Understanding the EU technical regulation notification procedure
by Owain Richards on 20 May 2020
Strengthening and deepening the Single Market is a key strategic priority for the 2019-24 European legislative cycle. Following the publication of the European Commission’s Single Market Enforcement Action Plan in March 2020, we look at the role and importance of the EU Single Market Transparency Directive in addressing market barriers, promoting the growth of the single market, and supporting a more harmonised regulatory environment for businesses.
Improving the functioning of the EU’s internal market is a primary role and focus for the European Union, as well as a high-level (and long-term) policy priority for its leadership. The European Council’s 2019-2024 Strategic Agenda (June 2019) called for a “deepening and strengthening of the Single Market”, and in his confirmation hearing at the European Parliament in November 2019, European Commissioner for the Internal Market Thierry Breton stated his intention to “modernise” the Single Market and address market barriers during his term.
The European Commission published in March 2020 its ‘Long term action plan for better implementation and enforcement of Single Market rules’ (Single Market Enforcement Action Plan) which outlined a series of new policy initiatives to ensure compliance with and the “effectiveness and efficiency” of Single Market rules across the EU. These initiatives broadly address ways of increasing understanding of Single Market rules, improving their implementation and application, utilising preventive mechanisms, detecting non-compliance, strengthening enforcement, and improving how infringement cases are addressed.
A key initiative outlined in the action plan involves streamlining the operation of the ‘Single Market Transparency Directive’ which, alongside other notification mechanisms - including in the e-Commerce and Services Directives - provides an essential mechanism for the regulation and functioning of the EU Single Market and the avoidance of new internal barriers.
What is the Single Market Transparency Directive?
European Union Directive 2015/1535 (Single Market Transparency Directive) provides a legal mechanism for the notification by Member State authorities of draft technical regulations on products and information society services to the European Commission before they are adopted in national law. Under the procedure, draft laws are submitted to the European Commission and the Commission and other Member States can review the draft law in an initial 3-month standstill period - during which time the law cannot be adopted - and, if necessary, provide comments or detailed opinions. Depending on what type of feedback (if any) is received, the notifying Member State is required to take certain actions and take this feedback into account in its next steps.
The Single Market Transparency Directive procedure therefore plays a crucial role in the enforcement of Single Market rules. It allows both Member States and the European Commission to be informed of new draft regulations, prevent the introduction of new internal barriers, and ensure that any new rules comply with EU law. New legislation notified by Member States is also accessible through the Technical Regulation Information System (TRIS), an online database which allows users to access information on cases - including an overview of the law and a statement of legal grounds - and participate in providing feedback. The Single Market Transparency Directive is therefore a key mechanism in promoting regulatory transparency and harmonisation in the Single Market, as well as ensuring that stakeholders - the European Commission, Member States and businesses - are informed.
Why is it important?
Although the Directive itself does not outline an infringement procedure or enforcement mechanism, the application of non-notified regulations is an increasingly important - and topical - issue. In September 2018, the Court of Justice of the European Union ruled in case C-299/17 (VG Media v Google) that under Directive 98/34 (repealed by the Single Market Transparency Directive), a non-notified technical regulation subject to prior notification to the European Commission is inapplicable and should therefore be “disregarded”. This may have important implications for the broader applicability of ‘non-notified’ national Member State technical regulations, raising important question marks over laws currently in force that haven’t been notified to the European Commission.
Although the categorisation of certain platforms as ‘information society services’ has been politically controversial in many Member States and subject to recent EU case law (e.g. case C-434/15 concerning Uber; case C-390/18 concerning Airbnb), regulation on ‘information society services’ broadly encompasses the platform and digital economy. Draft laws notified through the Technical Regulation Information System can cover issues ranging from content moderation (hate speech, terrorist content online) to automated vehicles, electronic documents and gambling services.
The Single Market Transparency Directive establishes an obligation for Member States to notify the European Commission of draft technical regulations on products or information society services. New regulations affecting businesses are therefore reviewed to ensure that they comply with EU law, preventing market barriers and the adoption of regulations infringing Single Market regulation, and supporting the integration of the Single Market. Given the range of draft legislation notified to the Commission through the Technical Regulation Information System, businesses can also use the mechanism to make their voices heard through providing feedback on potential regulations affecting their activities. This feedback will help the Commission in its own analysis and review of the draft law.
The European Commission’s Single Market Enforcement Action Plan outlined new steps on the implementation of the Transparency Directive which may have important implications for its long-term effectiveness. This includes a particular focus on measures with the highest impact on the Single Market, and legislation which received a reaction (response) from the Commission and which could, without necessary changes, lead to infringement proceedings. The Commission will also encourage national authorities to react to draft laws notified by Member States. The Commission also aims to improve the notification obligation mechanisms under Article 15 of the Services Directive (Directive 2006/123/EC) and Article 3 of the e-Commerce Directive (Directive 2000/31/EC) through promoting compliance by Member States.
Steps to improve cooperation between Member States and the notification mechanisms will also be reviewed as part of the upcoming ‘Digital Services Act’. In his Draft Report ‘Digital Services Act: Improving the functioning of the Single Market’ for the European Parliament’s Internal Market and Consumer Protection (IMCO) Committee, Rapporteur Alex Agius Saliba MEP addressed the need for “effective supervision and cooperation” between Member States in view of the cross-border nature of digital services. Any steps to improve regulatory cooperation and coordination between Member States will help ensure the effective enforcement of regulation.
Notification obligations under EU law are crucial in ensuring the correct transposition, enforcement, and implementation of Single Market rules. The Single Market Transparency Directive procedure provides a key mechanism in ensuring that draft laws concerning products and information society services are reviewed to prevent potential barriers to trade. A system to allow comments from businesses potentially affected by the new regulation is an important way to provide inputs at the key drafting stage, and could provide an alternative focus for engagement activities through highlighting the tangible impact of a draft law on businesses. With a renewed focus on streamlining and improving the Single Market Transparency Directive procedure and other notification mechanisms, businesses operating in the Single Market will benefit from a more transparent - and harmonised - regulatory environment.
Written by Owain Richards
With a background in political and economic analysis, Owain joined Inline Policy in 2019. He provides political analysis and monitoring for the sharing economy, online platforms and emerging technology clients from Inline Policy’s Brussels office. He has a particular interest in the short-term accommodation market and writes a weekly newsletter covering the sector.