Case Law: Alpine Investments

2 Colum. J. Eur. L. 154 (1995)

G. Straetmans. Assistant at the Institute for European Law, Katholieke Universiteit Leuven.

Case C-384/93, Alpine Investments v. Minister van Financiën (Minister for Finance), May 10, 1995, 1995 E.C.R., 1-1141.
Freedom to provide services; Prohibition against offering financial services by telephone (cold calling).

Facts and Procedure

Alpine Investments offers services in the market of commodities futures contracts. The company is established in the Netherlands, and receives orders from clients not only in the Netherlands but also in Belgium, France and the United Kingdom. At the time of the events, financial services were governed by the Dutch Law on Securities Transactions. Article 6(1) of that law prohibited a person from acting as an intermediary in securities transactions without a license; Article 8 empowered the Minister of Finance to grant narrow exemptions from that prohibition, provided that the exemption could be restricted with a view to preventing undesirable developments in securities trading. Alpine Investments was granted such an exception, permitting it to place orders with a specified broker, Merrill Lynch. The exemption required Alpine Investments to comply with future rules issued by the Finance Ministry regarding client contact.

Subsequently, the Finance Ministry imposed a general prohibition on financial intermediaries who offered investments in off-market commodities futures by “cold calling” potential clients, which means calling potential customers and offering them services without the customers’ prior consent to receiving telephone solicitation. The prohibition was adopted following complaints from investors who had made unfortunate investments, and since some of those complaints came from investors established in other Member States, the prohibition was extended to offers of services made to other Member States from the Netherlands with a view to preserve the reputation of the Netherlands financial sector also outside the Netherlands.

When Alpine Investments was unsuccessful with an administrative complaint against the Ministry’s prohibition, the company appealed to the Administrative Court. Alpine claimed that the prohibition against cold calling was incompatible with Article 59 of the EC Treaty in so far as it concerned potential clients established in Member States other than the Netherlands. The Administrative Court then referred questions on the interpretation of Article 59 to the Court of Justice.