COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Identifying and addressing barriers to the Single Market
Date: 2020-03-10
Institutions: Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, European Commission
Subjects: EU market, administrative cooperation, application of EU law, business activity, consumer protection, cross-border cooperation, goods and services, single market, small and medium-sized enterprises

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 10.3.2020  COM(2020) 93 final  COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS   Identifying and addressing barriers to the Single Market {SWD(2020) 54 final}  
 
 
Introduction 

35  years  ago,  in  June  1985  the  European  Commission  presented  a  White  Paper  to  the 
European Council on the completion of the single market. The message was clear: press ahead 
with  real  integration,  fulfilling  the  ambitions  of  the  Treaty  of  Rome  or  drop  back  into 
mediocrity by allowing Europe to develop into no more than a free trade area.  

The  EU  chose  the  path  of  closer  integration  and  today  we  have  the  world’s  largest  single 
market, with more than 447 million consumers and up to 56 million jobs that depend on trade 
within the single market.   

By virtue of its scale and integration, the single market has boosted the standing and influence 
of the EU in the world. Its principles, values and standards underpin the EU’s leadership and 
active role for a rules-based global order and a level playing field at home and abroad.  

Europe  is  now  leading  the  way  towards  the  twin  transition  towards  climate  neutrality  and 
digital leadership. The modernisation and strengthening of the single market in this context is 
one of the main priorities of the Commission for the next five years.  

Despite the real accomplishments of the single market, businesses and consumers still report 
many hurdles. In October 2018, at the final European Parliament of Enterprises, almost 70% 
of  businesses  answered  negatively  when  asked  whether,  in  their  opinion,  the  single  market 
was sufficiently integrated.   

This Communication takes the experiences and perceptions of businesses and consumers who 
try to use the single market on a daily basis (“users”) as the starting point for identifying the 
key  remaining  barriers  along  the  steps  of  their  respective  “journeys”  towards  cross-border 
activities. 

Drawing  on  the  evidence  gathered  in  two  reports1,  this  Communication  highlights  13  key 
barriers  from  a  user’s  perspective.  It  shows  that  barriers  are  not  only  of  a  regulatory  or 
administrative  nature,  but  also  of  a  practical  nature.  In  practice,  a  business  or  a  consumer 
often  faces  several  constraints  simultaneously  when  operating  across  the  EU.  Finally,  the 
users  most  penalised  by  this  situation  are  small  and  medium-sized  enterprises  (SMEs)  and 
professionals.  

All  Europeans  have  the  right  to  the  best  and  widest  choice  of  goods,  services,  employment 
and  entrepreneurial  opportunities  that  the  single  market  can  deliver  and  should  not  be 
prevented from enjoying them.  

To offer ways forward at both EU and Member State level, the Communication identifies five 
main root causes for these barriers: Regulatory choices at EU and national level, transposition, 
implementation  and  enforcement  of  legislation,  administrative  capacity  and  practices  in  the 
Member  States,  general  business  and  consumer  environment  and  root  causes  not  linked  to 

1 Commission Staff Working Document “Business Journey on the Single Market: Practical Obstacles and Barriers”; Commission Consumer 
conditions scoreboard: consumers at home in the single market - 2019 edition 

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public  policy  such  as  language  or  culture.  Among  those,  difficulties  related  to  the  general 
business and consumer environment are important since they affect domestic users and those 
from other Member States equally. 

In  March  2019,  the  European  Council  called  on  the  EU  and  the  Member  States  to  remove 
remaining  unjustified  obstacles  to  the  single  market,  while  stressing  that  no  new  barriers 
should be created. 

Addressing  the  barriers  identified  in  this  Communication  and  their  root  causes  will  have  to 
happen through a mix of measures at both EU and national level: digitalisation of the public 
administration  and  better  communication  to  help  users’  along  their  journey,  new  and 
improved EU legislation where necessary, better implementation and ultimately enforcement.  

One  key  area  of  action,  enforcement,  is  addressed  in  the  “Communication  on  a  Long  term 
action plan for better implementation and enforcement of single market rules”2, which sets out 
the Commission’s priorities for a renewed partnership with Member States.  

Today’s New Industry Strategy for Europe3 underlines that a strong, integrated single market 
is a springboard and pre-condition for a competitive EU industry. To make the single market 
work  for  all,  EU  law  puts  in  place  common  rules  to  eliminate  barriers  and  facilitate  the 
circulation of goods and services across the EU, while also protecting consumers. This report 
also shows that when the single market is failing to reach its full potential, SMEs and citizens 
are the most likely to suffer, due to their limited resources. Particularly start-ups and highly 
innovative SMEs are prevented from becoming competitive players on an international scale. 
The SME strategy for a sustainable and digital Europe4 also adopted today, sets out additional 
targeted measures to help SMEs make better use of the single market.  

This Communication also links with the European Semester, where the removal of the most 
problematic  regulatory  and  administrative  burdens  is  an  ongoing  concern,  as  well  as  with 
better regulation tools at EU level. 

Adapting the single market to today’s challenges is an ambitious goal and a better functioning 
of  the  single  market  would  unleash  untapped  economic  potential.  A  recent  update  of  the 
European Parliament’s “Cost  of non-Europe” study5 estimates that  the benefits of removing 
the  remaining  barriers  to  a  fully  functioning  single  market  for  goods  and  services  could 
amount to €713 billion by the end of 2029.  

Delivering the benefits of the single market is a joint responsibility of the Commission and the 
Member States. Safeguarding the integrity of the EU’s single market from external challenges 
is as important as strengthening it from within. The Commission stands ready to step up its 
efforts and help Member States achieve a single market that delivers on its promises. 

2 COM(2020)94 10.03.2020 
3 COM(2020)102 10.03.2020 
4 COM(2020)103 10.03.2020 
5 https://www.europarl.europa.eu/RegData/etudes/STUD/2019/631745/EPRS_STU(2019)631745_EN.pdf 

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I.  THE USER’S PERSPECTIVE: THE MOST FREQUENTLY REPORTED BARRIERS 
This Communication draws on two Commission reports6. The first one, released at the same 
time  as  this  Communication,  focuses  on  the  practical  obstacles  and  barriers  to  the  single 
market  as  perceived  by  businesses.  It  builds  on  sources  capturing  the  perceptions  of 
businesses that intend to be or already are active in the single market. These sources include 
surveys  of  businesses,  databases  and  analyses.  In  addition,  a  consultation  of  chambers  of 
commerce  was  conducted  to  get  a  more  comprehensive  picture  of  different  obstacles.  The 
analysis  also  builds  on  the  Commission’s  in-house  expertise.  Obstacles  are  included  in  this 
report  if  either  a  significant  percentage  of  surveyed  businesses  and/or  if  different  sources 
consistently  report  them  as  an  obstacle.  The  second  report,  the  EU  Consumer  Conditions 
Scoreboard,  published  in  November  2019,  relies  on  an  underlying  survey  of  consumers’ 
attitudes  to  cross  border  trade.  Both  reports  provide  a  snapshot  of  the  barriers  in  the  single 
market as perceived by its users and do not claim to be exhaustive.  

Drawing on the evidence gathered in these two reports, this Communication focuses first on 
the top 13 barriers to cross-border activity, as most commonly reported by businesses (with 
regard  to  cross-border  trade  or  establishment)  and  consumers  (with  regard  to  cross-border 
purchase of goods or services).  

The presented barriers follow the key steps of the “journeys” that businesses and consumers 
make in the single market, as shown in the box below. 

Key  steps  of  the  business  journey  include:  gathering  information  to  prepare  a  cross-border 
transaction (and/or expansion); meeting requirements to sell goods or services; marketing and 
selling;  delivery;  after  sales  and  dispute  resolution;  taxes;  (additional  steps  in  case  of 
establishment) setting up business activity; staffing; investing and financing. 

Key  steps  of  the  consumer  journey:  gathering  product/service  information;  purchasing; 
paying; obtaining delivery; after sales activities and dispute resolution. 

Gathering  the  information  needed  to  prepare  cross-border  transactions  and/or 
expansion 

1.  Businesses  report  difficulties  in  obtaining  information,  not  only  on  market 
opportunities and potential business partners, but also on the relevant regulatory 
requirements. 

