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Week Ahead (29 April)



Monday, 29 April – EU General Court to hear ByteDance’s DMA legal challenge 

Today, the General Court, the EU’s lower court, is set to hear ByteDance’s legal challenge (Case T-1077/23) against TikTok’s ‘’gatekeeper’’ designation under the Digital Markets Act (DMA). 

 

Last September, the European Commission confirmed its initial list of six tech companies qualifying as ‘’gatekeepers’’ under the DMA namely Apple, Alphabet (Google), Amazon, Meta, ByteDance (TikTok), and Microsoft. 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 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.  

 

After its inclusion to the Commission’s initial list, the Chinese online video platform challenged its designation at the General Court claiming that TikTok’s inclusion on the list could undermine the ‘’DMA's own stated goal by protecting actual gatekeepers from newer competitors like TikTok’’ and applied for interim measures. However, in February the Court ruled against the suspension of TikTok’s designation, arguing that it could not prove that it needed it urgently to prevent “serious and irreparable damage”. This meant that TikTok would have to at least temporarily comply with the DMA rules after the new rules went into effect on 7 March.  Nevertheless, ByteDance pledged last month to continue its legal challenge against TikTok’s gatekeeper designation. 

   

W/C Monday, 29 April – European Commission to propose 14th sanctions package against Russia 

This week, the European Commission is set to introduce its 14th sanctions package aimed at curtailing Russian military support and energy revenues amidst the ongoing conflict in Ukraine. The 13th sanctions package was adopted in late February and largely served a symbolic purpose in order to coincide with the two-year anniversary of Russia’s invasion of Ukraine. The new sanctions package is expected to target both military and energy sectors extensively. 

More specifically, the Commission plans to impose sanctions on ships delivering North Korean military equipment to Russia, which Western countries have accused of fueling Moscow’s war efforts with weapons, including ballistic missiles and munitions. Additionally, around 40 companies are likely to be added to the EU’s list of sanctioned entities. This list will include Russian firms involved in procuring military equipment and third-country companies that have supplied Russia with electronics, semiconductors, and chips with potential military applications. 

In the energy sector, the focus is expected to be given to countering the circumvention of the G7 oil price cap by targeting oil tankers from the so-called "shadow fleet" that transport Russian oil outside the G7 restrictions. Moreover, the Commission is discussing measures to halt Russian liquefied natural gas (LNG) exports to the EU, which have paradoxically increased despite the war. It will likely propose a ban on the onward sale of Russian LNG from EU ports and an import ban on three new Russian LNG terminals. However, existing LNG imports will continue for the time being due to concerns in some EU member states about rising energy prices. 

The Commission is poised to informally discuss the proposal with the EU permanent representatives on Wednesday, before presenting it to the Council for debate. On the battleground, the situation has been intensifying in recent weeks, following a winter stalemate. Although neither side has managed to make significant territorial gains, Ukraine is increasingly outgunned, facing front-line pressures, with Ukrainian forces withdrawing from key positions in Donetsk. 


W/C Monday, 29 April – Scottish First Minister faces no-confidence vote following fallout of power-sharing deal with the Greens  

Scottish First Minister Humza Yousaf is facing a no-confidence vote this week after his preemptive termination of the Scottish National Party’s (SNP) power-sharing deal with the Greens. The fallout occurred amid speculation that the Greens were about to withdraw due to a watering down of environmental commitments made by the SNP. Accused of acting to avoid appearing weak, Yousaf defended his decision, suggesting that while the Bute House agreement with the Greens had achieved its purpose, he aims to continue cooperation informally. 

The forthcoming confidence vote was initiated by the Scottish Conservatives. Given that the SNP has 63 MSPs in favour and 64 opposition MSPs against, the vote’s outcome depends crucially on Ash Regan, an Alba MSP who defected from SNP last year, after losing to Yousaf in the leadership race.  If Yousaf is ousted, the Scottish Parliament has 28 days to appoint a new leader; failure to do so could trigger an extraordinary election. Opinion polls show the SNP’s lead over Labour has narrowed significantly and an election in these circumstances may well benefit the latter.  

