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Brussels, 13 February 2003

Internal market: the preventive dialogue with the Member States on the regulation of online services bears fruit

The first European Commission report shows that the Community-level application of the binding system of prior notification of national rules on online services has been highly successful. Extended to online services by Directive 98/48/EC, this system has prevented new barriers to the free movement of services and saved litigation. The report confirms the notification procedure's importance in ensuring a clear and stable European legal framework at a time when the Information Society is developing rapidly. Part of the new strategy on services launched in 2000 (see IP/01/31), this Commission report takes account of the conclusions of the July 2002 report on the internal market in services (see IP/02/1180). These conclusions stressed the many barriers to be overcome before cross-border activities can work smoothly.

The commissioner responsible for the internal market, Frits Bolkestein, saw the report as clear proof that prevention is better than cure. The notification system would, he felt, help instil in national administrations a legislative culture conducive to the achievement of a genuine internal market in services, something vital to the future of the European economy. Moreover, the system could in some cases help avoid infringement procedures and other litigation, so sparing the European taxpayer unnecessary expense and offering businesses a more stable regulatory framework.

For his part, the commissioner responsible for enterprise policy, Erkki Liikanen, explained that notification procedures worked well for products and extending them to online services saves businesses the difficulties and economic losses caused by measures incompatible with the free movement of services. National authorities can ensure that the rules they adopt are compatible with European law and can see that other Member States are also complying with internal market rules.

The figures

Directive 98/34/EC, as amended by Directive 98/48/EC, requires Member States to notify the Commission of national regulatory initiatives specifically concerning Information Society services. The initiative may not be adopted at national level for three months, a period extended to four months if the Commission or a Member State issues a detailed opinion. Such drafts are also published on the website:

This enables businesses to take part in the procedure.

The report states that the Commission received 70 notifications in the first 30 months of the Directive's application to online services. They fall into five broad categories: the electronic signature, e-commerce, data protection, digital television and domain names.

In 50% of cases the Commission issued detailed opinions and/or observations, a very high response rate. In 95% of cases the Member States amended or withdrew their initiatives on the basis of the Commission's detailed opinions. Instances in which the Member States made substantial amendments, and in which the dialogue is in some cases still under way, include: domain names (Belgium), the electronic signature (Italy), computer crime and information and security services (the Netherlands) and e-commerce (Luxembourg, Austria, Germany and France).

The Commission's role

The Commission's overriding objective has been to scotch any national regulatory approach aimed at applying blanket, extra-territorial legal arrangements without distinction both to operators based in the notifying Member State or wishing to provide services in that Member State, without being established there, from their Member State of establishment.

The Commission has also made sure that planned national rules do not impose needless or excessive legal or administrative costs on operators and, possibly, users.

The Notification Directive has also enabled the Commission to exercise effective preventive supervision over the implementation of Directive 1999/93/EC on the electronic signature and Directive 2000/31/EC on e-commerce by establishing a fruitful dialogue with national authorities on complementary issues not covered by those two directives.


The conclusions are highly encouraging. The report shows that the Notification Directive has brought a constructive dialogue between the Commission and the Member States and has made impending regulatory initiatives much more transparent; they are now brought to the attention of the authorities and interested parties in good time. The Directive has in particular helped instil in the relevant national authorities (national, regional, technical, etc.) a Community reflex in that they now take account of the impact on the internal market when planning, debating and adopting new rules.

As an instrument for dialogue and preventing the adverse effects of a refragmentation of the internal market, the Directive has contributed materially to the Lisbon European Council's objective of "better law-making" and establishing a regulatory framework capable of strengthening the competitiveness of the European economy in such dynamic and innovative fields as Information Society services.

Other initiatives

The Commission intends to apply the Directive's administrative cooperation model more widely.

The Council of Europe has adopted an international convention incorporating the substance of the notification procedure for Information Society services; it opened for signatures in October 2001. The Commission is currently drafting a proposal for a Council decision signing this convention on behalf of the EU.

The Commission is studying the possibility of extending the Notifications Directive to services other than online activities.

The report will be published in the Official Journal of the European Union and is available on the following website:

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