COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Upgrading the Single Market: more opportunities for people and business
Date: 2015-10-28
Institutions: Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, European Commission
Subjects: application of EU law, consumer, goods and services, innovation, single market, small and medium-sized enterprises, tertiary sector

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 28.10.2015  COM(2015) 550 final   COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Upgrading the Single Market: more opportunities for people and business {SWD(2015) 202 final} {SWD(2015) 203 final}  
 
 
1. 

UPGRADING THE SINGLE MARKET 

The  Single  Market  is  one  of  Europe’s  great  achievements.  In  the  past  50  years,  it  has 
generated  new  opportunities  and  economies  of  scale  for  European  companies  that  have 
strengthened industrial competitiveness, it has created jobs and offered greater choice at lower 
prices for consumers and it has enabled people to live, study and work where they want. It has 
contributed  to  better  integrating  EU  firms  into  international  value  chains  and  strengthening 
the global competitiveness of European companies.  

But the EU and the Single Market need to adapt to a changing environment. Europe is facing 
economic and social challenges. The economic and financial crisis has tested our economies 
and  created  immense  social  costs.  Unemployment  remains  stubbornly  high  across  Europe, 
particularly among the young people who should be the heart of Europe’s vitality. Low levels 
of growth have affected people’s confidence in Europe. Inadequate levels of investment and 
obstacles 
the 
competitiveness  of  the  European  economy.  Businesses  often  feel  stifled  by  outdated  and 
excessively burdensome regulations and unable to find the information that they need. 

in  product  and  services  markets  have  hampered  productivity  and 

At the same time, innovation and global value chains are generating major new opportunities. 
Digital  technologies  are  transforming  many  industrial  sectors,  leading  to  more  efficient 
production and new, innovative business models. Manufacturing and services are increasingly 
being  merged  into  smart  and  clean  business  offers  that  provide  greater  value  added  for 
customers. But this innovation is also challenging traditional business models and established 
relationships between consumers and business operators.  

1.1.  A deeper and fairer Single Market 

The  European  Commission  that  came  into  office  in  November  2014  is  responding  to  these 
challenges. It has made increasing jobs, growth and investment its top priority and is pursuing 
it by deepening the Single Market across sectors and policy areas. 

Within a month of taking office, the Commission launched its  Investment Plan for Europe 
and the European Fund for Strategic Investments. The plan is already up and running, starting 
to  counter  the  decline  in  investment  and  driving  economic  recovery.  One  of  the  plan’s 
objectives  is  to  create  a  better  business  environment  for  investment  by  providing  greater 
regulatory predictability and further strengthening the Single Market.  

In February 2015, the Commission built on this with the European Energy Union, aiming to 
ensure that consumers and businesses have access to secure, affordable and climate-friendly 
energy and making the internal energy market a reality across the EU. 

In May, the Commission unveiled a Digital Single Market Strategy to meet the challenges 
of the digital economy. A connected digital Single Market will improve access for consumers 
and businesses to online goods and services while creating the right conditions for networks 
to flourish and maximising the growth potential of Europe’s digital economy. 

And  last  month,  the  Action  Plan  on  building  a  Capital  Markets  Union  was  released.  The 
Action  Plan  should  result  in  lower  costs  of  borrowing,  improved  start-up  financing  and  a 
broader investor base. This will make it easier for Europe’s firms to get access to the finance 
they  need  to  modernise  and  expand  by  linking  investors  with  those  who  need  funding.  The 
Capital Markets Union will make the financial system more stable and increase competition. 

We need a Europe that is open to the world and a world that is open to Europe. As outlined in 
its Communication Trade for All adopted earlier this month, the Commission has redesigned 
its trade and investment policy to make it more effective and more transparent, in tune with 
1 

 
 
our European values. It is working hard to secure an ambitious, fair and effective outcome to 
the Transatlantic Trade and Investment Partnership.  

The planned Circular Economy package will create new competitive advantages for Europe. 
It  will  aim  to  ensure  that  valuable  natural  resources  are  preserved  while  boosting 
competitiveness,  innovation  and  job  creation  in  the  design,  manufacturing,  use,  repair  and 
recycling of products, and in waste management.  

In order to ensure a fairer Single Market, the EU must also respond effectively to the concerns 
of people and businesses. They must have the assurance that the Single Market is protecting 
and empowering them. 

People need to be confident that their rights as employees are not undercut. To address those 
concerns,  the  forthcoming  Labour  Mobility  package  will  support  labour  mobility  through 
better  coordinated  social  security  systems  and  a  targeted  review  of  the  Posted  Workers 
Directive. 

People and businesses need to see fairness also in the area of tax. It is crucial that companies 
who benefit from the Single Market are no longer able to exploit differences and loopholes in 
national tax regimes. The Commission is finalising in-depth investigations on tax rulings in a 
number  of  Member  States  and  working  to  secure  the  quick  implementation  of  the  recently 
adopted Directive on tax rulings. With the recent Action Plan for fair and efficient corporate 
taxation, the Commission has rolled out an ambitious programme to ensure that taxes are paid 
where profits are generated. 

Finally,  the  Commission  is  taking  forward  a  number  of  sectoral  initiatives  relevant  for  the 
Single  Market.  For  example,  further  measures  to  improve  the  Single  Market  for  road 
transport  will  contribute  to  improved  and  more  competitive  transport  services.  The 
Commission will consider in particular how the rules on access to the haulage market can be 
made  simpler  and  more  enforceable.  It  will  look  at  ways  to  ensure  a  level  playing  field  for 
domestic  passenger  services,  greater  competition  for  the  hiring  of  heavy  goods  vehicles,  as 
well  as  how  to  strengthen  the  enforcement  of  applicable  rules  in  the  sector  and  ensure 
adequate working conditions and a level playing field.  

Underpinning all these actions, the Commission has made a new start on better regulation. 
By  focusing  on  Europe’s  real  priorities,  we  are  delivering  better  rules  for  better  results.  In 
many cases, one set of EU rules replaces a patchwork of 28 different national rules, making 
life  easier  for  citizens  and  businesses,  simplifying  the  legal  framework,  reducing  regulatory 
burden across the Single Market and increasing regulatory predictability. 

1.2.  A new Single Market Strategy based on opportunity, modernisation and results 

These  measures  need  to be  complemented by a true European  Single Market for goods and 
services. 

For all the progress made, too many significant economic barriers remain, notably in the area 
of  services.  The  Commission  estimates  that  more  ambitious  implementation  of  the  Services 
Directive would add 1.8 % of EU GDP.1  

Barriers  to  the  free  exchange  of  products  and  services,  inadequate  enforcement  of  existing 
rules,  low  levels  of  cross-border  public  procurement  and  insufficient  political  support  for 
structural reforms limit the opportunities for businesses and citizens, resulting in fewer jobs 
and unnecessarily high prices. 

1 http://ec.europa.eu/economy_finance/publications/economic_paper/2012/pdf/ecp_456_en.pdf  

2 

 
 
                                                 
These  barriers  also  affect  other  policies  in  key  areas,  such  as  transport, telecommunications 
and  energy.  They  make  the  EU  less  attractive  for  internal  and  external  investments.  They 
stifle  innovation  and  discourage  companies  from  developing  new  products  and  services  in 
Europe, from hiring additional staff and from expanding to new markets. 

So  the  Single  Market  needs  to  be  revived  and  modernised  in  a  way  that  improves  the 
functioning of the markets for products and services and guarantees appropriate protection for 
people. This Strategy aims to achieve that. It is made up of targeted actions in three key areas: 

  creating opportunities for consumers, professionals and businesses; 
  encouraging and enabling the modernisation and innovation that Europe needs; 
  ensuring  practical  delivery  that  benefits  consumers  and  businesses  in  their  daily 

lives. 

Its  focus  is  on  practical  measures  helping  small  and  medium-sized  enterprises  (SMEs)  and 
start-ups to grow and expand, promoting innovation, unlocking investments and empowering 
consumers. These measures complement a number of sectoral initiatives, such as for example, 
initiatives improving the functioning and enforcement of the Single Market for road transport. 
They are underpinned by economic evidence, focussing on the economically most important 
obstacles.  The  legislative  actions  will  be  subject  to  further  impact  assessment  work,  which 
will then be the basis for the Commission’s final decisions. 

2. 

CREATING OPPORTUNITIES FOR CONSUMERS AND BUSINESSES 

2.1. 

