Week Ahead (7 August)
Monday, 7 August – European Commission to decide whether to launch in-depth investigation for Adobe-Figma deal
Today, the European Commission will decide whether to proceed with the launch of an in-depth investigation (Phase 2) for Adobe’s $20 billion takeover bid for software maker Figma.
The proposed acquisition has been under scrutiny by the European Commission since February, when a ‘’Phase 1’’ investigation was launched over anti-competition concerns, even though the deal falls short of the bloc’s turnover threshold for a review. The move reflects the Commission’s worries about the implications of big tech firms acquiring smaller innovative rivals.
Last week, Adobe opted against submitting any early concessions to the Commission’s review of the deal which could have secured conditional approval. As a result, the launch of an in-depth investigation is widely expected today, possibly extending the deadline to December. Meanwhile, last month the UK Competition Markets Authority (CMA) announced its own in-depth investigation of the deal, highlighting the companies’ close competition ‘’in the all-in-one screen design market’’ and raising concerns about reduced competition if the merger is approved.
Wednesday, 9 August – Deadline for comments on Broadcom’s acquisition of VMWare, following the UK’s provisional clearance
On Wednesday, a deadline for submission of comments on the UK’s provisional approval of Broadcom’s $61 billion acquisition deal of VMWare expires.
Broadcom is a US chipmaker and provider of infrastructure software products while VMware is a software provider, specialising in cloud computing. The acquisition serves Broadcom’s quest to diversify Broadcom aims to diversify into enterprise software but has resulted in increasing regulatory scrutiny across different markets. On 19 July, the UK’s Competition and Markets Authority (CMA), provisionally cleared the deal, after launching an in-depth investigation in March, and invited interested parties to submit comments until 9 August. A final report is expected by 12 September.
Last month, Broadcom secured the EU’s conditional approval for the deal, after offering rival companies access to its intellectual property used for building crucial computer hardware. The US competition agency is also scrutinising the deal with its findings expected to be published later in August.
Thursday, 10 August – Deadline for trade groups and tech companies to provide feedback on EU’s proposal for Standard Essential Patents regulation
As the deadline approaches on 10 August, trade groups and tech companies are still actively providing feedback to the European Commission on the proposal to regulate royalty rates on Standard Essential Patents (SEPs). The proposal aims to reduce lengthy legal disputes by requiring patent-holding companies to engage in fair, reasonable, and non-discriminatory (FRAND) negotiations with licensees before resorting to legal action. The EU's Intellectual Property Office would oversee this process through a "competence center."
Nevertheless, some patent-holding companies are expressing dissatisfaction with the proposed rules. Seventeen groups have already submitted comments, with 12 of them being received in the last month. Companies specialising in SEPs, like Dutch company Philips, argue that the current draft proposal will slow down licensing negotiations and diminish the value of SEPs if implemented as is. However, implementers such as the German auto association Verband der Automobilindustrie claim that the proposal’s FRAND-setting requirement would be crucial for settling disputes without resorting to court. Meanwhile, major patent holders like Nokia, Qualcomm, and Ericsson have yet to submit their own comments. However, they have already echoed concerns that the proposed rules may hinder investment and are even questioning the need for such regulations altogether.
Following the feedback collection process, lawmakers and EU government officials will proceed with analysing the inputs and develop their own positions starting from September.
Thursday, 10 August – CSO to publish consumer prices for the month of July
The Consumer Price Index (CPI) data will be published on Thursday by the Central Statistics Office (CSO) revealing the latest trends in consumer pricing for July.
The CPI for the month of June was 6.1%, down from 6.6% in May, a significant decline from Ireland’s peak inflation of 9.2% in October 2022.
This week’s release of the CPI for the month of July should confirm the downward trend of consumer prices as evident in the flash estimate of the EU’s Harmonised Index of Consumer Prices (HICP), where prices were 4.6%. The data from the flash estimate shows that energy prices in the last 12 months decreased by 1.35%, while food prices increased by 8.6%.
Friday, 11 August – ONS GDP monthly estimate for June in the UK
On Friday, the Office of National Statistics (ONS) will release its GDP monthly estimates for June. Last month’s release for May demonstrated a 0.1% contraction, after a growth of 0.2% in April. This contraction was partially attributed to the additional bank holiday for the King's Coronation, which resulted in one fewer working day than usual during the month.
Despite the sluggish growth of 0.1% in the past quarter, the UK’s economy is projected to perform better in Q3 and Q4 2023. In May, the International Monetary Fund (IMF) revised its forecast for the UK economy this year, stating that it now expects the country to avoid a recession. Earlier this year, it forecasted a contraction of 0.3% in 2023 but it has now upgraded its growth forecast to 0.4%.
Nevertheless, the UK continues to battle with high levels of inflation. The annual inflation rate slowed to 7.3% in June, down from 7.9% in May, but remains the highest inflation rate among G7 countries and far above the Bank of England’s (BoE) 2% target. Against this backdrop, the Bank’s Monetary Policy Committee announced last Thursday its 14th consecutive rate hike, raising interest rates by a quarter-percentage point to 5.25%, a decision expected to weigh on economic growth in the coming months.