The COVID-19 pandemic has accelerated the trend toward digitalisation of retail financial services.
This report examines whether the COVID-19 pandemic changed the ways in which individuals and firms engage with innovative financial service providers and traditional financial incumbents. Its main finding is that the pandemic has accelerated the trend toward digitalisation of retail financial services.
Comprehensive data on market shares of FinTechs, BigTechs and incumbent financial institutions in retail digital services are scarce. However, available proxies and insights from market participants suggest that BigTechs in particular have further expanded their footprint in financial services.
The report discusses benefits from accelerated digitalisation of financial services during the pandemic, and whether those observed changes may be structural or revert back to pre-pandemic levels once conditions normalise. The report also considers the financial stability implications of this accelerated trend towards digitalisation, such as potential market dominance of certain players, and the related concerns around incumbent financial institutions that may be digital laggards.
The report outlines the range of policy actions authorities have taken during the pandemic that may impact market structure and the role of FinTechs, BigTechs and incumbent financial institutions. These actions relate to financial stability, competition, data privacy and governance issues. The report also outlines parallel international work on third-party dependencies of the financial sector, for instance in cloud computing.
The report stresses the importance of cooperation between regulatory and supervisory authorities, including those charged with overseeing the bank and non-bank sectors, and where relevant, with competition and data protection authorities.
Compliments of the Financial Stability Board.
The post FSB | FinTech and Market Structure in the COVID-19 Pandemic: Implications for financial stability first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

Introductory statement by Fabio Panetta, Member of the Executive Board of the ECB, at the Committee on Economic and Monetary Affairs of the European Parliament |