According  to  a  recent  survey7,  31%  of  SMEs  with  exporting  experience  and  21%  of  SMEs 
without  such  experience  mention  the  difficulty  to  identify  business  partners  in  another 
Member State as  a  barrier to  doing business  across the single market. In addition, 22%  and 
11%,  respectively,  report  not  knowing  where  to  find  information  about  potential  market 

6 Commission Staff Working Document “Business Journey on the Single Market: Practical Obstacles and Barriers”; Commission Consumer 
conditions scoreboard: consumers at home in the single market - 2019 edition 
7  Centre  for  European  Policy  Studies  ‘Hidden  Treasures:  Mapping  Europe’s  sources  of  competitive  advantage  in  doing  business’,  2019 
(Hidden Treasures report) 

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opportunities.  European  chambers  of  commerce  also  put  forward  that  inaccessibility  of 
information on rules and requirements ranks third in obstacles to the single market, reported 
by  69%  of  respondents  among  their  memberships8.  According  to  another  recent  survey 
focusing on the EU’s five largest economies, not knowing the rules that have to be followed is 
a  barrier  for  31%  of  SMEs  without  exporting  experience  and  9%  of  SMEs  with  exporting 
experience in the five largest Member States9. 

Meeting requirements and complying with procedures to sell goods or services 

2.  Businesses  report  burdensome  and  complex  administrative  procedures  when  it 

comes to selling goods or services in another Member State. 

Several recent surveys consistently quote “complex administrative procedures” as one of the 
most  serious  obstacles  to  the  single  market  for  businesses  and  in  particular  SMEs.  Among 
these, procedures for the posting of workers to another Member State are often singled out in 
the  area  of  services  and  are  considered  a  barrier  by  58%  of  the  respondents  to  the  recent 
survey of the European chambers of commerce10. 22% of the respondents to the survey done 
by  the  Finnish  trade  organisation11  consider  this  a  significant  or  a  very  significant  obstacle. 
10%  of  SOLVIT  business  cases  recorded  in  2018  concern  difficulties  related  to  posting  of 
workers12. 

While the European  Electronic Communications Code  addressed a number of long-standing 
obstacles  to  network  deployment,  including  the  timely  availability  of  spectrum  for  5G, 
obstacles  still  remain.  Complex  and/or  burdensome  procedures  for  the  granting  of 
permits/licences  have  been  reported  in  particular  in  a  number  of  services  sectors,  including 
electronic  communications,  professional  services  and  the  building  sector.  Particular  issues 
reported  by  businesses  include  a  lack  of  electronic  procedures,  onerous  documentation 
requirements  (including  for  certified  translation  and  copies),  high  fees  or  long  decision 
deadlines  by  authorities.  For  instance,  the  companies  deploying  and  running  electronic 
communications  networks  and  services,  including  5G,  are  facing  a  number  of  difficulties 
(burdensome  administrative  procedures  to  obtain  construction  permits;  high  fees  relative  to 
investment  needs,  in  particular  for  spectrum  assignment;  problems  to  access  and  lack  of 
information  on  existing  physical  infrastructure  such  as  ducts  or  poles,  etc.).  This  situation 
results in  a slower, more  costly  and less  efficient  deployment  of electronic communications 
networks, which are fundamental for the development of the digital single market13.  

8 Eurochambres, ‘Business survey – EU Internal Market: Barriers and Solutions’, 2019 
9  Centre  for  European  Policy  Studies  ‘Hidden  Treasures:  Mapping  Europe’s  sources  of  competitive  advantage  in  doing  business’,  2019 
(Hidden Treasures report 
10 Eurochambres, ‘Business survey – EU Internal Market: Barriers and Solutions’, 2019 
11 Confederation of Finnish Industries 
12 Single Market Scoreboard 2018 https://ec.europa.eu/internal_market/scoreboard/performance_by_governance_tool/solvit/index_en.htm 
13 On this issue, see root cause n.1 below  

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3.  Businesses complain about uneven access to public procurement. 

In  spite  of  the  digitalisation  of  procurement,  a  perceived  lack  of  transparency  and  possible 
discriminatory, disproportionate or non-objective behaviour from contracting authorities are a 
recurring concern for businesses. “Arbitrary public procurement practices” were reported as a 
barrier by 38% of businesses in a recent survey14. This concern seems to be reflected in data 
collected at EU level. Although the publication rate of procurement opportunities in the EU 
has  improved  overall,  its  level  varies  greatly  across  Member  States:  in  some  of  them,  it 
continues to be lower than the estimated sizes of their respective public procurement markets. 
In  addition,  the  proportion  of  tenders  with  a  single  offer  has  increased  between  2009  and 
2018, reaching 35% in 201815. 

4.  Businesses  report  inefficiencies  related  to  additional  technical  requirements, 
standards  and  other  rules  in  certain  sectors  at  national  level  (as  opposed  to  EU 
requirements). 

 According to a recent survey, up to 71% of SMEs who tried the existing mutual recognition 
system for non-harmonised goods16 were faced with a market access denial decision17. 

Issues  also  arise  in  areas  harmonised  under  EU  law.  “Different  technical  standards”  are 
reported as an obstacle by 18% of self-employed in a recent report from a Dutch survey.18 In 
the industrial machinery and/or construction product sectors for instance, particular concerns 
seem  to  be  undue  additional  markings,  rules  and  requirements  for  goods,  which  already 
comply  with  harmonised  legislation.  The  electronic  communications  sector  is  another 
example  of  a  situation  where  some  bottlenecks  appear  to  be  largely  due  to  inadequate  or 
inconsistent  regulations  applied  across  Member  States  (for  example  setting  different 
termination  rates  for  voice  calls  markets)19.  Future  actions  are  also  needed  to  ensure  that 
barriers already addressed will not re-emerge (e.g. roaming).  

5.  Businesses  in  the  services  sector  consistently  report  issues  relating  to  entry  and 

exercise requirements in relation to specific activities or professions.  

Service  providers  often  need  to  comply  with  general  or  sector-specific  requirements  when 
expanding  across  the  single  market  (providing  cross-border  services  and/or  setting  up  an 
establishment in another Member State). For presentational purposes, the rules at stake can be 
grouped  into  the  two  following  main  categories:  i)  rules  on  accessing  the  market  (entry 
requirements) and ii) rules on conduct when providing the service (exercise requirements).  

These  national  requirements  in  services  are  regularly  highlighted  by  businesses  as  an 
important  obstacle.  71%  of  respondents  to  the  recent  survey  of  the  European  chambers  of 
commerce report them as significant or very significant (81% and 60% for service providers 

14 Eurochambres, ‘Business survey – EU Internal Market: Barriers and Solutions’, 2019 
15 2019 Single market performance report, SWD (2019) 444 final. 
16 Goods that are not harmonised by EU legislation, such as textile, footwear, childcare articles, jewellery, tableware or furniture 
17 See root cause n.2 below  
18 Dutch Ministry of Economy, Dutch export agency, ‘Doing Business in Europe’, 2018 
19 On this issue, see root cause n.1 below. 

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and  producers  of  manufactured  goods,  respectively).  Entry  and  exercise  requirements  have 
been  identified  in  particular  as  important  barriers  for  many  regulated  professions  (such  as 
accountants,  tax  advisers,  auditors,  construction  trades,  architects  and  engineers,  legal 
professions or intellectual property agents) and for retail services. For regulated professions, 
entry  requirements  raise  issues  such  as  access  to  reserved  activities  (requiring  specific 
qualifications  and  compliance  with  other  conditions  such  as  compulsory  membership  of  a 
professional body) and authorisation requirements. Exercise requirements include restrictions 
on  advertising,  legal  form  or  shareholding  restrictions,  prohibitions  on  joint  exercise  of 
professions or insurance requirements. In retail, businesses may face disproportionate rules on 
establishment  of  physical  shops  as  well  as  on  their  daily  activities  such  as  rules  on  the 
location of shops or the range of products sold as well as restrictions on sales promotions and 
discounts. 

The  European  Semester  country-specific  recommendations  largely  echo  these  issues.  The 
recommendations for some Member States explicitly concern the removal of regulatory and 
administrative  burdens  in  professional  services  and  in  retail.  The  Commission  has  also 
designed  restrictiveness  indicators,  focusing  specifically  on  the  regulation  of  a  number  of 
professions and retail. The results add to the evidence of barriers faced by businesses. 

