The European Union’s single market was designed to eliminate customs duties between member states and, in theory, allows companies to expand freely across the continent. In reality, however, businesses still encounter national regulations, licensing requirements, permits, and divergent rules. The experiences of RegioJet and Rohlík show that crossing a border is far from the end of business hurdles.
The European Commission itself acknowledges that, especially for services, the cross-border market is much less integrated than for goods. According to EU assessments, around 60 percent of regulatory barriers in services today are similar to those that existed twenty years ago.
Tariffs Gone, Regulations Remain
The single market is a key pillar of the European Union.
A company founded in one member state generally has the option to sell goods or offer services in other EU countries without traditional customs barriers.
But the reality is more complicated.
Individual states retain many of their own rules regarding licensing, labor law, retail, opening hours, regulated professions, permit processes, and the provision of services.
As a result, a company expanding into a new country often has to build a separate legal and administrative structure almost from scratch.
For a large multinational corporation, this might be a manageable expense. For a business from a smaller country, it can present a major obstacle to further growth.
Brussels Identifies Ten Key Barriers
In its single market strategy, the European Commission has identified ten areas that entrepreneurs say most complicate business between member countries.
These include the complexity of establishing and running a business in another state, differences in national service regulations, recognition of professional qualifications, sending workers abroad, and varying product requirements.
The Commission also notes that cross-border provision of services still significantly lags behind the trade in goods.
This is notable given that services make up around 70 percent of the EU’s economy.
European rules can complicate cross-border business even in transport, as shown by recent protests by truck drivers at Schengen area borders.
RegioJet Faces a Much Tougher Barrier
The example of the Czech train operator RegioJet highlights an even more serious problem than regulatory divergence alone.
In 2024, the European Commission ruled that České dráhy and Austrian rail operator ÖBB had coordinated their actions when selling used Austrian railway carriages between 2012 and 2016.
According to the Commission, the aim was to restrict RegioJet’s access to the carriages it needed for expansion in the Czech market and on the Prague–Vienna international route.
At the time, RegioJet was a new competitor with limited capital, and access to used Austrian carriages was crucial for its growth.
České dráhy and ÖBB Fined €48.7 Million
The Commission concluded that both state-owned rail operators had coordinated carriage sales to ensure RegioJet would not acquire them, or could do so only with significant difficulty.
Anti-competitive practices cited by the Commission included timing the carriage sales, sharing information about offers, and seeking alternative buyers when České dráhy showed no interest in the carriages.
For violating competition rules, České dráhy and ÖBB were fined a total of €48.7 million.
České dráhy was fined around €32 million and ÖBB approximately €16.7 million.
Jančura: RegioJet Could Have Been Twice as Big
RegioJet owner Radim Jančura later stated that, in his view, the limitation on access to carriages had a fundamental impact on the company’s growth.
He claims that without these anti-competitive actions, RegioJet could be roughly twice its current size.
This is the company owner’s own assessment, not a conclusion of the European Commission.
The case illustrates that even a common European market does not guarantee equal conditions for a new entrant in a country with well-established competitors.
Rohlík Hits a Different Obstacle in Germany
Czech online supermarket Rohlík faced a different kind of barrier.
In Germany, the company operates under the name Knuspr and gradually expanded into several major cities.
In Berlin, however, the company became embroiled in a dispute over food deliveries on International Women’s Day, March 8, which is a public holiday in the city.
Knuspr’s logistics center is located in Schönefeld in the neighboring state of Brandenburg, where the day is not a public holiday.
The company planned to deliver orders to Berlin customers anyway.
REWE Secures a Court Ban
German retail giant REWE obtained a preliminary court injunction against the planned deliveries.
REWE argued that delivering on Berlin’s public holiday would give Knuspr an unfair competitive advantage.
The court accepted REWE’s argument at that time.
Knuspr strongly objected to the decision, describing the dispute as “David versus Goliath.”
The company argued that its logistics center operated in a federal state where the holiday does not apply, and therefore considered its plan to deliver as legal.
REWE, on the other hand, insisted that the same rules must apply to all competitors on the Berlin market.
Two Cases, Two Very Different Problems
RegioJet and Knuspr do not fall under the same legal category.
In RegioJet’s case, the European Commission directly found that rival railway operators had violated competition law.
The Knuspr case, in contrast, concerned the interpretation and application of national rules during a public holiday.
Both cases highlight a broader issue on the European market.
A company may have the legal freedom to enter another member state, but still faces local rules, court disputes, bureaucracy, and costs that it would not encounter at home.
Smaller Countries at a Disadvantage When Expanding
These fixed costs can be a particular problem for companies from smaller countries.
A company from the Czech Republic, Slovakia, or Slovenia starts on a market with only a few million potential customers.
If a business wants to achieve significant growth, sooner or later it must enter other countries.
By contrast, a company from Germany, France, or Italy can build a much larger business before needing to leave its domestic market.
Expenses for lawyers, local licenses, administration, or adapting systems can therefore have a much greater relative impact on smaller enterprises.
Brussels Plans Gradual Removal of Barriers
The European Commission has therefore prepared a new strategy to further deepen the single market.
The focus is on removing the most significant barriers, reducing bureaucracy, and better enforcing rules among member states.
Brussels also warns that existing EU rules are not always implemented uniformly, and differences between national systems are creating new fragmentation.
Completely eliminating these differences is not easy.
Many rules relate to areas where member nations retain their own competencies.
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The single European market is not a fiction. The removal of tariffs, free movement of capital, and common rules have given businesses opportunities that did not exist before the single market.
However, the stories of RegioJet and Rohlík highlight its limitations. Borders may no longer mean customs posts and barriers, but for entrepreneurs, they can appear as licensing demands, lawsuits, local regulations, or high fixed costs needed to enter each new country.
This article was translated from the original Slovak version with the assistance of AI.
