The Internal Market with its four freedoms lies at the heart of European integration since it’s conception with the Treaties of Rome. It was the Internal Market which by ‘integration through law’ formed the EU as the ‘sui generis’ organization it is today. It is hardly possible to imaging the current state of European integration without spillovers from (ongoing) market integration. Non-Discrimination and equal treatment, the negative integration enforced by the Court of Justice of the EU [CJEU] through the removal of obstacles to fundamental freedoms determined the way the EU interacts with Member States until this very day.

Yet, the Internal Market of the European Union is under considerable strain: The traditional driving force of (legal) developments of the internal market, i.e. free movement of goods, is losing drastically in importance when measured against the free movement of persons, capital, but foremost services and the freedom of establishment. What is more, EU integration and the acceptance of integration through law is no longer self-evident from the perspective of Member State governments, administrations, and Courts. Unconditional and absolute supremacy of EU rules as interpreted by the Court are questioned. It is fascinating to reflect how the Court of Justice reacts to these developments in the core area of its case-law, i.e. in the interpretation of the four fundamental freedoms.

This paper will argue that secondary EU law in the form of EU directives and regulations are today often more decisive for the nature of individual fundamental freedoms in the case-law of the CJEU than provisions of primary law itself. Such secondary law already contains political assessments about how restrictions to fundamental freedoms should look like in the eyes of the EU legislator. This has implications on the room left for interpretation by the CJEU, which seems in turn to become more sympathetic to Member States’ desires to restrict freedoms). Considering the development of the Internal Market to a service economy, this raises the question in how far the fundamental character of the EU’s internal market and the ‘integration through law’ paradigm at large has evolved, but also whether this new approach offers a larger bigger room for restrictions to fundamental freedoms for the Member States.

The borderline between Member States’ actions that are non-liberal or still comply with the internal market law of the European Union (EU) seems to be more and more relative nowadays. Challenges like the global financial and economic crisis of 2008 or more recently the coronavirus crisis and the ongoing war in Ukraine may even strengthen this ambivalence.

In the legislation of the European Union, we can see a trend for almost two decades that Member States’ governments get more influence in economic sectors which are subject to regulation at the EU level, and consequently, their discretion has been increasing in the determination of national measures that comply with the EU requirements. Such a trend may lead to the weakening of the integration as a whole, especially as an effect of nationalist powers showing scepticism towards a stronger Europe, and poses objective risks on competition in certain Member States, not to mention negative consequences from the point of view of rule of law. Risks of this kind have also been highlighted in the European Commission's Rule of Law reports of recent years in relation to certain countries (such as Hungary). This seems to imply, among other things, that if democratic control of a given political system is insufficient, then economic legislation and the practice of public authorities can be influenced by government power in ways that run counter to the normal functioning of a market economy in the European Union.

As a part of our research, we developed an original database of selected cases completed by the Court of Justice of the European Union (CJEU) between 2000 and 2023, primarily in economic sectors like electricity, gas, post, telecommunication, waste, water and wastewater. In our view, there is a correlation between broadening the scope of derogations from EU competition rules allowed for Member States, and changing the approach of the CJEU to be increasingly acceptive towards national derogatory instruments. In order to prove this statement, our study combines analytical research with a legal empirical method, specifically a statistical analysis of the case law of the CJEU. We may conclude that the CJEU, within the scope of its discretionary power, represents an approach which is rather acceptive than rejecting towards Member States’ derogatory instruments, in particular in times of crisis. This factor also contributes to the above-mentioned risks in competition, with possible negative rule of law consequences in certain countries.

The EU internal market guarantees the free movement of goods through the principle of mutual recognition: any product lawfully produced in one member state must also be accepted in all other member states. Recently, some scholars have increasingly questioned the functioning of this principle and tried to refute the famous ´asymmetry thesis´, articulated by Fritz Scharpf by claiming that negative integration has become weaker or even came to an end while positive integration would have gained in strength. A potentially strong effect is often overlooked in these analyses: the constraining shadow that former case law still exerts on the decisions of national authorities. This article challenges the recent claims and demonstrates how the principle of mutual recognition not only works very well (at least in the selected policy fields), but how it severely restricts the perceived policy space of member states, thereby upholding negative integration. Moreover, the article explores the legal and political feasibility of adopting national treatment as an alternative to mutual recognition in sensitive policy areas within the EU internal market. Drawing valuable insights from the integrated market of the US, where the Supreme Court recently decided to allow for national treatment in a landmark decision, this research provides essential lessons for the European context. This study contributes to the ongoing discourse on EU integration by offering a nuanced perspective on the dynamics between negative and positive integration and their implications for member states' policy discretion.