Keep on roaming

In 2007, the EU adopted legislation (Regulation (EC) 717/2007) designed to limit 'roaming' charges for mobile phone use. It regulated both the wholesale charges '“ the amounts that one network provider charged others '“ and retail charges '“ the amount that a network charged its own customers. Various mobile telephone companies challenged the English legislation implementing the regulation, though the true challenge was to the validity of the EU regulation itself. That challenge was referred, as it had to be, to the ECJ (Case C-58/08 Vodafone Ltd (Grand Chamber, 8 June 2010)).

The first ground of challenge was to the vires of the regulation. It was said that article 95 EC (now article 114 TFEU) was not a permissible legal basis for the harmonisation measure adopted because it was not really a 'single market' measure, but truly one of consumer protection. The problem was not really that national regulatory systems were divergent, and needed to be brought into harmony, but that they were, harmoniously, weak.

Consumer protection

The ECJ rejected that challenge. It was sufficient that there was a widely-perceived problem of excessive roaming charges which, if the EU had not acted, was likely to be addressed by national regulation which would probably have been divergent. The legislature was entitled to anticipate a problem with divergent national regulation '“ and to take steps to pre-empt it '“ rather than waiting for the problem to emerge. Having done so, the fact that the means it adopted involved a high level of consumer protection was unobjectionable.

Thus the ECJ continues to insist that, for article 114 to apply, the measure must be aimed at supporting the internal market. But accepting that a realistic possibility of divergence in national regulatory systems is sufficient '“ rather than an actual divergence '“ does broaden the power. The EU need not wait for member states to occupy the field before stepping in. But there must be limits. Here, without regulation at the EU level, national regulation was not merely possible, but was 'probably' going to happen. The risk of inconsistent national regulation must, clearly, reach some '“ albeit ill-defined '“ threshold of probability before the EU can act under article 114.

Subsidiarity and proportionality

The ECJ then turned to questions of subsidiarity and proportionality. It was submitted that the legislation was disproportionate because it regulated not just wholesale charges but also retail charges. The retail charges obviously had a less direct impact on intra-union trade; their effects were more closely confined to individual member states. Why regulate them?

The ECJ rejected that challenge. Once it was decided to regulate, the EU was not committed to a minimal level of regulation but was free, within broad limits, to adopt a measure which in its opinion legitimately met valid regulatory goals, such as consumer protection. Review of such decisions operates with a light touch. Sufficient valid reasons had been shown to justify the legislature's choice.

A similar '“ and perhaps even more deferential '“ approach was shown to the subsidiarity question (subsidiarity is the principle that the EU should act only if the action in question cannot be left to national authorities). The ECJ simply asked whether the legislature 'could legitimately take the view that it had to intervene at the level of retail charges as well'. It held that it could do so, preferring a 'single coherent regulatory framework' to the piecemeal regulation of wholesale and retail roaming charges. That confirms the impression '“ already well established from previous case law '“ that it will only be in an extreme case that failure to observe the principle of subsidiarity will be made out so as to enable legislation to be set aside.

The result '“ surely predictable '“ was that the challenge failed, and what may be one of the more popular EU harmonisation measures survives intact.