Week in Review (15 March)

Apple back in DG Comp crosshairs following Spotify complaint

Fresh competition trouble emerged for Apple on 11 March, when Spotify lodged an antitrust complaint with DG Comp, alleging that Apple had deliberately stifled music streaming competition. Specifically, Spotify have taken issue with the way that Apple has managed its dual role as a distributor, through its App Store and operating system, and as a competitor – through its Apple Music Service.

On 14 March Margrethe Vestager said that DG Comp was taking the complaint very seriously. Nevertheless, she said that it was far too early to see what would come from the complaint. If DG Comp does ultimately opt to act, it is possible that sanctions would involve Apple having to make changes to the way in which they manage the app store. Investigations into Google, particularly a probe into the manner in which apps were bundled with Android phones, could provide a template in this regard.

Regulatory uncertainty sees securitisation fall to a ten-year low

A key aim of the European Commission’s proposed EU Capital Markets Union is to increase securitisation issuance which according to the Commission, if built up again to the pre-crisis average, would generate up to €150 billion in additional funding for the economy.

However, uncertainty around Brexit and what the final securitisation framework looks like, has seen securitisation levels fall to €3 billion so far in 2019, representing the slowest start to a year since 2009. Traditional bank financing looks set to continue to dominate in Europe – a trend which will have been strengthened by the ECB’s recent TLTRO announcement.

Right-wing parties begin to jostle for position ahead of Spanish election

Opinion polling for the forthcoming Spanish general election continues to point towards further fragmentation of the country’s political landscape. The system of about four parties will shift towards five parties.

In the context of an election fought on nationalistic grounds a PP-Ciudadanos-Vox arrangement – similar to that agreed in Andalusia – becomes a likely option to form the government. The questions will be on the precise role of Vox, and on the sharing of government positions between parties.

Seemingly aware of this, in the last week PP leader Pablo Casado has worked to carve out firmer position for his party on the right. Casado has appealed to ‘new parties’ – i.e. Vox – to consider whether they should run candidates in every constituency, particularly small rural ones. Following Casado’s appeal Vox has reiterated that it will present candidates in every constituency. While this could lead to friction between the parties, the affair ultimately firms up our view that a right-wing based government will emerge following the election.