The three European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) have issued their Autumn 2023 Joint Committee Report on risks and vulnerabilities in the EU financial system. The Report underlines the continued high economic uncertainty. The ESAs warn national supervisors of the financial stability risks stemming from the heightened uncertainty, and call for vigilance from all financial market participants. Continue reading…

The European Commission has re-imposed a fine of around €376.36 million on Intel for a previously established abuse of dominant position in the market for computer chips called x86 central processing units (‘CPUs’). Intel engaged in a series of anticompetitive practices aimed at excluding competitors from the relevant market in breach of EU antitrust rules. In 2009, the Commission fined Intel €1.06 billion after finding that Intel abused its dominant position in the market for x86 CPUs. The Commission decision was based on findings that Intel had engaged in two specific forms of illegal practices by: (i) giving wholly or partially hidden rebates to computer manufacturers on condition that they bought all, or almost all, their x86 CPUs from Intel (so-called ‘conditional rebates’); and (ii) paying computer manufacturers to halt or delay the launch of specific products containing competitors’ x86 CPUs and to limit the sales channels available to these products (so-called ‘naked restrictions’). Continue reading…

The European Central Bank (ECB) has published the results of its second economy-wide climate stress test. The results show that the best way to achieve a net-zero economy for firms, households and banks in the euro area is to accelerate the green transition to a rate that is faster than under current policies. “We need more decisive policies to ensure a speedier transition towards a net-zero economy in line with the goals of the Paris Agreement. Moving at the current pace will push up risks and costs for the economy and financial system. There is a clear need for speed on the road to Paris,” says ECB Vice-President Luis de Guindos. Continue reading…

The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has recently published the second Trends, Risks and Vulnerabilities (TRV) Report of 2023. ESMA sees that financial markets are adapting to the new economic environment of durably higher inflation and interest rates, however risks remain high in ESMA’s remit. Markets are set to remain very sensitive to potential deteriorations in economic fundamentals or risks in the financial sector. Continue reading…

Yesterday, the European Commission adopted a key package of initiatives to reduce tax compliance costs for large, cross-border businesses in the European Union. The proposal, called “Business in Europe: Framework for Income Taxation” (BEFIT), will make life easier for both businesses and tax authorities by introducing a new, single set of rules to determine the tax base of groups of companies. This will reduce compliance costs for large businesses who operate in more than one Member State and make it easier for national tax authorities to determine which taxes are rightly due. The new, simpler rules could reduce tax compliance costs for businesses operating in the EU by up to 65%. Continue reading…

The European Commission welcomed the recent adoption by the Council of further targeted restrictive measures arising from Russia’s illegal invasion of Ukraine, and in response to Belarus’s involvement in the aggression. In particular, the new measures create a closer alignment of EU sanctions targeting Russia and Belarus and will help to ensure that Russian sanctions cannot be circumvented through Belarus. Continue reading…

The European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) has recently published their Progress Reports on Greenwashing in the financial sector. See EBA, EIOPA, and ESMA reports. In these reports, the ESAs put forward a common high-level understanding of greenwashing applicable to market participants across their respective remits – banking, insurance and pensions and financial markets. Continue reading…

The Commission welcomes the agreement made on 7 July at the International Maritime Organisation (IMO) to revise its 2018 strategy on reducing greenhouse gas (GHG) emissions from ships. The agreement is a milestone to cut the carbon footprint of international maritime transport and ensure that the shipping sector makes a fair contribution to achieving the Paris Agreement targets, commensurate to its 3% share of global emissions. Now that the agreement is reached, it is important to start implementation as soon as possible. Continue reading…

The European Commission has opened a formal investigation to assess whether Microsoft may have breached EU competition rules by tying or bundling its communication and collaboration product Teams to its popular suites for businesses Office 365 and Microsoft 365. Microsoft is a global technology company offering productivity and business software, cloud computing and personal computing. Teams is a cloud-based communication and collaboration tool. It offers functionalities such as messaging, calling, video meetings, file sharing and brings together Microsoft’s and third-party workplace tools and other applications. The coronavirus outbreak accelerated a shift to remote working as well as businesses’ transition to the cloud and the adoption of cloud-based software for communication and collaboration. The transition to the cloud has enabled the emergence of new market players and business models offering customers the ability to use multiple types of software from different providers, without the need to maintain an in-house data centre. Cloud-based software, including the products under investigation, are typically distributed on a subscription basis. Microsoft includes Teams in its well-entrenched cloud-based productivity suites for business customers Office 365 and Microsoft 365. The Commission is concerned that Microsoft may be abusing and defending its market position in productivity software by restricting competition in the European Economic Area (‘EEA’) for communication and collaboration products.
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Dr Sabine Mauderer, Member of the Executive Board of the Deutsche Bundesbank, delivered a keynote speech at the Keynote Oxford Sustainable Finance Summit 2023, Oxford. Walking down Oxford High Street, I was reminded of a picture by the great English painter William Turner. I am sure you are familiar with the painting. It is entitled High Street, Oxford. It depicts University College on the left, All Souls College on the right, and Carfax Tower in the distance. On my morning walk, I was startled by how little has changed since the early 19th century, when the painting was first exhibited. The buildings are still in place and they appear very well kept. Yet, at the same time, so much has changed. There are buses, cabs, modern amenities and so forth. It is precisely this sort of progress, which has been fuelling another type of change: Climate change. Continue reading…