Electronic commerce is in full tilt: it has influenced in a fundamental fashion the ways in which enterprises and countries produce, trade and compete in the EU and worldwide. Consequently, any legislation, which impedes traders and businesses from entering the world of online supplies, is frowned upon to a great degree.
This is the reason why Ker-Optika brought an action before the Hungarian courts in order to challenge a decision taken by the local health authority, which prohibited Ker-Optika from selling contact lenses via its internet site. In reaching this decision, the local authority relied on a Ministry of Health Order that authorised sales of contact lenses solely in a shop specialising in medical devices, having an optometrist or ophthalmologist on staff and with a minimum area of 18 square metres or premises with an attached workshop.
Ker-Optika however claimed that its right to pursue its activity freely meant that the sale of contact lenses online cannot be subject to restrictions such as those that the ministry imposed in relation to contact lenses. The ministry’s main justification in these proceedings was that the sale of contact lenses constituted an activity which, by its nature, required the physical examination of a patient and therefore could not allow online sale of such products.
The Hungarian Court hearing the case applied to the European Court of Justice for a ruling on the compatibility with EU law of the Hungarian legislation that prohibited sales of contact lenses online.
The European Court noted first that the prohibition under Hungarian law applied to contact lenses from other member states delivered to consumers in Hungary. The ban of selling contact lenses by mail order therefore deprived other EU traders from reaching Hungarian customers and thus was a restriction on the free movement of goods in the EU.
The court consequently turned to assess whether the law in question was legitimate in view of a higher aim sought to be achieved by the Hungarian state such as the risks to public health that could be generated by the sale online of contact lenses, thus rendering it permissible.
While the court acknowledged the merit of the restriction, which requires the delivery of contact lenses by qualified professionals to protect consumer health, the ECJ considered that the prohibition was not proportionate to the objective of the protection of public health and was thus contrary to rules on free movement of goods.
An outright ban was unreasonable since a state could instead, in order to protect public health, seek to make it obligatory for contact lenses to be supplied by qualified staff who can give the necessary guidance to wearers, which could achieve the same aim with less hindrance to traders. A state therefore could not prohibit the sale of contact lenses from any place other than opticians’ shops, more so when one considers that it is not medically necessary to make every supply of lenses dependent on a physical examination after the first purchase.
In conclusion, the European Court held that all trading rules enacted by member states that are capable of hindering trade in the EU are to be considered as breaching the EU Treaty. This was the case of Hungarian law which banned the online sale of contact lenses. The law was deemed to be incompatible with EU law given that health could nevertheless be protected even by allowing cross border trade in lenses.
jgrech@demarcoassociates.com
Dr Grech is an associate with Guido de Marco & Associates and heads its European law division.