Thank you for inviting me to update you on the digital euro project and the progress made since we last met in November.
We have previously discussed the broad policy objectives associated with a digital euro.[1] Today, I would first like to highlight some important features which, by making a digital euro attractive to citizens and merchants alike, would help us to achieve these objectives.
I will do so by discussing the findings of the focus groups we held – which we are publishing today on the occasion of this hearing[2] – and our analysis of “use cases” for the digital euro. In the jargon of payments, this term refers to the payment segments that a digital euro could serve.
I will then present our preliminary findings on how to reconcile the right to confidentiality with the public interest in countering illegal activities, continuing the discussion we had a year ago.[3]
Meeting the payment needs of Europeans today and tomorrow
The primary aim of a digital euro is to maintain the accessibility and usability of central bank money in an increasingly digitalised economy. But for a digital euro to fulfil this role, people need to be able and willing to use it.
From the outset, I have stressed that a digital euro can only be successful if it meets the payment needs of Europeans today and in the future.
The findings of our focus groups provide valuable input here, though we are mindful of the natural limitations of qualitative analyses of this kind.[4]
The focus groups suggested that people see the ability to “pay anywhere” as the most important feature of a new digital payment instrument. This emerged in all countries and age groups. It means that, ideally, all merchants across the euro area – both in physical stores and online – would need to accept a digital euro. 20 years ago, the introduction of euro banknotes made it possible for us to pay with physical euros anywhere in the euro area. So it is no surprise that people expect to be able to use the digital complement to banknotes wherever they can pay digitally or online.
Instant, easy, contactless payments, especially for person-to-person payments, were the second-most valued feature. Cash has so far remained dominant in person-to-person payments. And we will ensure that people continue to have access to cash. But the focus groups confirm previous findings: preferences are shifting towards digital payments.[5] The experience of countries both inside[6] and outside[7] the euro area shows that contactless person-to-person payments may grow very rapidly when convenient digital solutions become available.
Participants in the focus groups would like to see a solution that would allow instant person-to-person payments regardless of the platform used by the payers and payees. Today, making mobile payments to friends at the click of a button – for example when splitting bills in restaurants or collecting money for a gift – is often easiest when everyone is using the same app. Participants therefore envisaged a one-stop solution that would reduce the need for multiple cards, devices and identification methods and give them access to a range of payment options on a single device.
Our focus groups also confirmed what I called “rational inattention” during our exchange in November.[8] People tend not to pay attention to – or understand – the difference between the digital euro and the euros they already spend using private digital means of payment. For the financial system to work smoothly, public money and commercial bank money are meant to be fully interchangeable yet distinguishable. People do not think twice about storing and using their money via private intermediaries because they know they can regularly go to the cash machine and withdraw banknotes without any problems. This provides tangible proof that their money in the bank is safe. Convertibility with central bank money on a one-to-one basis therefore anchors people’s confidence in private money, supporting its wide acceptance.[9]
The findings from focus groups were also used to validate our selection of possible use cases of a digital euro.[10] We identified them by looking both at our policy objectives and at the importance of different market segments.
Physical stores are the most important market segment for digital payments, accounting for more than 40 billion transactions in the euro area in 2019.[11] E-commerce payments are less numerous but are expected to continue to grow rapidly in the coming years.[12] These segments are served by a multitude of payment solutions, often with only domestic reach. So far, they have been dominated by non-European providers and technologies.[13]
Given their importance now and in the future, payments in e-commerce and physical stores, as well as person-to-person payments, are natural candidates to be prioritised among the possible use cases of a digital euro. The digital euro could also be used for payments between governments and individuals, for example to pay out public welfare allowances or to pay taxes.[14]
If a digital euro offered these payment options, we would achieve network effects, continue to ensure public access and full usability of central bank money for digital payments, and help to address sovereignty concerns. In the next steps of our investigation phase, we will therefore focus on assessing the actual feasibility of these use cases.
But we will leave the door open to the inclusion of other use cases in the future. We are monitoring emerging trends such as machine-to-machine payments.[15] And we are looking into solutions to respond to these trends in future releases of a digital euro.[16]
In the coming months, and building on the findings of the focus groups, we will carefully investigate how to design an attractive digital euro product that responds to the expectations of payers and payees alike.
Co-legislators have a key role to play. For instance, the ability to pay with digital euro anywhere could be fostered by giving it legal tender status. We are thoroughly and carefully analysing this issue together with the European Commission. We stand ready to discuss the matter further with you, also on the basis of the outcome of the upcoming consultation on digital euro the Commission has recently announced.
The trade-offs between privacy and other EU policy objectives
The legal framework will also be key when it comes to privacy, which is one of the most important design features of a digital euro.[17]
The public consultation we conducted between October 2020 and January 2021 indicated that protecting privacy is key, so that the digital euro helps to maintain trust in payments in the digital age.[18] Focus group participants also said they would appreciate options that give them control over their personal data.
It is not surprising that people expect payments in digital euro to guarantee high privacy standards. As payments go digital, private companies are increasingly monetising payment data.
We already provide cash, the payment instrument with the highest level of privacy. We are committed, as a public institution, to retain people’s trust in this area if a digital euro is issued.
At the same time, we need to assess privacy in the context of other EU policy objectives, such as anti-money laundering (AML) and combating the financing of terrorism (CFT). Concerns about regulations being circumvented, including to bypass international sanctions, have become even more prominent recently, notably in relation to crypto-assets.
Over the past few months we have investigated various options to address the trade-off between retaining a high degree of privacy and other important public policy objectives.[19]
Full anonymity is not a viable option from a public policy perspective. It would raise concerns about the digital euro potentially being used for illicit purposes.[20] In addition, it would make it virtually impossible to limit the use of the digital euro as a form of investment, but this limitation is essential from a financial stability perspective.[21]
This means that users would need to identify themselves when they start using the digital euro.[22] Supervised intermediaries – which are the natural candidates for distributing a digital euro – are best placed to manage this onboarding process.[23]
Moving beyond onboarding, our analysis suggests that digital euro transaction data should not be visible to the Eurosystem – or any other central entity – beyond what is strictly needed to perform its functions.[24]
In a baseline scenario, a digital euro would provide people with a level of privacy equal to or higher than that of private digital solutions. Under this set-up, personal and transaction data[25] would only be accessible to intermediaries to ensure compliance with AML/CFT requirements and relevant provisions under EU law.[26]
We have also been exploring options to go beyond this baseline and provide greater privacy, should the co-legislators decide in favour of this approach. This could allow the digital euro to replicate some cash-like features and enable greater privacy for lower-value payments, which are usually low risk in terms of money laundering, terrorism financing and violations of relevant EU law.
Consider paying “offline” in digital euro in a shop, with payer and payee in close proximity to each other. This would be very similar to making a cash payment. Should different standards apply for these two payments, even if the risk profiles are similar? Take the example of a chip that can store up to €200 in digital euro – the risk that it is used for money laundering purposes hardly seems higher than for a physical €200 banknote, especially if the chip requires biometric authentication before you can use it.
We are therefore exploring an offline functionality whereby holdings, balances and transaction amounts would not be known to anyone but the user. To contain the risks, these balances and private offline payments would have an upper limit.
In general, a greater degree of privacy could be considered for lower-value online and offline payments. These payments could be subject to simplified AML/CFT checks, while higher-value transactions would remain subject to the standard controls.[27]
If greater privacy were to be enabled for lower-value payments in digital euro, it should apply to transactions anywhere in the euro area. This would require a harmonised framework for simplified checks, as foreseen in the European Commission’s AML/CFT package from July 2021.[28]
The Eurosystem High-Level Task Force that I chair is exploring the technical and regulatory aspects, in close cooperation with the European Commission and the European data protection authorities.[29]
But there are important political choices to be made, which makes our dialogue with you crucial.
Conclusion
Let me conclude.
We are building a broad consensus around the policy objectives for a digital euro through our interactions with stakeholders, political authorities and other major central banks. But just recognising the political need for a digital euro will not by itself guarantee sufficient usage.
Step by step, we are getting a clearer picture of what citizens and merchants want, so we can finetune all the design features of a digital euro before any potential issuance. And co-legislators have a key role to play, for instance to enable greater privacy.
We do not want to be “too successful” and crowd out private payment solutions and financial intermediation. But the digital euro should be “successful enough” and generate sufficient demand by adding value for users.
We already have an idea of the views of the prospective users of a digital euro thanks to our discussions with focus groups. Towards the end of the year we will conduct another round of focus groups, this time giving participants a better idea of the envisaged user experience to gather their feedback.
We will also step up our dialogue with stakeholders in the coming weeks and months, listening to prospective users like consumer groups, small and medium-sized enterprises, retailers and large corporations, as well as to banks and payment service providers. We will also continue to interact with academia and think tanks.
We stand ready to discuss these consultations with you at future hearings. The alignment of European authorities and institutions, mindful of their respective mandates and independence, will be key if a digital euro is to be accepted.
I now look forward to our discussion.
Compliments of the European Central Bank.