Cross-border purchasing of goods or services 

6.  Consumers  and  businesses  experience  that  their  cross  border  requests  for 

purchases are rejected or redirected. 

Before  the  entry  into  force  of  the  Geo-blocking  Regulation20,  one  of  the  most  commonly 
reported consumer problem with online cross-border shopping was linked to geo-blocking21. 
The  situation  seems  to  have  improved  following  the  Geo-blocking  Regulation’s  entry  into 
force22,  with  only  14  out  of  200  websites  checked  in  a  recent  investigation23  making  an 
(illegal) redirection without the consent of the consumer. This does not mean, however, that 
all  obstacles  related  to  cross-border sales  have  disappeared. In  53  cases,  consumers  had  not 
been  informed  that  their  purchases  could  not  be  delivered  in  the  countries  served  by  the 
trader. Furthermore, the Flash Eurobarometer 477b24 reports that cross-border access to audio-
visual  content  often  does  not  work  (in  approximately  half  of  cases),  mostly  due  to  geo-
blocking  practices25.  The  fact  that  content  producers/right  holders  restrict  cross-border 
accessibility of content in their copyright licensing agreement also seems to be a concern. In 
this context an evaluation report on the Geo-blocking Regulation will soon be adopted. 

20 Regulation (EU) 2018/302 of the European Parliament and of the Council of 28 February 2018 on addressing unjustified geo-blocking and 
other forms of discrimination based  on customers' nationality, place of residence or place  of establishment  within the internal  market and 
amending Regulations (EC) No 2006/2004 and (EU) 2017/2394 and Directive 2009/22/EC (Text with EEA relevance. ) 
21 See root cause n.5 below  
22  Regulation  (EU)  2018/302  that  addresses  unjustified  on  line  and  off-line  sales  discrimination  based  on  customers'  nationality,  place  of 
residence  or  place  of  establishment  within  the  internal  market.  The  Regulation  benefits  “customers”-  both  consumers  and  undertakings 
buying goods or services as end users 
23 Consumer Protection Cooperation Network sweep  https://ec.europa.eu/commission/presscorner/detail/en/IP_20_156 
24 https://ec.europa.eu/digital-single-market/en/news/flash-eurobarometer-study-intra-eu-communications 
25 Such content is not covered by the Geo-blocking Regulation  

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In  some  instances,  businesses  also  face  situations  where  they  cannot  source  goods  from  the 
country of their choice. Retailers complain about these territorial supply constraints imposed 
by  suppliers  directing  retailers  to  buy  nationally.  These  practices,  which  may  infringe 
competition  law,  can  fragment  the  single  market,  with  detriment  to  consumers  as  well  as 
businesses.  

7.  Consumers report lower levels of trust in online cross-border purchases. 

 The trust gap between online cross-border purchases and online domestic purchases did not 
narrow  between  2012  and  2018.  This  is  despite  the  sharp  rise  in  online  purchases,  and 
especially in the proportion of consumers shopping online intra-EU, which has nearly doubled 
from 11% in 2012 to 21% in 2018 (in comparison, domestic online purchases increased from 
40% in 2012 to 52%26). Consumers are still significantly less confident when buying from a 
website  in  another  EU  country  (48%)  than  a  website  in  their  country  (72%).  In  2012,  both 
figures were 15 percentage points lower. Consumers are not sufficiently aware and informed 
of  the  applicability  of  harmonised  consumer  protection  rules  and  of  the  existence  of  cross-
border means of redress. Accordingly, they are more hesitant to look for better online deals 
outside their borders. 

8.   Consumers are the target of fraud with a cross-border origin. 

In  the  EU,  about  56%  of  consumers  surveyed  experienced  a  fraud  or  scam  in  the  past  two 
years27.  Certain  scams,  where  for  example  consumers  are  asked  to  pay  money  to  collect  a 
prize,  are  the  most  reported  form  of  the  scams  with  unknown  geographical  origin  (9%  of 
consumers  have  experienced  such  a  scam  without  being  able  to  identify  the  origin  of  the 
trader)28. This figure shows that administrative and criminal cooperation within the EU needs 
to be improved and stepped up, with a view to face the challenges for consumer law enforcers 
in the current economy including in cases with a cross-border dimension29. 

Delivering goods and services cross-border 

9.   Businesses report burdensome procedures due to differences in tax systems and 

administrations.  

The  lack  of  tax  harmonisation  remains  one  of  the  main  obstacles  faced  by  business  when 
operating cross-border. Further efforts should be undertaken to reduce divergences in the tax 
systems and to reconsider the unanimity requirement in the Council. According to the Annual 
Report  on  European  SMEs  2017/201830,  63%  of  SMEs  consider  that  "dealing  with  foreign 
taxation issues is too complicated" and report it as a barrier to exporting (and establishment). 
Recent reports from Dutch and Finnish business organisations31 stress that Value Added Tax 

26 Consumer Conditions Scoreboard, 2019 edition, DG Justice and Consumers, p. 66. 
27 Commission’s survey Europeans’ attitudes towards cyber security   – Special Eurobarometer 499 29 January 2020. 
28 Consumer Conditions Scoreboard, 2019 edition, DG Justice and Consumers, p. 34. 
29 See root cause n.3 below. 
30 European Commission, ‘Annual report on European SMEs 2017/2018’, 2018 
31 Dutch Ministry of Economy, Dutch export agency, ‘Doing Business in Europe’, 2018 and Confederation of Finnish Industries  

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(VAT) compliance is a barrier to business in the single market for one respondent in five. This 
situation  is  confirmed  by  a  Commission  report,  which  finds  that  VAT  compliance  costs 
increase with cross-border activity32. The situation is similar for compliance costs related to 
business income taxation33. As in a domestic context, the challenge is bigger for SMEs than 
for large businesses. A survey estimated direct tax compliance costs at about 2% of taxes paid 
for large businesses, while for SMEs it was about 30% of taxes paid34. According to another 
survey35 on the relative tax compliance burden for both direct and indirect taxes across 19 EU 
Member States, SMEs spend 2.5% of their turnover on tax compliance costs, while these costs 
only account for 0.7% of turnover for large companies36. 

After-sales barriers 

10.  Businesses  report  problems  with  solving  commercial/civil  disputes  and  payment 

collection. 

In  the  recent  survey  of  the  European  chambers  of  commerce37,  “different  contractual/legal 
practices”  rank  fifth  in  obstacles  to  trading  within  the  single  market,  reported  by  66%  of 
respondents.  According  to  recent  Eurostat  data38,  retailers  selling  online  to  consumers 
reported having faced significantly more difficulties with cross-border online sales than when 
selling online in general (58% vs. 38%). According to other recent Commission data39, more 
than  3  out  of  10  retailers  selling  online  consider  that  “potentially  higher  costs  of  resolving 
disputes  and  complaints  cross-border”  (almost  35%)  are  obstacles  to  selling  online  to 
consumers in other EU countries. The lack of information remains an issue, with nearly half 
of the retailers surveyed for the Consumers’ Conditions Scoreboard 2019 declaring they were 
not aware about alternative dispute resolution bodies in their own countries40. 

Setting up a business activity in another Member State 

11.  Businesses  report  problems  with  registration  of  business  activity  in  another 

Member State. 

