EESC urges tougher EU action to curb single market fragmentation

Europe’s single market is facing ongoing challenges due to fragmentation, unfair commercial practices and the accelerating pace of technological change. 

In a series of recent opinions, the European Economic and Social Committee has called for stronger EU action to modernise the rules underpinning the single market ─ from product standards and market surveillance to territorial supply constraints that distort competition across the Union.

€14 billion a year: the hidden cost of single market fragmentation

The EESC is urging the EU to crack down on territorial supply constraints (TSCs), which cost European consumers around 14 billion EUR annually, with identical products sometimes being sold at prices more than 100% higher in one Member State than in a neighbouring country. 

The TSCs ─ practices through which multinational manufacturers restrict where retailers and wholesalers can find and buy products within the EU ─ are one of the most damaging barriers to the single market. They result in higher prices, reduced product choice and distorted competition across Member States, the EESC said in its opinion adopted at the April plenary.

'Ultimately, it is the European consumers who pay the price," said rapporteur of the opinion Antje Gerstein. 'The EESC warns that allowing the single market to remain thus fragmented is unsustainable. As Mario Draghi has underlined, internal market fragmentation is even more damaging to the EU economy than external trade barriers.'

The most common practices identified by the European Commission's Single Market Enforcement Taskforce include unjustified differences in packaging and labelling, refusals to supply retailers in other Member States and significant price differences across national markets.

While EU competition law has already led to major investigations and fines, such as against AB InBev and Mondelēz International, the EESC believes enforcement alone is insufficient.

The EESC is calling on Member States to avoid introducing new national barriers that further 'renationalise' sourcing markets and instead remove unjustified restrictions on cross-border trade. Among the solutions proposed are QR codes to address language requirements without limiting market access.

The Committee is also encouraging the Commission to explore new legislation inspired by the Digital Markets Act or unfair trading practices rules in order to tackle persistent supply restrictions more effectively.

A strategic rethink of European standards

Europe’s standards system must remain inclusive, transparent and firmly anchored in EU values, the EESC said in its opinion A strategic standardisation for a stronger Single Market on the revision of the EU's standardisation framework which is being prepared by the European Commission.

European standards increasingly shape everything from industrial competitiveness and digital technologies to workplace organisation and consumer protection. In the EESC's view, the current system faces mounting challenges linked to geopolitical tensions, rapid technological development and the growing internationalisation of standards.

'Standards should support innovation, sustainability and high levels of protection for workers, consumers and the environment,' rapporteur of the opinion Angelo Pagliara said.

At the moment, small businesses, trade unions and civil society groups still struggle to participate effectively in standardisation processes due to financial and administrative barriers. To counter this, the EESC called for stronger support mechanisms, improved access and greater representation in technical committees. 

'We insist that standards must remain technical tools supporting EU legislation, and not instruments that interfere with workers’ rights, collective bargaining or social dialogue,' Mr Pagliara said.

The EESC proposes introducing ex-ante assessments into the revised regulation as well as an explicit principle preventing interference to ensure that future standards do not overlap with matters covered by social dialogue or labour law.

In the opinion, the EESC pointed to the growing strategic importance of standards in areas such as artificial intelligence, digital platforms and advanced automation, warning that Europe must strengthen its position in international standard-setting bodies to avoid losing influence globally.

Stronger enforcement for a changing market

Alongside standardisation and territorial supply constraints, the EESC is also calling for a major overhaul of EU market surveillance and enforcement systems in response to growing digital trade flows and the rise of AI-enabled products.

In its evaluation report Evaluation of the Market Surveillance Regulation, the EESC has warned that EU rules designed to stop unsafe products from entering the single market are not keeping pace with the rapid growth of online shopping and direct imports from outside Europe.

The Market Surveillance Regulation remains important but is only partly effective, the EESC said in the report. The regulation is meant to ensure that non-food products sold in the EU comply with safety, consumer protection and fair competition rules.

'The main problem is not the law itself, but weak and uneven enforcement across Member States. National authorities often lack the staff, funding and tools needed to check the growing volume of products entering the EU, especially through e-commerce and small parcels,' rapporteur of the report Antje Gerstein said.

Online marketplaces and third-country sellers are a particular concern. Non-compliant products can be removed from websites after being flagged but often reappear quickly under new listings. This makes enforcement slow and reactive, while compliant European businesses face unfair competition from cheaper non-compliant goods.

The EESC also highlighted problems with 'authorised representatives', or EU-based actors who are supposed to be responsible for products sold by non-EU companies. These representatives are sometimes hard to identify, difficult to contact or unable to fulfil their duties.

To address the gaps, the Committee called for clearer responsibilities, stronger cooperation between customs and market surveillance authorities, better digital tools and more resources for enforcement. It also recommended a public EU database of reliable authorised representatives and simpler guidance for SMEs.

It also proposed a more risk-based enforcement model inspired by the logic of the Digital Services Act, arguing that larger actors creating systemic compliance risks should face proportionate additional responsibilities.

It additionally called for the creation of a European observatory on non-compliant products, stronger involvement of civil society organisations and social partners in enforcement processes, and simplified procedures to make compliance more accessible for SMEs and microenterprises.