Enabling the balanced development of the collaborative economy 

The  way  many  services  and  assets  are  provided  and  consumed  is  rapidly  changing:  the 
collaborative  economy,  a  complex  ecosystem  of  on-demand  services  and  temporary  use  of 
assets based on exchanges via online platforms, is developing at a fast pace. The collaborative 
economy  leads  to  greater  choice  and  lower  prices  for  consumers  and  provides  growth 
opportunities  for  innovative  start-ups  and  existing  European  companies,  both  in  their  home 
country and across borders. It also increases employment and benefits employees by allowing 
for more flexible schedules, from non-professional micro jobs to part-time entrepreneurship. 
Resources can be used more efficiently thereby increasing productivity and sustainability. 
According  to  a  recent  study,2  the  five  main  collaborative  economy  sectors  (peer-to-peer 
finance, online staffing, peer-to-peer accommodation, car sharing and music video streaming) 
have the potential to increase global revenues from around EUR 13 billion now to EUR 300 
billion by 2025. A third of European consumers say that they will increasingly participate in 
the collaborative economy.3  

However,  the  emergence  of  new  business  models  often  impacts  existing  markets,  creating 
tensions  with  existing  goods  and  services  providers.  Both  sides  complain  of  regulatory 
uncertainty  over  the  application  of  rules  on  consumer  protection,  taxation,  licensing,  health 
and safety norms, social security and employment protection. Hasty or inadequate regulatory 
responses to these challenges risk creating inequality and market fragmentation.  

Consumer 

Intelligence 

2 
https://www.pwc.com/us/en/technology/publications/assets/pwc-consumer-intelligence-series-the-sharing-
economy.pdf 
3 ING International Survey: What’s mine is yours - for a price. Rapid growth tipped for the sharing economy. 
http://www.ezonomics.com/ing_international_survey/sharing_economy_2015  

Economy. 

Sharing 

Series: 

2015, 

PwC 

The 

3 

 
 
                                                 
is  needed 

Such  difficulties  and  uncertainty  need  to  be  addressed.  A  clear  and  balanced  regulatory 
environment 
the  development  of  collaborative  economy 
entrepreneurship; protects workers, consumers and other public interests; and ensures that no 
unnecessary  regulatory  hurdles  are  imposed  on  either  existing  or  new  market  operators, 
whichever business model they use. 

that  allows 

The  Digital  Single  Market  Strategy  has  already  kick-started  work  to  analyse  the  role  of 
platforms,  including  in  the  collaborative  economy.  This  initiative  will  be  complemented  by 
other cross-sector studies and active engagement with market operators, consumers and public 
authorities.4 

Building  on  this  work,  the  Commission  will  issue  guidance  on  how  EU  law  applies  to 
collaborative  economy  business  models  and  relevant  provisions  of  national  law.  This 
guidance will be based on the Services Directive, E-Commerce Directive, European consumer 
legislation, as well as on relevant treaty provisions. It will consider international best practice 
and should help Member States and market operators better understand the applicable rules. It 
will  also  guide  the  Commission’s  enforcement  action  to  ensure  that  national  law  does  not 
hinder  the  development  of  the  collaborative  economy  in  an  unjustified  manner.  The 
Commission will further assess whether and how any regulatory gaps need to be addressed. It 
will  develop  a  monitoring  framework  helping  to  track  the  development  of  the  collaborative 
economy at local, national, company and sector level. 

Actions:  The  Commission  will  develop  a  European  agenda  for  the  collaborative  economy, 
including  guidance  on  how  existing  EU  law  applies  to  collaborative  economy  business 
models.  It  will  assess  possible  regulatory  gaps  and  monitor  the  development  of  the 
collaborative economy. 

2.2. 

Helping SMEs and start-ups to grow 

SMEs  are  the  backbone  of  the  European  economy.  Yet  far  too  many  obstacles  remain  for 
SMEs, start-ups and young entrepreneurs looking to grow in the Single Market. Many SMEs 
cater for a local or regional market. Few consider the EU their home market or set out with 
pan-European ambition. This limits innovation and job creation. 

In particular, SMEs complain about: 

the complexity of VAT regulations; 

 
  uncertainties over company law; 
  understanding and complying with regulatory requirements; 
  a lack of access to finance; 
 
  barriers to innovation. 

the fear of punitive bankruptcy laws; 

The Commission is determined to address key difficulties that SMEs – start-ups in particular 
– face in all phases of their lifecycle. 

Many  entrepreneurs  complain  about  the  complexity  of  VAT  regulations  when  looking  to 
operate  cross-border.  In  the  Digital  Single  Market  Strategy,  the  Commission  announced  a 
legislative VAT simplification measure to help small e-commerce businesses in particular to 
operate  cross-border.  In  addition,  the  Commission  will  bring  forward,  as  part  of  its  Action 
Plan for a fraud-proof VAT system, a comprehensive simplification package for SMEs, with 

4  A  public  consultation  on  the  regulatory  environment  for  platforms,  online  intermediaries,  data  and  cloud 
computing and the collaborative economy was launched in September 2015. 

4 

 
 
                                                 
the intention of reducing the administrative burdens experienced by such businesses. This is 
critical for their growth and will enable cross-border trade.  

Entrepreneurs  also  complain  about  uncertainties  surrounding  company 
law.  The 
Commission’s  Single  Member  Company  proposal,  which  should  be  adopted  by  the  co-
legislators  without  delay,  will  reduce  the  costs  of  company  registration  and  simplify 
procedures.  Building  on  this  initiative,  the  Commission  will  consider  further  ways  of 
achieving simpler and less burdensome rules for companies — while continuing to act against 
letterbox companies — including making digital solutions available throughout a company’s 
lifecycle, in particular in relation to their registration and to the filing of company documents 
and information.5 In light of the great difficulties which small companies, in particular, face 
when  carrying  out  cross-border  operations,  the  Commission  will  also  examine  the  need  to 
update  the  existing  rules  on  cross-border  mergers6  and  the  possibility  to  complement  them 
with  rules  as  regards  cross-border  divisions.  This  could  make  it  easier  for  SMEs  to  choose 
their  preferred  business  strategy  and  better  adapt  to  changes  in  market  conditions,  without 
weakening social and employment protection. 

Start-ups also find it difficult to identify and meet regulatory requirements. This is why the 
Commission, when considering policy solutions or evaluating legislation, is paying particular 
attention  to  rules  that  affect  SMEs,  starting  from  the  principle  ‘think  small  first’.7  Member 
States have been working on the creation of ‘one-stop-shops’ to provide information on all the 
regulatory  requirements  that  anyone  starting  a  business  in  any  sector  of  the  economy  will 
encounter. To complement these efforts, the Commission will launch a Start-up initiative to 
engage all relevant players, including entrepreneurs, start-up communities, social partners and 
regional and national authorities, with the aim of improving the environment for start-ups in 
Europe.  As  part  of  that  initiative,  it  will  organise  a  public  consultation  to  get  the  ideas  of 
entrepreneurs. The Commission can also benefit from the ‘REFIT Platform’8 to provide ideas 
to  inform  its  decisions.  It  will  examine  in  conjunction  with  stakeholders  how  the  Single 
Digital Gateway, initiated as part of the Digital Single Market Strategy, can best address the 
requirements  of  start-ups.  Together  with  the  participants  of  the  Start-up  initiative,  the 
Commission  will  develop  specific  features  for  the  Gateway  to  facilitate  the  cross-border 
operations of start-up companies and help them to scale up across Europe. 

SMEs and start-ups also find it difficult to secure funding. SMEs have already been placed at 
the heart of the Investment Plan for Europe. For instance, a quarter of the European Fund for 
Strategic  Investments  (EFSI)  guarantee  will  be  used  to  support  innovative  SMEs  and 
midcaps,  to  ensure  more  and  faster  access  to  risk  finance  for  start-ups.9  In  addition,  the 
Capital Markets Union is taking forward a range of measures in support of venture capital and 
risk capital financing in the EU. In this context, the Commission will bring forward proposals 
for a European venture capital fund of funds, supported by the EU budget and open to others 

5 Possible solutions would seek to achieve these objectives through legislative and/or non-legislative measures, 
but without relating to any particular type of company. 
6 See Directive 2005/56/EC on cross-border mergers of limited liability companies. 
7 See the Commission’s Better Regulation Guidelines, SWD(2015) 111. 
8 http://ec.europa.eu/smart-regulation/better_regulation/key_docs_en.htm  
9 The EU financing instruments for start-ups and SMEs include EFSI and InnovFin (EU Funding for Innovators), 
which  have  a  strong  risk  finance  aspect  for  innovation,  in  part  due  to  their  links  to  Horizon  2020.  The  SME 
Initiative - ESIF and Horizon 2020/COSME (EU programme for the Competitiveness of Enterprises and Small 
and Medium-sized Enterprises) - via the European Investment Bank (EIB) Group, provides uncapped guarantees 
for loans to SMEs and small midcaps; ESIF also supports a great number of incubators and is trying to motivate 
regions  to  cooperate  across  Europe  in  investing  in  smart  specialisation  and  into  key  enabling  technologies 
(KETs). 

5 

 
 
                                                 
in  order  to  attract  private  capital,  in  line  with  the  Investment  Plan.  The  fund  would  be 
dedicated to promoting the creation and the upscaling of start-ups in the Single Market. 

