Article 56(1) TFEU provides:
Within the framework of the provisions set out below, restrictions on freedom to provide services within the Union shall be prohibited in respect of nationals of Member States who are established in a Member State other than that of the person for whom the services are intended.
The concept of “services” is a relatively recent one, both in economic and in legal terms. While from today’s perspective the provision of services has always been an important field of the economy, it was only in the 1940s and 1950s that scholars started to conceptualize services as a distinct economic sector. In comparison to trade in goods, the legal framework for transnational trade in services began to evolve with a significant time lag. Negotiations for a global agreement on trade in services were initiated only in the 1980s, during the Uruguay Round of multilateral trade negotiations, and the General Agreement on Trade in Services (GATS) which emerged from them, came into force in 1995. The number of the Court’s cases in the field of services grew significantly during the same period.
Over the past decade, legislation and adjudication on the free movement of services has been one of the most dynamic, but also one of the most controversial, of the Treaty freedoms. The dynamic character of the field is owed to the fact that the integration of a European market in services essentially dates back only to the 1980s and 1990s. This means that a considerable number of regulatory questions are not yet fully settled, and that the legal framework has not yet been fully stabilized. Consequently, controversies persist, as unsolved regulatory questions are liable to attract different, sometimes conflicting, answers. A central field of controversy has been the area of public services. The main question in this regard has been the following: what does EU law require in a situation where a private provider wishes to offer the same service as is offered by a public provider? The question has important implications, because the issue of public services has been the center of a political conflict since the 1980s: some policymakers believed that private enterprises could provide public services more efficiently than public operators, whereas others believed that public operators were more efficient and could serve the public interest better.