Panetta, F. (2021), “Designing a digital euro for the retail payments landscape of tomorrow”, introductory remarks at the ECON Committee of the European Parliament, 18 November.

Study on New Digital Payment Methods, Report March 2022

See the letter to Ms Irene Tinagli MEP available on the ECB’s website.

The qualitative research was conducted by an external company in all euro area countries. To ensure the robustness of the research and to obtain a comprehensive overview of perceptions and attitudes on the topic, a carefully selected range of target audiences were interviewed across all 19 euro area countries. These included 2,160 members of the general public, 142 tech-savvy participants, 138 merchants and retailers, and 89 individuals with limited access to banking services or the internet, all of whom were interviewed using a tailored qualitative design per target group. At the same, given the qualitative nature of the research, no conclusions can be drawn with regard to the representativeness of these results for the population of the euro area.The aim of the focus groups was to explore the user perspective on new digital payment methods and potential key features which could drive the adoption of a new digital means of payment. Participants were not immediately presented with the concept of a digital euro for multiple reasons, including the complexity of the concept of central bank digital currencies in general and the concept of the digital euro specifically. Instead, the idea of a new “digital wallet” was introduced to encourage discussions about possible desirable features and functionalities of a new digital payment method in comparison with those already on the market. The digital euro was introduced towards the end of the discussion to explore the existing level of knowledge and understanding among respondents as well as their perception of a digital euro being backed by the ECB/Eurosystem.

ECB (2020), Study on the payment attitudes of consumers in the euro area (SPACE), December.

In 2019 Dutch consumers made 54% of their transactions with relatives, friends, colleagues and other acquaintances in cash and 45% electronically. Between 2018 and 2019, the share of cash fell by 5 percentage points, whereas that of electronic money transfers increased by 7 percentage points. See De Nederlandsche Bank (2020), “Shift of cash to debit card continues”, 20 April.

In Sweden, the successful introduction and rapid growth of Swish resulted in a sharp decline in the use of cash. See Sveriges Riksbank (2020), “Cash is losing ground”, 29 October.

Panetta, F. (2021), op. cit.

Panetta, F. (2021), “Central bank digital currencies: a monetary anchor for digital innovation”, speech at the Elcano Royal Institute, Madrid, 5 November.

A digital euro use case describes a payment segment that a digital euro could serve. For instance, a digital euro could be used by individuals to pay another individual (person to person), to pay e-retailers for online purchases (e-commerce) or for purchases made in a physical shop (point of sale). A digital euro could also be used by businesses to pay an individual (business to person) or to pay another company (business to business). Finally, a digital euro could be used for payments to/by the government (e.g. to pay tax or receive welfare payments) or for machine-initiated payments (e.g. to make fully automated payments initiated by a device or software based on predetermined conditions).

ECB (2020), op. cit.

