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BRUSSELS -- The European Court of Justice has undermined all protectionist European ad bans by ruling that Sweden's ban on alcohol advertising is in breach of European law.

Swedish food and drinks magazine Gourmet complained to the European Union's highest court about the national ban against all press ads for spirits, wine and strong beer in 1998.

The court ruling is a preliminary one. Sweden must now justify its ad ban. If Gourmet magazine is unsatisfied with the result, the case could return to the Luxembourg-based courtof justice on appeal.

The case sets an important precedent for all services but especially advertising, said Jonathan Todd, European Commission spokesman for internal market issues. A total ban on advertising for a product or service, such as the Swedish one, automatically puts non-domestic advertisers at a disadvantage to local competitors and is therefore discriminatory.

"Now we have a court ruling. This will make it much easier for us to remove other obstacles to the free movement of services," Mr. Todd said.

National restrictions now in the firing line of advertisers include Germany's bans on lifetime guarantees and two-for-the-price-of-one sales promotions; Greece's toy advertising ban; Sweden's ban on ads aimed at kids; and France's restrictions on retail and alcohol advertising.

"All these now can be clearly attacked," a commission official said, adding that he expects the ad industry to react to the Gourmet ruling by filing more complaints to the commission about the other protectionist national ad laws that obstruct the internal market in advertising.

Experts in the internal market division of the commission welcomed the ruling. The commission can initiate infringement proceedings against EU countries based on such complaints. If member states fail to act, the commission can fine them.

Copyright March 2001, Crain Communications Inc.

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