In  addition,  several  EU  funding  programmes,  such  as  Horizon  2020,  COSME  and  the 
European  Structural  Investment  Funds,  include  initiatives  supporting  SMEs  and  start-ups.10 
EU  programmes  also  finance  advice  and  support  for  SMEs  and  start-ups  for  their  funding 
options  and  cross-border  operations.11  The  Commission  will  use  COSME  funds  for 
information campaigns targeting young innovative SMEs to encourage them to expand cross-
border and make use of the possibilities. 

The  effects  of  bankruptcy  also  deter  people  from  entrepreneurial  activity.  The  fear  of  the 
social stigma, legal consequences and the inability to pay off debts is stronger in Europe than 
in many other parts of the world, for example because of much longer debt discharge periods. 
This is a significant disincentive for entrepreneurs to start up a business. Entrepreneurs need 
to know that they will have a second chance. Building on existing work,12 the Commission 
will  support  bona  fide  entrepreneurs  and  put  forward  a  legislative  proposal  on  business 
insolvency, including early restructuring and second chance,13 to ensure that Member States 
provide  a  regulatory  environment  that  is  able  to  accommodate  failure  without  discouraging 
entrepreneurs from trying new ideas. 

There  are  also  barriers  to  innovation.  The  Commission  Better  Regulation  framework  sets 
out the tool needed to assess the possible impacts on innovation of new policy proposal and to 
identify  existing  barriers  and  possible  ways  to  remove  them.  The  REFIT  platform  can 
contribute  advice  on  issues  identified  in  the  course  of  its  work.  In  this  context,  the 
Commission  will  also  seek  to  identify  innovative  markets  where  innovative  regulatory 
approaches could be piloted to verify the feasibility and sustainability of innovative solutions 
and their ability to contribute to stimulating investment and hence job creation. 

Europe  would also benefit from  attracting more  innovators from the rest  of the world.  As 
highlighted in the European Migration agenda,14 rules on attracting entrepreneurs, combined 
with  support  measures  helping  them  to  operate  in  the  Single  Market,  could  make  Europe  a 
more attractive destination for innovators from outside the EU. This could boost the creation 
of start-ups in Europe.15  

Actions:  The  Commission  will  put  forward  a  legislative  proposal  on  business  insolvency, 
including  early  restructuring  and  second  chance,  to  address  fear  of  failure  and  make  sure 
that entrepreneurs have a second chance. It will aim to further remove administrative burdens 
to  the  starting  and  scaling-up  of  companies’  activities,  including  through  initiatives  to 
facilitate  the  use  of  digital  technologies  and  cross-border  mergers  and  divisions.  The 

10 These initiatives help leverage finance for companies through loan guarantees and risk finance in collaboration 
with the EIB Group. Their aim is to assist the establishment and expansion of innovative start-ups and SMEs by 
de-risking private  investment  and  creating a  more  enabling  ecosystem.  This  includes support for  incubators  at 
regional  level  and  the  strategic  cross-border  connection  of  value  chains  as  a  priority  in  the  context  of  smart 
specialisation. 
11 For example, via the Enterprise Europe Network. 
12  Commission  Recommendation  of  12  March  2014  on  a  new  approach  to  business  failure  and  insolvency, 
C(2014) 1500. 
13 Cf. also the Capital Markets Union Action Plan, COM(2015) 468. 
14 COM(2015) 240. 
15  Entrepreneurs  from  non-EU  countries  have  great  potential  for  innovation  and  job  creation.  OECD  (2011) 
figures show that migrants from non-EU countries are more likely to start a new business (13.5 % self-employed 
versus 12.6 % for those born in the country) and contribute to job creation (foreign-born self-employed people 
who own a small or medium firm create between 1.4 and 2.1 additional jobs).  

6 

 
 
                                                 
Commission will launch a Start-up initiative, to initiate a broad assessment of requirements 
for start-ups and 

ways  to  reduce  such  requirements  and,  where  this  is  not  possible,  to  facilitate  compliance. 
This  will  include  the  development  of  specific  features  for  the  Single  Digital  Gateway  to 
facilitate  the  cross-border  operations  of  firms,  in  particular  of  start-up  companies.  The 
Commission  will  use  COSME  funds  to  provide  targeted  information  to  encourage  young 
innovative  SMEs  to  expand  cross-border  and  make  use  of  the  possibilities  offered  by  the 
Single Market. Through the Investment Plan and the Capital Markets Union, the Commission 
will ease access to finance for entrepreneurs in Europe. The Commission will ask the REFIT 
platform to focus on barriers to innovation and discuss how they can be removed or reduced. 
Finally,  the  Commission  will  examine  further  possible  measures  to  help  attract  innovators, 
such as the possible extension of the Blue Card approach to entrepreneurs. 

2.3.  Making the market without borders for services a practical reality 

The 2006 Services Directive led to a welcome modernisation of the economy across a variety 
of  sectors.  Member  States  adopted  more  than  a  thousand  measures  abolishing  unjustified 
barriers to the provision of services by businesses and professionals. 

Despite  this,  businesses  and  professionals  still  face  too  many  difficulties  operating  across 
borders.  They  are  hindered  by  differences  —  and  sometimes  inconsistencies  —  in  the 
regulation  of  professions  and  ‘reserved  activities’  across  the  EU,  unnecessary  regulatory 
barriers  to  the  provision  of  services  and  a  lack  of  clarity  and  predictability  in  certain  key 
sectors for those who want to provide a service in other Member States. 

Addressing 
impact  on 
the  most  problematic  restrictions  would  have  a  positive 
entrepreneurship  and  employment,  lead  to  lower  prices  and  a  more  effective  resource 
allocation in Europe. This means acting on both professions and service provision. 

Professional  services  generate  9 %  of  EU  GDP  and  regulated  professions  accounted  for 
around 20 % of the EU labour force.16 Professional services are strongly connected with other 
sectors.17 A more competitive and efficient professional services sector would therefore help 
industrial competitiveness and the economy as a whole.18 
Today,  Europe  has  over  5 000  regulated  professions,19  involving  over  50  million  people. 
While  regulations  on  the  access  and  exercise  of  these  professions  were  designed  to  protect 
both public interest and the beneficiary of the service provided, many of these regulations are 
now  disproportionate  and  create  unnecessary  regulatory  obstacles  to  the  mobility  of 
professionals, lowering productivity. 
Recent  studies20  show  that  reforms  implemented  by  a  number  of  Member  States  to  further 
open regulated professions led to job creation and better prices for consumers.21 

16 Measuring the prevalence of occupational regulation, a survey and a study contracted by the Commission in 
2014, 2015, publication forthcoming. 
17 Canton E., Ciriaci D. and Solera I., ‘The Economic Impact of Professional Services Liberalisation’, European 
Economy, Economic Papers 533, 2014. 
18 Ibid. 
19 European Database of Regulated Professions: 
http://ec.europa.eu/internal_market/qualifications/regprof/index.cfm?fuseaction=home.home 
20 Koumenta M., Humphris A., ‘The Effects of Occupational Licensing on Employment, Skills and Quality: A 
Case  Study of  Two  Occupations  in  the UK’, Queen  Mary  University of  London;  Pagliero  M., ‘The  effects  of 
recent  reforms  liberalising  regulated  professions  in  Italy’,  University  of  Turin  &  Carlo  Alberto  College; 
Athanassiou  E.,  Kanellopoulos  N.,  Karagiannis  R.,  Kotsi  A.,  ‘The  effects  of  liberalisation  of  professional 

7 

 
 
                                                 
 
At  EU level, the Services  Directive prohibits  a number of regulations and requires Member 
States  to  evaluate  whether  others  are  justified  and  proportionate.  The  Professional 
Qualifications Directive22 aims to facilitate the mobility of professionals across the European 
Union, provides the legislative framework to facilitate the mutual recognition of professional 
qualifications  and  organises  a  process  between  Member  States  and  the  Commission  to 
evaluate the regulation of professions at national level. In recent years, Member States have 
engaged in a reform process that has relaxed or removed a number of regulatory barriers.23  

However,  the  mutual  evaluation  exercise  carried  out  in  the  last  two  years  further  to  the 
revision  of  the  Professional  Qualifications  Directive  has  shown  that  regulation  of  similar 
professions varies substantially between Member States, as do reserves of activities.24  

The  Commission  will  therefore  propose,  through  periodic  guidance,  specific  actions  to 
improve access to, and the exercise of, regulated professions at national level and across the 
EU.  These  actions  will  identify  concrete  reform  needs  for  specific  Member  States.25  This 
exercise will consider all issues relating to access to and the exercise of regulated professions. 
In  a  first  phase,  the  focus  will  be  on  selected  professions  in  priority  sectors.26  In  a  second 
phase,  the  reforms  will  be  evaluated  and  the  remaining  barriers  will  be  addressed.27  As 
appropriate,  depending  on  the  Member  State  and  subject  to  an  individualised  prioritisation 
assessment,  reform  priorities  will  be  addressed  in  the  context  of  the  European  Semester 
process. 

