In my view, therefore, the Court does not need to consider Directive 84/450 as part of its answer. That Directive contains rather generally worded obligations which describe in relatively vague terms what is to be considered misleading. Directive 76/768 on the other hand, in Article 6(3), contains a specific rule which prohibits misleading information on the packaging and labelling of the products covered by the Directive. Given the completeness of harmonisation in this matter, the Member States are not permitted to deviate from the conditions laid down in that provision. That means, for example, that consumers cannot be given a higher level of protection against being misled, even by relying on Article 7 of Directive 84/450, which considers further-reaching protection permissible.
B - The first question
30. In order to answer the first question it should first be assessed whether Article 6(3) of Directive 76/768 leaves any room to the Member States to prohibit the general description dermatologically tested' on cosmetic products which are intended to come into contact with the skin, because that description suggests the existence of characteristics which the products in question do not possess.
31. To begin with, it is not disputed that the products at issue - soap and shampoo - are cosmetic products as referred to in Article 1 of Directive 76/768 and that the description objected to, i.e. dermatologically tested', falls under the scope of Article 6(3) of the Directive. I therefore assume that they should not be regarded as medicinal products, in which case the Community legislation on medicinal products would apply instead of Directive 76/768. Nor do the records on the file show that the products - apart from the contested description - have been illegally placed in circulation.
32. According to earlier case-law, Directive 76/768 aims to ensure the free movement of cosmetic products. Article 6(3) lists the measures which are to be taken in the interest of consumer protection and the fairness of commercial transactions, which are part of the mandatory requirements on the basis of which impediments to the free movement of goods in the sense of Article 28 EC are permitted in accordance with the Court's case-law. It has the added objective of protecting people's health within the meaning of Article 30 EC to the extent that misleading information concerning the characteristics of these products might affect public health.
33. However, the measures which the Member States are required to take in order to implement this provision must observe the principle of proportionality. In its assessment of the risk of the consumer being misled on the one hand and the requirements of the free movement of goods on the other, the Court has derived a standard from the principle of proportionality which takes a certain type of consumer as its point of departure. In order to determine whether a name, trade mark or promotional statement is liable to mislead, the Court must take into account the presumed expectations of an average consumer who is reasonably well informed and reasonably observant and circumspect' and who wrongly presumes that the product possesses certain characteristics.
34. This image of the average consumer' also applies in the context of the marketing of cosmetic products. The Court has expressly linked its application in this case to the condition that a mistake as to the product's characteristics cannot pose any risk to public health'. As in Clinique, Unilever and Estée Lauder, the health of persons is not an actual issue in this case either. The cases concern descriptions which may, either rightly or wrongly, create the impression on the part of consumers that they possess a certain medicinal function. Measures to prevent buyers from being potentially misled or confused are not, so it would appear to me, bound up with the protection of public health, but rather with the protection of consumers and the fairness of trade. This distinction is important in connection with the application of the principle of proportionality, which in my opinion is not a static concept, but should be examined in the light of the objective pursued.
35. In the application of the standard of the average consumer the relevant circumstances of the case in question must be taken into consideration. Case-law shows that when determining whether a certain description or advertisement is misleading within the meaning of Directive 76/768, the Court takes a critical attitude to national provisions which prohibit a statement that is in itself correct. The principle of proportionality is quick to oppose such provisions. The abstract danger of being misled does not suffice; only in cases where there is a real risk that the consumer will be misled as regards essential matters are measures permitted which result in the marketing of a product being made subject to further conditions.
36. Thus, the Court has earlier decided that the name Clinique' for cosmetic products cannot be misleading for consumers on the ground that they would attribute therapeutic effects to the product which it does not possess. In Estée Lauder the Court held that, at first sight, the average consumer - reasonably well informed and reasonably observant and circumspect - ought not to expect a skin-firming facial cream named Monteil Firming Action Lifting Extreme Crème', because of the incorporation of the term lifting', to produce the same enduring effects as surgery. Unilever involved an Austrian prohibition on the advertising of Odol-Med 3 (Samtweiß)' toothpaste, according to which the product prevents the formation of tartar or paradontosis, while the product contains none of the active substances listed in the regulations as substances through which such a result may be achieved. As in the present case, the regulations in question involved, among others, Articles 9 and 26 of the LMG. The list of substances mentioned was included in an Annex to the Kosmetikverordnung. This Annex, however, did not exhaustively list the substances capable of preventing the formation of tartar or paradontosis. It was therefore possible that the advertising of certain toothpastes was prohibited while it was unlikely to mislead the consumer. The Court therefore held that Article 6(3) of Directive 76/768 precluded the application of such regulations. The possibility of obtaining an authorised exemption from that prohibition did not alter the state of affairs.
37. Based on the above it should first be examined in the present case whether the description dermatologically tested' could mislead buyers at all, before perhaps entering into the matter of the proportionality of the national measure in question in terms of consumer protection and fairness in trade. Despite the fact that it ultimately falls to the national court to examine this question and that the referring court has failed to indicate to the Court any information concerning the circumstances under which the disputed products have been traded, it is my contention that the Court has the necessary information to give the following clarifications to the national court.