Five of the nine chambers of commerce that have shared the concerns of their membership on 
cross-border trade  with the Commission, have reported issues concerning the registration  of 
business activity in the EU, mostly regarding the difficulties in registering a company online. 
A recent survey on doing business in the EU prepared by the Dutch authorities41 confirms this 
view  with  27%  of  respondents  reporting  the  same  problem.  Commission  data  also  seem  to 

32 https://op.europa.eu/en/publication-detail/-/publication/0ed32649-fe8e-11e8-a96d-01aa75ed71a1 
33 Based on the 2016 CCCTB impact assessment (https://ec.europa.eu/taxation_customs/sites/taxation/files/swd_2016_341_en.pdf 
https://op.europa.eu/en/publication-detail/-/publication/0ed32649-fe8e-11e8-a96d-01aa75ed71a1 
34  https://ec.europa.eu/taxation_customs/sites/taxation/files/resources/documents/tax_survey.pdf  
35 KPMG-GFK (2018), Study on tax compliance costs for SMEs. Study commission by the European Commission, European Commission 
Tender No. EASME/COSME/2015/004. 
36 See root cause n.1 below 
37 Eurochambres, ‘Business survey – EU Internal Market: Barriers and Solutions’, 2019 
38 Retailers' attitudes towards cross-border trade and consumer protection (main report) – 2018 
39 Retailers' attitudes towards cross-border trade and consumer protection (main report) – 2018 
40 Consumer Conditions Scoreboard, 2019 edition, DG Justice and Consumers 
41 Dutch Ministry of Economy, Dutch export agency, ‘Doing Business in Europe’, 2018 

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support this perception. According to  the results of a 2016 public consultation linked to  the 
preparation of the single digital gateway proposal, registration of business activity was seen as 
one of the three priority procedures that should be available online. Specifically on company 
registration, the public consultation preparing the proposals for the 2018 EU Company Law 
Package,  now  adopted,  showed  strong  support  from  business  organisations  (70%)  and 
Member States (64%) for the introduction of new rules on fully online registration of limited 
liability companies and filing of company information in business registers. 

Staffing 

12.  Businesses report problems with skill shortages and mismatch. 

Skill  shortages  hinder  the  integration  of  the  single  market  as  they  may  impede  successful 
businesses in one Member State from expanding and establishing themselves elsewhere in the 
single  market,  inter  alia  across  borders.  The  availability  of  skilled  staff  or  experienced 
managers has increasingly been identified as the most important problem faced by SMEs in 
recent  years  (26%  of  SMEs  in  2019).  More  specifically,  in  2018,  53%  of  companies  that 
recruited or tried to recruit ICT specialists reported difficulties in filling vacancies, compared 
to  41%  a  year  earlier.  Moreover,  costly  procedures  for  the  recognition  of  professional 
qualifications  in  regulated  professions  (such  as  engineers  in  many  Member  States)  are 
limiting workers mobility. 

Language barriers 

13.  Many surveyed businesses report language as a barrier. 

“Language barriers” were reported by 36% of businesses in the recent survey of the European 
chambers of commerce42. Similarly, the “lack of language skills” was reported as a barrier by 
32% of SMEs without exporting experience and 10% of SMEs with exporting experience in 
the five largest Member States43.  

Conclusion 

Businesses  and  consumers  appear  to  experience  barriers  including,  but  often  going  beyond, 
the regulatory barriers typically addressed by EU legislation. In addition, other obstacles may 
not be of a regulatory or administrative nature, rather of a practical nature but they are equally 
important. In practice, a business or a consumer often faces several constraints simultaneously 
when operating within the EU. Finally, the users most penalised by this situation are SMEs 
and professionals. 

42 Eurochambres, ‘Business survey – EU Internal Market: Barriers and Solutions’, 2019 
43  Centre  for  European  Policy  Studies  ‘Hidden  Treasures:  Mapping  Europe’s  sources  of  competitive  advantage  in  doing  business’,  2019 
(Hidden Treasures report 

9 

 
 
                                                            
II.  THE  ROOT  CAUSES  OF  THE  TOP  13  MOST  FREQUENTLY  REPORTED  BARRIERS 
AND DIRECTIONS FOR FURTHER ACTION AT EU AND NATIONAL LEVEL  

Five main root causes are identified for the reported barriers described above. Some may fall 
under  the  responsibility  of  the  EU,  some  under  the  responsibility  of  Member  States,  while 
some  may  fall  under  both.  Others  do  not  or  only  partly  originate  in  public  policy  and  can 
result from a particular behaviour of consumers or commercial decisions by businesses. Each 
root cause is relevant for one or more of the 13 most often reported barriers by businesses and 
consumers under section I above, as set out in the table below. For each root cause, priorities 
are provided for action addressing them, including existing and possible future initiatives.  

Table: relevance of root causes for the top 13 barriers and obstacles reported by businesses and consumers 

Root causes 

1. 
Regulatory choices at EU level 
and national level 

2. Transposition, 
implementation and 
enforcement of EU 
legislation 

3. 
Administrative capacity 
and practices 

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10 

Reported  barriers  and  obstacles  in  the  “business/ 
consumer journey” 

1  Difficulties in obtaining information (B, C)  

2 

Complex administrative procedures when it 
comes to selling goods or services cross-
border (B) 

3  Uneven access to public procurement (B) 

Inefficiencies related to additional technical 
requirements, standards and other rules in 
certain sectors at national level (B) 

Issues relating to entry and exercise 
requirements (B in the services sector) 

Cross border purchases requests being rejected 
or redirected (B, C) 

Lower levels of trust in online cross-border 
purchases (C) 

4 

5 

6 

7 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8  Targets of fraud with a cross-border origin (C) 

9 

Burdensome procedures due to differences in 
tax systems and administrations (B) 

10 

11 

12 

Problems with solving commercial/civil 
disputes and payment collection (B)  

Problems with registration of business activity 
in another Member State (B) 

Problems with skill shortages and mismatch 
(B) 

× 

× 

× 

× 

13  Language as a barrier (B, C) 

× 

Legend: (B): businesses, (C): consumers 

× 

× 

1.  Regulatory choices at EU level and national level 

× 

× 

× 

× 

× 

× 

× 

× 

× 

× 

× 

× 

× 

× 

× 

× 

Restrictive national rules and role of EU legislation 

Businesses active across the single market often face restrictive national rules. This can be a 
particular  problem  in  sectors  where  Member  States  take  restrictive  and  often  divergent 
regulatory  approaches,  including  in  areas  where  innovation  and  new  business  models  are 
present. This Commission has identified several priority areas for further legislative initiatives 
in response to some of the barriers reported under section I above and which should facilitate 
cross-border  activity  for  businesses  and  consumers44.  Some  major  initiatives  relate  to  the 
green  transition  and  the  digital  transformation  and  are  set  out  in  the  Commission  Work 
Programme 202045. They include the development of a single market for sustainable products, 
artificial intelligence, data and digital services. 

Restrictive national rules are particularly important in services and include for instance entry 
and exercise requirements for certain activities or professions such as authorisation schemes, 
mandatory  chamber  memberships  in  a  range  of  professional  services  areas,  insurance 
requirements  or  restrictions  on  corporate  structures.  Where  EU  law  already  provides  a 
framework  for  the  assessment  of  such  restrictions  (Services  Directive,  Proportionality  Test 
Directive, etc.), in the interests of faster results, the Commission will focus its efforts on better 
implementation and enforcement in accordance with today’s Long term action plan for better 
implementation and enforcement of single market rules. 

Divergent  and  restrictive  regulatory  approaches  also  exist  in  areas  where  the  EU  has  no  or 
limited  legislative  competences  (social  security  or  education)  and/or  there  are  unanimity 
requirements  in  the  Treaty  (taxation).  This  does  not  mean  that  legislative  initiatives  are  not 
possible,  as  recently  demonstrated  in  the  area  of  direct  taxation.  The  EU  has  adopted  a 
directive  to  improve  dispute  resolution  in  direct  tax  matters46,  particularly  the  use  of 
mandatory  arbitration.  Moreover,  the  Council  has  recently  adopted  the  Commission’s 

44 Review of the broadband cost reduction directive (see barrier n.2), further harmonisation of the termination rates for voice calls under a 
forthcoming delegated act (see barrier n.4), Digital services act (see barrier n.4). 
45 Communication from the Commission to the European Parliament, the  Council, the European Economic and Social Committee and the 
Committee of the Regions Commission Work Programme 2020 An Union that strives for more, Brussels, 29.1.2020 COM(2020) 37 final  
46  Council  Directive  (EU)  2017/1852  of  10  October  2017  on  tax  dispute  resolution  mechanisms  in  the  European  Union  (OJ  L  265, 
14.10.2017, p. 1). 

11 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                            
proposal on the revision of the rules on VAT exemptions for SMEs 47. The Commission Work 
Programme  for  2020  also  includes  an  action  plan  to  fight  tax  evasion  and  to  make  taxation 
simple and easy.  