Figures from Eurostat indicate that the adoption of e-commerce doubled in the euro area between 2015 and 2021. In terms of population reach, 73% of the EU population indicated that they had “bought online or ordered” “goods or services” for private use in the previous 12 months, compared with 62% in 2015. Looking at developments across countries, growth rates in e-commerce tend to be inversely correlated with e-commerce penetration. Compared with the United States (20%) and the United Kingdom (24%), e-commerce penetration is still relatively low in key European markets such as Spain (9%), France (9%) and Germany (14%), which suggests there is potential for continued growth. See, for example, McKinsey & Company (2021), “How e-commerce share of retail soared across the globe: A look at eight countries”, 5 March.

Non-European payment providers handle around 70% of European card payment transactions. See ECB (2019), Card payments in Europe, April. Furthermore, international e-payment solutions are gaining traction.

Public payments would allow direct digital payment of government subsidies and allowances to citizens that have no access to bank accounts, which could provide added value compared with existing solutions in the market.

Machine-to-machine payments are automated payments between machines. For example, autonomous vehicles, such as cars or trucks, or other industrial machines could pay for their own energy, maintenance and insurance and accept payments for their services.

Design features like privacy, programmability or an offline functionality could apply to multiple use cases.

Panetta, F. (2021), “A digital euro to meet the expectations of Europeans”, introductory remarks at the ECON Committee of the European Parliament, 14 April.

About 43% of respondents to the public consultation conducted by the ECB from 12 October 2020 to 12 January 2021 ranked privacy as the most important aspect of a digital euro, well ahead of other features.

From a user perspective, different privacy options could be envisaged. Full anonymity would mean the identity of users is unknown when they access services, with no “know your customer” (KYC) or customer due diligence (CDD) checks. Payments that would be fully transparent to the central bank would involve KYC checks during onboarding, and all transaction data and user profiling data would be fully transparent to the central bank. Payments that are non-transparent to third parties would also involve KYC checks during onboarding, but balances and transaction amounts would not be known to intermediaries or the central bank. Payments that are transparent to intermediaries would involve KYC checks during onboarding, and transaction data and user profiling data would be transparent to the intermediary for AML/CFT purposes. Selective privacy would involve KYC checks during onboarding, but there would be a higher degree of privacy for low-value transactions, while large-value transactions would remain subject to standard CDD checks.

The AML/CFT package proposed by the European Commission in July 2021 extends the ban on anonymous accounts to wallets, in line with the international standards of the Financial Action Task Force. This means that intermediaries of a digital euro will be prohibited from hosting anonymous accounts and/or wallets.

Panetta, F. (2021), “Evolution or revolution? The impact of a digital euro on the financial system”, speech at a Bruegel online seminar, 10 February.

The KYC and CDD checks currently in place include processes to determine a customer’s status, such as their political exposure, source of funds, appearance on sanction lists, etc. Users will need to go through the onboarding process when first starting to use a digital euro. One possibility could be to provide different types of accounts/wallets where the transaction amounts could be limited in proportion to KYC/CDD measures – similar to the risk-based approach taken by some other central banks.

ECB (2020), Report on a digital euro, October.

The Eurosystem would only access the minimum information required, for example for performing the settlement function (i.e. validating payments if performed by the Eurosystem), or for other central bank functions, such as supervisory and oversight tasks.

Personal data are understood as any information that relates to an individual who can be identified (e.g. name, physical and email addresses and location information). Transaction data include any information related to a specific payment, which includes payer’s wallet/account number, transaction counterparty, transaction amount, date/time/location of the transaction, and information about goods/services purchased (including billing or shipping address).

In particular, the requirements set out in the General Data Protection Regulation and the Payment Services (PSD 2) Directive.

Larger-value transactions would still be subject to standard CDD checks and it would be important to ensure that larger payments are not split into many smaller ones to circumvent checks.

The AML package proposes harmonising AML/CFT requirements, including CDD checks, across the EU. This would ensure a level playing field for CDD checks that could also benefit the digital euro. The package also proposes defining new harmonised conditions for simplified due diligence by means of a regulatory technical standard to be prepared by the future EU AML authority. Where lower risks are identified, simplified due diligence could potentially be applied, in certain circumstances, to certain digital euro transactions.

ECB (2021), “ECB intensifies technical work on digital euro with the European Commission”, MIP News, 19 January.

