Background

The Single Market has delivered advantages to European businesses. The implementation of the Services Directive has contributed to the removal of barriers for companies across the EU. A 2015 Commission analysis of the effects of the Services Directive showed that an even more ambitious implementation of the Directive could generate up to 1.7% of EU GDP in

131 http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32006L0123&from=EN 132 http://ec.europa.eu/growth/tools-databases/newsroom/cf/itemdetail.cfm?item_id=8076 133 See Annex 7

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addition to the 0.9% that will be realised by reforms undertaken since the adoption of the Services Directive.134 However, facilitating the provision of services across national borders is not enough for the establishment of a genuine Single Market. It is equally important to ensure that service recipients, and in particular, consumers can make full use of the opportunities of the Single Market.

2.1 Services Directive

The objective of the Services Directive is to release the full potential of services markets in Europe by removing legal and administrative barriers to trade. The Directive was adopted in 2006 and transposed by all EU countries in 2009.

To enhance the rights of service recipients and strengthen their confidence in the Single Market, the Services Directive obliges Member States to remove obstacles for service recipients wanting to purchase goods or services across the borders, such as obligations to obtain a specific authorisation to receive services from another Member State. It also introduced an obligation on Member States to ensure that discriminatory requirements based on service recipients' nationality or place of residence were not applied against them.

Article 20 of the Services Directive prohibits discrimination against service recipients, by both public and private service providers, on the basis of their nationality or place of residence. The purpose of the Article is to help service recipients, especially consumers, access offers available in other Member States and make the most of the Single Market. Article 20(1) is targeting public service providers such as public authorities. It obliges Member States to ensure that the recipients are not made subject to discriminatory requirements based on nationality or place of residence under national, regional or local regulations. It includes situations where public authorities treat service recipients differently. Article 20(2) cover situations where private service providers, i.e. private companies, treat service recipients differently based on their nationality or place of residence when trying to access offers across the borders. It obliges Member States to ensure that the general conditions of access to a service, which are made available to the public at large by the provider, do not contain discriminatory provisions relating to the nationality or place of residence of the recipient, but without precluding the possibility of providing for differences in the conditions of access where those differences are directly justified by objective criteria. According to Recital 95 of the Directive, objective criteria could be additional costs incurred because of the distance involved or the technical characteristics of the provision of the service, or different market conditions, such as higher or lower demand influenced by seasonality, different vacation periods in Member States and pricing by different competitors, or extra risks linked to rules differing from those of the Member State of establishment. The

134

European Commission analysis available under http://ec.europa.eu/growth/single-market/services/economic- analysis/index_en.htm

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lack of the required intellectual property rights in a particular territory could also constitute objective criteria according to the Recital.

2.2. National implementation of the non-discrimination principle

Member States were obliged to implement Article 20 into their national legislation. Article 20(2) is implemented through national provisions that make the prohibition of discrimination on grounds of nationality or residence binding on service providers. Most Member States have introduced in the horizontal laws transposing the Services Directive the provision on non-discrimination. Many simply reproduced literally the wording of Article 20(2). Others have relied on already existing legislation that achieves the same purpose. It is for the relevant national competent authorities to ensure compliance with the relevant national provisions implementing Article 20(2) into their national law.135

Apart from enforcement authorities, Member States were also obliged to designate assistance bodies according to Article 21 of the Services Directive. The objective was to enhance confidence of recipients of services by giving them the means to make informed choices and comparisons when engaging in cross-border transactions. It introduces the right to recipients to obtain, in their home state, general information and assistance on the legal requirements, in particular on consumer protection rules, and on redress procedures applicable in other Member States. The "Article 21 bodies" may assists service recipients who have experienced discrimination based on residence or nationality in violation of Article 20(2).

2.3. Commission guidance on the application of Article 20(2) of the Services Directive and the brochure "Buying services everywhere in the EU – A practical guide to consumers"

In 2012, the Commission issued guidance on the application of Article 20(2) of the Services Directive. The purpose was to improve the application and enforcement by national authorities and courts. In light of the situation where national authorities received numerous complaints but there were hardly any enforcement actions, the guidance was an attempt to give full effect to Article 20(2) by further clarifying the interpretation of the non- discrimination obligation.136

In 2014, the Commission published a brochure "Buying services everywhere in the EU – A practical guide for consumers" explaining the non-discrimination principle by giving real life examples of differences in treatment and advice on how to act if experiencing alleged discrimination including a list with contact details to the "Article 21 bodies".