Unanimity is also required to create European company law forms. This does not rule out EU 
initiatives  but  makes  it  difficult  in  practice  to  reach  agreement  on  those48.  However,  some 
other aspects of company law are harmonised at EU level. Importantly, the 2019 Directive on 
the use of digital tools and procedures will soon allow entrepreneurs to set up new companies 
or branches fully online in all Member States and on a cross-border basis across the EU, and 
oblige  Member  States  to  provide  information  about  the  most  important  company  law 
requirements  online  and  free  of  charge.  This  should  address  some  of  the  above-mentioned 
barriers, and result in important cost savings and efficiency gains for companies, in particular 
for SMEs. The issues of transposition and compliance are of concern to the Commission and 
Member  States  alike.  Tackling  them  should  thus  build  on  a  deepened  cooperation  between 
them.  The  “Communication  on  a  Long  term  action  plan  for  better  implementation  and 
enforcement of single market rules” sets out concrete initiatives on this matter. 

Finally,  the  EU’s  limited  role  can  also  be  due  to  the  need  to  comply  with  the  principles  of 
subsidiarity and proportionality in a given area.   

EU legislation may leave flexibility in the level of harmonisation and/or Member States’ 
practice (“gold plating”). 

Some matters related to the single market are fully harmonized at EU level. The EU legislator 
has regulated a given matter exhaustively, by balancing the need for market opening with the 
need  to  pursue  public  interest  objectives.  For  those  matters,  EU  rules  set  both  a  “floor” 
(“baseline”)  and  a  “ceiling”:  there  is  no  more  room  for  adding  requirements  at  national 
level49.  

In many areas (such as certain aspects of consumer protection), some matters are the object of 
a minimum EU harmonisation, which leaves room for Member States to set standards above 
the identified baseline. This may lead to partly divergent rules across the single market that 
can  impose  burdens  on  market  actors  (so  called  “gold  plating”).  These  divergent  rules  may 
also make it more difficult for consumers to understand the legal basis and the scope of their 
protection when making a cross-border purchase. 

For  matters  that  are  not  fully  harmonized  at  EU  level,  Member  States  have  a  margin  to  set 
additional  requirements  at  national  level  where  justified  and  proportionate  to  pursue  certain 
legitimate  public  interests.  However,  this  often  translates  into  additional  regulatory  or 
administrative  burden  for  businesses,    with  a  particular  impact  on  SMEs.  Gold  plating  is  a 
particular  issue  in  relation  to  the  services  sector.  These  requirements  also  have  an  indirect 

47 see reform of VAT (barrier n.9)  
48  For instance,  the  2008  Commission  proposal  on  the  statute  for a  European  private  company  and  the  2012  proposal  on  the  statute  for a 
European Foundation were subsequently withdrawn given the absence of progress in negotiations.   
49 The question of whether harmonization is exhaustive or not must be assessed with regard not only to an area but also to a specific matter. 

12 

 
 
 
                                                            
impact  on  the  consumer,  to  the  extent  that  they  may  be  denied  the  benefit  of  offers  from 
foreign companies and, in particular, innovative SMEs. 

In matters falling into the ambit of application of EU law, Member States must comply with 
free movement rules enshrined in the Treaty, the secondary legislation, the general principles 
of EU law (such as proportionality and legal certainty) and the Charter of Fundamental Rights 
of the EU, to ensure full effect of the free movement of people, goods, services and capital. 

The Commission recalls the Member States’ obligation to comply with EU law and calls on 
them to intensify their simplification efforts and reduce unnecessary administrative burden50. 
Additional national requirements must be justified by an overriding reason of public interest, 
be non-discriminatory, proportionate, easy to understand and compliant with the harmonized 
minimum rules.51 Moreover, even within the legal rules, in light of the objective of the single 
market  differences  must  be  kept  to  a  minimum.  The  Commission  has  under  the  Treaty  the 
power to bring infringement procedures and, as mentioned in the “Communication on a Long 
term action plan for better implementation and enforcement of single market rules”, it stands 
ready to  assist Member States in improving compliance with  EU law pursuing the common 
objective of a well-functioning single market. 

Requirements justified for public policy reasons 

Some  of  the  concerns  reported  by  the  users  can  partly  stem  from  situations  in  which  EU 
legislation  pursues  other  legitimate  policy  objectives  aiming  at  striking  a  balance  between 
such objectives and free movement in the single market. These policy objectives include, for 
instance,  consumer  protection,  workers’  rights  protection  and  protection  of  social  rights.  In 
certain  cases,  these  objectives  could  be  achieved  better  and  with  less  fragmentation  of  the 
single market through a common EU legal framework. For example, the Posting of Workers 
Directive  aimed  at  facilitating  freedom  of  movement  of  workers,  freedom  of  establishment 
and freedom to provide services by adopting a common set of rules at EU level. In addition, 
there  is  a  need  for  better  implementation  of  existing  EU  rules  by  Member  States  so  that 
businesses do not face unjustified or disproportionate national rules and formalities. 

Complex EU legislation 

The interaction between various pieces of legislation, often at EU and at national level, and 
frequently changing legislation are a challenge. This may generate legal uncertainty as well as 
compliance costs, and thus adversely affect the business environment and economic activities, 
with  a  particular  impact  on  SMEs  and  individual  consumers.  In  addition,  a  more  green  and 
digital economy requires adapted rules for products at EU level. For example, in line with the 
new  Circular  Economy  Action  Plan,  the  ecological  transition  will  require  EU  product 
legislation, taken as a whole, to give the right incentives towards sustainability and circularity. 

50 Point 43 of the Interinstitutional Agreement on Better Law-Making of 13 April 2016  lays down that Member States transposing directives 
into national law and choosing to  add elements that are in no way related to that Union legislation, should make such additional elements  
identifiable through the transposing act(s) or through associated documents.  
51 See Communication of the Commission of 19 July 2018 on “Protection of intra-EU Investment”.  

13 

 
 
                                                            
The ongoing  consultation on possible adaptations to  safety and liability  rules in  the light  of 
artificial intelligence, robotics and the internet of things may not exhaust the questions raised 
by  digitalisation,  for  example  as  regards  standardisation.  To  this  end,  the  Commission  will 
take the necessary steps to ensure that the legal regime accommodates, in a coherent manner, 
a more circular and digital economy for non-food products, enlarging to the extent necessary 
existing consultations. 

At  EU  level,  better  regulation  rules  aim  to  ensure  that  EU  legislation  brings  benefits  to 
ordinary  people  and  businesses,  that  it  is  based  on  evidence  and  a  thorough  impact 
assessment, and that regulatory burdens on individuals and businesses are kept to a minimum. 
A  careful  assessment  of  significant  amendments  to  the  initial  Commission  proposals  would 
help  minimising  the  risk  of  unintended  impacts  on  businesses  and  consumers.  Under  its 
regulatory  fitness  and  performance  programme  (REFIT),  the  Commission  systematically 
screens  existing  legislation  to  identify  where  the  burden  on  individuals,  businesses  or 
administrations  can  be  reduced  and  legislation  simplified  without  reducing  its  public-policy 
benefits.  In  its  Work  Programme  for  2020,  the  Commission  has  identified  44  pieces  of 
legislation to undergo this exercise. 

In  the  future,  the  Commission  will  apply  the  ‘one-in,  one-out’  approach.  The  purpose  is  to 
make  sure  that  EU  legislation  produces  benefits  without  imposing  unnecessary  burdens  on 
citizens  and  businesses.  A  new  expert  group52,  the  Fit  for  Future  Platform,  will  advise  and 
support  the  Commission  in  its  efforts  to  simplify  legislation  and  reduce  administrative 
burdens for business and individuals. 

Since  regulatory  challenges  particularly  affect  SMEs,  the  Commission  is  committed  to 
considering their effect on SMEs in its impact assessments.53 The SME test is already part of 
the regular assessment and will continue to be applied for all relevant Commission proposals, 
including  the  Green  Deal.  The  “SME  Strategy  for  a  sustainable  and  digital  Europe”  further 
proposes  that  to  ensure  that  new  legislation  is  SME  proof,  the  new  EU  SME  Envoy54  will 
filter EU initiatives in collaboration with SME stakeholders, to signal those that merit close 
attention  from  an  SME  perspective.  S/he  will  have  a  specific  role  in  the  new  Fit  for  Future 
Platform.  

Furthermore, the “Communication on a Long term action plan for better implementation and 
enforcement  of  single  market  rules”  identifies  complex  EU  legislation  as  an  area  where 
cooperation  between  the  Commission  and  Member  States  needs  to  be  further  reinforced  to 
prevent non-compliance issues. Proposed actions include boosting knowledge and awareness 
and improving access to information on rules and requirements.  

