Fact Sheets on the European Union
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The ubiquitous digital single market

Recent shocks, such as the COVID-19 pandemic and the war in Ukraine, have not only exposed the vulnerabilities of the EU single market but have also highlighted its centrality for EU competitiveness. Today, the digital single market plays a transformative role: it boosts productivity and consumer welfare through e-commerce and e-government, while EU rules on data, platforms, AI and cybersecurity underpin trust and resilience. Key legislation (Digital Services Act, Digital Markets Act, eIDAS 2.0, Data Act, AI Act, NIS2, Cyber Resilience Act) has been adopted and is in force, with staged application.
The Digital Services Act and the Digital Markets Act are already transforming the market through enforcement and compliance obligations.

Legal basis

Articles 4(2)(a), 26, 27, 114 and 115 of the Treaty on the Functioning of the European Union.

Objectives

The digital single market (DSM) aims to remove digital barriers to the free movement of goods, services, people and capital and to enable trusted data flows, interoperable digital identity, fair platform markets and secure digital products and services, in line with the EU’s Digital Decade targets. The Europe 2020 strategy highlighted the Digital Agenda for Europe, emphasising the importance of information and communications technology (ICT) for the EU’s 2020 goals. In her Political Guidelines 2024-2029, the President of the Commission underlined the role that the digital single market can play in completing the single market and unlocking its full potential.

The DSM can enhance access to information, reduce transaction costs, minimise environmental impacts and introduce better business models. E-commerce growth offers tangible benefits for consumers, such as new products, lower prices, more choice and higher-quality goods, while boosting cross-border trade and offering easy price comparison. Additionally, the rise in e-government services streamlines online compliance and access to jobs and business opportunities for EU entities.

Achievements

Despite efforts in the 1990s and 2000s to improve the operation of the internal market[1], its full potential remains unexploited. Since 2010, Parliament, the Council and the Commission have made efforts to relaunch it, and to put the public, consumers and small and medium-sized enterprises (SMEs) at the centre of the single market policy. The DSM has a salient role to play in these efforts.

In its communication entitled ‘Europe 2020 – A strategy for smart, sustainable and inclusive growth’ (COM(2010)2020), the Commission presented seven flagship initiatives - including the Digital Agenda - intended to ‘turn the EU into a smart, sustainable and inclusive economy delivering high levels of employment, productivity and social cohesion’.

The Commission communication and the European Parliament’s resolution on delivering a single market to consumers and citizens paved the way for the Single Market Act in 2010 (COM(2010)0608) and, in October 2012, the Single Market Act II (COM(2012)0573), setting 12 actions around four growth drivers: integrated networks, cross-border mobility, the digital economy, and cohesion and consumer benefits.

On 6 May 2015, the Commission launched the DSM strategy with three pillars: improving access to digital goods and services across the EU; fostering conditions for digital networks and innovative services; and optimising the digital economy’s growth potential. Following the strategy’s release, several legislative measures to achieve a DSM were adopted:

The enhancement of the DSM was further pursued through:

In 2018, the Commission presented its strategy on artificial intelligence (AI) for Europe (COM(2018)0237) and agreed on a coordinated plan with the Member States. In April 2019, the High-Level Expert Group on Artificial Intelligence presented its ‘Ethics Guidelines for Trustworthy AI’. The Commission then presented:

The ambitious objective to establish the first ever horizontal regulatory framework for AI eventually led to the publication of the proposal for an Artificial Intelligence Act in April 2021 (COM(2021)0206). The AI Act has been in force since 1 August 2024 with staged application (6/9/12/24/36 months) and the European AI Office has been established.

The revised Electronic Identification and Trust Services Regulation (eIDAS 2.0) has been in force since 20 May 2024. It introduces the EU digital identity wallet, enabling secure, user-controlled proof of identity and attributes across borders. Member States are now preparing EU digital identity wallets for rollout.

In spring 2020, the Commission issued a recommendation on a common EU toolbox for the use of technology and data to combat and exit from the COVID-19 crisis. In its communication entitled ‘Europe’s moment: Repair and Prepare for the Next Generation’ (COM(2020)0456), the Commission announced that the DSM would be a pillar of the EU’s COVID-19 recovery plan. This communication focuses on: (1) investment in better connectivity, (2) a stronger industrial and technological presence in strategic parts of the supply chain (e.g. AI, cybersecurity, 5G, cloud infrastructure), (3) a real data economy and European data spaces, and (4) fairer and simpler business environments.

The NIS2 Directive, the EU’s upgraded cybersecurity directive, had to be incorporated into the national laws of the Member States by 17 October 2024, and several Member States missed the deadline. The Commission has since opened infringement proceedings and is monitoring implementation, with guidance and related measures being rolled out during 2025.

Role of the European Parliament

Parliament has played a leading role in relaunching the internal market and is a keen promoter and agenda setter for the DSM.

In resolutions adopted in 2012, Parliament called for an EU-wide framework for e-authentication/e-signatures, completion of the DSM, and measures to boost trust, security, skills, lawful digital content and cross-border services.

In 2016 in its resolution entitled ‘Towards a Digital Single Market Act’, Parliament pressed to end unjustified geo-blocking, strengthen consumer access and protection, improve cross-border parcel delivery, support SMEs and start-ups, foster innovation on online platforms and review the e-Privacy Directive to align with EU data protection.

Parliament has been advancing the DSM with robust legislative actions on the legislative measures proposed by the Commission to implement the DSM strategy.