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The Commission is presenting today a package of European Green Deal proposals to make sustainable products the norm in the EU, boost circular business models and empower consumers for the green transition. As announced in the Circular Economy Action Plan, the Commission is proposing new rules to make almost all physical goods on the EU market more friendly to the environment, circular, and energy efficient throughout their whole lifecycle from the design phase through to daily use, repurposing and end-of-life.
The Commission is also presenting today a new strategy to make textiles more durable, repairable, reusable and recyclable, to tackle fast fashion, textile waste and the destruction of unsold textiles, and ensure their production takes place in full respect of social rights.
A third proposal aims to boost the internal market for construction products and ensure that the regulatory framework in place is fit for making the built environment deliver on our sustainability and climate objectives.
Finally, the package includes a proposal on new rules to empower consumers in the green transition so that consumers are better informed about the environmental sustainability of products and better protected against greenwashing.
With today’s proposals, the Commission is presenting the tools to move to a truly circular economy in the EU: decoupled from energy- and resource dependencies, more resilient to external shocks and respectful of nature and people’s health. The proposals build on the success of EU’s existing Ecodesign rules, which have brought remarkable reductions in EU’s energy consumption and significant savings to consumers. In 2021 alone, existing ecodesign requirements saved consumers €120 billion. The rules have also led to a 10% lower annual energy consumption by the products in scope. By 2030, the new framework can lead to 132 mtoe of primary energy savings, which corresponds roughly to 150 bcm of natural gas, almost equivalent to EU’s import of Russian gas. 
Making sustainable products the norm
The proposal for a Regulation on Ecodesign for Sustainable Products addresses product design, which determines up to 80% of a product’s lifecycle environmental impact. It sets new requirements to make products more durable, reliable, reusable, upgradable, reparable, easier to maintain, refurbish and recycle, and energy and resource efficient. In addition, product-specific information requirements will ensure consumers know the environmental impacts of their purchases. All regulated products will have Digital Product Passports. This will make it easier to repair or recycle products and facilitate tracking substances of concern along the supply chain. Labelling can be introduced as well. The proposal also contains measures to end the destruction of unsold consumer goods, as well as expand green public procurement and provide incentives for sustainable products.
Today’s proposal extends the existing Ecodesign framework in two ways: first, to cover the broadest possible range of products; and second, to broaden the scope of the requirements with which products are to comply. Setting criteria not only for energy efficiency, but also for circularity and an overall reduction of the environmental and climate footprint of products will lead to more energy and resource independence and less pollution. It will strengthen the Single Market, avoiding diverging legislation in each Member State, and create economic opportunities for innovation and job creation, notably in remanufacturing, maintenance, recycling and repair. The proposal will set a framework and a process through which the Commission, working in close cooperation with all those concerned, will progressively set out requirements for each product or group of products.
Together with this proposal, the Commission has also adopted an Ecodesign and Energy Labelling Working Plan 2022-2024 to cover new energy-related products, update and increase the ambition for products that are already regulated, as a transitionary measure until the new regulation enters into force. It notably addresses consumer electronics (smartphones, tablets, solar panels) – the fastest growing waste stream.
To support the deployment of sustainable products across the EU market, targeted sectoral initiatives are also presented today. The EU Strategy for Sustainable and Circular Textiles and the revision of the Construction Products Regulation will address two priority product groups with significant impacts.
Sustainable and circular textiles
European consumption of textiles has the fourth highest impact on the environment and climate change, after food, housing and mobility. It is also the third highest area of consumption for water and land use, and fifth highest for the use of primary raw materials.
The EU Strategy for Sustainable and Circular Textiles sets out the vision and concrete actions to ensure that by 2030 textile products placed on the EU market are long-lived and recyclable, made as much as possible of recycled fibres, free of hazardous substances and produced in respect of social rights and the environment. Consumers will benefit longer from high quality textiles, fast fashion should be out of fashion, and economically profitable re-use and repair services should be widely available. In a competitive, resilient and innovative textiles sector, producers have to take responsibility for their products along the value chain, including when they become waste. In this way, the circular textiles ecosystem will be thriving, and be driven by sufficient capacities for innovative fibre-to-fibre recycling, while the incineration and landfilling of textiles has to be reduced to the minimum.
The specific measures will include ecodesign requirements for textiles, clearer information, a Digital Product Passport and a mandatory EU extended producer responsibility scheme. It also foresees measures to tackle the unintentional release of microplastics from textiles, ensure the accuracy of green claims, and boost circular business models, including reuse and repair services. To address fast fashion, the Strategy also calls on companies to reduce the number of collections per year, take responsibility and act to minimise their carbon and environmental footprints, and on Member States to adopt favourable taxation measures for the reuse and repair sector. The Commission will promote the shift also with awareness-raising activities.
The Strategy also aims to provide support to and accompany the textiles ecosystem throughout its transformative journey. Therefore, the Commission is launching today the co-creation of a transition pathway for the textiles ecosystem. This is an essential collaborative tool to help the ecosystem to recover from negative impacts of the Covid-19 pandemic which have been affecting companies in their daily operations for the last two years. It will also strengthen their capacities to withstand both a fierce global competition and future shocks for their long-term survival. All the actors are encouraged to take active part in the co-creation process through their commitments on circularity and circular business models, actions to strengthen sustainable competitiveness, digitalisation and resilience, and identification of specific investments needed for the twin transition.
The construction products of tomorrow
