Purely Internal Situations, Reverse Discrimination, Guimont, Dzodzi and Article 234

Abstract

Over the years the ECJ has consistently held that the five freedoms do not apply in "purely internal situations", that is, situations where all the facts are confined within one Member State and where there is no "cross-border element" and therefore no connection with EC law. This has led to what is known as "reverse discrimination". Reverse discrimination arises when nationals/products of a Member State are disadvantaged because they are subject to a national measure, while foreign (EU) nationals/products are protected from that national measure by virtue of EC law. In the Guimont judgment of 2000, the ECJ ruled that it will reply to preliminary questions about purely internal situations because a reply "might be useful" to the national court "if" its national law were to prohibit reverse discrimination. The purpose of this paper is to show that (a) the Guimont principle is (i) misguided and (ii) unnecessary, because it overlaps with the Dzodzi principle; and (b) reverse discrimination is a necessary evil.