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Tuesday, 7 January – Eurozone flash inflation estimate for December
Tomorrow, Eurostat will release its Eurozone flash inflation estimate for December.
In September, inflation eased to 1.7%, falling below the European Central Bank’s (ECB) target of 2% for the first time in over three years. Since then, it has shown signs of rebounding, with November marking the second consecutive uptick to 2.3%, following October’s rise to 2.0%. This upward trend is attributed to stabilising energy prices and resilient wage growth. However, the eurozone economy remains fragile, with growth for 2024 forecast at just 0.7%, compounded by Germany’s poor economic performance, US tariff concerns, and the political fallout from the collapse of France's government. Against this backdrop, the ECB’s Governing Council (GC) made another modest interest rate cut of 25 basis points in its previous monetary policy meeting on 12 December, trimming its deposit rate to 3%, following a series of quarter-point cuts initiated in June to counter slowing growth and subdued inflation.
Following its dovish turn in late 2024, the ECB has indicated that it will maintain a cautious pace of rate cuts over the coming year, aiming to stabilise the eurozone’s faltering economy while ensuring inflation remains aligned with its 2% medium-term target. Notably, in its December meeting, the ECB dropped its reference to maintaining a “restrictive” monetary policy, signalling that more rate cuts will follow in 2025.
Market expectations suggest the ECB will reduce rates further to between 1.75% and 2% by September 2025, a scenario supported by the ECB’s recent acknowledgment of ongoing weak economic momentum. Furthermore, wage tracker date released by the ECB on 18 December suggests that average negotiated wage growth will ease to 2.7% in 2025, from 4.8% in 2024. This will give further comfort to members of the ECB GC wishing to shift the focus from inflation control to helping economic growth.
Thursday, 9 January – Deadline for feedback on draft orders issued to Apple under DMA
The European Commission has set a 9 January deadline for feedback on draft orders issued to Apple under the Digital Markets Act (DMA). These orders, issued on 18 December, focus on interoperability issues, requiring Apple to make its devices, such as headsets and smartwatches, function more seamlessly with competing products. The measures also address access for third-party software developers, aiming to ensure that external software integrates effectively within Apple’s ecosystem.
The draft orders are part of the ongoing DMA probes into Apple’s compliance with its gatekeeper obligations. These investigations, launched last March focus on Apple’s alleged violations, including restricting interoperability and limiting competition through its App Store policies. Apple, designated as a gatekeeper under the DMA due to its market dominance, is subject to strict rules aimed at preventing the abuse of its position and fostering competition.
The DMA, a landmark regulation, was introduced to address entrenched market dominance by Big Tech firms. It imposes obligations on companies with an annual turnover exceeding €7.5 billion, a market capitalisation of over €75 billion, and 45 million active EU users. These firms are required to share data, provide interoperability with rival services, and refrain from self-preferencing practices. Other gatekeepers include Meta, Alphabet, ByteDance, Microsoft, and Booking.com, with Apple facing some of the most high-profile enforcement actions to date.
If Apple does not comply with the draft orders, the measures could become legally binding by March 2025, setting a precedent for how the DMA addresses anti-competitive practices. Ribera’s handling of these cases, along with the ongoing ones into Meta and Alphabet, will shape the future of DMA enforcement and influence the behaviour of all designated gatekeepers.
Friday, 10 January – Deadline for a Commission decision on Synopsys’ $34 billion acquisition of software maker Ansys
In recent weeks, the Commission has been progressing its investigation of Synopsys’ $34 billion acquisition of Ansys, a deal involving chip design technologies. A decision on whether to clear the deal or escalate the review into a second phase was pushed back by a month into 10 January, after the two sides submitted a series of remedies on 9 December.
In addition, in September, Synopsys, the US-based chip design software company, pre-emptively offered to sell its optical solutions business to Keysight Technologies to ease concerns. The current regulatory focus is on potential conglomerate risks, particularly Synopsys’ ability to bundle chip design tools in ways that could disadvantage competitors.
The companies aim to close the deal in the first half of 2025, depending on regulatory approval – the deal is also currently under review by the competition authorities in the UK and the US. Notably, on 20 December, the UK’s Competition and Markets Authority (CMA) warned that the potential acquisition could reduce competition in the supply of specific semiconductor chip design and light simulation products, which are crucial for various products, including consumer electronics, medical devices, and automobiles. From an EU viewpoint, the deal will also serve as one of the first high-profile test cases for the DG COMP under its new Competition Chief, executive vice-President Teresa Ribera.
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