52 The group will consist of Member States’ national, regional and local authorities, the Committee of the Regions, the Economic and Social 

Committee and external stakeholders. 

53 SWD (2017) 350. Better Regulation Guidelines. 
54 The EU SME Envoy ensures the link between SME policy making at EU level and the national SME envoys/bodies in charge of SME 
policy. He/she chairs the network of national SME envoys who, in turn, make sure that national business communities, national authorities 
and the EU work together on SME policy. 

14 

 
 
                                                            
2.  Transposition, implementation and enforcement of EU legislation  

Imperfect transposition of EU Directives 

the  proper  functioning  of 

The  lack  of  timely,  complete  and  correct  transposition  of  EU  directives  by  Member  States 
undermines 
increasing  regulatory 
fragmentation.  Equally,  the  lacking  application  of  rules  ensuing  from  EU  directives  and 
failings  in  compliance  in  Member  States  create  problems  for  individuals  (consumers  and 
businesses)  in  terms  of  violation  of  their  rights,  legal  uncertainty  and  lack  of  equal 
opportunities, and furthermore lead to unbalances and inefficiencies within the single market.   

the  single  market  by 

Inadequate implementation of Union Law 

In addition to correctly transposing EU directives, Member States are also responsible for the 
correct implementation of EU legislation. Several of the 13 most reported barriers identified 
above could be addressed by better implementing existing EU law.  

In services, for example, large potential still lies in the better implementation of existing rules 
(e.g.  the  Services  Directive  and  the  Professional  Qualifications  Directive),  in  combination 
with a more vigorous enforcement of these rules.  

Difficulties  also  arise  in  domains  subject  to  the  application  of  the  mutual  recognition 
principle.  In  the  area  of  non-harmonised  goods,  businesses  often  have  to  meet  additional 
requirements  imposed  by  the  Member  State  to  which  they  are  willing  to  export.  The  new 
regulation  on  the  mutual  recognition  of  goods  lawfully  marketed  in  another  Member  State 
under the ‘Goods Package’, which becomes applicable in April 2020, will help make mutual 
recognition  more  effective.  In  particular,  transparency  of  decisions  taken  by  the  competent 
authorities of the Member States will be increased and businesses may obtain information on 
mutual  recognition  and  national  technical  rules  on  non-harmonised  goods  in  the  product 
contact points55. 

Inadequate enforcement of EU legislation 

Member States are obliged to enforce EU legislation. To that effect, they are to step up their 
efforts, with the support of the Commission. In particular, the Commission reminds them of 
their obligation to implement recent EU legislative measures, which provide Member States 
authorities  with  additional  enforcement  powers,  such  as  the 
  Market  Surveillance 
Regulation56,  the  Directive  on  better  enforcement  and  modernisation  of  EU  consumer 
protection  rules  and  the  Consumer  Protection  Cooperation  Regulation  (which  for  the  latter 
will  provide  consumers  with  better  protection  and  redress  in  cross-border  settings).  Better 
enforcement of rules should also be complemented by the cooperation of individuals. This is 
the  purpose  of  the  whistle-blower  protection  Directive  (to  be  transposed  by  December 

55 Regulation (EU) 2019/515 of the European Parliament and of the Council of 19 March 2019 on the mutual recognition of goods lawfully 
marketed in another Member State and repealing Regulation (EC) No 764/2008 (Text with EEA relevance.) 
56 Regulation (EU) 2019/1020 of the European Parliament and of the Council of 20 June 2019 on market surveillance and compliance of 
products and amending Directive 2004/42/EC and Regulations (EC) No 765/2008 and (EU) No 305/2011 (Text with EEA relevance) 

15 

 
 
                                                            
2021)57,  a  new  tool  reinforcing  the  ability  of  national  and  EU  enforcement  authorities  to 
detect, address  and prevent breaches  to  key single market areas such as  public procurement 
and consumer protection. Finally, as set out in the ” Communication on a Long term action 
plan  for  better  implementation  and  enforcement  of  single  market  rules”,  the  Commission  is 
committed to work with Member States to strengthen working arrangements and make good 
use  of  all  administrative  tools  available  to  improve  the  speed  and  effectiveness  of  handling 
alleged infringements. 

The “Communication on a Long term action plan for better implementation and enforcement 
of  single  market  rules”  sets  out  several  new  initiatives  to  address  the  implementation  and 
enforcement  of  EU  legislation  challenges  set  out  above.  These  include  a  more  efficient 
detection  and  investigation  of  non-compliance  (rationalisation  of  existing  single  market  IT 
systems  used  to  share  information  about  illegal  and  non-compliant  industrial  and  consumer 
goods) as well as the creation of a Single Market Enforcement Task-Force (SMET) composed 
of Member States and Commission, the setting up of enforcement authorities with adequate 
powers  (role  of  the  EU  network  of  national  enforcement  coordinators  and  the  European 
Labour Authority58).  

3. Administrative capacity and practices  

Insufficient or incompatible e-government solutions at national level 

Insufficient development of e-government solutions can hamper the development of the single 
market. This is particularly an issue for access to information on rules and requirements. This 
is also a root cause of the difficulties linked with national formalities or procedures to meet 
requirements for selling goods or services cross-border. 

Where e-government solutions are being implemented, interoperability is likely to be an issue 
if not properly addressed. The European Interoperability Framework Implementation Strategy 
and Action Plan59, which was revised in 2017, provides a large number of recommendations 
supporting cross-border and cross-sectorial interoperability. A number of programmes support 
the  uptake  of  these  solutions60.  Initiatives  such  as  the  cross-border  recognition  of  electronic 
identifications  and  trust  services  (laid  down  in  several  pieces  of  EU  legislation  such  as  the 
eIDAS  Regulation  (EU)  910/2014)61  and  the  ‘once  only’  principle  (Article  14  of  the  single 
digital gateway Regulation (EU) 2018/1724) have been supporting cross-border digital public 
services. In the new Digital Strategy, the Commission calls for a reinforced EU Governments 

57 Directive (EU) 2019/1937 provides for a high level of protection from retaliation for persons who report information on breaches of Union 
law acquired in the context of their work-related activities. This directive reinforces the ability of national and EU enforcement authorities to 
detect, address and prevent breaches in key single market areas, such as public procurement, financial services, anti-money laundering, the 
EU’s financial interests, and consumer protection 
58 Regulation (EU)2019/1149 of the European Parliament and the Council of 20 June 2019 establishing a European Labour Authority 
59 Communication from the Commission to the European Parliament, the  Council, the European Economic and Social Committee and the 
Committee of the Regions - European Interoperability Framework – Implementation Strategy COM(2017)134) 
60  The  Connecting  Europe  Facility  and  their  Digital  Service  Infrastructures  building  blocks  and  interoperability  solutions  from  the  ISA² 
programme. 
61 Under review with the objective of increasing effectiveness in commercial settings. 

16 

 
 
                                                            
interoperability  strategy62.  It  also  calls  for  a  revised  eIDAS  Regulation  to  improve  its 
effectiveness, extend its benefits to the private sector and promote trusted digital identities for 
all Europeans. 

As of 12 December 2020, with the implementation of the single digital gateway63, the Your 
Europe  portal  will  provide  access  to  comprehensive  information  on  operating  within  the 
single  market.  It  will  also  direct  users  to  the  most  relevant  assistance  service.  The  gateway 
also  foresees  the  digitalisation  of  21  frequently  used  administrative  procedures,  full  cross-
border accessibility of all online procedures and the implementation of a cross-border once-
only system by December 2023. 

The interconnection of business registers system (BRIS), available since 2017, links business 
registers  of  Member  States  and  EEA  countries  and  allows  companies  and  entrepreneurs  to 
search  and  obtain  free  information  on  EU  limited  liability  companies  in  a  multilingual  and 
user-friendly way through the e-Justice Portal64. 

Several  proposals  to  address  these  issues  are  also  included  in  the  Multiannual  Financial 
Framework  proposal  for  2021-2027.  For  instance,  actions  under  the  Digital  Europe 
programme  will  aim  to  promote  the  uptake  of  e-government  solutions  and  interoperability. 
The Goods Package65 broadens the mandate of the EU product contact points to provide better 
and faster information to businesses about the rules that apply to their goods.  