The construction ecosystem represents almost 10% of EU value added, and employs around 25 million people in over 5 million firms. The construction products industry counts 430,000 companies in the EU, with a turnover of €800 billion. These are mainly small and medium-size enterprises. They are a key economic and social asset for local communities in European regions and cities.
Buildings are responsible for around 50% of resource extraction and consumption and more than 30% of the EU’s total waste generated per year. In addition, buildings are responsible for 40% of EU’s energy consumption and 36% of energy-related greenhouse gas emissions.
The revision of the Construction Products Regulation will strengthen and modernise the rules in place since 2011. It will create a harmonised framework to assess and communicate the environmental and climate performance of construction products. New product requirements will ensure that the design and manufacture of construction products is based on state of the art to make these more durable, repairable, recyclable, easier to re-manufacture.
It will also make it easier for standardisation bodies to do their work of creating common European standards. Together with enhanced market surveillance capacities and clearer rules for economic operators along the supply chain, this will help to remove obstacles to the free movement of the internal market. Finally, the revised Regulation will offer digital solutions to reduce administrative burdens, particularly on SMEs, including a construction products database and a Digital Products Passport.
Members of the College said:
Executive Vice-President for the European Green Deal Frans Timmermans said: “It’s time to end the model of ‘take, make, break, and throw away’ that is so harmful to our planet, our health and our economy. Today’s proposals will ensure that only the most sustainable products are sold in Europe. They allow consumers to save energy, repair and not replace broken products, and make smart environmental choices when they are shopping for new ones. This is how we bring balance back in our relationship with nature and reduce our vulnerability to disruptions in global supply chains.”
Commissioner for the Internal Market Thierry Breton said: “European consumers rightly expect more environment-friendly and longer-lasting products. More sustainability and resource efficiency also means more resilience when a crisis disrupts our industrial supply chains. By harnessing the potential of the Single Market, making the most of digital tools and improving market surveillance, we will maximise opportunities for businesses and consumers alike. Greater resource and energy efficiency in the construction and textile sectors in particular will generate highly skilled jobs across Europe.”
Commissioner for the Environment, Oceans and Fisheries Virginijus Sinkevičius said: “Our circular economy proposals kick off an era where products will be designed in a way that brings benefits to all, respects the boundaries of our planet and protects the environment. Giving a longer lifespan to the phones we use, to the clothes we wear and to many other products will save money for European consumers. And at the end of their life products will not be a source of pollution, but of new materials for the economy, decreasing the dependency of European businesses on imports.” 
Compliments of the European Commission.
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The European Commission and the United States announce that they have agreed in principle on a new Trans-Atlantic Data Privacy Framework, which will foster trans-Atlantic data flows and address the concerns raised by the Court of Justice of the European Union in the Schrems II decision of July 2020.
The new Framework marks an unprecedented commitment on the U.S. side to implement reforms that will strengthen the privacy and civil liberties protections applicable to U.S. signals intelligence activities.  Under the Trans-Atlantic Data Privacy Framework, the United States is to put in place new safeguards to ensure that signals surveillance activities are necessary and proportionate in the pursuit of defined national security objectives, establish a two-level independent redress mechanism with binding authority to direct remedial measures, and enhance rigorous and layered oversight of signals intelligence activities to ensure compliance with limitations on surveillance activities.
The Trans-Atlantic Data Privacy Framework reflects more than a year of detailed negotiations between the U.S. and E.U. led by Secretary of Commerce Gina Raimondo and Commissioner for Justice Didier Reynders. It will provide a durable basis for trans-Atlantic data flows, which are critical to protecting citizens’ rights and enabling trans-Atlantic commerce in all sectors of the economy, including for small and medium enterprises.  By advancing cross-border data flows, the new framework will promote an inclusive digital economy in which all people can participate and in which companies of all sizes from all of our countries can thrive.
The announcement is another demonstration of the strength of the U.S.-EU relationship, in that we continue to deepen our partnership as a community of democracies to ensure both security and respect for privacy and to enable economic opportunities for our companies and citizens.  The new Framework will facilitate further U.S.-EU cooperation, including through the Trade and Technology Council and through multilateral fora, such as the Organisation for Economic Cooperation and Development, on digital policies.
The teams of the U.S. Government and the European Commission will now continue their cooperation with a view to translate this arrangement into legal documents that will need to be adopted on both sides to put in place this new Trans-Atlantic Data Privacy Framework. For that purpose, these U.S. commitments will be included in an Executive Order that will form the basis of the Commission’s assessment in its future adequacy decision.
For more information
Factsheet Trans-Atlantic Data Privacy Framework 
Compliments of the European Commission.
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Today, the European Council was joined by President Joseph R. Biden, Jr. of the United States.
The leaders discussed the coordinated and united response of the European Union and the United States to Russia’s unprovoked and unjustified military aggression in Ukraine.
They reviewed their ongoing efforts to impose economic costs on Russia and Belarus, as well as their readiness to adopt additional measures and to stop any attempts to circumvent sanctions.
Leaders discussed the urgent needs caused by Russia’s aggression, committed to continuing providing humanitarian assistance, including to neighboring countries hosting refugees, and underscored the need for Russia to guarantee humanitarian access to those affected by or fleeing the violence.
Leaders welcomed the opening of international investigations, including by the Prosecutor of the International Criminal Court, and ongoing efforts to gather evidence of atrocities.
In addition, leaders discussed EU-U.S. cooperation to reduce dependence on Russian fossil fuels, accelerate the transition to clean energy, as well as the need to respond to evolving food security needs worldwide.
The leaders also concurred on the importance of strengthening democratic resilience in Ukraine, Moldova, and the wider Eastern partnership region.
Finally, leaders underscored the importance of enhancing transatlantic security and defence, including through robust NATO-EU cooperation as described in the EU’s Strategic Compass.
Contact:

Barend Leyts, Spokesperson for the European Council President | press.president@consilium.europa.eu

Compliments of the European Council.
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The Council and the Parliament today reached a provisional political agreement on the Digital Markets Act (DMA), which aims to make the digital sector fairer and more competitive. Final technical work will make it possible to finalise the text in the coming days.
The DMA defines clear rules for large online platforms. It aims to ensure that no large online platform that acts as a ‘gatekeeper’ for a large number of users abuses its position to the detriment of companies wishing to access such users.
Which platforms are considered gatekeepers?
The Council and the European Parliament agreed that for a platform to qualify as a gatekeeper, firstly it must either have had an annual turnover of at least €7.5 billion within the European Union (EU) in the past three years or have a market valuation of at least €75 billion, and secondly it must have at least 45 million monthly end users and at least 10 000 business users established in the EU.
The platform must also control one or more core platform services in at least three member states. These core platform services include marketplaces and app stores, search engines, social networking, cloud services, advertising services, voice assistants and web browsers.
To ensure that the rules laid down in the regulation are proportionate, SMEs are exempt from being identified as gatekeepers, apart from in exceptional cases. In order to ensure the progressive nature of the obligations, the category of ‘emerging gatekeeper’ is also provided for; this will enable the Commission to impose certain obligations on companies whose competitive position is proven but not yet sustainable.
Gatekeepers will have to:

ensure that users have the right to unsubscribe from core platform services under similar conditions to subscription
for the the most important software (e.g. web browsers), not require this software by default upon installation of the operating system
ensure the interoperability of their instant messaging services’ basic functionalities
allow app developers fair access to the supplementary functionalities of smartphones (e.g. NFC chip)
give sellers access to their marketing or advertising performance data on the platform
inform the European Commission of their acquisitions and mergers

But they can no longer:

rank their own products or services higher than those of others (self-preferencing)
reuse private data collected during a service for the purposes of another service
establish unfair conditions for business users
pre-install certain software applications
require app developers to use certain services (e.g. payment systems or identity providers) in order to be listed in app stores

