The subject-matter of this article is a characterization of the specific notion and concept of the market-oriented modernization of “services of general interest" (SGI) applied by the European Commission, against the commonly used general notion of public services, as well as a presentation of the internal structure of SGI, its functional justification and reference to regulations on state aid and public procurement. The article explains the rationale and legal implications of the current policy of the European Commission related to the implementation of exclusive competence of the EU to establish the competition rules necessary for the functioning of the internal market and coordination competence in the field of social policy. Thus, the market-oriented concept of SGI constitutes an important reference point for the modernization of social policy and public services in member states. However, serious problems requiring a solution emerged which weaken the potential effectiveness and social credibility of the promoted marketization of public service provision. Among them are the deformation of fair competition and public service financing by tax-avoiding multinational corporations and the consequences of the “constitutional asymmetry” phenomenon.