The  Commission  will  also  set  out  an  analytical  framework  for  Member  States  to  use  when 
reviewing  existing  professional  regulations  or  proposing  new  ones.  This  framework  will 
contain  a  methodology  for  comprehensive  proportionality  assessments  of  professional 
regulations. Member States will need to demonstrate that public interest objectives cannot be 
achieved through means other than limiting access to, or conduct in, the professional activities 
in question.  

Finally, the mutual evaluation exercise will also help modernise the legal framework in this 
area by addressing problems arising from differing legal form, shareholding requirements and 
multidisciplinary  restrictions  that  apply  to  certain  business  services.  The  Commission  will 
propose,  possibly  as  part  of  the  service  passport  initiative,  legislative  action  to  address 
legal  form,  shareholding  requirements  and 
regulatory  barriers  such  as  diverging 

requirements  in  Greece’,  Centre  for  Planning  and  Economic  Research  (KEPE),  Athens;  Rostam-Afschar  D., 
‘Regulatory Effects of the Amendment to the HwO in 2004 in German Craftsmanship’, Free University Berlin 
and  German  Institute  for  Economic  Research  (DIW  Berlin)  —  studies  commissioned  by  the  European 
Commission  in  2014.  (Publication  forthcoming  at  http://ec.europa.eu/growth/single-market/services/free-
movement-professionals/index_en.htm). 
21  For  example,  reforms  of  services  of  legal  professions,  accountants,  tax  consultants,  real  estate  agents  and 
physiotherapists as well as more innovative services. See Athanassiou E. et al, ibid, study commissioned by the 
European Commission in 2014 (publication forthcoming). 
22 Directive (EU) 2013/55 of 20 November 2013, due to be implemented by Member States by 18 January 2016. 
23 For example, most compulsory tariffs have been abolished and replaced by market prices. 
24  Justification  and  proportionality  considerations  can  differ  for  a  single  activity,  with  some  Member  States 
stating  clearly  the  ability  to  rely  on  the  functioning  of  the  market  and  general  legislation  (e.g.  in  the  case  of 
consumer protection), whereas others argue for stringent professional regulation. 
25  Based on  the ongoing process  of  mutual  evaluation,  academic  studies,  a  large  scale survey  and  the  updated 
database of regulated professions. 
26 E.g. civil engineers, architects, accountants, lawyers, real estate agents, tourist guides and patent agents. 
27 Based on reports to be submitted by Member States every two years. 

8 

 
 
                                                                                                                                                         
multidisciplinary  restrictions  in  key  business  services28  and,  if  appropriate,  organisational 
requirements in construction companies.29 

On  services  more  generally,  access  to  reliable  information  on  applicable  requirements  is 
often  a  barrier,  notably  for  cross-border  service  providers.  Equally,  construction  service 
providers are sometimes confronted with certain requirements relating to their organisation in 
their  home  state  that  make  offering  their  services  cross  border  too  complex.  Insurance 
requirements are often difficult to comply with for business services and construction service 
providers and need to be addressed. 

A  legislative  initiative  will  therefore  be  proposed  for  cross-border  service  providers,  in 
particular for the construction and business services sectors. Under this initiative, harmonised 
forms would enable service providers to notify to host countries, in one place, the information 
required under that country’s legislation for the service provider to be able to provide services 
across  borders  in  that  country.  This  will  ensure  that  businesses  have  full  certainty  on  the 
requirements applicable in each Member State in key areas30 for the cross-border provision of 
services.  It  will  also  provide  additional  certainty  for  consumers.  These  requirements  will 
include notifications on posted workers, professional qualifications and other requirements to 
the extent they are compatible with Article 16 of the Services Directive and Article 9 of the 
Posted Workers Enforcement Directive.31  

This  will  enhance  the  cooperation  between  home  and  host  Member  States  in  supporting 
service providers going cross-border. Upon request, the authorities of the home Member State 
will  issue  a  services  passport  to  help  them  demonstrate  that  they  satisfy  the  requirements 
applicable to them in the Member State where they want to provide their service.32  

In  line  with  the  ‘once  only’  principle,  the  services  passport  will  eliminate  the  need  for 
multiple requests for information and documentation already provided to the home Member 
State,  through  the  creation  of  a  ‘common  electronic  repository’  of  documents  by  the  home 
country administration upon the request of a service provider. In combination, the harmonised 
notification form and the electronic document repository would ease compliance with existing 
ex ante notification and control requirements. 

Actions: The Commission will launch a legislative initiative introducing a services passport 
with  a  harmonised  notification  form  and  an  electronic  document  repository  to  increase 
certainty and reduce barriers for service providers who want to access other EU markets in 
order  to  expand  their  activities.  It  will  further  improve  access  to  professional  services  at 
national and EU level by issuing periodic guidance that identifies concrete reform needs for 
specific  Member  States  and  professions  that  have  unjustified  regulations.  The  Commission 
will also propose an analytical framework for Member States to use when reviewing existing 
regulations  or  proposing  additional  ones.  Finally,  the  Commission  will  propose  legislative 
action  to  address  regulatory  barriers,  such  as  diverging  legal  form  and  shareholding 
requirements,  as  well  as  multidisciplinary  restrictions  for  key  business  services  and,  if 

28 For instance, firms dealing with accounting, architecture and civil engineering services, all of which are highly 
relevant for industry. 
29 For example, requirements to employ a certain number of architects or engineers or have certain equipment 
available, irrespective of actual works to be undertaken. 
30 In full compliance with the existing EU legal framework. 
31  Although  it  is  related  to  issues  covered  by  the  Services  Directive  or  the  Posted  Workers  Enforcement 
Directive, the passport will not alter the content of these Directives, nor eliminate the fact that access to activities 
is reserved to individual professionals holding the necessary professional qualification. 
32 The Member State where a service provider wants to provide its services will remain responsible for defining 
these requirements, as long as these requirements comply with the relevant provisions of EU law. 

9 

 
 
                                                 
appropriate,  organisational  requirements  in  construction  companies.  The  Commission  will 
review  market  developments  and,  if  necessary,  take  action  in  connection  with  insurance 
requirements for business and construction service providers. 

2.4. 

Addressing restrictions in the retail sector 

Retail and wholesale activities are one of the largest services sectors in Europe, accounting for 
9.6 %  of  value  added  and  13.1 %  of  total  employment  in  2012.  From  2010  to  2012, 
productivity growth in the sector was flat in the EU compared to a growth of 3.9 % in the US. 
Recent  studies33  conclude  that  restrictive  regulations  create  significant  barriers  to  entry, 
leading  to  fewer  new  outlet  openings  for  most  store  formats,  hampering  competition  and 
leading to higher prices for consumers. Even with the development of e-commerce, this will 
remain  an  issue  because  a  physical  presence  is  often  important  for  building  consumer  trust 
and confidence. 

The  responsibility  to  regulate  the  establishment  and  operation  of  the  retail  sector  lies 
primarily with Member States. Regional and local rules also tend to play an important role. 
To  comply  with  the  fundamental  Treaty  freedom  of  establishment,  these  regulations  must 
however be justified by public policy objectives such as environmental protection, town and 
country planning or consumer protection. They must be appropriate and proportionate to the 
objectives pursued. The peer review34 on retail establishment showed that retailers often face 
disproportionate and inappropriate establishment conditions and procedures. 

Member States have a margin of discretion in regulating the retail sector, but must not unduly 
restrict  the  Single  Market  freedoms.  Member  States  should  assess  and  modernise,  as 
necessary, their retail markets, taking inspiration, where relevant, from well-functioning and 
less disruptive solutions developed in other Member States. 

The Commission will therefore set out best practices on retail establishment and operational 
restrictions  in  the  Single  Market,  in  full  compliance  with  the  subsidiarity  principle  and 
legitimate public policy objectives pursued by Member States. In doing so, the Commission 
will support Member States in giving consumers the choice they deserve. This initiative will 
also  provide  guidance  about  the  Commission’s  priority  setting  for  enforcement  action  with 
respect to restrictions in the retail sector. 

Actions: The Commission will set out best practices for facilitating retail establishment and 
reducing  operational  restrictions  in  the  Single  Market.  These  will  provide  guidance  for 
Member State reforms and priority-setting for enforcement policy in the retail sector. 

2.5. 

Preventing discrimination of consumers and entrepreneurs 

The rise of online trade and increased travel between Member States, has led to new business 
opportunities for entrepreneurs and access to a wider range of offers in goods and services for 
consumers. 

Yet, too often they find themselves discriminated against  on the basis of their nationality or 
place  of  residence.  The  Commission  and  European  Consumer  Centres  regularly  receive 
complaints  from  consumers  who  are  denied access  to  cheaper  websites,  offers  or  discounts. 

