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Week Ahead (19 March)

W/C Monday, 18 March – European Commission to host a series of workshops on gatekeepers’ compliance with the DMA rules 

This week, the European Commission is hosting a series of Digital Markets Act (DMA) compliance workshops, after the new rules entered into force on 7 March. The schedule kicked off with Apple yesterday. Meta’s turn is today, followed by Amazon on 20 March, Alphabet (Google) on 21 March, ByteDance (TikTok) on 22 March, and wrapping up with Microsoft on 26 March. Each workshop aims to delve into the respective company's alignment with the DMA.  

Last week, Apple announced that smaller developers in the EU can now distribute their iOS apps directly from their own websites, a departure from the previous requirement to use Apple's App Store exclusively. This marked the second instance of Apple modifying its approach to comply with the DMA, following a series of tweaks to how developers could use the new options. At the first DMA workshop, Apple’s lawyer also defended the company’s new fee on apps, arguing that the company opted for a ‘’fair’’ and ‘’reasonable’’ fee. However, the Coalition for App Fairness, which represents Apple’s critics like Spotify and Epic Games reiterated that this approach discriminates against digital goods sellers. The Commission is currently considering an investigation into Apple’s compliance plans based on feedback from various stakeholders with further scrutiny expected on interoperability and competition within iOS. 

The DMA’s purpose is to regulate the digital market by preventing big tech companies, referred to as ‘’gatekeepers’’ from abusing their dominant market positions, and opening competition to smaller competitors. To that end, it introduces new responsibilities for tech companies, including sharing data, linking to competitors, and ensuring interoperability with rival apps. Companies with an annual turnover exceeding €7.5 billion, a market capitalisation of over €75 billion, and active monthly users in the EU totalling 45 million fall under these rules. The European Commission has the power to investigate the actions of gatekeepers and fine them up to 10% of their global turnover from the preceding year if they are found to be in breach of the DMA. The online travel platform Booking and the social media platform X have also filed a notification as potential gatekeepers, expected to become the latest entries in the list of gatekeepers and the first European platform to be regulated by the new rules.   

Wednesday, 20 March – Crown and Silgan to defend their appeals against Commission’s cartel charges in General Court hearings 

On Wednesday, legal representatives from Crown and Silgan will defend their respective appeals (Cases: T-587/22 and T-589/22) against a fine imposed by the European Commission before the General Court, the EU’s lower court. 

More specifically, in July 2022, the Commission concluded that Crown, a US packaging company, and Silgan, a US manufacturing company, were involved in a cartel concerning the sale of metal cans and closures in Germany. The alleged collusion involved the exchange of detailed customer sales data, coordination on surcharges and durability recommendations, and mutual information on commercial strategies. As a result, the Commission imposed fines of €8 million on Crown and €24 million on Silgan for their anti-competitive practices. 

In response, Crown and Silgan decided to challenge the Commission's decision at the General Court. Their appeal is based on the argument that the Commission overstepped its boundaries by infringing on the principle of subsidiarity. They contended that the Commission ‘’unjustly’’ took over the investigation from the Bundeskartellamt, the German Federal Cartel Office (FCO), which initially referred the case to the Commission due to concerns that the conduct might have effects beyond Germany. 


Thursday, 21 March - Friday, 22 March – European Council to discuss Ukraine, migration, defence, and the Middle East; eurozone nations to discuss capital markets union  

This week, the European Council will discuss inter alia the bloc’s support for Ukraine, migration, as well as the situation in the Middle East. The summit will also aim to further solidify the EU's stance on defence readiness and discuss the European Defence Industry Strategy. The agricultural sector's current challenges will also be addressed, reflecting the EU's efforts to respond to the massive farmers’ protests across the continent, ahead of the European elections. 


Furthermore, the agenda includes the EU's enlargement policy, particularly regarding Ukraine, Moldova, and Bosnia and Herzegovina. Last December, the European Council agreed to commence negotiations with Kyiv and Chisinau, with EU leaders expressing their readiness to begin accession talks with Sarajevo upon completion of the required membership criteria. Earlier this week, seven member states (Austria, Croatia, Czechia, Greece, Italy, Slovakia, and Slovenia) sent a letter to the European Commission and their counterparts, arguing in favour of opening accession negotiations with the country in order to ‘’seize the momentum and the current window of opportunity’’. Last week, the Commission recommended the initiation of accession talks with Bosnia and Herzegovina. The day before the Summit, on 20 March, the Commission will also present its latest communication on pre-enlargement reforms, outlining progress made so far by Ukraine and Moldova.  


Finally, on the concluding day of the European Council, the eurozone nations will convene for a separate summit dedicated to the economic landscape within the euro area and advancing the capital markets union (CMU).  


Thursday, 21 March – Bank of England committee to decide on interest rates; expected to keep them at 5.25% for fifth consecutive time 

The Monetary Policy Committee (MPC) of the Bank of England (BoE) will meet on Thursday, with a fifth consecutive pause in rates priced in. On 1 February, BoE decided to leave interest rates unchanged for a fourth time in a row, following 14 consecutive increases from December 2021 to August 2023. The key interest rate was kept at 5.25%, which is the highest level since the 2008 financial crisis.   


However, it is worth noting that for the first time since 2021 a member of the MPC, Swati Dhingra, voted in favour of a rate cut.  An analysis by capital economics has found that when one MPC member votes to cut interest rates, a majority of the nine members will agree about two meetings later.  We already have a strong indication of this from one of the two MPC members who voted in favour of a hike at the 1 February meeting, Jonathan Haskel, who told Reuters on 9 February that his decision had been "finely balanced" and that should the encouraging signs of lower inflation persist he would be “happy to change my vote”.   


In a statement last week, BoE’s Governor Andrew Bailey, expressed a cautiously optimistic outlook regarding inflation control and the diminishing concerns of a wage-price spiral, adding that there has been ‘’very limited evidence so far’’ that an increase in unemployment was needed to curb inflation. However, Bailey also highlighted uncertainties in labour market data and geopolitical risks, which necessitate a careful approach to monetary policy. In January, the annual inflation rate was 4.0% remaining unchanged from December.  Nevertheless, the bank predicted last month that inflation would drop towards 2% in Q2 2024, before rebounding later in 2024. 


According to a Reuters survey conducted last week, a majority of 68 economists suggest that the BoE will begin reducing borrowing costs in Q3, aligning with anticipated moves by the Federal Reserve and the European Central Bank. 40% of these economists predict an earlier rate cut, potentially in the next quarter. The unanimous expectation among them is for a rate cut from the current 16-year high of 5.25% by the end of September, with no further increases anticipated. Overall, the Bank's strategy appears to be one of caution, preferring to gather more data, particularly regarding the impact of April's price and wage adjustments, before making any moves to lower rates. 



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