Looking Ahead (19 March)

w/c Monday, 18 March – Vestager expected to issue Google Adsense decision

Reports suggest that DG Comp will this week announce the decision on Google’s Adsense product. This follows the opening of a formal investigation in July 2016, and a preliminary conclusion that Google breached anti-trust law by preventing websites that use its search bar and ads from showing competing ads. The expectation is that Google will be found to have breached competition law.

While the size of any fine is likely to grab headlines, the true significance of the findings will lie in the extent to which they ask Google to implement changes to its business model regarding the display of competing advertisements.

Wednesday 20 March - Commission Task Force Chief in Athens while Greece aims to resolve foreclosure framework dispute

With Greece in urgent negotiations with its lenders on the protection of primary residences from foreclosure, it is anticipated that European Commission Mission Chief Declan Costello, who will be in Athens on Wednesday for a conference hosted by the Greek Foundation for Economic & Industrial Research, will he finalise this process.

Greece’s aim is to secure the release of the first €970 million tranche of ANFA and SMP profits and quickly secure approval to repay €3.5 billion of the €9.8 billion in expensive IMF debt. Both Ireland and Portugal took similar steps when emerging from their respective programmes.

Thursday, 21 March – Theresa May to seek Article 50 extension following Bercow meaningful vote intervention

As expected, MPs last week voted in favour of seeking some form of extension to Article 50 from the EU. This now makes it highly unlikely that Britain will leave the EU at the end of March. Even if Parliament can agree on a Brexit strategy before that date a technical extension will be required.

The government motion on the Article 50 extension had seemingly paved the way for a third meaningful vote this week. The motion stated that if Theresa May’s Brexit deal is approved by 20 March, then an extension running up to 30 June will be sought. In the event that the deal is not approved by 20 March, then the length of extension sought will be indeterminate.

May’s hope was that the mere threat of a lengthier extension, possibly requiring British participation in the European election, would be sufficient to bring more ERG and DUP MPs behind her deal in a renewed meaningful vote. As we noted in our 14 March report, this was likely to be part of a two-step strategy by May. While unlikely to have gained sufficient support in the 19 March vote May would have been hoping to come close to carrying the deal over the line.

This strategy, which in any case was always risky, has now been upturned by the 18 March intervention of House of Commons Speaker John Bercow. Bercow, leaning on a precedent stretching back to 1604, has prevented May from tabling a motion for a third meaningful vote as it ‘the same in substance’ as previous motions.

The government could hold a vote on whether to overturn Bercow’s blocking motion. This should command a majority if there is also one for May’s deal. However, as this is not yet certain to be the case, it is now unlikely that May will be able to hold a meaningful vote before she attends the 21 March EU Council.

The likelihood that May will attend the EU Council without parliamentary backing has changed the dynamic of her strategy. The prospects for her deal will rest on what is agreed with the EU regarding an Article 50 extension. If, after the Council, Eurosceptic MPs remain sufficiently spooked by the prospect of a Brexit delay, we would expect May to attempt to vote to overrule Bercow and then have a further vote on her deal. If this proves impossible, then we expect that there will be a decisive shift towards softer Brexit options

Thursday, 21 March – Xi Jinping to visit Rome following Italian endorsement of ‘Belt and Road’ scheme

Chinese President Xi Jinping’s visit to Rome comes following the Italian Government’s endorsement of the ‘Belt and Road’ scheme. Italy is expected to become the only G-7 Country to sign up to the Chinese investment and infrastructure initiative.

There is an ongoing EU dispute about how to handle China ahead of an EU-China summit on 9 April where EU Member States will look to balance the need for Chinese investment with the wishes of the United States.