Abstract
In Case C-376/98 Germany v Council the European Court of Justice annulled a Directive which banned the advertisement and sponsorship of tobacco. The judgment sanctions regulatory policy-making at the national rather than the Community level. The paper examines the legal basis of the annulment, its effect on economic efficiency and the implied role of the Court in the formulation of public policy in Europe. Within the institutional limits of the judicial power to determine policy, the Court focused on whether or not disparate national laws restrict free movement and distort competition and affirmed the primacy of the nation state to regulate economic activity.
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