EU Law - Freedom of Establishment and Services

The distinction between establishment and services is based on the idea that establishment is more permanent whereas services are more temporary in nature.

Establishment mainly falls under Art. 49 with 49(1) allowing for primary and secondary establishment and (2) prohibiting unequal or discriminatory treatment.
The law in this area is directly effective as per Reyners [1974].
Equivalent qualifications across member states are interpreted broadly as per Heylens [1987] and also Directive 2005/36
Meanwhile article 49(2) has been broadened beyond discrimination to include any unjustified restriction on the freedom of establishment. The main case in this are is Gebhard [1995] that allows for restrictions only if they meet four criteria:
1) Non-discriminatory
2) Justified
3) Needed to secure an objective
4) Don’t go beyond what is necessary to achieve that objective
A national can rely on Art. 49 with respect to their own member state only when they have exercised the freedom of movement themselves as per Knoors [1979]
Article 54 states companies should be treated in the same way as individuals and although company law can vary from state to state the ECJ has placed a lot of focus on achieving the overall objective of freedom of establishment as seen in Centros [1999] and Überseering [2002].
However once a company is established in a Member State they are then subject to that country’s rules as regards incorporation etc. as per Daily Mail [1988] and Cartesio [2008]
The liberalisation provided by Art. 54 means that it can be difficult to crack down on tax avoidance as seen in Cadbury Schweppes [2006].

Freedom of services is based on the temporary nature of the work rather than the infrastructure or, as per Commission v Portugal [2010], the period of time.
Art. 57 loosely defines services and 58 excludes other services that are covered in other parts of the treaty.
Art. 56 also has direct effect as per Van Binsbergen [1974].
Similarly there also has to be an inter-state element as seen in Deliège [2000]
Also covered is the freedom to receive services; Luisi & Carbone [1984]
The service does have to be provided for remuneration and this line can become blurred in relation to certain healthcare systems that are a hybrid between user and government payments
Some controversial services such as abortion, gambling and marijuana can still be considered services (Grogan [1991]) but can be subject to national rules that provide a proportional and non-discriminatory restriction (Zenatti [1999]).
Taking a broad definition it is even possible that certain social benefits may also fall within the definition; Cowan [1989].
Art. 62 allows for restrictions on policy, security and health grounds. Beyond this Van Binsbergen [1974] sets out the conditions for any restriction imposed by a Member State:
1) Pursuit of a legitimate public interest
2) Applied without discrimination
3) Proportionate
4) Respects fundamental rights (Carpenter [2002])
This freedom can be controversial as it allows greater liberalisation in the labour market at the expense of employee rights. This came to a head in Laval [2007] although this judgment has been tempered somewhat by the Rome I Regulation.
Restrictions on tax grounds can be allowed to prevent fraud but not for other, broader reasons; Danner [2002].
Non-discriminatory restrictions can also be caught if they are a hinderance to the freedom of services (Alpine Investments [1995]) and Gebhard [1995] also applies within this context.

The Bolkenstein Directive sought to achieve greater harmonisation by focusing on the country of origin but after protest this was watered down and so only mainly deals with a range of procedural and administrative issues.