33  Holland  van  Giizen  Advocaten,  Legal  study  on  retail  establishment  through  the  28  Member  States: 
Restrictions and freedom of establishment – forthcoming; Commission internal analysis, 2015. 
34  The  peer  review  of  the  regulatory  frameworks  applicable  to  retail establishment  was  carried out  throughout 
2014-2015. 

10 

 
 
                                                 
They are often faced with higher prices or have difficulty obtaining the same service as local 
customers.  Such  practices  concern  a  vast  array  of  goods  and  services,  ranging  from 
amusement park tickets to utility charges. 

While  different  access,  prices  or  sales  conditions  can  be  the  result  of  objective  differences 
(e.g. in delivery costs or justified legal requirements), they are often motivated by unjustified 
market fragmentation strategies on a territorial basis. 

This  goes  against  the  very  idea  of  the  Single  Market.  It  leads  to  lower  consumer  trust  and 
greater  reluctance  to  shop  cross-border,  be  it  in  person  or  online.  The  lost  opportunities  for 
businesses and for the European economy go far beyond the individual purchase from which 
the individual trader may pocket higher profits. 
Article  20  of  the  Services  Directive35  already  prohibits  all  types  of  unjustified  territorial 
restrictions,36 but sets only general principles which have not always prevented discriminatory 
practices on the ground. Further action is therefore necessary to give effect to these principles 
and  develop  concrete  rules  against  discrimination  based  on  the  nationality  or  place  of 
residence of market participants.  
In  its  Strategy  for  a  Digital  Single  Market,37  the  Commission  has  already  announced 
legislative  proposals  by  mid-2016  to  end  unjustified  geo-blocking.  This  is  reflected  in  the 
Conclusions of the European Council of June 2015.38 As part of its broader efforts for a fairer 
Single  Market,  the  Commission  aims  to  fight  comprehensively  all  forms  of  unjustified 
discriminatory  treatment  for  purchasers  based  in  different  Member  States,  irrespective  of 
whether they are applied in direct sales or via distribution channels and regardless of the way 
they take place or the technology used. 

In  September,  the  Commission  launched  a  public  consultation  on  geo-blocking  and  other 
geographically-based  restrictions  when  shopping  and  accessing  information  in  the  EU.39  Its 
outcome will provide important insights for the Commission’s forthcoming legislative action, 
which will address geo-blocking  and other  forms of discriminations by market operators on 
the  grounds  of  place  of  residence  or  of  nationality.  They  must  go  hand  in  hand  with 
strengthened  enforcement  in  each  Member  State,  which,  as  announced  in  the  Digital  Single 
Market  Strategy,  must  be  further  enhanced  through  the  reform  of  the  Consumer  Protection 
Cooperation Regulation. 

Actions: In line with its geo-blocking initiative in the Digital Single Market Strategy and as 
part  of  a  comprehensive  approach  to  further  increase  fairness  in  the  Single  Market,  the 
Commission  will  take  measures  —  both  legislative  and  enforcement  actions  —  to  fight 
unjustified different treatment of customers on the basis of residence or nationality in terms of 
access,  prices,  or  other  sales  conditions  by:  identifying  and  banning  specific  forms  of 
residence-based  discrimination  not  grounded  on  objective  and  verifiable  factors;  making  it 
easier for consumers and consumer associations to know if and how there is discrimination, 

35 Directive 2006/123/EC of 12 December 2006. 
36  European  companies  offer  their  goods  and  services  throughout  the  EU.  They  cannot  be  subject  to  different 
treatment  because  of  their  nationality,  place  of  establishment  or  location.  In  the  same  way,  discrimination  of 
consumers  on  the  basis  of  their  nationality,  residence  or  location  can  have  no  place  in  a  true  European  single 
market.  Only  objective  and  verifiable  circumstances  may  justify  applying  different  prices  and  conditions  to 
customers just because they happen to live in a different Member State. 
37 COM(2015) 192. 
38 The June 2015 European Council Conclusions call on the Commission to take action to ‘remove the remaining 
barriers  to  the  free  circulation  of  goods  and  services  sold  online  and  tackle  unjustified  discrimination  on  the 
grounds of geographic location’. 
39 See https://ec.europa.eu/eusurvey/runner/geoblocksurvey2015/  

11 

 
 
                                                 
including  through  the  use  of  transparency  tools;  and  improving  enforcement  by  national 
authorities through the reform of the Consumer Protection Cooperation Regulation. 

3. 

ENCOURAGING MODERNISATION AND INNOVATION 

3.1.  Modernising our standards system 

Standards are crucial for innovation and progress in the Single Market: they increase safety, 
interoperability  and  competition  and  help  remove  trade  barriers.  They  are  essential  for 
European competitiveness. Over the past decades, the European Standardisation System has 
greatly  contributed  to  this  success.  A  recent  study  from  the  UK40  shows  that  the  use  of 
standards contributed over 28 % to UK productivity growth, while the benefit to companies in 
general from the use of standards is valued at up to 5 % of their annual turnover. The success 
has been possible due to a unique public private partnership between the European regulator 
and European standardisation community. 

But the standardisation process faces challenges from the changing nature of the economy and 
diversification  of  business  models, 
information  and 
communication  technology,  and  the  growing  importance  of  services  in  today’s  global  value 
chains, where goods and services are increasingly provided together in a package. 

the  ever-increasing 

role  of 

The  European  Standardisation  System  needs  to  be  up  to  these  challenges,  producing  timely 
and  market-driven  standards  in  an  inclusive  way  and  consolidating  Europe’s  leadership  in 
international standardisation. European standards need to support EU policies and for digital 
innovations, they need to offer increased security and interoperability. This is why the Digital 
Single  Market  Strategy  launched  an  integrated  standardisation  priority  plan  with  a  focus  on 
ICT technologies and a review of the European interoperability framework. 

More  generally,  this  means  modernising  the  existing  partnership.  The  Commission  will 
therefore propose a ‘Joint initiative on Standardisation’ between the Commission, the industry 
concerned,  European  standardisation  organisations  and  the  standardisation  community  in 
general. The Joint initiative will aim to speed up and better prioritise standard setting across 
the board. Following discussion with stakeholders, the Joint initiative could be agreed in early 
2016. 

In  addition,  there  remains  significant  untapped  potential  from  the  development  and  use  of 
voluntary  European  service  standards  to  address  servicification  and  deliver  an  integrated 
European services market.41 Such standards could reduce costs and market fragmentation yet 
currently  account  for  only  2 %  of  all  EU  standards.  Drawing  on  the  successful  experience 
acquired  for  products,  the  Commission  will  issue  dedicated  guidance,  exploring  the  issues, 
including  ensuring  that  such  standards  are  demand-led  and  adopted  where  they  are  most 
needed. 

Actions: To modernise our standardisation system, the Commission will propose and agree a 
‘Joint  initiative  on  Standardisation’  with  the  European  standardisation  community.  It  will 
also  issue  dedicated  guidance  on  service  standardisation.  This  will  give  businesses  and 
consumers confidence in cross-border services and enhance cross-border trade. 

40 British Standards Institution (BSI), ‘The Economic Contribution of Standards to the UK Economy’, 2015. 
41 As discussed in Section 2.3 above. 

12 

 
 
                                                 
3.2.  More transparent, efficient and accountable public procurement 

Public  procurement  represents  around  19 %  of  EU  GDP,  with  over  EUR  2.3  trillion  being 
spent each year by public authorities and utilities. In 2014, the EU adopted a major overhaul 
of  the  EU  procurement  framework,  simplifying  procedures,  making  the  rules  more  flexible 
and adapting them to  better serve other  public sector policies, in particular  innovation.  This 
was aimed at making public procurement more efficient and strategic, fulfilling the principles 
of  transparency  and  competition  to  the  benefit  of  both  public  purchasers  and  economic 
operators, in particular SMEs. 

But  the  EU  can  and  must  go  further.  Procurement  is  still  often  carried  out  without  the 
necessary business skills, technical knowledge or procedural understanding, leading to a lack 
of compliance and negative consequences for both businesses and taxpayers. 

A key challenge is the lack of available data and analytical tools that would allow problems or 
irregularities  to  be  prevented  or  detected.  Furthermore,  the  way  in  which  national  review 
systems  operate  can  vary  considerably,  in  particular  as  regards  the  length  of  the  procedure. 
There are also significant differences in the level of fees and litigation costs. Finally, data on 
complaints are not collected in a structured manner. 

Another challenge is that, for large-scale infrastructure projects in particular, the complexity 
and duration of the procurement process also often lead to delays. Nine out of ten large-scale 
infrastructure projects do not go according to plan: cost over-runs of up to 50 % are common. 
Delays are also common in all stages of the process, from planning to project implementation 
and contract execution. 