Overall, the situation presents an advantageous scenario for the Labour Party, particularly in the context of upcoming general elections. The SNP’s potential leadership shakeup could diminish its dominance in Scottish politics and allow Labour to bolster its power in Westminster, by regaining seats in Scotland. 


Tuesday, 30 April – Eurostat flash inflation estimate for April 

Tomorrow, Eurostat will release its Eurozone flash inflation estimate for April. Inflation dropped to 2.4% in March, down from 2.6% the previous month, continuing its overall downward trend and moving closer to the ECB’s 2% target. At its April meeting, the ECB decided to keep rates unchanged for a fifth consecutive time, at a record high of 4%. However, the ECB also gave its strongest signal that a rate cut should be expected in its next monetary policy meeting in June, stating that ‘’it would be appropriate to reduce the current level of monetary policy restriction’’. 

 

In her statement, ECB President Christine Lagarde also highlighted the eurozone’s differing economic conditions from the US, asserting that despite the latter’s recent inflation resurgence, the ECB is ‘’data-dependent’’ not ‘’Fed-dependent’’. Earlier this month, Francois Villeroy de Galhau, Bank of France Governor and ECB member, also confirmed in an interview that ‘’barring a major surprise we should cut rates because we are now confident enough and increasingly confident about the disinflationary path in the euro area’’. Therefore, the potential rate cut, planned for 6 June, would precede any anticipated Fed adjustment.  

 

In March, the ECB lowered its inflation forecasts for the next two years, projecting that the headline rate will run at 5.4% in 2023, falling to 2.3% in 2024 and 2.0% in 2025. Nevertheless, elements of the ECB GC remain wary of inflation due to a series of factors, including elevated wage growth, scrutiny on corporate profits, and geopolitical volatility threatening supply chains. This means that despite the imminent rate cut of June, the ECB will most likely remain cautious about committing to further reductions, given the potential for inflation surprises.  

 

Tuesday, 30 April – EU Court of Justice advocate general to issue opinion on case concerning the governance of football transfers in Europe 

On Tuesday, the EU Court of Justice Advocate General Maciej Szpunar will publish his opinion on a case concerning football players’ contracts with clubs. The case revolves around Lassana Diarra, a former football player who allegedly terminated his contract with Lokomotiv Moscow without just cause. Diarra refused a salary reduction and stopped attending training, leading to his dismissal.  

 

Lokomotiv sought damages for breach of contract, resulting in the International Association Football Federation (FIFA) finding in favour of Lokomotiv and against Diarra.  This resulted inter alia in the imposition of FIFA’s Regulations on the Status and Transfer of Players (RTSP) which prohibit a new club from registering a professional footballer who has terminated his previous contract without just cause and permit the former club not to deliver the international transfer certificate (‘ITC’) required to register the player, where there is a contractual dispute between that club and the player concerning the termination of the previous contract.  The RSTP also provide that a player and his new club are jointly and severally liable to pay the compensation due to the club whose contract with the player has been terminated without just cause. 

 

Diarra argued successfully at a commercial court in Charleroi that as a result of RTSP, he was unable to take up offers from Inter Milan, Celtic, West Ham United and Charleroi, who ultimately backed out of signing Diarra due to the risk that they would have to pay compensation to Lokomotiv Moscow.  The commercial court awarded him €60,000 in damages related to the three months' salary he would have earned if Charleroi had signed him in March 2015 and in its 22 page ruling stated that "There is no doubt that the European Commission would have never validated such a system, which amounts to preventing a worker dismissed by his employer from finding a new job". 

 

FIFA appealed the ruling to a court in Mons who referred the case to the EU Court of Justice for a preliminary ruling.  The court will be asked to opine on whether FIFA’s RTSP contravene both Article 45 TFEU concerning the Freedom of Movement of Workers within the European Union and Article 101 TFEU which seeks to prohibit anti-competitive practices.   

 

The Advocate General’s ruling is not binding but the Court tends to follow their recommendations.  While the outcome of the Diarra case is unlikely to be as impactful as the Bosman ruling it could nevertheless require a change in the governance of football transfers across Europe.   

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