Italian law prohibits the opening of certain retail stores without first obtaining a license from the local authorities. A request for a license might be denied if it was believed that the market is adequately served already. The license could be granted by the local mayor on the advice of a 10 to 15-person local committee made up of local government representatives, local merchants, and members of local unions of shopkeepers and workers. This particular action was brought by three applicants whose licenses to open new retail stores in Italy had been denied. One of the applicants, a subsidiary of a German company, argued that the Italian retail licensing law discriminated against non-Italian companies and imported goods, and lead to higher consumer prices. It argued that the Italian law was invalid under the laws of the European Union and the Treaty of Rome.
1. What was the ostensible purpose of the Italian law? What was its effect?
2. Why was the law not found to be discriminatory?