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The main proposition of this paper is that the Croatian legal framework for higher education fails to meet the criteria of the internal market of the EU. In the first part, the author draws a distinction between education as public good and education as service, and explains how EU law affects the regulatory autonomy of the Member States in the area of higher education. In the second part, the author analyses hitherto identified barriers to the exercise of market, freedoms created by national legal frameworks of higher education. The third part discusses the Croatian legal framework and tests it against EU standards. The author concludes that deficiencies of Croatian higher education law are partly caused by the ignorance of policy makers and partly by the structural weakness of the negotiating process, where chapters are negotiated independently from one another and focused on formal fulfillment of benchmarks. [ABSTRACT FROM AUTHOR]