Preparatory work by the Digital Single Market Working Group has laid the groundwork for Parliament’s achievements in the digital area. Studies commissioned by the working group show the significant potential of the DSM in reducing costs and barriers for consumers and businesses and making the EU economy greener and more social. They also show that much of this potential can be achieved through the development of e-government and related services, such as e-health. Relevant research includes:

The data protection package, which became effective on 25 May 2018, includes a regulation on the processing and free movement of personal data (Regulation (EU) 2016/679) and a directive on processing personal data in judicial cooperation in criminal matters (Directive (EU) 2016/680). These laws ensure easier access to personal data, a clarified ‘right to be forgotten’, data portability and knowledge of data breaches. Furthermore, on 20 June 2019, a regulation addressing online intermediation services (Regulation (EU) 2019/1150) was adopted. On 18 December 2019, Parliament passed a resolution on the digital transformation of health and care in the DSM.

Parliament’s legislative work on the DSM contributes about EUR 177 billion annually to the EU economy. According to a study on the economic benefits of the DSM, key areas of benefit include electronic communications and services (EUR 86.1 billion), data flows and AI (EUR 51.6 billion), the single digital gateway (EUR 20 billion) and regulations on geo-blocking and online platforms (EUR 14 billion). In its April 2020 resolution on combating the COVID-19 pandemic, Parliament emphasised that the post-COVID-19 recovery would focus on digital transformation to rejuvenate the economy.

Ahead of the Commission proposal on AI, Parliament set up a Special Committee on Artificial Intelligence in a Digital Age in order to analyse the impact of artificial intelligence on the EU economy. On 20 October 2020, it adopted three resolutions outlining how the EU can best regulate AI: a resolution on intellectual property, a resolution on ethical standards and a resolution on civil liability for AI, supported by research on AI, the single market and consumer protection.

On 21 March 2022, Parliament’s Committees on Internal Market and Consumer Protection (IMCO) and on Civil Liberties, Justice and Home Affairs (LIBE) held a joint hearing on the Artificial Intelligence Act to discuss the Commission’s proposal. Following interinstitutional negotiations, the AI Act was adopted by Parliament and the Council in April and May 2024 respectively and entered into force on 2 August 2024. It will be fully applicable from 2 August 2026, except for bans on prohibited practices, which will apply from 2 February 2025, codes of practice (from 2 May 2025), general-purpose AI rules, including governance (from 2 August 2025), and obligations for high-risk systems (from 2 August 2027).

For the DSM to function efficiently, it is essential to understand the Member States’ laws. In November 2020, a study for the IMCO Committee entitled ‘Legal obstacles in Member States to Single Market rules’ revealed that barriers are not solely digital-specific. Numerous DSM strategy measures aimed to address cross-border online sales issues. Although a gap in dependable information on Member State regulations persists, the single digital gateway is operational and addresses information gaps. A  2020 study on points of single contact, commissioned by the IMCO Committee, assessed the role and development of points of single contact and related information services, emphasising the need for better monitoring using the Single Digital Gateway Regulation.

To advance the DSM, Parliament adopted a resolution on the Digital Services Act on 20 October 2020. It suggests that the package bolsters the internal market, guarantees consumer protection, ensures offline and online activity parity, maintains transparency, respects rights and includes non-EU entities affecting EU consumers. The resolution drew from research, a workshop on e-commerce rules and a series of studies commissioned by the IMCO Committee.

On 15 December 2020, the Commission submitted two legislative initiatives: the Digital Services Act (DSA) and the Digital Markets Act (DMA), with the main goals to create a safer digital space in which the fundamental rights of users of digital services are protected, and to establish a level playing field to foster innovation, growth and competitiveness in the EU single market and globally. The alignment of the DSA and DMA proposals with Parliament’s October 2020 resolution shows that Parliament can influence the legislative agenda, even without a formal right of legislative initiative. The DSA (Regulation (EU) 2022/2065) and the DMA (Regulation (EU) 2022/1925) came into force in May 2023, The DSA has been fully applicable since 17 Feb 2024 and the first DMA fines followed in 2025. Enforcement is now the focus.

A study on online advertising, relevant to the DSA and DMA, examined the effects of targeted advertising on consumers and the market. Insights were also gained in 2021 from a workshop on the implications of the DSA and DMA, and a hearing with Facebook whistleblower Frances Haugen, highlighting big tech’s malpractices.

A 2022 study on the impact of influencers examined their impact on advertising and consumer protection in the single market, particularly in spreading misleading information and promoting unsafe products. This study’s findings may guide future legislation on the topic. The influencer marketing industry, which has expanded rapidly, frequently uses deceptive tactics to target vulnerable consumers. The DSA and DMA aim to enhance transparency and regulate online platform gatekeepers – crucial areas in influencer activity.

A 2022 study on e-commerce and the EU Green Deal analysed the environmental footprint of online trade in the context of the circular economy. It also provided information on the role of e-commerce in the implementation of the European Green Deal and made recommendations for future action.

The Data Act, applicable since 12 September 2025, aims to facilitate fair access to and use of data across the EU. It establishes rules for data sharing between businesses and consumers, promoting innovation and competition while ensuring data protection.

Adopted at the end of 2024, the Cyber Resilience Act introduces mandatory cybersecurity requirements for products with digital elements, including hardware and software. Manufacturers must ensure their products are secure throughout their life cycle, conduct risk assessments and report incidents within 24 hours. The core obligations apply from December 2027, with interim milestones.

For more information on this topic, please see the website of the Committee on Internal Market and Consumer Protection.

 

[1]Early efforts to improve the operation of the internal market and ensure consumer protection included the Data Protection Directive (95/46/EC), the e-Commerce Directive (2000/31/EC), the Telecommunication Package including the e-Privacy Directive (2002/58/EC), the Payment Services Directive (2007/64/EC), the Consumer Rights Directive (2011/83/EU) and the Roaming Regulation ((EU) No 531/2012).

Maxim Hauk