Week Ahead (5 February)

W/C Monday, 5 February – European Commission likely to announce decision on Korean Air’s acquisition of Asiana Airlines 

This week, the European Commission is likely to announce its decision on whether to allow Korean Air’s acquisition of rival company Asiana Airlines, following the submission of a series of concessions. Announced in 2020, the deal reflects a broader trend of consolidation in the airline industry.  It will also be the third such deal the European Commission has ruled on in the past weeks, following last month’s launch of in-depth investigations into IAG’s acquisition of Air Europa and Lufthansa’s purchase of a controlling stake in ITA Airways. 

In contrast with these two deals, the two Korean companies are anticipated to receive Phase 1 approval from the EU for their proposed acquisition. To address antitrust concerns, Korean Air offered to sell Asiana's cargo business, a departure from traditional remedies involving airport slots and access to frequent flyer programs. T'way Air, a South Korean budget airline, is expected to acquire Asiana's cargo business, aligning with the EU's preference for an Asian buyer. The routes to be divested include those to Barcelona, Frankfurt, Paris, and Rome. 

W/C Monday, 5 February – European Commission likely to rule on $6.4 billion private equity investment in Vantage Data Centers 

Also this week, the European Commission is likely to announce whether to allow a $6.4 billion joint private equity investment by private equity firms Digital Bridge and Silver Lake into Vantage Data Centers, a leading global provider of hyperscale data centre campuses. 

According to the announcement of the deal, this funding, spanning North America and EMEA supplements the previously announced €1.5 billion investment by AustralianSuper in Vantage EMEA. The additional investment aims to enhance Vantage's strategic capabilities, allowing it to collaborate with global hyperscalers to address the increasing demand for cloud and artificial intelligence services. 

Although the Commission’s deadline for Phase 1 of the deal is on 14 February, a decision may come this week. DG Comp may clear the deal after the completion of the preliminary review or initiate a four-month investigation if serious concerns about competition distortion arise. 

Wednesday, 7 February – General Court to rule on Ryanair challenge to state aid granted to KLM 

On Wednesday, the EU General Court will rule on Ryanair’s legal challenge (T-146/22) against the European Commission’s readopted decision to clear €3.4 billion of Dutch state aid for KLM, the flag carrier of the Netherlands. The measure, originally approved in July 2020, was considered by the Commission as an ‘’urgent liquidity support’’ in the context of the disruptions caused by the Covid-19 pandemic, with EU competition chief Vestager recognising KLM’s ‘’key role for the Dutch economy in terms of employment and air connectivity’’. The scheme was approved under the State aid Temporary Framework, adopted by the Commission in March of the same year. 

However, in 2021, the General Court annulled the Commission’s green light, citing a lack of reasoning with regards to the determination of the beneficiary of the measure in question. Nevertheless, it also suspended the effects of the annulment until the readoption of a new decision by the Commission. Subsequently, the Commission adopted a new decision in July 2021, reiterating that the state aid was compatible with the internal market. As a result, Ryanair once again referred the case to the General Court, claiming that these measures contravene the principle of non-discrimination. 

In a similar case concerning KLM’s parent company in December 2023, Air France-KLM, the General Court declared the €7 billion COVID-19 state aid granted by the French state to the company in 2020 and €4 billion in 2021 as illegal. Overall, Ryanair has filed 16 lawsuits against the Commission for allowing state aid to airlines across Europe, including Lufthansa, Austrian Airlines and TAP.  

Wednesday, 7 February – Plenary vote on Instant Payments Regulation 

On Wednesday, the European Parliament’s plenary session is scheduled to vote on the Instant Payments Regulation.  Unveiled by the European Commission last October, the proposal aims to force banks to offer instant payments in euros at no extra cost. This would allow consumers to transfer money at any time of the day or any day of the week, within less than 10 seconds, in contrast with the traditional model of card payments or credit transfers which can take up to three business days for intra-EU transactions.  

Last November, the Council and the European Parliament reached a provisional agreement on the Instant Payments proposal, concluding the trilogue negotiations launched on 20 July, and paving the way for this week’s final vote. A compromise on the timeline for non-Eurozone banks to set up their instant payment systems – alongside the issue of granting fintechs access to the Eurozone’s payment infrastructure - was key to breaking the impasse in interinstitutional talks. 

Friday, 9 February – Deadline for 17 VLOPs to respond to the Commission’s latest request for information under the DSA 

By Friday, 17 tech platforms designated under the Digital Services Act as Very Large Online Platforms (VLOPs) will have to provide details over expert data access ahead of EU elections. 

In January, the European Commission sent formal Requests for Information (RFI) regarding algorithmic transparency under the Digital Services Act (DSA) to 17 major online platforms designated as "very large online platforms" (VLOPs), including AliExpress, Amazon Store, Facebook, Google Search, Instagram, TikTok, and YouTube. These RFIs relate to the DSA's obligation for platforms to provide data access to eligible researchers investigating systemic risks in the EU. The Commission emphasised the significance of empowering researchers, particularly ahead of the upcoming European elections in June, to detect and monitor larger trends and content that could impact the electoral process. Notably, Elon Musk’s X was not among the platforms listed in these RFIs. However, the platform is already under investigation by the European Commission under the new rules. 

Overall, the DSA, which entered into force in August 2023, aims to force tech companies to increase advertising transparency, take more responsibility for illegal content on their platforms, including any content promoting terrorist organisations, and improve data access.  Sending a formal request for information is a preliminary step before the potential initiation of a formal investigation, which could result in fines of up to 6% of X's global revenue. The Commission has sent such formal requests for information to Meta, TikTok, and YouTube, asking them to provide details regarding their efforts to combat the spread of illegal content, disinformation, and hate speech on their platforms, in the wake of growing concerns surrounding the Israel-Hamas conflict and its associated disinformation.