Insufficient  coordination  between  the  Commission  and  national  administrations  and 
among national administrations.  

This  particular  situation  is  a  major  factor  undermining  effective  enforcement,  trust  and  fair 
competition in the single market. Businesses or professionals who wish to lawfully grow their 
business  in  another  Member  State  would  benefit  from  a  more  efficient  and  effective 
coordination.  

This  issue  is  particularly  relevant  in  the  area  of  product  market  surveillance,  where  the 
divergent  views  of  market  surveillance  authorities  have  been  identified  as  an  obstacle  to 
cross-border  activity.  Reinforcing  coordination  through  a  smooth  mutual  assistance 
cooperation  mechanism  for  competent  market  surveillance  authorities  will  lead  to  a  safer 
single market and improved competitive conditions for businesses.  

Also  in  the  area  of  services,  insufficient  or  ineffective  cooperation  between  national 
authorities  often  result  in  restrictive  regulation  and  procedures  being  imposed  on  service 
providers.  Because  of  limited  exchange  of  information  between  Member  States,  national 

62 Communication from the Commission to the European Parliament, the  Council, the European Economic and Social Committee and the 
Committee of the Regions COM/2020/67 final. 
63  Regulation  (EU)  2018/1724  of  the  European  Parliament  and  of  the  Council  of  2  October  2018  establishing  a  single  digital  gateway  to 
provide access to information, to procedures and to assistance and problem-solving services and amending Regulation (EU) No 1024/2012 
(Text with EEA relevance.) 
64 https://e-justice.europa.eu/content_business_registers_at_european_level-105-en.do 
65 Regulation (EU) 2019/515 of the European Parliament and of the Council of 19 March 2019 on the mutual recognition of goods lawfully 
marketed in another Member State and repealing Regulation (EC) No 764/2008 (Text with EEA relevance.) 
Regulation  (EU)  2019/1020  of  the  European  Parliament  and  of  the  Council  of  20  June  2019  on  market  surveillance  and  compliance  of 
products and amending Directive 2004/42/EC and Regulations (EC) No 765/2008 and (EU) No 305/2011 (Text with EEA relevance)  

17 

 
 
                                                            
procedures  often  do  not  take  account  of  requirements  that  service  providers  have  already 
complied  with  in  their  home  Member  State.  This  happens  despite  existing  obligations  for 
national  authorities  to  apply  the  mutual  recognition  principle,  under  the  Treaty  and  in 
secondary  legislation  (for  example  under  the  Services  Directive).  As  a  result,  there  may  be 
unnecessary duplication of controls and complexities for service providers coming from other 
Member States. 

The  EU  has  developed  administrative  cooperation  tools  such  as  the  internal  market 
information  tool,  which  allows  the  transmission  of  information  between  administrations  on 
individual situations in a secure environment. The tool is currently applicable to 14 different 
areas and is constantly being expanded and improved. Member States are supposed to use it 
regularly and fully.  

The  Consumer  Protection  Cooperation  Regulation  (2017/2394),  in  force  since  17  January 
2020,  provides  national  authorities  with  stronger  enforcement  powers  and  a  framework  for 
cooperation among themselves and with the Commission66. 

Addressing  this  root  cause  in  areas  where  there  is  no  specific  or  enough  cooperation  is  a 
prominent  feature  of  the  “Communication  on  a  Long  term  action  plan  for  better 
implementation  and  enforcement  of  single  market  rules”.  In  particular,  it  recalls  the 
importance  of  setting  up  the  EU  Product  Compliance  Network  to  enhance  cooperation 
between market surveillance authorities in the non-food harmonised sector67. 

Insufficient staff or expertise at national, regional or local level. 

Insufficient administrative capacity dedicated to implementing single market rules, including 
at  regional  and  local  level,  does  not  enable  to  reap  the  benefits  of  the  single  market.  It 
undermines  public  trust  in  the  single  market  and  fair  competition  between  businesses.  This 
root  cause  is  relevant  when  businesses  or  professionals  want  to  grow  their  business  in  their 
home or another Member State (including in the field of public procurement), as repeatedly 
raised in the European Semester country-specific recommendations for a number of Member 
States. 

The  Commission  has  created  a  comprehensive  framework  to  assist  Member  States’ 
administrations, including improving administrative capacity. The Commission also continues 
to support the professionalisation of procurement practitioners with different programmes, for 
instance training for SME-friendly policies in central purchasing bodies. 

The Commission’s proposal for a single market programme under the 2021-2027 Multiannual 
Financial  Framework  suggests  prioritising  capacity-building  of  national  administrations  and 
consumer associations  to assist them in  developing  their enforcement  activities.  In addition, 
new  actions  are  proposed  in  the  “Communication  on  a  Long  term  action  plan  for  better 
implementation  and  enforcement  of  single  market  rules”,  in  particular  the  setting  up  of  a 

66  This  should  help  boost  consumer  trust  when  carrying  out  cross  border  purchases  (barrier  n.7)  or  improve  protection  against  scams 
originating from other geographical locations. 
67 As a result of the new 2019 market surveillance regulation. 

18 

 
 
                                                            
cooperation  network  between  national  enforcement  coordinators  in  the  field  of  the  single 
market,  or  stepping  up  training  of  legal  practitioners  in  charge  of  enforcing  single  market 
legislation. 

4. General business and consumer environment in Member States  

Many reported barriers in this Communication are often common to domestic consumers and 
businesses and to those active across borders. They result from causes that have no specific 
cross-border  element  and  are  instead  linked  to  the  general  business  and  consumer 
environment.  They  include  dealing  with  construction  permits  (for  instance  in  the  area  of 
telecoms infrastructure), entry and exercise requirements for certain activities or professions, 
getting electricity, solving business disputes in and out of court and paying taxes. The analysis 
of the World Bank’s “Doing Business Survey”68 reflects this reality: Member States can rate 
strongly on the dimension of “trading across borders”, but poorly on other obstacles to doing 
business.  

In 2019, the European Semester country-specific recommendations concerned the removal of 
the  most  problematic  regulatory  and  administrative  burdens,  weaknesses  in  public 
administration  and  in  the  business  environment,  and  the  lack  of  predictable  regulatory 
frameworks in 16 Member States. The Semester analysis also emphasises the need to improve 
the quality of governance and institutions and the effectiveness of justice systems and public 
administrations.  Similarly,  and  as  mentioned  earlier,  the  Commission’s  Single  Market 
Performance  Report  mentions  a  series  of  restrictiveness  indicators  in  a  number  of  areas  of 
economic importance, such as regulated professions and retail services.  

The  Commission  has  also  introduced  instruments  to  prevent  the  adoption  of  unnecessarily 
restrictive  national  rules.  One  recent  example  is  the  Proportionality  Test  Directive,  which 
Member States need to transpose by 30 July 2020. The directive will require Member States 
to  assess  beforehand  the  proportionality  of  any  new  or  amending  legislative,  regulatory  or 
administrative  provisions  that  impose  restrictions  on  the  entry  or  exercise  of  regulated 
professions. 

Skills-related policies also have a role to play in improving the business environment, both in 
terms  of  matching  skills  to  those  sought  by  businesses,  and  in  improving  skills  intelligence 
and  increasing  their  visibility  and  transparency  across  borders.  The  forthcoming  reinforced 
skills  agenda  for  Europe  will  suggest  a  number  of  actions  relating  to  these  objectives.  In 
addition, the forthcoming European Pact on Migration and Asylum will specify the approach 
to legal migration management in order for the EU to better attract the skills and talents that 
the EU labour market needs. Relaunching and concluding swiftly the negotiations of the Blue 
Card Directive to attract highly skilled workers will remain a priority. 

The  SME  Strategy  for  a  sustainable  and  digital  Europe  addresses  the  need  to  improve 
domestic  national  environments  through  specific  initiatives.  These  include  strengthened 

68 The World Bank Group. Doing Business 2020 

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cooperation  with  Member  States  in  implementing  the  “think  small  first”  principle  and  the 
reinforcement  of  the  SME  envoys  network,  as  well  as  the  completeness  and  efficiency  of 
national one-stop-shops to further support SMEs wishing to operate cross-border. 

