Freedom of services in the European Union

What could be more revealing about the European Union than the benefits it provides to its Member States. The benefits of free trade are immense. Free trade leads to specialization, and to comparative advantage. All of this maximizes consumer welfare.

According to the EU case law, services and employment account for 70 per cent of the majority in the Member States. They cover a vast range of situations: connectivity, mobility from one state to another. They even overlap with the freedom of establishment which outsmarts the former by a time frame (see the Sager case).

In case a member state attempts to restrict or causes difficulties for a company to provide services, rely on Article 56 TFEU, which can be used to challenge rules laid down by the host state. For example, in the case Ciola the ECJ said the Court said that an Austrian company which provided moorings for boats to boat owners resident in other Member States could rely on Article 56 TFEU against the Austrian authorities when the authorities limited the number of moorings available for boat owners resident abroad.

Article 57 TFEU gives examples of what constitutes a service: all activities of an industrial or a commercial character. The Luisi and Carbone case mentions tourism, medical, financial, business and educational activities consititute services. Transmission of a television signal also constitutes a service.

In Sager, the ECJ has arrived with an orthodox interpretation of this provision which prohibits discrimination on the ground of nationality against those wishing to provide or receive services. 

When a national measure can constitute a discrimination? We have three examples: refusal of exit, entry or even deportation (Carpenter), direct discrimination on the grounds of nationality (see Gouda) and indirect discrimination on the grounds of nationality. The test is simple: do national rules indistinctly apply or are discriminatory.

The fact that the European Union has yet to face up to obstacles posed by the unexpected (COVID19, discriminatory laws) they can confront the brutality by invoking Articles 56-57 and relevant case law.


Catherine Barnard, The Substantive Law of the EU. The Four Freedoms

Malgosia Krakowska
Malgosia Krakowska
Freelance journalist covering Poland for major international news channels. The University of Amsterdam alumna ( international trade and investment law).