The controversial directive that would open the EU services sector up to cross-border competition has been passed in the European Parliament. Constant division and opposition led to a "watered down" final legislation.

The scope of the services bill was slimmed down by excluding social, health care, security and transport services, as well as temporary work agencies. However, commercial service providers in the area of education or culture will be under the jurisdiction of the new services directive. This decision has led to some protests by unionists that were generally in favour of the legislation.

The general controversy surrounding the directive was very much dampened with the decision to take out the "country of origin" proposal, which was replaced with a clause titled "freedom to provide services". Initially the "country of origin" principle would have let the service provider adhere only to the rules of their home country. Now, service providers must work within the legislation of the country they operate in, but Member States have to guarantee the provider "free access to and free exercise of a service activity within its territory."

The impact of the services directive on higher education remains to be seen, but with a heavily compromised final directive being passed, its influence on the sector will be limited.