5. Root causes not linked to public policy  

Root causes of underlying barriers are not always linked directly to public policies, whether 
national  or  EU.  Markets  in  different  Member  States  exist  within  broader  cultural  contexts. 
Different consumer preferences or languages throughout the EU make cross-border activities 
more complex. Commercial choices by private parties - or logistical issues can explain certain 
difficulties reported by businesses, such as in the case of rejection of business opportunities or 
territorial  supply  constraints  on  retail  businesses.  In  this  regard,  the  results  of  the 
Commission’s  e-commerce  sector  inquiry  (10  May  2017)  show  that  more  than  11%  of 
retailers report that their suppliers impose contractual restrictions on cross-border sales.  

General  macroeconomic  and  microeconomic  conditions  can  also  play  a  role.  Moreover, 
geographical and infrastructural conditions can create barriers to market access, for example 
due to increased transport times and distances or natural barriers to entry. 

The fact that these root causes do not originate directly from public policy does not mean that 
the EU cannot play a role in addressing some of them. This is the case inter alia for barriers 
whose  root  cause  lies  in  the  commercial  choices  of  private  parties,  since  these,  when  not 
justified  for  objective  reasons,  can  lead  to  an  artificial  partitioning  of  the  single  market.  A 
recent  example  of  the  EU  addressing  these  issues  is  the  Geo-blocking  Regulation69. 
Competition  rules  are  another  example.  The  Commission  has  recently  tackled  certain 
companies’ anti-competitive agreements that partitioned the single market as follow-up to the 
sector inquiry70. 

Regarding  territorial  supply  constraints,  in  addition  to  requiring  full  compliance  with 
competition  law,  following  the  2018  Communication  on  retail71,  the  Commission  asked 
suppliers  to  change  their  approach  voluntarily.  In  addition,  and  before  considering  possible 
next  steps,  the  Commission  is  currently  looking  into  how  widespread  the  use  of  territorial 
supply constraints is, what products are affected, what reasons might be given by suppliers for 
their  use,  how  competition  between  retailers  may  affect  occurring  territorial  supply 
constraints  and  what  the  economic  impact  is  at  different  levels  of  the  supply  chain  and  on 
consumers.  Based  on  the  results,  the  Commission  will  consider  the  need  for  further  policy 
action.  

69 The aim of this regulation is to address the situations described under barrier n.6 described above. Regulation (EU) 2018/302 entered into 
force on 22 March 2018 in all EU Member States and applied as from 3 December 2018.. 
70  To  name  but  a  few:  the  practices  of  four  consumer  electronics  manufacturers  (Asus,  Denon  &  Marantz,  Philips  and  Pioneer)  that  the 
Commission fined for resale price maintenance (“RPM”) in relation to a number of widely used consumer electronics products and (in the 
case of Pioneer) also in relation to restrictions to cross-border trade between EU Member States, the practices of the US clothing company 
Guess that the Commission fined for imposing, among others, restrictions of cross-border sales to consumers (contractual geo-blocking) and 
RPM, and the practices of three brand-owners and licensors of rights for merchandising products (Nike, Sanrio and NBC Universal) that the 
Commission fined for their licensing and distribution agreements restricting cross-border and online sales of merchandising products such as 
bags, toys, school accessories and clothes, notably for children. 
71 Communication from the Commission to the European Parliament, the  Council, the European Economic and Social Committee and the 

Committee of the Regions A European retail sector fit for the 21st century, COM/2018/219 final 

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The  Erasmus  programme  contributes  to  improving  language  knowledge  among  students. 
Similarly,  European  structural  and  investment  funds  contribute  to  improving  infrastructure 
and reduce geographical bottlenecks within the Member States. They will be complemented 
by other EU programmes, with in particular € 42.3 billion proposed for the new Connecting 
Europe Facility programme under the new Multiannual Financial Framework.  

III.  KEY ACTIONS 

This Communication, and the new policy initiatives adopted today, set out priority actions to 
be taken forward jointly by the Member States and the Commission.  

In particular, the Commission calls on the Member States and the European Parliament: 

 

 

to  swiftly  adopt  all  single  market,  and  e-government-relevant  Multiannual  Financial 
Framework proposals to finance new standards, IT tools (such as the Internal Market 
Information  system  (IMI)),  citizen  and  business  services  (such  as  SOLVIT)  or 
awareness-raising  campaigns,  in  particular  the  Digital  Europe  programme  and  the 
Single Market programme; 
to swiftly adopt pending legislative proposals which aim to tackle the root causes of 
the  barriers  identified  in  this  Communication,  in  particular  the  priority  pending 
proposals set out in the Commission Work Programme 2020. 

In addition, it calls on the Member States: 

 

 

 

 

to fulfil their legal duties and take their responsibility to address the root causes that 
are within their remit such as burdensome regulation and procedures, and ensure that 
their negative impact, both present and future, on the single market is compliant with 
EU law and in any event limited; 
to  step  up  efforts  to  comply  with  single  market  legislation,  abating  existing  barriers 
and avoiding the creation of new ones  
to direct enough resources to those administrations that are key for implementing the 
single  market,  such  as  authorities  coordinating  the  single  digital  gateway,  market 
surveillance  authorities,  competition  authorities  and  authorities  responsible  for 
consumer  protection,  assistance  services  such  as  points  of  single  contact,  product 
contact points or SOLVIT centres; 
to  ensure  the  effectiveness  of  one  stop  shops  with  a  view  to  assisting  in  particular 
SMEs with coordinated answers on applicable rules and regulations that they need to 
comply  with  to  do  business  in  the  single  market  (cross-border  and  domestically)  as 
well as on investment opportunities/programmes offered by the EU. 

On its part, the Commission:  

  adopts today a Long Term Action Plan for better implementation and enforcement of 
single market rules72 to address barriers reported in this Communication, whose root 
cause lies in insufficient enforcement of EU law. In this context, a joint Single Market 

72 COM(2020)94 10.03.2020 

21 

 
 
                                                            
Enforcement Task-Force (SMET) will be set up, composed of Member States and the 
Commission. 

  will assess the need of further regulatory action to address the barriers depending on 
other root causes which can be addressed at EU level. The Commission will report on 
the results of this analysis next year, also in order to be able to take into account the 
impact  of  the  first  year  of  application  of  the  Long  term  action  plan  for  better 
implementation and enforcement of single market rules.  

  will  continue  to  work  together  with  Member  States  to  address  the  root  causes  of 
national  barriers,  including  in  terms  of  prevention  under,  for  example,  the  Single 
Market Transparency Directive73 and the Proportionality Test directive. The European 
Semester provides another relevant framework for monitoring and addressing the root 
causes of barriers and hurdles identified in this Communication; 

  will strengthen the  REFIT programme,  including through the application of the ‘one-
in,  one-out’  approach,  with  full  involvement  of  stakeholders.  The  Fit  for  Future 
Platform will look at how to simplify existing legislation and at how to make sure that 
it  can  cope  with  future  challenges;  the  ambition  is  that  all  future  legislation,  at 
European  and  national  levels,  is  made  with  the  end  user  in  mind,  by  identifying 
potential barriers and mitigating them early on in the process, for example by the use 
of digital tools. 

IV.  CONCLUSION 

With  this  Communication  and  its  accompanying  reports,  the  Commission  takes  a  different 
perspective  on  the  functioning  of  the  single  market:  that  of  its  users.  What  it  shows  is  that 
today too many barriers continue to hamper the functioning of the single market. This makes 
the business and consumer journeys difficult. We need political will and determination, as in 
1985, to work jointly and hand in hand at EU and Member State level to address remaining 
barriers  through  their  respective  root  causes.  The  package  of  initiatives  adopted  today  –  a 
New  Industry  Strategy  for  Europe,  an  SME  Strategy  for  a sustainable and  digital Europe,  a 
“Communication  on  a  Long  term  action  plan  for  better  implementation  and  enforcement  of 
single market rules” and this Communication – provide a basis on which we can relaunch our 
partnership to ensure that Europe can deliver growth, prosperity and stability for its  citizens 
and businesses at home and globally. 

73 Directive (EU) 2015/1535 of the European Parliament and of the Council of 9 September 2015 laying down a procedure for the provision 
of information in the field of technical regulations and of rules on Information Society services. OJ L 241, 17.9.2015, p. 1.  

22