38. Cosmetic products such as soap and shampoo are intended to come into contact with the skin. It is therefore inevitable that the products should be tested for their effects on the skin before they are first put into circulation. This is essentially what the description dermatologically tested' refers to. Dermatology is the science which concerns itself with research into skin diseases. Using the term dermatologically tested' therefore implies that it has been investigated whether the skin tolerates the product.
39. Such information appearing on the labelling, the packaging or in the advertising of such products can, by its nature, hardly be considered to give rise to misunderstandings. In view of the intrinsic characteristics of soap and shampoo it is inconceivable to me that the average consumer who is reasonably well informed and reasonably observant and circumspect would be under the impression that the product possesses certain characteristics which it actually lacks. The description dermatologically tested' aims to express the idea that the product has been carefully tested for damaging effects on the skin. This, however, is in itself a superfluous piece of information as, pursuant to Article 3 in conjunction with Article 2 of Directive 76/768, cosmetic products which cause damage to human health when they are applied under normal conditions of use may not be put on the market under any circumstances.
40. The referring court has pointed out that in accordance with national case-law a reference to a medical report by mentioning a dermatological test can at least instil in the consumer the vague notion of some health effect if that reference is not elaborated upon. However, even if the description dermatologically tested' is capable of evoking vague medical associations on the part of some consumers - for example, due to the Greek origin of the word dermatological' - this is not sufficient to attribute to it a misleading effect which could justify a prohibition of the description if the products are marketed in an otherwise lawful manner. There is, in my view, insufficient cause to assume a real risk that the average consumer will be confused or misled. It is, moreover, prima facie contrary to the principle of proportionality to prohibit only the description dermatologically tested', whereas claims containing further-reaching and therefore more suggestive information, such as dermatologically tested for skin tolerability and the removal of the hair together with the root' upon the marketing of a hair removal product, have been permitted.
41. From the point of view of the scope of Article 6(3) of Directive 76/768 it is therefore not necessary to prohibit the use of the description dermatologically tested' on the two products involved in order to protect the consumer and the fairness of trade. The argument of the Austrian Government that the national legislation does permit non-misleading references in certain situations of course does nothing to change this.
C - The second question
42. Given the above, the second question no longer warrants extensive examination. Whether Community law precludes a Member State's regulations allowing the use of the description dermatologically tested' only after prior authorisation by the competent minister is already implied in the answer to the first question. Since the description concerned cannot mislead the consumer within the meaning of Article 6(3) of Directive 76/768, the requirement of prior authorisation to use the description is evidently also unjustified.
43. The Austrian Government has stated that, pursuant to Article 9(3) of the LMG, the minister authorises health-related information by decision subject to the condition that when the cosmetic product is first marketed the advertising is certifiably correct and the relevant medical reports can be produced. In the opinion of the Austrian Government this procedure is compatible with Unilever, since the Court held in that case that a regulation providing for verification of the accuracy of advertising statements was a proportionate measure, unlike an automatic prohibition of advertising.
44. That argument is based on an incorrect reading of Unilever and cannot be accepted. In Unilever it was established, with respect to the same national legislation, that, whilst authorisation might be requested, the requirement to obtain such authorisation constituted an impediment to the free movement of the product in question, which the Court found wholly unjustified. A requirement for prior authorisation is tantamount to an automatic prohibition of advertising, since the information on the cosmetic products subject to the authorisation requirements is not permitted without the Minister's approval. In Unilever, the Court indicated alternative measures ensuring the objective of Directive 76/768 which impinge on the free movement of goods to a lesser extent. It did not in any way tolerate an authorisation regime. When in doubt about the degree of truth in health-related descriptions it will, as far as the Court is concerned, suffice that the Member State imposes an obligation on the market participant which is responsible for the cosmetic product to prove the correctness of its medical tests. This will pose no difficulty at all with the unpretentious description of dermatologically tested'. Furthermore, Austrian legislation already provides for this. As Mr Linhart has rightly noted, the authorities may, pursuant to Article 26(2) of the LMG, request the manufacturer or distributor to impart the active ingredients if non-misleading physiological or pharmacological functions are ascribed to the product.
45. In conclusion, it should be added that the authorisation in question is even more disproportionate as a measure for protecting consumers and ensuring the fairness of trade if Dr Biffl's contention that the procedure under Article 9(3) of the LMG is not free of charge proves to be true.
V - Conclusion
46. Based on the above, I propose that the Court should reply as follows to the reference for a preliminary ruling from the Verwaltungsgerichtshof:
(1) Article 6(3) of Council Directive 76/768/EEC of 27 July 1976 on the approximation of the laws of the Member States relating to cosmetic products precludes the application of national rules in the interpretation given to them by national case-law which, upon the marketing of cosmetic products intended for use on the skin, prohibits a general description, such as dermatologically tested', when it has not been indicated which properties of the product were tested and with which results and the manufacturer or distributor of the products in question is not given the opportunity to demonstrate the correctness of the statement.
(2) Article 6(3) of that directive also precludes national rules which allow the use of the description dermatologically tested' only after prior authorisation from the competent minister.