What if a gatekeeper does not play by the rules?
If a gatekeeper violates the rules laid down in the legislation, it risks a fine of up to 10% of its total worldwide turnover. For a repeat offence, a fine of up to 20% of its worldwide turnover may be imposed.
If a gatekeeper systematically fails to comply with the DMA, i.e. it violates the rules at least three times in eight years, the European Commission can open a market investigation and, if necessary, impose behavioural or structural remedies.
What if the platform does not agree that it is a gatekeeper?
If a platform has good arguments against its designation as a gatekeeper, it can challenge the designation by means of a specific procedure that enables the Commission to check the validity of those arguments.
Who makes sure that gatekeepers stick to the rules?
To ensure a high degree of harmonisation in the internal market, the European Commission will be the sole enforcer of the regulation. The Commission can decide to engage in regulatory dialogue to make sure gatekeepers have a clear understanding of the rules they have to abide by, and to specify their application where necessary.
An advisory committee and a high-level group will be set up to assist and facilitate the work of the European Commission. Member states will be able to empower national competition authorities to start investigations into possible infringements and transmit their findings to the Commission.
To make sure that gatekeepers do not undermine the rules set out in the DMA, the regulation also enforces anti-circumvention provisions.
Link to the Digital Services Act (DSA)
The co-legislators agreed that, whereas economic concerns deriving from a gatekeeper’s data collection will be addressed in the DMA, wider societal concerns should be tackled in the Digital Services Act (DSA). An agreement on the DSA is also expected shortly.
The DSA and the DMA will be the two pillars of digital regulation which respects European values and the European model, and will define a framework adapted to the economic and democratic footprint of digital giants.
Background
The European Commission presented a digital services package comprising the Digital Services Act (DSA) and a Digital Markets Act (DMA) in December 2020.
On 25 November 2021, less than a year after the start of negotiations in the Council, member states unanimously agreed on the Council’s position on the DMA.
Next steps
The provisional agreement reached today is subject to approval by the Council and the European Parliament. The regulation must be implemented within six months after its entry into force.
On the Council’s side, the presidency aims to submit the agreement to the Permanent Representatives Committee (Coreper) for endorsement shortly.

European Commission proposal for a digital markets act
Council’s general approach
European parliament’s position
Original Press Release

Compliments of the European Council.
The post Digital Markets Act (DMA): agreement between the Council and the European Parliament first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

After the various measures taken by countries, international organizations and companies to pressure Russia to stop its aggression against Ukraine, it is now the turn of the antitrust enforcers of the European Competition Network (ECN) to make their contribution. They did so by publishing a joint statement on 22 March, in which they indicated that they would be pragmatic, if not flexible, in assessing the behaviour adopted by companies in response to the severe difficulties encountered in connection with the war. They emphasised that cooperation between companies to address war disruptions – for example to ensure the supply, purchase and fair distribution of scarce products and inputs, or to try to minimise the consequences of compliance with EU sanctions – would likely not be considered problematic under antitrust law. The European Antitrust Enforcers also added that they would not actively pursue those temporary and necessary cooperation measures, and that they would provide informal guidance to companies that had doubts about the compliance of such cooperation. However, the Commission pointed out that they would be ruthless with companies that take advantage of the crisis to collude at the expense of free competition. This initiative is reminiscent of the one they adopted in response to the COVID-19 crisis, which was perceived with some relief by companies placed under unprecedented constraints.
The full statement:
Joint statement by the European Competition Network (ECN) on the application of competition law in the context of the war in Ukraine:
• We, the ECN, join the European Council in its statement of 24 February 2022 (link), to condemn in the strongest possible terms Russia’s unprecedented military aggression against Ukraine. We
stand firmly by Ukraine and its people as they face this war. We are fully aware of the social and economic consequences for Ukraine as well as for the EU/EEA.
• As stated in our joint statement on the application of competition law during the COVID crisis, the different EU/EEA competition instruments have mechanisms to take into account, where
appropriate and necessary, market and economic developments. Competition rules ensure a level playing field between companies. This objective remains relevant also in a period when companies and the economy as a whole suffer from crisis conditions.
• The ECN understands that this extraordinary situation may trigger the need for companies to address severe disruptions caused by the impact of the war and/or of sanctions in the Internal
Market. This may include for example cooperation in order to (i) ensure the purchase, supply and fair distribution of scarce products and inputs; or (ii) mitigate severe economic
consequences including those arising from compliance with sanctions imposed by the EU.
• Considering the current circumstances, cooperation measures to mitigate the effect of severe disruptions would likely either not amount to a restriction of competition under Article 101
TFEU/53 EEA or generate efficiencies that would most likely outweigh any such restriction. In any event, in the current circumstances, the ECN will not actively intervene against strictly
necessary and temporary measures specifically targeted at avoiding the aforementioned severe disruptions caused by the impact of the war and/or of sanctions in the Internal Market.
• If companies, on the basis of their self-assessment, have doubts about the compatibility of such cooperation initiatives with EU/EEA competition law, they can reach out to the Commission, the
EFTA Surveillance Authority or the national competition authority concerned any time for informal guidance.
• At the same time, it is of utmost importance to ensure that essential products (for example energy, food, raw materials) remain available at competitive prices and that the current crisis is
not used to undermine a competitive level playing field between companies. The ECN will therefore not hesitate to take action against companies taking advantage of the current situation by entering into cartels or abusing their dominant position.
View the original statement
Compliments of Orrick Herrington & Sutcliffe LLP – a member of the EACCNY.
The post Orrick | The European Antitrust Enforcers’ Response to the Russia/Ukraine Crisis first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.