Based on data available, projects over EUR 700 million generally take substantially longer to 
contract  than  other  procedures42  and  the  reason  is  not  due  to  longer  time-to-tender.  If  the 
average  duration  of  a  typical  procedure  (from  the  dispatch of  the  invitation  to  tender  to  the 
award of the contract) is three and a half months, for large-scale infrastructure projects it is 
approximately 25 months, rising to 35 months for negotiated procedures.  

The  Commission  will  therefore  take  a  number  of  initiatives.  It  will  seek  to  facilitate  the 
collection, consolidation, management and analysis of procurement data, supporting Member 
States’  efforts  towards  better  governance  in  public  procurement.  Building  on  the  policies 
already in place, such as eProcurement, the Commission will foster the development of tools 
for improved data quality and availability by streamlining existing data gathering mechanisms 
and supporting the creation of contract registers. It will also promote the development of data 
analytics tools, in particular to detect anomalies in the procurement process. 

The Commission will also seek to improve the effectiveness, efficiency and transparency of 
the  procurement  remedies  system  under  the  Remedies  Directives.43  These  Directives  aim  to 
ensure that procurement decisions are reviewed effectively and as quickly as possible. Review 
procedures are available in all Member States and are widely used by economic operators.  

The  Commission  will  encourage  first  instance  review  bodies  to  cooperate  and  network  to 
improve the exchange of information and best practice. Particular attention will be paid to the 
strengthening of the specialised first instance administrative review bodies. The Commission 
will  also  improve  the  monitoring  of  effectiveness  of  the  national  review  systems  through 

42 The duration for the large-scale projects is calculated based on TED data for contracts awarded between 2010-
2014, the calculations for a typical project come from European Commission, ‘Impact and Effectiveness of EU 
Public Procurement Law’, Commission Staff Working Paper, SEC(2011) 853. 
43 Directive 2007/66/EC of 11 December 2007. 

13 

 
 
                                                 
regular  assessment,  including  through  the  Single  Market  Scoreboard.  This  will  be 
complemented by a REFIT evaluation report of the Remedies Directives. 

In addition, the Commission will offer Member States the possibility of receiving assistance 
and advice on the legality of the procurement aspects of projects they intend to launch. Such 
assistance  will  be  based  on  a  voluntary  ex  ante  assessment  mechanism  for  infrastructure 
projects whose total value equals or exceeds EUR 700 million. 

A  specific  procedure  will  be  developed  to  allow  procurement  authorities  to  obtain  a 
Commission  opinion  on  the  compatibility  of  the  envisaged  tender  procedure  with  EU 
procurement  rules  on  the  basis  of  the  notification  of  the  project.  This  notification  should 
include information on the project, together with any relevant documents, including the draft 
tender documents. The Commission will deliver its opinion within a timeframe which should 
in  principle  not  exceed  three  months  following  the  notification  of  the  project.  It  will  take 
stock of this experience in due course to see whether it is delivering according to needs and 
expectations. 

Actions:  The  Commission  will  set  up  a  voluntary  ex  ante  assessment  mechanism  of  the 
procurement aspects of certain large-scale infrastructure projects. It will encourage Member 
States to improve the review of procurement decisions by promoting networking between first 
instance  review  bodies,  providing  special  legal  and  technical  assistance  to  Member  States 
willing  to  create  or  strengthen  specialised  first  instance  administrative  review  bodies  and 
improving the monitoring of effectiveness by regular assessment including through the Single 
Market  Scoreboard.  The  Commission  will  work  with  Member  States  to  improve  the 
transparency  and  quality  of  national  procurement  systems  through  better  data,  by  the 
establishment  of  contract  registers  covering  the  whole  life  cycle  of  contracts  and  by 
supporting the development and deployment of a data analytics and anomaly-detection tool to 
better uncover existing or prospective procurement irregularities. 

3.3. 

Consolidating Europe’s intellectual property framework  

Intellectual property-intensive sectors account for 39 % of GDP and for 35 % of jobs in the 
EU and are a force for innovation. There has been great progress with regard to intellectual 
property protection in Europe, particularly through the recent adoption of the Unitary Patent 
system44 and the modernisation of the trademark acquis. 
The  Unitary  Patent  system  will  play  an  essential  role  in  enabling  innovation45  in  the 
participating Member States.46 Europe is now on the cusp of making this patent a reality and 
establishing the European patent specialised court for which the industry has been calling for 
decades.  However,  the key challenge now is  to get the endgame right,  including  addressing 
uncertainties  over  how  the  Unitary  Patent  will  work  together  with  national  patents  and 
national  supplementary  protection  certificates  (SPC)  granted  under  the  SPC  regime  and  the 
possible creation of a unitary SPC title. 

44 The unitary patent is a legal title that will provide uniform protection across the EU on a one-stop-shop basis, 
providing  huge  cost  advantages  and  reducing  administrative  burdens.  The  package  will  also  set  up  a  Unified 
Patent Court that will offer a single, specialised patent jurisdiction. 
45 The full implementation of the Unitary Patent will lead to a gain of 0.25 % in EU GDP. The potential gains for 
individual Member States vary, but could exceed 1 % of GDP in certain Member States. 
46  On  30  September  2015,  the  Commission  adopted  a  Decision  confirming  the  participation  of  Italy  in  the 
enhanced cooperation on unitary patent protection in the EU. This has brought the total number of participating 
Member States to 26, with Croatia and Spain not participating. 

14 

 
 
                                                 
The supplementary protection certificate is critical for producers of pharmaceuticals, medical 
equipment, animal health products and crop treatment products, but also for new sectors that 
are likely to require market authorisation for their products. 

A unitary SPC title would bring enhanced certainty to industries whose products are subject to 
regulated  market  authorisations.  More  specifically,  a  unitary  SPC  title  would  improve 
transparency and certainty on the protection of medicines. This would make it easier both for 
manufacturers of novel and generic/biosimilar medicines to invest, and for Member States to 
optimise their health budgets, resulting in an improvement of patients’ access to medicines. 

To  strengthen  EU-based  manufacturing  and  competitiveness  in  industry  sectors  whose 
products  are  subject  to  regulated  market  authorisations,  the  Commission  will  explore  a 
recalibration of certain aspects of patent and SPC protection. An SPC manufacturing waiver 
could allow the European generic and biosimilar medicines industries to create thousands of 
high-tech jobs in the EU and many new companies.47 An update of the scope of the EU patent 
research  exemption  would  lead,  among  other  things,  to  a  smooth  supply  of  active 
pharmaceutical ingredients throughout the Single Market. 

The EU and its Member States also need to step up their support for SMEs to be able to take 
full advantage of protecting their investments. A recent study by the Office for Harmonization 
in the Internal Market (OHIM) has shown that only 9 % of SMEs in Europe own intellectual 
property  rights,  but  that  -  on  average  -  those  SMEs  that  do  own  such  rights  generate  32 % 
more revenue per employee than those that do not.48 As a follow-up to the 2014 action plan 
on the enforcement of intellectual property rights (IPR),49 the Commission will help smaller 
firms  to  more  effectively  secure,  manage  and  enforce  intellectual  property  rights  by  better 
coordinating information availability and financial assistance programmes.  The Commission 
will also take work forward on how to make the most of Europe’s traditional know-how and 
follow  up  on  the  public  consultation  on  the  protection  of  non-agricultural  geographical 
indications. 

Finally, as announced in the Digital Single Market Strategy for Europe, the Commission will 
review the IPR enforcement framework, to respond to the increasingly cross-border nature of 
infringements.  It  will  favour  a  ‘follow  the  money’50  approach  to  deprive  commercial-scale 
infringers of their revenue flows, since it is these IPR infringements that do the most harm to 
the EU economy. In line with the objectives of this Strategy, specific attention will be paid to 
SMEs, with a view to helping them enforce their intellectual property rights. 

Actions: The Commission will come forward with initiatives to consolidate and modernise the 
intellectual  property  framework,  including  measures  to  support  the  use  of  intellectual 
property by SMEs. It will consult, consider and propose further measures, as appropriate, to 
improve the patent system in Europe, notably for pharmaceutical and other industries whose 
products  are  subject  to  regulated  market  authorisations.  As  announced  under  the  Digital 
Single Market Strategy, it will review the EU intellectual property enforcement framework in 
2016, supporting a ‘follow the money’ approach to commercial-scale infringements. 

47 Vanda Vicente and Sergio Simoes, 2014, Manufacturing and export provisions: Impact on the competitiveness 
of European pharmaceutical manufacturers and on the creation of jobs in Europe. 
48  OHIM,  ‘Intellectual  property  rights  and  firm  performance  in  Europe:  an  economic  analysis’,  Firm-Level 
Analysis Report, 2015. 
49 COM(2014) 392. 
50  Rather  than  penalising  the  citizen  for  infringing  –  often  unknowingly  –  IP  rights,  a  ‘follow  the  money 
approach’  is  seeking  to  deprive  commercial  scale  infringers  of  the  revenue  flows  that  draw  them  into  such 
activities. 

15 

 
 
                                                 
4. 

