ECB moves economic assessment to the downside
At its 24 January meeting, the ECB Governing Council (GC) opted to make no changes to its forward guidance on Monetary Policy. Despite this, the GC’s economic assessment took account of changing economic circumstances stating that ‘The risks surrounding the euro area growth outlook have moved to the downside.’
The manner in which the ECB will react to this will depend on the nature of the economic weakness, with two schools of thought currently existing in the GC. While some worry about a broader based slowdown, others see it as something transient that will pass as China gets over its economic blip and as Brexit outcomes become clearer, among other factors.
As to the ECB response, a TLTRO remains a possibility but will require the emergence of a greater consensus in the GC. Draghi also suggested that persistent market expectations of a delayed rate hike would eventually need to be reflected in the forward guidance. On foot of this, we now firm our view that a hike will be delayed until 2020, and that this decision will be reflected in changed forward guidance in the coming months.
French fine and Schrems complaints bring GDPR enforcement into focus
On 21 January the French Data Protection authority issued Google with a €50 million fine – the largest yet levied under GDPR. The French authorities found that Google’s advertising policy had committed the following breaches of the GDPR:
- Breach of transparency and information obligations
- Failure to provide a legal basis for advertising personalisation
Google will appeal the decision before France’s highest administrative court – the Council of State – with the result likely to further determine how consent to gather data operates under the GDPR. This could have an effect on the way in which operators structure their online business.
The French fine is also unlikely to be the last high profile GDPR finding in 2019. On 18 January privacy campaigner Max Schrems, who previously succeeded in challenging the US-EU Safe Harbor data sharing scheme, issued complaints against tech companies running video streaming services.
Reprieve for UberX in Brussels
In our 7 January report we highlighted the decision of the commercial court in Brussels to uphold its 2015 ban on Uber offering taxi services without a licence in Brussels. On 23 January a separate court – the French speaking tribunal of commerce – ruled that drivers using Uber’s X service do not have to be considered as employees.
The decision means that, despite the earlier finding of the commercial court, Uber will be able to continue operating UberX in Brussels.