1.6.2. Concurrent Regulatory jurisdiction

While a Member State lacks jurisdiction with regard to interests entirely foreign to

its territory, it must also be noted that an interest is not necessarily located within a

single Member State's sphere of responsibility exclusively. Thus, the Court indicated

that the outcome in Counnctterie Van den linry, would have been different if the red

grouse had been a migratory species or a species threatened with extinction. The

Netherlands would have been entitled to protect the red grouse as well, as the interest

could no longer have been said to be entirely foreign to its territory."

Interests which can be said to have a sufficiently close connection with two or more

Member States result in concurrent regulatory jurisdiction. Those Member States

would concurrently be entitled to take measures. Concurrent regulatory jurisdiction

forms a potential source of obstacles to trade. Transactions in the exercise of one of

the freedoms affecting such a transnational interest may become subject to two or

more conflicting regulatory measures. Whether and, i f so, in what manner, Community

law informs the private international law of the Member States in this respect

requires an analysis of the status of measures of sister Member States under Community

law. Concurrent and conflicting (exercise of) regulatory jurisdiction is therefore

further discussed later in this chapter."'

Renvoi and 'Positive C.oniity'

Where a Member State lacks jurisdiction it must refrain from taking its own measures

and leave regulation to the Member States that can show a sufficiently close connection.

This applies equally to measures consist ingot the application of a Member State's

own substantive, mandatory rules of law as well as to a Member State's use of abstract

choice of law rules resulting in obstacles to trade.'"' As, according to the Court, a Member

State is not entitled to protect 'consumers in other Member States', it can neither

extend its mandatory rules of law nor employ an objective connecting factor based

on the protection of the consumer. The latter holds even if the choice of law refers to

the substantive law of the 'other Member States'. At the same time, the fact that a

particular Member State i s not entitled to protect consumers in other Member States,

does not necessarily leave the consumer without (a need for) protection. Or, more

generally, a lack of regulatory jurisdiction for one Member State does not necessarily

leave the relevant activity without (a need for) regulation. However, that Member State

is not the one to provide it. What it can do is to refer the matter to the law of a Member

State that has a sufficiently close connection to the interest involved. The reference

should include that Member State's regulatory choices as to the (international) scope

of its mandatory rules of law as well as in respect of objective connecting factors. In

other words, a Member State may be forced to accept renvoi and refer to a Member

State including its rules of private international law.1 11 Whether and, if so, under what

circumstances Member States are in tact under a duty to refer to the regulatory

measures of sister Member States is discussed below."

A mirror-image situation would, at least in theory, also be possible. A Member State's

interests may be adversely affected by activity for which that Member State has no

appropriate and proportionate regulatory measures available. In other words, although

the Member State would be entitled to take measures, de facto it would be prevented

from exercising that power. The Court may have thought that such a situation was

at hand in Alpine Investments. The Court observed that even if the host Member Statewished

to control cold calling it was not in a position to prevent or control telephone

calls without the co-operation of the Member State from which the telephone call was

made." In such an instance, the Member State that is in a position to take effective

I national law as a source, de facto a favor principle is the result: it is not the law of the

country of origin but the most favourable law which applies.

As Basedow himself recognises, this line of reasoning raises a problem. T h e freedoms

not only protect the producer but also the consumer. Consumers could therefore

equally claim treatment on the basis of a /m w-principle. In Basedow's thesis, favouring

the producer and favouring the consumer risk negating each other. Basedow resolves

this conflict in favour of the producer. They and not the consumers provide the real

thrust behind the process of market-integration. Therefore, the producer/offerer

prevails and not just a favor but a favor offcrentis applies.1

Von Wilmowsky rejects Basedow's thesis and the favor offcrentis as the basic rule of

Community conflicts ot l a w . 1 " In particular, the freedoms could not be reduced to

the country of origin principle nor would Community law support a principle which

favours the producer over the c o n s u m e r . ' ' ' Yon Wilmowsky, in his turn, argues that

the economic freedoms 'guarantee' (gcwahrleistcn) party-autonomy or the freedom

of choice of law.1 ' 1 In support of this, at least at fust sight, dramatic conclusion he

argues that the use of objective connecting factors or the restriction of party-autonomy

in private international law imposes specific burdens on parties in concluding crossborder

transactions.1 "The use of objective connecting factors introduces a degree of

legal uncertainty, which increases the (transaction) costs of any given cross-border

transaction. Moreover, by restricting the freedom of c h o i c e of law, parties are precluded

from selecting what they consider the most efficient legal regime for their transaction.

In particular, it may prevent uniform strategies for the European market.

Differently put, restricting party-autonomy in conflicts of law burdens cross-border

transactions. Where these transactions are entered into in the exercise of one of the

freedoms of CCommunity law, so the argument runs, the restriction of"party-autonomy

must be shown to be necessary for and proportionate to the protection of mandatory

requirements of the public interest.

The quest to find and formulate a basic rule of ("ommunity conflicts of law has met

with criticism. Sonnenberger, for instance, refers to 'blojie Erfindungcif (mere fabrica-

measures may be called upon to take measures for the protection of the foreign

interest.1" This exception should be understood in light of the duty of mutual

assistance and co-operation in good faith arising under Community law and the related

concept of 'positive comity' to be discussed l a t e r . 1 '