ENSURING PRACTICAL DELIVERY 

4.1. 

A culture of compliance and smart enforcement 

Effective  compliance  is  essential  to  deliver  the  opportunities  and  benefits  of  the  Single 
Market. In mid-2015, around 1 090 infringement proceedings were pending in the area of the 
Single Market.51 On average, national administrations, with the help of the Commission, need 
almost  30  months  to  resolve  an  infringement  proceeding.  In  addition,  many  people  and 
companies are still unaware of the possibilities available to them with regard to having their 
rights  respected.  All  this  weakens  the  Single  Market  and  lowers  people’s  confidence.  This 
needs to change.  

Changing this means pursuing a holistic approach, covering all stages of policy-making from 
policy  design,  implementation,  to  information,  in  line  with  the  Better  Regulation  approach. 
This includes better integration of evaluation and enforcement aspects in policy design, better 
assistance and guidance to Member States in the implementation of Single Market rules and a 
more consistent and efficient enforcement policy aimed at improving overall compliance with 
Single  Market  rules  and  EU  law  in  general.  The  Commission  is  determined  to  bring  this 
about. 

To deliver this, the Commission is relying on its Better Regulation guidelines and promoting 
an  enhanced  partnership  with  Member  States  through  a  number  of  initiatives,  such  as 
implementation  plans  for  major  new  legislation;  compliance  dialogues  with  each  Member 
State  on  a  yearly  basis;  and  using  a  comprehensive  array  of  compliance-promoting  tools.52 
The Commission will step up its efforts to carry out systematic compliance checks of national 
legislation. It will also seek to develop a data analytics tool, which could help to better detect 
non-compliance. 

The Commission will also draw up and apply sectoral strategies to streamline the monitoring 
system  of  the  application  of  EU  law.  Following  the  2012  Communication  on  Better 
Governance  for  the  Single  Market,  a  number  of  enforcement  measures  have  been  taken  to 
make  swift  progress  on  key  areas  for  growth.  This  Strategy  has  delivered  some  positive 
results. Based on the lessons learned from this exercise, the Commission  will reflect  on the 
possibility of further expanding the scope of sectors subject to these measures. 

The  Commission  will  in  particular  propose  a  regulatory  initiative  on  a  market  information 
tool  for  the  Single  Market,  enabling  it  to  collect  information  from  selected  market  players. 
The  ability  to  obtain  timely,  comprehensive  and  reliable  quantitative  and  qualitative 
information  from selected  market players will  improve the Commission’s ability to monitor 
and  enforce  EU  rules  in  priority  areas.  It  will  also  help  the  Commission  to  propose 
improvements  where  evaluation  shows  that  enforcement  deficits  are  due  to  flaws  in  the 
relevant sectoral legislation. This new tool would only be used once a proper screening of all 
available  information  has  been  conducted,  showing  the  need  to  gather  directly  from  market 
players comprehensive and reliable information on companies’ market behaviour, and having 
regard to best practice with regard to Member States’ existing practices affecting the proper 
functioning of the Single Market. On the basis of this, the Commission will publish a report, 
taking  into  account  the  confidential  nature  of  some  of  the  information  collected.  The  new 
market  information  tool  will  help  the  Commission  to  better  target  its  cooperation  with 
Member  States,  reinforce  the  basis  for  infringement  action  and  also  help  determine  where 
regulatory solutions are needed. 

51 http://ec.europa.eu/internal_market/scoreboard/performance_by_governance_tool/infringements/index_en.htm  
52 E.g. networks and expert committee meetings and guidelines. 

16 

 
 
                                                 
Together  with  Member  States,  the  Commission  will  also  strengthen  and  streamline  the 
existing Single Market problem-solving tools such as SOLVIT.53 Problems are best resolved 
early  and  at  national  level.  In  particular,  it  will  consider  giving  appropriate  follow-up  to 
recurrent or structural cases that could not be resolved through SOLVIT. It will also improve 
awareness  among  citizens  and  companies  of  their  rights  and  the  use  of  national  redress 
mechanisms, including through the Single Digital Gateway. 

Actions:  The  Commission  will  apply  a  smart  enforcement  strategy,  including  sectoral 
strategies.  It  will  propose  a  regulatory  initiative  allowing  it  to  collect  reliable  information 
directly  from  selected  market  players,  with  a  view  to  safeguarding  and  improving  the 
functioning  of  the  Single  Market.  It  will  further  deepen  its  partnership  with  Member  States 
through implementation plans for new major legislation, compliance dialogues organised on 
a yearly basis with each Member State and the possible development of a data analytics tool 
to  improve  the  monitoring  of  Single  Market  legislation.  Finally,  the  Commission  will 
strengthen  and  streamline  the  Single  Market  problem-solving  tools,  including  the  SOLVIT 
network, and promote awareness among citizens and companies of their rights. 

4.2. 

Improving  the  delivery  of  the  Services  Directive  by  reforming  the  notification 
procedure 

To  ensure  that  all  new  regulatory  measures  imposed  by  Member  States  are  non-
discriminatory,  justified  by  public  interest  objectives,  and  proportionate,  the  Services 
Directive  obliges  Member  States  to  notify  the  Commission  of  new  regulatory  measures 
affecting services. 

Yet despite this, there are still a multitude of varying national rules and regulations and the 
notification procedure is often not complied with. Seven Member States have failed to notify 
notify any new regulations since the entry into force of the Services Directive in 2009. Five 
Member  States  have  notified  only  very  few  new  regulations.  By  contrast,  other  Member 
States have sent large numbers of notifications. 

In  addition,  the  possibility  for  the  Commission  or  other  Member  States  to  effectively 
intervene is severely limited by the fact that Member States mostly notify final laws instead of 
draft laws.54  

Moreover,  the  notifications  are  not  transparent:  affected  consumers  and  businesses  have  no 
access and can only react by complaining at a later stage when they are already suffering from 
the  regulatory  burden  and  additional  costs.  This  is  clearly  at  odds  with  the  Transparency 
Directive,55 which provides for transparency for stakeholders operating in the field of goods 
and information society services.  

Finally, the existing notification framework does not provide for an in-depth proportionality 
assessment.  As  a  consequence,  Member  States  often  have  difficulties  assessing  the 
proportionality of new requirements for services. A preventive system as part of an improved 

53 SOLVIT is a service provided by the national administration in each EU country and in Iceland, Liechtenstein 
and Norway. It aims to find solutions within 10 weeks, starting on the day a case is taken on by the SOLVIT 
centre in the country where the problem occurred. 
54 Between September 2013 and February 2015, the Commission received 277 notifications from the Member 
States; 198 of these notifications referred to final legislation and 79 to draft legislation meaning that 71 % of the 
notified requirements were already in force. 
55  Directive  98/34/EC  laying  down  a  procedure  for  the  provision  of  information  in  the  field  of  technical 
standards  and  regulations  (‘Transparency  Directive’).  This  Directive  has  been  replaced  by  Directive  (EU) 
2015/1535 of 9 September 2015. 

17 

 
 
                                                 
notification  system  could  therefore  significantly  improve  the  identification  of  possible 
alternatives and less intrusive measures to reach the objectives pursued. 

Given  the  many  shortcomings,  the  Commission  will  propose  legislation  to  improve  the 
notification procedure under the Services Directive. This proposal will extend the successful 
features of the existing procedure for goods and information society services to other services, 
including  the requirement  to  notify draft legislation and transparency  for stakeholders. As a 
consequence, a measure that has not been notified should be considered void and a standstill 
period  is  to  be  applied.  Due  account  will  also  be  given  to  the  need  to  conduct  a  proper 
proportionality assessment. 

Actions:  The  Commission  will  present  a  legislative  proposal  modelled  on  the  successful 
features of the notification procedure under Directive (EU) 2015/1535 for services currently 
not covered by that Directive. This will improve the existing notification procedure under the 
Services  Directive.  This  will  allow  for  more  upstream  verification  of  the  justification  and 
proportionality of new national regulations restricting the free movement of services. 

4.3. 

Strengthening the Single Market for goods 

Goods generate around 75 % of intra-EU trade. In 2014, trade in goods between EU Member 
States  was  valued  at  EUR  2 900  billion.  Regulatory  obstacles  have  been  removed  for  over 
80 % of industrial products through the adoption of common rules and, where no such Union 
rules exist, through the principle of mutual recognition. 

In areas where no EU legislation exists, the principle of mutual recognition means that goods 
that are lawfully marketed in one Member State enjoy the right to free movement and can be 
sold in another Member State. However, inadequate application of mutual recognition makes 
it  harder  for  companies  seeking  access  to  markets  in  other  Member  States.  In  addition,  the 
increasing presence on the market of products that are not compliant with EU rules puts law-
abiding operators at a disadvantage and endangers consumers. 

Despite  the  high  degree  of  market  integration  in  the  area  of  goods,  this  leads  to  lost 
opportunities for the economy at large.  

