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Week Ahead (21 August)

The latest Irish wholesale price index data will be released on Tuesday, showing the prices of industrial products manufactured in Ireland through July.

The government will be hopeful that wholesale electricity prices, or what is paid for electricity from the Single Electricity Market grid, will continue its downward trend. The June 2023 release showed that wholesale electricity prices were 35.6% lower compared to June 2022.

Wind energy generated 35% of all electricity in the State in July, according to figures from Gas networks Ireland (GNI). GNI figures also suggest that gas demand decreased by 20% when compared to July 2022. Gas generated 48% of Ireland’s electricity in July – a decline of 17% compared to June, when gas generated 58% of Ireland’s electricity, and a 23% decrease on its 62% contribution in July 2022. This suggests a further reduction in electricity prices is likely.

Meta has filed a request with a Norwegian court to halt a penalty imposed by the country's data regulatory body for the breach of user privacy on Facebook and Instagram, as stated in a court submission. According to the court filing, Meta is seeking a temporary restraining order against the directive. The formal plea is scheduled to be heard during a two-day court session commencing on Tuesday, 22 August.

On 7 August, the Norwegian Data Protection Authority (Datatilsynet), informed Meta that it would impose financial penalties on the tech company for its failure to comply with a privacy order related to behavioural ads, following a ruling by the Court of Justice of the European Union in July. The ruling determined that Meta's existing advertising practices violated the General Data Protection Regulation (GDPR). The order of the Norwegian regulatory authority demands that Meta cease displaying personalised ads to users in Norway based on their online behaviours and approximate locations without obtaining their consent.

Under mounting pressure, Meta revealed earlier in August its intention to obtain explicit consent from European users prior to tracking their activities and collecting data for personalised advertisements. However, specific details and the timeline for implementing these legal and practical changes remain undisclosed, with Meta insisting that it will have to ensure first that its new model respects both the GDPR and the Digital Markets Act (DMA).

The daily fine of 1 million Norwegian kroner (€89,500) began on 14 August and will run until 3 November. To make this fine permanent, the Norwegian authority has indicated that it will refer the decision to the European Data Protection Board (EDPB), potentially broadening its applicability to the rest of Europe. The outcome of this legal battle could have significant implications not only for Meta but also for the broader landscape of data privacy regulations in Europe.

The European Central Bank will release the minutes of its July meeting on Thursday, which will indicate the level of support for the governing council’s decision to increase interest rates by 25 basis points.

While a 25-basis point hike had been priced in, markets will be watching closely for indications of how the ECB intends to proceed at its next meeting in September, for which markets are currently pricing in only a 40% chance of another rate hike. At her press conference in July, Christine Lagarde indicated that the ECB likely had more ground to cover in tackling inflation, while also reiterating that the ECB’s decisions will be data dependent.

To that end, the ECB’s own Economic Bulletin, released on 10 August, will be of interest as it states that a variety of alternative measures of underlying inflation all appear to have peaked. In particular, the Supercore indicator, which comprises cyclically sensitive HICP items, decreased to 6.0%, down from 6.2% in May while the model-based Persistent and Common Component of Inflation (PCCI) measure, which is expressed in terms of an annualised rate, declined further in June (regardless of whether energy is included). Overall, the authors conclude, recent developments in these measures suggest a turning point in underlying inflationary pressures. The minutes will reflect whether this notion of inflation having peaked is gaining traction among significant sections of the Governing Council.

By Friday, several tech firms will have to comply with the requirements of the Digital Services Act (DSA). The act introduces obligations for categories of companies which are defined according to the size of their userbase. Particularly stringent requirements will be placed on very large online platforms (VLOPs) and very large online search engines (VLOSEs), defined as services with more that 45 million active users in the European Union area.

On 25 April, the European Commission designated Google Search and Bing as VLOSEs and the following as VLOPs:

· Alibaba AliExpress

· Amazon Store

· Apple AppStore


· Facebook

· Google Play

· Google Maps

· Google Shopping

· Instagram

· LinkedIn

· Pinterest

· Snapchat

· TikTok

· Twitter

· Wikipedia

· YouTube

· Zalando

On 27 June, German online retailer Zalando filed a lawsuit with the EU’s General Court in Luxembourg to challenging its designation as a VLOP. According to Zalando, the Commission’s classification overlooks the company’s primarily retail business model and strict content moderation process. Also, the retailer insists that it does not pose the same systemic risks associated with major tech companies and should not be subject to the same obligations under the DSA. Zalando’s CEO and co-founder, Robert Gentz, expressed concerns that the Commission misunderstood Zalando’s hybrid business model, with the majority of its sales derived from products sold directly to online shoppers, rather than through other vendors on the Zalando platform.

The DSA will inter alia impose fines of up to 6% of global turnover on companies found to have violated the rules, while multiple breaches could lead to companies being banned from operating in Europe.

The DSA aims to force tech companies to increase advertising transparency, take more responsibility for illegal content on their platforms, and improve data access while it also outlaws advertising which is targeted at users on the basis of their race, gender, politics or religion, as well as any advertising aimed at children. The practice of using so-called "dark patterns", by which internet users are misled into providing their personal data to online companies is also banned under the DSA.

The scale of the monitoring operations will be considerable; to that end the act also imposes an annual fee of up to 0.05% of a company's worldwide revenue to cover the costs involved in monitoring compliance. 0.05% is a ceiling and the costs will be reviewed each year.

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