The single market for services and integration through law

Recent transatlantic trade tensions and the Draghi and Letta reports have once again revived interest in completing the EU single market for services, which now account for three quarters of EU GDP. Integration of the services market rest on the EU’s fundamental freedoms (the freedom of movement for services and the freedom of establishment) – much like the single market for goods, where ECJ case law has gradually eliminated ever more regulatory barriers. But despite numerous secondary law regulations and directives, the implementation of barrier removal and integration of the services market remains limited and uneven across sectors and member states. To understand this uneven pattern, this paper asks when mechanisms of integration through law are more or less likely to be activated, and takes a step beyond common explanations related to the Commission’s reluctance to alienate member states by enforcing liberalization too forcefully. We advance a competence-control framework that conceptualizes rule enforcement as control over how member states use their competence to govern services markets. This framework encapsulates both the Commission and other (private) actors, the factors that shape whether they pursue the enforcement of single market rules through litigation, and the consequences for member states’ governance. Studying the 2006 services directive, which mobilized long-standing fears about regulatory competition and deregulation, we establish variegated implementation and litigation before the ECJ, and explore what factors shape variation in actors’ pursuit of such litigation. By highlighting the role of specific actors in pursuing litigation and by exploring the factors shaping uneven implementation and litigation, the paper advances our understanding of the uneven nature of integration through law.