The  Commission  will  therefore  act  to  improve  the  application  of  mutual  recognition  and  to 
take action against illegal and non-compliant goods. 
The  adoption  of  the  Mutual  Recognition  Regulation56  in  2008  has  been  crucial  in 
transferring the burden of proof that products are lawfully marketed elsewhere from economic 
operators to national authorities. 

However,  national  regulations  and  practices  continue  to  create  barriers.  National  authorities 
often  require  specific  proof  of  lawful  marketing  or  simply  refuse  access  to  their  national 
market. Economic operators are often required to produce specific documentation or carry out 
additional  tests  for  their  products.  This  increases  the  costs  for  economic  operators  or 
discourages  them  from  expanding  to  new  markets.  While  these  problems  occur  in  many 
industrial sectors, they are particularly present in the fields of construction, foodstuffs, food 
supplements  and  fertilisers.  This  translates  into lost  business  opportunities,  less  competition 
and higher prices for consumers. 

The  Commission  will  therefore  present  an  EU-wide  Action  Plan  to  raise  awareness  of  the 
principle  of  mutual  recognition,  including  specific  actions  for  sectors  in  which  mutual 
recognition  could  achieve  the  greatest increase in  EU  competitiveness (e.g.  construction).  It 

56 Regulation (EC) No 764/2008. 

18 

 
 
                                                 
will  also  revise  the  Mutual  Recognition  Regulation  to  address  administrative  fragmentation 
and streamline the documentation required to prove that a product is being marketed lawfully 
in a Member State. 

This will be achieved by making it possible for economic operators to issue a self-declaration 
on  the  product  being  lawfully  marketed  in  another  Member  State.  The  corresponding 
presumption of compliance will make it easier for companies to market their goods in another 
Member State, unless an official decision is adopted and notified to both the Commission and 
the relevant economic operator. To support the offering of integrated products and services, 
synergies with the ‘services passport’ will be examined. 

The  Commission  will  use  the  tools  of  the  Transparency  Directive  more  strategically  to 
promote mutual awareness and trust among Member States. 

To  improve  the  functioning  of  the  Single  Market  for  health  products,  the  Commission  will 
introduce an initiative of health technology assessments,57 to increase coordination in order to 
avoid multiple assessments of a product in different Member States.  

The  increasing  number  of  illegal  and  non-compliant  products  on  the  market  distorts 
competition and puts consumers at risk. In the field of radio equipment, for instance, evidence 
indicates a very low rate of fully compliant products which ranges between 28 % and 56 %.58 
Similar percentages of non-compliance are seen for other categories of industrial products. 

For  consumer  products,  Member  States  submitted  almost  2 500  notifications  on  dangerous 
products through the European Rapid Alert System for dangerous products ‘RAPEX’ in 2014. 
This is 3 % more than in 2013 and almost 90 % of all notifications concerned products which 
posed a serious risk to consumers. 

Many  economic  operators  disregard  the  rules  either  through  lack  of  knowledge  or 
intentionally to gain a competitive advantage. More deterrence is needed, and the responsible 
market surveillance authorities are often underfunded and constrained by national boundaries, 
while  economic  operators  are  active  at  European  or  even  global  level.  In  the  case  of  e-
commerce  in  particular,  market  surveillance  authorities  have  great  difficulty  tracing  non-
compliant  products  imported  from  non-EU  countries  and  identifying  the  responsible  entity 
within their jurisdiction. 

The  Commission  will  therefore  introduce  an  initiative  to  strengthen  product  compliance  by 
providing  the  right  incentives  to  economic  operators,  intensifying  compliance  checks  and 
promoting closer cross-border cooperation among enforcement authorities, including through 
cooperation  with  customs  authorities.  It  will  consolidate  the  existing  framework  for  market 
surveillance activities; encourage joint actions by market surveillance authorities from several 
Member States; improve the exchange of information and promote the coordination of market 
surveillance programmes. 

In addition, based on the existing Product Contact Points, the Commission will set up a ‘first 
port of call’ available for business on EU product legislation. This will help raise awareness 
and  understanding  of  the  applicable  legislation.  Economic  operators  will  also  be  offered  a 
system  which  will  allow  them  to  demonstrate  product  compliance  to  competent  authorities, 
and  potentially  also  consumers,  by  digital  means  (e-compliance).  This  will  facilitate 

57 Health Technology Assessments guide national decisions in relation to pricing and reimbursement of health 
interventions. 
58 See Staff Working Document (2012) 300 of 17 October 2012, ‘Executive summary of the impact assessment 
accompanying the Proposal for a Directive of the European Parliament and of the Council on the harmonisation 
of laws of the Member States to the making available on the market of radio equipment’. 

19 

 
 
                                                 
compliance checks by authorities while reducing costs for the economic operators and helping 
renew consumer confidence. 

Actions:  The  Commission  will  present  an  EU-wide  Action  Plan  to  increase  awareness  of 
mutual recognition and revise the Mutual Recognition Regulation. In order to make it easier 
for  companies  to  market  their  products  in  another  Member  State,  the  Commission  will 
introduce a voluntary self-declaration as regards the compliance with the relevant legislation, 
which companies can use if they so wish. The Commission will also launch a comprehensive 
set of actions to further enhance efforts to keep non-compliant products from the EU market 
by  strengthening  market  surveillance  and  providing  the  right  incentives  to  economic 
operators.  

5. 

CONCLUSION 

The  Commission  set  out  to  create  a  deeper  and  fairer  Single  Market  with  a  strengthened 
industrial base. To achieve this objective, we need to upgrade our Single Market in line with 
today’s  economic  realities  of  increased  digitalisation,  new  business  models  and  increasing 
links between manufacturing and services in today’s global value chains. The Single Market 
Strategy proposes a concrete and ambitious set of actions to remove economically significant 
barriers that hold back Europe’s jobs, growth and investment agenda. The Commission counts 
on  the  European  Parliament  and  the  Council,  as  well  as  on  all  stakeholders,  to  strongly 
support  this  ambitious  and  urgently  needed  programme  and  help  make  a  significant  step 
forward  in  the  interests  of  citizens  and  businesses  across  Europe.  Most  importantly,  it  is 
essential for this programme to be carried forward by the Member States at national, regional 
and local level, for there can only be a Single Market with their support and commitment. 

The actions envisaged in this Strategy will be launched in 2016 and 2017. By the end of 2017, 
the  Commission  will  review  progress  on  its  implementation  and,  on  the  basis  of 
comprehensive  economic  analysis,  consider  whether  additional  action  is  needed  to  meet  its 
objective of a deeper and fairer EU Single Market. 

20 

 
 
 
 
Roadmap to delivering on the Single Market Strategy 

Actions 

Timetable 

Guidance on how EU law applies to collaborative economy 
business models 

VAT Action Plan 

Legislative initiative on business insolvency, including early 
restructuring and second chance 

Initiatives  to  facilitate  the  use  of  digital  technologies 
throughout a company’s lifecycle and cross-border mergers 
and divisions 

Start-up initiative 

Guidance on reform needs for Member States in regulation 
of professions 

Analytical  framework  for  Member  States  to  use  when 
reviewing the existing or proposing additional regulation of 
professions 

Legislative  action  to  address  targeted  regulatory  barriers  in 
key business services and construction services 

Legislative  initiative  to  introduce  a  ‘services  passport’  for 
key  sectors  of  the  economy  such  as  construction  and 
business services 

Communication  setting  out  best  practices to  facilitate  retail 
establishment and reduce operational restrictions 

2016 

2016 

2016 

2017 

2016 

2016 

2016 

2016 

2016 

2017 

Legislative  action 
consumers based on nationality or country of residence 

to  prevent  discrimination  against 

Mid-2016 

Joint initiative on Standardisation 

Dedicated guidance on service standardisation 

Public  procurement:  voluntary  ex  ante  assessment 
mechanism for large infrastructure projects  

Initiatives  for  better  governance  of  public  procurement 
through  the  establishment  of  contract  registers,  improved 
data collection and a networking of review bodies 

Initiatives to modernise the intellectual property rights (IPR) 
framework,  including  a  review  of  the  EU  IP  enforcement 
framework 

21 

2016 

2016 

2017 

2017-2018 

2016-2017 

 
 
Data analytics tool for monitoring Single Market legislation 

for  market 

Proposal 
the 
information 
Commission  to  collect  information  from  selected  market 
players 

tools  allowing 

Legislative proposal modelled on the successful features of 
the  current  notification  procedure  under  Directive  (EU) 
2015/1535  for  services  currently  not  covered  by  that 
Directive 

Action Plan to increase awareness of the mutual recognition 
principle 

Revision of Mutual Recognition Regulation 

2017 

2016 

2016 

2016 

2017 

Comprehensive  set  of  actions  to  further  enhance  efforts  to 
keep non-compliant products from the EU market (including 
a possible legislative initiative) 

2016-2017 

22