From 20 May, the EU’s Tobacco Products Directive will restrict e-cigarette advertising in print, on television and radio, as well as clamp down on the strength of nicotine liquids and flavours that can be used.
Manufacturers will be required to notify government bodies about new products six months before they are launched, potentially thwarting innovation and new technologies.
Matthew Moden, board member of the Independent British Vape Trade Association, said: "It’s inappropriate for these products to be regulated as ‘tobacco related products’ when in reality they are a consumer product. The directive will have a significant impact on our sector, banning nearly all advertising and hampering free trade across the EU. At the very least this will force some vapers back to smoking and cause a number of smaller businesses to close.”
Britons spend over half a billion pounds a year on vaping products, according to Euromonitor International. More than 2.5m people in the UK are estimated to be e-cigarette users.
The ECJ upheld the EU's Tobacco Products Directive after deliberating on two legal challenges brought ahead by tobacco industry majors Philip Morris International and British American Tobacco, and another was brought by vaping firm Totally Wicked.
Read more: Just what has the EU got against e-cigs?
Totally Wicked has blasted the "disproportionate" new laws, which will result in e-cigarettes "being subjected to a stricter regulatory regime than some tobacco products".
"It is closing down our ability to communicate to customers," Fraser Cropper, managing director of Totally Wicked said. "Tobacco firms have had 50 to 60 years to build up a client base, while we had less than five years."
A British American Tobacco spokesperson said: "Despite today’s decision by the European Court of Justice, we stand by our belief that the Tobacco Products Directive is a clear example of the EU overstepping the limits of its authority. The reality is that many elements of the Directive are disproportionate, distort competition, and fail to respect the autonomy of the Member States."
Last week a landmark report by doctors' body the Royal College of Physicians concluded e-cigarettes should be "encouraged" and the public should be reassured that they are much safer than smoking, for example when they are trying to quit the habit.
While the RCP acknowledged the need for "proportionate regulation" of vaping products, it also emphasised that new laws should not be allowed to "significantly [inhibit] the development and use of harm-reduction products by smokers".